A model of sustainable commerce, carbon footprint, grid concerns push SoCal weed industry to be more green

A sterile windowless room glows with the light of 32 high-pressure sodium bulbs. For 12 hours a day, the light shines down upon meticulous rows of about 260 flowering cannabis plants.

This is one of the flowering rooms at Canndescent, a Desert Hot Springs cannabis business that operates several cultivation facilities. The company has the dual distinction of being the first municipally permitted cannabis cultivator in California, and the first in the industry to embrace commercial-scale solar.

Canndescent’s CEO Adrian Sedlin said the solar project, which consists of more than 700 solar modules set up on carports, offsets about 30% of the energy used at the facility. The operation allows Canndescent  to sell energy back to the utility, while also providing shade and cooling on the property itself.

Plus, many cannabis consumers desire a green product, Sedlin said.

“It was an absolute alignment of our internal values with the values of our consumers,” Sedlin said.

Cannabis cultivation generated the carbon emission equivalent of 92,660 cars in 2017. That figure is likely to increase as the legal market expands – 33 states already allow use in some form.

But the nascent industry also presents an opportunity to implement alternative energy processes and build a sustainable farming sector from the ground up.

Derek Smith, a cannabis sustainability expert with Resources Innovation Institute, said companies have yet to embrace sustainable practices on a large scale. But the seeds have been planted.

“I’ve never seen a bigger opportunity for an individual industry to make a positive leap from a highly carbon-intensive model to a low-carbon model,” Smith said. “We truly have the opportunity. We actually can show the world a model of sustainable commerce.”

How much energy does it take to grow cannabis?

The energy needs of cannabis cultivation already have presented challenges for municipalities and utilities as more states move to legalize. Oregon saw cultivation-related outages in 2015, shortly after recreational marijuana was legalized, leading officials elsewhere to ponder the need for additional substations, or how to keep their grids alight in the face of increased usage.

In the Southern California Edison service area encompassing the western side of the Coachella Valley, cannabis cultivation facilities use about 235 megawatts a day, or the equivalent of about 100,000 California homes.

System-wide, daily energy use ranges from about 10,000 to 11,000 to as much as 20,000 to 22,000 megawatts, depending on the seasons. That means the energy used by cannabis cultivation facilities could represent 1-2% of overall usage.

In Desert Hot Springs, now home to about 10 dispensaries and 23 cultivation, manufacturing or distribution projects, Mayor Scott Matas said initially there were concerns about whether the SCE grid could support the added load.

But as the facilities have gotten grows underway, some have found ways to limit usage to save energy and money — like Canndescent’s solar panels, or the implementation of LED lights, Matas said.

“If you could go to Las Vegas and see the lights that are used there, and the power that’s used there, I think they can find power to power up our industrial area here with no problem,” Matas said.

At Canndescent, the solar offset allows the company to sell energy back to SCE and recoup money on its energy bills. For its indoor grow facility, the bill could be around $30,000 a month without solar. Since the new solar project that came online in March 2019, the bill is about $12,000, Sedlin said.

Canndescent also takes advantage of an agricultural discount through SCE, which knocks 20% off of the energy costs.

Indoor vs. outdoor grows

Mike Rowe is the vice president of MSA Consulting, a Rancho Mirage civil engineering firm that’s worked with cannabis cultivation businesses on permitting, site design and other planning needs. He said indoor cannabis cultivation facilities generally use about 25 times what a standard industrial development may need.

“We’ve found that they all have their special way of growing, but there is a pretty consistent demand for the power they need,” Rowe said.

Sophisticated indoor grow facilities deploy climate control systems to keep the temperature consistent and humidity in check. The facilities often have ventilation systems and large overhead fans that frequently run to control air flow.

Perhaps most crucially, plants need extensive lighting systems to replicate the sun’s intensity. Bulbs can run for 12 to 18 hours a day, depending on what point in the life cycle the plant is at.

The benefit of the tightly controlled indoor environment is a carefully crafted product that’s been spared the wildcards of weather and pests, ultimately yielding a better output.

“When you grow outside, you can’t get as many crops as you can in a controlled environment inside,” Rowe said.

Rooms are also outfitted with automated temperature and climate controls, which helps cut down potential wasted energy and helps the plants thrive.

A few streets away, Canndescent operates a greenhouse cultivation facility which yields cannabis sold at a lower price point under the name Good Brands.

