Starting in 2015, Pinecrest-based environmental activist Delaney Reynolds began asking dozens of public officials across South Florida to consider working with her to create a law that would change the way new homes are constructed – and “help change the world for the better.”

One mayor just a few miles from here answered her call, Phil Stoddard of South Miami, widely known as an activist in his own right, a proponent of renewable energy, an environmentalist. He quickly responded and set a course whereby he and Reynolds would work side by side for a year to research and write the language that would make up a new “Solar Requirements” section to South Miami’s Land Development Code.

On July 18, it was mission accomplished, as they enacted its new residential solar mandate, making South Miami the only municipality between The Golden State of California and The Sunshine State to enact a law mandating that solar power be installed in newly built homes or those subject to major renovation.

Reynolds issued a statement immediately following the vote: “This brave decision is historic and certainly is a step in the right direction towards my dream of turning the ‘Sunshine State’ of Florida into ‘THE Solar State’.”

A recent graduate of Palmer Trinity, Reynolds begins as a freshman this fall studying Marine Biology at the University of Miami.

The legislative process was not without its critics. In June, just hours prior to one of the city commission’s many hearings on the matter, a misinformation campaign was launched asserted this rule would force all homeowners to install solar-collection systems.

This fake fact and other inflammatory statements shared in robocalls to city residents were swiftly debunked by city commissioners. After all, the installation of solar collectors applies only to new homes being constructed and those that are renovated at or above 75 percent of their current value.

A Bold Move

“In actuality, the new requirements will impact only a few South Miami homes,” said Reynolds. “But make no mistake, this bold and smart move by city leaders is very, very important – and certainly ‘moves the needle’ in the right direction.”

Sponsor of the legislation Mayor Stoddard says it’s a “significant win-win” for residents.

“The greater benefit of this rule is, we’ll reduce carbon emissions and maybe our kids and grand kids get to stay in South Florida. And the immediate short-term benefit of having solar on rooftops is, you get power at better-than-utility prices and you get to save money.”

South Miami Commissioner Josh Liebman isn’t so sure. While he says he fully supports solar power, he says this is a “classic example” of the city commission failing to represent the community. “They are taking away our citizens’ right to choice,” Liebman said.

But Reynolds sees a bigger picture.

“Sadly, Florida ranks 14th in the amount of energy we produce from solar power, but the good news is, we rank third in our potential to generate power from the sun,” said Reynolds.

Experts predict that 50 percent of Florida’s energy can be derived from solar power by the year 2045 if the state begins to as Reynolds suggests, “get serious” about this clean, abundant energy source.

“At a time that our state and country should be dramatically increasing its sustainable use such as solar power, these rankings are a bit discouraging, but not surprising,” Reynolds said.

A Family Affair

Delaney’s brother Owen Reynolds, a sophomore at Palmer Trinity and the creator of a solar-car concept called “The Apollo Project,” spent part of his summer advocating for South Miami’s proposed solar panel law, as well. Like his sister, he’s grown up in a solar-powered home and sees the virtue of solar as he explained before the city commission at a July 11 hearing.

“In 1931, Thomas Edison was touting solar and was quoted as saying, ‘I’d put my money on the sun and solar energy. What a source of power!’” Owen Reynolds said. “So almost 100 years later it’s time we took one of the world’s greatest inventor’s advice and installed solar power everywhere. A reliance on fossil fuels and of old technologies is destroying our planet, and established businesses such as Florida Power & Light are all too happy with the way things are.”

At every opportunity, Delaney Reynolds challenges residents and elected officials to continue working “to help take on the many challenges facing our country as we evolve from a fossil-fuel economy to a sustainable one. But if we are to ever make that transition, I believe the solutions will most certainly begin in our local communities, just as it did in South Miami.”

While on a recent speaking trip in May in St. Petersburg, Florida, that city commission voted to begin researching and drafting a similar law after Reynolds shared public remarks about the work she did with South Miami. Now, as many as seven other Florida cities are also working on drafting similar rules.

