2 Minnesota farmers say policy changes work against on-farm energy systems

KERKHOVEN , Minn. — At a time when rising energy and input costs are a growing burden for farmers, policies and decisions are working against one of the strategies to control them: on-farm solar and wind systems.

That was the message from Jim Falk, of Falk’s Seed Farm, and Cindy VanDerPol, of the Pastures a Plenty farm. Both of rural Kerkhoven, the two outlined the challenges farmers are facing during a roundtable hosted last week by the Minnesota Department of Commerce with the Minnesota Farmers Union at Falk’s Seed Farm.

Contributed / Falk’s Seed Farm

“Lots of concerns out there,” Falk said, speaking of his conversations with other area farmers. Tariffs and inconsistent trade policies have led to rising input costs and market declines. Soybean markets are down $3 to $4 a bushel from the average of the last four years, he said.

Federal legislation has revoked tax incentives for renewable energy development, and tariffs have increased the cost of parts needed to upgrade aging energy systems in Minnesota, according to Pete Wyckoff, Minnesota Department of Commerce deputy commissioner for the Division of Energy Resources. He joined the roundtable discussion Thursday, Dec. 11, along with Erick Hedman, of Prairie Five Community Action, and Erik Hatlestad with CURE, which promotes renewable energy among other rural, environmental and community issues.

“Families are struggling,” Hedman said.

Rising energy and food costs are a concern for many rural residents with limited incomes in the five Upper Minnesota River Valley counties served by Prairie Five Community Action. Programs offered by the private nonprofit agency range from child care and aging care to energy and food assistance and more.

Hedman said his agency has already received more than 1,400 applications for energy assistance, and expects a total of 2,500 or more. He and his staff members are hearing from people who are turning down thermostats, cutting back on the food they eat, and relying on assistance from food shelves.

Hatlestad said utilities have increased rates by 10% in 2024-2025. Electric rates will continue to rise in the years ahead, he said. He blamed rising costs on federal legislation rolling back support for renewable energy development while supporting fossil fuels. He pointed to the rollback in grant funding that supported on-farm renewable energy projects.

Cindy VanDerPol said her family farm operation installed a 40-kilowatt-capacity solar system in 2012. It serves the farm operation and two of the family homes. The family decided to make the investment in the system when Minnesota’s net meter law required utilities to compensate them at the retail rate for any excess power produced by on-farm systems.

VanDerPol said their system began production after it would have been grandfathered in to be compensated for excess electricity at the full retail rate. Now, their rural cooperative pays them 6 cents a kilowatt-hour for any excess electricity produced by their system, while charging them 14.5 cents per kilowatt-hour for the power they purchase, she said.

The VanDerPols have had to install three separate meters — two for the houses and one for the farm connections to the system — and pay meter fees ranging from $6 for the house served by Xcel Energy to $45 for the farm and house served by the Minnesota Valley Cooperative Light and Power Association.

Contributed / Pastures A Plenty Farm

The cooperative maintains many more miles of lines per connection since it serves a rural area, and consequently has higher costs for maintaining the system per customer. It also charges a $45 surcharge during months when the co-op does not buy power from the farm system.

Meter costs, payments for electricity, and other fees and charges often vary significantly among the rural electric cooperatives. Consequently, so do the economics for on-farm systems depending on which electric cooperative serves a farm, Jim Falk told the West Central Tribune.

The VanDerPol family initially expected a seven-year payback for the system, but now believes the payback will be twice that or longer. There are also ongoing maintenance and repairs costs to manage, she added.

Falk said the seed farm operation installed a 30-kilowatt-capacity wind system in 2016 and a 33-kilowatt-capacity solar system in 2017. The renewable energy powers around 70% percent of the seed plant operations.

“All the inputs make a difference,” Falk said, explaining that the on-farm power production helps lower costs.

On-farm, renewable energy systems that provide excess power to the grid are the “most efficient energy there is,” Falk said.

He and VanDerPol said rural residents need to speak up and urge lawmakers to support policies that support renewable energy development.