The mixed-light greenhouse facility incorporates the plentiful sunlight of Southern California, limiting the energy usage from the facility. And the dry desert climate also can work in a grower’s favor due to decreased humidity— the greenhouse also uses an evaporative cooling wall that can chill the facility by 35 degrees. It also doesn’t require the same HVAC or carbon dioxide implementation systems that are used in the indoor facility.

“It’s a much more cost-effective approach, less carbon footprint, but we can still produce beautiful cannabis at the same time,” said Tom Williamson, Canndescent’s operations manager.

While commercial-scale industrial grows run up five-figure electric bills, smaller cannabis grows can also stress power systems.

Kevin Short is the general manger of the Anza Electric Cooperative, which provides power to nearly 700 square miles in Riverside County. The mountainous high country area has long been a haven for cannabis growers, many of whom operated under the medical usage laws that preceded recreational cannabis legalization through the Proposition 64 ballot initiative in 2016.

While there aren’t commercially licensed indoor industrial-sized grows on the co-op’s grid, a Riverside County ordinance allows qualified patients to grow 12 plants, or 24 plants for two patients on the same premises.

But in the post-Prop 64 era, Short said the system has seen an increase in overloads on the transformers.

“Growers will move into an area or into a service location, not tell us how much load they’re adding onto the system, and eventually overload the transformer,” he said.

Repairs can cost the co-op precious time and money. He recommends anyone who plans to start growing in the area run the plans by the co-op so they can be sure to support the service.

Jazmyn McCammon, a board member of the High Country Growers Association who gets power from the co-op, grows 12 plants that she mostly gives away and makes solvents with.

Her operation is as natural as it gets: Plants are watered with a closed-loop system that avoids drawing well water, and she creates plant food out of fermented herbs from a garden.

She said she tries to be “a good neighbor” when it comes to power usage: that means running the lights during off-peak hours, like midday or the middle of the night.

“We go around that (peak hours) whenever we do use our lights and our power,” she said.

McCammon likes to think of the emerging cannabis industry to the beer industry: there are both large domestic brewers, and craft breweries with specialty products. And she sees California as a place where the omnipresent sun could contribute to off-grid solar-powered properties, and outdoor grows, should they be permitted.

But the area is also becoming a hotbed of enforcement: Sheriff Chad Bianco has prioritized cracking down on illegal grow operations, with deputies linking some operations to increased criminal activity and organized crime.

McCammon is concerned that Riverside County is punishing law-abiding growers by not permitting legal operations fast enough, and restricting methods of cultivating.

“The ultimate answer is outdoor growing,” she said.

Building a future on alternative energy

Smith, the sustainability expert from RII, said more data is needed to determine the most efficient set of indoor environmental conditions for a grow environment.

While some technology that could use less energy is becoming more common-place — like LED lights that could use 40% less energy than other bulbs — such improvements won’t make a difference if inappropriately used, Smith said.

“We’re seeing the opportunity of increased efficiency being left on the table, and it’s primarily because everybody needs more data to guide their decision-making,” Smith said. “This whole phenomena of growing plants in buildings is new to everyone.”

As more states move to legalize, they’re finding new ways to address energy use. In Illinois, where legalization will take effect in 2020, lawmakers this year approved a plan to set limits on how much electricity and water cannabis cultivators can use.

Canndescent’s CEO Sedlin said more cannabis facilities would be able to make sustainability-related improvements if the cannabis industry had access to traditional banking.

Even though dozens of states have legalized access to cannabis in some form, it’s still illegal to possess or sell it under federal law. That means banks who take in money associated with cannabis sales could be at legal risk.

“For us this was a priority, so we made it happen and we were able to secure private loans,” he said.

Changes could be coming soon; the Secure And Fair Enforcement Banking Act would protect banks that work with state-compliant cannabis businesses from federal penalties. It passed the Democrat-controlled House of Representatives in late September and still must go through the Republican-controlled Senate.

Sedlin said banking reforms are necessary for companies in the cannabis space who want to make big investments in alternative energy. While the solar offset is valuable for the company and, as Sedlin puts it, “the right thing to do,” private financing comes at a hefty cost that not all companies can swallow.

“I’m paying double digits (for interest rates),” Sedlin said. “It’s a joke. But again, it’s the right thing to do … Our consumers know we’re serious about being a positive force. Our company name, Canndescent, means to project light, and we’re very serious about doing that top to bottom in the company.”

