USDA Ohio Rural Development - Green Energy Oh Business Development Grant Photo credit: Ohio’s Hill...
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Randy Monhemius April 8, 2016 USDA Ohio Rural Development Energy Coordinator
Transcript of USDA Ohio Rural Development - Green Energy Oh Business Development Grant Photo credit: Ohio’s Hill...
Randy Monhemius
April 8, 2016
USDA Ohio Rural Development
Energy Coordinator
Purpose
REAP is designed to helpagricultural producers and rural small businesses
reduce energy costs and consumption.
It’s not intended for residential use.
Assistance is provided through loan guarantees and grants:- Renewable Energy System (RES)- Energy Efficiency Improvement (EEI)
2014 Farm Bill Changes
USDA Photo Credit: Darin Leach
• REAP allocation = $50 million per fiscal year
• Ohio’s share = roughly $900,000 in grant authority
• $250,000 reserved for grants $20,000 and under
• $650,000 unrestricted grants
• FY 2016 grant application deadlines:
• May 2, 2016: Project requests up to $500,000
• October 31, 2016: Project requests less than
$20,000
• Agricultural producer or Rural Small Business (for profit)
• Project must be located in a rural area
• Applicant must own or control site for the life of the project
• Project must be RES or EEI
• Project must be commercially-available technology (not for research and development)
• Project must have technical merit (works when installed)
• Legal authority and responsibility
• Registration number (SAM)
Eligibility Criteria
Basic Eligibility Requirements:
Eligible Rural Areas
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
Eligible
Ineligible
The BioEconomy: a Force of Nature
• Biomass, Biofuel and Bioenergy- Pellet mills, biomass boilers, ethanol & biodiesel facilities
• Anaerobic Digesters- Facilities that use animal or food waste to produce
methane and then convert methane to electricity
• Geothermal, electric generation
The BioEconomy: a Force of Nature
• Hydrogen production from renewables
• Solar – small, large, photovoltaic, and thermal
• Wind - small and large
• Hydroelectric
• Energy Efficiency improvements– Replacement (not for new construction)
– Freezer & cooler replacement, lighting improvement, electric motor replacement, gas boiler replacement, insulation, grain dryer replacement
– Documented efficiency improvements per energy audit
Eligible Project Costs are solely those costs incurred after a
complete application has been received by Rural
Development
Eligible Costs
Important note: residential improvements are NOT eligible for assistance
• Purchase and installation of new or refurbished equipment
• Construction, retrofitting, replacement and improvements
• EEI identified in Applicable Energy Assessment or Energy Audit
• Fees for construction permits and licenses
• Costs limited to those integral to a completed RES or EEI project
• Grant amounts may not exceed 25 percent of eligible costs
– Renewable Energy maximum = $500,000
– Energy Efficiency maximum = $250,000
– Minimum grant = $2,500 (RES) and $1,500 (EEI)
– Grant assistance is taxable
Grant Amounts
All projects are scored based on these seven criteria:
1. Energy generated, replaced or saved (25 points)
2. Environmental benefits (5 points)
3. Commitment of funds (20 points)
4. Size of agricultural producer or rural small business (10 points)
5. Previous grantees and borrowers (15 points)
6. Simple payback (15 points)
7. State Director and Rural Utilities Service Administrator Priority
Points (10 points)
Maximum possible score = 100 points
REAP Scoring
USDA Photo Credit: Darin Leach
• $25 million maximum loan amount
• $5,000 minimum loan amount
• Guarantees 60 – 85 percent depending on amount of loan request. Smaller requests receive higher guarantee percentage
• 1 percent guarantee fee + annual renewal fee (0.25 percent)
• Loan guarantee/grant combination may not exceed 75 percent of eligible project costs
• Available funding = $150 million+
• Monthly consideration and funding of projects
REAP Loan Guarantees
Bank & Customer Benefits
Bank Benefits
• Reduced risk
• Increased confidence of banking regulators
• Improved loan portfolio quality
• Increased rate of return
• More competitive
Customer Benefits
• Allows project to be built
• Longer term loan
• Better interest rate
• Improved cash flow
• Helps ensure project success
Grant & Loan Guarantee Comparison
Grant:• Limited funding
– About $1 million available for Ohio projects
• Highly competitive
– About 35 percent of applications received funding for
requests less than $20,000
– Less than 20 percent received funding of more than
$20,000
– No assurance project will receive requested funds
• Grant is taxable
– Recipient receives 1099 the year the grant is received
• Review of projects by Rural Development
– Semi Annual Review of Projects requesting $20k or less
– Annual Review of projects requesting more than $20K
Grant & Loan Guarantee Comparison
Loan Guarantee:• Sufficient funding
– $150 million available nationwide
• Monthly review and approval of projects and loan guarantee requests
– Faster turnaround
• Longer term; better rate than conventional financing
– 15-year-term on equipment
– Possible fixed-rate financing
• Allows applicant to conserve cash
– Take advantage of tax credits and accelerated depreciation
– Up to 70 percent of projects may be financed
• Loan guarantee allows project to be constructed sooner; this means
savings start sooner, as well
2009 – 2015 REAP Approvals
Grant
Loan
Guarantee
TOTAL OHIO PROJECTS $15,450,023 $31,911,089
Guaranteed Loan Example: Solar
• Installation of 65 kW Solar Array
• Project costs: $150,000 estimated
• Financing of break-even scenario:
– Tax Credit @ 30 percent = $45,000
– REAP Loan Guarantee $105,000 @ 4.5 percent fixed / 15 years =
$804/month
– Energy generated 78,000 kWh/ year = $9,750 ($0.125/ kWh)
$812.50/ month
– Does not account for depreciation (improves return on investment)
– Does not account for anticipated increases in energy costs
(estimated 2 percent increase per year)
– Hedge against increases in energy costs
Small Solar Electric Installation
Installation of a 17.4kW
Solar Photovoltaic System
that will produce 21,527
kWh annually and replace
100 percent of the farm’s
annual energy usage.
