Grants, Loans, and Funding Available for Digesters

- Welcome to today's webinar, the C-CHANGE Grass2Gas: Grants, loans and funding available for digesters.

Happy to have you all here.

C-CHANGE is a five-year USDA funded research and extension project led by Iowa State University in partnership with Penn State University and other stakeholders.

So we're excited for today's program.

This is the final installment of our C-CHANGE summer webinar series.

So I wanna thank you all for supporting us and hopefully you'll come back for programming in the future.

I also wanna make you aware of our "C-CHANGE Grass2Gas" podcast.

We released our second episode last week, realizing the potential of cover crops and prairie grasses through RNG.

That is available on the Penn State Extension site as well as Spotify app podcasts, Amazon Music and other places you get your podcast.

And upcoming, episode three, that will release September 11th, is economics of a digester project.

So if you wanna keep up to date with everything, C-CHANGE that we're doing, you can contact us at GrasstoGas@psu.edu and we will add you to the emailing list.

Also, if you wanna keep up with all things energy from the Penn State Extension Energy team, you can join our Penn State Extension Energy essentials team newsletter.

A lot of different topics in there, from solar to energy efficiency and, of course, anaerobic digestion.

So if you're interested in keeping up with that, it'd be great if you signed up.

All right, so this webinar is being recorded.

Anybody who's registered should receive their recording a few days after the webinar.

Also, if you have questions, there is a Q&A button at the bottom of the screen, so put your questions in there and we'll answer them at the end with our Q&A.

And also, if you're having any technical difficulties, you can use the chat to let us know and we will do our best to assist you.

At the end of the webinar, there will be a survey, so we'd greatly appreciate it and it'd be very helpful if you filled that out so we can then improve our programming in the future.

And with all that housekeeping out of the way, allow me to introduce our speakers.

Our first panelist is Mary Akingbasote.

Penn State graduate extension assistant from the Departments of Agricultural and Biological Engineering and International Agriculture.

We have Timothy Peters, NRCS state conservation engineer, and our own Joseph C. Conklin from fellow Penn State Extension energy educator.

So with that, happy to have them all here with us and I'll pass it over to Mary to talk about kind of a broad overview of all the different funding opportunities there are for anaerobic digesters.

- Okay, yes, good afternoon, everyone.

I'll probably share my screen.

- [Dana] No, your screen is not shared, not yet.

And then just click the little icon at the bottom there.

- Yeah.

Thank you. - Looks good.

- So good afternoon, everyone.

Today I'll be speaking on the topic grants, loans and funding, I believe, for digesters.

I want people know that this is the fourth model of a compressive extension curriculum on anaerobic digesters.

I would want to introduce myself, although Matt already introduced me, but I am Mary Tutuola Akingbasote.

I am a graduate extension assistant in the Department of Agricultural and Biological Engineering and International Agriculture.

I have two speakers here with me.

Timothy Peters will be speaking on the USDA EQIP program and Joseph Conklin who is speaking on the USDA REAP program and Small Business Advantage grants.

So the learning objectives for this webinar is to know the grant and loans available in Pennsylvania, the exact time to apply for this grant and to know if you are eligible for the grant.

Before I proceed, I would just like to ask a brief question.

You can drop your answer in the chat box.

Why is funding for anaerobic digester important?

So I'll be reading the chat box to, like, receive any answer.

- No answers yet, Mary. - Yes, okay, yes, okay.

Talked about to capture meeting that allows it for a beneficial way.

Okay, yes.

This is one of the way out for climate change to help us to be able to keep this greenhouse gas intact.

Any other answers?

Exactly, we need a better way to process our sewage.

Yes, they are very expensive.

The cost of the all funds capital.

So anaerobic digester, which is an air tight container that helps where the microbial decomposition of biogas or of microbial decomposition of feeds or cost to put this biogas and digest it requires a significant upfront capital, which is why the cost of digester is expensive.

And we need a good way to, like, fund that digester.

And that is why I'm discussing about ways to fund digesters here.

So which leads me to my next slide, ways to fund digesters.

There are different ways to fund digesters, and I'm talking about four, which is the grant.

This grant is usually gotten from the federal government or the state government.

It's usually issued before or after the construction of the facility, in this case a digester.

It can be through the USDA REAP grant or NRCS grants.

Another type of method to fund digester is through loan guarantees.

In this step of funding mechanisms, the federal government or the state government guarantees the full equipment of the loan, making this loan have lower interest rates and allows lenders to have this guarantee of getting their money back, even when an operator defaults.

In this case, the operator is the applicant of the loan.

The third type of loan, third type of funding I'll be speaking on is the industrial revenue bond.

In this funding mechanism, the government issuer, there is money through issuing of bonds.

Investors buy these bonds and the funds gotten are used as loans to fund facilities.

And in this case, the facility I'm talking about is digester.

This facility remains the property of the owner, the people that issued the bond, in this case, a federal government or the state government, till the loan is repaid.

