Organic Valley Launches $1M Loan Fund for Farmers to Go Solar

When a United Kingdom supermarket chain promised to move its farms to Net Zero by 2030, it made it abundantly clear the effort would require working on many different fronts. From energy consumption and land-use change to methane/cow burps, it’s certainly no secret that cattle farming comes with environmental challenges. So even if recent studies suggesting it's possible to cut methane emissions 80% do turn out to be accurate, there’s still a very long way to go for most cattle farming to get anywhere close to truly net-zero. 

The folks at the dairy co-op Organic Valley, however, might be closer to that goal than many. Already, the co-op made headlines in 2019 by becoming one of the largest food companies in the world to go 100% renewable, and to do so through investments in community-based solar. Now the company is expanding on that tradition — taking a leap into what some folks might describe as "carbon inserting" — by launching a major loan initiative to help its farm suppliers adopt renewable energy too.

Created in conjunction with Clean Energy Credit Union, the $1 million loan fund will deliver loans at below-market rates, with plans to expand from there. Specifically, the funds will be made available to Organic Valley’s 1,700 farmer members, and can be used for a variety of projects that include: 

• Solar electric systems to offset farm energy consumption.
• Farm energy efficiency improvements such as plate coolers, VFDs, LED lighting, insulation, ventilation, and more.
• Geothermal systems and ground-source heat pumps for farm heating and cooling.

The goal, apparently, is to triple the number of Organic Valley farmers using solar energy within the next three years. According to Bob Kirchoff, Organic Valley CEO, this expansion is a logical extension of its overall focus on regenerative agriculture.

“We are focused on a whole systems approach to renewable energy, and I’m excited to debut this energy loan fund. From the farm to the shelf, I see renewable energy playing a bigger role in organic food," said Kirchoff. "We are providing farmers a means to reduce their energy costs and become more self-sufficient and sustainable. Farmers who participate in this loan fund contribute to a healthy, regenerative future for the next generation.”

It will be interesting to see if similar commitments spread across the organic sector. After all, once upon a time organic food was almost inherently perceived by shoppers as being environmentally preferable and fundamentally different from the mainstream, industrialized food system. Yet the rise of mass-produced organic brands on almost every supermarket shelf has left that distinction somewhat fuzzier. 

For brands wanting to maintain the "halo" effect of an organic label and live into the original ethos of the movement, it makes sense to now find ways to demonstrate a deeper and more comprehensive commitment to environmental stewardship. To be credible, that commitment will need to include organic production methods, but will likely also need to move beyond them to include regenerative agricultural techniques, carbon farming, renewable energy, and cleaner processing and transportation methods too. 

That’s certainly how Blake Jones, volunteer board chair of Clean Energy Credit Union, framed the effort in a press release accompanying the launch.

“Organic Valley is already helping to protect the environment through regenerative and organic farming practices, and now they’re going one step further by supporting the installation of renewable energy and energy efficiency projects for their farmer-members," said Jones. "In addition to the environmental benefits, we’re also excited about helping family farmers throughout the USA to lower their energy costs and improve the bottom line of their independently owned farms.”

From agrivoltaics to solar apiaries, the world is not short of examples of farmers innovating in the field of renewable energy. What’s encouraging about Organic Valley's announcement is the idea of a national brand putting its marketing and financing weight behind such efforts and, hopefully, creating consumer demand that pushes the rest of the industry in this direction too. 

According to Wisconsin Public Radio, there may be other knock-on effects beyond consumer demand thanks to this new loan fund. Specifically, by showing it is possible to successfully lend to small farms, initiatives like Organic Valley’s may also unlock capital from other lenders too. Much like RE-Volv's model of pay-it-forward financing for non-profits, the ultimate value may not be in the sheer number of dollars lent out or solar installed, but rather, in the fact that it paves the way for other, larger lenders to follow.