State and federal energy grants spur local projects

From manure digesters to fluorescent lighting, governments and utilities are investing a lot of money in energy efficiency.

Manure digester could heat greenhouses

By Isaac Bonnell

If all goes as planned, Mike Van Wingerden’s next greenhouse will be heated by cow manure.

As the owner of Van Wingerden Garden Center just south of Blaine, Van Wingerden already has nine acres of greenhouses that cost him $270,000 to heat last year.

In planning a new greenhouse complex, Van Wingerden is seeking out a cheaper way to heat such a vast expanse of space. His quest led him to Kevin Maas of Farm Power, a Mount Vernon-based alternative energy company.

Maas and his brother Daryl build manure digesters, which basically take the methane gas out of cow manure and burn it for electricity. In the process, the generators produce a lot of heat that can be used to heat water pipes that would run underneath a greenhouse like radiant heating.

“This generator is producing more heat than we know what to do with,” Maas said.

Though Van Wingerden already uses eco-friendly wood pellets to heat his greenhouses, he likes the idea of taking energy conservation one step further with a manure digester.Energy conservation

“It just makes good business sense,” Van Wingerden said. “You can’t beat it. You’re using manure that other wise would pollute the air to heat greenhouses.”

But the process isn’t as simple as burning cow pies, nor as cheap. Building a manure digester can cost anywhere from $2 million to $4 million, depending on its size, Maas said. Due to the difficulty of raising that much capital, Farm Power relies heavily on state and federal grants to get projects started.

And thanks to the American Reinvestment and Recovery Act, more grants for renewable energy and energy conservation are being offered these days — but with a sense of urgency. For example, the U.S. Department of Energy grant that could fund the digester that would heat Van Wingerden’s new greenhouse had a two-week window for application.

The grant, which specifically targets heat and power generation projects, could fund 50 percent of the project cost and Maas said he will find out by October if the project received the grant.

“My concern is that we are too small,” he said. “They want to do big projects. But we’ll wait and see.”

If this grant doesn’t come through, Maas has several other options to fund the greenhouse-digester project. Many state and federal energy grant programs have received extra money for grants this year. For example, the U.S. Department of Agriculture regularly offers a $500,000 grant for renewable energy systems and energy efficiency improvement.

“The federal government wants a lot of new stuff, but there aren’t many companies with projects under development,” Maas said. “The whole concept of shovel ready is huge.”

Block grants

What is unique about the money being allocated now for energy conservation and renewable energy is that much of it is in the form of grants and cash, rather than tax breaks. In the past, tax breaks made up a majority of the incentives for these types of projects, Maas said.

With the stimulus package, though, “Instead of 10 years of tax breaks, we can get it all in one year,” Maas said. “Then they said we can get it as cash if we want it. For us, it’s about $750,000. It doesn’t make upfront financing that much easier but it does make life easier once the project is complete.”

As the federal government hands out money to the states, those governments then allocate funds through their own programs. In Washington, that is the Energy Efficiency and Conservation Block Grant program, through which the City of Bellingham just received $780,000 for local energy programs.

“This award will further Bellingham’s position as a national leader on energy conservation and sustainable practices,” said Mayor Dan Pike in a statement.

The city has proposed four different uses for the funding:

  • Municipal Facility Energy Conservation Program: This project will employ an energy conservation coordinator to develop a comprehensive energy conservation strategy for city facilities. Total budget: $257,100.
  • Community Energy Challenge: The city is partnering with Sustainable Connections, the Opportunity Council, Whatcom County, Puget Sound Energy, Cascade Natural Gas and others to promote community-wide energy efficiency improvements.  $250,000 of the funds will be used to create a loan mechanism that will leverage an estimated $2.5 million in private investment from local lenders for energy efficiency projects. Total budget: $337,000.
  • Green code adoption: The city will analyze new codes that are designed to make it easier to implement energy efficiency measures while providing greater predictability in the permit review process. Total budget: $23,000.
  • Energy efficient land use planning: Part of the city’s infill strategy is to establish a series of compact “urban villages” to accommodate new population growth.  These funds will allow the city to continue developing master plans and development regulations that support the creation of urban villages and emphasize connection with local high-frequency transit systems.  Total budget: $163,000.

“This is just one of the many innovative ways we are supplementing community resources during these difficult financial times,” Pike said.

Utilizing the utilities

Though Farm Power relies on grants to get projects started, what really makes the business model work is securing a 10-year contract with Puget Sound Energy to buy the power generated by the manure digester.

“The PSE contract is what secures the whole project,” Maas said. “We’re getting effectively retail rates for our energy.”

Besides buying back power put on the grid from renewable resources, Puget Sound Energy also offers its own incentives and grants for energy conservation. Already this year, PSE has handed out $13 million in grants to commercial and industrial customers for energy efficiency projects, said spokesperson Rebekah Anderson.rock the bold

“We have two main types of programs for commercial customers: retrofits for existing buildings and incentives for new construction,” Anderson said. “Retrofitting is certainly more popular right now.”

Though the utility is also actively pursuing renewable energy sources such as wind and solar, much of its focus is aimed at conserving energy, Anderson said.

“The benefit of conservation is it is something that you can do right now,” she said. “It’s easier to use less energy than to create more energy.”

That means good business for Woody Haehn, owner of Energy Conservation Services in Bellingham. Haehn specializes in upgrading light systems to more energy efficient fluorescent technology and said he is glad to see a push for retrofitting.

“A lot of utilities are targeting lighting because it’s the low-hanging fruit,” Haehn said. “Lighting is usually the focus because the lights have to be on as long as the building is open. It’s the most targetable of all the usages in the building — it’s also very measurable and very identifiable.”

Haehn credits PSE with being the leaders in crafting successful energy conservation programs, though he thinks they could have promoted them a bit better. But in just the last year, Haehn said public awareness of energy issues has grown and PSE has allocated more funds toward energy conservation. In the last year, Haehn said he has seen an increase in the number of small businesses inquiring about whether they qualify for a retrofit program.

“If we can show PSE an energy savings of around 30 percent, they’ll fund it,” Haehn said. “And they fund about 75 percent of the project costs.”

For the remaining project costs, Haehn offers his customers a few payment options. The most common is an agreement where Haehn will cover the project costs if the company will continue to pay the same amount for energy until enough energy savings have accumulated to pay back the investment.

“This eases the price and takes away the sticker shock,” Haehn said. “And at the end of the day, they are still going to see a savings and the reduction of their energy costs is getting them better lighting.”

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