(UPDATED WITH VIDEO, March 29) PORTERVILLE, Calif. — Low interest rates, improved technology and skyrocketing electric bills converged to create the perfect storm that spurred the Magnolia Citrus Association to install a solar-generation system.
The 672-kilowatt facility came online in November 2012 and has been performing better than expected, said Dick Porter, chairman of the board.
“It’s wonderful,” he said at a March 27 dedication ceremony. “We brought it online in November and went right through the winter. And here we are, we’re still above what we would have imagined.”
The system at the Porterville, Calif.-based association, a member of Sunkist Growers, was producing 137% of the packinghouse’s actual electricity needs in late March.
The system is designed to meet 80%-90% of the packinghouse’s annual electricity use, said Nader Yarpezeshkan, director of sales and corporate development for Carlsbad, Calif.-based Cenergy Power, which designed and built the system.
Magnolia receives credit from its electricity supplier, Southern California Edison, when it generates more than it uses, Yarpezeshkan said.
The system has reduced Magnolia’s overall electric bill by about 60%, Porter said. That’s because the packinghouse still has to pay monthly fixed charges billed by the utility. He said the system should pay for itself in about four years and will save the citrus association about $5 million over 25 years.
In addition to offsetting much of the packinghouse’s electricity use, the solar-generation system created another opportunity to improve overall operational efficiency, Porter said.
Sunland Packing House Inc., a Magnolia-owned facility about a half-mile away, packed the association’s specialty citrus. But it was inefficient and guzzled electricity, he said.
The board decided to sell Sunland and consolidate packing at Magnolia to take advantage of the solar power system, Porter said.
Sunland is currently in escrow.
Russ Hanlin, chief executive officer of Sherman Oaks, Calif.-based Sunkist Growers Inc., said each member association that packs for Sunkist examines energy options independently.
“But anything they can do to become more efficient and keep their costs down, we encourage,” he said. “As people have success with (solar energy), I’m sure you’ll see others jump in.”
Sunkist has a formal sustainability program, and projects such as Magnolia’s can only enhance it, Hamlin said.
“All of these things are all very positively received by the customer base and the consumer,” he said. “So sustainability and corporate responsibility, all of these things are major parts of doing business.”
Magnolia began exploring solar-generation systems about five years ago. But the technology wasn’t economically feasible out back then, Porter said.
“We’d talk about it about once a year, but something just didn’t ring right,” he said.
Slightly more than a year ago, the association revisited solar generation and put out a request for bids. Three companies, including Cenergy, responded.
Porter said the decision was easier this time because of attractive interest rates, soaring electric rates and technology that had made great strides from five years ago.
More than 3,000 solar panels occupy about 2.5 acres of marginal, vacant land adjacent to the packinghouse.
Porter said they never considered a roof-mount system because they wanted to retain the option of reconfiguring the packing line, which could change the roof structure.
The association is involved in a 10-year lease-purchase program and will own the system at the end of that period.