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How REAP program can benefit farmers and rural small businesses

February 9th, 2022 | By Christopher Butts

Farmers and small-town businesses across the country have an opportunity to go solar through a guaranteed loan financing and grant funding program known as REAP, which stands for the Rural Energy for America Program. No matter what type of agricultural producer you are and where you do it, or if you run a small business in a rural area (defined as 50,000 population or less), you’re potentially eligible to receive guaranteed loan financing and grant funding when installing a renewable energy system or energy efficiency upgrades.

REAP and the solar tax credit

Grants offered by the program can cover up to 25% of total project costs. Combine that with the current federal income tax credit for those who go solar and eligible businesses could be looking at getting over half of the cost of their new solar panels covered by government incentives alone. However, these grants are not guaranteed and applying for them can be competitive. There are people who write REAP proposals for a living. We caution our customers to only choose highly rated professionals if they choose to have their proposals written for them. Again, even then, you are not guaranteed a full or partial grant.

Imagine how much shorter the payback period would be on a system that costs half of what it would have otherwise. Unfortunately, the government has put a timeline on these incentives. Prospective REAP recipients have between November 1 and March 31 each year to apply for funding, while the 26% federal income tax credit is scheduled to drop to 22% at the end of this year.

A Growing Partnership in Agriculture

Solar is becoming a more and more popular option for farmers due to factors like the REAP program, not to mention the ample land space and minimal interference. After all, sunlight and farming have always gone hand-in-hand. Not only can a farmer put panels on their house, but they could also utilize them on a barn, silo, or even ground mounts. According to the latest Census of Agriculture in 2017, a USDA study done every five years, the number of farms that utilize some form of self-producing renewable energy more than doubled from 2012 to 2017. Those numbers are again expected to rise significantly in the upcoming 2022 Census of Agriculture.

Potentially Cut Electric Bills While Future-Proofing

There are numerous benefits to a farm or business made available by producing their own power through solar. First would be the potential cost savings associated with electric bills. It’s easy to quantify, the more energy you use from your solar panels, the more you increase the possible savings on electric bills. There’s also the potential to sell back excess electricity to the utility company via net metering, provided your utility company offers it.

Then there’s future-proofing your business. Just as it has for electric vehicles, demand for battery-powered farm equipment is expected to rise in the next few years. Charging all this equipment will not only stress the grid, but it’s also likely to raise a farm or business’s electrical costs despite the potential savings on fuel costs. Imagine the possible savings powering that modern equipment with your own electricity could bring.

Growing on the Green Initiative

Then of course there’s the positive, environmental benefits of going solar. Not only can it reduce the carbon footprint of a farm or small business, solar creates a positive visual for potential clients. With 60% of traditional grid electrical energy still being generated through the burning of fossil fuels, a solar system combined with an electric fleet of equipment could potentially double these carbon reducing benefits. Of course, battery powered farm equipment has not yet completely replaced most traditional heavy equipment, but it is catching up. Kubota, John Deere and several other farm equipment manufacturers offer battery powered models of tractors now.

Harvesting the Sun’s Energy

We can help your business reach its sustainability goals. Pink Energy is ready to design a system that fits your needs and helps your farm or business grow. Give us a call at (877) 4-GO-Pink today to get started.

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