Eight Southern Oregon companies were among the 705 recipients who received $62 million in loans and grants for renewable energy and energy efficiency projects in 45 states and Puerto Rico.

Gary and Chris Pellett thought a proposal to power their farm with solar energy was a good one.

The U.S. Agricultural Department agreed.

New Flora, the Pelletts' hybrid rose-testing business off Old Stage Road, was one of 23 Oregon companies and entrepreneurs receiving grants worth more than $866,000 from the Rural Energy for America Program on Thursday.

Eight Southern Oregon companies were among the 705 recipients who received $62.5 million in loans and grants for renewable energy and energy efficiency projects in 45 states and Puerto Rico.

The Pelletts are installing a 7.5-kilowatt photovoltaic system on their 8-acre farm. They grow 450 fruit trees — primarily peach and nectarine — as well as vegetables on about 3.5 acres. Another 3.5 acres is used to test 300 to 350 selections from hybrid rose producer Kordes, out of Hamburg, Germany.

"Basically we will run our irrigation pumps and cold storage for fruit and roses via solar energy," said Chris Pellett. "When we get a lot of sun that's when you are irrigating."

The overall project will cost about $52,500, with the $13,128 grant picking up a fourth of the cost. In addition, the Pelletts will receive tax credits and accelerated depreciation.

"Our understanding is the grant will come in before we pay for the project," she said. "That said, we will still have to pay the majority of the money."

They have two electrical meters, one specificially for agricultural use that feeds the grid and runs the meter backwards.

"We're excited we can use solar for farm uses," Pellett said. "Some people without electricity for farm parcels have gone to solar for irrigation, but it's fairly expensive to get in."

This is the first year for the REAP program which grew out of 2002 Rural Development bill.

"Typically we're seeing wind energy for a grain dryer, upgrades to lighting systems and that kind of thing," said Jay Fletcher, a USDA spokesman in Washington.

There were 83 Oregon applications with 44 projects picked, including 21 awarded in August, said Jeff Deiss, with the USDA office in Portland.

"The way the process worked this year favored people asking for $20,000 or less," Deiss said. "The people asking for more than that almost didn't have a chance."

The exception was a massive wind farm application in Baker City, by custom window and door manufacturer Joseph Millworks Inc., which hauled in a $500,000 grant as well as a $2.23 million loan to finance the 3 megawatt Lime Wind Energy Project.

The next round of grants will be released in May 2010.

"We're taking applications now," Deiss said. "We can convert the applications for the people who didn't get grants this time and still help them on a delayed basis."

For information about the program, go to www.rurdev.usda.gov/or/reap.htm or e-mail jeff.deiss@or.usda.gov

Reach reporter Greg Stiles at 776-4463 or e-mail business@mailtribune.com.