Alternative energy down on the farm: A still-untapped resource
Nov 8th 2009 9:15PM
Updated Dec 4th 2009 4:30PM
Still, acccording to the AP, the ranks of farmers who are producing their own power is increasing. But what's even more striking is how few now do so, considering the nature of their business and their access to precious energy commodities such as large acreage needed for solar panels and steady winds needed for wind-power generation. According to U.S. government figures collected in 2007, just over 1 percent of the 2 million U.S. farms are producing their own electricity, reported Cleantech.
More discouraging still, renewable energy production on farms increased by only 5% between 2007 and 2008. This meager rise came despite the vulnerability of low-margin farming operations to dramatically higher power prices and, more broadly, to indirect oil costs in fertilizer and tractor fuel, among other areas.
In all likelihood, the slow growth of greentech on farms is related to the paucity of subsidies to offset initial installation costs. In 2008, the Department of Agriculture handed out a paltry $35 million in grants and guaranteed loans to farmers. That will rise to $80 million in 2009 and $85 million in 2010. Those increases are clearly welcome but hardly sufficient, compared to the billions and billions pouring into the U.S. auto industry and electric vehicle makers that remain highly speculative plays.
Self-Sufficiency Is Good
The lack of funding for greentech in rural America at a time when money is raining out of the sky for so many other industries is difficult to understand for several reasons. Farmers are natural alternative energy advocates. They generally favor self-sufficiency to the greatest degree possible. They hate relying on utilities, oil, gas or anything that pulls money out of their pockets. If they didn't, they wouldn't have chosen to be farmers.
Farmers also have large swaths of acreage under tillage or pasture. These acres could be very handy for alternative energy projects, which are usually take up a lot of space. How much space? A solar installation of 140 acres in the Nevada desert (where solar power harvest has ideal conditions) will generate only one-fourth the power of a small coal-fired power plant. Plus, some solar power installations can now actually provide field shade to keep crops protected from the sun and even keep workers cooler. SolFocus, a California concentrated photovoltaic company backed by venture capital giant New Enterprise Associates, claims that its flat-panel arrays can shield veggies while harvesting solar rays.
Farmers also tend to have access to large amounts of water, another necessary factor in solar farm development. While many farms are far from transmission wires, most are relatively close to the grid infrastructure. Also, they often provide a much better alternative in terms of zoning and access compared to a greenfield project located in an undeveloped location far away from people and permitting processes. Their remoteness, copious land and wind resources have made farms a favorite location for wind towers in Midwest states and in Texas.
A Mere $17 Per Farm Last Year
While some farmers may be leveraging the wind to earn a bit of cash, they don't seem to be using it to produce their own power to any great degree. That's partly because so many have little extra cash and are lucky to break even. So the idea of coughing up money for an alternative energy installation is hard to accept.
And that's why maybe the government should rethink its grants and loans policies for farmers, which averaged a miserly $17 per farm last year and could reach a little more than twice that in 2009. That's OK if you want to buy a solar-powered battery charger for your cell phone, but it's hardly helpful if you want to take Bessie's milking machine off the grid. And it sure won't help farms become part of the solution for increasing alternative energy production.
Alex Salkever is Senior Writer at AOL Daily Finance covering technology and greentech. Follow him on twitter @alexsalkever, read his articles, or email him at email@example.com.