Case Study

Hmmm interesting…

-Zaron Ayers

Case Study

How Two Companies Turned Around Their Operations by Going Solar

Two companies in primarily different industries have been faced with exceedingly high energy bills. Consequently, both needed a quick reduction, or the rising costs of their energy bills would adversely dampen their financial health. One company, a plastic and steel drum manufacturer, the other, a sheet metal fabrication company, both companies decided to utilize solar energy to operate their large manufacturing facilities. The following company names have been changed at their request.

All Packaging Inc. is an industry-leading manufacturer of packaging products, such as plastic and steel drums. The publicly held company currently operates over 150 plants; some located overseas, and with four currently located in the state of California. All Packaging has internally established their own renewable portfolio goal and with phase one of their goal they have installed solar electric systems on three of their California plants with the help from their chosen solar installation company So-Cal Solar Inc.

Stellar Sheet Metal Inc. is a privately owned and operated sheet metal fabrication manufacturer located in Southern California. Established in 1970, Stellar Sheet Metal has since garnished a reputation as one of the best in its industry. Determined by its thousands of loyal customers, the company has staked a large portion of the market share.

To handle their large solar electric system installations, the two companies enlisted the help of a top California Solar Company, So-Cal Solar Inc. The Southern California based solar energy company is an industry leader, specializing in commercial solar electric systems. Additionally, they offer assistance in securing the financial aspects of acquiring a solar system, and process all state rebate applications and utility interconnection paperwork. For All Packaging and Stellar Sheet Metal, So-Cal Solar efficiently engineered, constructed, and installed each company’s project to completion.

Summary of All Packaging Inc.

All Packaging Inc. made the decision to install solar in three of their plants to reduce monthly energy costs by 20%. Before installing solar in their three solar operated plants, All Packaging had an energy bill of $49,600. After completion of installing the company’s commercial solar electric system, they experienced a significant 20% reduction in energy costs. In fact, All Packaging’s monthly energy bill was reduced to $39,740.

All Packaging chose to operate their plants with a 172.1 kW DC (143.8 kW AC) system. Each system features 765 Upsolar Solar Panels (Model UP-M225SP) and 2 Kaco Blueplanet XP100U-H4 inverters components. Of the 55,000 sq. ft. roof that All Packaging’s plant featured, only 24,330 sq. ft. were taken up by the installation of the solar electric system. Furthermore, the company’s TPO roof featured a non- roof penetrating rack for the solar mount, thus allowing the system to be placed on the roof without damage to the roof’s surface, and more importantly, keeping the roof’s warranty intact.
In terms of All Packaging’s return on investment (ROI), the solar installation cost them $715,500, but also came with a 30% federal tax credit, which resulted in a $214,665 discount. The tax credit was received the following year when their taxes were filed. Additionally, All Packaging received a $134,229 rebate from the California Solar Initiative. The installed solar electric system subsequently featured a MACRS depreciation of $199,968 which was received in year one after installation. With all things considered, however, the net cost of All Packaging’s solar electric system only cost $166,688. With the over 20% reduction in the company’s energy bill, they are on track to receive a full ROI in less than five years.

Summary of Stellar Sheet Metal Inc.

Stellar Sheet Metal Inc. had a reoccurring monthly energy bill of $25,000 before installing a solar system at their fabrication facility. Immediately after making the switch, the company saw a dramatic reduction in their energy bill, ultimately dropping their monthly energy bill to $1,500. They installed a 260kW DC (226kW AC) system with 1134 Suntech Solar Panels (Model: STP230-20/Wd) and 1 Power-One Inverter (Model: PVI-Central-300-US-480V) components. Similar to All Packaging, Stellar Sheet Metal’s facility featured a torch down roof that housed the system on a non-penetrating hardware rack mount.

As for Stellar Sheet Metal’s ROI, the retail price of their commercial solar installation was $830,000, which also featured a 30% tax credit of $249,000, and a California State Rebate of $94,200. Additionally, the system incurred a $295,952 MACRS depreciation. In total, after all costs and credits were considered, Stellar Sheet Metal’s system had a net cost of only $190,848, including all additional incentives. With the company’s monthly energy bill figured in, the system will pay for itself in a little over three years showing a strong ROI on their solar investment.

Conclusion

Comparatively speaking, it is apparent that although Stellar Sheet Metal Inc. and All Packaging Inc. are in entirely different industries, they both found a commonality in the utilization of solar powered operations. The two companies had different costs for both their monthly energy bills and solar electric system installations, yet both were able to reap the financial and environmental benefits. Through the California Solar Initiative rebate and federal tax credits, along with the system’s reduction of monthly energy expenditure, both companies were able to solve their excessive energy costs by receiving a full ROI in less than five years and thus reducing their carbon footprint and monthly operational overhead. In the end, both companies could not have made the easy transition to solar powered operations were it not for the knowledgeable staff at So-Cal Solar.