Smart Energy Living - August 2011

Saving Money on the Farm :
Agriculture Energy Audits Help Identify Upgrades

By: Cary Weiner

Many agricultural producers and rural communities are searching for ways to increase profit margins.  With energy costs for common agricultural operations in the western U.S. ranging from approximately 30% of total operating costs (sugar beets) to more than 50% of total operating costs (wheat), a significant opportunity exists to increase profit margins by reducing energy expenses.

An energy audit is a systematic review of a consumer’s energy use intended to uncover inefficiencies and cost-effective improvements for the consumer’s consideration.  When applied to agriculture, an audit looks at energy used by buildings, other structures and field operations.  For example, an energy audit of an irrigated corn farm may include an analysis of the lighting, heating, and cooling of non-residential structures as well as an analysis of irrigation pumps and motors, tractors, and practices associated with tillage and chemical applications.

Agricultural energy audits can be composed of both phone and field visits, with the field visit lasting four hours or more.  The consumer receiving the audit will typically supply at least one year’s worth of utility bills to the auditor for analysis, share any energy-related concerns with the auditor, and may or may not accompany the auditor throughout the field audit.  The consumer should provide as much information as possible to the auditor regarding energy-related equipment and operational practices in order for the auditor to conduct the most informed analysis.

The agricultural energy audit will result in a written set of recommendations for energy upgrades that the consumer can use to make decisions.  The cost of each upgrade is provided, as is the annual savings and simple payback period expected for each upgrade.  For example, the audit report may include a recommendation to upgrade lighting in a barn from metal halide to T5 fluorescent at a cost of $6,000, expected annual savings of $2,000, and payback period of three years.

Financial incentives – although often in flux – are often provided with the audit report and can substantially reduce the cost of making efficiency improvements.  These incentives can range from federal tax credits to state and local utility rebates.  Grant and loan programs through agencies like the U.S. Department of Agriculture are also available to qualified producers.  In fact, USDA’s Rural Energy for America Program provides funding to offset both the costs of the audits themselves as well as implementation of efficiency upgrades recommended by the audits.

So why aren’t more producers taking advantage of these opportunities to increase profits by decreasing energy-related expenses?  The first challenge is helping agricultural communities see the value of the audit, the recommendations, and the upgrades through real, locally relevant examples.  The second challenge is the lack of auditors qualified to conduct audits in much of the rural US.

Entities such as the Cooperative Extension Service and rural electric associations are currently increasing efforts to both educate agricultural producers and train qualified energy auditors to perform audits at affordable prices.  This work has the potential to generate economic stability in rural communities while creating jobs and reducing our fossil fuel energy use.

Cary Weiner is the Clean Energy Specialist for Colorado State University Extension

Shoemaker, R., McGranahan, D., & McBride, W.  (2006, April).  Agriculture and Rural
Communities are Resilient to High Energy Costs.  Amber Waves. 

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