Farmers who want to migrate to renewable energy face at least one major hurdle: how to pay for it. It’s expensive to install solar, wind, and other clean energy systems, and obtaining traditional bank loans can be a challenge if the money doesn’t directly contribute to boosting revenue.
To address this problem, farm cooperative Organic Valley has joined forces with financial services provider Clean Energy Credit Union to help farms across rural America get funds for renewable energy installations.
In March, Organic Valley and Clean Energy CU announced plans to launch the Powering the Good Loan Fund, which will provide favorable loan terms for farmers who want to reduce their reliance on fossil fuels.
The program – the first of its kind for either organization – will make loans available to more than 1,700 farmers across the country. The fund will initially total $1 million, though there are plans to expand, according to an Organic Valley press release.
Clean Energy CU will loan money to Organic Valley farmers to be used for the following:
- Solar electric systems to offset farm energy consumption
- Farm energy efficiency improvements such as plate coolers, variable-frequency drives (VFDs), LED lighting, insulation, and ventilation
- Geothermal systems and ground-source heat pumps for farm heating and cooling
Organic Valley is based in La Farge, Wisconsin, and was founded in 1988. In the years since, it has become the nation’s largest organic, farmer-owned cooperative, representing nearly 1,800 farmers in the U.S., Canada, Australia, and the United Kingdom. Its own facilities have been 100 percent renewable-powered since 2019, and the cooperative has been a leader in using regenerative practices such as rotational grazing to pull carbon out of the air.
Englewood, Colorado-based Clean Energy CU is a not-for-profit financial services cooperative that focuses exclusively on providing loans for clean energy and energy-saving projects such as electric vehicles, e-bikes, solar electric systems, geothermal heat pump systems, and other eco-friendly home improvements. It’s a federally chartered credit union focused on mitigating climate change, reducing pollution, improving public health, creating jobs, and building wealth.
The two cooperatives’ shared focus on renewable energy makes them natural partners for loans that can help organic farmers transition to cleaner and more sustainable and efficient power sources.
“From the farm to the shelf, I see renewable energy playing a bigger role in organic food,” said Bob Kirchoff, Organic Valley’s CEO. “We are providing farmers a means to reduce their energy costs and become more self-sufficient and sustainable. Farmers who participate in this loan fund contribute to a healthy, regenerative future for the next generation.”
The loan program went into effect on April 1. Interest rates for all loans will be below 5 percent, said Organic Valley Director of Sustainability Nicole Rakobitsch, who spoke with the Farm and Dairy. Loans for energy efficiency upgrades are between 2.75 – 4.24 percent, with term options of three, five, and 10 years. Rates for solar loans are between 4.49 – 4.99 percent, with terms of 12, 15, or 20 years. No collateral is required beyond the new energy equipment, and farm assets are not encumbered.
“This is a great example of cooperation among cooperatives to pursue our aligned missions,” said Blake Jones, Volunteer Board chair of Clean Energy CU. “Organic Valley is already helping to protect the environment through regenerative and organic farming practices, and now they’re going one step further by supporting the installation of renewable energy and energy efficiency projects for their farmer-members.”
