The dairy farmer is subjected to all the vagaries that working on the land presents. Droughts, floods, livestock disease all affect income flow. In addition to all standard electrical loads such as lighting, office air conditioning etc that all farms and businesses experience, dairies have the following additional expenses:
Dairy farmers have adopted particular energy management strategies that take advantage of the off peak electricity tariffs (if they have access) to heat and cool their milk. Now the financial viability of this approach depends on the difference between the off peak and peak tariff amounts and what we are about to suggest is that there may be a better way.
A dairy's loads are based on the milking cycle, and in regards to their pumping requirements, this occurs early morning and late evening.
This particular pumping regime is fixed and cannot be changed. The savings a dairy farmer can possibly obtain are due to the differential between the cost of peak power and off peak power. If there is no tariff differential, heating of water and cooling of milk can occur at any time (consistent with other factors that determine these processes).
As peak loads on a dairy fall outside of traditional solar output (i.e. max output in the middle of the day with North facing array) the efficacy of solar as an energy management solution is limited apart from some reduction in the bill from exporting excess solar energy produced (see the farming the sun blog)
If however, there is a shift of the load to a time of day when solar is being produced, we can effectively reduce the overall expenditure on electricity.
If we did indeed change the load profile to align more closely with solar output, how much would a dairy save and what would be the payback period?
So the total energy consumed by heating and cooling is:
This amounts to a bill of $30,295/year
But what about if the farmer has no off peak rate?
So in this case, the total energy consumed on site is:
This amounts to a bill of $45,917/year
This amounts to a bill of $5,518/year
But what if the dairy is in the unlucky situation where electricity is delivered via a flat rat?
This scenario assumes a flat rate of electricity consumption of $0.35kWh with no off peak rate to fall back on:
This amounts to a bill of $13,797/year
So we can see that savings just addressing the heating and cooling are substantial.
So if a dairy farm has a Flat Rate, a commercial solar system will save around $32,120 per year and with an assumed price of $110,000 + GST for a 100 kW system you’re looking at a payback period of 3.4 years
Now if the dairy farm does have access to an off-peak tariff scenario then the savings per year are $24,777 and so payback for the same size system is 4.4 years.
Note: both scenarios have not included an annual increase in electricity or the fact that excess solar not used on site can be exported at around $0.09 kWh. Both have the potential to reduce the payback period.
Running a dairy business is hard. As mentioned all the environmental factors play a huge role in influencing income flow, not to mention fluctuating wholesale milk prices and less than optimal “arrangements” with large supermarkets.
But there is some semblance of control when it comes to addressing energy consumption. Dairy farms experiencing flat tariff scenarios stand to benefit more than ones with off-peak tariffs, but undoubtedly both will benefit with the addition of a commercial solar panel system in the long run.
This is all part of a TEMS approach (Total Energy Management Strategy). The prudent dairy farmer looks at a range of approaches that include heat recovery strategies, water tanks utilised in the chilling approach and load shifting, and solar is just one of these that can offer concrete energy and financial savings.
