Renewable energy is a growing area of interest for many farms. In particular, off-grid solar energy systems have become a popular form of renewable energy. Off-grid systems create energy from solar panels and are not connected to an electrical grid. By producing off-grid electricity, a solar energy system can reduce the electricity costs on your farm.
This article looks at the annual cost savings that can be achieved with a solar energy system. The second article in this series will discuss how installation costs can be reduced through government programs and tax savings.
To illustrate the cost savings from a solar energy system, let’s look at an example farm that has installed a 10-kilowatt system (1 kilowatt = 1,000 watts). This 10-kilowatt system costs $30,000 to be fully installed, using an average of $3 per watt. This example farm uses $3 per watt to calculate installation costs, which is often used as a starting point for most system design costs. System costs vary depending on components and the farm’s desired goals, which determine how much solar is needed. The design and cost of a solar system will also influence financing and returns on investment. For more information on designing a solar system, visit: Solar Electric Investment Analysis Bulletin Series.
A 10-kilowatt system generates approximately 10,950 kWh of electricity per year. This would provide $2,080 in electricity cost savings at $0.19 per kilowatt-hour. Residential rates are used as a standard for comparing off-grid solar systems. Residential cost per kWh can range from $0.06/kWh to $0.71/kWh, depending on location, electricity source, and when electricity is consumed. In 2022, Michigan had an average residential cost of $0.19 per kilowatt-hour (kWh). Repair and maintenance costs for solar energy systems can vary depending on components used, but the average cost for most 10-kilowatt systems is $20 per kilowatt per year or $200 annually. Thus, total electrical cost savings from this solar energy system would be $1,880 per year.
The key to fully realizing potential savings is in identifying the best design for your farm, as different types of farms often have different electrical needs. A solar system can be used for a single purpose or designed for multiple farm activities. If an off-grid solar system exceeds desired electricity production demand, some cost savings may go unrealized. Let’s look at three farm scenarios to illustrate potential uses of a solar system.
Scenario One: Dairy Farm
Dairy farms use a considerable amount of energy to operate. In particular, milk parlors consume large amounts of electricity for cooling milk, running various pumps, heating water, and lighting.
In a study by the University of Minnesota, a 300-cow dairy consumed 30,613 kWh per year to power a naturally ventilated barn with stirring fans and six automatic milking systems. At $0.19 per kWh, the total cost of electricity used by this system would be $5,816.47. Our example 10-kilowatt system could supply 10,950 kWh, which would generate $1,880 of electricity cost savings. This savings would reduce the electricity cost of this milking parlor system to $3,936.47.
Source: msu.edu
Photo Credit: pexels-pixabay
Categories: Michigan, Energy