Like I said, it has lower interest rates.

And last type of way to fund a digester is the private funding.

In a situation whereby the operator already has grants, loan, but the capital is not enough to cover up the cost of the funding.

So it decides to, like, use this private funding.

And private funding is divided into two ways.

We have the debt financing and the equity financing.

In the case of debt financing, it goes out to, like, banks mortgage to get loans to fund digester.

But this is related to the traditional means of funding and thus higher interest rates.

For the equity financing, this is where interested parties come together to own the digester with lieu of partial ownership, whereby a farmer uses a digester as a waste management and gets his fertilizers back from digester.

And an electricity company gets the electricity from the farm.

So they have both partial ownership of the digester.

So I'll be speaking more on five grants, and those three from the federal government and two from the state governments.

And they are the USDA REAP program, the USDA EQIP program, the USDA Value-Added Producer grants, the Pennsylvania Department of Environmental Protection Alternative for Incentive grants.

And finally, the Pennsylvania Department of Environmental Protection Small Business Advantage grants.

The REAP grant is designed to help agricultural producers and rural business reduce environmental cost and consumption.

This current funding is made possible through the Inflation Reduction Act, and it's given over $2 billion US for renewable energy systems and energy efficiency systems.

The people eligible for this grant are agricultural food users and small businesses.

And they must have no outstanding debts, federal taxes, judgment or department.

Due to the competitiveness of this particular grant, it is down to rubrics whereby 25 points is given to energy generated, 15 points is given to previous recipients, as shown in the figure in my slide.

The REAP grant gives both loan guarantees and grants.

For the loan guarantee, it gives 75% of the total eligible costs and 50% for the grant.

In the situation whereby the farmer or the operator wants to get both loan and grants, is eligible to 75% of the total costs.

Like I said earlier, this grant is made possible through the Inflation Reduction Act.

So they've increased the maximum size of the funding, whereby we have from 250,000 US dollars to 500,000 US dollars for the energy efficiency project and from 500,000 US dollars to 1 million for the renewable energy systems project.

This application is currently going and will be ending next month, that's certain about that year.

This is the fourth fiscal year.

The contact for this grant is Rana, and I'm displaying her contact on the screen.

And Joseph will give us more details on these grants.

The next grant I'll be speaking on is the USD EQIP grants.

The NRCS EQIP, they provide technical financial assistance to address natural concerns and carry out on farm practices.

They help agricultural producers provide one-on-one help and financial assistance.

The people eligible for this grant are basically farmers and ranchers who own or rent agricultural land.

And the funding covers 75% of incurred costs and 100% of lost income of starting conservation practice and activities.

Application for this grant is usually continuous, but it is based on the state's ranking dates.

So to apply for this, you have to like check your state and know when to apply.

I'll now be moving to the third grant given by USDA that I'll be speaking on today, which is the USDA Value-Added Producer grants.

This funding, it helps producer and top value added activities to generate new product, create and expand marketing opportunities.

It provides funds for visibility studies and business plans.

For you to be eligible for this fund, basically, you have to be a farmer or a rancher, like a beginning farmer, social disadvantaged farmers, small, medium-sized farmer, as seen in my slide, The funding available for this grant, but the program gives that 1 million.

But for the grant, it gives 75,000 for planning grant and working capital 250,000.

Application of this grant is done through the system for award management.

Pre-registration is also required, but it's absolutely free, and it's always advisable that the application is done a month prior to the end dates.

This grant is currently closed, but the applicants that waited out for the grants, which ended April 16th, 2024, will be expecting their anticipated award dates this September.

So we look forward to the opening of this grant next year.

But the contact for this grant is displayed on the screen.

So now I'll be moving on to the grant given by Pennsylvania Department of Environmental Protection.

And the first one I'll speaking on is the Pennsylvania Department Alternative Fuel Incentive.

This program, it provides funding to schools district, municipalities, non-profit organization that want to transit to a cleaner for transportation.

It's basically support alternative fuels.

The project that priorities are given to in this grant includes the zero emission projects, renewable natural gas vehicles and infrastructure projects, where digester are falls into, and project located in predominantly several environmental justice areas.

The maximum grant is $500,000, but individual applications are capped at $300,000.

Application for this grant is currently going, is done through the Electronic Single Application website.

And it will be ending, the second part should be ending December, 2020.

The last grant, which I'll be talking about, is also from the Department of Environmental Protection here at Pennsylvania, which is the Small Business Advantage grants.

It is given to small businesses to purchase equipment which will help increase efficiency and reduce environmental pollution.

The business or the people eligible for this grant are small businesses with 100 or fewer employees.

The business has to save at least $500 or 20% of the energy use and must be registered in Pennsylvania.

The grant available for these business is within 5,000 to 8,000.

Application is currently going on and will be ending this August.

And the contact based for this grant is as displayed on my screen.