Delaney Reynolds is founder of The Sink or Swim Project, educating and engaging people of all ages about the risks of climate change and sea level rise in hopes that we can work together as a global community to solve this crisis. For information visit


Source: Miami’s Community Newspaper

A state agency in Massachusetts recently sold “green bonds,” a type of debt designed to fund environmentally-friendly projects.

But the money raised from the sale won’t go to a new park, more bike lanes or a renewable energy facility. Instead, the Massachusetts State College Building Authority plans to use some of the funds to build a 725-space parking garage at Salem State University near Boston.

A parking garage at Salem State University near Boston, financed by so-called green bonds issued by a Massachusetts state agency, would feature car-charging stations, such as this one in Atlanta. Photo: Chris Aluka Berry for The Wall Street Journal

A parking garage at Salem State University near Boston, financed by so-called green bonds issued by a Massachusetts state agency, would feature car-charging stations, such as this one in Atlanta. Photo: Chris Aluka Berry for The Wall Street Journal

The garage will have electric-car charging stations and spots for carpoolers, and officials said it would cut down on pollution from students who now circle the campus in their cars, looking for spots. But some analysts and environmental advocates said the garage still encourages people to drive, a major contributor to greenhouse-gas emissions.

The debate over the garage underscores the lack of clear rules for determining what projects help the environment. Investors said the green-bond market allows companies and governments to tap into large pools of money for environmental initiatives. But some said “greenwashing,” the financing of projects whose environmental impacts are at best unclear, could discredit the market and make buyers wary.

One concern is that there is no mandatory legal framework to decide what projects are environmentally friendly. That leaves issuers and banks to decide. Wall Street firms last year adopted voluntary green-bond guidelines, but critics said they aren’t sufficiently stringent.

“I really don’t trust developers and bond issuers to police themselves, to make sure what they say is green is really green,” said Karen Orenstein, a senior analyst at environmental group Friends of the Earth U.S. When asked about using green bonds to pay for a parking garage, Ms. Orenstein said: “That’s why you need standards.”

The Massachusetts agency generally follows the banks’ green-bond guidelines. Edward Adelman, the executive director, said the garage has environmental positives.

To be open by early 2016, it will free up land for other new school buildings, reducing sprawl and making the rest of the campus more pedestrian friendly, he said. It is also being designed to receive a certification from the Green Parking Council, according to the bond prospectus.

The issue is becoming more important as the market expands. Green-bond sales have more than tripled from a year ago in each of the past two years, with $53.2 billion outstanding at the end of 2014, according to the Climate Bonds Initiative, a nonprofit group in London.

Big asset managers such as BlackRock Inc., Vanguard Group and TIAA-CREF have purchased green bonds. Calvert Investments, a $13 billion asset manager, has raised $33 million for a mutual fund that focuses on green bonds, drawing on what portfolio manager Matthew Duch calls investors’ increasing “social consciousness about the environment.”

The voluntary guidelines, called the “green-bond principles,” suggest green bonds can pay for renewable energy, clean transportation and energy efficiency projects. Nothing, however, is explicitly ruled out.

GreenBondsChartThe guidelines are expected to be updated this month, and many investors are generally supportive. Still, one group of buyers, including BlackRock and Pacific Investment Management Co., said recently that the guidelines “can benefit from further definition and structure.”

“Personally, I do think the principles could use an update and provide a little bit more rigor,” said Rob Fernandez, a credit analyst at Breckinridge Capital Advisors, which buys green bonds.

Some investors said having inflexible rules would be counterproductive, discouraging issuers from selling green bonds and making it more difficult to pay for environmentally friendly projects. But they said it is important that issuers are transparent about how the money is used.

Environmentally dubious deals are rare, and one questionable bond shouldn’t disrupt the market, investors said. But “if there were multiple events in a short period of time, and investors just get uncomfortable, that would be a different story,” said Manuel Lewin, head of responsible investment for Zurich Insurance Group, a green-bond buyer.

At Salem State, where many people commute, students said the need for parking is real.

“I feel like I’m in a battle with all these people for spots,” said Tessa Haynes, a junior. “It’s a little episode of ‘The Hunger Games,’ ” a movie about a fight to the death among teens.

