Marijuana companies partner with utilities, solar gardens to offset electricity costs

Jack's Solar Garden

Jack's Solar Garden in Colorado combines solar installations and agriculture to help companies offset their carbon footprints. (Courtesy photo)

Marijuana businesses looking to reduce their carbon footprints can get help from a growing number of diverse energy companies that range from consultancies to publicly traded utilities.

Consider Terrapin Care Station, one of Colorado’s largest vertically integrated cannabis companies. It has struck carbon-cutting partnerships with Jack’s Solar Garden, a community farm that combines solar installations and agriculture in Longmont, Colorado, as well as Xcel Energy, the utility giant based in Minneapolis.

Terrapin is one of roughly a dozen cannabis companies enrolled in an 18-month strategic energy program developed by Xcel and energy consulting firms Resource Innovations and Cascade Energy to teach businesses “strategic energy management” practices that will reduce their energy usage and costs.

The program begins with visits from California-based Resource Innovations and Oregon-based Cascade Energy representatives who conduct comprehensive energy audits of the cultivation facilities, measuring how much energy their lights, HVAC (heating, ventilation and air conditioning) and other equipment use, as well as how much humidity is in the air because of plant transpiration and other factors.

“A team comes into all of your grows and does a top-down audit,” Terrapin spokesman Peter Marcus said of cannabis businesses involved in the program. “They have their tools to measure. And then it all goes into computer systems. There’s modeling that’s done to identify where you can save. And then, even better, is they work with you and literally hold your hand to get the rebates that Xcel and others can offer you for making switches (to energy-saving equipment).” 

Making Changes

“In terms of the project costs, there are incentives from the utility to encourage the customer to get those projects done,” said Jake Mitchell, a senior outreach consultant with Resource Innovations who is helping Terrapin with its energy-savings efforts.

The primary equipment that Mitchell sees cannabis companies implementing to create large energy savings are LED lights, variable-frequency drives for irrigation pumps and exhaust fans. He added that companies often get rebates for building automation systems to control HVAC, dehumidification, lighting and irrigation—although rebates are specific to the projects at each individual grow.

“Not one project recommendation that we do is the same for any two grows. We calculate savings and then Xcel does the incentives based on the energy that’s saved with that equipment or with that process,” Mitchell said.

The consulting services come at a discount and are paid for by a fund to which the cannabis businesses contribute. Mitchell said utilities such as Xcel support the program because “it’s cheaper in the long run—and better for the grid in the long run—to incentivize energy-efficient measures than it is to, say, build a new power plant.” 

Saving Money, Doing Good

Rebates vary, but they can be anywhere from 20% to 50% off the total price of equipment, observers said.

“The program is not just about the incentives in the rebates for equipment. Our goal in a strategic energy-management program is to actually build good energy-management practices into the business itself,” Mitchell said.

He said that many utilities where there are legal marijuana markets offer similar consulting, audit and rebate programs for cannabis businesses, including, California, Illinois, New Jersey and Utah.

Another way Terrapin reduces its carbon footprint is by buying 10% of the energy produced by Jack’s Solar Garden, which went online in October. Jack’s Solar Garden supplies power to municipal buildings, homes and about a half-dozen businesses, including Terrapin and one other cannabis company, In The Flow in Boulder, Colorado.

The amount of energy that Terrapin gets from Jack’s Solar Garden covers about 25% of the company’s energy needs, Marcus said.

Boulder County incentivizes such projects with a tax of 2.16 cents per kilowatt hour on the energy consumption of local cultivators, according to Byron Kominek, owner of Jack’s Solar Garden. Alternately, to avoid the tax, cultivators can subscribe to a community solar garden such as Jack’s.

Such options might become increasingly available to Colorado cannabis companies. Kominek estimated more than a dozen companies in Colorado are building solar gardens that other businesses will be able to plug into.

“As an industry, we’re going to be facing renewable energy and sustainability mandates. A lot of this is positioning ourselves and knowing that we’re going to have to make a difference for the Earth,” Marcus said.