Daniel Menard is the COO of VOTI Detection, a company offering advanced security scanning products for government, military, aviation, and other industries. Frequently consulted for his expertise on the intersection between emerging technology and renewable energy, Mr. Menard reports on some recent developments in the adoption of renewables.
While clean energy programs continue to draw both support and criticism in Washington, small businesses have been quietly adopting renewable technological solutions using government grants.
This week has been tumultuous for the administration as its clean electricity program may wind up being dropped from the massive spending bill. But small agricultural businesses have been betting on renewable solutions for years as a means to make their future energy resources more efficient and more affordable. This proves there is an appetite in rural communities across the country for new energy systems. But what does this mean for the future?
Dan Menard breaks down how small businesses are changing renewable energy below.
Department of Agriculture’s Investment
This month’s US Department of Agriculture pledged to invest $464 million in renewable energy infrastructure, with $129 million invested through the US Department of Agriculture’s Rural Energy for America Program (REAP), which focuses on building solar systems or upgrading inefficient grain dryers. The program allocates loans or grants. For example, $170,000 was awarded to rural farmers in Ohio in September.
Not the first of its kind, the department of energy also awarded 110 grants in 26 states worth $127 million in July 2021. These grants were given to a wide range of small businesses working on technological solutions to help create renewable energy. This gesture is evidence of the ongoing efforts to reduce American reliance on fossil fuels.
Daniel Menard notes that the grants appeal to small businesses is that the energy sources will undoubtedly save money in the long term with the renewable systems. According to a 2020 analysis by Rewiring America, the adoption of renewable energy would save Americans as much as $321 billion in energy costs, and many rural companies are taking on board these figures.
A History of Generous Grants
The grants have been crucial: before their existing renewable power was out of reach for most businesses, even when viewed as a long-term investment. But the program itself is not new. In 2015, REAP awarded $63 million dollars in grants to small businesses. In previous administrations, $300 million was invested in small business energy efficiency.
REAP also continued throughout Trump’s administration. Now, growing environmental and political pressures place more importance on the work of the program.
How the Grants Work
To be eligible for the grants, Daniel Menard notes that agricultural businesses must be located in areas with less than 50,000 inhabitants. Grants may be used for adding renewable power, such as solar, wind, biomass, and ocean generation. However, they may also be used for energy efficiency improvements such as insulation, cooling, doors, and windows.
The possible grants provided run up to $250,000, while loans run to $500,000.
Addressing Reliance on Non-Renewable Energy
There is a complicated picture of the uptake of renewable energy across the US. In some instances, figures indicate a positive trend, with states like New York, New Jersey, Virginia, Massachusetts, Connecticut, and Maryland investing in 30,000 megawatts of offshore electricity by 2035. In 2020, 57% of Iowa’s in-state electricity generation was wind-powered, while it provided more than 30% of electricity in Kansas, South Dakota, North Dakota, and Oklahoma.
But, according to the Department of Energy, the US wind industry supports just 116,800 jobs. Comparatively, over 1.1 million people are employed in traditional energy industries such as coal, oil, and gas. In 2020, just 12% of the energy consumed in America was from renewable energy, whereas petroleum and natural gases made up 35% and 34% of usage respectively, even as renewable power becomes dramatically cheaper.
Wind turbines have more than halved in price since 2008, costing from $1,800/kW in 2008 to $770–$850 per kilowatt (kW) now. Building renewable energy systems is cheaper than burning fossil fuels, despite the hurdles that need to be overcome to actually assemble some of these systems.
Two-thirds of the wind and solar power built around the world in 2020 will generate electricity which is cheaper than even the cheapest new coal plants.
Complications From Prevailing Climate Policies
While the USDA is receiving acclaim for funding renewable energy initiatives, their praise is overshadowed by ongoing political battles in Washington. The resistance to Biden’s 2030 expansive climate plans is more indicative of conflicting approaches to execution rather than resistance to renewable energy itself.
The plan proposes to build up to 2,000 new wind turbines off the coast of the US over the next eight and a half years. This is one component of its larger ambitions to end greenhouse gas emissions from the power sector by 2035 and reach net-zero emissions by 2050.
However, to persuade larger businesses to get on board, The White House is backing a controversial plan to let renewable energy companies form tax-advantageous partnerships, which are currently used by the oil and gas industry.
Despite complications over how to persuade corporations to fund climate change initiatives, the USDA is keeping their grants aimed towards small businesses that are showing strong initiative and scientific research for their projects.
While lobbyists and politicians argue about policy in Washington, and there is still a large dependency on non-renewable energy sources in the US, many small businesses nationwide are using USDA’s grants. With the promise of a long-term financial return and aims to advance the implementation of renewable energy resources, these small businesses are leading the way towards developing new energy systems.
Mr. Menard expects businesses to continue applying for these grants and for support from the USDA to continue, even if the current doings in Washington are bringing complications to the issue.