Marketing Solar for Agricultural Users

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Marketing Solar for Agricultural Users

  1. 1. It Don’t Mean a Thing Without Good Marketing!! Marketing Solar for Agricultural Uses
  2. 2. MY AGENDA  Survey of agricultural uses  Economics – case studies  Marketing solar in Minnesota 2
  3. 3. Energy Harvest Group  Solar thermal for agriculture  Distributed energy storage  Urban Solar Farm for Peak Power 3
  4. 4.  Industrial process heat  Agriculture  Commercial hot water  Domestic hot water  Not space-heating !! 4
  5. 5. Monthly DHW Load 5
  6. 6. 6
  7. 7.  Stock watering  Electric fencing  Emergency power  Electric grid support 7
  8. 8. The Two Sides of Solar Reduces Produces Demand Energy 8
  9. 9. Solar Thermal vs. PV comparison Solar Thermal is my first choice! Solar Thermal 50 – 75% Efficient Photovoltaics 17-23% Efficient
  10. 10. Reliability  4.6 Megawatt AZ Solar Electric Plant Online since 2002 Annual maintenance cost Availability 99.72%  0.16% of installed cost No onsite staff Remotely monitored
  11. 11. 11
  12. 12. The Guts of a System
  13. 13. 13
  14. 14.  Intention  planning  Structural engineering  first!!  Keeping it in the budget  Incentives & Financing tools  Preparation for “Phase II”  Streamline the GANTT chart 14
  15. 15. Solar Energy is variable  Primary Fossil Fuel is stored  Backup Solar Energy is our Paycheck Fossil Fuel our Savings Account 16
  16. 16. Stock Watering 17
  17. 17. PV Tracker 18
  18. 18. Wool-drying 19
  19. 19. Bavarian Farmhouse 20
  20. 20. Utilize the Roof space !! 21
  21. 21. Lumber Drying BARN VENTILATION 22
  22. 22. Residential SDHW & PV 23
  23. 23. Weekday Water Usage Single Family Home Apartment Building H ot w ater usage 12:00 AM 6:00 AM 12:00 PM 6:00 PM 12:00 AM Time of Day 26
  24. 24. 8 each 4’ X 10’ collectors $18,000 and racks Hardware & plumbing $ 3,000 2 each 120-gallon storage $ 2,500 tanks Heating plant tie-in $ 3,000 Engineering & Labor $ 6,000 Total $32,500
  25. 25. Fossil Fuel Solar Energy Low front-end cost High front-end cost   Shorter life  Long life of product  Higher maintenance  Low maintenance  Consumes fuel  No fuel costs !  Replacement cost! 
  26. 26.  simple payback = Front-end cost Yearly savings  but consider: energy price inflation  incentives  depreciation 
  27. 27. Annual Cash Flow Model Assumptions (Inputs) Total Installed Cost ($): $32,500 Allocation to Business (%): 100 Year Net O&M Net Net Loan Annual Total Annual Therms Saved: 800 Energy Costs Depreciat. Payments Cash Flow Cash Flow Price/ therm ($) $1.0000 ($17,718) ($17,718) 0 Energy Inflation Rate (%): 7 Loan Down payment (%): 100 1 $800 $0 $2,383 $0 $3,183 ($14,535) Down Payment ($): $32,500 2 $856 $0 $1,430 $0 $2,286 ($12,249) Amount of Loan ($): $0 3 $916 $0 $858 $0 $1,774 ($10,475) Interest Rate (%): 4 4 $980 ($250) $858 $0 $1,588 ($8,887) Loan Term (Years): 5 5 $1,049 $0 $429 $0 $1,478 ($7,409) Month Installed: 0 6 $1,122 $0 $0 $0 $1,122 ($6,287) Net Federal Tax Rate (%): 30 7 $1,201 $0 $0 $0 $1,201 ($5,087) Net State Tax Rate (%): 8 8 $1,285 ($270) $0 $0 $1,015 ($4,072) O & M Cost ($/therm): $0.020 9 $1,375 $0 $0 $0 $1,375 ($2,698) O & M Inflation Rate (%): 2 10 $1,471 $0 $0 $0 $1,471 ($1,227) Utility Rebate (%): 10.00 11 $1,574 $0 $0 $0 $1,574 $347 State Tax Credit (%): 0 12 $1,684 ($1,300) $0 $0 $384 $731 Federal Tax Credit (%): 30 13 $1,802 $0 $0 $0 $1,802 $2,533 Basis for Depreciation $19,600 14 $1,928 $0 $0 $0 $1,928 $4,460 15 $2,063 $0 $0 $0 $2,063 $6,523
