Rising energy costs are forcing greenhouse operators to rethink both daily operations and long-term investment decisions. According to Dave Arkell, CEO at 360 Energy, the pressure is no longer theoretical, but already reshaping how growers structure their businesses.
"Ontario growers are adapting rather than waiting for relief," he explains. "The operational changes happening on greenhouse floors right now tell you everything about how serious the pressure has become."
One of the most visible shifts is in crop and production strategy. Some operators are moving away from varieties that rely heavily on artificial lighting, while others are adjusting production schedules to reduce lighting hours. "Adjustments to lighting schedules increasingly reflect how electricity costs are influencing broader operational decisions," he says.
For growers continuing with light-intensive crops, equipment decisions are also changing. The transition from high-intensity discharge (HID) fixtures to LEDs was already underway, but rising electricity prices have accelerated adoption. "Payback periods that once took years to pencil out now look very different when you're paying today's rates. Operators who were sitting on the fence are moving, and many are starting to realise the importance of data in managing energy."
Expansion pressures and competitiveness
Energy costs are also influencing longer-term investment decisions. Historically, the greenhouse sector in Ontario expanded steadily through new construction and capacity additions. That momentum is now slowing.
"Expansion plans that were in motion have slowed, while some have stopped altogether," Dave says. "Operators are running the numbers and finding the economics don't work at current energy costs."
Some growers are exploring opportunities beyond provincial borders. "When the economics of building and operating across the border compare better than expanding in your own backyard, capital follows," he adds, noting that parts of the United States offer more favourable energy cost structures for controlled-environment agriculture.
The visibility gap in energy data
Despite the cost pressures, Arkell believes the sector's biggest challenge is not the price of energy itself, but understanding what drives it.
"The biggest energy problem in Ontario's greenhouse sector isn't the cost," he says. "It's that most operators don't fully understand what's driving it, and they don't always have the right expertise helping them figure it out."
Energy management often remains reactive. Growers typically examine bills only after they arrive. "When the bill shows up, and it's painful, the response is to fix whatever looks obviously wrong. But reactive management means you're always solving yesterday's problem."
The operators gaining an advantage are asking different questions. Instead of focusing on the latest invoice, they analyse how operational decisions over the previous weeks produced the result. "That shift requires a level of electrical literacy the industry simply didn't need in the past," Dave says. "Growers now need to understand how electricity markets work; how demand charges are triggered, how capacity mechanisms influence pricing, and what tools exist to manage exposure."
The role of real-time and historical data
Improving visibility requires better data, but Arkell cautions that technology alone is not enough.
"Real-time energy data can be powerful," he says, "but only when the data is reliable and the people using it understand what they're looking at."
Effective monitoring systems combine operational data (electricity consumption, natural gas usage, temperature, and CO₂) with pricing information. "Knowing what you consumed means little if you can't see what it actually cost at the moment it was consumed," he explains.
At the same time, he emphasises that historical billing data still plays a critical role. "Monthly utility invoices feed directly into your P&L," he says. "They help you build a strategic picture, verify whether actions are actually moving the needle, and establish a baseline for future performance."
Used together, real-time monitoring and long-term analysis allow operators to identify inefficiencies and adjust operations with confidence. "Once you have that visibility, you stop guessing."
Global energy pressures
Energy planning is also being shaped by broader market forces beyond the greenhouse sector. Recent geopolitical tensions in the Middle East, particularly around Iran and the Strait of Hormuz, are contributing to higher crude oil price expectations in 2026. Because global energy systems are interconnected, these pressures can ripple through oil, liquefied natural gas (LNG), and electricity markets.
Rising demand for electricity, driven by electrification, industrial expansion, and data-centre growth, adds another layer of uncertainty. Capacity markets in parts of the United States have already seen significant price increases as grid operators secure future generation supply.
For greenhouse growers, he says, these developments reinforce the need for proactive planning. "Energy used to be something you dealt with when costs got out of hand. It's becoming something you build into operations from the ground up."
For more information:
360 Energy
Dave Arkell, CEO
[email protected]
www.360energy.net
