Four Predictions for Controlled Environment Agriculture in 2025
January 22, 2025 As we step into 2025, the controlled environment agriculture (CEA) industry continues to evolve as it balances both economic and technological challenges. Reflecting on trends from the past year, it’s clear that CEA is at a crossroads, offering stakeholders an opportunity to rethink strategies and investments to ensure the future success of our industry. In this blog, I share my four predictions for the key trends that will define CEA in 2025, ranging from increased focus on optimizing existing facilities to the growing push for decarbonization. Let’s dive into what lies ahead for this ever-evolving industry.
Nadia Sabeh, Dr. Greenhouse
Prediction 1: There will be increased investment in improving existing CEA facilities.
I predict we will continue to see greater interest in improving and optimizing existing CEA operations. In 2024, we saw a slow-down in new construction CEA projects and an up-tick of existing facility improvements. High interest rates, inflation, and uncertainty in the market for CEA-grown products have all helped drive this trend toward capital improvements. Rather than spend millions of dollars on a new facility that may or may not pan out, owners and investors will opt to spend fewer dollars on optimizing the facility they already have. They will invest in replacing old equipment, permanently fixing band-aids, and installing new technology that will improve production outputs and reduce operating costs.
Prediction 2: There will be more greenhouse projects in 2025.
In 2024, we worked on fewer indoor CEA projects and a lot more greenhouse-related projects. Not just new builds, but also retrofitting and repurposing existing greenhouse structures. The high energy cost of growing fully indoors is becoming insurmountable in low-margin produce markets. Higher prices for commercial or light-industrial properties, infrastructure upgrades, and building materials are also driving up first costs. Building a greenhouse on cheaper land, with fewer power-hungry technologies and less regulation comes with lower financial risk upfront. But greenhouse can come with operational risk too, if they don’t have the right technology and grow team.
Prediction 3: Investors will want greater assurances that they are making a sound investment.
With so many high-profile failures of vertical farms and large-scale greenhouse operations, investing in the CEA industry is looking pretty risky these days. Not to mention the lack of knowledgeable and experienced engineers, contractors, and equipment vendors that historically over-sold, over-engineered, and over-charged for solutions that didn’t work and instead created money pit to fix operational and maintenance nightmares. To help manage their investment risks in the future, investors will require a third party technical review of engineering designs, startup processes, and equipment proposals by experts like Dr. Greenhouse.
Prediction 4: More CEA projects will look to decarbonize their new and existing operations.
Agriculture is responsible for about 10% of all greenhouse gas emissions, both in the U.S. and globally. If CEA is going to realize its vision of reducing the environmental impact of food production, the industry will need to do its part to curb its carbon footprint. To help decarbonize the ag sector, many farms will abandon combustion-based processes and electrify them instead. For the CEA industry, this will lead to less use of gas-fired boilers and unit heater and greater use of electric heat pumps, heat recovery systems, and renewable energy sources. Depending on the local source of electrical power, on-farm co-generation systems may prove a lower carbon option than what the local utility can deliver.
Conclusion
The CEA industry is poised for a transformative year in 2025. There will be greater investment in greenhouses, existing facilities, and electrification, all of which will be under the microscope of potential investors. At Dr. Greenhouse, we’re excited to help shape this evolving landscape, offering expertise to ensure that CEA operations are productive, profitable, and environmentally responsible.