In early 2018, about six months into the multimillion-dollar renovation and build-out of his planned cultivation, manufacturing and retail space in Somerset, Massachusetts, Ed Dow, CEO of Solar Therapeutics, hit a major problem.
The utility circuit that Dow planned to rely on for 5,000 amps of power was old and couldn’t handle the projected energy load.
National Grid, the utility with a nearby power station, told Dow that replacing the aged circuit with an updated one capable of generating enough power for his operation would cost Solar about $2 million up front.
Worse still, the project would take two years.
Dow and his partners already had invested several million dollars in the project—a 70,000-plus-square-foot manufacturing building that came with 70,000 square feet of solar panels on the roof, plus another 5 acres of solar panels on property behind the facility.
Combined, the solar panels can generate more than 1 megawatt of power, which is enough to power 300-400 homes for an hour, according to conservative estimates.
Dow’s plan was to generate the maximum amount of clean power with the panels, while the grid would provide whatever else Solar needed. It also would serve as a stable source of energy when the sun didn’t shine.
After consulting with energy and design specialists, Dow decided that rather than paying National Grid $2 million for an upgrade that would take two years, he would spend the money to create Solar’s own clean-power source.
He found two highly efficient, combined heat and power (CHP) cogeneration units: one from Caterpillar and the other from MTU, a Rolls-Royce subsidiary based in Germany. Dow estimated the cost at “around $3 million.” To pay for it, Dow and his partners had to get a loan at an interest rate he called “north of 20%.”
“That’s really the backbone. They’re ultra-high efficiency (natural) gas generators,” Dow said of the two cogeneration units, commonly referred to as “cogens.” Each generator produces about 1.5 megawatts of power.
The decision to buy the cogens not only saved Solar from an expensive delay but turned out to be an environmentally friendly cost-saver that reduced the company’s spending as well as its carbon footprint. Cogens are far more efficient than getting power from the grid, Dow said.
“Because you’re producing DC power on-site (with cogens), you’re already producing at a much higher efficiency rate than, say, a big power plant would down the road,” Dow said. “At a power plant, you’d lose maybe 30% plus in the transmission lines. We don’t lose any; there’s no transmission loss.”
Creating its own microgrid also cemented Solar’s business and brand strategy, one based on sustainability.
“It’s our core ethos to build sustainably any way we can. It’s a major upfront expenditure, but I think it will pay dividends with the way that general consumer behavior is trending,” Dow said.
A Registered Power Plant
Many casinos, hospitals, pharmaceutical companies and factories have used cogens for years.
To get its own cogens up and running, Solar had to meet federal Environmental Protection Agency and Massachusetts Department of Environmental Protection standards, such as for emissions and noise.
While Solar researched many companies purporting to have both cannabis industry experience and generator-installation experience, the company ultimately opted for one without cannabis experience but steeped in industrial experience installing cogens in remote places such as oil rigs and mining operations.
“We’re now a registered power plant,” Dow told MJBizMagazine.
In addition to the cogens—each producing about 1.5 megawatts—and the solar panels, which produce 1-plus megawatt of energy, Solar has a backup diesel generator capable of producing another 1.5 megawatts. Dow said the company tries to avoid using the diesel generator, but having backup power is critical when you go off-grid.
Under Solar’s current microgrid scheme, the cogens generate more than enough energy to power the 42,500 square feet of the facility already built out and in use. Meanwhile, the power generated by Solar’s solar panels goes back into National Grid’s network, earning Solar hundreds of thousands of dollars in energy credits, Dow said.
Solar is building out the remaining 30,000-plus square feet of the facility, which the cogens will also be able to power once the build-out is complete. Solar’s contract to sell solar energy back into the grid expires at the end of the year, but Dow hopes to renew it.
He cautioned that having one’s own microgrid comes with headaches, most notably being responsible for the grid when it goes down because of parts and mechanical issues. Complicating the challenge, parts sometimes must be ordered from abroad, while workers with the expertise to service the cogens must come from outside the state.
Issues such as worn or broken parts can arise a few times per year, Dow said. “Be it the solar, any of the generators, whatever, you’re going to have maintenance,” he added.
Beyond reducing energy spending and carbon emissions, the cogens offer other cost and environmental savings opportunities.
Traditionally, heat generated by microgrids and other factory and production equipment gets expelled into the atmosphere. But Solar captures and recycles that heat, using it for processes such as powering its HVAC equipment including evaporative chillers. The evaporative chillers convert water into vapor used to cool hot grow rooms.
“We have a very significant heat load. We can take all our waste heat from those cogens and pump it right back into our main facility. And that can optimize your carbon footprint,” Dow said. “Let’s say they operate at 60% efficiency prior, which is still great. You can tweak it to north of 80% efficiency out of those cogens once you start taking the heat back.”
Solar has a central heating and cooling loop that flows through the facility, and equipment in different parts of that facility are connected to the loop.
While New England weather might not always be conducive to solar panels, it is conducive to another energy-saving investment, free-fluid coolers, which work when the outside temperature drops below a certain level. (Dow estimated 45 degrees Fahrenheit.)
Free-fluid coolers are placed outside the facility and draw cool air, which is piped back into the facility to cool it down. Dow said the free-fluid coolers, which Solar purchased from Cancoil in Ontario, Canada, eliminate the need for the company to run evaporative coolers.
Another way Solar reduces its energy consumption and heat emissions is using LED lights. The benefits of less heat load include reduced need for HVAC cooling as well as less plant transpiration, which reduces how much you need to water the plants.
Solar also uses recycled water. Up to 90% of the company’s water is either recycled or comes from humidity (thanks to plant transpiration) that Solar recaptures with heat-recovery units that convert the humidity into condensate. That condensate then falls into sump pumps that transfer it back into Solar’s fertigation room.
A Model for the Future
While Solar’s environmental efforts are most extensive in cultivation, they’re also present in manufacturing, where the company uses CO2 instead of solvents such as butane and ethanol for extraction.
On the retail side, Solar uses LED lights and recycled ocean plastic from Los Angeles-based Ocean Works for packaging. The TV monitors that display menus and specials demand very little electrical current to operate. Solar is transitioning to tin packaging because tin is more likely to be recycled than plastic, Dow said.
But the cogens continue to be the main focus. And as Solar’s relationship with National Grid has evolved, the company has returned to the idea of replacing the old circuit with an upgraded one so that it can reconnect with the grid.
While the idea is very much in its earliest stages, Dow said National Grid would pay for the upgrade in rebates. And although Solar would be connected to the grid, it wouldn’t draw power from it but serve as an emergency backup. If Solar does strike such a deal with National Grid, the upgrade would take about two years to complete, Dow said.
“Then we’d have the best of both worlds: We’d have electric grid on-site, and we’d have a grid power utility provider on-site,” Dow said. “We’ve today already gotten over $1 million in rebates from them. And this one would be double or triple that.”
Having proved that Solar’s model works in Massachusetts, Dow is looking to take it elsewhere. The best market candidates, he said, are regions and states with aging electrical infrastructure such as the Northeast and Midwest as well as Texas.
“Those are the type of markets where our model absolutely makes perfect sense,” Dow said.