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Frequently Asked Questions

Grain Drying

Question:
    • Can we use this grant to help finance the building of a new aerated grain drying bin (with perforated floor and fans). This improvement would reduce the cost of LP drying.

Answer:
  • Yes, it is an eligible technology, but to be eligible, the new grain drying system would need to be a replacement for an existing grain drying system on the farm. We need an existing baseline of energy costs to compare to proposed energy costs.
    • The purchase and installation cost of the grain drying system, not the bin, is an eligible cost to finance. Costs need to be clearly defined to separate the bin costs from the grain drying system costs.
Question:
    • A farmer wants to convert an existing grain storage bininto a grain drying bin by installing grain drying equipment. It is an addition to the farming operation (grain drying equipment) that had not been there previously. Is this OK?

Answer:
  • No, the purpose of the energy efficiency improvement program is for replacement of inefficient equipment.
Question:
    • What equipment can be included in a grant beyond just the dryer itself?

Answer:
  • Any equipment that is permanently attached and is required for the entire system to operate can be included.
Question:
    • When do farmers get paid?

Answer:
  • Payment is made upon completion of the grain drying system. Work can begin right after the application package is received by the USDA.
Question:
    • Can we promise the farmer that he will win the grant?

Answer:
  • NO!!! The grants are awarded competitively. Since we do not know who will compete and how strong a proposal he will make, we do not know who will be awarded a grant.
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Question:
    • How much money is available?

Answer:
  • Over $90,000,000 will be awarded for either a grant, or a loan, or a combination of the two. 50% more than was awarded last year (2010). We anticipate much greater competition this year. Less money will be spent on large projects than in past years.
Question:
    • When will farmers find out if they won the grant?

Answer:
  • It depends on the type of grant applied for. In 2008 & 2009, they could have applied for a Grant/Loan combo and found out in two weeks. The grant-only applications found out in September or October if they won.

Windmills

Question:
    • Can I apply for more than one grant or rebate and still qualify for the REAP program?

Answer:
  • Yes, you're highly encouraged to apply for not only a REAP grant but also for a state grant and or any utility rebates available in your area.
Question:
    • Can I put the windmill on set aside land or must it be on the acreage that I plant?

Answer:
  • You are allowed to put the tower on land that is in the soil conservation bank or on acreage you plant.
Question:
    • What is the definition of a small wind application?

Answer:
  • Typically 100 KwH and less than $200,000 in total project size but the grants are available no matter what size turbine you choose to install.
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Solar

Question:
    • I only have one electric meter for both my home and farm. Will I be eligible?

Answer:
  • The REAP program is for rural small business and agricultural producers. Grants cannot be awarded for residential use. The Solar panels will need to be connected to a commercial meter.
Question:
    • I am applying for several grants. What if not all are awarded?

Answer:
  • You are allowed and encouraged to apply for any and all funding for this project. Awards made prior to the application can be used as part of your funding. Grants applied for but not awarded cannot be used as funding sources.
Question:
    • I plan on installing a stand-alone solar system. Will this affect my chances of winning?

Answer:
  • Typically, stand alone systems have a higher cost which does impact the payback of the systems. Payback is used as one of many criteria for the award of a grant.
Question:
    • I want to sell electricity back to the utility. Will this impact my chances of winning?

Answer:
  • In order for a grant to be awarded, you will need to calculate the payback of the system. Selling utilities your power under a net metering arrangement is typically the best return on investment. Under net metering an investor owned utility will allow you to generate up to 10kw of power to offset your total electric use over a 12 month period of time. If you are on an REMC line most Coops will only purchase the power from you at a wholesale rate, which will significantly change your payback and return on investment (ROI). Both of these factors are used to determine the final score of your grant proposal.
Question:
    • I plan to heat my shop with solar power. Should I write up the grant as a renewable energy project or as an energy savings project?

Answer:
  • Typically, proposals score best when written up as energy conservation. Examination of the self-scoring sheet is the best way to determine if it is renewable or energy conservation for heating of an existing building. Of course, if the building is new, the only choice is to apply for the renewable grant.
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Poultry
Question:
    • Who helps with the costs and what are the costs?

Answer:

Action  

Who will help you?

How much will it cost?

1 ) Site Survey

Local Cumberland dealer

A free service

2) Prepare a Conservation Action Plan (CAP) to let you know all your alternatives. This phase is critical because it creates ALL the information needed to apply for the grants.                                                                                

Energy Improvement Matters (EIM)
EIM reserves the right to limit the number of applicants, based on the announced state funding levels. This increases applicant’s probability of winning.

