Brenden Williams (Biogest), Paul Percy and Jim Muir outside Paul’s farm in Stowe, Vermont.

The USDA in Washington and Montpelier, Vermont formally announced today that it obtained grants from the USDA’s Rural Energy for America Program (REAP) to build anaerobic digesters at three Vermont dairy farms in addition to a fourth already under development.

Dustin Machia discusses his family’s two dairy farms that will soon have digesters.

“While incentives are available, now is the time to install a methane digester. Limited-time grants and tax credits can cover up to 60 percent of the development and construction cost,” Director of Marketing and Development Jim Muir of Agricultural Digesters, the development company for these projects said.

Agricultural Digesters LLC plans to install the digesters at three farms, including Machia and Sons Dairy in Sheldon, Machia Brothers Dairy in Sheldon, and Percy Farm in Stowe. The grants, totaling more than $2.4 million, were formally announced by USDA the week of January 22, 2024. Of the 3.7 million total grants awarded in January, 65 percent of the grant funds are dedicated to Agricultural Digesters LLC projects, showing a commitment to renewable energy on dairy farms. The 2022 Inflation Reduction Act (IRA) has enhanced funding for 2023 and 2024 as well.

Television and print media covered these welcome incentives for Vermont’s farms.

Anaerobic digesters reduce greenhouse gas emissions by converting cow manure and organic waste (e.g., from a brewery) into renewable energy, heat, largely pathogen-free animal bedding, and a more spreadable fertilizer. It’s estimated that the average dairy farm in Vermont can provide electricity for approximately 140 homes and heat to four large homes or farm structures (Efficiency Vermont has offered to assist with this).

A fourth Vermont digester by Agricultural Digesters, supported by USDA grant funds obtained in 2022, is in the permitting process and will be built in Grand Isle at Bullis Savage View Farm. Construction is slated to begin on all four digesters in 2024. Together, the projects have garnered over four million in federal and state grants through REAP, the Vermont Community Loan Fund, and the Environmental Quality Incentives Program (EQIP).

“These four farms are significant when you consider that Vermont only has about 14 operating digesters today, with most built more than ten years ago,” Muir said. “Ideally, Vermont can grow to become the leading model for individual, farmer-owned digesters throughout the U.S.”

Jim Muir of Agricultural Digesters explains to reporter the importance of a digester to ensure the future survival of generational farms.

The next REAP grant application deadline for funding for a methane digester is on March 31, and Muir says at least four more farms in Vermont are expected to apply through Agricultural Digesters. In Agricultural Digester’s model, the digesters are farmer-owned, meaning they will not be owned by outside investors but by the farms themselves.  This model maximizes the financial benefits and provides security as farms grapple with volatile milk prices and transitioning each farm to the next generation.

“In Vermont and areas where higher energy payments are available, farmers can earn 200K to 450K or more per year in total cash and offsets with a farmer-owner digester,” Muir said of the profits possible.

Each farm also benefits from the investment tax credit (ITC), which can be monetized with outside investors to reduce the total project cost by an additional 26 percent on average.

“Compare that to when a third party builds a large digester, asking no investment from farmers, but provides only some bedding solids or possibly a token annual payment,” Muir said.

Since 2020, most new digesters have been extremely large and produce renewable natural gas (RNG), which requires far more capital cost. As a result, outside investor dollars and ownership have become common. While these projects fight global warming through greenhouse gas mitigation, farmers receive a smaller share of profits or an annual fee that is significantly less than the farm could earn owning the digester itself.

Muir says grants will likely only be available at the current level into 2025. The steel-tank digesters, built by Agricultural Digesters and sourced through a European manufacturer, are best suited for medium-sized dairy farms (200 – 700 cows) as well as large ones.

“There may never be another time like this when installing a digester is so affordable,” Muir said. “If you’re a dairy farmer, especially in Vermont it’s worth looking into how to reduce your environmental footprint and increase your income with a digester.”

Dustin Machia discussing the obligation his family’s farms feel toward the environment. Reducing methane emissions with a digester is key.

About Agricultural Digesters
Agricultural Digesters is a biogas development company made up of a custom team of independent professionals specializing in renewable energy, primarily farmer-owned digesters. The farmer-owned model focuses on building many digesters, not taking excessive profit from a few very large ones. Agricultural Digesters assists farmers through grant application, permitting, construction, tax credit monetization, environmental benefit monetization, and a successful launch. They also provide operations and maintenance for an extended period after launch.

About the REAP Grantees (per USDA, Vermont)
Machia & Sons Dairy LLC: $929,360 grant (REAP) – The award will support the installation of an anaerobic digester that will process manure produced onsite and produce biogas to fuel a CHP unit. The system will generate biogas equaling 1.96 million kWh of power to run the CHP unit. The project will also produce liquid fertilizer, animal bedding and compost material, with nearly 3,750 cubic yards of digestate solids will be produced annually.

Machia Brothers Dairy LLC: $747,124 grant (REAP) – The award will support the installation of an anaerobic digester that will produce off-site organic food waste, producing biogas that will be used to power a CHP unit. The system will generate biogas equaling 1.96 million kWh of power to run a CHP unit. It will also produce liquid fertilizer, animal bedding and compost materials, with approximately 3,750 cubic yards of digestate solids produced annually.

Percy Farm: $750,284 grant (REAP) – The award will support the installation of an anaerobic digester. The project will include receiving off-site organic food waste in a receiving tank and processing that food waste and farm manure in an anaerobic digester. The biogas will be used in a CHP application and the digestate will be processed into liquid fertilizer and animal bedding.