Cannabis growers lead off-grid energy development

Its a little known fact that the Marijuana growers of Northern California were amongst the first to use solar panels to improve their crop yields, back in the mid 1970s.  Forty years later they are still at the forefront of energy innovation, and a burgeoning number of utility companies are working with cannabis cultivators to better manage costs by:

* Assigning employees to work exclusively with marijuana businesses.

* Recommending lighting, heating, ventilation and air-conditioning (HVAC) systems, which they say can save cultivators tens of thousands of dollars annually.

Here are some of the points growers are focusing on as they consider potential energy savings:

1. Electricity consumption typically is the second-largest cost incurred by indoor cultivation facilities.T

2. Find a Utility executive who is willing to focus on you  0 In May of 2017, I started devoting 100% of my time to the cannabis operations coming into our territory, knowing that all those companies were going to fill one portfolio of commercial account management,” said Matt McGregor, strategic account manager, cannabis operations, for the Sacramento Municipal Utility District (SMUD).McGregor estimates he has roughly 200 marijuana customers, mostly growers, but also about two dozen customers involved in extraction, infusion, processing and packaging.

3. Go to private utility companies, not government funded or municipal Utlities. Private utilities are investor-owned, for-profit corporations; public utilities are government-owned.Public utilities risk losing their licenses.Private utilities don’t have those constraints. Consider Puget Sound Energy (PSE) in Washington state, which has helped about 80 cannabis customers with about 100 energy-savings projects since 2014.  PSE buys the power it sells to customers off the market or from its own power generation.“So, we didn’t have to be concerned about losing federal funding by serving the cannabis sector,” said David Montgomery, an energy management engineer with PGE.

4.Find a private energy company that operates in your own State.  Xcel Energy – a private utility operator serving eight Western and Midwestern states including Colorado – goes by the same premise.“We work with marijuana companies because they are legal operating entities in the state of Colorado,” Xcel spokesman Mark Stutz said.”We are regulated at the state level, and to deny services would be in violation of state law.”

5. Remember what the Utility stands to gain –  Utility companies may have to build new power plants to supply customers’ demands, which is costly. It’s cheaper to persuade existing customers to reduce energy usage by using conservation practices and buying newer, more efficient lighting and HVAC.

Now, utilities are looking to the cannabis industry as a place where they can help customers take pressure off the grid.“With the legalization of the cannabis market in Massachusetts, and the fact that this business is extremely energy-intensive, this is an agricultural area where there is opportunity to proactively influence the design of these facilities in order to mitigate their very significant energy demand,” noted Robert Kievra, a spokesman for National Grid, a major utility in Massachusetts.About 70% of the cannabis facilities in National Grid’s service area participate their rebate and incentive programs, Kievra added.

6. Consider LED and HVAC technologies Energy companies say the best way for marijuana growers to reduce their energy consumption is to switch from conventional lights to LED, and to upgrade HVAC.  Montgomery estimated he saves his marijuana customers about 50 million kilowatt hours per year.A kilowatt hour is a unit measuring the amount of watts used over 60 minutes. For example, 1,000 watts of power used for one hour represent one kilowatt hour.Despite outreach from PSE and lighting companies, cannabis businesses may have not taken much advantage of incentive programs.For example, LED lights should be installed at about one light per a 4-foot-by-4-foot area of canopy.That means 10,000 square feet of canopy would require about 625 lights, with each light costing about $1,000 each.

Montgomery said PSE typically picks up 50%-70% of that cost through rebates, although it’s sometimes lower based on the types of lights that are chosen.

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