Stop Renting Power: The Payback Math on Owning Your Farm’s Energy Infrastructure
How do you like your monthly power bills? If you run a good-size irrigation pump, cold storage, HVAC, and a modest residence on your farm, the answer is probably “not so much.”
Paying the utility company is like renting — you don’t end up with any equity, no matter how long you’ve been paying the bills. You don’t own anything, and therefore, you can’t control anything.
That means you’re in the power company’s mercy when it comes to outages and rate hikes while you send them a fat check every month. But what if you could redirect that monthly payment into building an energy infrastructure you own and control?
Our grid-independent solar solution helps you slash power bills and protects your farm against outages. If you take out a loan and redirect the amount you already pay the power company to the lender, you can build equity and own your energy infrastructure in several years without having to rejig your cash flow plan.
Building a solar solution is a capital investment and deserves serious consideration. But you’re not on your own. Our engineering methodology not only addresses all the technical details. We also consider the numbers from the operational and financial perspectives to design a solution that works best for your business.
Let’s delve into the nuts and bolts to see how the payback math pencils out.
The grid-independent solar payback time calculus
Let’s say a farm has a 10 HP irrigation pump (7 kW), a walk-in cooler for cold storage (2.5 HP, 2.41 kW), a 4-ton AC unit for a workshop or packing structure, and a modest residence. A reasonable monthly bill lands around $1,500, using a blended agricultural rate of roughly $0.50/kWh, consistent with current PG&E agricultural rate structures.
A typical 24kW system sized to a load in that range costs around $70,000 at the time of publication. Here’s the math if you redirect the $1,500 you're already paying the utility toward financing that system:
The 20-year utility cost looks big, and it is. But we didn’t make it up: A $1,500 bill escalating at 6% per year (based on historical data), driven by wildfire mitigation and grid hardening investments, and showing no sign of slowing.
The numbers here are for illustrative purposes only, based on typical usage. Your actual cost will vary based on your equipment, monthly bill, usage patterns, interest rate, and other factors. The example uses a standard SBA 7(a) loan at a 10% interest rate, a conservative benchmark based on the current prime rate plus the SBA's rate cap structure. Use this interactive calculator to fine-tune your estimated payback time.
Good news: the real-life math is even better…
The deal is actually even better because the payback ROI above hasn’t accounted for the cost of outages and downtime:
Fuel, maintenance, and labor costs of running a generator.
Potential spoilage if there’s no adequate plan B for cold storage.
Diverting your team’s attention from revenue-generating activities to damage control.
Loss of agritourism income if your farm has hospitality operations like U-pick, farm stands, seasonal events, petting zoos, and farm-to-table dining.
Moreover, an owned energy infrastructure gives you peace of mind that your farm runs uninterrupted 24/7/365, regardless of the grid’s status and without human intervention.
Shorten payback time with a fit-for-purpose solar solution
“The payback time in your calculation is surprisingly short. What’s the catch?”
There’s no catch, but you do need to work with us by answering a slew of questions and providing detailed information during the engineering process to right-size your solution and align financing and performance to maximize your ROI.
We talk technology, but we also understand business finances and operations, and think alongside you as a farm owner.
The payback time math works because we engineer each solution to match the requirements without excess capacity that you don’t need. Let’s talk to see what works for you.
