Prohibition of cannabis used to drive the culture of clandestine production, and solar energy helped farmers grow it in remote, off-the-grid locations. Now that the global commercial cannabis market is emerging, solar energy is playing an even bigger role.
Solar energy and cannabis cultivation are old beds. PV pioneer John Schaeffer is even credited with facilitating solar power in Northern California’s cannabis industry, which in turn supported the nascent solar sector. Now, as the legalization of medical and recreational cannabis accelerates, solar energy continues to play a key role.
In the weeds
Cannabis can be grown outdoors, indoors or in greenhouses. Although outdoor farming has been around for millennia, the industry’s growth and increased demand for higher-quality products—as well as tight profit margins—have pushed producers indoors, where ideal environments can be replicated. Indoor growth gives control over environmental factors and flowering time. More importantly, it means consistent, year-round yields.
However, high-powered lights and the heating, ventilation and air conditioning equipment needed to regulate temperature and humidity have a Sasquatch-sized carbon footprint. According to a report published by the UN Office on Drugs and Crime (UNODC) in 2022, climate control measures cover more than 80 percent of the carbon footprint of domestic cannabis production.
UNODC estimates that the carbon footprint is 16-100 times larger than in outdoor farming. Indoor “factory farming” is at odds with environmental, social and corporate governance (ESG) standards, says Evan Mills, principal of Energy Associates and former senior scientist at Lawrence Berkeley National Laboratory.
Mills laid out the issue in an article published in the journal “Energy Policy” in 2012, the year Colorado and Washington state legalized cannabis and set off a domino effect elsewhere. Already at that time, he estimated that indoor farming accounted for 1% of the total US electricity consumption, which is the equivalent of three million cars.
The scientist estimates that 42% of cultivators will be grown exclusively indoors by 2020, often in multiple vast Walmart-scale factories with energy consumption comparable to that of data centers.
Unfortunately, installing large-scale solar energy on site is not an easy solution. According to a recent study by Mills of an indoor cannabis industrial park in Blythe, California, the amount of solar energy needed to achieve net-zero energy would cover 1,400 acres—much more land than would be needed if cannabis were grown outdoors.
While completely valid, Mills’ research suggests a false equivalence between indoor and outdoor cannabis. After all, anyone can make a big batch of moonshine in a bathtub, but it’s not so easy to make great single-malt Scotch at scale. Indoor cannabis is a premium product, and in a state like California where people still have easy access to black markets that are at least twice the size of the regulated (and taxed) industry, commercial cannabis companies are incentivized to produce premium products that can only be grown in such a climate. -controlled environment.
There are also risks associated with large-scale outdoor farming. In October, or “Croptober” as it’s known, all of California’s outdoor cannabis is harvested. This single crop, if not spoiled by environmental effects such as wildfires, only attracts consumers for several months. If crops fail or people choose to use cannabis during the other nine months of the year, they turn to indoors or greenhouses.
Through the roof
Despite the alarming energy intensity of indoor cultivation, the mere roof space of greenhouses is an ideal solar platform.
Based in California, Canndescent has over 100,000 square feet of indoor growing space and produces nearly 17 tons of cannabis annually. In 2019, Canndescent installed a 282.5 kW solar system at its facility in Desert Hot Springs.
Andrew Mochulsky, Director of Compliance at Canndescent, says: pv magazine The unrelenting sunshine and limited cloud cover of the Colorado desert make solar energy a no-brainer. “We’re in the heart of solar and wind country, so it made sense to bring solar online,” he says. “We also think it’s the right way to do it.”
Mochulsky says indoor farming doesn’t try to replace the sun, but rather enhances it to create rigid 12-hour midday sun conditions that are physically impossible outside. Therefore, you need to control the environment, so it is very thirsty for electricity.
According to Mochulsky, Canndescent’s solar energy offsets 25-35 percent of the company’s electricity consumption, depending on the season. “It’s a great investment,” he adds. “And if we can get closer to a 1:1 canopy space ratio, that would have a significant impact on our electricity costs.”
The inclusion of umbrellas and carports also provides a “quality of life benefit” for employees, Mochulsky says. “So people have a nice, shady place to sit.”
The cash flow puzzle
Despite these advantages, only a small percentage of North American indoor growers have used the sun.
“We’re outliers,” Mochulsky says. “I can’t say it’s the norm. Even here in Desert Hot Springs, we’re the only one, and that’s in stark contrast to the housing market, where every roof has solar. Solar makes a lot of sense, but there’s an upfront cost.”
A Canndescent executive says tight margins on cannabis are a factor. “Even with a five-year ROI (solar yield), the market is soft, (costs) are low — except in operations — and liquidity is very tight.”
