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Solar's Gone Country
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We offer service plans that are designed to shield and protect solar PV investments from unavoidable degradation.  Provide cost effective approach to solar O&M management including reporting/warranty management, performance monitoring and best practices for highest return on investment.


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26 March 2015

Solar's Gone Country


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Posted in In The News

The best specialty cash crop for farmers


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by Ted Walsh

Reprinted from Acres- The Voice of Eco-Agriculture: April 2015 - Vol. 45,No.4

Whats the best specialty cash crop for farmers right now? Nuts? Citrus?
The answer could be solar energy. Agricultural companies are generating $60,000 to $85,000 per acre per year from solar power. Thissolar profitis the cost avoided in their utility bills, inclusive of the cost of operations and maintenance. Thats as high as pretty much any other legal crop right now outside of grapes grown for high-end California wines.
Recently our firm worked with a large agricultural company in California that had 5 acres of cropland located near one of their processing facilities. They were leasing the land to another grower for strawberry production (one of the highest value-per-acre crops grown in California), but the lease was providing him with limited revenue of approximately $5,000 per acre per year. They decided to use the land themselves, remove the berries and install a 1.3 megawatt solar electric system. The result: they turned their $25,000 annual lease revenues into approximately $350,000 in annual savings from solar for the next 20-plus years. The solar savings is actually helping to finance a large expansion and exponentially more growing than was initially displaced for solar.
Over the past few years there has been a transformation in how farmers view solar. Rather than  just  installing solar as part of their sustainable growing programs, primarily to reduce greenhouse gas emissions and realize other environmental benefits, farmers increasingly see solar as an economic boon, a new technology that can significantly lower their operating costs and make them more competitive. Recently,  Bonipak, a 75-year-old farm in Santa Maria, California, that takes a vertically integrated seed-to-sale approach to ensure quality and freshness, decided to install over megawatts of solar over the next year, enough solar to power 400 homes, into its operations. Meanwhile Taylor Farms, an 80-year-old agricultural leader based in Salinas, California, dedicated to high-quality salads and sustainable growing, recently installed 675 kilo-watts of solar that was integrated into their existing fuel cell power system.

LOWER COSTS, FINANCING OPTIONS

Some of the growing interest in solar is driven by the economic trends across the market. Installed prices for residential and commercial photovoltaic (PV) solar systems completed in 2013 fell by roughly $0.70 per watt (W) or 12 to 15 percent from the prior year, according to a recent report from Berkeley Lab.
 
In addition, while the price of solar keeps dropping, the price of electricity continues to increase.  According to U.S. Energy Information Administration, average U.S. commercial electricity prices rose almost 4 percent last year, and more than 6 percent in solar-friendly states like California. In fact, solar power generation is now cost-competitive with natural gas and other fossil fuels in several regions of the country.
Flexible, attractive financing options in the form of agriculture-specific loans and operating leases are also helping farmers and agriculture-related firms deploy solar in the same manner that they have financed other equipment and facility construction. These low-interest, long-term financing options can monetize the tax incentives directly, or leave them outside the financing for the farm to capture, most often allowing a farm to go solar with no money down and be cash flow positive from day 1. They can also front- load the solar savings in the early years or extend them evenly over 7-15 years. This kind of flexibility allows farms to use solar as a strategic financial asset that can provide cash for other core business needs or expansion.
Stewart & Jasper Orchards, one of California’s most successful almond and citrus growers, uses four solar systems to help power their sheller and huller processing plants. In cases like this, the benefit is not just cost savings but also the avoidance of energy price volatility the farmer does not have to worry about fluctuating energy bills, just a steady loan or lease payment on a system with a positive ROI.
PRIME REAL ESTATE
Farmers possess the key asset needed for almost any renewable energy installation space. Many farmers are finding that hilly, dry or other marginal land for farming can deliver tens of thousands of dollars per acre per year in revenue and avoided expenses, especially since you do not need water for a solar installation. With serious drought affecting the West, rising water prices and water scarcity make being able to find a new crop that does not need water a very big deal.
Combine this marginal farmland with other quasi-industrial real estate often owned by farmers, as well as rooftop real estate on processing, storage and farming facilities, and farmers have a tremendous opportunity to use unproductive real estate as a cost-cutting measures are particularly helpful to farmers doing businesses in a hyper-competitive global market- place, where revenues fluctuate based on crop yields and global commodity prices.
Deep down, farmers have a tremendous respect for the environment and value the responsible use of natural resources. Their lives are based upon a partnership with the land, and the calculated management of plants, water and sunshine. They are the original solar engineers, converting the sunlight into energy in its most basic and essential form food. They have a deep connection to the natural environment and possess the patience, hard work and careful planning it takes to feed our country. Due to their appreciation of the extraordinary power of the sun, it makes perfect sense that farmers have been early and strong adopters of solar.

Ted Walsh is the president of Stellar Energy, one of the nations foremost large-scale solar developers and integrators. Reach him at ted.walsh@stellarenergy.com.

To download a pdf of this ACRES article, click here.


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