From doing a little digging, it appears the main problem is that they thought "alternative fuels" meant solely ethanol. Worse, corn-based ethanol.
...and then the supply side of ethanol production got devastated by too little supply and too high a price for what supply there was (corn has gone from ~$2 US to ~$6 US in one year. Soy has had similar scale price increases.)
The solution is for them to stop being so fixated on ethanol and corn based solutions.
They need to do a geographical analysis to figure out what niche alternative energy sources are best suited to their town. They also need to objectively evaluate what role solar can play for them. In particular, there is a house in NJ they should look very closely at. ~$50K per house would allow them to have a community where every house is nigh unto 100% self suffcient energy wise.
Then they need to punt ethanol in favor of more effective and more efficient fuel solutions. All that corn and all those bails of corn stover can be more effectively useful in just about any other capacity other than as fuel sources.
Instead of growing corn for fuel they should grow a more efficient oil crop like rapeseed.
Oh, and someone has been feeding them a line of BS about them not being able to take themselves off the grid if they want. AFAIK, there is no law that requires any municipality to get their E from a big commercial producer. Nor is there a law that they must sell excess E they produce back to said big E company.
If a town wants to produce their own E for strictly their own use, they have every right to do so. Ditto storing excess E produced. In NE, there are a number of towns that have their own muni EPG that do exactly these things.