To round up, I'll be giving the summary of all the grant I spoke on, starting from the USDA grant, which offers both grant and loan guarantees.

For the grant, it gives 50% of the total eligible cost.

For the loan guarantee, it gives 75% of the total eligible cost.

And when an operator wants to have both grant and loan, is eligible to 75% of the total cost.

And this application is currently going to be ending in September 30, and that is next month.

For the EQIP grant, the application is continuous and it gives 75% of the incurred cost and 100% of the lost income on certain conservational practices and activities.

Like I said, it is a continuous per application that is based on state ranking.

For the USDA Value-Added Producer Grant, it gives 75% for plan, that is for visibility studies.

And the working grant is $250,000.

The application is currently closed, but the people that applied earlier this year will be anticipating their reward date, which is September, 2024.

For the Pennsylvania Grant, which is the Alternative Fuel Grant, it gives a maximum grant of $500,000, but for individual, the maximum cap is $200,000 and is currently going on, so you can apply for this.

For the Small Business Grant Advantage program, it gives a maximum grant of between 5,000 to 8,000 and the ending is August.

So these are some of the reference to the information I provided in my slide.

I would like to acknowledge my funding source, C-CHANGE, the USDA NIFA and my group members.

I would also like to say a big thank you to all the attendees, and I'll be passing this to Tim to discuss more on the USDA EQIP Grant.

Thank you.

- Okay, good afternoon.

Let's see, I need to share my screen.

I'm Tim Peters, I'm the state engineer for NRCS in Pennsylvania, and I am a proud graduate of the Penn State Ag and Bioengineering program, a couple of years ago, more than a couple years ago.

I started my career as an intern with NRCS back in 2002.

And I bounced around the state to various offices and worked in various positions.

And I spent a lot of my time in Western PA with NRCS.

But for the past six years, I've been in our Harrisburg state office.

Now, as Mary mentioned, NRCS, we have the EQIP program and that's where my slides are gonna mainly focus today.

We don't have a program that's specific to digesters, but digesters do fit nicely into the EQIP program.

So it's important to understand that all work with NRCS is voluntary and it's confidential.

NRCS has staff that will work with producers at any scale in both rural and urban environments.

And NRCS employs natural resources professionals such as silicon conservationists, biologists, foresters, engineers.

And these professionals strive to balance farm productivity with conservation benefits.

And the staff at NRCS can help to develop a conservation plan for producers.

And that conservation plan would help to identify potential environmental improvements that could be made on the farm and provide options for addressing them.

Now, for projects that move towards a contract and are awarded a contract, NRCS would then provide an incentive for implementing a practice.

And Mary mentioned the equipment sounds quite a bit.

I'm gonna get into that a lot more in my next couple of slides.

Now, digesters fall under- - I'm sorry. - Yes.

- [Dana] Your presentation hasn't been shared.

- Oh, it hasn't?

Oh, I'm sorry.

I did that earlier as well.

Let me hit the share button now.

Thanks, Dana, does that look better?

- Yes, great, thank you. - All right, sorry about that.

So let's see.

So for NRCS, the incentive we would be providing for digesters would fall under practice 366 for anaerobic digester.

And NRCS would be able to provide the technical assistance, which could include engineering site plans and work with various manufacturers' requirements or systems to incorporate those into a site plan for that producer.

And the technical assistance would also include providing construction oversight to ensure that the work is being completed according to that design, and also document, that the work is being completed according to that design.

So NRCS is providing financial assistance, but also the technical assistance to implement these projects.

Now, just a quick history.

NRCS started as the soil conservation service to address soil erosion following the Dust Bowl decades ago.

And the agency has since evolved.

And now NRCS provides assistance for addressing resource concerns such as soil, water, air, plants, animals and energy resource concerns.

Now all of our work that we do is gonna be in response to at least one of those resource concerns.

And when a producer has an interest in implementing a digester, that could typically be part of a system that is addressing a water quality, air quality, or for greenhouse gases or an energy resource concern.

As Mary mentioned, EQIP, it is the main vehicle that NRCS uses to drive our voluntary conservation.

It provides funding for the financial and technical assistance to producers for these projects.

And NRCS is gonna work one-on-one with the producer to develop a conservation plan that would outline the conservation of practices and activities that would be used to help solve that farm's resource concerns.

Producers can then implement the practices and activities such as an anaerobic digester.

Now for fiscal year 2024, which runs the beginning of October through the end of September, for NRCS in Pennsylvania, we are gonna be obligating nearly $60 million in EQIP financial assistance.

IRA funding, targeting the climate-smart practices for agriculture and for reducing greenhouse gases, took what we had been obligating at around 25 or 30 million a year to that 60 million that we see this year.

So a big increase from IRA, specifically for climate-smart practices.

So the EQIP IRA funds are specifically intended to target practices from the NRCS Climate-Smart Agriculture and Forestry Mitigation activities list, the CSAF list that we have.

These IRA funds are required to be used for the practices on the list and other practices that could support the practices on the list.

