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  • Erin Sharp

Cannabis Microgrids are needed to decarbonize a carbon heavy industry

Large Cannabis cultivation companies considering a microgrid for cheaper, cleaner and more reliable power can use Renewable Energy Microgrids to meet Net Zero targets. This can happen without any capital down using a Power Purchase Agreement, and with billions (over $40 billion) available in clean energy funds up for grabs, as alternative loans from the US Government there are more options on the table. Biden’s goal of decarbonizing U.S. electrical grids by 2035 is backed by the Energy Department’s Loan Programs Office. Between LPO and third party PPAs available from Zam Energy, there is no reason why decarbonization is not a priority for a cannabis cultivation.

Does your firm have a Net Zero goal? Does your team have credible plans to reach that goal?

Now is the time to start the conversation for the cannabis industry on how facilities can have a cheaper, cleaner, more reliable power with a microgrid system. Zam Energy can work with your executive team to facilitate this conversation, as cannabis offers a strong levelized load, and cost of energy (LCOE) making this industry ripe for Microgrids.

As over 30% of microgrids will rely on renewable energy and storage by 2025. The main purpose of microgrids is to give those served by it the ability to operate independently of a utility’s main grid (macrogrid). In fact, the 2018 Cannabis Energy Report, published by New Frontier Data and co-authored by Resource Innovation Institute and Scale Microgrid Solutions, estimates that the energy usage of cannabis growers could increase from a national energy usage of 1.1 million MWh in 2017 to 2.8 million MWh by 2022 for legal production. In addition, illicit production within the United States also adds approximately 3.1 million MWh each year, although it is expected to remain relatively stagnant until 2022.

California Cannabis Operators are first in line to profit from a Microgrid:

1. SGIP funds will run out soon

As part of the Self-Generation Incentive Program (SGIP), California provides funding to incentivize home and business owners to install energy storage systems. This pot of money is quickly depleting - but there is still time.

We hear a lot from folks that they don’t have time to figure out the application process for this. We’re happy to completely handle this for you! We will confirm your eligibility and see if you qualify for a completely free storage system. It’s worth looking into.

2. Secure your retail rate of electricity credits

The next version of Net Energy Metering (NEM) proceedings are underway, and utility proposals significantly devalue credits from solar energy sold back to the grid. Scale can help you secure your NEM value at the retail rate of electricity for the next 20 years by submitting for interconnection this year. New regulations are scheduled to take effect in 2022.

3. Earn thousands of dollars in revenue through new demand response programs

Just this summer, Governor Newsom ordered California utilities to dramatically increase demand response payments to commercial and industrial energy users in an effort to reduce summer blackouts. The payments can result in thousands of dollars of additional revenue generated by your microgrid each time an energy shortage event takes place. With a microgrid you can participate in these programs with no change to your business-as-usual operations.

4. Avoid utility rate hikes

PG&E has proposed an 18% rate hike for 2023 to the CPUC in addition to the 6-7% increase approved for 2022.

The situation in California is dire. In addition to an increasing number of wildfires and utility power shutoffs, we’re facing a supply shortage of 3.5 GW this summer and 5 GW next summer.

Let’s get a strong plan in place for Net Zero Cannabis, Zam Energy will get you there, first.


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