Organic Broadcaster

Michigan farmer shares insights after adding solar to power her farm

See 1-page of tips in Agricultural Solar Buyers Guide.

By Kristen Muehlhauser

We installed a solar panel system on our farm this year that was made possible by a federal tax incentive and a low-interest renewable energy loan. We are committed to stewarding this land, raising our kids, and building our community farm here, so we trust that we will remain here and see the financial investment pay off. Plus, we think reducing our fossil fuel usage is the right thing to do.

On our small farm in southeast Michigan, I raise two acres of certified organic vegetables, flowers, and garlic for a regional farmers market, two retail locations, and a 50-family CSA program. This operation runs on an 8-by-20-foot walk-in cooler, a small electric-heated propagation house, barn lights, an electric well pump, year-round intern housing, and a 130-year-old farmhouse for our family. Our annual electric bills are about $4,000.

To cover 100% of our electric energy consumption, we needed an 18.5 kW solar panel system. Our highly recommended local contractor quoted us $40,589 for the 48-panel array. When we realized with joy that federal tax incentives would reduce our out-of-pocket cost to only $23,350, we decided to go for it because our payback is only six years of our old annual electric bills. In fact, the loan payment for the next 15 years is lower than our old monthly electric bill. After we pay off the loan, we will have no electric bill at all. We will be running on sunshine—for free—for at least 10 years beyond the life of the loan. Plus, we receive an extra $17,000 back for immediate use when we file federal taxes this spring. We plan to use this sum to pay off half the loan early, further reducing our future monthly bills.

We did a lot research and learned so much in the process of acquiring our solar array—information and work I’m sharing here to help other farmers decide if a solar system is right for their farms.

Financial Incentives
Current federal tax incentives for solar power greatly reduce the cost of solar panel installations, making it an easy choice to align farm energy consumption with conservation values.

Solar panels installed in 2019 receive a 30% tax rebate through the solar Investment Tax Credit (ITC). This credit is available for both residential or commercial systems, so whether or not farmers live and work on the same property, the incentive still applies. Over the next two years, the tax credit phases out, reducing to 26% of the solar cost in 2020 and 22% in 2021. This credit is available to any residential or commercial taxpayer at any address, not just to farmers.

Furthermore, because farms are businesses, farmers can also write off the cost of the solar installation as a business expense to the extent that the electricity powers business operations. The benefit of this write-off varies based on your family usage of the solar system and your tax bracket, but it reduces your farm profit, saving dollars on both your federal and state income taxes.

Estimate System Size, Costs
Google offers an incredibly informative, free website called Project Sunroof that allows users to enter a residential or commercial address and immediately find a wealth of specific information about the costs and benefits of adding solar to that address. Project Sunroof calculates the number of usable sunlight hours for a building based on latitude and local weather patterns. It measures the number of square feet available for solar panels on a roof based on 3D modeling of the building and nearby trees. It provides a rough estimate of the amount of money saved over 20 years if solar is installed. When you input your average monthly electric bill, Project Sunroof recommends a solar installation size based on your specific consumption. If the roof is not big enough to hold a solar installation that covers 100% of energy needs, it calculates the percentage of electric use that the roof installation can cover.

The website calculates the positive environmental impact of a solar installation in metric tons of carbon dioxide or the equivalent number of cars taken off the road. It also estimates the cost savings you can expect from a solar power system. This calculation makes assumptions about local costs, so make a quick call to a local solar installer to get a real estimate. In our case, our local contractor charged us $9,000 less than Project Sunroof estimated for our large installation.

Hammocks hang in the shade under the solar roof, which was elevated 10-20 feet to provide a shelter for multiple uses for the farm crew and customers. Photo Kristen Muehlhauser

Hire or DIY?
Consider whether you will hire out this project or do it yourself. Besides designing, purchasing, and building the solar installation, the DIYer also needs to coordinate and possibly haggle with the utility company, obtain local township permits, and pass an electrical inspection. These are the requirements for electrical grid tie-in, which allows solar owners to sell their excess energy back to utility companies. Since we are beginning farmers in the business-building stage, we opted to pay the solar installers for their expertise and time.