Anaerobic digesters are practiced on the climate-smart list, making it eligible for those extra equipped funds, those extra IRA funds that are targeting the climate-smart practices.

So I mentioned this year's funding that we are obligating, but we are expecting those numbers to increase even more.

In future years, we're expecting to have around 30 million of our general EQIP that would be used for water quality and for other resource concerns.

But then we're expecting that that IRA funding, that extra portion of EQIP, could increase to around 60 million per year to target those climate-smart practices.

Now NRCS, we promote a systems approach.

So farmsteads would tie into pasture, which would tie into cropping and the nutrients being applied on those crops.

So either before producer contracts to do a practice like a digester, or potentially as a first step after a contract has been signed, NRCS would work with that producer to complete a Comprehensive Nutrient Management Plan, a CNMP.

A CNMPs take a look at the full operation to identify areas where improvements can be made and then recommendations and options are presented to that producer for addressing any of those identified resource concerns.

CNMPs are gonna have three main parts.

The first part's gonna be a conservation plan, the second part's gonna be a nutrient management plan.

And then the third part's gonna be an engineering inventory and evaluation.

And the three parts all tie together.

They all jive together, and typically projects that already have an up-to-date CNMP are gonna rank higher for funding than projects that don't have a CNMP.

So eligibility, what and who is eligible?

Well, NRCS, most of our focus is for ag producers and for the EQIP program, for a project to be eligible, the land has to be considered an ag land with commodities such as livestock or forestry products that are being produced.

This could include crop land, it could include ranch land, it could be pasture or non-industrial private forest land or other farmer ranch lands.

There's no minimum acreage requirements and sites will be ranked based on resource concerns that would be addressed.

And then for producers, who is eligible?

Well, anyone with control of that land and currently managing it for agricultural, forest or livestock production.

Now, producers must have established farm records with the Farm Service Agency.

And if a producer doesn't have that, NRCS field staff can help direct producers to FSA to help make that happen.

And for incentive assistance, the gross income for producers to be eligible, they have to have a gross income less than $900,000 per year.

As Mary mentioned, applications for EQIP are accepted by NRCS on a continuous basis and throughout the year.

But there are periodic cutoff dates to evaluate, rank and prioritize applications.

The cutoff dates change every year, and the local NRCS field staff could communicate those deadlines to producers.

Applications can be submitted in person, they could be scanned and emailed.

They could be faxed or mailed directly to the USDA service center, the local USDA service center.

And applications, if you want a hard copy, would be available at the USDA service center and also on the PA NRCS website.

Now, I wanted to mention, applying early increases the likelihood of being offered a contract.

So you get those first cutoff dates, those first ranking rounds.

You're more likely to get funded if your application's in by that date.

Now my slide says we have 46 field offices, but in reality, NRCS now has 47 field offices in Pennsylvania.

Missing from this map is Philadelphia which commenced as a service center last year.

Many counties have their own service center while some counties share with another.

And the link here that I have on my slide, I can share this later, would take you to a website that would direct you to the local service center for your area.

And connecting with the local field staff is important.

They can assist with getting ready-to-apply for a project and they can help with each step of the process.

If the producer has any questions, they're there to help and guide producers through that process.

So a big question is how much funding can be offered via incentives for a completed project?

And Mary mentioned 75%, and that's mostly true, but there are some caveats to it.

Incentives are gonna vary from project to project, but they would be based on a payment scenario.

Scenarios are developed and updated at a national and regional level, and payment schedules are available at the link here.

So anyone can go and see the published pay scales that we have for providing incentive payments for specific practices.

Incentive payments are gonna be based on a typical scenarios, associated quantities and costs which get broken down into a unit cost.

So typically, NRCS incentives target about 75% of the installed cost, but this can vary tremendously depending on project contractor and the specific site.

So ahead of time, a producer's gonna know how much incentive they're getting.

We don't collect bills after the fact.

We don't pay a straight up 75% of whatever bills are submitted.

We provide an incentive.

And if a producer chooses to work with a cheaper contractor, they may save some money and that percentage may go up, or they may choose to work with a contractor that they're more comfortable with or does maybe a little bit better detailed work, and the costs could go up and then the corresponding percentage could go down.

Now, just for example, a concrete mineral storage may pay $1.50 or a dollar 50 per cubic yard of storage, depending on that tank size.

And as the size goes up, the corresponding incentive would be less.

And as the size goes down, the corresponding unit cost could go up, so.

Now anaerobic digesters are currently based on just the number of digesters being installed.

So there's no cubic feet or a unit cost associated to that.

It's just one flat payment for a digester.

And unfortunately, well, at least in my opinion it's unfortunate, the farm bill, the current farm bill limits incentives for the EQIP program over the entire life of a farm bill to $450,000.

So this is a fraction of what the payment scenario would've been for a digester based on NRCS's payment scenario.

But the farm bill does limit us to paying $450,000 to one producer.