Total project costs $53,120
Grant $13,279
Non-guaranteed Loan $39,841
Biomass/Wood Gasification Boiler
Replacement of an existing propane furnace with a biomass
fired boiler allowing the greenhouse to save nearly 6,550 gallons
of propane or approximately $13,100 per year. Gasification
boiler is 90%+ efficient.
Biomass Boiler purchase and Installation: $31,459
Grant $ 7,864
Out-of-pocket costs $23,595
Estimated annual savings: $10,000
Return on investment: About 3 years
Similar boiler could be used to provide heat to livestock facilities.
Biomass/Wood Gasification Boiler
Grocery Store Lighting Upgrade
This project replaced florescent tube lighting with energy-efficient LED lighting
inside and outside the business.
• Benefits:
– Reduced electric energy consumption by 32 percent or $9,829/year savings
– Lower maintenance costs by about $3,600 per year
– Longer bulb and fixture life expectancy for LED (estimated 50,000 hours)
versus 15,000 hours for florescent tubes
– Improved visibility and store atmosphere
• Project costs:
– Total cost of lighting replacement $86,609
– Less: grant amount $20,000
– Final Costs to customer $66,609
– Return on total project costs 8.8 years
Grocery Store Lighting Upgrade
LED Lighting installation
Reduce electric consumption by 120,000kwh/year
Bakery Geothermal Installation
This project installed a geothermal system which handles heating, cooling and hot
water for the bakery
• Benefits:
– Reduced energy consumption by about 50 percent
– Lower maintenance costs and longer life expectancy for system over
conventional methods
– Fits in with the company’s “Green” energy plan
• Project costs:
– Total cost of lighting replacement $36,663
– Less grant amount $ 9,165
– Final costs to customer $27,498
Bakery Geothermal Installation
Anaerobic Digester Project
This project funded the construction of an anaerobic digester in
Sheffield, Ohio that will produce an estimated 6 million kWh annually.
The system will be constructed at a waste water treatment plant and
use bio-solids and regional food wastes to generate methane which will
power electricity generators.
Loan guarantee: $1.65 million
Grant: $500,000
Project equity: $1.05 million
Total project costs: $3.2 million
Anaerobic Digester Project
Actual production 2014 production = 6,200,000 kWh
REAP Application Process
• Reimbursement Grant
- Applications must be received prior to installation of the RES or
EEI.
- Grant recipient will be reimbursed after the work is completed.
• Grant Agreement
• Reporting requirements
- Report energy savings for two years after receipt of grant for EEI
and three years for RES
USDA Energy Web Portal
Energy Investments Map 2.0
• Interactive
• Research by state or county
• Newly redesigned
More than 14,000 visible energy projects from across
USDA mission areas www.usda.gov/energy
Debbie Rausch
April 8, 2016Business Program Specialist
• Formerly known as the “Small, Socially-Disadvantaged Producer Grant
Program”
• Funds are intended to support eligible cooperatives, co-op associations or co-op
development centers
• May be used for technical assistance
• Grants awarded on a competitive basis
• There is no match requirement
Socially Disadvantaged Groups Grants
• Helps agricultural producers generate new products,
create and expand marketing opportunities and increase
income
• Designed for independent producers, farmer and rancher
cooperatives, producer groups and majority-controlled
producer-based business ventures
• Cash or eligible in-kind matching funds equal to
at least the grant amount requested
• May be used for feasibility studies, business plans and
working capital
• Maximum: $100K / planning $300K / working capital
Value-Added Producer Grant
Photo credit: Ann’s Raspberry Farm
• Combines the former Rural Business Enterprise and
Rural Business Opportunity Grant programs
• Assists with the start-up or expansion of small and
emerging private businesses and non-profits
• Available to public bodies, government entities, non-
profits and federally-recognized Indian Tribes.
• May be used to acquire or develop land, buildings and
equipment; provide technical assistance, establish
revolving loan funds and support distance learning
programs for educational or job training
Rural Business Development Grant
Photo credit: Ohio’s Hill Country Heritage Area
Massillon
330-830-7700
Marietta
740-373-7113
Columbus
614-255-2400
Hillsboro
937-393-1921
Findlay
419-422-0242
USDA Ohio Rural Development
Ohio Business Program Contacts
Michael Rutherford, Business & Cooperative Programs Director
Phone: 740-373-7113 Ext. 206 Email [email protected]
Randy Monhemius, Business Program Specialist
Phone: 614.255.2424 Email [email protected]
Debbie Rausch, Business Program Specialist
Phone: 614.255.2425 Email: [email protected]
Christie Hooks, Business Program Specialist
Phone: 614.255.2397 Email: [email protected]
Cindy Musshel, Business Program Specialist
Phone: 614-255-2427 Email: [email protected]
Jennifer Brown, Business Program Specialist
Phone: 614-255-2423 Email: [email protected]
Rural Development Energy programs: http://www.rd.usda.gov/programs-services/rural-energy-america-program-renewable-energy-systems-
energy-efficiency
Database of State Incentives for Renewables and Efficiencyhttp://www.dsireusa.org/
USDA Ohio Rural Development State Director Tony LoganPhone: 614-255-2390Email: [email protected]
