Cost-effective energy solutions are not only an important part of facility design and operation, but they are also an integral part of a company’s sustainability initiatives. Renewable energy sources can improve a company’s environmental profile and its bottom line. The choice of a particular energy source depends on the capital costs of implementing alternative power systems, the energy source’s compatibility with existing systems, and other operational issues.
Last month, NewAge Industries, a manufacturer of plastic molding and fittings for the pharmaceutical and biopharmaceutical industries, completed a solar-energy project at its facility in Southampton, Pennsylvania. The company installed 4082 solar panels on its roof in an array that is designed to generate 1 MW of electricity annually, which is roughly half the amount of power that the company uses each year. The solar panels cover about three-quarters of the company’s 244,000-ft 2roof, making it one of the largest solar installations in the state.
The total cost of the solar-power system was $4.2 million. The state of Pennsylvania gave NewAge Industries a $1-million grant for the project, and the federal government contributed $1.2 million. As a result, the total cost to the company will be roughly $2 million, and the company expects to get a return on its investment in around six years. NewAge Industries predicts that the solar panels will have a service life of 20 years without additional labor costs.
Environmental considerations were one reason that the company decided to install the solar-panel array. “I think it’s the right thing to do for the planet,” said Ken Baker, the CEO of NewAge Industries. The solar array generates power to run the extruders, injection-molding machines, motors, and chillers that the company uses to make its products. The solar array will cut the company’s reliance on the local utility company by about half. By generating power, the company estimates that the solar panels will yield a positive cash flow of between $300,000 and $400,000 per year. A system of inverters and switch gear ensures a consistent flow of power to the facility. The system first looks to the solar array to meet the facility’s demand for power. If the solar array isn’t generating enough power, the system automatically supplements the power supply through the municipal power grid.
The company considered other renewable energy sources, such as wind, but decided that they would be impractical, and Baker began thinking about solar energy several years ago. To learn more about the technology, he attended seminars at the Solar Power 2008 trade show in San Diego, California. During the trade show, Baker visited various vendors of solar arrays to gain a firsthand look at the technology. To take advantage of federal and state grants in sustainable energy as a way to finance part of the project, NewAge Industries hired Keith Peltzman, CEO of Independence Solar, a solar-power consulting company, to advise the company about financing options and the project’s predicted return on investment.
The vendor-selection process started with a pool of six vendors that eventually was narrowed down to one company, Borrego Solar, a privately held solar-power contractor. Several factors played a role in the company’s decision, such as the company’s financial strength and 31 years of experience in solar power. In addition, NewAge asked all potential vendors technical questions that Peltzman had developed, and Borrego’s employees, which included solar engineers, had an exceptional amount of knowledge.
Baker wanted to work with US-based companies, parts, and labor to complete the solar-power project to help keep jobs in the US—and because of the state and federal funding that he was receiving. This criterion helped Borrego, which is headquartered in California, win the NewAge contract. Baker purchased American-made solar panels from Oregon-based SolarWorld, even though he could have bought Chinese-made panels for $150,000 less. California-based SunLink provided the racking system, and Colorado-based Advanced Energy supplied the electrical inverters.
But before the solar-array project could begin, NewAge Industries had to determine whether the facility’s roof could bear the weight of the panels, which totals about 98 tons. After hiring a structural engineer to examine the question, the company learned that about 60,000 ft 2 of its standing-seam roof could not handle the weight. Rather than reinforcing the roof’s superstructure, the company chose to use the larger part of the roof that could bear the panels.
The company also had to assess its electrical transformer. NewAge Industries receives incoming electricity at 33,000 volts, and its transformer adjusts the voltage according to the company’s changing demand for power. The utility firm PECO asked the company to change its transformer to ensure the safety of PECO employees who would work on the line in the future.
Baker emphasizes that he was not alone in making sure that the solar-array project went smoothly. NewAge’s purchasing and accounting groups helped hammer out the terms and conditions of the contract with Borrego. The company’s engineering and plant-maintenance teams also worked with the consultants to ensure that the installation is sound. All of the company’s workers have an additional stake in the project’s success. Employees own 30% of NewAge Industries and 30% of the solar array. Thus, employees receive a share of the company’s profits, and they will benefit when the solar array generates revenue.
NewAge Industries had already been embracing sustainability initiatives before it began considering solar power. One of the company’s first projects was to reduce the amount of energy it used. An early initiative involved changing the lighting in the warehouse and manufacturing areas. By switching from mercury-vapor to T5 fluorescent lights, the company reduced its energy consumption by one-third. Later, the company replaced its propane trucks with cleaner electric trucks, which the solar array will now be able to charge.
In addition, the company recently began installing high-efficiency motors in its equipment and upgrading its air-conditioning units. During the ribbon-cutting ceremony, contractors were installing energy-efficient windows to improve insulation and reduce power consumption.
Installing the solar panels has not ended the company’s interest in alternative power sources. The site’s next project might involve powering some air-conditioning and heating units with geothermal energy, says Baker, thereby offering another way for the company to improve its environmental footprint.