The energy world is changing – from the way we create power to how we use power. In the solar energy market, growth and evolution have skyrocketed, making the technology more reliable and affordable than ever. For over 100 years, businesses have suffered from little choice with one of their largest operating expenses – energy. That changes…now.
Solar panels create energy by converting light energy from the sun into kilowatt-hours, which can be distributed on the existing utility electrical grid. Solar energy generators, installed on the excess land, roof, or parking area of industrial sites, can directly offset the energy usage that historically would be purchased from the utility.
The current utility structure requires significant ongoing costs that have historically increased 2-5%+ annually. Fuel costs, operations and maintenance, and environmental costs all contribute to the ongoing investment required to maintain an aging electrical grid. By installing onsite solar energy, companies can take control of these costs.
Knobelsdorff Energy, a leading electrical contractor across the Midwest, partners with Nokomis Energy, a leading energy developer based in Minnesota to deliver state-of-the-art solar energy system to businesses looking to take advantage of the energy transition.
Let’s take a deeper dive into solar energy for industrial clients.
Let’s face it, all companies want to save money. And by reducing reliance on the utility company through an onsite solar energy generator, industrial manufacturers can save thousands annually. “Industrial customers typically save 20%-80% of their utility costs by integrating onsite solar into their operations,” said Joe Stofega, Partner, Nokomis Energy. “Solar, unlike traditional energy procurement, requires an upfront investment to get the system operating, however, most customers see the savings within five years, after which each solar kWh is generated at <$0.01/kWh for over 25 years.”
In addition to lower utility costs, businesses can take advantage of a host of other incentives – Federal tax credits, State and utility incentives allow the solar system owner to recoup over 50% of the solar investment in the first year. With the attractive stack of incentives, creditworthy entities can take advantage of onsite solar, with no capital outlay, delivering an immediate reduction to the company’s bottom line.
“Solar provides customers with a high return on investment, and allows businesses to fix a portion of their energy spend for the next 25 years,” said Stofega. “Additionally, investors have started to provide more competitive financing for businesses that have strong Environmental, Social, and Corporate Governance (ESG) practices.” According to S&P Global Ratings, companies have seen a reduction in costs and risk potential, improved employee productivity, and increased revenue opportunities by focusing on ESG concerns.
There are a number of factors to consider when evaluating the benefits of onsite solar, including site availability, current utility rates/cost structure, incentives, and sustainability benefits. Systems can generally be sized up to 100% of the customer’s annual energy usage if site conditions can accommodate the solar array. Stofega added, “By working with Nokomis Energy, customers will receive a detailed cost savings analysis demonstrating the improvements available for each facility.”
Not only is solar energy sustainable, it does not emit greenhouse gases, air or water pollution when producing electricity, contributing to a company’s sustainability plan. By relying on the sun for energy, solar power is the cleanest, most abundant renewable energy source. Companies who install onsite solar receive favorable feedback from customers, employees, and investors by reducing their carbon footprint. “We are seeing an increasing amount of feedback from customers who know sustainability is really just another way to improve returns and serve their customers,” said Jeff Schrimpf, General Manager – Energy, Knobelsdorff.
Onsite energy storage, typically through lithium-ion batteries, allow industrial clients an even deeper level of control around their energy usage. With battery costs declining, onsite storage provides an excellent complement to onsite solar and provides a range of additional benefits to industrial customers.
With solar energy generating only when the sun is shining, adding battery storage allows customers to determine when to use the benefit of the onsite generation. This unlocks a number of additional cost-saving measures, such as:
- Peak Shaving – lower the facilities peak demand, fundamentally reducing kW charges on utility bills, in addition to the solar kWh reduction
- Energy Arbitrage - shift loads from on-peak to off-peak periods
- Demand Response - participate in utility programs that provide financial incentive for reducing load critical times throughout the year
According to Stofega, adding battery storage to a solar system provides increased protection from future utility rate hikes, helps manage facility’s load volatility, supports onsite solar in utilities without net metering policy, and provides an additional layer of resiliency. Rate structure, load profiles, and incentives are key factors in determining the economics of a solar and storage system.
With the economics of integrating battery storage improving rapidly, Nokomis designs all systems to integrate with a future battery system.
“When installed and maintained properly, solar systems are incredibly reliable. They have few moving parts, no fuel costs, and produce predictable energy based on 30+ years of historical weather data,” said Stofega. Long-term warranties are also available on all equipment.
KE performs O&M services on more than 50 solar sites, and with little to no downtime. “With proper preventative maintenance, systems rarely provide any unforeseen surprises,” says Schrimpf, “We also provide customers with a robust, real-time solar monitoring system which can be integrated into the plant SCADA, allowing systems to operate and be maintained with great efficiency.”
There are several factors to consider prior to installing an onsite solar system. The first step is to determine if onsite solar is right for your company. Ask yourself:
- Do we want to save on our electrical bill?
- Do we utilize a over 1,000,000 kWh annually?
- Are we interested in an additional revenue stream?
- Do we want to reduce our contribution to local air pollution?
- Do we want to improve our carbon footprint?
Nokomis Energy and KE guide customers through the solar and storage process, helping to determine if the ROI is in the customers favor. “Nokomis provides prospective clients with a free technical and financial feasibility study to identify how a solar system can meet their goals. We then evaluate a range of site-specific factors including, site selection (ground, roof, or parking), existing electrical infrastructure, energy usage, and utility rates and costs,” said Stofega.
By partnering with our customers and determining the best path forward to attain their goals, Nokomis and KE work seamlessly together to deliver the best-in-class technical solution. Our turnkey solutions include all engineering, procurement, and construction (EPC), as well as operations and maintenance (O&M). “At KE, we are a one-stop shop for all solar services. By utilizing our deep-bench of experienced electrical contractors, we bring a level of experience, quality, cost control, and safety that set us apart” said Schrimpf.