Why Legalizing Cannabis Benefits the Solar Energy Industry

The energy consumption of cannabis cultivation is comparable to that of data centers. As a result, solar panels are becoming increasingly in demand in this rapidly growing industry. This type of energy is especially relevant given the growing attention to the decriminalization of the cannabis business.

The Ongoing Issue of Decriminalization

Cannabis cultivation is a massive branch of modern business. In 2016, legal sales of ready-to-use cannabis products in North America reached $6.73 billion, nearly 34% more than in 2015. According to Cannabis Business Times, the legal cannabis market exceeded $7 billion. However, despite the profitability of this sector, it is also very costly due to its enormous energy consumption. In fact, about 1% of total energy consumption in the United States is attributed to legal cannabis cultivation facilities. As legalization spreads, energy costs for cultivation are expected to rise each year.

Currently, cannabis use is legal in nine U.S. states: California, Colorado, Alaska, Nevada, Oregon, Maine, Massachusetts, and Washington, D.C. Additionally, thirty states have legalized medical cannabis use. Outside the U.S., Uruguay has fully decriminalized cannabis. Some countries allow medical use, while others permit limited home cultivation for personal use, even if consumption remains illegal.

Electricity Consumption

A single cannabis cultivation facility of 460 square meters consumes at least 29,000 kWh of electricity. For comparison, the average household uses no more than 630 kWh. Cannabis is typically grown under artificial lighting, and the process also requires fans, water pumps, dehumidifiers, and other electrical equipment running around the clock.

Cultivation facilities are generally divided into three types:

• Indoor
• Partially indoor
• Outdoor

With legalization, there are more options for open cultivation without the need for concealment, which significantly reduces electricity costs by allowing the use of natural sunlight. For outdoor grows, the main energy expenses are for irrigation and security systems. Indoor grows require additional energy for lighting, air conditioning, CO₂ injection, ventilation, dehumidification, and irrigation. Partially indoor grows have slightly lower costs due to partial use of natural light.

Lighting Needs at Different Growth Stages

• Seed germination lasts four weeks and requires 24-hour lighting.
• The vegetative stage lasts about five weeks and needs 18 hours of light per day.
• From flowering to harvest takes about 60 days, with 12 hours of light daily.

High-pressure sodium lamps are commonly used, which emit both light and heat, necessitating extra air conditioning to maintain stable temperatures. According to a 2012 independent study, a typical indoor grow room uses as much energy as a data center. About 50% of electricity goes to air conditioning, heating, and ventilation, while over 33% is used for lighting.

How to Reduce Energy Consumption

Energy consumption can be significantly reduced by installing energy-saving lamps. Replacing traditional sodium lamps with energy-efficient ones can cut lighting energy use by more than 33% (or 25% of total energy costs). Additionally, LED lamps emit less heat, reducing air conditioning expenses.

Growing cannabis in partially or fully open areas further minimizes lighting costs thanks to sunlight. As a result, legal greenhouses, which are expected to become more common with legalization, will use at least one-third less energy than indoor facilities.

However, in states where cannabis is legal, about 50% of cultivation still occurs indoors, as it allows for better control over plant development and higher-quality yields, which can sell for about 47% more—offsetting the higher energy costs. Full automation of climate, irrigation, heating, and ventilation systems can also significantly reduce energy use.

Smart Business Practices

Installing solar panels is another effective way to minimize electricity consumption. Previously, many growers used solar panels to hide high electricity usage. Now, with legalization, solar panels are seen as a way to reduce energy consumption and ease the load on the power grid. Experts warn that the growth of legal indoor cultivation could strain the grid, so they recommend installing solar panels on greenhouse roofs.

According to Scale Microgrid Solutions, installing solar panels can provide about 25% of a facility’s electricity for free. Solar energy companies are encouraged to target these high-energy consumers, as many are looking to build long-term businesses and brands. Using “green” energy is also a marketing advantage, as it demonstrates environmentally friendly production.

Energy independence is another clear benefit of solar panels. A single day without power in a commercial cannabis greenhouse can be very costly. However, farmers note that to generate a significant amount of electricity, very large and expensive solar arrays are needed, making full energy independence unprofitable for an industry that is already highly lucrative, according to GroTec Builders, a company specializing in cannabis farm construction.

Cost and Lifespan of Solar Panels

Solar panels are a long-term investment, with a lifespan of over six years. For those planning to stay in the cannabis business long-term, this makes sense. However, most current producers want quick returns and are not willing to wait six years for solar installations to pay off.

In 2018, Ukraine set a new record with 4,660 private solar power stations in operation. The popularity of home solar installations is rapidly growing, with 1,107 families starting to use solar energy in the second quarter of the year—almost double the first quarter. By mid-2018, 4,660 households had installed solar panels, with a total capacity of nearly 90 MW. Total investment in the sector reached about 88 million euros, with a “green” tariff linked to the euro for private solar stations up to 30 kW. The leading regions in Ukraine for private solar use are Dnipropetrovsk, Kyiv, and Ternopil.

In addition to the obvious benefits for consumers, private solar stations are a great example of distributed generation, which positively impacts the energy system as a whole.

Comparing Costs

While solar panels are expensive, when you calculate their cost over their lifespan and compare it to what you’d pay for grid electricity, the benefits become clear. For example, a complete 5 kW solar station costs about 195,798 hryvnias. This may seem high, but such a station can generate 5,348 kWh per year for 12 years. Compare that to what you’d pay for the same amount of grid electricity over that period.

Now, Ukrainian-made solar panels are available, thanks to the launch of the Enerhodar plant in Zaporizhzhia, which produces solar panels for businesses and households.