Tax credits, grants and loans are helping landowners and small businesses get into the business of burning biomass for renewable energy.
Speakers from the Oregon Departments and Energy and Agriculture and from USDA Rural Development guided an audience of over 80 landowners and business representatives through the intricacies of state and federal incentive programs at a forestry and ag biomass renewable energy workshop sponsored by OSU Extension in Island City, Ore., on April 9.
"Oregon is involved in biomass because it's probably our single best renewable resource. Biomass has two benefits. It reduces fire risk by making forests healthier and offsets other thermal energy uses," said ODOE Senior Policy Analyst Mark Kendall.
The state of Oregon offers the business energy tax credit, or BETC, a capital tax credit to help offset investment in equipment for forest recovery of biomass, woody biomass boilers and steam turbines, and the manufacture of renewable resource equipment.
The tax credit on renewable energy projects is for 50 percent of the cost, claimed at 10 percent a year for five years. The credit on conservation and recycling projects is 35 percent of the cost, claimed at 10 percent for two years and five percent for three years.
"The benefit of this tax credit, for those who don't have the appetite for, say half a million in tax credits, is that it can be transferred to a third party. The buyer claims the credit and pays you maybe 35 percent of the amount," Kendall said.
Kendall also discussed Oregon House Bill 2210, which would provide tax credits for the production of bioseed oil and energy from grass straw and woody forest material that would otherwise be burned as slash.
ODA renewable energy specialist Stephanie Page talked about agricultural bioenergy sources including straw, oilseeds, grains, manure and processing by-products.
Straw is a potential feedstock for cellulosic ethanol and anaerobic digesters and can be mixed with other materials to make pelletized fuel. The state of Oregon offers the same 50 percent BETC for equipment for processing and hauling straw as for woody biomass, along with a $10 per ton biomass credit, and 10 cents per gallon for ethanol production.
Similar BETCs are available for equipment for processing oilseed to biodiesel or for grains (excluding corn) for ethanol. Both are also eligible for biomass credits of 5 cents a pound for oilseed or 90 cents a bushel for grains, and 10 cents a gallon for ethanol.
Page described two biodiesel operations, one that sells the oil to a processor and another where the grower makes his own biodiesel to help fuel his trucks. Both received tax credits for their equipment.
"The most important thing to know about BETCs is that they have to be applied for in advance. Get an application into the ODOE before purchasing equipment or beginning a project," Page said.
Page suggested looking at energy efficiency projects before investing in renewable energy. "Efficiency projects typically pay back more quickly that renewable energy. The same tax credits apply, though they are a little lower for efficiency projects."
Don Hollis from the USDA discussed the Rural Energy for America Program, or REAP. Originally authorized under the 2002 Farm Bill, the program was renamed and funded at $36 million in 2008. National funding for 2010 is projected at $60 million and over $70 million for 2011 and 2012.
REAP provides grants, guaranteed loans and grant-guaranteed loan combinations for energy efficiency and renewable energy systems.
Grants can be made for up to 25 percent of the total cost, with a maximum grants of $250,000 for energy efficiency and $500,000 for renewable energy projects. State incentives can be used as matching funds.
REAP funds wind, solar, biomass and bioenergy, digesters, geothermal and energy efficiency projects. Both agricultural producers and small rural businesses are eligible. Projects must be located in non-metro areas and use commercially available technology.
"The application is daunting," Hollis warned. A template is available on the Oregon Rural Development website. "If you have a question, call me. I'm pretty user friendly in assisting you through the application process."
Energy efficiency and small wind and rooftop solar projects have the greatest chance of success.
"Congress wanted to assist small rural businesses and ag producers, that was the design behind this program," Hollis said.
Freelance writer Lee Farren is based in Ukiah, Ore. E-mail: leewfarren@centurytel.net
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