Smart Controls for Data-Driven Indoor Agriculture Field Evaluation

Executive SummaryThe CalNEXT ET23SWE0067 Smart Controls for Data-Driven Indoor Agriculture Field Evaluation project, conducted from 2023 to 2025, explored the market potential for and evaluated the impact of “smart controls” technologies on controlled environment agriculture (CEA). This method of agriculture involves the cultivation and manufacturing of floriculture, food, and cannabis products. The study focused on automated, integrated, and intelligent environmental controls technologies used in indoor and greenhouse CEA facilities in California. Smart controls monitor, evaluate, and control energy consumption of the facility’s heating, ventilation, and air conditioning; lighting; crop irrigation; and nutrient management systems. The project investigated smart CEA controls, which must be capable of one or more of the following functions:-Automation: Hardware and software that optimize individual CEA systems, reducing labor—as well as electricity use and demand—by implementing control strategies for lighting, HVAC, and irrigation systems. These strategies include scheduling, dimming, daylighting, temperature and humidity optimization, staging and modulation of pumps and fans, and demand management.-Integration: Hardware and software that optimize and connect CEA systems—including lighting, heating, ventilation, cooling, as well as irrigation and fertigation—to electricity use and demand.-Artificial intelligence: Hardware and software systems that use machine learning, cameras and sensing technology to optimize resources like water and fertilizer, as well as electricity use and demand, based on plant growth and quality characteristics. These characteristics include light levels, temperature, humidity, airflow, and irrigation flowrates, among others. The project included a market assessment, field evaluations, and this technology roadmap to identify cost-effective energy efficiency and demand response measures for smart environmental controls in California’s CEA sector. The technology roadmap shares five program pathway recommendations, including ideas for two new energy efficiency measure packages:1. Develop a deemed measure package for greenhouse supplemental lighting Daily Light Integral controls. Investor-owned utilities may have only three years to implement an energy efficiency program for Daily Light Integral controls before the energy code requires this automation strategy.2. Develop a deemed measure package for greenhouse ventilation fan variable frequency drive controls. The existing agricultural fan measure is not applicable to greenhouses.The following sections of this Executive Summary provide introductory smart controls definitions and highlighted findings from the various phases of the study. Refer to the Objectives section of this report to understand the methodology and stakeholder engagement results for each mechanism. Market Assessment HighlightsDuring the market assessment phase of the project, literature review, surveys, interviews, and site visits supported a characterization of smart CEA controls adoption, technology penetration, and energy savings potential. Table 1 defines the five categories of control technology in California’s 2025 controlled environment agriculture market, and the CEA Controls and Automation section of this report provides additional detail.Highlights from the market assessment stakeholder engagement mechanisms are below.Literature ReviewThe team conducted a literature review in 2023, which assessed more than 100 academic studies, trade journal articles, industry publications, and conference proceedings. Refer to the Introduction and Background sections of this report to understand the ways CEA operations use electricity, types of existing CEA controls technologies, currently available off-the-shelf technology, the latest vendor offerings in the market, and insights on controls decision-making logic. These sections also provide information on the energy savings potential of various controls strategies for lighting; heating, ventilation, and air conditioning; and irrigation systems.Findings included demographics of indoor and greenhouse growers in California, which can help the investor-owned utility energy efficiency programs understand the controlled environment agriculture market to gain insights on energy efficiency opportunities in this sector.-California had 4,611 greenhouses and indoor farms comprising 7,185 acres—or 313 million square feet—in 2022. This represents an 87 percent increase since 2017, mostly reflecting growth in the greenhouse industry.-61 percent of every square foot of a CEA facility in California is used for greenhouse floriculture or nursery crop production.-Nine controls strategies identified in this review can reduce lighting; heating, ventilation, and air conditioning; and irrigation systems electricity consumption by up to 69 percent in California greenhouses and indoor farms.SurveysGrowers across the state of California shared information in 2024 about their baseline control systems and level of automation, integration, and intelligence. Refer to the Survey Results section of this report for data visualizations of survey responses to understand the California CEA market’s adoption of smart controlled environment agriculture environmental controls and barriers to energy efficiency; more detail is available in Appendix B. The average facility size represented by survey respondents is 259,000 square feet, and the median facility size represented in survey responses is 65,520 square feet.  