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Exploring Energy Q&A: The Solar Advantage

Tue, 03/19/2013 - 9:00am

Chem.Info’s Exploring Energy feature provides readers with a chance to familiarize themselves with energy technologies and processes, both new and old. In this installment, we explore solar power and talk with Scott Schumacher, project developer at Borrego Solar.

Borrego Solar is one of the oldest solar installers in the country. The company was founded in California in 1980, and it now has offices on both the East and West coasts. Borrego exclusively focuses on commercial-scale and utility-scale solar projects, working with companies, governments and utilities.

Q: Why might a processing facility decide to switch to solar power?

Scott SchumacherA: My background might help you better understand why I’m focusing on chemical manufacturing plants. Before I came to work at Borrego Solar, I was a general manager at Peak Sun Materials Corp., a chemical manufacturing plant that manufactured polysilicon and phosphorus oxychloride for use in the semiconductor and the solar industries. I started out on the manufacturing side of solar, but I switched over to the installation side later on down the road.

One of the biggest costs that I had in running that plant was my cost of electricity — that was one of the largest components of my cost of goods sold. The ability to switch over to solar and reduce the cost of electricity at that plant would have given me a competitive advantage and also allowed me to advertise and market that we were a sustainable energy company. This sustainability message was important because a lot of my customers had sustainability objectives that they wanted to achieve, and they wanted their upstream supply chain to have the ability to achieve their sustainability efforts as well.

In my opinion, solar helps manufacturers in two ways. Number one: It can lower your costs. And number two: It can help you become sustainable, which may be a requirement of your customers.

Q: Implementing solar power can be a large investment initially. How can that investment pay off in the long run?

A:
There are multiple ways to pay for solar. One option is to make a cash purchase of the solar system. Anywhere within the 50 United States, you’re going to get a 30 percent investment tax credit back — and most states also offer a rebate on top of that Federal investment tax credit. The returns, once you factor in the 30 percent Federal tax credit, the state rebates, and the elimination or reduction of your electricity costs, can often turn into an internal rate of return that’s greater than just about any investment that a chemical manufacturer can make.

So, if you have capital and you’re looking to make a return on that capital, you can make a cash purchase of the system, but there are some chemical manufacturers that don’t want to put that capital into a solar system, because they plan to buy equipment or spend the capital in another way. So, many photovoltaic (PV) solar  providers will actually install and own the equipment on your site, and provide a lease — so you can lease that equipment and get the benefits of the electricity that’s created by that solar PV system.

Another alternative is to create what’s called a power purchase agreement (PPA), and in that case, the solar company will install the solar system at no cost to the chemical manufacturer, and then sell them the electricity at a fixed rate that is generally well lower than the rate that the local utility is charging.

In summary, you can pay cash and get a great internal rate of return, or you can either lease or enter into a PPA at rates that are lower than what utilities are charging.

Q: How do facilities decide if their property is ready to accommodate solar panels?

A:
There are a couple of ways to install solar. One of the ways is on the rooftop. And, if you are going to install solar on the rooftop, you want to make sure that you have an unobstructed view toward the south. So if you have a bunch of trees or a 20-story tall building next to you that’s blocking the sun to the south, you’re not going to have a roof that’s good for solar.

You’ll also want to have a roof that is relatively new. Solar installations last 20 to 30 years and still continue to produce a huge amount of electricity, so if you have an old roof, you don’t want to install an array that’s going to last for 30 years on a roof that’s only going to last 10 more years. You’ll want to have a newer roof so you won’t have to take the solar modules off the rooftop, do your roof repair and then put it all back on.

The third factor is weight. You want to make sure that the roof can support a certain amount of weight before you install the solar panels. We have structural engineers that will take a look at the plant to make sure that the weight of the solar system can be supported by its rooftop. The final factor is that there needs to be some space on the rooftop. If you have a roof that’s covered in HVACs and other equipment, that’s not going to be as suitable as a wide-open roof with room to install the solar system.

So, you’ll need a newer roof with some space to install the solar, not a lot of obstructions, visibility toward the south, and a roof that supports the weight of the solar system if you want a rooftop installation.

In addition to rooftop installations, there are ground-mount options. If you have a chemical processing plant and you have a couple of acres that you own that are currently not be used, that would probably be the best way to go solar, because the ground-mount tracking systems will create the most electricity in the least amount of space and they are the least expensive to build.

You can either do a ground-mount tracker or a rooftop installation, and either of them would be a great option for a facility that’s manufacturing chemicals.

Q: Is there anything else that you would like to share with our readers?

A: In managing that plant that I worked for before I came to work at Borrego, I really looked closely at making that plant solar-powered, and it is something that I knew was going to contribute to cost savings while giving my company a competitive advantage over other companies that were making the same chemicals.

I think solar power is a good option to consider: an option that chemical plant owners aren’t necessarily thinking about right now. It’s great to get a chance to get the message out and talk to other people who are in the position that I was in, in order to get them thinking about the possibilities.

For more information on Borrego Solar, please visit www.borregosolar.com.

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