Case study examines energy reduction in partnership with Energy Trust of Oregon
By Becky Garrison
Conservation is a major component in Oregon’s reputation for sustainable, craft products, including cannabis. Efforts to reduce energy consumption has brought together cannabis companies and Energy Trust of Oregon.
The ongoing collaboration between Energy Trust and Eco Firma Farms of Canby was highlighted at January’s Cannabis Collaborative Conference 4.0 in Portland. “Energy Trust of Oregon: Decrease Your Watts Per Gram: A Case Study on Energy Reduction” featured Jesse Peters, Eco Firma chief executive officer, with representatives from Energy Trust’s Advanced Energy Systems.
Prior to Energy Trust’s assistance, Eco Firma operated entirely on renewable wind energy. They received Portland General Electric’s Green Mountain Energy gold certification last year for their clean, wind-energy efforts, and the company is on track for platinum certification this year.
Still, Peters noted, they wanted to generate as much electricity as they use in a year. After moving into a 23,000-square-foot indoor facility, Peters experimented with a variety of LED lights and heating, cooling and ventilation systems that failed to work. Then he decided to enlist Energy Trust’s help. “Instead of telling us what we can’t do, they said what we can do. Also, their customer service treats us like we’re a real business.”
Because lighting represents 22 percent of its overall energy load, Eco Firma immediately saved by switching to LED lights under Energy Trust’s guidance. The upgrade to LEDs cost $161,500, partially offset with a $79,700 cash incentive from Energy Trust. Some suppliers can defer this cost, noted Energy Trust’s Doug Oppendal, explaining that incentives can serve as suppliers’ down payments. This lighting upgrade offers a 41-percent rate of return with a 2.4-year simple payback.
Annual savings from upgrading to LED lighting is $33,800 in energy costs, with 388.800 kilowatt hours (kWh) saved and 185 tons of carbon dioxide emissions avoided. Also, Peters noted that he pays $3,000 in labor to replace regular light bulbs every six months; LED light bulbs last for 5 years.
Once Peters installed the lighting, he focused on upgrading his heating and cooling system and dehumidifiers. This upgrade cost $71,000, funded in part by a $20,100 cash incentive from Energy Trust. Upon completion, Eco Firma should see an estimated $29,600 annual energy-cost savings with a nine-month payback. Also, this upgrade will save 366.900 kWh and avoid 174 tons of carbon dioxide emissions.
Expanding its facility has Eco Firma looking to solar power, with construction expected to begin in April. They calculate that solar will save $30,000 a year by generating 240,000 watts of power. The cost for their 250-kilowatt solar system is estimated at $600,000, offset with an Energy Trust grant of approximately $100,000.
These costs and benefits are unique to Eco Firma’s particular venture. Each grow site has its own variables, including how much sunlight it receives, if the building has favorable southern exposure and if trees are blocking sunlight. For smaller cannabis grows, Energy Trust can scale down upgrades to meet farmers’ needs.
The federal tax credit for a project of this size averages $175,000, and federal and state depreciation benefits average $160,000. Although cannabis is classified as a Schedule I drug, prohibited by federal law, Energy Trust has developed ways that cannabis businesses still can get their federal tax credits.
For example, a cannabis grow can pay the landlord for energy-saving measures. Then as the landlord pays federal taxes, the cannabis grow can get its federal tax credits via the landlord. These estimates were made before President Donald Trump initiated changes regarding financing solar energy.
Although this project now will cost more money, Peters expressed commitment to the venture. “It will cost us more money, but we’re going to do it anyway, as we want to be good humans by getting our energy naturally from the sun and burning less electricity.”
As more companies go green, Peters encouraged other cannabis growers to be cautious. In his estimation: “I need to be efficient. Every cubic foot of my facility either makes me money or costs me money. I weigh the up-front investment, so we can become energy-efficient versus the long-term investment of savings I will incur over time.
“Some leasing companies will purchase your companies at zero-percent interest, and all they need is for you to sign over your energy credit,” he added. “They are preying on people who don’t understand this industry.”
While Eco Firma champions sustainable farming practices, they work to ensure that energy upgrades do not impact their craft cannabis. LED lights, according to Peters, change cannabis plants’ phenotypes by altering their metabolism, radiant heat profiles and environment. Some plants get bigger or assume different colors while some don’t change at all.
Once Eco Firma installed LED lighting, Peters said, they found the cannabis quantity went up. The quality is about the same, and they continue to work on bringing quality up to the highest organic standards possible. “I’m never going back from LED lights.”