Accessing USDA Rural Utility Service Loans for Solar Energy Infrastructure Projects

August 31, 2020

Some solar and wind developers have discovered a surprising new source of funding for their rural infrastructure projects: USDA Rural Utility Service (RUS) loans. USDA’s Rural Utilities Service’s charter is to provide funding and support for infrastructure or infrastructure improvements in rural communities. These include water and waste treatment, electric power, and telecommunications services. All of these services help to expand economic opportunities and improve the quality of life for rural residents.


As the saying goes, “What's old is new again.” Rural utilities have long tapped USDA Rural Development loans to fund conventional electric infrastructure projects, but in recent years this funding has expanded to include solar and wind projects. It's a rarely used financing mechanism, but OneEnergy Renewables is trying to change that. “There are not many folks in the industry who are aware of this particular source of funding,” explains Eric Udelhofen of OneEnergy's Midwestern Development team, “and only a very small handful have gone on to obtain it.”


OneEnergy is leading the effort, having successfully navigated the RUS application process to obtain a $960,000 loan for Ore Dock Solar, a 1-megawatt solar project in Ashland, Wisconsin. Ore Dock rounds out Xcel Energy's Solar Connect Community Solar Garden, a 3-megawatt pilot program that has enjoyed the support of multiple community partners. OneEnergy also obtained an RUS loan for the Endicott Solar Project, another 1 megawatt solar project in the Solar Connect program located in Cashton, Wisconsin. Ore Dock and Endicott are proof that RUS loans, once considered somewhat elusive, can be successfully utilized for modern solar projects that benefit a myriad of rural customers and communities.


Ore Dock Solar is owned and operated by OneEnergy Renewables and sells its output to Xcel Energy under a 25-year Power Purchase Agreement. Xcel manages the community solar program which distributes the benefits of the project to Bayfield County, Bretting Manufacturing, City of Ashland, City of Bayfield, Northland College, and many other small businesses, residential customers and other government entities throughout the region.

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