Now there is work on a new farm bill.

I know there are draft versions out there by the House and Senate, but I haven't really heard a lot of rumblings about when the new farm bill would be approved or what the final language would be.

So I'll be curious if that number changes or if there are any differences for that limit.

But right now, the incentive limit from NRCS for EQIP would be limited to $450,000 due to the farm bill.

So when working with NRCS, there's no commitment on the producer until a contract is signed.

So producers can get preliminary ideas from NRCS and NRCS engineers can do an inventory and evaluation prior to anyone signing on the dotted line.

And this would give producers a good concept of what can be addressed and the options of potential out-of-pocket costs that could be incurred before a contract is signed.

Once a contract is signed, NRCS engineers can assist with completing a design package.

The approved design would then be provided to that producer.

And just a note here, by policy, NRCS isn't able to do permits, so that would be the producer's responsibility, but we would try to provide as much information as possible to assist the producer in completing that permit.

The producer then would select their preferred contractor and NRCS would provide onsite inspection during the construction to ensure and document that that work is being completed correctly and according to the design and specifications.

Finally, the incentive would be provided after the project is completed.

So the project would be certified by NRCS engineers and then following that, the incentive could be provided.

And that is not paid back.

That is a straight up incentive payment.

Now I also wanted to mention that PA NRCS, we work hard to partner with other conservation agencies and entities, and often our NRCS offices are partnering with local conservation districts too.

I know it wasn't mentioned as part of Mary's slides, but many local NRCS field offices are able to work with conservation districts.

And the conservation districts do have the newer agricultural conservation assistance program, which is administered by the State Conservation Commission.

And there's significant funding that's been written into law for the State Conservation Commission to administer that funding through districts.

And the local NRCS field office can help point producers to district staff and hopefully help to maximize funding between those programs and other programs to offset the out-of-pocket costs for producers.

Now if you have more questions about PA NRCS financial assistance, there's more information on this website.

And you're certainly welcome to reach out to me and I can point anyone to their local field office as well.

So I guess we're probably gonna save questions until the end, but that concludes my slides.

Thank you, Mary.

- All right, thank you, Tim.

That was informative.

You sort of ended yours how I'm gonna end mine.

So we're in the same train of thought.

Let me get my screen shared here.

Are we good?

Dana, Matt? - Yeah, you're good.

- All right, thank you.

That, I always say that is the most stressful part of my day 'cause I'm afraid of messing it up all the time.

But, all right, so my name is Joseph Conklin.

I am an extension educator here with Penn State Extension and the College of Ag Sciences.

And I am gonna give another overview, a little bit deeper overview of REAP and some of the state programs as well along with some of the IRA tax incentives that anaerobic digesters are eligible for.

You know, anaerobic digesters are one of the more costly renewable energy projects, one of the more time consuming when it comes to planning.

So these are the types of projects that you wanna be serious about before you get involved in them.

You know, putting up a farm windmill is, you know, is an easy task compared to perhaps an anaerobic digester.

So in recognizing that the federal government through the Inflation Reduction Act of 2022 has allotted funds and tax incentives for these types of projects and other types of projects.

So like Tim mentioned with the EQIP program, these incentives and these dollars aren't just for anaerobic digesters, they're for a lot of other renewable energy projects as well.

So keep that in mind as we go through some of my slides here.

For instance, the REAP program is for multiple different things as you'll see, and anaerobic digesters is just one of those.

So, all right, so the REAP in Inflation Reduction Act, the Inflation Reduction Act increased funding to REAP.

And as Tim mentioned, probably likely will increase funding to EQIP as well in the coming years with the objective of investing in more farms and small businesses.

Grants, a significant thing that happened with grants for these types of projects was, I believe it was set at 25%, then it jumped to 40% and now it's up to 50%.

There's a caveat there, which we'll get to in a second here for anaerobic digesters.

But that has really created some interest in these programs.

I believe at the state level here in Pennsylvania, they were dealing with dozens of projects a year.

Now they're dealing with hundreds because of this increase in the percentage.

Renewable project grants are up to $1 million.

The grants for the energy efficient improvements are up to half a million.

I believe somebody did ask that question in the chat.

There is a caveat if you're combining EQIP and REAP funds though, you would've to ask USD about the particulars of that.

So what does REAP offer?

It does offer grants, it does offer loan guarantees and it offers a combo up to a certain percentage of the cost.

So who is eligible?

Well, if you're gonna be doing an anaerobic digester, you are, you know, likely an agricultural producer, so you would be eligible.

But if you're interested in some of the other programs, if, you know, you have colleagues or whatever that aren't involved in agricultural production, they could also be a rural, small business, like a car dealership, if they wanna put up a solar array on the roof or something of that nature.

So for the sake of this argument though, if you're gonna do an a anaerobic digester, you're likely an agricultural producer.

So types of REAP projects, they're twofold.

Either renewable energy systems, which anaerobic digesters falls under, or an energy efficiency improvement project.

