What the USDA REAP Grant Means for the Poultry Industry in Missouri & Arkansas
Electricity costs can be a significant burden for any poultry farm in Missouri or Arkansas, and with energy costs rising between 3% and 4% each year, that burden will continue to grow. But what if there was an easy way to virtually eliminate your electricity bill with minimal out-of-pocket costs?
Thanks to the Inflation Reduction Act of 2022, the USDA REAP grant has been expanded, doubling its total size while increasing the maximum individual grant amount from 25% to 50%. This means that you can reduce the initial cost of installing a solar energy system on your poultry farm by up to 50%, and with other federal tax incentives and credits, you can decrease that cost even more.
What Is the USDA REAP Grant?
The Rural Energy for America Program (REAP) offers grants or loan guarantees for agricultural producers who earn over 50% of their income from farming or for small businesses that serve rural communities of less than 50,000 people. These grants or loans are applicable toward renewable energy projects or energy-efficiency improvements, such as installing a solar energy system, switching to biomass fuel sources, or installing high-efficiency heating and cooling equipment.
The REAP grant can cover up to 50% of the total cost of a solar installation, while the REAP loan or a combination of a grant and a loan can cover up to 75% of the installation cost.
What Other Incentives Are Available?
The Federal Investment Tax Credit (ITC) can provide a tax credit equal to 30% of the total cost for a solar system installation, thanks to changes introduced in the Inflation Reduction Act that increased the maximum credit from 26% to 30%. Additionally, your solar project could qualify for an additional bonus ITC of 10% or more, up to 50%, if:
- It is made from mostly U.S. domestic-made materials
- It is in a low-income area
- It is in an “energy community,” such as:
- Brownfield sites
- Communities that generated certain percentages of income from the transportation, processing, extraction, or storage of natural gas, oil, or coal after 2009
- Communities where a coal mine closed after 1999 or a coal-fired power plant has closed and unemployment is higher than the national average
If your tax liability is not high enough to take full advantage of the ITC, the ITC can be transferred to a non-related entity in some cases, potentially reducing the total credit amount.
A solar project can also qualify for an allowance that covers depreciation. If you have enough tax liability, the Modified Accelerated Cost Recovery System (MACRS) can be used, with up to a 100% bonus the first year, or the depreciation can be claimed on a schedule. This can account for 25% to 35% of the total installation cost of a solar system.
How Much Can You Save With REAP & ITC Incentives?
When you combine all these incentives, the total savings on a solar energy system for your poultry farm can be quite substantial. Here’s an example of a solar system that costs $100,000 to install:
- $100,000 installed cost
- Minus $50,000 USDA REAP grant of 50%
- Minus $40,000 30% ITC with 10% bonus credit
- Minus $25,000 MACRS deduction
- Total: -$15,000
In this example, the solar system does not cost anything to install, and the farm can actually receive a $5,000 credit, plus they will save between $18,000 to $35,000 every year by virtually eliminating their electrical bill.
Commercial Solar Systems for the Poultry Industry in Missouri & Arkansas
If you are considering a solar system for your poultry farm in Missouri or Northwest Arkansas, turn to our experts at Solera Energy. We contract with grant writers that can significantly improve your chances of earning a USDA REAP grant while guiding you through the application process, and they only charge a 4% fee if the grant is approved. Funds are limited, so it’s important to act as soon as possible.
Solera Energy has been helping business owners in Missouri and Arkansas cut costs and become more energy-efficient for over a decade. We provide proven, reliable commercial solar solutions that can make your business more profitable, and we offer exceptional service with unsurpassed excellence, integrity, and attention to detail.
Call us today at (855) 650-7404 or contact us online to schedule your FREE consultation and learn if a solar system will be a good fit for your poultry facility in Missouri or Arkansas.