Energy efficiency on the farm is probably more important now than ever in Pennsylvania, with rising energy prices and increased competition that makes it tougher and tougher to make a living. Farms that utilize their energy efficiently tend to have a much better prospect for being successful in the current economy.
Farms use energy in a variety of forms - electricity, gasoline, diesel fuel, propane and natural gas are all common sources of energy. Renewable energy resources, such as biogas or biomass, can also be produced as well as used on the farm. However, they must all be used effectively if a farm's profitability is to be maximized.
The First Step: Analyze
The most important step in improving a farm's energy efficiency is to understand the current energy use on the farm. This cannot be done by intuition alone - a careful assessment of the farm's energy use is necessary to really know where the energy is being used. It is not uncommon to find unexpected "energy hogs" - equipment or processes that use more energy than they should.
What are the Possibilities?
Once the existing energy usage is determined, it is time to figure out what sort of changes can be made to reduce energy use and operating costs. These changes are often referred to as "energy conservation measures" or ECMs. Some ECMs can save a great deal of energy with minimal cost or trouble - these are always the most desirable. Other ECMs may be less worthwhile if they save only a small amount of energy at a relatively high cost or hassle to the farmer. ECMs can be as simple as changing a temperature setting or as complex as replacing multiple pieces of equipment with more efficient devices.
Generating a list of ECMs for a farm is not always an easy process - it often requires experience with farms as well as with energy systems. One good starting point is the Penn State Extension "Top 10 Ways to Save Farm Energy" fact sheets.
Sorting out the Options
The most common way to compare ECMs is to calculate their "simple payback" - the number of years that it takes for the savings of an ECM to cover the cost of installing the measure. For example, if a new, energy efficient fan costs $300 to install, but reduces electricity costs by $100 per year, the payback is 300/100, or 3.0 years. Shorter paybacks tend to be better, with 4 to 5 years often considered the maximum for many commercial operations.
Usually, an ECM should not be considered if it reduces the performance of the farm - unless the savings in energy is so great that the reduction in performance is "worth it" in the long run. Figuring out this trade-off is not a simple matter, and involves both economic analysis and using your best judgment.
Saving Money Without Saving Energy
Reducing energy use is not the only way to save on your energy bill and make your farm more profitable. There are several related strategies that involve changing the way that you use energy, that could also yield savings - including Demand Management and Renewable Generation.
Demand Management is the method of controlling when in the day you use your electricity, in order to reduce costs. Some farms (usually larger ones) pay a charge for the maximum rate at which electricity is used (the kW demand). All farms may soon be required to pay for "real time pricing" of electricity that varies the cost over the course of the day. In either situation, it is possible for farmers to adjust their operating schedule to reduce their electricity charge.
The other major related issue to energy efficiency is the opportunity for farmers to produce renewable energy on the farm, thus reducing the amount they have to purchase from off the farm. One popular option in Pennsylvania is the production of biogas from animal manure. More information is available on Penn State's Biogas website. Another possibility is to grow energy crops.