It’s always a good season for saving money, whether commodity prices are high or low. Energy costs on your dairy can often be reduced by 10 to 35 percent, saving you money in the long run. In our experience, this savings equates to anywhere from 2 cents to 30 cents per hundredweight in avoided costs.

You can make these savings even better by taking advantage of funding opportunities through the USDA for energy-saving projects.

There are many types of energy efficiency and renewable energy projects that can help your dairy save money. The most common opportunities we see are lighting retrofits, variable-speed drives for milk and transfer pumps, compressor heat recovery, scroll compressors and milk pre-coolers.

There are also newer energy and water efficiency technologies such as conductive cow cooling, ozone laundry and ventilation controllers increasingly popular on dairy farms. Renewable technologies, particularly solar photovoltaic systems and anaerobic digesters, can also be an excellent way to reduce overhead costs once efficiency opportunities are exhausted.

While energy efficiency and renewable energy technologies can make financial sense for your dairy, it can be difficult to find the money for the initial purchase, particularly when milk prices are low. Fortunately, the USDA has a few programs that offer financing and grants for energy-saving projects, helping to reduce your out-of-pocket investment and substantially reduce the payback period.

Here are two programs that could help your farm.

Environmental Quality Incentives Program (EQIP)

The Environmental Quality Incentives Program (EQIP) through the USDA Natural Resources Conservation Service (NRCS) provides financial assistance for both energy audits and the installation of energy efficiency projects.

NRCS requires you to receive an energy audit before you can apply for technology funding to determine the opportunities on your farm, and the energy savings and payback period associated with each opportunity. NRCS provides a fixed payment for an energy audit or energy efficiency technologies, typically covering between 50 and 75 percent of the costs.

To apply for EQIP, call your local NRCS service center and ask about signing up for an Agricultural Energy Management Plan; this is the energy audit that will enable you to apply for additional funds to install equipment through EQIP. After you are approved, you will receive an EQIP contract for the energy audit.

You will be provided with a list of technical service providers – farm energy professionals whose qualifications have been vetted by the USDA to provide energy audits. The technical service provider you select will deliver an energy audit to you that can then be used to apply for energy-efficient equipment funding.

Because contracts are typically only written a few times each year, you may have to wait a while for funding, depending on when you apply. For that reason, call NRCS now to find out when the next application period opens so you can be prepared.

To minimize the wait, consider contacting a technical service provider to provide your energy audit directly so you can apply for equipment funding sooner. You will have to pay out of pocket, but it’s well worth paying a few thousand dollars up-front to be able to leverage tens of thousands of dollars in financial assistance sooner.

If you want to seek EQIP funding for an energy efficiency project, make sure you wait until NRCS notifies you that you can install, as installing too early can jeopardize your funding.

Rural Energy for America Program (REAP)

The USDA Rural Development’s Rural Energy for America Program (REAP) offers grants and loans for energy efficiency projects as well as renewable energy projects like solar, wind and methane digesters.

REAP offers competitive grants and guaranteed loans covering up to 25 percent of an eligible project’s costs, up to $250,000 for energy efficiency projects and up to $500,000 for renewable energy projects. Grant deadlines occur a few times each year, typically near the end of October and the end of April.

REAP grant applications for under $20,000 have a set-aside pool of funding for the fall deadline and can have a better chance of being funded.

The application process is lengthy, so many applicants utilize a professional grant writer to put together their applications. REAP applications will require either an energy audit, energy assessment or feasibility study depending on the size of the project. Your local rural development office can provide a list of energy auditors as well as consultants who can help prepare your grant or loan application.

Be wary of vendors or equipment suppliers who offer to help you with a REAP application. REAP guidelines stipulate that technical analyses must be completed by a neutral third party to avoid conflicts of interest.

Unlike EQIP, you can install your project any time after you apply for funding rather than waiting until funding is awarded. This is good news if you have a time-sensitive project you are going to install regardless of available funding.

Consultant considerations

Third-party consultants are heavily involved in both programs to help deliver the technical services needed to apply for funding. Before engaging a technical service provider or grant writer, make sure you do your homework and feel comfortable with your consultant. It’s good to ask about how long the firm has been in business, their familiarity with the dairy sector, how many similar projects they have completed and the qualifications of the staff performing the work.

Make sure you have any agreements or specifications in writing so you have a record of what is being provided and within what timeline.

If you do your due diligence, you will be able to find a trusted partner who can provide valuable information about energy management opportunities on your farm.