To fine-tune the details of your prospective solar project, call a local solar installation company. They have automated programs that allow them to quickly plug in your address and annual electric usage to generate a report recommending system size, incentives and costs, and payback time for your situation.

Local solar contractors will also know about state-specific solar tax incentives. If you do not want to pay for the cost of the system up front, ask the contractor about low-interest renewable energy loans in your state.

Power Grid
Decide whether you want to be on or off-grid. We connected to the grid because it allows us to sell the excess solar power we generate back to our utility company. Power also can flow from the grid to our farm. The Midwest is famous for short, gray days in winter. Grid tie-in allows us to draw power without interruption or worry.

Determine whether or not to install battery storage in order to have power when the grid goes down. Battery technology is advancing so rapidly that we reasoned we would rather wait five years to buy a cheaper, more efficient battery for power backup when we have more cash reserves.

Kids line up to try a hand at making apple cider. Families in the farm’s CSA use the new shelter to gather for potlucks. Photo Kristen Muehlhauser

Location
Once you choose a solar contractor and system size, work together with your contractor to choose the best location on your house or farm. Unshaded house or barn roofs often work well, but ground-mounted panels offer the advantage of optimal angle positioning for the greatest sunlight harvest.

When we realized the solar installation would span 1,200 square feet, we wondered if smart design could help meet other needs on our farm: shade and shelter. We decided to elevate the panels 10 to 20 feet off the ground. The new space hosts 60 feet of table space or a whole slew of hammocks with ease and, thus far, has been used for weekly CSA potlucks, morning crew meetings, and community tours. We imagine a wash-pack and more community events in the space in the future.

Talk with your solar installer about trenching work in advance. Despite warnings, the trencher hit the electric line that powers our walk-in cooler and wash-pack lights. Even though the contractor rushed their electrician to the site to do a quick, temporary repair, the cooler’s high energy demand kept tripping the breaker for weeks until the permanent repair could be completed. That means our cooler went out on three major pre-market harvest days in August when we were full to the brim with delicate summer produce and flowers.

Also, if you are trenching for new lines for your solar installation, consider laying other utility lines in your trench before filling it back in. I remember learning from market-farming expert Chris Blanchard to lay any cable, gas, water, internet, or electric lines you can think of whenever you open a trench on a farm since trenching is so expensive. Thinking a bit ahead allows for future farm expansion!

REAP Grants, Loans
Farmers who derive the majority of their income from farming should look at the USDA’s Rural Energy for America Program (REAP). It provides grants and loans to farmers and rural businesses to improve energy efficiency. Funds may be used to purchase and install renewable energy systems, such as wind, solar, renewable biomass, anaerobic digesters, small-hydroelectric, and geothermal. Grants can provide up to 25% of eligible project costs, while loans can provide up to 75% of total eligible project costs. There are two pools of funding, one for grants less than $20,000 and one for larger grants or a combination of grant and guaranteed loan. The application period for both pools runs through March 31, 2020.

Solar Magic
Our farms already run on solar power. The vegetables, flowers, or forage on the lands we steward naturally take in solar energy, spinning it through the alchemy of photosynthesis into sustenance for livestock and people. The sun always ultimately fueled how people lived and made a living, but in the last few decades, humanity entered a new age. Humans now have the ability to catch the sun and change it into light, power, and heat. It is a little bit of magic.

If you plan to stay on your farm long-term, and if it is within your means to make a small down payment, then all that is required is several hours to coordinate with a solar contractor and a loan officer. Today’s pricing and incentives put renewable power within reach.

Kristen Muehlhauser raises vegetables, flowers, and children at Raindance Organic Farm in Michigan.

 

From the November | December 2019 Issue

 

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