What happens to old solar farms?
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It was nearly 80 degrees here in NY this past week and now its in the low 50s and 60s.
Fall weather is confusing…
In Your Inbox: An overview of the sustainable food market; an evaluation of the opportunity in redeveloping solar farms.
This newsletter went out first to readers of The Impact, an Op-Ed email newsletter focused on cleantech that is written by analysts, founders and executives in the industry. Check it out and subscribe here.
Sustainable Food Trend Recap
The need for sustainable food is growing. Not only is sustainable food generally better for overall health, but it also has a better impact on the environment in terms of resource usage.
Below are a few trends I identified, as well as a few companies that are innovating in the space.
Reduce Carbon Footprint
One main driver behind food innovation is the reduction in emissions and resources. For perspective, 70% of the world’s freshwater is used for agriculture (30% of that is for feedstock), 26% of land is for grazing livestock, and another 33% of land is for growing feed.
Insect protein is an interesting play, as there are many benefits. Chirps Chips is focused on reducing impact in many aspects. Chirps Chips is making tortilla chips with cricket protein. Crickets take fewer resources and produce fewer greenhouse gases, compared to meat. Crickets can consume food waste, and they also have a better feed to food production conversion and water usage — it takes thousands gallons of water to make a pound of beef but only one gallon of water to make a pound of crickets. It also takes less space (it takes one square foot of space to grow one pound of crickets), giving production more flexibility in terms of location and transportation logistics.
Plant-based protein is another sector that aligns itself with the mission of reducing impact. Hooray Foods is making plant-based bacon. Pigs are the number two contributor, after cows, to greenhouse gas emissions from agriculture. By switching from animal meat to plant-based meat, you reduce the emissions by around 85%, when it comes to pork.
Reduce Waste
Another focus for sustainable food innovation is to reduce waste. 1.3 billion tons of food per year are wasted globally (roughly a third of all food produced), adding 3.3 billion tons of greenhouse gas emissions into the atmosphere.
One of the more common solutions to reduce waste is by upcycling. In 2019, the food upcycling sector was worth $46.7B and is expected to grow 5% each year over the next decade. Even though most of the market is currently made up of companies turning food waste into animal feed, food upcycling is a great opportunity to create an impact with innovation.
Companies like Reveal and Renewal Mill are fighting climate change and reducing food being sent to landfill global by upcycling waste byproducts. Reveal is taking avocado seeds, extracting nutrients from the seeds, and creating a sustainable probiotic beverage. Meanwhile Renewal Mill is upcycling waste byproducts into premium ingredients and finished products.
Lifecycle Analysis
There are some companies that have some overlap with the previous trends, but are truly developing a greener product with sustainable packaging.
Impact Snacks is one company that is combining aspects from the reducing carbon footprint and reducing waste to develop a truly sustainable product. The mission behind Impact Snacks is to change the way people look at everyday snacking by creating a 100% plant-based superfood bar that reclaims more carbon than it makes and produces no plastic.
No Evil Foods is in a similar boat. The company recently announced their partnership with rePurpose Global to offset their plastic footprint. No Evil Foods has committed to going plastic negative by funding the recovery and recycling of 2 pounds of plastic waste for every 1 pound they generate.
One other company with a similar mission, but different execution is Apeel Sciences. Apeel Sciences is developing a plant-based coating for produce that allows for longer shelf life, keeping produce fresh longer and reducing food waste. This effectively decreases emissions associated with cold chain transportation and food waste.
Future Outlook
Solutions are needed to ultimately reduce both food waste and carbon emissions. There is no one solution that can do it all. The food sector is vast, and there are many opportunities to bring new products to market.
For solely reducing carbon emissions, plant-based meat is popular and growing trend. In March, grocery stores sold 231% more plant-based food than the previous year, and the graph below shows the year-over-year percent change between meat and plant-based meat sales:
Something to keep in mind is that the US meat market is worth about $95B, compared $1B for plant-based meat. While meat alternatives are growing, it will take more adoption and sales to see big changes in the meat industry. However, there has been an increase in both consumer awareness and the number of plant-based products in the market.
When it comes to decreasing food waste, the best way to reduce waste is to minimize food waste in the first place. Looking at solutions for food waste through a production lens, one of the best ways to do this is by upcycling food byproducts. Naturally, this will require looking for opportunities in current processes and the supply chain and will likely lead to new products.
For upcycled food to create a big enough impact, it’s crucial that companies scale up. The real challenge is marketing and growing the number of consumers, which is tough when products are seen as waste and are usually sold at a higher price than traditional items. However, CEOs should keep in mind that for every dollar invested in reducing food loss, $14 is saved in operational costs — the “roadblock is companies not taking it seriously.”
Food waste is a growing business that was worth $46.7B in 2019 with an expected annual growth rate of 5% for the next 10 years. This is a great opportunity for companies to repurpose their food waste into packaging and upcycled food.
Combining these two key factors of reducing emissions and waste are going to be critical to a sustainable future. We only have a little over 7 years to address the climate crisis, and food adaptation and adoption is an achievable goal. The only thing standing in the way is consumer behavior.
Is There Opportunity in Redeveloping Solar Farms?
The rise of solar farms grid wide happened in the early 2000s and really kicked into high gear in the early 2010s.
States like California have already saturated the grid with solar power that effectively can cover most of California’s day time energy demands. However, a lot of these plants are starting to reach the end of life for equipment and more importantly the financing period for these contracts.
Recently there has been big movement in solar farm portfolio acquisitions. Recently Cypress Creek Renewables purchased and refinanced 92 MW of solar capacity which we can infer will eventually lead to redevelopment efforts around these solar farms.
Why does it matter?
- Solar farms are under 15 to 25 year contracts with utilities or with third party lenders — a lot of those farms are nearing end of life
- Panels maintain an operable life of up to 30 and in some cases 35 years. There is value for these now inefficient panels in secondary markets where space is not a constraint. Ie. Countries with no or minimal electric grid infrastructure.
- Much like how hydro power works with contract renewals with utilities, introducing similar financing and ownership approaches toward solar farms could attract more private sector investment into the space.
- The result of farms starting to finish their contractual life might revitalize the speed at which solar capacity becomes available to the grid. Efficiency improvements will yield higher output at these older farms.
What’s next?
- It is likely we will start to see more buyouts and consolidation of solar farm assets
- We suspect that there may be opportunities to roll these assets up and finance them through bonds on the public market
- The amortization of these projects will likely be extended well beyond 25 years when private groups are looking at purchasing these assets, driving cost of electricity further down
Thoughts
Stay highly attentive to the M&A activity happening in the solar space. We believe that the activity over the next year will definitely drive an emergence of a secondary or used market for solar panels.
The potential for redevelopment of these existing assets will likely drive additional lower risk capital into the market as well.
Your A/C Probably Sucks! With Liam Berryman
Liam Berryman comes on the show to share more about how your AC is hurting the environment.
Check out and subscribe to our Youtube Channel for future episodes!
Writers: Swarnav S Pujari, Daniel Kriozere
This newsletter went out first to readers of The Impact, an Op-Ed email newsletter focused on cleantech that is written by analysts, founders and executives in the industry. Check it out and subscribe here.
