Renewable Energy, Funding Options for Farms

Aerial view of wind turbine in a field.

In today’s rapidly evolving world, the farming community is embracing renewable energy as a path to a sustainable and economically viable future.

Renewable energy sources, such as solar, wind and biofuels, offer numerous benefits to private farm operations and large-scale commercial agriculture. There are various renewable energy options that positively impact the economics of the farming industry, and many come with funding opportunities.

One of the most accessible and widely adopted forms of renewable energy for farms is solar power. Farmers can significantly reduce their electricity bills by harnessing the sun’s energy.

Solar panels installed on barns or open fields capture sunlight and convert it into usable electricity. This clean energy source not only helps to reduce the carbon footprint but also provides a long-term, cost-saving solution.

Another renewable energy option gaining popularity in the farming community is wind energy. Farms situated in regions with consistent wind patterns can benefit from wind turbines.

These tall structures with rotating blades capture the wind’s kinetic energy and convert it into electricity. On windy days, excess electricity can be stored in batteries or fed back into the power grid, allowing farmers to earn extra income.

Biofuels, such as biodiesel and ethanol, offer an environmentally friendly alternative to fossil fuels in the farming sector. Many farmers grow crops like corn, soybeans or switchgrass, that can be converted into biofuels.

By producing their own biofuels, farmers would reduce their dependence on nonrenewable resources and stabilize fuel costs.

Large agriculture operations can also benefit from renewable energy. With vast land resources at their disposal, these farms have the potential to generate significant amounts of clean energy.

By installing large solar arrays or wind farms, these operations can power their irrigation systems and processing facilities and sell excess electricity to the local power grid.

Agricultural producers can take advantage of several different programs and tax incentives to harness the power of renewable energy. Some programs and tax incentives can even be combined.

The federal Inflation Reduction Act bolstered the Rural Energy for America Program by increasing program funding and grant eligibility to 50% of the costs. A producer can also combine a grant and loan through the program for funding up to 75%.

USDA also provides support through the Bioenergy Program for Advanced Biofuels, encouraging farmers to participate in sustainable biofuel production. The investment tax credit will reduce the federal income tax liability for up to 30% of the costs of a solar system.

In Pennsylvania, the Department of Environmental Protection has energy programs such as the Agriculture Energy Efficiency Rebate program and the Small Business Advantage Grant.

The Agriculture Energy Efficiency Rebate Program offers rebates to agricultural producers for energy-efficient projects. The Small Business Advantage Grant partially reimburses small businesses to improve energy efficiency or reduce pollution.

Producers may also qualify for USDA’s Environmental Quality Incentives Program On-Farm Energy Initiative. Eligible producers must take part in a qualifying energy audit.

Once completed, they may be able to receive assistance to purchase and install equipment to improve energy efficiency.

Contacting the respective federal or state agencies before undertaking a project can help with clarification of specific guidelines, including starting the paperwork before the project begins. Tax incentives should also be discussed with tax advisers and installers to be sure the project qualifies.

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