Deep-dive guide
Hydroponic Greenhouse Climate Breakeven Simulator: Yield, Energy and Capex per Square Metre
Executive industry analysis
A climate-controlled greenhouse turns energy into produce that would not otherwise be available when it sells for the most. It can grow all year, use less water, and place high-value crops in the market in the winter months. The price of that control is a large running cost: heating, cooling, lighting and fans consume kilowatt-hours every day, and the structure and systems are paid for by a loan that lasts a decade or more. The business is a bet that the yield and the price will outrun the energy and the debt.
What makes the economics unforgiving is that most of the cost does not depend on the harvest. Energy is used to keep the climate, not to make each kilogram, and the loan payment is the same in a poor month as a good one. So when yield falls or the price slips, the cost per kilogram rises quickly, and when the energy price rises there is no natural reduction in other costs to offset it. A greenhouse that makes a comfortable margin at one energy price can run at a loss at another.
The domino model follows the chain. Yield and area set the harvest, the harvest and the price set sales, and the energy bill as a share of sales shows how much of the income goes to climate. The full cost per kilogram, with the loan, labour and consumables, is then compared with the price to give the cover, and the last box shows the profit. A small rise in the energy price or fall in yield can turn the cover from comfortable to below one.
The iceberg separates the visible running costs from the full cost of growing. Above the waterline sit energy, labour and the loan principal. Below it sit the interest on the loan, the maintenance and parts that wear out, the seed, nutrients, CO2 and packaging that scale with harvest, and the value of produce that does not make grade. Use the simulator to find the yield, price or energy cost at which your greenhouse stops paying.
Formula and methodology blueprint
The model uses a 5,000 square metre greenhouse. Monthly harvest is area times yearly yield divided by twelve, and 94 percent of it makes the sellable grade. Energy is area times yearly kilowatt-hours divided by twelve times the energy price. Labour is area times yearly labour divided by twelve. Capex is area times capex per square metre, financed over twelve years at 9 percent. Maintenance is 2 percent of capex a year, and consumables are a fixed amount per kilogram harvested.
- Monthly harvest
- H = area × yield ÷ 12
- Kilograms picked each month before grading.
- Sales
- R = H × 94% × price
- Revenue from produce that makes the sellable grade.
- Energy cost
- E = area × kWh per m² ÷ 12 × energy price
- The monthly climate bill for heating, cooling, lighting and fans.
- Loan payment
- P = capex × r ÷ (1 − (1 + r)^−144)
- Level monthly payment on the structure and systems.
- Net profit
- Net = R − E − labour − P − maintenance − consumables
- The monthly result; the breaking point is where it reaches zero.
- Full cost per kg
- c = (E + labour + P + maintenance + consumables) ÷ (H × 94%)
- What each sellable kilogram costs to grow, to compare with the price.
Cascading elasticity
Yield and price are the steepest levers because they multiply the whole harvest and the whole sales line. Energy price and energy use act together on the climate bill, so a ten percent improvement in either is worth about the same. Capex and labour are the gentlest levers but they are fixed, so they set the threshold that sales must clear each month.
Three real-world case studies
Bootstrapped starter
A first greenhouse at moderate cost
A new grower builds a basic climate-controlled house at a moderate capex and sells at a good price, with energy use near the norm. The yield is solid and the labour cost modest, so the month earns a margin. Loading it shows how a smaller, simpler greenhouse can pay when costs are controlled.
Scaling mid-market
A high-yield house with cheap power
An experienced grower runs a higher-spec house with strong yield and cheap energy from a long supply contract, selling at a lower price in a bigger market. The volume turns the lower price into a good profit. Loading it shows how yield and power cost can outweigh price.
Black-swan crisis
A harsh winter and a spike in energy prices
A cold winter lifts energy use by almost half, the energy price doubles, yield falls with the lower light and the price slips because of imports. Capex and labour were set when conditions were better. Loading it shows the month turning deeply negative and which lever restores it first.