  28. 28. Financed Cash Flow Assumptions (Inputs) Total Installed Cost ($): $30,000 Net 100 Allocation to Business (%): Year Net O&M Net Loan Annual Total Annual Therms Saved: Payme Cash Cash 850 Energy Cost Deprec. nts Flow Flow Price/ therm: $1.0000 0 ($2,079) ($2,079) 7 Energy Inflation Rate (%): 25 1 $850 $0 $2,554 ($4,826) ($1,423) ($3,502) Loan Downpayment (%): $7,500 2 $910 $0 $1,532 ($4,826) ($2,385) ($5,886) Down Payment: $22,500 3 $973 $0 $919 ($4,826) ($2,934) ($8,820) Amount of Loan: 4 4 $1,041 ($250) $919 ($4,826) ($3,116) ($11,936) Interest Rate (%): 5 5 $1,114 $0 $460 $0 $1,574 ($10,362) Loan Term (Years): 0 6 $1,192 $0 $0 $0 $1,192 ($9,170) Month Installed: 30 7 $1,276 $0 $0 $0 $1,276 ($7,894) Net Federal Tax Rate (%): 8 8 $1,365 ($270) $0 $0 $1,095 ($6,799) Net State Tax Rate (%): $0.020 9 $1,460 $0 $0 $0 $1,460 ($5,339) O & M Cost ($/therm): 2 10 $1,563 $0 $0 $0 $1,563 ($3,776) O & M Inflation Rate (%): 30.00 11 $1,672 $0 $0 $0 $1,672 ($2,104) USDA & Utility Rebates (%): 0 12 $1,789 ($1,300) $0 $0 $489 ($1,615) State Tax Credit (%): 30 13 $1,914 $0 $0 $0 $1,914 $300 Federal Tax Credit (%): $21,000 14 $2,048 $0 $0 $0 $2,048 $2,348 Basis for Depreciation 15 $2,192 $0 $0 $0 $2,192 $4,540 31
  29. 29. Space Heat and SDHW
  30. 30. 33
  31. 31. 34
  32. 32. Solar Thermal – 1200 SF 26 4x10 panels $ 50,000 Contractor Hardware & plumbing $ 3,000 450-gallon storage tank $ 2,000 DHW and Furnace tie-in $ 3,000 Admin & Engineering $ 4,000 Labor $10,000 Total $72,000
  33. 33. Large Commercial System
  34. 34. Commercial Grid Tie 200 each, 200 watt collectors $ 235,000 and racks and blocks Hardware & wiring parts $ 25,000 Inverters $ 20,000 Crew & Electrician Labor $ 60,000 Engineering & crane $ 10,000 Total $ 350,000 37
  35. 35. Price of Solar Electricity  Amortized Cost = Total cost Total production Over 25 years = $350,000 1,300,000 kwh Raw Cost = 27¢ /kwh Subsidized Cost = 13¢ /kwh
  36. 36.  Product or service  Local manufacturing !!  Market research  Look for Opportunities  Improve the economics  Government support  Utility support 41
  37. 37.  Solar Skies MFG is the Midwest’s Leading manufacturer of Solar Thermal Collectors  Solar Skies is located in West Central MN in the town of Starbuck.
  38. 38.  Farmers & ranchers  Food industry  Animal handlers  Bankers  HVAC contractors  Electrical contractors 43
  39. 39.  Build awareness  RE on Schools  Contractor training  Minimize risk for banks  Local expertise  Build business models  Create green jobs  Local vs. International 44
  40. 40. Contact Us At: Minnesota Renewable Energy Society 2928 5th Avenue South Minneapolis, MN 55408 Phone: (612) 308-4757 General Info E-mail: info@MNRenewables.org Website: www.MNRenewables.org
  41. 41. Ralph Jacobson ralphj@energyharvestgroup.com 46

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