CEA Controls Adoption-Large CEA farms--greater than 100,000 square feet—that grow food are more likely to employ smart environmental controls than small CEA facilities, or CEA farms that cultivate cannabis or floriculture crops.-Respondents employing smart environmental controls were the only growers monitoring energy use at the system level.Barriers to Energy Efficiency-When surveyed about energy efficiency projects, 40 percent of survey respondents were primarily concerned with system performance, while 30 percent were concerned with associated capital cost.-A majority of respondents—87.5 percent—wanted simple payback periods shorter than five years, while 37.5 percent of respondents preferred paybacks of less than two years.InterviewsIndustry experts and stakeholders across nine key CEA market segments provided feedback in 2024 and 2025. The Interview Findings section of this report illustrates the level of smart environmental controls adoption across food, floriculture, and cannabis cultivators in California; it also includes additional insights on the energy savings potential of smart environmental controls, as well as industry perspectives about baselines, industry standard practice, and the status of standards, energy codes, and third-party certification programs affecting CEA facilities.Smart Controls Adoption-Energy code requirements for smart CEA controls are not in the final proposed measures for the 2025 code cycle, but there may be requirements introduced for the 2028 cycle.-A third-party certification organization may create a qualified product library for networked horticultural lighting controls that could soon be available for California investor-owned utilities, which incentive programs will be able to reference.-California cannabis, tomato, vegetable, herb, and strawberry growers are more likely to use smart heating, ventilation, and air conditioning controls than some floriculture growers due to higher profit margins and tighter plant-specific environmental requirements.-The level of irrigation controls sophistication is heavily influenced by crop type.Site VisitsThe project team visited four CEA operations in four California climate zones to observe controls systems in the field and assess energy monitoring capabilities. Refer to the Site Visit Results section of this report to understand the level of smart controls adoption in each greenhouse and indoor farm. Appendix C includes system-level information for each site, with the average facility size represented at 1,224,950 square feet, and the median size at 43,900 square feet. CEA Controls-The industry standard practice observed at site visits demonstrated higher levels of controls automation than surveys or interviews.-50 percent of the facilities the team visited used smart CEA controls for multiple systems.Energy AnalysisTwo data sets of electricity consumption history helped characterize the California CEA market in investor-owned utilities territory. The first data set uses monthly utility bill data from two greenhouses and one indoor farm in California to understand monthly electricity use, peak demand, and electric energy use intensity for a 12-month period. The second dataset uses a larger sample of CEA facilities using data shared by Pacific Gas & Electric to compare smaller, medium-sized, and larger growers. Refer to the Energy Analysis section of this report to review detailed information from the two data sets.Site-level energy benchmarking-Indoor farm electric energy use intensity can be 29 times higher than greenhouse electric energy use intensity.-Larger greenhouse growers consume more electricity in winter, likely because large greenhouses typically use artificial lighting seasonally for photoperiod extension. For this reason, large growers may present the greatest opportunity for energy savings from smart horticultural lighting controls. Technology Roadmap HighlightsUsing the recommendations from the market assessment, as well as the results of field demonstrations in three hard-to-reach communities in California, the Technology Roadmap identified and detailed low-cost, readily available solutions for adoption—especially those that would be successful in disadvantaged communities. The Recommendations section of this report provides an initial list of measures identified for further investigation in the field demonstrations phase of the project.Field DemonstrationsThe team installed smart controls systems in three greenhouses and one indoor farm in California to evaluate the energy savings potential of smart controls for CEA process systems and uncover a strategic direction for smart controls program development. These systems observed energy and environmental data for six months. Energy Savings Potential-Automated greenhouse Daily Light Integral controls have the potential to achieve 53 to 78 percent electricity savings across leafy greens, tomato, and cannabis greenhouses in California’s 16 CZ.-Automated greenhouse ventilation fan variable frequency drive controls have the potential to achieve an average of 63 percent electricity savings across California’s 16 CZ.Hard-To-Reach Customer Insights-CEA businesses are more likely to be hard-to-reach customers because concentrations of cultivation facilities are in California counties that satisfy the geographic criteria. This means CEA businesses in hard-to-reach counties are hard-to-reach customers if they meet one of the other criteria—such as having leased buildings, being non-English speakers, or being a micro-business with less than 25 employees. -Consider implementing rebate programs upstream with manufacturers and distributors to accelerate the adoption of smart CEA environmental controls.