So you can see I kindly highlighted anaerobic digester there.

That was my skill of the day, technology-wise.

Additional requirements, what is important, and I think Tim mentioned this when it comes to EQIP, if you think you're gonna do this project, do a project, an anaerobic digester or any of the other projects that would qualify for REAP, the first thing you need to do is you need to contact the USDA Rural Development Office and start the process with them.

Understand what they're gonna need, understand the paperwork what they're gonna need, understand some of the caveats in the different, you know, things like what qualifies and what doesn't qualify.

Does labor qualify for this or are you only covering equipment?

That those types of questions.

So funding requirements for REAP, again, the renewable energy systems, what we're talking about here, the maximum grant request would be $1 million for this type of project.

Energy efficiency improvement projects, which isn't this topic but would be a half a million dollars.

So you know, if you've done any research on the cost of an anaerobic digester, you're gonna be near in a million plus depending on the size.

The maximum federal grant share.

So we did discover a caveat recently, actually about 10 minutes before this webinar, that it appears as though an anaerobic digester at a base is eligible for about a 25% grant.

But if it's in energy community, which I have a map of coming up, it is eligible for the 50% full grant.

Matt, I can't tell if you can do this, but if you could put that fact sheet that you sent me earlier into the chat.

I was looking at a different fact sheet than Matt and Matt was, right, I was wrong, so.

And again, eligible project costs and ineligible project costs, what you're gonna find for a lot of these renewable energy contractors is they might even have a person on staff that helps out with these REAP applications.

So I've seen some questions in the chat about who can help.

When it comes to REAP, the first thing is is to contact USDA, but secondly, when it comes to REAP at least, they do have organizations out there now that will help with completing the application.

And in some instances, I know this is particularly true with solar and wind, those developers, those businesses, have people on staff that assist in getting those applications completed.

So again, funding requirements for the guaranteed loan, that is a low interest loan that does raise up above the million obviously to the 25 million.

That would be a rather large anaerobic digester.

But I think we do have one on the western side of the state that is nearing or has eclipsed that mark at this point.

Here is an example, this is before the IRA, this is right off of USDA's presentation, but one megawatt anaerobic digester and you know, they got a REAP grant for $100,000 with a REAP guaranteed loan of $2.65 million.

Now you could expect that likely now with the new provisions through the IRA that that $100,000 REAP grant would be more.

But if you are interested in putting one of these things in, you know, it would behoove you even for $100,000 to fill out the application, right, towards that project.

So there is a OneRD Guarantee Loan program guideline.

What that means is this has to be submitted online and usually that OneRD Guarantee Loan is the template for several different applications, if you will.

How to apply?

If you just Google USDA REAP, because if you don't Google USDA REAP, you might come up with Pennsylvania REAP, which we'll talk about in a minute here, but USDA REAP, it'll bring you up to the USDA website.

And the contact information for the state coordinator is Rana Pfeil.

And I believe Mary mentioned her earlier, but Rana is one of the initial points of contact as Tim mentioned, USDA service centers, especially if they have a rural development arm there.

I know I live in Westmoreland, we have people in that office that can assist and point the direction there.

So that's REAP in a nutshell.

I'm gonna move on here with the IRA tax incentives, And I'm pushing on time, so I'm gonna start moving.

As a disclaimer, we are not tax advisors.

You should consult with a tax advisor if you are going to go down this road, especially if it's a million dollar project, right?

The IRA does offer a broad range of incentives to encourage renewable energy, really broken down into the ITC and the PTC.

So the investment tax credit and the production tax credit.

What we're seeing for anaerobic digesters or for solar or wind or whatever these projects are, most smaller businesses are taking the investment tax credit, which in this case is 30% if it's under a megawatt as a base credit.

If it is above one megawatt, there are some conditions.

It's a 6% base credit, plus you can get the other 24% with prevailing wage, so you'd have to talk to your contractor about that.

I will say when it comes to the tax incentives, I kind of skipped over this real quick, but you must begin construction by December 31st, 2024, right?

So in like three or four months, you gotta start that project if you haven't started it already.

But there is some help on the way, and I'll get to that here.

The IRS, it has released guidance for a new incentive program for anaerobic digesters.

They released that out in May of 2024.

They just finished the comment period last week.

So there will be guidance to come.

I would expect it to be very similar to the 30% base credit.

Going back a slide, you might be eligible for a 10% bonus if your project is an energy community.

And you can see here in Pennsylvania that is like 66% of the state.

So jumping back to REAP in the anaerobic digesters, you would be eligible for a 25% grant in most of the southeastern part of the state, which is a problem around Lancaster.

But if you are in the blue, the yellow or the orange, you would be eligible for that full 50%.

Again, if you have any questions, please contact Rana Pfeil at the USD office.

She can further clarify these issues.

And last but not least, we'll talk about some programs through DEP, the Pennsylvania Department of Environmental Protection.