Industry benchmark matrix
| Metric | Danger zone | Industry average | Top 10% elite |
|---|---|---|---|
| Yield (tomato-type crops in high-tech houses) | Below 35 kg/m² | 45–60 kg/m² | Above 70 kg/m² |
| Energy share of sales | Above 35% | 15–25% | Below 12% |
| Labour share of sales | Above 35% | 20–30% | Below 15% |
| Cost cover (sales ÷ all costs) | Below 1.0 | 1.1–1.3 | Above 1.5 |
| Grade-out (produce below the sellable grade) | Above 12% | 4–8% | Below 3% |
Variables and levers
Yield per m² per year
Kilograms harvested per square metre of growing area in a year, which depends on crop, lighting and climate control.
Lever: Work on light, nutrient recipe and plant spacing with an adviser, because yield spreads every fixed cost over more kilograms.
Selling price per kg
Average price received per kilogram of sellable produce, after the buyer's grading and packing.
Lever: Sell under supply contracts and target the months and grades that pay a premium, rather than the open market at harvest peaks.
Energy use per m² per year
Heating, cooling, lighting and fans combined, in kilowatt-hours per square metre of growing area per year.
Lever: Add thermal screens, better insulation and heat recovery, and tune set-points, since climate energy is the biggest running cost.
Energy price per kWh
Average delivered price of the energy you use, converted to kilowatt-hours if you burn gas or other fuel.
Lever: Compare tariffs, long-term supply deals and on-site generation or waste heat, because the price multiplies every kilowatt-hour.
Capex per m²
Cost of structure, climate and irrigation systems per square metre of growing area, financed over twelve years at 9%.
Lever: Phase the build, compare suppliers on the full system and avoid specification you do not use, since capex becomes a payment for twelve years.
Labour cost per m² per year
Yearly cost of growers, pickers and packers per square metre of growing area.
Lever: Simplify handling with trolleys, automated irrigation and better layouts, as labour is paid whether the crop is good or not.
How to use this simulator
- 1Enter the yield and the average price you expect per kilogram of sellable produce.
- 2Set the energy use per square metre and the delivered energy price from your bills or design study.
- 3Add the capex per square metre and the labour cost per square metre per year.
- 4Read the five domino boxes and press Find my breaking point to see the yield or energy price that erases profit.
- 5Compare with the energy retrofit in the Parallel universe tab over 24 months.
Mistakes to avoid
- Using a yield from the best trial house. Commercial yields over a full year are lower than the best crop in the best season.
- Pricing energy at a contract rate that expires. The cost over the loan period matters more than this winter's quote.
- Leaving out the loan interest and maintenance. A budget that shows only running costs overstates the profit.
- Counting all picked produce as sold. Produce that misses grade is sold at a discount or not at all.
Frequently asked questions
Which crops does this suit?
The model uses generic figures that fit high-value crops like tomatoes, cucumbers and leafy greens. Yields, prices and energy needs differ by crop, so enter figures for your own crop.
Why is energy use expressed per square metre?
It lets you compare houses of different size and scale the model to your own area. Heating, lighting and cooling together set the figure, and it depends strongly on local climate.
How should I treat heat from gas or biomass?
Convert the fuel to kilowatt-hours and enter its delivered price per kilowatt-hour. The model then treats it like any other energy cost.
Why does the loan matter so much?
Because it is fixed. The payment is due every month for twelve years regardless of harvest, so it sets a floor that sales must clear.
How do I find the break-even yield?
Press Find my breaking point. The tool pushes each input towards its worse end and reports the value at which monthly profit reaches zero, ranked by how close each lever is.
How accurate is this?
It is an educational model with simplified costs, not agronomic, engineering or financial advice. Replace the inputs with your own yield records, energy bills and quotes, and check subsidies and rules locally.
This is an educational planning model with stated assumptions. It is not financial, tax or legal advice. Replace the inputs with your own figures and verify important decisions with a qualified professional.