A Greenhouse Profitability Model: The Effect of the Energy System

Abstract

This study proposes a technoeconomic model for assessing the profitability of modern greenhouses, with emphasis on hydroponic systems and the integration of combined heat and power (CHP) technology. Given the high share of energy costs in total operating expenses (~35%), the model includes both cultivation and energy subsystems and is implemented in a spreadsheet environment for ease of use. The model calculates Return on Investment (ROI) under various scenarios, considering geographical latitude, CHP capacity, cultivation settings, and energy prices. In the baseline case, the greenhouse ROI is 12%, rising to 14% when CHP is integrated, with CHP itself achieving 24%. Key findings include the identification of optimum CHP sizing (0.5–1.5 MW/ha, depending on latitude) and critical inflection points in ROI behavior associated with latitude and cultivation temperature, driven by the depletion of cooling demand and redistribution of operating modes. The analysis confirms that CHP becomes economically attractive when the Spark Ratio (the electricity price to the natural gas price) exceeds 3, offering enhanced profitability and resilience against energy price volatility. The proposed method is simple, transparent, and suitable for preliminary investment analysis and policy planning in sustainable agri-energy systems.