Solar grants offer solution to energy costs (opinion)
February 14, 2023
Attention, rural businesses, municipalities, and nonprofits: The U.S. Department of Agriculture has announced a solution for your skyrocketing energy bills.
Grants through the USDA’s “Rural Energy for America Program” have recently doubled due to the Inflation Reduction Act, and rural businesses can use them to implement renewable energy systems such as solar power, which have been proved to slash, if not eliminate, monthly energy bills. Meanwhile rural municipalities and nonprofits are eligible for the USDA’s Community Facilities Direct Loan & Grant program.
Projects in rural underserved areas — like many parts of Berks County — are being prioritized.
Total REAP funding has nearly doubled from $300 million to $550 million for 2023, and maximum individual grant amounts have increased from $500,000 to $1 million. The maximum federal grant share is also increasing from 25% to 40% of total project costs.
Combining these grants with the new 30% solar tax credit and additional tax credits for low-income and energy communities in the Inflation Reduction Act will result in major – and immediate – energy cost savings for almost all applicants as soon as the switch to solar is flipped.
Here is an example of how this would work. Say your business spends $1,000 a month on electricity bills. A typical solar system for a business of this size could be about 140 kilowatts and would cost about $300,000 or less to install. A REAP grant could cover 40% of this amount, the solar tax credit an additional 30%, and a low-income or energy communities tax credit an additional 10%, in addition to the 100% depreciation in the first year.
All those tax benefits equate to an almost 100% reduction from the cost of system in the first year — quite a bargain. And then those solar panels would go on to save that business big money each month. Countless businesses have almost eliminated their energy bills altogether through the power of solar — saving tens to hundreds of thousands each year. (Note: A business will still need to pay the demand charges of their bill, so it will not be eliminated entirely.)
Many businesses and nonprofits may wish to learn more about this rare opportunity but do not know where to begin. That’s why the Pennsylvania Solar Center — a nonprofit committed to providing trusted guidance to all Pennsylvanians looking to go solar — started its free G.E.T. Solar and G.E.T. Solar Communities programs. G.E.T. Solar provides businesses, nonprofits and community property owners with free technical assistance and financial guidance on going solar, answering any questions – like whether your company is a good candidate for solar, what kind of financing programs are available, and more.
The REAP application deadline is March 31. The PA Solar Center will be hosting a free Zoom webinar on this grant program, as well as the Community Facilities program and tax credit opportunities, on Friday, February 17, from noon to 1:15pm. The Center will also be discussing its G.E.T. Solar Communities programs and its next Request for Application deadline from interested community leaders during the webinar. G.E.T. Solar Communities works with community leaders to engage their businesses and nonprofits to explore solar.
If your company, municipality, school, or nonprofit has been hit hard by soaring energy bills, you might want to at least learn more about going solar. There may not be a better time to flip the switch.
Please note that rural electric cooperatives and municipal-owned utilities do not abide by the same rules as the investor-owned utilities that are governed by the state Public Utility Commission. Many of them have restrictive rules or large fees for installing solar energy, which may inhibit or reduce the significant savings that other Pennsylvanians can enjoy through solar that are amplified with the USDA and IRA benefits for solar and storage.
Leo Kowalski is the program director for the nonprofit Pennsylvania Solar Center. Learn more at www.pasolarcenter.org.