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Cost Savings and Energy Technologies for Dairy Farms

This guide outlines various ways that dairy farms can save energy through different technologies or enhancements. Grants are available through MDAR or federal partners to help dairy farmers invest in these changes.

Table of Contents

Seven Ways to Save Energy on your Dairy Farm

The average Massachusetts dairy farm produces 18,297 cwts. 5012 lbs daily

The median Massachusetts dairy farm produces 11,240 cwts. 3079 lb daily

How much can the average and median farms save with 7 best energy management practices? This guide will outline best practices and how farmers can access to funds to make those improvements. 

Dairy Farm Energy Cost Savings Summary Table

Energy Saving Method

Potential Annual Cost Savings Notes
Switch to LED lighting    $135 per bulb Average lifespan is 25,000 hours
Plate Coolers  $1,031 Used to pre-cool milk
Refrigeration Heat Recovery Units  45-50% Captures and uses waste heat. Savings vary based on size
Scroll Compressors  $500-$1,000 More efficient than standard reciprocating compressors 
Efficient Ventilation  $490-$2050 Improves airflow
Variable Speed Vacuum Pumps  $344-$2,578 Regulates pump speeds during milking and cleaning
Low and no energy waterers  $200 More efficient

Source: Dairy Farm Best Practices

**Savings will vary based on individual circumstances

Additional Resources   for Seven Ways to Save Energy on your Dairy Farm

Switch to LED lighting

$135   Average Savings per LED Lightbulb

Switching from linear fluorescent light tubes (commonly found in barns and shops) to sealed gasketed Consortium for Energy Efficiency certified HPT-8 lighting systems, or T-5 high output systems where increased light levels are needed. The electricity savings may be as high as 40%.

The average lifespan of LED lighting is 25,000 hours. This can save over $135 per bulb over its lifetime relative to incandescent bulbs which has an average lifespan of 1,200 hours.

Plate Coolers

$1031   Average Annual Savings

Plate Coolers are used to pre-cool milk and can help save 40-50% on cooling cost. With 45% savings, the average dairy farm with 45% in cooling costs savings, the average dairy farm producing 6,000 lbs of milk per day could save $1,031 annually. A single pass plate cooler will typically cool milk from 98°F to 71°F. Results may vary based on equipment, and usage of variable speed milk pumps may even increase energy cost savings. 

Plate coolers prices will primarily vary by milk and water volumes and number of passes and can range from $4,500 up to $7,500.

Visit Financing Section of this webpage for information on grants, loans and rebates. 

Refrigeration Heat Recovery Units

Refrigeration Heat Recovery Units are one of the most cost-effective energy saving investments for dairy farms. They capture and use waste heat for energy which reduces overall energy usage. Prices can range from $3,000 for a 50 gallon unit to $4,200 for a 120 gallon unit. Savings will vary, and could reduce energy associated with water heating by over 50%.

This table is based on a farm who invests in the Refrigeration Heat Recovery units that captures 40% of the waste heat, installation cost of $3,000, combustion efficiency of 80% for a gas water heater and 99% for electric. Note that the average Massachusetts dairy farm produces 5,012 lbs daily, and the median Massachusetts dairy farm produces 3,079 lbs daily.

Minimum Daily Milk Production for an 8-Year Break Even on Investment

Fuel Source

Fuel Cost 

Min. Daily Lbs of Milk


 $    0.15 per kWh

             1,100 lbs.


 $    2.00 per gal

             1,700 lbs.

Natural Gas

 $    1.10 per therm

             3,400 lbs.

Visit Financing Section of this webpage for information on grants, loans and rebates. 

Scroll Compressors

Scroll Compressors are more efficient than standard reciprocating compressors by 15-20%. Refrigeration compressors are one of the highest energy users on the farm. New scroll compressors can cost between $4,500-$6,500. An energy audit is recommended to determine actual savings and your current energy efficiency ratio (EER) of your compressor.

Visit Financing Section of this webpage for information on grants, loans and rebates. 

Key Actions   for Scroll Compressors

Efficient Ventilation

Efficient Ventilation is important for keeping cows happy and healthy with good air flows. When choosing new fans for ventilation, fans with higher cubic feet per minute per watt (cfm/watt) will provide more efficient airflow.

