- Successful agricultural operations depend on access to energy that has three vital qualities:
- Reliability – even a temporary loss of power can create significant losses in production (ie: the loss of refrigeration for products that are perishable).
- Predictability – price fluctuations associated with agricultural products make predictable energy prices extremely important. A sudden increase in energy prices, at the same time crop prices drop, can be financially devastating.
- Affordability – because energy makes up a large percentage of the cost associated with agriculture, energy costs must be kept low. Costs associated with energy represent a significant barrier to farm production expansion (bringing power to a remote location can be extremely expensive).
» The need for reliable, predictable and affordable energy has agricultural operations joining a national trend of pursuing various energy efficiency strategies, cutting edge technologies, and overcoming the financial hurdles that hinder the addition of renewable sources of energy.
» Renewable energy technologies, including geothermal, solar and wind which may not have been cost effective several years ago, have dramatically dropped in price. However, a sizable barrier against acquiring those technologies still remains. Agricultural operations, with a need to protect their cash flow, often find it difficult to justify the up-front cost of converting to energy efficient technologies or adding renewable energy.
- A short list of the strategies that help overcome the initial expense are: utility company rebates, tax incentives, Property Assessed Clean Energy (PACE) and the Rural Energy for America program (REAP).