Tl;Dr - Just skip to the bottom where I lay out my solar/battery requirements for mining and my solar/battery requirements for vertical farming. Oh...and costs and earnings.
Well, Summer is here and we have had some extremely hot weeks. This has given us a chance to test our greenhouses at temperatures of 126F/52C. We are still up and running quite well. Our energy requirements have gone up quite a bit. But the electricity we are consuming is right in line with our estimates. We do not feel that the temperatures will be any higher than the numbers we have seen so far. Unless Global Warming is for real...because now that I think about it, we did blow through our all-time-high in temperatures...and this was the last day of Spring, if I recall.
We are ordering all of our equipment directly from China. Our 40' greenhouses are extremely cheap to build in China. We are building them for about 40% of what companies like Freight Farms and Bright-Agro-Tech are selling their systems for. Our system is at least 90% as good as their systems. But we do have many bugs, it seems when we first receive them from China. Perhaps my main complaint. They can be a bit finicky. I would not want to sell these as the customer service would consume me.
Our most simple greenhouse uses between 250 and 450 kwh per day. I am in San Diego. Our residential rates from SDG&E are $0.43 per kwh. That is crazy high, for the record. This would cost between about $105 and $190 per DAY. Between about $3,000 and $5,500 per month. Most people in the US pay about $0.11 per kwh. This would equate to a monthly bill of $750 and $1350 per month. The Arizona desert pays that rate, for example.
Next, these greenhouses grow about 4,000 heads of lettuce per month. Wholesale price for this lettuce is $1. We sell direct to the end user. We charge $1.50. But at wholesale prices, this generates $4,000 per month in revenue. Labor is 10 hours per greenhouse. We pay $20 per hour. When you add all the California bullshit taxes and fees for employees this puts us at about $30 per hour. We also have insurance and Workers Comp. This is about $40 per month for each greenhouse.
Ok, now for the solar and battery requirements. We use 150 panels of 300 watt panels. I know...this is a lot. It takes a lot of space. You need a lot of cheap land. We spend about $0.45 per watt for solar panels from China. Our lettuce greenhouses run for 8 hours per day with lights. The other 16 hours we go "dark" and do not use much energy (just pumps, air conditioning and a few devices). We run the lights and everything during the peak sun hours. This allows us to not purchase as many batteries because we are turning the sun directly into the farming and lighting. Then, when the sun starts to wane, we turn most systems off and just remain in a well-insulated state. The battery requirements are still large, however. We currently use 50 lead acid batteries for each greenhouse. Each battery is 24V and 200 amp hours. Each battery costs us $180 from China.
Ok, how does this all tie into bitcoin and bitcoin mining? Here's the answer. Each Antminer S9 uses about 1400 watts when it is placed in the environment of our lettuce greenhouse. We place between one and four miners in each greenhouse. We need about 6,000 watts in solar panels to charge up the batteries and simultaneously run one S9 for 24 hours straight. We need 15 of the 24V/200 amp hour batteries for each miner. Cost for panels is $3,000. Batteries are $2750. The miner, when you buy from Bitmain is $1225 delivered to your door in the US. I have over-clocked the miners as high as I am comfy with. I am generating 0.007 btc per miner per day right now. That is about $18 per day at today's rate.
So here is how it all breaks down for the vertical farm: cost for one lettuce farm that is 100% off grid is about $90k. This includes EVERYTHING... solar, batteries, control systems, installation and framing for the solar, greenhouse, all equipment, air conditioners a water cooler...everything. Monthly labor, insurance, nutrients and supplies is $1500. Shipping of the lettuce is about $400. Total net profit is about $2100 per month. And $25,000 per year.
