The US Department of Agriculture (USDA) is investing US$207 million in renewable energy and domestic fertilizer projects to lower energy bills, generate new income, create jobs, and strengthen competition for US farmers, ranchers, and agricultural producers. Many of the projects are being funded by the Inflation Reduction Act, the nation’s largest-ever investment in combating the climate crisis.
The announcement was made by USDA Secretary Tom Vilsack at the 105th annual American Farm Bureau Federation convention in Salt Lake City, Utah. This funding advances the Investing in America agenda to grow the nation’s economy from the middle-out and bottom up, create jobs, and spur economic growth in rural communities by increasing competition in agricultural markets, lowering costs, and expanding clean energy.
“President Biden and USDA are ensuring farmers, ranchers, and small businesses are not only a part of the clean energy economy, but directly benefitting from it,” said Secretary Vilsack. “The investments announced will expand access to renewable energy infrastructure and increase domestic fertilizer production, all while creating good-paying jobs and saving people money on their energy costs that they can then invest back into their businesses and communities.”
The funding will pass through the Rural Energy for America Program (REAP) and the Fertilizer Production Expansion Program (FPEP).
REAP
REAP provides grants and loans to help agriculture producers and rural small business owners expand their use of wind, solar, and other forms of clean energy and make energy efficiency improvements. These innovations help them increase their income, grow their businesses, address climate change, and lower energy costs for American families.
USDA continues to accept REAP applications and will hold funding competitions quarterly through September 30, 2024. The funding includes a dedicated portion for underutilized renewable energy technologies.
The REAP awards total US$157 million for 675 projects in 42 states, including more than US$94 million from the Inflation Reduction Act. The REAP program delivers on the Justice40 Initiative, which aims to deliver 40% of the overall benefits of certain federal investments to disadvantaged communities that are marginalized by underinvestment and overburdened by pollution. These investments will cut energy costs for farmers and agriculture producers that can instead be used to create jobs and new revenue streams for people in their communities. For example:
- In Colorado’s La Plata County, a grant for US$187,000 will install a solar array that, through a power purchase agreement, will benefit a wastewater treatment facility. The facility is expected to save US$58,000 per year, bringing down costs for residents. It will replace 652,923 kWh, or 98%, of the plant’s energy use per year, which is enough energy to power 60 homes.
- A soybean farm in Pennsylvania will install a 1248-kW solar photovoltaic system that will save US$262,000 per year. These funds can be reinvested to grow the business or create more jobs for the local community. It will also save the farm 2.814 million kWh per year, which is enough energy to power 259 homes.
- Sturgis Meats in Meade, South Dakota, will install a refrigeration system that will save US$32,000 in energy costs per year. It will also save the company 255,000 kWh per year, which is enough energy to power 23 homes.
FPEP
FPEP provides grants to independent business owners to help them modernize equipment, adopt new technologies, build production plants, and more. Funding helps boost domestic fertilizer production, strengthen competition, and lower costs for US farmers.
The Biden-Harris Administration and USDA created FPEP to combat issues facing American farmers due to rising fertilizer prices, which more than doubled between 2021 and 2022 due to a variety of factors. Factors included the war in Ukraine, a lack of competition in the fertilizer industry, and more.
FPEP is part of a broader effort to help producers boost production and address global food insecurity. It is also one of many ways the Administration is promoting fair competition, innovation, and resiliency across food and agriculture while combating the climate crisis.
Projects financed through FPEP will help US farmers increase independent domestic fertilizer production. Today’s investments include US$50 million in seven projects in seven states. President Biden committed up to US$900 million through the Commodity Credit Corporation for FPEP. Funding supports long-term investments that will strengthen supply chains, create new economic opportunities for American businesses, and support climate-smart innovation. For example:
- ARE Properties LLC in Nebraska will build a fully automated fertilizer facility designed to manufacture custom products based on the results of plant tissue and soil samples. All equipment in the facility runs on natural gas with the long-range strategy to retrofit the facility for alternative energy sources in the future.
- Biogas Corporation will purchase and install a new anaerobic digestion facility in Monroe County, North Carolina. This project is expected to create 19 additional positions. The new facility will produce 50,000 tons (45,359 tonnes) of organic fertilizer and ammonium sulfate annually, all available to farming operations or resellers supporting local producers. Through the unique combustion process, the facility projects to generate 55,000 MW of clean energy per year to be purchased and distributed through Duke Energy Carolinas.
Since the start of the Biden-Harris Administration, USDA has invested more than US$166 million in 40 projects nationwide to boost domestic fertilizer production through FPEP. USDA has also taken steps to support producers in leveraging these tools through nutrient management assistance and climate-smart management practices. During that same time, USDA has invested more than US$1.6 billion through REAP in 5457 renewable energy and energy efficiency improvements that will help rural business owners lower energy costs, generate new income, and strengthen their resiliency of operations.