The parking garage isn’t the only project to come under scrutiny. Environmental groups, including Friends of the Earth U.S. and International Rivers, have raised concerns that proceeds from a green bond sold by French power company GDF Suez SA could help support a hydropower plant in Brazil. The groups said the plant could imperil fish species and has increased deforestation.

I really don’t trust developers and bond issuers to police themselves, to make sure what they say is green is really green.

—Karen Orenstein, senior analyst at Friends of the Earth

GDF Suez said “a great effort is being undertaken to understand and to preserve biodiversity.” The company said it is deciding which projects will benefit from a €2.5 billion ($2.66 billion) green bond it sold last year and will disclose its decision in the coming weeks.

Mr. Adelman, driving around the Salem State campus, pointed out cars parked on nearby side streets with university parking stickers. He said the new garage isn’t encouraging people to drive more but is serving existing students who must park off campus. “Nobody objects to building a parking garage,” said Mr. Adelman, who drives a hybrid car himself. “The reason it’s questioned is because of the discussion about the green bond.”


Source: Wall Street Journal

Our state’s nickname, The Sunshine State, is more than just a bumper-sticker slogan: Florida has the best solar energy resource east of the Mississippi.

This potential, coupled with Florida’s size and growing population, means that we should be a national leader in affordable solar-energy generation. But we’re not.

Two of Florida’s big power companies have recently announced new large, utility-scale solar projects. However, the private investment market is clamoring to invest in solar in Florida, too. Florida’s distributed (roof top) solar market, which is funded by private investment dollars, is being artificially constrained by unnecessary barriers.

So far, Florida’s big monopoly utilities have been effective at controlling who generates power from the sun and what they can do with it. These barriers stifle innovation, constrain customer choice and prevent job creation, hurting my business and hundreds like it.

Kent Crook

Kent Crook

That why longtime solar advocate, CEO of Wiremaster’s Electric, an electrical-services company in Miami, and board member of the Florida Alliance for Renewable Energy, Kent Crook, supports a newly launched ballot petition to expand solar choice by allowing customers the option to power their homes or businesses with solar power and choose who provides it to them. This petition is not a mandate, and it won’t raise taxes. It simply removes barriers in order to expand the choices for Floridians who want to power their homes and businesses with clean, renewable solar power.

Solar choice would enable customers to contract with solar providers who can offer innovative financing plans to provide solar power systems at no upfront cost — much as we already purchase and finance homes or cars. Landlords likewise will have the opportunity to provide the economic benefits of solar power to tenants. And this ballot would also permit solar providers to sell power directly to the customer at a long-term fixed rate. Fixed rates lock in long-term savings and offer more control over our energy future. In addition, recent studies have shown that solar-energy systems increase homes’ resale value.

These benefits are great news for middle- and lower-income customers who may have been locked out of the solar market because they did not have the upfront cash to invest in a solar system. Clean, nonpolluting energy sources like solar can also reduce traditional energy’s health impacts, which disproportionately affect low-income and minority communities in our state and around the country. Thus we are able to leave cleaner air and water for future generations to enjoy.

Despite protests from the big power companies, solar energy does not raise electricity rates, and because the fuel source — the sun — is free, it will help customers control electricity rates. Monopoly power companies like Florida Power & Light make their money by building new power plants. They earn a guaranteed rate of return, which is then passed on as profits to its shareholders. The company doesn’t seem to consider its low-income customers when gutting customer energy-efficiency opportunities or building costly new power plants.

Monopoly utilities are understandably scared of losing their monopoly and the lucrative profits that the government guarantees them. When homeowners and businesses are able to generate their own power, it means less profit for power companies.

 By allowing the private market to invest in solar, investment risk is shifted away from the monopoly utilities’ customers to the private market, saving customers money and reducing the need to build new expensive power generating facilities.

It’s called the free market, and competition will benefit us all. More solar energy customers means businesses will hire and train more solar installers and electricians — resulting in more well-paid, local jobs that cannot be outsourced.

A recent poll found that 74 percent of state voters support a proposal to change the law and allow Floridians to contract directly with solar providers to power their homes or businesses with solar energy. Residents of the Sunshine State clearly support solar power, but they are currently being denied the right to choose it as their power source.

