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Reducing Energy Expenses

If you are looking for ways to reduce your energy expenses, you will want to attend one of the Energy Conservation: Impact on the Bottom Line workshops being held around the state. Farmers who attend a workshop will learn how to develop an energy management strategy and receive information on the sources of financial assistance available to implement that strategy. While attendance at a workshop is no guarantee of project funding, farmers who have submitted applications for utility rebates and USDA grant funding have experienced success in securing dollars from these sources to implement energy efficiency and renewable energy projects. For example, three farmers who attended a workshop in January completed a NRCS Agricultural Energy Management Plan and will be applying for EQIP funds to implement recommended practices. Another farmer applied for USDA Rural Development Rural Energy for America (REAP) grant and received $108,000 to install high-efficiency fans, automatic curtain controls and vent controls, static pressure modules, and LED bulbs and fixtures. Registration information and an agenda can be found at http://events.anr.msu.edu/2016_AgEnConsWorkshop/.

Most energy efficiency practices have a payback period of less than 4 years as shown in Table 1. For example, on average, farmers who have replaced old energy inefficient grain dryers with new energy efficient grain dryers have seen an average reduction of 33 percent in their energy costs. Hog producers who have installed recommended energy conservation practices have seen their energy costs reduced, on average, by 89 percent.

Table 1. 2010-2014 average potential energy efficiency savings for different operation types.

Operation Type

Average Savings (% Energy Cost)

Average Payback (Years)

Potential Average Annual Savings ($)

Dairy*

41%

2.5

$8,371

Greenhouse

38%

3.8

$32,941

Crops

16%

2.0

$1,864

Grain Drying*

33%

8.0

$15,827

Irrigation

40%

2.2

$6,192

Hogs*

89%

5.7

$20,263

Beef*

23%

3.4

$4,745

Food Processing/Marketing

39%

4.0

$13,366

Rural Business

38%

2.4

$23,187

Total (260 operations)

39%

3.9

$14,449

Source. Michigan Farm Energy Program, 2015. * Homestead activities only, does not include field operations.

Grant funds can be used to purchase a renewable energy system or make energy efficiency improvements. Utility rebates can only be used for energy efficiency improvements. Some examples of energy efficiency improvements include:

Freezer and cooler upgrades
Lighting improvements, window and plumbing upgrades, insulation
Replacement grain dryers
Replacement irrigation units (diesel to electric, high presser to low pressure, traveler to pivots)
Greenhouse heating, lighting and cooling improvements
High efficiency motors, pumps, fans, blowers, compressors
Upgrading /replacing HVAC equipment
For more information about the workshops contact Charles Gould at 616-994-4547 or gouldm@msu.edu. For more information on energy conservation programs contact Al Go at 517-353-0643 or goaluel@egr.msu.edu.

This article was published by Michigan State University Extension. For more information, visit http://www.msue.msu.edu. To have a digest of information delivered straight to your email inbox, visit http://bit.ly/MSUENews. To contact an expert in your area, visit http://expert.msue.msu.edu, or call 888-MSUE4MI (888-678-3464).

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