Large high volume low speed fans can potentially save $490 - $2,050 in energy costs annually and savings may vary depending on your current energy efficiency. Additionally, installing thermostats that can automate fan usage depending on temperatures will increase energy efficiency.

Visit Financing Section of this webpage for information on grants, loans and rebates. 

Variable Speed Vacuum Pumps

Variable Speed Vacuum Pumps regulate pump motor speeds during milking or cleaning equipment. The vacuum pump removes air from the milking system and creates negative pressure that pumps the milk through the pipeline to the receiver jar.

Having a variable speed vacuum can save 30-65% on energy costs - savings vary depending on your pump size, number of hours of milking per day, vacuum pump horsepower and vacuum run time operation per dayThe larger the herd size the greater the savings.

Costs and installation depend on herd and system size but typically vary between $8,000- $15,000 for larger systems. For a simple payback , take the full cost of a variable speed vacuum pump and divide by the annual savings.

Table of Annual Cost Savings* of Variable Speed Vacuum Pumps

Vacuum Pump Size (hp)/Daily Hours of Operation (Milking Only) 2 hrs. 3 hrs. 4 hrs. 5 hrs. 6 hrs.
5 hp $267 $400 $534 $667 $800
7.5 hp $400 $600 $800 $1,000 $1,200
10 hp $530 $800 $1,070 $1,330 $1,600
15 hp $800 $1,200 $1,600 $2,000 $2,400
20 hp $1,070 $1,600 $2,130 $2,670 $3,200

* $0.15/kWh, 55% energy savings, vacuum pump efficiency of 80%, and a load factor of 95%.

Visit Financing Section of this webpage for information on grants, loans and rebates. 

Low and No Energy Waterers

$200/year   Annual Cost Savings Per Waterer

Low and no energy waterers increase insulation to limit heat loss. They may reduce energy usage by 50-100% or up to $200 per waterer per year. The estimated cost of a new waterer ranges between $300 - $800 depending on size.

Visit Financing Section of this webpage for information on grants, loans and rebates. 

Financing and Contacts


MA Farm Energy Program (MFEP)

Offers rebates based on fuel savings, available year round, first come first served.

The amount of the incentive is based on the quantified energy savings in an energy audit, the value is up to $4,000.00 ($2,500.00 for lighting projects), not to exceed the total cost of the measure, no match required. Renewable heating & cooling technologies are now the priority and there is a preference for no longer funding fossil fuel (oil, propane, natural gas) fired equipment.

Megan Denardo, CET, 413-727-3090, Megan.Denardo@cetonline.orgThe Center for EcoTechnology is MDAR’s current partner for MFEP


MassSave is a utility sponsored energy efficiency program typically geared toward residential applications but can also include commercial operations, including lighting. Contact your local utility for more information on MassSave for your farm.


Agricultural Energy Program

Now part of MDAR’s Climate Smart Agricultural Program (CSAP) funding varies between $25,000-$50,000 depending on funding availability; an annual RFR typically issued in spring before next fiscal year (fiscal year July 1 – June 30 following year); 20% match of either cash or in-kind or a combination of the two.

Gerry Palano, Agricultural Energy Program Coordinator, 617-626-1706 

USDA Rural Development Rural Energy for America (REAP)

The Rural Energy Program for America (REAP) funds up to 25% of project costs and provides loan guarantees. Two rounds of annual funding in federal fiscal year October 1 – September 30: 1st round deadline October 31st for requests of $20,000 and less; 2nd round deadline March 31st for all requests.

Jonathan Burns, Renewable Energy Coordinator,  (508) 295-5151 x 7238


NRCS provides funding for a variety of energy efficient technologies through their Environmental Quality Incentives Program (EQIP).  NRCS Farm Energy Practice Senarios

Robert C. Purcell, Soil Conservationist, 


USDA Farm Service Agency -  FSA is the lending agency for USDA and provides a variety of loans and loan guarantees.

Farm Credit East - Farm Credit is a private sector lender specifically for farms offering a variety of loans and financing programs.

Local Community Banks – check out your own local bank for potential financing offerings.

Bridge Loan Resources – The MA Farm Energy Program has compiled Farm Energy Bridge Loan Resources. See downloads section.

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