On-Farm Renewable Energy: Technologies and Opportunities for Funding California Climate and Agriculture Network Climate and Agriculture Summit March 31, 2011
Who are we? We have CPAs (and others) but we don t do CPA work. Services include: Project planning & research. Feasibility studies. Grant writing. Assistance with financing applications (e.g., loan guarantee programs). 2
On-Farm Renewable Energy 2009 USDA On-Farm Renewable Energy Production Survey: More than 8,500 operations nationwide reported producing on-farm renewable energy in 2009. The survey focused on three primary renewable energy technologies: solar, wind and methane digesters. 3
California Leads the Way 2,000 California farmers and ranchers produce on-farm energy, accounting for nearly a quarter of all farm-based renewable energy participants in America. 4
Solar Overview Of the 8,569 operations nationwide generating on-farm renewable energy in 2009, 7,968 reported using solar panels (almost 93 percent). 1,906 California farms reported using on-farm solar power. The reported solar projects had an average cost of $78,910, with 41 percent of the installation cost funded by outside sources. 5
Benefits of Solar Power What does solar provide farming operations?: Solar power provides a clean alternative to purchased electricity for just about anything. Solar power can be used for irrigation, heating, drying, to irrigate crops, power dryers, or light facilities. Solar technology is becoming more affordable and can be more economical than other renewable energy alternatives. 6
California On-Farm Solar Projects: Butte County family farm: 14 solar panels installed by Alternative Energy Systems, Inc., Chico, CA Project will replace 90% of the current usage for the farm s main agricultural well pump. $30,000 system cost with an expected 5 year return on investment. We helped secure 25 percent of equipment and installation cost through a federal grant program. 7
California On-Farm Solar Projects: Northeast CA Ranch: Cattle and hay ranch wishing to use solar to irrigate 750 acres, replacing diesel pumps. Total project cost estimated at $2.3 million. We wrote a grant for $500,000 in federal funding for equipment costs. 8
Barriers to Solar Power Like any alternative energy source, solar power requires upfront capital for equipment and installation. Solar projects need clear, unobstructed access to the sun. May require significant mounting space (we ve seen up to six or eight acres). May require frequent cleaning, especially if there is significant dust from farm operations. May have a long payback period, even with incentives. And, of course, solar power requires sunshine. 9
Wind Overview 134 California farms reported using small wind turbines. The average installation cost was $13,995, though about 50 percent of the total installation costs were funded by outside sources, such as grants. 10
Benefits of Wind Power Wind turbines can power anything to replace purchased electricity. Wind turbines come in a variety of sizes, depending on need. In most cases, farming equipment can come right alongside turbines; not the case with most ground mounted solar. 11
California On-Farm Wind Projects In 2009, we helped a Northern California walnut producer with a project that included installing four 20kW wind turbines. The turbines provide power for irrigation, a dryer, and help offset the farm s electricity usage. The project saves the farm thousands of dollars a year in energy costs. 12
Other Wind Projects We are currently working with a Midwest land owner on a proposed $100 million wind farm to secure federal grant funding for a feasibility study on the proposed project. Most of the power generated would be sold into the grid. 13
Barriers to Wind Power Wind turbines are only feasible in areas that generate enough wind; wind studies generally needed. Energy from wind turbines can be inconsistent. Noise complaints from neighbors. May have a long payback, even with incentives 14
Methane Digester Overview Not as common as solar and wind. The 2009 USDA survey found 14 methane digesters in CA AgStar, a outreach program of the U.S. Department of Agriculture, EPA and U.S. Department of Energy reports 15 methane digesters on commercial livestock operations in California. Mostly for manure, but we are aware of uses for onion waste. 15
California On-Farm Methane Digesters Olivera Egg Ranch: Main ranch in French Camp houses up to 70,000 layers. Waste was previously pumped into a16.5-acre lagoon, bringing neighbor complaints and a lawsuit. In late 2010, the ranch decided to install an anaerobic manure digester to produce methane gas from more than a million pounds of poultry waste a week. The digester should produce enough energy to run the ranch facilities. 16