While cannabis legalization in the United States is progressing state by state, and President Joe Biden has ordered his Health and Human Services and Attorney Generals to review cannabis schedules under federal law, the market remains in legal limbo at the national level. solar energy financing difficult.
“There are many prevailing headwinds for cannabis to absorb more solar energy,” says Mochulsky. “Access to many financial instruments is simply not available. We cannot get a regular loan from regular banks. For example, we cannot lend to a company. Cannabis companies cannot afford bankruptcy. Federal illegality also means we don’t have access to state and federal tax credit programs (like the Inflation Reduction Act). Investors are much more exposed to this level of risk. After all, if a business cannot innovate, it must fail.
However, there are more examples of using the sun. Much further north, Freedom Cannabis tapped AltaPro Electric to design and install a 1.83 MW system at its facility in Acheson, Alberta in 2020.
“It’s the largest working rooftop electrical installation in Canada,” says AltaPro CFO David DeBruin.
Freedom Cannabis collects rewards for betting on solar energy. “Indoor growing margins are very competitive and cutting one of the biggest operational costs (operating expenses) is a great way that Freedom Cannabis has been able to be a leader in the industry,” says DeBruin. pv magazine.
He says other cannabis companies have inquired about solar, but like in the US, “it seems like customers are holding back because it’s harder to get financing from lenders. It’s a shame because the cost of savings is reduced many times over, making everyone go solar.” of loans intended for installation in the first year of the positive.
Agrivoltaics and greenhouses
Cannabis is not limited to medical and recreational use. Hemp is one of the most versatile crops on the planet – and it’s making a big comeback. Since hemp is not grown for the psychoactive component tetrahydrocannabinol (THC), its cultivation is much less intensive and finickier than, for example, the high-THC flower grown by Canndescent in California. This makes hemp a potentially ideal agrovoltaic crop.
In Melz, Germany, agricultural electricity developer SunFarming is currently experimenting with growing hemp under solar panels. “All the plants, without exception, have grown well and developed excellently,” says Hanf Farm founder and CEO Rafael Dulon. Dulon says the panels also help with mold, a key concern for hemp growers. Mold becomes a problem in the fall, when the temperatures cool and the rains on the plants do not dry. “The rain protection for the plants provided by the PV system works great,” says Dulon.
Another option for cultivation that consumes less energy is a greenhouse. However, the need for natural sunlight makes rooftop solar less attractive for such structures. Building integrated solar PV (BIPV) is developing rapidly, but products such as solar facades for greenhouses may be years away. Meanwhile, US nanomaterials innovator UbiQD’s agricultural product UbiGro – and solar panel maker Heliene – have entered into a joint development agreement for light-optimizing, energy-generating modules designed for agricultural greenhouses.
UbiGro’s translucent greenhouse film is integrated with photoluminescent particles that convert light into an affordable wavelength and can be easily connected to a solar module. UbiQD founder and CEO Hunter McDaniel says pv magazine that if the panels shade the greenhouse only partially, the yield lost to shading can be compensated by the spectral improvement provided by the film.
McDaniel adds that while indoor growers have so far managed to keep the extent of their energy intensity quiet — unlike similarly emerging energy-intensive industries like cryptomining — indoor growth is likely to shrink. Research from Scientist Mills supports this idea, with the number of predominantly indoor growers falling from 80% to 60% between 2016 and 2020. With too much inconsistent outdoor growth and shrinking indoor growth, the hybrid option for greenhouses is likely to become more common. the future.
The cannabis industry’s trend of harnessing solar energy continues in US states where the plant has recently been legalized, such as New York. Nate VerHague, market development manager for New York-based installer Solar Liberty, says pv magazine the new cannabis market “is going to have a lot of potential for solar power.”
VerHague notes that cannabis operations in New York State (NYS) are just getting started. “Electricity for these large operations becomes extreme electricity costs,” he says. “It’s an ideal customer for solar energy, because these facilities usually have a lot of roof space to use.”
While the emerging nature of the NYS market means that Solar Liberty has yet to install solar for a cannabis company, VerHague confirms that the installer is “in the bidding process with some organizations,” and the market looks promising for this year.
National and regional governments around the world are following in the footsteps of the United States, Canada, Mexico, Thailand, Uruguay and others. Germany could fully legalize cannabis within a few years, a development that would make it not only the world’s largest single legal market, but also, given its European centrality, the world’s “trickiest” domino, with its neighbors expected to follow. Cannabis is becoming big business, and because of its energy needs, it could also be big business in the field of solar energy.