Floridians for Solar Choice is bringing the issue directly to the people. Sign the petition at


Source: Miami Herald

Several green building trends emerged over the past 12 months that will impact commercial real estate in the United States in 2015, according to Doug Lawrence, founder and managing principal of 5 Stone Green Capital—Bainbridge, an institutional real estate company.

Lawrence serves on the investment and natural resources committees of the University of Connecticut Foundation and the advisory board of Rutgers Business School.

Here’s what he foresees for emerging trends in green real estate in the year ahead.

1. Aging baby boomers and Gen X, Y and Z will continue to move to cities, requiring more affordable housing—and expecting it to be green.

CREPredictionNo1U.S. cities are growing faster than the suburbs. Baby boomers will need urban housing that supports their health and community needs, but so will the younger generations flocking to live in urban environments. As a policy matter, this means cities will be pressured to create housing that serves a wider range of income and age demographics. Affordable housing is likely to be the target of municipal agendas throughout the country.

Green multifamily really wins within this demand picture. The ability to reduce overall operating expenses through green technology, therefore also reducing occupancy costs for tenants, should improve residential affordability. Green multifamily properties featuring optimal health designs will become increasingly attractive. These would include better air filtration systems to reduce dust, pollen and airborne pathogens that may trigger asthma; more daylighting to improve natural vitamin D production; and antibacterial countertops and doorknobs.

Expect multifamily vacancy rates to continue to fall for affordable and seniors housing sub-sectors. Absorption rates will remain solid for new multifamily construction. The 18-to-34-year-olds seem psychologically predisposed to green housing and, thanks to tight lending standards and high student loan debt, this group will not be seeking single-family homes in the near future. Thus, multifamily demand looks pretty good for 2015, and green multifamily will be the likely winner with the younger generations.

2. The anti-climate-change voices will yell even louder.

CREPredictionNo2Some naysayers will stop arguing that there is no increase in carbon dioxide (CO2) in our atmosphere. Instead, they will argue that increasing CO2 is good for the global economy because CO2 is necessary to increase agriculture. Under this theory, more CO2 in the atmosphere would mean a golden age for crop production. Green real estate investors will continue to reduce their carbon footprint under the belief that doing so increases profitability and is good for the environment as well.

3. Renewable technology, particularly solar, will continue to fall in price and improve in efficiency.

CREPredictionNo3Solar panels that can convert up to 70 percent of the sun’s light spectrum into electricity (from gamma rays to X-rays) are already in beta testing. This could be a game-changer for real estate owners, especially in the multifamily and industrial sectors, as well as for those with properties in dense urban environments in high-cost electricity states.

The cost of solar energy could fall below that of fossil fuel-generated electricity per kilowatt hour, even with the drop in oil and/or gas prices. As technology improves, real estate managers will explore new ways to provide energy to tenants and users at more efficient prices.

4. Urban resiliency and climate change will become topics for deeper discussion among policy-makers.

CREPredictionNo4Following rising average sea levels in a wide range of American cities—from Los Angeles to Galveston, Texas to New York and Boston—and more frequent and more damaging storms, cities are becoming very focused on hardening essential infrastructure.

The real estate industry may see new building codes that emphasize sustainability, as well as resiliency.

5. Utilities companies and smart developers will form partnerships for distributed generation.

CREPredictionNo5It’s getting harder and harder to build new power plants, yet we have more people for whom to provide electricity; meanwhile, business demand for electricity is increasing as the economy strengthens. U.S. power plants are not only aged, but also use incredibly large amounts of fresh water for cooling. Moreover, some experts predict that as much as 10 percent of coal-fired electricity-generating plants in the United States may be shut down over the next few years. More demand, coupled with fewer production resources, may spur real estate owners and power companies into an alliance.

The concept of distributed generation, wherein solar-powered rooftops are used to create renewable energy that feeds the grid, will become more attractive. In this way, the utility company will gain a production source to feed growing demand without having to go through nightmarish public hearings to obtain the production increase. Meanwhile, the real estate owner may see a new revenue stream, or at least a reduction in energy consumption. All in all, partnerships between developers and utility companies may reduce overall operating expenses for garages, public areas, elevators and other electrical hot points.

