A federal program that has spurred clean energy projects throughout the Great Lakes region is facing a huge cut this week as Congress finalizes the budget for next year.
After 521 projects were supported by federal grants this year in the Great Lakes region, the program stands to lose about $50 million, or 66 percent of its funding.
The Rural Energy for America Program (REAP) allows small businesses to create clean energy projects by providing up to 25 percent of a project’s cost, up to $500,000 for renewable energy systems and $250,000 for energy efficiency improvements, said Alan Anderson, a specialist with the U.S. Department of Agriculture’s Rural Development program. Anderson is based in Traverse City, Mich.
| Great Lakes State | Number of REAP projects in 2011 |
| Illinois | 59 |
| Indiana | 55 |
| Michigan | 79 |
| Minnesota | 122 |
| New York | 73 |
| Ohio | 43 |
| Pennsylvania | 51 |
| Wisconsin | 3 |
REAP announced its last round of grants for 2011 last week in Iowa. This week Congress is scheduled to finalize the budget for 2012.
“With less funding, there will be less economic development in rural areas and fewer jobs,” said Andy Olsen, senior policy advocate at the Environmental Law & Policy Center in Wisconsin. “There will be less clean energy development, fewer options and less momentum for agriculture energy.”
Olsen said REAP funding allows for diversity in clean energy. In 2011, 478 solar projects were funded nationwide. Michigan had the most with 48, a number Olsen called “remarkable.”
Mark Hagerty, president of Michigan Solar & Wind Power Solutions in Commerce, Mich., said the number is high because of the lack of state incentives. The state of Michigan does not have a renewable energy incentive program and we have a need for solar power, he said.
“There are a lot of blackouts during the summer because utility companies cannot reach their peaks,” Hagerty said. “A good barn is a good place for solar because they face south and the roof is perfect for a solar panel.”
However, Michigan has a very diverse energy portfolio, said Alec Lloyd, public information coordinator with the U.S. Department of Agriculture in East Lansing, Mich.
“Including wind, solar and soy-based diesel, Michigan is a state with huge variation, not one size will fit all and you can see that in our projects,” Lloyd said.
A federal program that spurred clean energy in the region faces large cuts. Photo: Marquette University (Flickr)
Olsen said 2011 REAP funding was $75 million, and the House of Representatives wanted to cut it down to $2.3 million and the Senate proposed cutting it to $38.5 million. He said when it goes to the floor it will be passed at $25.4 million. If Congress does not resolve the looming budget, REAP will come to a halt until they do pass it, along with other government programs.
Four Great Lakes states received REAP grants for the last quarter of 2011 announced on Nov. 9 – Michigan ($169,103), Minnesota ($92,036), Wisconsin ($31,057) and New York ($19,860). The grants were mostly for geothermal and solar energy.
While the cuts will gouge REAP, Hagerty thinks changes in funding requirements could help support the program.
“There is obviously going to be a lot less solar and renewable energy projects,” Hagerty said. “If the politicians want to make cuts to make the budget balanced, they should first require that products are made in America. This would increase taxes for corporations that make their products overseas. Our tax dollars for REAP allow for Chinese solar panels instead of those made in America, it just doesn’t make sense to me.”