This story was originally authored by Melissa Daniels at https://www.desertsun.com/ Melissa covers business and real estate in the Coachella Valley. She can be reached at (760) 567-8458 or melissa.daniels@desertsun.com. Follow Melissa on Twitter @melissamdaniels

SunPower Helps U.S. Military Double Down on Renewable Energy

As the nation is thinking about its military forces this Memorial Day, we want to salute the many branches of our armed forces that are embracing renewable energy to increase autonomy and reduce costs.

U.S. Department of Defense, the single largest energy consumer in the world, has embraced clean energy sources in recent years, doubling its renewable power generation between 2011 and 2015. That means the military is producing enough clean energy to power the equivalent of about 286,000 average homes, the Defense Department says.

SunPower has installed, and is under contract to install, more than 100 megawatts of solar power at 33 federal government project sites.

Take Vandenberg Air Force base near Lompoc, Calif. We just broke ground there on a 28-megawatt solar photovoltaic (PV) system. Once completed, it’s expected to be the largest behind-the-meter solar power system in the Air Force, meaning 100 percent of the energy it produces will be consumed on site. It will produce about 53,000 megawatt hours each year – about 35 percent of Vandenberg’s energy needs.

Other significant SunPower® solar military projects include:

Military Solar Panels Increase Security

The goal here? Like many government institutions facing tight budget times, the military is interested in maximizing its resources.

PV solar power allows them to do just that. Here’s one example. Soldiers have to haul diesel fuel to run the generators needed to power their equipment and forward bases in areas without access to conventional electricity.

The convoys trucking in that fuel are always at risk of being attacked in combat situations. But now soldiers can pop up a PV system to charge their equipment, meaning fewer convoys are needed, helping troops avoid unnecessary risks. Also, the solar energy those arrays are generating is free, saving the military – and taxpayers – billions of dollars over time.

The future continues to indicate a clean energy policy for the military, with more branches adopting the net zero strategy. The Defense Department’s goal is to consume 3,000 megawatts from renewable sources by 2025.

SunPower looks forward to helping to make that a reality, and we’re excited this year to be joining this week’s Society of American Military Engineers 2017 Joint Engineer Training Conference & Expo in Columbus, Ohio. There we’ll be meeting uniformed service members, private sector engineers and government civilians to share the latest about our SunPower® Oasis®and SunPower® Helix™ solar solutions as well as our solar energy storage options.

Sunpower Solar Carports and Solar Canopies

Solar carports also known as “solar canopies” are an increasingly popular type of onsite commercial solar installation. These versatile structures offer features that provide more than just long term energy savings including covered parking, solar parking lot lights and integrated vehicle charging stations. 

This is a simple video of a typical Sunpower carport structure we install for our clients for a commercial solar panel carport solar system. Check it out, this might be the right solution for your organization.

In general these are one of the most common dual purpose solar systems. They add value in terms of solar electricity, covered parking for staff of customers and maximize limited space in urban solar installation scenarios. One of the biggest benefits of a commercial solar system is they can stabilize a business’ cash flow. This can also provide an opportunity to invest energy savings in various areas of the company or organization.

Call us today at 480-636-0321 to learn how much we can help lower your operating costs with a renewable energy solar system by Sunpower. 

Commercial Solar 30% Investment Tax Credit Extended by 2 More Years

This is great news! Essentially, the IRS has given commercial businesses the opportunity to take full advantage of the 30% tax credit amount for two more years.  That’s good news for your finance department that wants to capture the financial benefits on your tax statements to offset your tax liabilities.

For all practical purposes, medium- and large-scale solar power projects that expect to take a year to two (or more) for development and construction just got a two year extension on the Investment Tax Credit (ITC).

Per the ‘Bipartisan Budget Act of 2018, Pub. L. 115-123, Div. D, Title I, § 40411, 132 Stat. 150 (BBA 2018)‘, and published in Notice 2018-59, the Internal Revenue Service (IRS) has officially noted that it is “replacing the requirement to place energy property in service by a certain date with a requirement to begin construction by a certain later date.”

Meaning that instead of your solar project having to finish by December 31st, 2019, it must now begin (defined below in two specific ways) on or by that date t0 qualify for 30%. This same logic applies to the follow two years and their 26% and 22% tax credits.

The IRS notes that there are two methods for ‘establishing beginning of construction’ – the Physical Work Test or the Five Percent Safe Harbor.

