On-farm renewable energy and biofuels production can help farmers and ranchers establish economic and environmental sustainability and combat climate change, as Minnesota Farmers Union member and fourth-generation farmer Jim Falk told the House Agriculture Subcommittee on Commodity Exchanges, Energy, and Credit during a hearing held last week.
The hearing, entitled “On Farm Energy Production: Impacts on Farm Income and Rural Communities,” gave Falk and several other farmers the opportunity to discuss their experiences with energy production and recommend policies that could support their efforts. Farmers, on average, dedicate
15 percent of their budget to energy, far more than the 4 percent that most Americans spend.
Like most farmers, Falk was facing significant energy costs; powering his seed cleaning facility was running him about $14,300 every year. To offset their energy consumption and spending, he and his wife installed a wind turbine and a solar system, which collectively now produce about 73.7 percent of the seed plant’s power needs. “We wanted to do our part to offset our carbon footprint and power the majority of the seed plant from renewable energy produced onsite,” Falk told the subcommittee. “In addition, as the cost of power continues to rise, there should be a cost savings for us after the equipment is paid for.”
Though both energy systems have benefitted Falk’s operation, he has had much better luck with solar energy. “Our turbine, in our local wind resource, is under performing in comparison to what was projected,” he noted, adding that it also “suffered damage from a severe weather event in 2019, and it took about seven months to complete the repairs.”
Falk has not faced such difficulties with his solar power system. “Our solar system is performing above what was projected as our likely output of power per year,” he said. On top of that, “repair and maintenance issues for a solar system are minimal compared to a wind turbine. . . in my opinion, solar is the safer investment for farmers who wish to install a renewable energy system.”
While renewable energy often ends up paying for itself over time, there are high upfront costs. For Falk, tax credits were one factor that helped make the endeavor affordable. He urged for “an extension of tax credits for small wind and solar” to bring renewable energy within more farmers’ financial grasp. Another tool that some farmers rely on is Rural Energy for America Program (REAP), which provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements. Falk applied for a REAP grant but was turned down because “demand for REAP grants far exceeds the funding available.” As a result, “more funding and farmer access for REAP are needed to get more renewable energy systems. . . installed on private lands across the country.”