Marijuana growers will soon be able to apply for state-funded energy reduction loans and technical assistance, according to an announcement from the Colorado Energy Office.
Part of an ongoing effort by that office, the Cannabis Resource Optimization Program (CROP) will provide commercial marijuana growers with free technical resources, renewable-energy assessments and, down the road, financing for equipment and facility upgrades.
A 2018 market report from the Energy Office estimated that the marijuana industry consumed around 2 percent of Colorado's annual electricity generation. The five-year CROP initiative was approved by the state legislature last year in hopes of persuading growers to adopt energy-saving techniques and equipment like LED lighting and improved HVAC systems.
“The state recognizes that cannabis cultivation uses a substantial amount of energy and created the CROP program to provide unprecedented access to low-interest loans for improvements that ease this financial burden on Colorado businesses," Energy Office cannabis sustainability program manager Elizabeth Lee says in a statement.
Energy use accounts for around one-third of a pot cultivation's operating costs, Colorado Energy Office research shows. Loans for commercial growing equipment are harder to come by than in other agricultural industries, however, because of federal marijuana prohibition, with interest rates as high as 15 or 20 percent, according to Michael Turner, the CEO's building innovation and energy finance director.
State officials hope that marijuana business owners will jump on opportunities to save money in the long run after learning more about energy-saving techniques. Rebates for energy-saving techniques are available for growers who purchase electricity from Xcel Energy, Black Hills Energy and Platte River Power Authority, the Energy Office notes, and the electric bill would go down after implementing these practices, too.
According to Turner, CROP was based on a 2020 pilot program with a handful of growers in Colorado. During the pilot program, state audits indicated that participants saved around 100,000 kilowatt hours on average. Over a five-year run, CROP is expected to save millions of kilowatt hours, eliminating thousands of metric tons of CO2 emissions in the process.
In a statement on CROP's launch, Governor Jared Polis praised the program's innovation.
"Colorado was the first state to legalize cannabis and now will be the first state to help licensed cultivation operators make their operation more energy efficient,” Polis says. “Providing innovative ways for cannabis cultivation operators to improve energy efficiency will save business owners money and reduce energy use in the industry.”
An Energy Office budget summary from December shows that $500,000 was appropriated for CROP's first year, with another $500,000 requested for a second year.
Licensed marijuana growers can start applying for technical assistance and energy audits on February 15. A webinar will be held that same day for business owners to learn more about the program and how to navigate the application process.
To be eligible for audits and technical help, a grower must not already have access to assistance through their utility providers. Applications for equipment financing will be available to all licensed Colorado growers later in the year, according to the Energy Office.