A Wisconsin-based organic cooperative is offering farms low-interest loans to invest in clean energy projects.
Bio Valley announcement their “Powering the Good” loan fund on Monday. Created through a partnership with Clean Energy Credit Union, the $ 1 million initiative will provide loans at below market rates to producers in Organic Valley for projects such as solar power systems and heating and cooling. geothermal.
“Dairy farms need to use a decent amount of energy and solar power is a good way to produce it,” said Bob Kirchoff, CEO of Organic Valley. “Then there are things we can do on the farm based on efficiency improvements per se. Plate coolers are things that cool milk and keep it cool until it’s picked up. facilities. “
Kirchoff said the program will support farms that already have clean energy projects in mind or offer technical assistance to help producers find the best system.
Organic Valley has been powered 100% by renewable energy since 2019, when the brand helped launch three new solar sites in Wisconsin as part of a regional project involving rural communities and the city of Madison.
Kirchoff said there are two main reasons the cooperative wants to help its farmers invest in their own clean energy projects.
“First, it’s the right thing to do for the environment. But second, it should work for them economically,” Kirchoff said. “When our farmers look at this, we think the interest rate and the length of the loan will help turn the situation around, where it makes perfect sense to do so.”
Kirchoff said they already have up to a dozen farms across the national cooperative applying for a loan, and he expects Organic Valley to allocate more money to the fund as interest from producers increases.
Many farms have struggled to obtain financing for these types of improvements from traditional farm lenders, Kirchoff said.
“It’s probably not easy for (agricultural lenders) to always finance renewable energy projects. They are sometimes a little different in terms of scope and scale. put numbers every now and then, ”Kirchoff said.
Steve Deller, an agricultural economist at the University of Wisconsin-Madison, said he agrees that many traditional lenders like banks and credit unions have remained cautious about investing in new projects since the Great Recession.
“It’s almost like ‘Let’s see a number of farms making these investments, let’s see how it goes.’ And if that makes good business sense, good economic sense, then the banks will start stepping in, “Deller said.
And Deller said most farmers feel the same way about adopting the new technology. He said most renewable energy projects in agriculture take place on larger, more capital-intensive farms, such as concentrated animal feed operations (CAFOs) and environmentally conscious small producers.
“(The early adopters) take it, they use it, and then other farmers are going to sit down and see how it works,” Deller said. “If we see a handful of farmers investing in these mid-sized solar farms and it makes sense to those farms, you’ll see other farmers say, ‘I’m interested in doing that too.’ And that’s where you start to see it snowball. “
Sherrie Gruder, sustainability design and energy specialist for UW-Madison’s extension division, said getting more farms interested in renewables could help make funding more available.
She said a group of farms and rural residents in northwestern Wisconsin recently got together to share the purchase of solar panels and contract an installer for a lower rate.
And she said lenders are starting to see the value of clean energy beyond simple return on investment.
“One thing that banks are starting to look at, because insurance companies are starting to take an interest in it, is resilience. And they are looking at risk because we’ve had so many floods and high impact weather events.” , said Gruder. “They are starting to realize that renewables have a value and I think that is also helping to move the market.”
This item republished with permission from Wisconsin Public Radio