December 04, 2020

Getting Ahead of the Curve: Energy Rebates & Incentives for Cannabis Operations

Act now, these programs won't last forever!

With cannabis science finally getting daytime acceptance, incentives for energy efficiency are coming into play. While it may be intimidating to reveal sensitive information about operations, doing so saves cultivators across the country hundreds of thousands of dollars in new programs meant to improve efficiency in the cannabis industry. 

Know Your Allies With Energy Efficiency

Across North America, legalization is spreading. More and more legal operations are cropping up across the continent, and thus utility companies are keen to get in contact. While cannabis operations consume large quantities of energy, many fail to communicate with their local providers often due to feeling mistrustful of such companies. However, transparency about energy efficiency will help our understanding of how light interacts with cannabis and help producers save potentially millions of dollars. In partnership with Fluence by OSRAM, Corinne Wilder from Fluence, Derek Smith from the Resource Innovation Insititute, and Edward Dow, CEO at Solar Therapeutics, joined host Kristina Etter on this live webcast to discuss this topic.

Rushing defines the whole ordeal of a gold rush. Waiting too long means the opportunity will pass, and so cultivators are wise to adapt quickly to the changes in tides. According to Corinne Wilder, "Different companies like Energy Trust, which is out in Oregon, IESO, which is in Canada, SMUD, Nevada Energy, DTE which is in Michigan, these different utility companies want to give you money. Many different sources show that utility companies would rather give you a rebate to incentivize efficient technology rather than building additional infrastructure and load onto their grid. It's really in your favor, and it's also in their favor." 

Setting Up for Success Includes Being Informed and Invested

Wilder went on to explain, "one of the things we need to be cognizant of in this industry is how energy-intensive it is. We're on the level of data centers and hospitals for the amount of energy required to operate these facilities. On lighting, we need somewhere to about 80 to 100 times more light in a cannabis operation than you do in a commercial office area, so it's just a lot of light and a lot of electricity going into these facilities. Any incremental improvement that can be made will be very, very needed."

Luckily for the industry's greater efficiency, several states have implemented, or will implement, regulations upon new grows and updates for existing ones. From California to Illinois and Massachusetts, several states have written energy codes that essentially require new operations and expansions to existing operations to rely on LED lights throughout the country. 

While these rebates and incentives related to energy efficiency are fantastic, they won't last forever. As Smith rightfully pointed out, "as these regulations come into play that requires certain technologies, these incentives will go away. Even without regulation, the more these requirements become the industry standard, the incentives go away. Do this sooner than later and rely on good information that's peer-reviewed." 

Innovative and Better Methods of Energy Efficiency

While cannabis is an industry on the cutting edge of American technology, many people are slow to adopt new methods. Edward Dow, CEO at Solar Therapeutics, admitted, "LEDs had a pretty terrible reputation just five years ago. I myself had some really bad experiences, and my grower wouldn't even consider LEDs... [Now] we're still building out our facility, but with our initial order of [LED] lights, we got $155,000 initially, and we'll be just under $200,000 for that first batch of lights. The next batch we're putting in triples our first order, so it'll have corresponding rebates." Now Dow's facility can produce about 5 megawatts of energy, or in his words, "we could produce power for about 5,000 small homes from this facility." 

Given this unique position as literal powerhouses in America, companies such as Solar Therapeutics can stand as real examples of sustainability for all industries across the nation. However, whether or not cultivators get hip to LEDs in time for rebates or other incentives, research is proving LEDs to be ideal for cannabis production.

"What we're also seeing," Smith elaborated, "which may be more important, is that it's increasing productivity. So, in other words, you're getting more, nearly double, 80% improvement in the amount of flower that is produced per unit of energy consumed. So if you think about that, that is profit. What this data is verifying is energy savings.”

He continued, “There's a lot more to learn from leaders like Ed and others about the non-energy benefits of LEDs, and we're beginning to understand that, and secondary metabolite expressions, and everything else. That needs to be studied. The news on energy efficiency is that these technologies are working. The facilities which are using them are more efficient, and that's the picture of the market today."