6. The sharing economy will continue to grow.

CREPredictionNo6Sharing economy enterprises are thriving, particularly in urban markets. Think office sharing, or even These phenomena are no longer fads, and they are changing how we think about office space, hoteling and more.

Many experts assume that the more we share, the less stress we will have on the environment, but it may still be too early to tell whether that’s true.

7. Food production will become more urban and commercial buildings’ rooftops will increase in value.

CREPredictionNo7It’s becoming less profitable to truck a tomato from California to New York and, due to the increasing demand for locally-grown produce, the term “farm-to-table” has become embedded in our vocabulary. The demand for food that is grown without pesticides, fungicides or other chemicals is increasing. We already see grocers like Whole Foods establishing hydroponic farms on their rooftops. Such production reduces transportation costs and improves produce freshness and variety. Other grocers, including Safeway, have gone green by deploying solar arrays and other renewable energy technologies on their stores’ rooftops in order to reduce peak-demand electricity charges. Large rooftops will therefore continue to find new value as non-traditional tenants begin to use them in new ways.

8. Mortgage finance and insurance organizations will consider green standards.

CREPredictionNo8As the government-sponsored entities Freddie Mac and Fannie Mae continue reviewing and improving their standards for green buildings, other mainstream lenders and insurance companies will catch up with the trend. Insurance companies will see green buildings as a way to reduce risk. Lenders will potentially see lower volatility in net operating cash flows. As the capital markets go green, so will more building owners and investors.

The Dow Jones Sustainability Index is proving that green business outperforms the non-green Dow Jones Industrials Index. Green building will mimic that outperformance and, as a result, gain momentum in 2015.


Source: NREI

Demand response is an energy-saving tool that encourages customers to shift their electricity use to times of day when there is less demand on the power grid or when more renewable energy is abundant.

Karan Gupta at 77 West Wacker's Central Command Center

Karan Gupta at 77 West Wacker’s Central Command Center

This has been at the core of the work of Karan Gupta, a high-performance building consultant and Environmental Defense Fund Climate Corps fellow based in North Carolina. His host company, Jones Lang Lasalle, is the property manager for 77 West Wacker Drive, a 50-story office building in downtown Chicago. Here, his focus is on maximizing the benefits of demand response, which already have been implemented through multiple technologies.

Currently, 77 West Wacker is enrolled in the PJM demand response capacity market through a demand response service provider. There are standby payments for demand response commitments, meaning that the building is paid for simply making itself available to reduce energy demand when called upon to do so. In addition to these standby payments, the building is paid for with actual energy conservation as real demand falls below baseline demand during emergency events. The building also participates in voluntary price-based demand response, whereby energy conservation is performed in non-emergency events to take advantage of opportunities when real-time energy prices exceed the fixed rate that the building pays for energy.

Load-Shifting Makes It Easier To Bear

The software platform provided by the demand response service provider allows engineers to view the building’s baseline demand, real-time action alerts and forecasts for weather and energy prices. When the grid is stressed due to extreme weather or system lapses, the engineers receive notification, usually the day of, to enact demand response protocols. While extreme weather may or may not result in an emergency event, it almost always presents earnings opportunities through economic demand response.

For this reason, the team here is proactive and monitors weather forecasts throughout the Midwest and East Coast, and usually has taken action by the time emergency notification is received. In the summer, the primary form of action is “load shifting,” a process works by pre-cooling the building during early morning off-peak hours and reducing cooling demand during peak hours.


(Credit: Karan Gupta)

A hypothetical demand response event in which load shifting was used. In this snapshot, the red line represents the baseline and the green line represents actual building use. Actual use exceeded the baseline in the morning hours when building equipment ramped up to pre-cool the building (there is no penalty for going above the baseline during non-peak hours), and then around 10 a.m., the equipment ramped down for the rest of the day as it had to work less hard to maintain the lower temperature. During the period where the green line is below the red line, real-time energy prices are paid back to the building for the difference between baseline energy consumption and actual consumption.

