The cannabis industry is growing rapidly, and with that growth comes a growing demand for energy. Cannabis cultivation, particularly indoors, is energy-intensive, requiring substantial amounts of electricity for lighting, HVAC, and other equipment. But there's good news. The cannabis industry has the potential to be a leader in sustainability. By adopting energy-efficient practices, cannabis cultivators can reduce their environmental impact and save money.
The Importance of Beneficial Electrification
Beneficial electrification is the process of replacing fossil fuel-based systems with electric systems that are more efficient and environmentally friendly. In the context of cannabis cultivation, this means transitioning to energy-efficient lighting, HVAC systems, and other equipment.
Source: New Frontier Data, 2018
One of the most effective ways to achieve beneficial electrification in cannabis cultivation is using LED lighting. LEDs consume significantly less energy than traditional high-intensity discharge (HID) lights and have a longer lifespan, reducing both operational costs and environmental impact.
Did You Know? Growing four pounds of marijuana at an indoor facility can consume as much electricity as the average American home uses in one year?
Horticultural Lighting Rebate Programs
To incentivize the adoption of LED lighting, states can start by implementing horticultural lighting rebate programs. These programs can offer financial incentives to cannabis cultivators who invest in energy-efficient lighting systems.
Jolene Hansen, a Minnesota-based freelance writer specializing in the horticulture, cannabis and hemp industries, explained for Cannabis Business Times:
Cost is often cited as a barrier to LED adoption. Cultivators who don’t plan to use LEDs in flowering in the next year named ‘payback/ROI too long’ and ‘challenges in securing funding/capital for LED lighting’ as top reasons preventing them from leveraging this technology. For many LED users, utility rebates and incentives provided crucial boosts, but rebate awareness remains low.
By subsidizing the initial cost of LED lights, such programs can accelerate the transition to more sustainable cultivation practices. Additionally, these rebates can be structured to reward cultivators who achieve specific energy reduction targets, further encouraging efficiency improvements. While most rebates for traditional LED fixtures are a fixed amount per fixture, about two-thirds of rebates for horticulture lighting are calculated based on energy savings. This is because the technology is newer, and utilities are still gathering data on its performance. As this data becomes available and utilities gain a better understanding of horticulture lighting, rebate programs are expected to shift towards simpler, fixed-amount incentives.
Source: BriteSwitch, 2021
Demand Response (DR) Programs for Energy Management
But it doesn't stop within lighting changes. Demand response programs are another crucial component of beneficial electrification that can benefit both cultivators and utilities. DR firms like Enersponse explain that adjusting power consumption in real-time based on grid and price signals enables growers to save costs while easing strains experienced by the grid and deferring costly generation and distribution system upgrades. These programs encourage consumers to reduce or shift their electricity usage during peak demand periods in response to time-based rates or other financial incentives.
But it is worth noting that participating in demand response programs involves some operational changes for cannabis cultivators:
- Temporarily dimming lights
- Adjusting climate control settings
- Delaying certain energy intensive tasks during peak times
State-Specific Energy Standards
Implementing these changes is only half the equation. As any energy program or project manager will tell you, measurement and evaluation are essential to success. Genevieve Byrne, Professor of Law and Staff Attorney for the Farm and Energy Initiative at Vermont Law and Graduate School elaborates in her report, Energy and Equity in Cannabis Culitvation:
When energy planning and reporting is a component of cannabis cultivation licensing, it allows utilities time to prepare for large new electric loads being added to the grid system and analyze how the cost of any needed energy infrastructure upgrades should be allocated between utilities and cultivation facilities.
By mandating energy audits and setting benchmarks for improvement, states can drive continuous progress towards energy sustainability in the cannabis industry.
State and local lawmakers should also incorporate:
- Rigorous monitoring and reporting mechanisms to ensure compliance
- Measures to assess the impact of these initiatives
A Path Forward
High energy consumption industries like cannabis cultivation pose significant challenges to the integrity of power grids across the North America. However, through beneficial electrification, horticultural lighting rebate programs, and demand response initiatives, states can play an active role in helping utilities mitigate these impacts and further sustainable energy practices.
If industry, utilities, and states can align their efforts, we solve one the most frustrating hurdles for cannabis cultivation while creating a template that may be useful for the wider indoor agriculture business.
Author
Kenneth Cottrell, M.A.
Doctoral Candidate in Public Policy, University of Nevada, Las Vegas
Kenneth A. Cottrell is a seasoned urban policy expert and community leader with extensive experience in public policy, energy efficiency, and social equity. As a second-year doctoral candidate in Public Policy at the University of Nevada, Las Vegas, Kenneth's work spans from managing energy rebate programs and the promotion of sustainable urban development. He serves on the executive board of 100 Black Men of Las Vegas Inc. and Global Paint for Charity Inc. Kenneth holds a Master of Arts in Urban Leadership, Bachelors of Science in Urban Leadership from UNLV and studied Finance at Morehouse College. He actively contributes to Las Vegas community initiatives, particularly in youth leadership and sustainable business growth.