Energy costs are eating up indoor farming budgets. Here’s how to control them.

Author: Drew Gravitt Schneider Electric Blog

Indoor agriculture is revolutionizing the way we grow and distribute food by making it more local and available year-round — but at what price?

Between lighting, humidity, ventilation, and temperature control, energy can make up as much as 60 percent of an indoor farming company’s operational expenditures. Couple high energy use with electrical grid instability and fluctuating energy costs, and you can begin to see a pattern of energy challenges.

As a member of the indoor agriculture industry, how do you manage your energy so that it’s reliable, efficient, sustainable, and cost-controlled? In this blog post, I address one key technology and an innovative financing model making it possible.

The technology: Microgrids for indoor agriculture

Microgrids are self-contained electrical networks that allow you to generate and use your own electricity at your indoor farming facility. Although this sounds like a traditional renewable electricity system, it’s not. What sets a microgrid apart from, for example, a solar array, is control of the system.

With a microgrid, you gain control over the energy you generate — deploying it when it’s needed most with the help of battery systems and intelligent software solutions. Unlike conventional grid-tied solar systems, these technologies can switch your facility’s power between the utility grid and the microgrid during an outage. This flexibility helps you avoid paying peak demand charges, participate in time-of-use rates, generate revenue via ancillary service programs, and maintain uptime during grid outages.

Microgrids solve four major energy challenges for indoor farmers.

1. Reliability: Keep your facility’s electricity on — powering your lights, HVAC, data center, etc. — during a grid outage
2. Efficiency: Integrate on-site renewable energy with intelligent controls, enabling you to pick and choose the best times to utilize these sources and, ultimately, save money
3. Sustainability: Reduce your emissions with distributed energy resources, such as solar
4. Cost control: Store electricity and distribute back to the grid during peak demand or during demand-response events

In short, microgrids enable indoor farmers such as Fifth Season optimize their energy production and usage. But that sounds expensive. Is it?

The financing: Energy as a Service

Like most projects involving capital expenditures (CapEx), installing a microgrid can be a major expense. However, you may not need to pay for a microgrid upfront— new financing models make it possible to convert CapEx into a monthly fixed rate.

This method, Energy as Service, makes microgrids and other energy infrastructure improvements accessible and affordable to indoor farms of varying sizes and geographies.

Energy as a Service provides you the energy outcomes you need to run your indoor farming company and meet your goals, with no upfront capital and low operational costs. It includes the design, construction, financing, ownership, operation, and maintenance of an entire microgrid system, plus all the electrical infrastructure behind the system.

Energy as a Service financing goes beyond microgrids. Do you need to modernize your metering system? With Energy as a Service, you can do that. Are you in need of switchgear for a solar integration? Energy as a Service can do that too, without charging you upfront.

As a customer, you receive everything you need to optimize your energy production and consumption, including:

• Industry-leading engineering, financial, and power distribution expertise
• Optimized energy infrastructure, such as upgraded switchgear, microgrids, controls, batteries, etc.
• Renewables and other emissions-reducing technologies
• Lower execution, financial, and operational risk by leaving installations and operations to energy management experts
• Predictable long-term contracts, pricing, maintenance, and other support
• Enhanced outcomes for resilience, efficiency, sustainability, and cost control

Energy as a Service makes energy optimization for indoor agriculture attainable. To take a deeper dive into Energy as a Service, read our e-guide: Energy control. Less risk. Zero upfront costs.

Breaking ground, together

The buzz around indoor agriculture is palpable and warranted — the industry is changing the way people across the world get their food. And the energy challenges I addressed in this post? These are just part of the learning curve.

The good news is that tackling your energy challenges now with microgrids and Energy as a Service allows you to produce more efficiently, profit faster, and be more sustainable in the long run.

Schneider Electric™ has built 300+ microgrids (and counting) — and our energy infrastructure supports some of the county’s most critical facilities, including airports, military bases, and government buildings. We have the expertise to help you control your indoor farming facility’s unique energy challenges.

Want to take a deeper dive into these tailored energy solutions for indoor farmers?

Watch this free, on-demand webinarfor more strategies to help your indoor agriculture business thrive.