BAS + VFD Spells Comfort’

When a non-weather event occurs, load shifting may not be an option, and instead a series of minor operational adjustments must be made to achieve the necessary reductions. Tenant comfort is an important consideration when making these adjustments, as reasonable temperatures and minimum levels of ventilation have to be maintained. Excessive ramping and cycling of equipment also should be avoided to prevent undue stress and shortened life. Where base building equipment adjustments alone are not sufficient, the building may send out notices for tenant involvement. Effective communication is critical for tenant satisfaction, but to that end, building management has performed exceedingly well, making efforts to educate occupants about the value of demand response.

The two primary technologies that have enabled demand response capability at 77 West Wacker are the building automation system and variable frequency drives. The BAS allows for monitoring and control of the various equipment from a central command center. This control is necessary to quickly enact demand response protocols while guarding the health, safety and comfort of the building occupants. In the past, motor-driven equipment such as fans and pumps either would run at full load or not at all, and when at full load, would be modulated by dampers or fans. A common analogy is using the brakes to control the speed of a car while pushing the accelerator to the limit. VFDs basically provide throttle control and allow for the modulation of such equipment.

Aiming Higher

The next step in fully implementing demand response at 77 West Wacker is enrolling into ancillary services, which are used to support the transmission of electric power from seller to purchaser (scheduling and dispatch, electric grid protection, etc.). While BAS and VFDs are a strong first step, further hardware and software investments will be necessary to make frequency regulation possible. To some extent, real-time control will have to be relinquished to the system operator, but the primary objective still will remain to maintain tenant satisfaction. Automated scripts that guide operational parameters within predefined limits occasionally will have to override signals to ramp loads up or down.

Cracking the code for successful implementation hopefully will release a new wave of revenue for property managers around the country while enhancing grid reliability.


Source: GreenBiz

In a 90,000-square-foot warehouse not far from Chicago’s Midway Airport, the future of urban farming has taken root. Welcome to the world of vertical farming.

Long shelves thick with fresh herbs and salad greens sit beneath hundreds of fluorescent grow lights. There are planters of basil, watercress and kale stacked in neat rows reaching the ceiling, afloat in a nutrient-rich stream of water fed by large blue tanks filled with tilapia. It’s an eerily beautiful scene, interrupted only by the occasional worker driving an aerial lift through the aisles, stopping to pluck handfuls of greens ready to be packaged and distributed throughout the city.

As the demand for fresh, locally grown food has increased among urban consumers, businesses like FarmedHere, which runs the Chicago warehouse, have stepped in to compete with conventional farms. Using advanced hydroponic and aquaponic methods, they’re growing fruits and vegetables year-round in facilities that are often in the same neighborhood as the restaurants and retailers they supply. Proponents like to call it ultra-local farming. “We can grow 200 percent more food per square foot than traditional agriculture, and without the use of chemical fertilizers,” said Mark Thomann, chief executive officer of FarmedHere.

The Association for Vertical Farming, an industry trade group, says vertical farms use 98 percent less water and 70 percent less fertilizer on average than outdoor farms. Weather fluctuations aren’t a factor, and neither is soil management. They can harvest crops as often as 20 times a year, and with their stack-it-high layout, occupy a fraction of the land traditional agriculture requires. So efficient is vertical farming that many believe it could move beyond a niche market and become a solution for food insecurity in the United States, which affects nearly 15 percent of households, according to the U.S. Department of Agriculture. Some believe it could even be the future of agriculture altogether, with climate change negatively affecting rural farmland while the global population continues to swell. By 2050, the World Health Organization estimates, there will be 9 billion people on Earth, with 70 percent of them residing in urban areas.

But before vertical farming can conquer the world, it has to prove it can scale up and be as environmentally sound as its backers claim. Of the many questions surrounding these ventures, the most important one may be whether it is a good business model to begin with. Thomann certainly believes so. In the two years FarmedHere has been in business, it has expanded distribution to dozens of supermarkets throughout Chicago, including all of the city’s Whole Foods locations. The company packages its own herbs and salad greens, which are certified organic, and can deliver to stores within 24 hours of the product being harvested.

