Food Processing and Greenhouse Energy Costs in Ohio

Ohio market insight · Industry strategy

Updated September 27, 2026Ohio Commercial Energy editorial teamHow we review content Book a free 15-min bill review

The short answer

Food processors and greenhouses are refrigeration-, process- and lighting-heavy operations, so their electricity costs are driven as much by demand charges, capacity tags and operating hours as by the price per kWh. The first question for any rural site is who delivers the power: many Ohio farms and rural plants are served by electric cooperatives, whose members cannot choose a competitive supplier, so savings there come from tariff selection, load management and efficiency rather than procurement. For sites that can shop, high-load-factor operations are attractive customers for suppliers, and USDA REAP remains a funding route through its guaranteed loans, although REAP grants have been paused since April 2026.

Check who serves the site first

Ohio businesses are served by one of three kinds of electric provider:

Provider type	Can you choose a supplier?	Where savings come from
Investor-owned utility (AEP Ohio, Duke Energy Ohio, AES Ohio, Ohio Edison, CEI, Toledo Edison)	Yes	Supplier contract, capacity-tag management, tariff, efficiency
Electric cooperative (co-op territory exists in 77 of Ohio's 88 counties)	Generally no	Co-op rate schedule, demand and load management, efficiency
Municipal electric system	Generally no	Municipal tariff, demand management, efficiency

Many greenhouse, farm and rural food-plant sites fall in co-op territory. Check the name on your bill before requesting supplier quotes. See municipal and cooperative electric areas for how those territories work.

Refrigeration and process loads in food plants

EIA's building survey puts refrigerated warehouses at about 29.6 kWh per square foot per year, versus 5.3 for non-refrigerated warehouses, which shows how refrigeration dominates electricity use in cold chain and food facilities. The main levers:

Compressor control. Variable-speed drives or proper sequencing of screw and reciprocating compressors so the plant runs efficiently at part load.
Floating head pressure. Letting condensing pressure fall in cold Ohio weather reduces compressor work for much of the year.
Evaporator and defrost management. Defrost on demand rather than fixed timers; clean coils; check evaporator fans with variable speed where loads vary.
Infiltration at freezer and cooler doors. Fast-acting doors, strip curtains and door discipline reduce both refrigeration load and frost.
Compressed air. Leak repair and pressure reduction are low-cost wins in most plants.
Process heat and sanitation. Much process heat, cooking and clean-in-place hot water is gas-fired; heat recovery from refrigeration condensers or air compressors can preheat that water.

For facility-specific benchmarks and procurement notes, see food processing and cold storage.

Greenhouse lighting and heating

Ohio's short winter days mean supplemental lighting runs hardest from late fall through early spring, and heating is usually natural gas.

Lighting efficacy. Compare fixtures on photosynthetic photon efficacy (micromoles of light per joule of electricity). Modern horticultural LEDs deliver more usable light per watt than high-pressure sodium, and the DesignLights Consortium maintains a horticultural qualified products list.
Controls. Daylight-responsive dimming, photoperiod scheduling and zoning cut lighting hours without cutting the plants' daily light targets.
Heat balance. LEDs give off less radiant heat than HPS, so a lighting retrofit can raise gas heating needs; model both fuels together.
Thermal curtains and sealing. Energy curtains closed at night and repaired glazing or poly reduce heating load.
Fans and pumps. Variable-speed drives on horizontal airflow fans, exhaust fans and irrigation pumps match output to need.

Because supplemental lighting load is highest in winter, it rarely coincides with the summer peak hours that set capacity tags, but it does drive monthly demand charges. See greenhouses and agriculture for more.

Demand charges, capacity tags and load shape

Round-the-clock refrigeration gives many food plants a high load factor (average demand close to peak), which suppliers price favorably. The costs to manage are the peaks:

Capacity tag. Each kW of tag costs about $120 a year at the 2026/27 PJM price of $329.17/MW-day, with 2027/28 and 2028/29 prices near the same level. Pre-cooling product and spaces before PJM's summer peak hours and shifting defrost, washdown and batch processing out of those hours can lower the tag. See capacity tags explained.
Monthly demand charges. Stagger compressor and line start-ups, and avoid running peak production, sanitation and charging at the same time. See demand charges explained.
Power factor. Large motor loads can pull power factor down; check whether your tariff bills on kVA or charges for low power factor. See the power factor guide.

Buying power when you can shop

Mercantile status. Sites using more than 700,000 kWh a year are mercantile customers: they are excluded from automatic community aggregation and can negotiate custom contracts.
Contract structure. For high-load-factor sites, compare fixed all-in pricing with structures that fix energy but pass capacity through at your tag; the right choice depends on how confident you are in lowering the tag.
Behind-the-meter generation. Under HB 15, mercantile customers can host generation owned by a third party behind the meter. Food plants with steady steam or hot-water needs may find combined heat and power worth evaluating.
Renewal timing. HB 15 requires suppliers to notify you twice before a fixed contract rolls to a variable rate; start shopping before the first notice.

Funding: REAP and what is left

Program	Status in 2026
USDA REAP grants	Applications paused since April 1, 2026, while USDA rewrites program rules; prior applicants will be able to reapply
USDA REAP guaranteed loans	Accepted year-round
REAP eligibility	Agricultural producers with at least 50% of gross income from agriculture (projects may be in non-rural areas if tied to production); rural small businesses in areas of 50,000 people or fewer
REAP grant limits when open	Up to 50% federal share for efficiency and zero-emission renewable projects (25% for others); maximum $500,000 for efficiency and $1 million for renewable energy
Utility rebates	None from Ohio's investor-owned utilities in 2026
Ohio Department of Development	Advanced Energy Fund grants and Energy Loan Fund for projects cutting energy use at least 15%, in periodic rounds

For a broader incentive list, see the Ohio small business energy rebates guide.

FAQ

Can a farm or greenhouse on an electric cooperative choose its electricity supplier?

Generally no. Cooperative members buy power under the co-op's rate schedules, so savings come from rate selection, demand management and efficiency rather than competitive supply.

What drives electricity cost in a food processing plant?

Refrigeration compressors, process equipment and compressed air, billed through energy, demand charges and the capacity tag. Refrigerated warehouses use roughly 5.6 times the electricity per square foot of non-refrigerated warehouses in EIA survey data.

Is USDA REAP still available for Ohio agricultural businesses?

REAP guaranteed loans are accepted year-round, but USDA stopped accepting grant applications on April 1, 2026, pending new rules, with no reopening date announced.

Do LED grow lights always cut a greenhouse's energy bill?

They cut lighting electricity, but they also give off less heat than HPS fixtures, so winter gas heating use may rise; model both fuels before deciding.