“With rising utility prices, solar plus storage projects have become a sustainable and cost-effective energy alternative for business owners. The average commercial property owner can reduce overall energy costs by 75% by going solar, which improved margins and appeals to shareholders.“
Ross Williams
HES Solar, President and CEO
Energy costs are often one of the highest operational business expenses, especially for small- to mid-sized manufacturers. An unexpected surge in electricity charges can mean the difference between investing in a critical new piece of machinery or even making payroll. For Magnaflow, an automotive manufacturer in Southern California, annual electricity bills of $350,000 or more were a strain on the business. Magnaflow manufactures components such as high-performance mufflers, catalytic converters and other parts for the automotive industry, selling direct from their web site. This on-demand business model makes manufacturing a 24/7 job—with energy needs to match—and James Mayor, VP of Industrial Technologies at Magnaflow, wanted to find out if solar could help.
After consulting with HES Solar, a SunPower Commercial Dealer, Magnaflow’s management team found out that their site was ideal for solar. With a fully- integrated SunPower® Helix® system, Magnaflow could install both a rooftop and a carport system, which would provide the added benefit of shaded parking for customers and employees. And by including Helix® Energy Storage,Magnaflow could make the most of their solar installation to save even more.
As a business that operates virtually constantly, Magnaflow needed to have the system installed with minimal business disruption. The modular Helix® system is prewired and preconfigured for easy installation, allowing the construction on the rooftop system to be completed in less than 90 days. Installation of the carport and energy storage systems were equally efficient and the whole system was finished just in time to maximize tax credits for 2018.
The Helix system is expected to save the company more than $350,000 per year, with nearly $50,000 of that savings generated from energy storage. The direct electricity offset from the solar and demand mitigation from energy storage, help protect the company from demand charges when consumption needs spike. SunPower’s software also enables Magnaflow to participate in “energy arbitrage” – essentially buying and selling energy at different times of day, which increases their savings and shortens payback time under the time-of-use utility rate structure recently implemented by San Diego Gas & Electric.
Solar and energy storage rebates and incentives added up to nearly $1.8 million, including the federal Investment Tax Credit and accelerated depreciation. This reduced the total net cost enough for Magnaflow to self-finance the system, which will pay for itself in under three years.
Over the next 30 years, Magnaflow will save an estimated $19.2 million on electricity due to its decision to invest in solar + storage. The company is already reinvesting the savings into the business and has been able to increase production for virtually no incremental costs in electricity. Running their business with the sun has put Magnaflow on the road to even greater success.
Net Energy Metering 3.0 (NEM 3.0) is the incoming law created by the California Public Utilities Commission (CPUC). The new tariffs and fees will impact both residential and commercial solar systems built in California.
As this notice is posted in November of 2022, the Proposed Decision from the CPUC outlining the proposed NEM 3.0 terms is expected soon. This comes after a year’s delay. Once the new agreement is finalized and passed into law, there will exist a designation of the deadline under which new systems will continue to qualify for NEM 2.0 rates.
The new NEM 3.0 rates will be designed to lower the value of electricity during the daytime hours, when solar is producing, and increase the value of electricity during the evening hours, when solar homes and businesses purchase electricity. In short, NEM 3.0 will create a “sell low, buy high” proposition to new solar system owners.
To Californians looking to install a solar system on their home or commercial building, the NEM 2.0 rates will be preferred. As of this post, the solar industry does not know the details of how different the NEM 3.0 rates will be from the NEM 2.0 rates.
Please use the HES Solar website as a resource to learn more, and please take our offer to speak with an HES Solar Energy Consultant at no obligation.
"*" indicates required fields