GREENHOUSE FINANCING OPTIONS
Many growers need a year-round greenhouse but struggle to finance the full project upfront. Below are several financing options, including both greenhouse loans and grants, offered through some of our partners. Options depend on what type of grower you are — whether a commercial greenhouse grower, school greenhouse grower, or part of a non-profit organization. At this time, we do not know of financing options for residential greenhouses. (If you know about a resource not listed here, please let us know.)
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COMMERCIAL GREENHOUSE GROWERS
Loans for greenhouses
For: New commercial greenhouses
New greenhouses can be financed with business loans, similar to other types of businesses. Certain types of greenhouses (metal structures) are often considered equipment and easier to finance, and in some situations constructions loans may also be appropriate.
We have partnered with Contain Inc to help our growers find greenhouse financing and insurance. Contain Inc is an alternate finance group dedicated to indoor growers, so they already have information on our equipment and know the indoor agriculture industry well. They work with growers working in greenhouses, warehouses and containers and fund clients from new startup farms through to multi-generational ones. They have also worked with a leading regional insurance broker to create indoor ag-specific insurance.
Grants for greenhouses
Financing for greenhouse equipment and related larger impact projects can sometimes be secured through several different types of grants:
- Private Foundations (local, state and national)
- County and State Government Grants
- Federal Grants (USDA, Energy, Education, etc.)
Grants are typically made to nonprofit or public organizations, coalitions or partnership coalitions. Grantsmanship is a competitive process, which is why it is important to understand grant formatting as well as the priorities of each funder. Some grants take 3 to 6 months for funder review. Grants are one component of a total philanthropy strategy for raising money. We work with BrightSpot Communities LLC for grant writing and training services, as well as philanthropy strategy consultation, to help customers financing their vision.
National Grants for Commercial Greenhouses
For: Existing commercial greenhouse growers who want to make energy-efficiency improvements. New commercial greenhouses who want to add a renewable energy system.
The Rural Energy for America Program (REAP) has a program called Renewable Energy Systems & Energy Efficiency Improvement Loans & Grants. The program helps farmers save energy in their operation by financing upgrades, including greenhouses. The money can be used to upgrade an existing structure or add a renewable energy system to an existing greenhouse. For example, by adding insulation to the North side you can make an energy-efficient commercial greenhouse more efficient, following passive solar greenhouse design. Alternatively, the money can be used to add an energy-efficient or renewable energy system, such as adding a solar panel to help power the building, or a Ground to Air Heat Transfer (GAHT®) system to heat and cool the building year-round. The money cannot be used for building a new structure. More information available on the REAP program website.
National Resources Conservation Service (NRCS) EQIP Grants
For: Existing commercial greenhouse growers who want to make energy-efficiency improvements
Similar to the REAP program, EQUIP On-Farm Energy Initiative helps farmers to save energy with equipment upgrades. Greenhouse improvements – such as adding insulation, using passive solar greenhouse design, or installing more efficient heating / cooling systems – are eligible for funding (if your farm meets the requirements). The program has two parts. First, it provides an energy audit. Once the audit is complete and on file with the NRCS, the program funds much of the recommendations in the audit. Most commercial greenhouse growers receive 75% of projects cost. More information on the EQUIP website.
SARE Research Grants
For: commercial greenhouse growers, non-profits, schools, and individuals that want to conduct a research project relating to sustainable greenhouse growing.
The Sustainable Agriculture Research and Extension (SARE) is government-funded organization that administers grants for education and research relating to sustainable agriculture. This spans a huge range of sectors, from permaculture to animal production. They also fund research related to season extension, including growing in a year-round greenhouse. Grants are available to all types of growers –commercial greenhouse growers, non-profit and research organizations, professionals, students, schools and individuals.
Past greenhouse-related grants include installing a compost-heat recovery system, or an energy-efficient heat exchanger similar to a GAHT® system. A key ingredient of all SARE grants is research: the project must research something related to sustainable agriculture and document the results. More information on the SARE website.
State Grants for Commercial Greenhouses
In addition to federal grants, your state may have programs for growers. Please contact us if you know of a program in your state. The below is not a complete list.
Colorado – Agricultural Energy Efficiency Program via the Colorado Energy Office
In 2016 the Colorado Energy Office expanded their Agricultural Energy Efficiency program to include commercial greenhouses (non-profit greenhouses may also apply). Similar to national programs listed above, the program aims to help farmers save energy through energy-efficiency upgrades, or renewable energy systems. Specifically, the program provides a free energy audit of the greenhouse, and then acts as a hands-on consultant to help the grower initiate improvements and get funding to pay for the upgrades.
Illinois – Northern Illinois Agricultural Energy Efficiency Program
This program spans many agricultural sectors, including commercial greenhouse growers in Illinois. The program provides both technical assistance (free energy audits and recommendations) as well as financial assistance (cash incentives for making energy-efficiency improvements to an existing greenhouse).
Projects that demonstrate strong growth potential, return on investment and community impact are sometimes investor worthy. Three types of investments are made by individuals and/or investment financing firms. These include:
- Angel Investment: generally, cover start-up operations, or research and development.
- Debt Financing: covering operating costs over a set period of time, with negotiated terms of return.
- Equity Financing: full financing through terms of joint ownership.
The development of a basic business document toolkit is required for an investor approach, including executive summary, business plan, budget proforma, and supporting research. Finding the right investor requires prospect research, as well as a communication strategy to attract interest. BrightSpot Communities LLC provides both business toolkit development support, growth advising and investor research and development.
SCHOOL GREENHOUSE PROGRAMS
Several private companies offer grants to help fund school gardens. These are typically small grants, in range of $1,000 to $5,000, and aimed at starting an outdoor school garden. Most can apply to a year-round school greenhouse. The organization Grants for Plants has a list of small private grants for school gardens and greenhouses here: Seed Your Future
Of course, larger foundations exist that provide larger grants, but these may not apply to all schools. For example, the Edward E Ford Foundation provides funding for private and independent schools, for a range of projects, often including greenhouses.
Individual states also often have incentives for schools to become more energy-efficient, which can extend to upgrading or financing a new school greenhouse. The Colorado Energy Office, for example, provides energy audits and assistance with funding energy-efficiency improvements. Though they may be the ultimate source of funding, they can help a school procure funding through other sources.
Many schools ultimately provide some of their own funding for a school greenhouse. You can read more about our tips for designing a school greenhouse on our blog.
RESOURCES FOR NON-PROFIT ORGANIZATIONS
Non-profit and community organizations can take advantage of some of the greenhouse financing resources above. By incorporating a research component into the greenhouse, they can apply for SARE grants. The Colorado Energy Office Agricultural Efficiency program also may have grants for starting a greenhouse business.