Dive Brief:
- The U.S. Department of Agriculture (USDA) said Tuesday it is investing $237 million on efficiency and renewables for farmers and agriculture producers in an effort to lessen the burden of energy expenses while also growing clean energy resources.
- The Rural Energy for America Program (REAP) will provide grants and loan guarantees for hundreds of projects in all 50 states and some territories, ranging from solar generation to upgraded farming and fishing equipment.
- Last year, a report from USDA's Interagency Task Force on Agriculture and Rural Prosperity concluded modernizing rural energy infrastructure, including a "full installation of smart grid technology," is one key to growth in the agricultural sector.
Dive Insight:
The Trump administration has consistently acted to cut spending on efficiency and renewables, but when it comes to farmers, energy is still a bipartisan affair.
The REAP program is popular and draws support from both sides of the aisle, though Congressional advocates "tend to be Republicans because of the program's popularity with their constituency," according to Neal Elliott, senior director for research at the American Council for an Energy-Efficiency Economy.
Under Trump, the U.S. Department of Energy has not issued or updated any efficiency standards, and has missed more than 20 legal deadlines for reviewing standards. The administration also challenged standards for light bulbs, and is creating loopholes for product testing.
But on Tuesday, USDA announced it would make efficiency and renewable energy investments in 640 businesses to help boost their bottom line. Projects include solar arrays, efficient lighting, grain dryers that will consume less propane, upgraded coolers and freezers, biofuel production and more.
For many farmers, "the energy share of their overall cash flow is probably at levels you would normally associate with very large energy intensive industries like steel," Elliott told Utility Dive. "A lot of people don't appreciate how much money, as a fraction of their budget, these companies end up spending. Investments in energy efficiency or renewable energy ... can have a significant benefit for these farms and small businesses."
REAP will receive about $250 million in both mandatory and discretionary funding through Title IX of the 2018 Farm Bill. That is one reason the program has continued making investments, according to ACEEE Senior Policy Advisor Lowell Ungar.
"The administration has continued grant and assistance programs when Congress has explicitly funded them," Ungar said in an email. "Although the president’s proposed budgets would have cut or eliminated many of these programs, Congress has generally protected and sometimes increased them."
A lack of staff and increased high-level review "have slowed some of the programs but not stopped them," according to Ungar.
Trump in 2017 established a task force on agriculture and rural prosperity and in 2018 the interagency group presented its findings. Those included modernizing rural electric systems to allow for smart grid applications like demand side management, distributed generation and renewable integration.
"The ability to dynamically manage energy use is critical to ensuring network reliability, enhancing system-wide efficiency and keeping electric rates affordable for rural residents and businesses," the report concluded
Elliott, who worked with lawmakers years ago to develop the farm bill's Title IX provisions, says the REAP program can make a big difference to farmers.
"Particularly in a year like we're having now, when overall farm revenues are down due to macro considerations, this kind of investment can help reduce exposure to energy price volatility," said Elliott. That is something "frequently at front of mind for farmers and rural small businesses."