NRCS funds this under their conservation practice 122. Payment for this is assigned by you to your TSP using the form CCR XXX

3) Make application to USDA NRCS for EQIP funding

Your local district conservation officer using your CAP

A free service

4) Make application to USDA Rural Development REAP program

EIM. EIM reserves the right to limit the number of applicants, based on the announced state funding levels. This increases applicant’s probability of winning.

$300 up front and then you would pay EIM 1% of your project cost if you win.

5) Make application to your local Gas or Electric utility for incentive  funds

Technical Service Provider,
Energy Improvement Matters

Cost is dependent upon feasibility and incentives.

6) Application to possible state grants

Technical Service Provider
Energy Improvement Matters

Cost is dependent upon feasibility and incentives.

7) Claim tax credits or deductions for action taken

Your accountant with some very basic guidance from your TSP

Fees vary depending on the accountant with an average cost of $100/hour for additional work beyond your normal work.

Question:
    • What is the total impact: How do your profits go up?

Answer:
  • Example: How could improving a single house impact your profits?

    New income
    Current heating cost/year/house $ 4000 * 30% (energy savings) = $ 1,200
    Current electrical costs/year/house $ 2000 * 40% (energy savings) = $ 800
    Current contract price per lb of chicken = $.062
    Revised contract price per lb of chicken = $ .067
    Increased price per lb of chicken = $ .005
    100,000 birds raised/year * weight of bird 7/lbs = $3,500
    Total new income = $ 5,500

    New expense:
    Loan on ($ 40,000 � $10,000 REAP � $1,000 utility grant) for 10 years @ 4 % = - $ 3,500

    Annual increase in profits $ 2,000
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Question:
    • What will you have to do?

Answer:
  • Sign the enclosed application to create a Conservation Activity Plan and assign direct payment from the NRCS to the recommended Technical Service Provider: EIM, LLC.
  • Allow access to your houses for a site survey by a trained Cumberland representative.
  • Provide commonly needed grant application information to the TSP, such as:
  • First two pages of your income taxes. This information is used only for grant purposes and is then properly destroyed.
  • DUNS Number. EIM can assist you with this at no additional cost.
  • Copy of your articles of incorporation or partnership agreement, unless you are applying as a sole proprietor.
  • Copy of permits.
  • A letter of support from your bank or the FSA office stating the amount of the loan, the interest rate and the term of the loan. EIM will send a sample letter to the bank explaining this after we get a copy of the quote.
  • Proof of property control, shown by a copy of property taxes, deed, or a long term lease.
  • Copies of recent utility bills for the business or equipment (i.e.: propane bill and electric bill for the last 12 months.
  • EIM would anticipate that it will take about 4 hours of your time to perform the actions above.
Question:
    • Where does the initial money come from?

Answer:
  • The REAP grants are from a USDA federal fund distributed by the state Rural Development office.  $72 million was awarded nationally for the REAP program in 2011. EQIP is funded from a USDA federal fund distributed by the states’ Natural Resource Conservation Services office. This is a new program in 2012 so no funds were paid for either Conservation Activity Plans program 122 or for Conservation Action Program 374 last year. The utility incentives are paid from a fund established by the state utility commission.  A part of each commercial building’s utility payments are set aside to fund future work that will save energy. Funding varies.
Question:
    • What strings are attached?

Answer:
  • If you win a grant, you typically will need to turn in the utility bills to report your energy usage for a two year period.  Almost all government grants are considered to be cash payments and are taxable events.
Question:
    • When can you get the money?

Answer:
  • In the case of the USDA’s REAP grants, the winners are usually announced between July and October. Payments will occur after the announcement of winners and the completion of the project. In the case of the USDA EQIP program, projects are selected for support February to March and payment is made after completion. Utility program payments are typically made monthly. Tax deductions or credits are adjustments to the tax you owe annually.
Question:
    • When can you get the products?

Answer:
  • Don’t pay for the equipment or start the project until the grant application is turned in to the USDA. It is recommended that you only request grants and subsidies for projects that you intend to do anyway for your operation. Winning the grant increases the profitability of the projects, but should not make you do something that is not needed. Do what is needed and seek financial support for these needed actions.  For REAP, you are allowed to start the project any time within 2 years after the application is turned in to the USDA. For EQIP you are allowed to start the project after funding is approved.

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