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Market Snapshot: On Farm Natural Resources and Renewable Energy

Renewable energy is a popular topic these days with new users and application areas maturing in all sectors. As agriculture begins to incorporate renewable energy into everyday operations, innovative technologies and initiatives can help promote energy efficiency and conservation. The use of renewable energy in agriculture holds the promise of reducing operation costs, increasing energy efficiency, and increasing profits while utilizing natural resources. Given the availability of resources in this sector – wind, solar, geothermal energy, and other feedstocks – the potential to create scalable solutions that serve multiple and individual farms is increasing.

According to the United States Department of Agriculture (USDA), the number of U.S. farms fell sharply until the early 1970s after peaking at 6.8 million farms in 1935. However, while the number of U.S. farms has continued to decline since the 1970s, the rate of decline has slowed. In the most recent USDA survey there were 2.02 million U.S. farms in 2019 utilizing 897 million acres of land. The average farm size was 444 acres, which is slightly greater than the 440 acres recorded in the early 1970s. In 2019, family farms, commonly defined as a farm where the majority of the business is owned by the operator and individuals related to the operator, accounted for nearly 98 percent of U.S. farms, and small family farms accounted for 90 percent of all U.S. farms. By contrast, large-scale family farms, make up about 3% of farms but 44 percent of the value of production.

So, what does the number of farms mean for energy use? The EPA reports that agriculture accounts for 10% of all greenhouse gas emissions in the U.S., and that doesn’t include land and water usage. This sector both uses and produces energy, which makes energy an expense as well as a source of potential income. On-farm renewable energy generation is seen as offering the opportunity to diversify farm business and offset emissions from other farm activities while reducing energy costs. To realize these goals, farmers are tapping into the wide range of options for renewable energy generation. According to the 2017 Census of Agriculture, the number of farms with renewable energy producing systems increased from 57,299 in 2012 to 133,176 in 2017.

While not every option will be suitable for every farm, the following list provides a brief overview of some of these sources.

  • Bioenergy: Biomass energy can be made up of sugars and oils from plants and used to make fuel for vehicles (Biofuel or Biodiesel). Additionally, the burning of biomass for heat or electricity is simply called Biopower. Both of these offer the potential for generation and use in the agricultural sector and beyond.
  • Geothermal: Geothermal energy can be expensive to set-up, but reports indicate that the long-term benefit makes this cost worthwhile to farmers. In this case, farm buildings could use geothermal heat pumps to exchange air temperature and ground temperature year round, keeping buildings cool in summer and warm in winter.
  • Solar: Agricultural applications of solar energy can take many forms, some of which have been used for years. For example, the sun’s energy can be used for passive heating of greenhouses or as solar thermal heating for hot water systems. With photovoltaics (PV) solar energy can be used to produce electricity. Farm-produced solar energy can be sold as a commodity or used to power the farm itself.
  • Wind: With wind energy, turbines produce electricity from wind, and can provide a large portion of the average power needed by a farm. However the turbines must be located in high wind areas and typically require at least one acre of land to produce enough energy.
  • Hydropower: Hydropower is also dependent upon the farm’s location – for this form of renewable energy the force of fast moving, falling, or flowing water is used to produce or capture energy. In agriculture, on-farm hydropower generation can be used to power the farm directly, or it can be connected to the electrical grid to offset electricity consumption.

The USDA offers a variety of links and resources for this topic and provides information on work being done in this area by other agencies as well as by individual states. A listing of agriculture conferences scheduled for 2021 is available here.