This article appears in the July 2018 issue of Potato Grower.
Hindsight has a way of making even the most brilliant of ideas seem obvious and elementary. It’s easy to wonder, “Why didn’t somebody think of this years ago?”
In 2016, the folks at Agri-Stor Companies called a meeting to address what was, at the time, a depressed potato market. The Twin Falls, Idaho-based company has developed and built potato storages for over 50 years. There is a prevailing belief at Agri-Stor that they have a responsibility to help growers succeed in whatever ways they can. So in that stressful economic environment for the region’s potato industry, the Agri-Stor folks were looking for solutions just as earnestly as growers were.
Jesse Vierstra is a forward-thinking kind of guy. Though he was still a fairly new hire at Agri-Stor at the time, he spoke up and voiced a big idea in that meeting: “Why don’t we get into solar?” After all, energy costs are at or near the top of the list of farm expenditures year in and year out; why not see whether it’s feasible to set growers up with a way to produce some of their own energy? Vierstra was tabbed to head up the project, dubbed Solar Farms. The crew at Agri-Stor set to work investigating what it would take to install solar systems on farms, where on a farm it would make the most sense, and what the initial cost and long-term savings would be for growers.
“Once we got a product that was deliverable and beneficial for our customers, we rolled it out,” says Vierstra. “We talked to our initial customer base, showed them, and delivered what we said we would deliver on. Now we have happy customers who have already seen benefits.”
Solar Farms systems are installed and produce energy for irrigation pumps, potato storages, fresh-pack sheds, dairy barns and just about any other application a customer can dream up in Agri-Stor’s home territory of southern Idaho. Vierstra says the area has a near-ideal climate to utilize solar panels: lots of sunshine, but without the consistent, extreme heat that shortens the panels’ lifespans in more southerly climes like Arizona. (“Solar panels don’t produce more power with more heat,” says Vierstra. “They use the light in a process similar to photosynthesis.”) Agri-Stor warranties the panels for 30 years, but Vierstra says their standard lifespan in southern Idaho is around 40 years.
But do Solar Farms really save money for producers? Through its financing arm—partnered with KeCorp—Agri-Stor helps growers explore every available option for installing solar power on their individual farms. The company helps its customers capitalize on tax incentives, maxing out depreciation and grants available to solar power producers. Capital leases—where the farmer takes all the tax benefits—and operation leases—where KeyCorp takes those benefits but the customer gets the system at net present cost—are available. With the way the majority of relevant tax incentives and grants are currently structured, Vierstra says there has never been—and may never be again—a better time for growers to invest in solar power on their operations.
“We put everything on the table so they can make an important decision about what they want to do and what’s best for their operation,” says Vierstra. “That’s how we want to work.”
When all options are carefully considered and individualized, Vierstra says, most Solar Farms systems have a return on investment of five years or less. For a 40-year investment, that’s nothing to sniff at.
“I call it extreme couponing, because we try to capitalize on everything out there,” says Vierstra. “If we can structure the financing correctly, our customers can be net cash-positive in Year 1 and every year through the lease. Then when they do the bubble pay and their lease payment is complete, they’ll be offsetting a ton of power, and their cash revenue’s going to fly.”
Beyond what he sees as obvious financial benefits, Vierstra believes Solar Farms offer more value that is difficult to quantify.
“Once you get past all the economics of it, which is necessary in any business, you get into all the secondary benefits,” he says. “A lot of organic growers like to market it because it’s putting their money where their mouth is. We’re talking about clean, green energy. There’s a tremendous amount of PR value to it. If it’s financially responsible for a grower to do this, it’s a no-brainer.”
Ultimately, Vierstra says Agri-Stor is looking out for its growers. Without their success, there is no Agri-Stor.
“Solar Farms was developed because we asked, ‘What can we do to benefit growers in new ways?’” he says. “We’re a company, but we’re friends with a lot of these growers. After that, it just comes down to being a company whose entire job is to help potato growers and their product.”
To learn more about Solar Farms, visit www.solarfarms.info. In Idaho, call Jesse Vierstra at (208) 733-7000. In Washington, call Michelle Ahmann at (509) 761-2166.