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Mississippi poultryman Spencer Pope is so pleased with the economics of the solar system he installed a year ago that he’s planning to install another 180 solar panels, which will then generate enough electricity to offset an entire year's requirements of his six poultry houses.
Payments guaranteed for 10 years
Payment is issued in the form of a credit on the participant’s monthly power bill by the local power company, which meters both the power use of the business/home and the output of the renewable energy generation system. The customer is guaranteed payments for 10 years from the start of the agreement with the local power company.
All new participants also qualify for an additional $1,000 incentive to help with system start-up costs.
“With the price of electricity continually rising — energy prices have gone through the roof over the past three years, and we’d just been eating those additional costs — we see this as a way to hedge against future increases,” Pope says.
Other assistance with the cost of the system came through
the Rural Energy for America Program (REAP), enacted by the 2008 Farm Bill.
REAP offers grants and/or loan guarantees for the purchase and installation of renewable energy generating systems and for energy efficiency improvements. Assistance is limited to small businesses and farmers & ranchers.
Projects must be located in a rural area. REAP grants and guarantees may be used individually or in combination. Together they may finance up to 75 percent of a project's cost. Grants can finance up to 25 percent of project cost, not to exceed $500,000 for renewables and $250,000 for efficiency. There are also REAP grants to help pay for technical assistance on energy projects.
In addition, REAP has several special grant funds that can share part of the cost of energy audits, feasibility studies, and other technical assistance that help farmer, ranchers, and rural small businesses successfully undertake rural energy projects.
Key eligibility criteria include being a rural farm or small business and having projected costs that meet the minimum grant amount of $2,500 (Pope received just under $20,000 for his installation).
The project also took advantage of the 30 percent federal renewable energy tax credit and the solar equipment is depreciated as farm equipment, using the modified accelerated cost recovery system (MACRS) in the IRS tax code.