SALINAS, CA - For many growers, shippers, processors, and other agriculture related operations, there are a number of opportunities to profitably deploy renewable energy solutions.

Whether it’s solar, or solar plus batteries or another combination, it can often be done on a relatively small amount of land. At least that is what Aaron Enz, Alta Energy’s Director of Corporate Development, tells me. Alta Energy is a company that enables organizations to achieve the economic and environmental benefits of renewable energy.

“These opportunities can help to significantly reduce energy costs, drive attractive investment returns, hedge against rising energy costs, and enhance sustainability and brand value with customers,” Aaron says. “Another factor is that agriculture utility rates are among the highest in California versus other commercial customers. For example, for most of the growers we have worked with, we have seen opportunities to offset 70% to 85% of electricity from the utility with solar, generate attractive returns and paybacks, and use less than 1% of land for these systems. Of course, results will vary for each grower as the economics of solar reflect specific utility rate structures and customer-specific issues.”

He adds that agricultural enterprises can benefit from a 30% federal Investment Tax Credit that enables the owner of the system to offset 30% of the system cost dollar-for-dollar against their tax liability in the first year, as well as receiving accelerated depreciation on the system.

One of the companies taking advantage of Alta Energy’s program is Merrill Farms, a fourth-generation Salinas Valley, California-based grower with a reputation for sound business practices and stewardship of the land.

Merrill Farms’ solar projects are located on two growing sites and have a combined size of 1.6 megawatts; occupying only six acres and producing 2,560 megawatt-hours of electricity per year. This is enough to offset nearly 80% of these ranches’ electricity consumption, Aaron adds.

Want to see the Merrill Farms project coming to fruition? Check out this video.

“The solar projects for Merrill Farms will eliminate 505 metric tons of carbon dioxide annually,” Aaron says, "and produce enough energy to power 360 homes each year.”

The solar systems at Merrill Farms are generating approximately $60,000 per acre of revenue annually with $12 million of gross energy savings and $4.2 million in cash flow over 25 years. Using the federal Investment Tax Credit incentive, 30 percent of the system costs are offset, while Merrill’s energy costs on these ranches are fixed for years. In addition, the solar systems qualify for accelerated depreciation and are exempt from real and personal property taxes.

“The projects also required very little upfront investment due to attractive financing that was secured, and the energy savings will pay off the loan,” Aaron tells me. “Solar also helps Merrill Farms meet its customers’ sustainability requirements and supply chain reporting criteria.”

When I ask Aaron where the challenges to reaping the benefits lie, he tells me it is in the complexity of renewable energy. This complexity resides in five major areas:

• Analysis – the upfront feasibility analysis is more complicated than customers sometimes understand. There are over 3,000 utilities in the U.S., and even within California utilities, there are multiple rate structures and differing rules. In addition, knowing the possible solar or battery storage system tradeoffs, appropriate installation service providers and costs, financing opportunities, taxes and incentives, and the like all need to be understood and modeled properly.
• Technologies - understanding which technologies are appropriate for a given application, which ones are mature, have valid warranties, etc.
• Vendors – deciding which vendor(s) to use and the appropriate project costs (each vendor has different strengths, areas of focus, preferred project types). California farmers receive a wide variety of proposals from differing vendors, sometimes with conflicting information, and it can be difficult to determine what makes sense for them.
• Utility Issues – in addition to understanding the utility rates, there are also various rules, permitting issues and the grid interconnection process, all of which can be complex and time-consuming.
• Financing – considering which financing alternatives are best for various agricultural operations considering their own unique needs

So, what is Alta Energy looking for in a partnership and a client?

“Ideal clients are growers, processors, shippers, dairy operators, and farmland owners with different locations throughout California and even across the country,” Aaron says. “In terms of size–for growers, 250 acres or larger and agricultural enterprises with integrated operations and complex energy needs. Also, companies desiring to improve their sustainability and create additional brand value with their customers.”

With many projects under its belt, Alta Energy is empowering enterprises to make a greater impact on sustainability in 2017, and it looks to be an amazing year ahead.

Alta Energy Merrill Farms