The USDA Rural Development operates over fifty financial assistance programs for a variety of rural applications. The Renewable Energy Development Assistance (REDA) and Rural Energy for America Program (REAP) program grantees assist rural small businesses and agricultural producers by providing energy audits, technical assistants and site assessments, and loan guarantees and grants for Renewables & Energy Efficiency Improvement projects.
Up to 75% of eligible project costs are covered by guaranteed loans. Grants are available up to 25% of total eligible project costs. And for combined grant and guaranteed loan funding up to 75% of total eligible project costs are eligible for funding.
Up to a 85% loan guarantee is available for loans ranging from $5,000 to $25 million. All rates and terms are negotiated with the lender and subject to USDA approval. Maximum terms apply of 30 years for real estate, 15 years for machinery and equipment, 7 years for capital loans, and 30 years for combined real estate and equipment loans. Additional requirements apply for both grant and guaranteed loan programs. Read more here.
Renewable energy projects for the Renewable Energy Systems and Energy Efficiency Improvement Guaranteed Loan and Grant Program include wind, solar, biomass and geothermal, and hydrogen derived from biomass or water using wind, solar, or geothermal energy sources.
The #1 Problem facing Rural Small Businesses and Agricultural Producers
Rural small businesses and Agricultural producers are having a difficult time understanding how much they should pay for a solar renewable energy systems and how much they can really save. Many are seeking a non-intrusive means of determining how best to obtain low-cost, high quality solar from a source they can trust.
The annoying phone calls, email spam, and random door knockers has left most with the frame of mind that they would rather stay with an expensive local utility rather than dealing with pesky, commission hungry salespeople!
Most often owners will obtain construction quotes from multiple contractors hoping that competition will reduce their cost for a solar renewable energy system. However, most often this process will only lead to more confusion without an advocate on your side. Contractors typically represent various solar equipment manufacturers and they will submit proposals with multiple options based on different technology, system sizes, and system production calculations.
The #1 problem owners face is making an apples-to-apples comparison when they receive multiple construction quotes each with several options from a source they do not trust!
The Solution?! The K.I.S.S Principle
K.I.S.S. (Keep Investor Solar Simple)!
Capital costs vary depending on the chosen solar renewable energy system technology (e.g. crystalline silicon or thin-film, string inverter, micro inverter), installation specifics such as the type of roof or a tracking system, the contractor costs, the size of the system and the supplier`s retail mark-up.
The solar renewable energy system’s (PV) modules, also know as PV panels are the fundamental components of a PV system, and constitute half or more of the installed capital costs. Other capital costs include: the ac-to-dc power inverter, direct labor and the balance-of-system (BOS), which includes the mounting equipment, the electrical wiring and connection equipment, site evaluation, permitting, and design and installation services.
In the example to the left, the contractor offers a 25 kW-DC PV System were DC stands for Direct Current. The DC system size is calculated by multiplying the number of panels by the wattage of each panel.
In this case, the contractor is using a quantity of 100 PV panels and each panel is rated at 250 watts. 1 kW is equal to 1,000 W.
The DC system size is calculated as follows:
( 100 PV panels ) x ( 250 W / panel ) = 25,000 W-DC = 25 kW-DC
The cost of the system is $100,000. Therefore, the average cost per watt DC ($/W-DC) cost of the system is equal to:
( $100,000 ) / ( 25,000 W-DC ) = $4/W-DC
Use the K.I.S.S Principle for an Apples-to-Apples Comparison
Given the solar renewable energy system components are similar in technology and efficiency. A simple comparison of the average dollar per watt cost will help rural small businesses and Agricultural producers understand the value of the investment regardless of a cash purchase or $0 down loan or power purchase agreement.
Contractor #1 Offers: 100, 250 W panels for $125,000
( 100 PV panels ) x ( 250 W / panel ) = 25,000 W-DC = 25.0 kW-DC
( $100,000 ) / ( 25,000 W-DC ) = $4.00/W-DC
Contractor #2 Offers: 84, 300 W panels for $95,760
( 84 PV panels ) x ( 300 W / panel ) = 25,200 W-DC = 25.2 kW-DC
( $95,760 ) / ( 25,200 W-DC ) = $3.80/W-DC
Contractor #3 Offers: 78, 330 W panels for $109,395
( 78 PV panels ) x ( 330 W / panel ) = 25,740 W-DC = 25.74 kW-DC
( $109,395 ) / ( 25,740 W-DC ) = $4.25/W-DC
Contractor #2 at $3.80/W-DC has the best offer, all things considered equal!