Agriculture energy expenditures in Wisconsin amount to roughly $681.4 million each year. Farmers are constantly striving to eliminate unnecessary energy expenses, while still maintaining a safe and productive business. Lower milk prices have had a big impact on dairy farms considering ways to reduce their expenses and keep their business profitable.
Even with making some strategic cuts to feed, labor, and supplies, farmers are still not breaking even. And with less money available for capital projects, farmers are determined to find creative solutions to keep their business in the black. Eliminating energy expenses is a way to keep your operation cost effective while maintaining herd size, safety, and a modern facility.
There are many ways to decrease energy usage, and technology is a key part of efficiency on farms. Dairy service companies have noticed that fewer farms are installing new equipment and more are focusing on repairing and maintaining current systems. By assessing your farm’s energy usage, you can find efficiency changes that will have a positive impact on your milking operation without reducing cow productivity or increasing labor costs. This can include anything from basic behavioral adjustments to modifying light and temperature controls.
Dairy farms average between 800 and 1,200 kilowatt-hours (kWh) of annual electricity use per cow. In order to better manage your farm’s energy costs, it’s important to understand how those costs are incurred. To develop this understanding, contact your electric provider account representative to review your daily, weekly, and monthly electric use patterns. This knowledge will allow you to evaluate your operating procedures to identify adjustments that can reduce your energy use and operational costs, and provide a strategy for a cost-effective energy management plan.
After you identify your energy use and operational costs, consider conducting a mini energy audit on your farm. Start by contacting your Focus on Energy advisor, Trade Ally, or utility representative. The majority of energy consumed on dairy farms goes into milk production processes such as the milking equipment, milk cooling, and water heating. Additional energy is consumed by process equipment including vacuum pumps, lighting, and ventilation systems. The chart below summarizes these top energy users to give you an idea of how much of your monthly bills incurred to cover these necessary farm processes and equipment.
When you are ready to identify the return on investment (ROI) of the equipment upgrades, work with your Dairy Service Company or Trade Ally and Energy Advisor to conduct a simple payback for your upgrade. The basic payback equation below can be used to prioritize future equipment purchases.
For example, say you are interested in replacing your current waterers with newer, energy efficient versions to help cut your water heating energy costs. Livestock waterers are vital pieces of equipment used on a daily basis to maintain animal health and well-being, but older versions can be extremely inefficient causing you to pay hundreds of dollars extra per month during the cold winter months. New waterers have increased insulation to reduce heat loss, therefore reducing or eliminating the need for energy to keep the water from freezing.
If you are purchasing 10 waterers for a total of $11,100, and are able to apply an energy efficiency incentive credit of $600 towards the new waterers, then by averaging the new cost of the waterers from the energy savings on your utility bill, you will be able to pay off these waterers in under three years! This makes the return on investment for this project approximately 33 percent.
All the data listed in this article can be found in Focus on Energy’s Agriculture Energy Efficiency Best Practices Guidebook. Need help identifying other energy efficiency measures for your farm operation? Request a copy this guidebook to evaluate your agribusiness. Visit focusonenergy.com/guidebooks to download your FREE copy or call 888.947.7828 to request a Guidebook sent to your home. Focus on Energy Advisors have the tools and skills to help guide you through potential energy savings projects and provide an unbiased third party source of information to improve the energy efficiency of your farm.
About Focus on Energy
Focus on Energy is Wisconsin utilities’ statewide energy efficiency and renewable resource program funded by the state’s investor-owned energy utilities and participating municipal and electric cooperative utilities. Focus on Energy works with eligible Wisconsin residents and businesses to install cost-effective energy efficiency and renewable energy projects. Focus on Energy information, resources and financial incentives help to implement projects that otherwise would not be completed. Its efforts help Wisconsin residents and businesses manage rising energy costs, promote in-state economic development, protect our environment and control Wisconsin’s growing demand for electricity and natural gas. For more information call 800.762.7077 or visit focusonenergy.com.