FarmedHere’s foray into urban agriculture has been so successful, it’s planning to build vertical farms in other cities. “From an economic standpoint, I think we’re well down the pathway to showing that vertical farming can not only be a reality, but that it can be profitable,” Thomann said. From an environmental standpoint, FarmedHere has tremendous upside. In addition to growing food close to stores and without the use of chemical fertilizers and pesticides, the company conserves water — the most intensively used resource in conventional farming — through a closed-loop aquaponic system. The waste produced by the tilapia provides nutrients for the greens to absorb as they clean the water, which then flows back into the tanks.

Vertical farming also makes efficient use of urban spaces, occupying previously neglected warehouses, underutilized rooftops and other vacant areas. In New York, Gotham Greens grows everything from butterhead lettuce to bok choy in rooftop greenhouses, including a 20,000 square foot one atop a Whole Foods in Brooklyn. Green Spirit Farms in New Buffalo, Michigan, meanwhile, operates out of a former plastics molding factory. “Buildings like this are available throughout the United States,” said Milan Kluko, president of Green Spirit Farms. “Usually, they just need a power wash and a paint to get up and running again.”

Worldwide, vertical farm models range from rotating plant towers in Singapore to portable aquaponic crates in Germany. A former semiconductor factory in Japan is now a large-scale lettuce farm, growing 10,000 heads per day. In London, a company called Growing Underground went viral earlier this year after it revealed plans to build a hydroponic farm 100 feet under the city, in an abandoned World War II bomb shelter. “We wanted to build a vertical farm, but the financials of building in central London didn’t stack up,” said Steven Dring, co-founder of Growing Underground, which raised $1.4 million in seed funding and will open for business next year.

Originally conceived as skyscrapers filled with produce farms and livestock — an idea that quickly proved prohibitively expensive — vertical farming has come to encompass all sorts of green-tech operations in places as varied as parking garages, shopping malls and office buildings. There’s even a small aeroponic farm in Chicago’s O’Hare Airport.

But for all the novelty of indoor farming, there are hurdles that even the most eager start-ups struggle to clear. For starters, there’s the large upfront cost, typically in the millions of dollars, required to outfit a growing space. Recouping all that capital in the low-margin food industry can be a daunting task, and a reason many investors shy away. “A controlled environment like that requires a lot of technology that your typical outdoor field doesn’t have,” said J. Michael Gould, director of Texas A&M’s AgriLife Research and Extension Center in Dallas, which studies urban agriculture. “You get benefits from that technology, but right now the cost-benefit ratio is not particularly favorable.”

There’s also, for all vertical farming’s efficiencies, one very inefficient component: keeping all those lights on when the growing is done indoors. Without sunlight, plants require intense lighting for 16 to 18 hours a day, said Blake Davis, a vertical farming expert and professor at Illinois Institute of Technology. That adds up to sky-high energy bills. Improvements to indoor farming technology, including cheaper, more efficient lights, as well as monitoring equipment that measures and adjusts growing conditions, have brought down costs in the past few years, and further innovations are on the horizon.

A recent report from sustainable energy consulting firm Clean Edge noted companies like Philips are developing red- and blue-spectrum LED lights specifically for growing plants while others are testing sensors that detect optimal lighting levels for various crops. “Energy for lighting is one of vertical farming’s greatest expenses, making it a financial challenge if not carefully and properly designed,” the report stated. Gould, for one, thinks innovation will eventually bring down costs enough to make large-scale expansion a reality. There’s even room to make the plants themselves better, he said. “Every plant that’s grown indoors was originally developed and selected to grow outdoors,” Gould explained. “What needs to happen is the breeding programs need to begin to breed plants for indoor environments.”

Even with improvements, though, many vertical farms still draw energy from the grid, making them less of a green alternative than their ultra-local image suggests. There are also limits to the types of food that can be grown indoors. Staple crops like corn and wheat, for instance, are optimized for outdoor agriculture.      “Urban agriculture will never be able to replace rural agriculture, though I think there are opportunities for them to work together,” said Danielle Nieremberg, president of Food Tank, a nonprofit organization focused on sustainable agriculture issues.