Mining...ok...this is the wobbly one to predict. Just remember this and it'll make it all easier to accept these numbers: bitcoin is probably headed to $10,000 within 3 years. If you don't believe that then much of this will just be comical to you (if it isn't already). One miner will cost (miner + solar panels + batteries + power control systems + cooling equipment and the solar/batteries to support it) = $8000. The solar and battery system costs a total of $6800. The miner is $1200. Once you have purchased the solar and batteries, you own them forever. They can be used to mine for 25 years for solar and at least 6 years with the lead acid batteries. You can amortize these costs. If bitcoin drops to $0 then you can instantly switch your solar and batteries to your farm. This is how I backstop my potential losses.
Now, here is the magical way we have figured out how to avoid the "decay" that is built into the miners: we run them for 4 to 8 weeks then we sell them on the open market at a premium over cost. When you purchase large numbers from Bitmain, they will offer you a discounted price. The miners seem to always go up in value in between releases fom Bitmain. After 6 to 9 months of reselling at this pace, you will make all of your initial investment back in the miners. You will also stay current with the miners. So, one miner will generate about 2 btc per year (when you stay ahead of decay). That is $5,000 per year at today's rate. If bitcoin follows the trend (and you believe) then I expect that you will generate $6500 or more within one year from mining today. This means the system will completely pay for itself (including solar and batteries) in about one year. Oh...and then after a year, you own a brand new miner (cuz you have been constantly reselling them to stay current and slightly profit). Oh...and you how have 6kw of solar AND batteries...just keep mining til bitcoin is outlawed. You are now in a unique position...your mining rig costs you $0 from this point forward.
I have calculated the amount of profit you can make if you build your own solar/battery array and point this array to different businesses. One business is a modern, vertical farm which is good for the environment and makes healthier food. The other is a bitcoin mining operation. Both businesses have energy as their single largest cost of doing business. I like the idea of having two businesses that I can just point an energy source towards and they start making money. Isn't that kinda cool to think about? Farming generates a net profit of $0.22 per kwh from a solar/battery system. Bitcoin mining generates $0.51 per kwh for the exact same system. Think about that for a minute.
Also, what the fuck? If bitcoin actually does take off, imagine how it will pollute the world with miners in places with shitty but cheap fossil fuel. Shouldn't we be mining on renewable energy since...let's be honest, bitcoin shouldn't really exist? It only exists because people lie a bunch. It seems like protecting ourselves from our despicable selves shouldn't turn the world into a toilet that may become uninhabitable.
I just wanted to share everything with this community. If it weren't for this community, I would have been nervous about trying this crazy idea. What I mean by this is that I appreciate the handful of people here who have a lot of bitcoin and just handed them over to me so that I could test this TOTALLY insane and HIGHLY SPECULATIVE business model. I told you (those who lost their btc to me) that I will make it up to you. For the couple of you who didn't threaten to kill me, I will return your btc when my profits from mining hit 4,000 btc, unless the price is under $3100 per btc...seems fair...you did lose...and it was a fair bet.
I hope for several things from this post. (1) The nice people who are here hopefully will take this info and appreciate what went into getting these numbers. (2) Someone will read this, run the numbers themselves and decide to do the exact same thing. (3) Someone in an area with good sun, year round, will set up a mining operation based on my model. (4) Someone will bet me publicly again that I am lying. (5) Someone interesting will buy the land next to mine and compete head-to-head with me...I seem to perform better under competition.
To;Dr - To take a miner off grid, in a sunny place, will cost $8,000 (including the miner). You'll break even in a year if you follow my plan (and if fate complies as well). One 40' greenhouse that is off grid costs me $90k. Least amount of net profit per greenhouse is $25,000 per year. Average net profit is $36,000per year, typically from blending lettuce and other crops such as basil.
Farming generates a net profit of $0.22 per kwh from a solar/battery system. Bitcoin mining generates $0.51 per kwh for the exact same system. Think about that for a minute. We sell energy back to the grid for about $0.05. Does anyone look at this the way I am looking at it?...I am just curious.
Anybody have any questions?
Submitted July 01, 2017 at 04:15AM by dan_from_san_diego http://bit.ly/2t2DA7e
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