California On-Farm Methane Digesters Strauss Family Dairy: Organic dairy and creamery in Marshall, CA, installed a methane digester in 2004 to convert waste from 300 dairy cows. Strauss website says the system generates over 300,000 kilowatt-hours per year, saving about $40,000. Power in excess of the dairy s needs is sold into the grid. The project received a 50 percent grant from the California Energy Commission. 17
Barriers to Methane Digesters Number one barrier is cost. The USDA found the average cost of installation for methane digesters to be $1.7 million. 18
Promising Technologies Powerhouse24 JKB Energy, Turlock, CA Curved mirrors collect sunlight to produce steam. The steam s energy is used to make power, and is stored for 24 hour operation even when the sun isn t shining. www.jkbenergy.com Power block Energy storage Parabolic solar collector 19
Promising Innovations Springboard Biodiesel, Chico, CA Technology to produce biodiesel from oilseed crops and/ or waste vegetable oil. Capacities up to 100 gallons per day. Can be more costly than diesel, but if there is a use for spent grain (e.g., protein value for cattle operations), net all-in cost can be as low as $1.50/gal. Case studies at www.springboardbiodiesel.com/ biodiesel-farmers 20
Promising Innovations Pelletizing of Biomass Many materials can be pelletized, e.g., crop residues, wood waste, spoiled feed. Pelletizing facilitates handling, storage, and use in some existing conversion processes. Can be burned in a modified corn burner (usually too much ash for wood pellet burners) Can be used for barn heat, to power a boilergenerator, etc. PelletPros in Davenport, IA makes small farmscale equipment; see www.pelletpros.com 21
Promising Innovations Bio-oil Mississippi State University is commercializing a process to produce bio-oil from crop residues, wood wastes, energy crops, etc. Bio-oil is an intermediary that can be used to produce burner fuel (for heat or electric generation), biodiesel, ethanol etc. Technology is scalable; can be installed on skids and be moved. Philip H Steele Ph.D., Psteele@cfr.msstate.edu 22
Incentives Database of State Incentives for Renewables and Efficiency (DSIRE) Comprehensive source of information on state, local, and utility incentives and policies that promote renewable energy and energy efficiency. Established in 1995 and funded by the U.S. Department of Energy. www.dsireusa.org 23
Incentives Examples: 30% Federal Investment Tax Credit, available through 2016. 1063 Grant Extension for 2011 30% Grant instead of tax credit. California Solar Initiative, Performance Based Incentive. $.15/kWh for governments and nonprofits; $.05/kWh commercial. Based on actual output. Accelerated Depreciation 100% First Year or 5 Years Macrs or straight line 24
Incentives Rural Energy for America Program (REAP): Renewable energy system and energy efficiency improvement grants and loan guarantees. Energy audit and renewable energy development assistance grants. Renewable energy feasibility study grants. One of the few programs that provides funding for equipment. 25
Incentives REAP Grants: Based on funds available. Up to 25% of total eligible project costs. Grants are limited to $500,000 for renewable energy systems and $250,000 for energy efficiency improvements. Loan Guarantees: Up to $25 million or 75% of total eligible project costs, whichever is less (the 75% includes grant dollars received under REAP Combination Program) 26
Incentives REAP REAP program typically announced in late spring with application due mid-summer. FY 2011 program has yet to be announced, but if you re interested, don t wait. Requires a lot of data, may need an independent feasibility study. Phil Brown, USDA Rural Development, Business & Cooperative Loan Specialist. Phil.Brown@ca.usda.gov, (530) 792-5811 27
MorrisonGrants.com Currently over 2,500 programs focused exclusively on food, agribusiness, energy, and the environment. Federal, state (currently the 20 largest ag states), nearly 200 private foundations, others. Save search parameters or follow specific grants for automatic future notifications. 30 day free trial, full functionality. 28
Brent Morrison, CPA Morrison & Company 2623 Forest Ave., Ste. 110 Chico, CA 95938 (530) 893-4764, ext. 202 bmorrison@morrisonco.net www.morrisonco.net www.morrisongrants.com 29