And as Mary mentioned, they do have a small business advantage grant.

When it comes to these types of projects being million, 2 million, maybe $3 million, cobbling is always good.

So you know, cobbling one grant, one loan, maybe you're cobbling another grant, cobbling a tax incentive to make these things work.

So here in Pennsylvania, this is from last year.

The window is gonna open for this next round this month, right?

It should open by the end of this month.

So with any luck, some of these numbers may have increased.

But for a small business advantage grant, when it comes to anaerobic digesters, you're depending on where it's located, looking at least this year, anywhere between a 5,000 to an $8,000 grant incentive.

Now that's a reimbursement, so you're not gonna get a check up front, but that would be a reimbursement.

And you know, it's equipment only, not your labor installation.

But you know, that $1 million project, I'm sure, you can find $8,000 worth of equipment to come up with.

So again, that reopens.

I don't have the new numbers for you, but I looked this morning, they weren't there.

Another program is the Pollution Prevention Assistance Account and it's a combination program between DEP and DCED.

And that is a loan program, I think it's 1 or 2% loan interest.

It is a revolving loan fund.

And you would apply again through the state, through that.

And that is an electronic application as well.

2%, so it's a 2% fixed rate with a 10-year maximum term.

So all these slides and all these links will be available to you at the end of this.

But for more information, you can talk contact, the small business Ombudsman office at that phone number there, and the director there is is Samantha Harmon.

So with all that being said, I will end where Tim ended.

And you know, I was kind of looking at the energy efficiency aspect, but you know, there's a whole other aspect to anaerobic digesters with manure management best practices.

And as Tim said, contacting your local conservation district for ACAP, the Agriculture Conservation Assistance Program might be eligible, or depending on your conservation district, a conservation excellence grant.

Especially down the Chesapeake water area.

Those are relevant.

And PDA also has a REAP program, but it's called PDA REAP and it's a tax incentive program, not a grant program.

So with that, I guess that's all I have on my end.

The one other thing would be, you know, revenue streams selling that electricity back in SRECs.

But it is a big puzzle, it's a big ticket item.

So I'm sure at some point, we'll talk about the revenue streams in another webinar.

Maybe not, what do you think, Matt?

- Actually part of that is gonna be in our next podcast talking about the economics of digesters with William Lazarus, who has a tool that factors in all the different revenue streams you can kind of acquire with digesters.

- All right. - Yeah.

- I'm glad I didn't go down that rabbit hole then.

All right, thank you.

I'm glad I asked that question.

Tune into Matt's podcast for some revenue diversification advice.

- All right, with that, I think we'll open it up for the Q&A, and we have a few good questions here.

So I think one of the first ones I'm going to open up here with is, so this, for the EQIP program, for the $450,000, if you've already applied to that program, got in that amount, is it the new farm bill that this will kind of start over and you can apply again?

Or when does that kind of allow you to reapply for the EQIP program?

- My understanding is that the new farm bill would restart that clock and so that would open up financial incentives available again.

Now I have heard some rumblings, just rumors that if the new farm bill doesn't get signed in the near future, there could be some sort of accommodations or extension made to the existing farm bill to open up some additional incentive for those that have already maxed out 450.

So I don't know if that's potentially seriously on the table or not, but I have heard that there's interest at some level for something like that.

So I don't have a solid answer there just 'cause I don't know, but the new farm bill would reset that.

- All right.

Okay, and one other question for you here is, so could you kind of clarify how a private technical service provider can work with the EQIP program?

Yeah, and how that kind of functions?

- Sure, so NRCS is allocated technical assistance funds with all the financial assistance dollars that come, that are obligated for projects.

Each state can decide how they prefer to use those technical assistance dollars.

Within Pennsylvania, we are pretty well staffed with engineers and we typically would do the site designs ourselves.

And so we use technical service providers, TSPs, that are registered through the NRCS TSP registry.

They've been approved, we'll use them for planning and certain activities.

The CNMPs that I mentioned are often developed by technical service providers.

But it's different in other states.

Where other states may use technical service providers, they may not have engineers on staff and that may be how they get all their engineering work completed, design work, inspection work.

So it really varies from state to state.

In Pennsylvania, we have a lot of on staff engineers to do site plans, but we do have the opportunity to use TSPs in certain aspects.

Does that answer the question, Matt?

- Yes, I believe so.

The next question I think I see here is also for EQIP.

So we see this model kind of starting with community digesters, or it'd also be referred to as the hub and spoke model where instead of a farmer owning a digester on farm, you have a community digester that farmers would ship their manure to.

And that would run the digester and then they would receive a, you know, clean or a more kind of refined manure that can be better applied.

Would that be eligible for the EQIP program if a farmer was sending their manure offsite or?

- There's some nuances there that I would really prefer our programs people answer, but I would say that there absolutely are opportunities for incentive to be provided in some way through EQIP for that producer.

So along with the digester, there are a lot of components that go into these systems to make it work.

