Vertical farming: 15 ways to reduce your costs
Updated: Oct 19, 2020
From lighting to your choice of crops, the decisions you make now will have a big impact on your costs going forward.
Vertical farming can yield impressive results and high returns. However, the startup costs are considerable. Add in the ongoing operational expenses, and it’s easy to see why some farmers and investors are hesitant to take the plunge.
However, it is possible to bring the costs down and optimise operations in order to maximise results.
1. Remember that location is everything
One of the benefits of vertical farming is that it requires less land than traditional growing. However, while the media may have you believe that all you need is an empty office block, finding the right location for your vertical farm isn’t as easy as you might think.
The wrong location can prove a costly mistake, so do your homework before committing. Do you have the right local infrastructure in place to get your product to your buyer as efficiently as possible? Can you source enough electricity? How much does water cost in this county compared to the next one over?
2. Balance OpEx and CapEx costs
Take a long-term view on costs. Spending more to start with could reap rewards later down the line. For one thing, you might want to spend more on technology in order to automate seeding, feeding, watering and harvesting. This will require a greater initial outlay, but a far smaller workforce; labour costs can easily account for over 50% of a vertical farm’s OpEx.
According to CambridgeHOK, a small vertical farm with minimal automation costs in the region of £1000 per square metre to set up. A large farm with full automation will cost in the region of £3000 per square metre.
There are also OPEX differences to the growing system you choose (hydroponic, aeroponic, and/or aquaponic), which will need to be factored in.
3. Don’t cut corners when vertical farming
Buy wisely. There’s always a temptation to cut costs by gambling on cheaper products, such as mass-produced imported lighting. Make sure your biggest costs come with decent guarantees and support in place should anything go wrong.
Cutting corners at the start could cause serious issues down the line, and not just in maintenance and replacement costs. You may well find the inflexibility of cheaper options prevents your vertical farm from achieving what it would otherwise be capable of.
4. Choose your lights carefully
One of your biggest expenses is going to be the lighting, in terms of both the initial build and running costs. Up to 30% of the cost of setting up a vertical farm is lighting. Running those lights will account for at least a quarter of your operational costs.
And lighting makes a substantial difference to how well your crops will grow. By isolating and combining different light wavelengths, you can create the optimum environment for your crops. So it’s crucial to get your lighting right from the start.
Most companies take a one-size-fits-all approach to lighting rigs. As with most things in life, bespoke lighting tends to be better. But surprisingly, it’s not always more expensive. And it could offer you greater returns on your investment by allowing you to grow more for less.
5. Buy smart to save on maintenance costs
LEDs need replacing regularly, every five years or so. In most cases, that means replacing the whole lighting infrastructure. It’s estimated that, on average, a vertical farm will take seven years to recoup its initial investment. It’s therefore even more crucial to ensure that you don’t get hit by an exorbitant infrastructure bill within just five years.
At Light Science Technologies, we take a rather different approach to our competitors.
If you were buying a new lamp for your home, you’d expect to replace the bulb regularly but not the lamp itself. That’s the approach we take. Our infrastructure is designed to last for up to 25 years. You’ll replace bulbs and parts when necessary, but won’t need to invest in a whole new lighting rig, cabling, housing and so on, which equates to a considerable cost saving – upwards of £100,000s in some cases.
6. Choose your crops carefully
There are pros and cons to different types of crops. Quick-growing plants tend to be cheaper to grow and you’ll end up with a lot of product. However, some slower-growing crops, such as medicinal cannabis, can earn you far more per plant. Some crops require less energy. Others take up less space so you can pack more in. Do the research, do the maths and choose the best option for your own vertical farm.
7. Make sure there’s a market for your produce
It might seem obvious, but neglecting to ensure there’s a market for what you’re growing is an easy mistake to make. Many vertical farmers focus on fast-growing salad crops. In an optimised environment, you could end up producing 30 tonnes of salad a day.
Demand will fluctuate throughout the year. Can you guarantee that you’ll be able to sell lettuce through the depths of winter? If not, you’re either looking at considerable wastage, or letting part of your vertical farm sit idle for weeks on end. Neither of which is going to give you the return you’re looking for. Switching to a different crop every few months may be possible with flexible lighting systems, but to do that you need to get the setup right from the start.
8. Get the recipe right
Our labs can discover the optimum growth recipe for your crops. In other words, we can help to make sure you’re giving your crops exactly what they need, but not more than they need. Hitting that sweet spot means you keep your costs down and your profits up.
9. Use smart technology
Data is your friend. It can show you whether you can get away with turning the lights and heating down, reducing your water, reducing the nutrients and so on. Conversely, it will also tell you whether increasing those factors could lead to a far greater yield. Research will give you a baseline to start from; testing will enable you to optimise that baseline for your particular farm.
Take water. Vertical farming requires up to 95% less water than traditional farming. However, that water comes at a cost. Plant monitoring technology can help to ensure that your plants receive adequate water without any wastage.
10. Be proactive when vertical farming
Traditionally, farming is often reactive. For example, crops are only watered if it’s absolutely essential, by which time the plants are already stressed. With vertical farming, you need to think proactively and give the crops what they need before they need it.
11. Ask questions
Shop around. Compare products, guarantees and customer support. And don’t be afraid to ask questions. We welcome those initial conversations at Light Science Technologies and take a long-term approach to client support. Our aim is to help you to get what you need, whether that’s bespoke lighting, performance data, or the evidence you need to present your business case to investors.
12. Maximise energy efficiency
Your lights and heating are two of your biggest operational expenses, so it’s crucial that you’re only using what you need. Part of that comes down to the data analysis we’ve already talked about. But some of it comes down to setting things up right to start with. For one thing, you’re going to want to use the heat generated from your lights, not waste it. That means installing an intelligent climate control system. A HVAC system that’s specifically optimised for indoor growing may cost more to start with, but save money and improve productivity long term.
13. Minimise energy costs
However energy efficient your operation is, you’re still going to use a huge amount of electricity every year. The most cost-effective solution might be to create your own renewable energy. That isn’t possible for all sites, but even micro-generation could help to bring your OPEX down.
14. Engage the experts
There’s a hell of a lot to learn when it comes to vertical farming. You’re going to need people to rely on about all aspects of it, from lighting and data to botany. Start building those relationships as early as possible.
15. Don’t be afraid to collaborate
There can be a lot of secrecy around vertical farming. Farmers, understandably, want to hold on to their market advantage. But that doesn’t mean you can’t collaborate with other organisations, whether it’s your local science park or your nearest university.
We can help you to both reduce your costs and maximise your profits. Call 01332 410601 to speak to one of the team.