At Green Spirit Farms, Kluko, an engineer by trade, is constantly tinkering with lighting and other parts of his farming system. He currently uses grow lights that last 100,000 hours and are, he claims, as efficient as anything on the market. Still, he finds that in some cases technical innovations don’t match natural remedies. To control pests, he recently released 27,000 ladybugs inside the Michigan warehouse.        “You really have to know what works best in these environments and use your resources wisely,” Kluko said.

Other operations are similarly trying to lessen their impact through natural as well as high-tech solutions. The Plant, a business incubator in a former meatpacking plant in Chicago, houses several start-up businesses, including a brewery, a kombucha maker, a bakery and three vertical farms. To cut down on waste, tenants utilize byproducts produced by other tenants. The kombucha maker produces CO2 that’s used in the vertical farms while leftover barley from the brewery feeds the fish used in one of the farm’s aquaponic growing systems.

The Plant is also in the process of installing an anaerobic digester, which will provide renewable energy for the entire operation by turning organic waste into methane gas. The price tag: $2 million, offset by a $1.5 million grant from the state of Illinois.  “It’s basically like a big stomach,” said Davis, who is a board member with The Plant.

Finding renewable sources of energy is critical for vertical farms, Gould said. With climate change already causing extreme weather such as droughts, severe storms and flooding, “the last thing we want to do is pump more carbon dioxide into the air,” he said. A recent study in the journal Environmental Research Letters noted staple crops such as corn and wheat are seeing decreased yields as a result of climate change, with yield losses expected to as much as double from current levels by the year 2080.

But to survive and expand as a business, vertical farms may have to look beyond food sales alone to generate revenue. Davis said The Plant offers weekly tours along with classes like a “Do It Yourself Aquaponics Workshop.” Other companies offer consulting services or sell growing kits to hobbyist farmers. FarmedHere has received local producer grants from the USDA and from Whole Foods while Bright Farms, a New York vertical farming company, signs long-term contracts with supermarkets before it builds a facility.

Ben Greene said he thinks he has just the formula for adding value. Growing up on a small organic farm in North Carolina, he experienced the joys, as well as the frustrations, of food farming. After serving as a combat engineer in Iraq for several years, he returned to his home state and is currently raising money for a hybrid business that will combine farm and supermarket under one roof. The Farmery will grow fruits and vegetables in a second-story hydroponic farm, then cart them downstairs to be sold in the grocery store.

Greene said produce grown on-site will comprise 15 percent of The Farmery’s retail sales while locally sourced products, including meat, beer and grocery items, will make up the rest. There will be a café on the first floor, he said, as well as a growing wall filled with herbs. If a customer wants to add a sprig of mint to her tea, she can pluck it right off the wall.       “It’s designed to have the high margins of a restaurant with the high foot traffic of a grocery store and the unique experience of being able to see where your food is grown,” Greene said.

And even though construction has not yet begun — that is expected to happen in December, near Raleigh-Durham — he envisions The Farmery as a successful model for cities across the country. Aside from food sales, he said the space will rely on savings coming from reduced inventory loss. In researching his business model, Greene said he discovered that as much as a third of fresh inventory is spoiled or damaged on the way from the farm to the grocery store. “That’s where we see a big opportunity, is bringing that number down to next to nothing,” he said.

Less food waste, fresher product, year-round availability — these are some of the advantages vertical farming offers. And while the industry has numerous kinks to work out, many experts believe it will adapt out of necessity.

At the extension center in Dallas, Gould and his team are studying ways to tailor low-cost, high-volume vertical farms to inner-city neighborhoods. All of the growth and technology currently resides in the niche markets — the FarmedHeres and Green Spirit Farms that supply to retailers serving mostly affluent customers. But he hopes eventually to see models scale up and become economically feasible for consumers of all income levels. “We’re going to have 7 billion people living in cities in the next few decades, and there isn’t enough countryside to grow all the food we’re going to need to keep people fed,” Gould said. “Agriculture today is pretty much a two dimensional operation. We need to figure out how to do it in the third dimension.”


Source: International Business Times