There's the collection and the stores that happens ahead of time and transfer systems.

And so, you know, EQIP can certainly be applied to that on each home farm that's sending to the main digester or the community digester.

But then I also believe there could be opportunity for community digesters to receive EQIP funding too, but that would have to be worked through our programs team and they would know the rules about that.

- Yeah. - Better than I would, so.

- Okay, and this might also be a programs team question, but one person was also curious about with equip and contracting work, can they, say, submit internal labor as part of the cost?

Say if they wanted to take on some of the work themselves.

- So with EQIP, we don't collect any bills.

There's nothing submitted to receiving that incentive payment.

So we would provide an incentive payment and that would be provided once the project is completed and certified by the engineers.

So if a producer is able to do some work on their own, they're certainly able to do that and save their out-of-pocket costs.

It's totally up to the producer, but at the end of the day, we're gonna offer the same incentive to that producer, whether they did the work on their own, whether they got a cheap contractor or whether they got an expensive contractor.

And we even allow producers to choose if they wanna bid this out, how many bids they wanna get.

They don't have to, they can.

So I would always encourage that, to getting the best cost, but it's not a requirement of our program.

Totally up to the producer, and the incentive's gonna be the same as long as that final product meets standards and specs and is the size that was planned.

- Okay, and I did receive a clarification on that one question I asked about TSPs.

So it's reading the NCRCS timeline is long bogged down for the foreseeable future, can parts of the CNMP be done by private TSPs, certified NMP, INE, et cetera, and not affect the ability to be ranked as high for funding?

- Can you say that again?

- Yeah, so they're trying to reduce the NRCS's timeline and they're suggesting can parts of the CNMP be done by private TSPs?

- Absolutely, yeah.

And so there are DIAs or design and implementation activities and then there's CPAs, conservation project activities, I think, and seamless conservation evaluation management activities.

And so those are all activities that, and there are certain ones that would apply to developing a CNMP and we do contract with TSPs to complete those, to develop a CNMP.

- Yeah. - So the answer is yes.

- Yeah, and would that affect the ability to be ranked as high for funding?

- Whether the CNMP is completed by a TSP or not by a TSP, it wouldn't affect the ranking.

Just having a completed CNMP would be what's important.

So if that expedites getting a CNMP faster to a producer, if the TSP is able to do it very quickly and the producer's coming up against a deadline or ranking deadline with NRCS, then certainly that would help having that CNMP.

But it doesn't matter who does it, as long as the CNMP's in place, the ranking would be there.

- Okay, and I think I see another question here about, I think this is for just general programs for EQIP and REAP and these kind of programs, but kind of what's the timeline for getting a project approved through these different programs?

So I'll give you a break, Tim.

We can start with Joe, what kind of is this timeline for REAP?

- Well, probably same as NRCS, REAP is on a quarterly, actually it's six times a year.

It went from a quarterly to six times, I believe, application process.

So they're trying to push those out as quick as possible.

But you know, every application is gonna have, you know, a nuance and, you know, you might have to resubmit, especially with the complexity of some of these projects, right, on the REAP side.

But I can't speak to the state side.

My understanding on the state side is the Small Business Advantage Grant is relatively straightforward and they're relatively quick on getting those grants out.

But they are small dollar grants.

When it comes to the PPAA loan, on the other hand, that they're gonna do their due diligence on a loan for tens of thousands of dollars to make sure that that project is viable.

So that would take more time.

- Okay, and Tim, kind of what does this timeline kind of look like for the EQIP program?

- That's a good question and, you know, it's not my world being an engineer, it's more on the program side.

I don't think that there's a lengthy time in between when a contract's awarded and when a project could start moving forward.

I think the longer timeframe would be getting a design in place.

So NRCS, we wouldn't start doing the site designs until after a contract's awarded.

And there is a time that it takes either for NRCS to do that design work or if a consultant's doing the design or a technical service provider, there would be time involved there too.

So that's probably a longer waiting period.

- Okay, and I think the final question I'll field here is this question about what if your land is under some sort of easement from the state or county, will these construction projects come into conflict with that easement?

- For me, I don't know.

And it probably would depend on the easements.

There are a variety of easements out there, and I think that would be a case by case specific question that needs to be asked to programs team and whoever the easement's with, would be my answer.

- Okay, yeah, no worries.

That's definitely a tough question.

But anyways, with that, it looks like we are at time.

Definitely got a lot of great participation from the audience, definitely a lot of great questions.

So we definitely appreciate that.

I also wanna thank our panelist.

A lot of great information, a lot of, you know, knowhow on getting through these programs and how to make them work, and definitely a good overview of what's available for people who are considering a digester.

So I appreciate you all coming on.

And yeah, with that, this is the end of our summer webinar series.

We will be having more program in the future.

So I wanna thank you all for joining this webinar and I hope you'll join us in the future.

With that, I think we'll call it a day, and you all have a good one.