Onsite physical work can take many forms, however, it does include any of the following “preliminary activities”:

(a) planning or designing; (b) securing financing; (c) exploring; (d) researching; (e) conducting mapping and modeling to assess a resource; (f) obtaining permits and licenses; (g) conducting geophysical, gravity, magnetic, seismic and resistivity surveys; (h) conducting environmental and engineering studies

It is notable that manufacturing of hardware necessary to the project that is done off-site counts toward physical work, including assembly of “racks and rails, inverters, and transformers.” However, if those components come from inventory or are normally held in inventory, then they aren’t allowed to be considered “physical work.”

The Five Percent Safe Harbor provision states that construction will be considered as having begun if the taxpayer has paid or incurred – per Treas. Reg. § 1.461-1(a) – 5% of more of the total cost of the project. This does not include land costs.

Keith Martin of Norton Rose Fulbright notes that an equipment or service purchase – a ‘bare payment’ alone – can account for the 5% rule if it is delivered within 31/2 months.

Once work begins, it must keep going – meeting a continuity requirement.


Real world consequences

Also noted by Martin, is that the IRS guidance is not addressed to the directly owned residential solar power market – as this is the corporate focused Investment Tax Credit, and not the Residential Renewable Energy Tax Credit. However, it does apply to third party owned residential solar systems that solar companies lease or use to sell electricity to homeowners.

In the larger commercial and utility scale projects this ruling will absolutely be put into the spreadsheets of financiers at the utilities, which have explicitly stated these solar power tax benefits are driving their decision-making. For instance, in Xcel Energy’s recent long-term plan – which included solar power bids as low as 2.2¢/kWh – the company stated:

Bidders’ ability to take full advantage of the full federal PTC and ITC combined with falling costs for renewable technologies  resulted in a robust pool of wind, solar with battery, and solar bids at unprecedented pricing.

This two year window will give investors and utilities reasonable motivation to invest in more projects, even as end of year dates arrive. And this in turn can have repercussions for fossil generation, as Xcel noted that this would allow it to close two coal plants a decade early.

Conversely, there could also be projects whose timelines are extended. For instance, the above Xcel Energy projects could potentially be pushed back up to two years under the expectation of continued declines in hardware pricing for solar panels, batteries and other components.

This article was originally published in PV Magazine on  

Solar Electricity Battery Storage Architect, Energy Hub, & Intelligent Energy Management System

The Eguana Elevate battery system is operated by Pason Power’s Storage Architect; an intelligent EMS system with built in financial modeling and remote monitoring tools. With more than 40 years experience and millions of dollars in monitoring and control assets deployed in the oil ;gas drilling sector,  Pason Power is well positioned to deliver energy storage performance with confidence. This is one of the few different storage systems we install for our commercial customer base. If you are serious about storage the Eguana Elevate system is perfect for you.

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Eguana’s popular AC Battery product line has been expanded to include larger three phase models for commercial applications. The AC Battery features full integration between PCS, BMS, and Battery to deliver the industry’s highest performance and longevity in an extremely flexible package.  Monitoring and control of all PCS and battery data  is available through a single MESA compliant interface making the AC Battery easily dispatched by any aggregation network. A convenient location inside the enclosure is provided to install a customer supplied networking gateway.

With rising electricity prices from coast to coast, intelligent building energy management systems have been growing in sophistication and popularity.  What energy management providers have been missing is the ability to time shift, peak shave, and deliver services back to the utility.  By integrating energy storage with broader building energy management solutions, rather than making storage a standalone project, the battery system can deliver higher value and be installed with lower upfront cost.  Energy storage will achieve its true potential when it gets deployed as part of an overall building energy management system, and only a factory assembled product can make it happen.

Electric Vehicle adoption is driving the expansion of public EV charging networks.  However, fast charging sites are being saddled with high demand charges that raise prices for customers and undermine convenience.  The advanced control networks that manage these sites are capable of delivering grid services, and much has been written about the potential to dispatch the batteries in parked vehicles for grid support capacity.  But grid service contracts rely on capacity being there when its needed, customers prefer to have their battery filled while parked at a charging station, and vehicle manufacturers are wary of the impact of additional cycling on warranty exposure.    Adding an AC Battery at the charging site solves both problems: reducing charging costs by offsetting the fast charging demand, and allowing the charging network operator to become an energy storage aggregator and earn additional revenue from grid services.

Contact us today at 480.636.0321 to learn how solar panels and battery storage will make your business more profitable now and in the future.

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