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Indiana gaining slowly in USDA energy efficiency grant receipts

By LINDA McGURK
Indiana Correspondent

INDIANAPOLIS, Ind. — Indiana has been late in the game when it comes to securing funding from USDA’s renewable energy and energy efficiency initiatives for individuals and businesses in rural America. But that could change; USDA Rural Development in Indiana is making a push to spread the word about the programs.
“Next year I’m hoping we’ll at least double the number of applications,” said Dean Edwards, director of business programs. “The applications compete on a national basis, but we anticipate at least half of them will be approved.”

USDA recently announced it awarded $35 million to 639 farmers and businesses in 43 states and the Virgin Islands through its Rural Energy for America Program (REAP). Indiana submitted 13 applications, of which nine were funded for a total of $320,401 – a far cry from 44 funded projects for Georgia, 79 for Iowa and a whopping 170 for Nebraska.

Edwards said there are several reasons why certain states seem to receive a disproportionate amount of grant money and why Indiana lags behind.

“Part of it is knowledge about the program. In some of the other states I think some of the farm organizations have picked it up and run with it a little more,” he said. “A lot of the grants are for the same thing – grain dryers – and I think some of the companies have picked (the grant program) up and use it as a sales technique.”

The nine grants still represent an increase from 2007, when Indiana only submitted and received five REAP applications. Sharon Ellison with USDA Rural Development in Indiana said a series of seven workshops hosted by her office and the Indiana Office of Energy and Defense Development across the state earlier this year probably helped boost the numbers.

“We’re probably going to do workshops every year from now on,” she said. “We need more applications, and I think we’ll get a lot more this year. We’re already getting a lot more phone calls about it.”

No date has been set for the next round of workshops, but Edwards said they will probably be offered right after the first of the year. Grant applications are usually due at the beginning of summer. His office is also planning a program for the end of October or early November that would explain and promote REAP to local grant writers.

REAP, formerly known as the Section 9006 Renewable Energy Systems and Energy Efficiency Improvements program, provides grants and loan guarantees to agricultural producers and small rural businesses for installing technology that produces renewable energy from wind, solar, biomass, geothermal and hydrogen-based sources.

The program also funds energy efficiency projects, such as retrofitting lighting or insulation, or purchasing or replacing equipment with more efficient units.

Grants can be awarded for up to 25 percent of the project cost, with an upper limit of $500,000 for renewable energy systems and $250,000 for energy efficiency improvements. Loan guarantees can be granted to loans that cover up to 50 percent of the project cost, for a maximum of $25 million. The guaranteed amount varies from 70-85 percent, depending on the size of the loan.

In Indiana, most of the REAP applications were for grain dryers, except one for installation of geothermal energy and solar panels. Ellison pointed out the grant only can be used for replacing an existing dryer, not for adding a new one. Applicants for the energy efficiency grant need to do an energy audit to calculate how much energy they will save with the new equipment, compared to the old dryer.

“The more energy you’ll save, the more points you get, and you need high scores to get the funds because it’s a competitive grant,” she said.

To be eligible for the grant, applicants must live in a rural area, show financial need and meet certain environmental and technical prerequisites. For more information about REAP grants and loan guarantees, go to www.rurdev.usda.gov/rbs or call Ellison at 317-290-3100, ext. 429.

9/24/2008