How the sun can work for manufacturers with solar panels

A flat roof of a large building is perfect for the solar farm. The panels are able to soak in all of the sun’s energy for a maximum amount of time, which is not the case for panels attached to smaller, angled roofs. Getty Images

The forecast of possible 100-degree days in mid-July in the Chicago area might have been more newsworthy but for the fact that successive days of more than 90-degree temperatures is plenty hot enough already. At some point it doesn’t matter much anymore.

Of course, working in the heat is much different from simply being in the heat. Anyone who works outside or in a shop with air-conditioning can tell you that. But that’s why it’s called work, and for most manufacturers, a hot day on the job is nothing out of the ordinary.

Shapiro & Duncan, a mechanical contractor, doesn’t necessarily think like that anymore. The sun is working for them now.

With a new roof needed on its 51,000-square-foot fabrication facility in Landover, Md., the company committed to having solar roof panels installed at the same time.

“It made sense to put the solar panels up there with the tax incentives, and electricity is not getting any cheaper,” said Mark Drury, Shapiro & Duncan’s vice president, business development. “So the motivation was to do the right thing for the environment, save some money, and earn some good PR in the long run.”

The mechanical contractor had some knowledge of solar panel installations, having been involved in some customers’ projects in the past, Drury said. It also had confidence in its roofing contractor and Aurora Energy, the commercial solar project developer.

In addition, the building’s flat roof was perfect for the solar farm. The panels are able to soak in all of the sun’s energy for a maximum amount of time, which is not the case for panels attached to smaller, angled roofs. Also, the fabrication facility had a southern exposure, which further maximized hours of sunlight.

By the end of 2018, the company had installed 925 solar modules with a 302-kW production capacity. Drury said the goal is to generate approximately 105 percent of its power, with the extra being fed back into the grid, which can result in revenue from solar renewable energy certificates (SREC) purchased on the utility market and monthly credits directly from the electric utility.

Checking an app on his mobile phone, Drury was able to see that Shapiro & Duncan’s solar panels had produced more than 30 mW of electricity in April and consumption was only 25 mW. It had exported 5 mW into the SREC market.

“We’re going to save close to $50,000 per year,” Drury said. After taking into account all of the federal and state taxes, which knocked a substantial amount off of the approximately $665,000 investment, the company hopes to see its ROI achieved in six years.

The timing of Shapiro & Duncan’s investment was fortuitous, because one of the most important tax incentives helping to fuel investment in solar panels is not likely to be renewed by the Trump administration. Even though the Solar Energy Industries Association (SEIA) and nearly 1,000 companies from across the U.S. solar industry are calling on Congress to extend the Section 48 and Section 25D solar investment tax credits, the calls might be falling on deaf ears. SEIA contends the tax credit, which was part of the 2005 Energy Policy Act, has helped to create 200,000 U.S. jobs and added $140 billion in private sector investment.

Meanwhile, many on Capitol Hill believe the incentive tax credit has done its job and don’t see the need to renew it. Today a company can claim a 30 percent tax credit for installing solar panels; if the current policy is not renewed, the tax credit drops to 26 percent in 2020 and ultimately settles at 10 percent in 2022, but only for utility and commercial projects. Any tax credit for residential installations would be completely eliminated by 2022.

If metal fabricators are interested in harnessing the power of the sun, they probably need to act now. The sun is setting on this opportunity.

For those who are worried about rainy or cloudy days, they don’t need to be. A company like Shapiro & Duncan is still attached to the grid. When it can’t produce its own or not enough power, it draws power from its local electricity supplier. For the most part, it hopes to be exporting power back to the grid.

“If you’re a business owner, you should be investing in your company, not something like Wall Street,” Drury said. “It might be nice to play with stocks and keep track of the ticker on your computer screen, but if you have the money, invest in your company. I think the returns you get are going to be much better.”

That’s the bright advice from a fabricator that sees the light.