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Solar Panels Help Farmers Cut Energy Costs

by Steve Grinczel

Published: Friday, July 9, 2021

Agriculture as we know it wouldn't exist without sunlight, which powers plant growth. That's one reason Randy Matthys and his son Doug see the futuristic solar panels installed at their row crop operation not as an afront to traditional farming, but as a harmonious extension.

"We're farming the sun whether the corn's absorbing it or these solar panels are," Randy said last Wednesday while surveying the glass and aluminum structures, called arrays, standing next to a thriving field of green-ribboned stalks that will produce grain destined to be turned into ethanol.

The Matthyses, in turn, will use the solar energy coming from this particular grouping to run the grain bins and dryer located just beyond the field. They also raise soybeans, peppermint and spearmint at the 5,500-acre, fifth-generation spread just west of South Bend.

When their six other arrays are brought online (possibly this week) they will power the farm's electric irrigation systems and mint distillery. If they create more energy than the farm can use, the excess electricity will be diverted to the electric grid managed by American Electric Power (AEP)/Indiana Michigan Power and banked in the form of kilowatt hour credits on their account.

The panels will continue to generate electricity sent to the grid all year round even when the pivots are shut down for the season, Doug said.

Electricity comes out of a solar panel as direct current. It is converted to alternate current by an inverter for use by whatever installation, a pivot for example, it's connected to. When it's especially cloudy or stormy, and in months when there's less sunlight, the Matthyses' credits will offset the cost of the electricity drawn from power company.

Doug can monitor how each solar panel is performing through an app on his smartphone. He expects that when the solar panels are completely operational, the farm will realize a $40,000-$45,000 savings on an electrical bill that's been running about $90,000-$110,000 a year depending on weather and how often the farm has to irrigate. Federal tax benefits and grant opportunities also can provide significant financial relief.

"Our banker keeps telling us, 'Lower your costs, produce bushels cheaper, produce pounds of mint oil cheaper,'" Doug said. "Well, this is one way I see, businesswise, to do that. The numbers are there."

A well-timed way, at that.

The sun is gradually setting, so to speak, on cost-cutting incentives built into Indiana's solar power law. The net metering provision, which allows solar owners to receive a dollar-for-dollar credit for the electricity they send back to the grid, is scheduled to expire on July 1, 2022.

Property owners who installed solar panels in 2017 were given a 30-year window in which the credits would effectively pay for the initial investment. New installations that go in before the expiration will have net metering until 2032, and then, it will cease to be available unless the law is changed.

Consequently, national and state nonprofit solar groups are urging farmers, homeowners and small businesses interested in becoming more energy independent to take action sooner rather than later.

Last month in South Bend and Goshen, Solar United Neighbors (SUN) and Solarize Indiana announced their sponsorship of the Northern Indiana Solar Co-op in partnership with the cities of South Bend, Goshen and Elkhart, the Michiana Electric Vehicle Network and the Michiana Area Council of Governments.

The co-op provides information, free quotes and designs, helps arrange financing, facilitates the bid process and lines up vendors at a group-buy rate throughout Elkhart, St. Joseph, Kosciusko and Marshall counties, explained Dan Robinson, SUN's northern Indiana field organizer.

"This is a really important time for people to go solar," he said. "What we're encouraging people to do is join a co-op so you'll be guaranteed to be on the timeline to get you into net metering. We're encouraging people to get it done by the end of this calendar year.

"We are pushing to get (lawmakers) to extend (net metering), but there hasn't been any movement. They've also extended the federal tax credits of 26 percent through 2023. It goes down to 21 percent in 2024, and then it goes away. I think there's going to be a rush of interest with this deadline coming up."

Once their panel debts are paid off, many solar owners could pay as little as nothing for electricity. If net metering is permanently discontinued, the solar panels will continue to produce electricity independent of the utility. However, the credits earned at the new rate may not be enough to cover the cost of electricity purchased from the power company when the solar panels aren't producing enough on their own.

"Assuming the laws stay the same, when net metering ends, the law states that solar customers will receive credit for their excess electricity equal to the wholesale price the utility pays for electricity plus 25 percent," Robinson said. "That will be the case for people who install solar after June 30, 2022, for customers whose net metering ends in 2032, and for customers whose net metering ends in 2047."

The arrays are sized and configured to produce the number of kilowatts needed (or desired) to power a pivot, a grain dryer or a house over the course of a year. The Mathysses will receive an email notification to change thr angle of the solar panels with a hand crank for optimum production depending on the season.

"When we start harvesting grain in the fall and are turning the dryer on and using the whole grain-handling system, we will have to pull in large amounts of electric off of AEP," Randy said. "But even on cloudy day like today, because the dryer's not on and we don't have any fans running, it's feeding electric into their system, and who knows where it's going."

The Matthyses started looking into solar as a way to lower their federal tax burden, Doug said, but didn't join a co-op. They purchased their system through their New Holland equipment dealer in Rochester. Solar arrays are connected to seven of the farm's 20 meters.

"By this time next year, we should not be writing a check for electricity on those (seven) meters," Doug said. "In the process of researching this, it basically was, you were either going to pay an electric bill or, if you could get the money to pay for it, you're gonna pay the loan on the solar panels.

"The difference is, in about seven-and-a-half years your loan's paid off and you're producing your own electricity for those meters."

Randy preferred not to disclose how much Shady Lane invested in solar, but said "it's no worse than buying a combine."

The Mars Wrigley group, which uses Matthyses' mint in its candy, chewing gum and other confections, also makes going solar worthwhile. The company awarded Shady Lane a $25,000 grant "for sustainable practices used to grow, produce and cultivate spearmint and peppermint," Doug said.

The Matthyses also feel good about their chances of procuring a grant, through the USDA's Rural Energy Assistance Program, that could pay for 25-30 percent of the total cost of the solar panels.

"As you move forward down the road, we'll be able to produce corn, beans and mint at a lower cost if we can produce our own electricity," said Doug, who also had solar installed at his own home. "At my house and for my pivot that got energized last August, in the months of January and February I did have to pay an electric bill. But since that time all I've paid is a $16.05 monthly service fee for AEP to have the meter there.

"On my house, everything they said would happen has happened. Moving forward, I should not be looking at an electric bill for the next 25-30 years."

Randy wanted the solar arrays to be as unobtrusive as possible so as not to spoil the view from his house. The biggest array, for the grain-dryer operation, takes up about a quarter-of-an acre of hilly ground beyond the pivot's reach, and will eventually be hidden by the corn stalks. The others are tucked away near the irrigation electrical meters already in place.

Randy and Doug's philosophies on solar reflects their generational biases.

"It boils down to how you feel about going green and going into the future," Randy said. "What are your beliefs? Do you think it's all hoodoo, or do you think it's here to stay? It'll work even if the sun's not shining but it's going to take a few years to see that."

Said Doug, "We need the sun to grow 200-bushel-an-acre corn. We need it to do things for our livelihood. I phrase it as, this is just another commodity we're producing, and solar panels are no different than buying a combine or irrigation system.

"I agree that I don't think people want a 100-acre solar farm in their neighborhood. But for individual businesses, for individual houses, at the end of the day it makes the bottom dollar look better. For Shady Lane Farms, in three or four years this is going to make things look a lot healthier. If you're concerned about the sun not shining, then why are you farming?"

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