Benchmarking Solyndra Photovoltaic Installations

LPS Industries, Frito-Lay, and Solyndra Fab 2.
A tinge of greenwashing at PepsiCo’s Frito-Lay?

After the “LPS Industries Demonstrates Commitment to the Environment with Record Solar Panel Installation” announcement in June 2010, I initiated a pet project to understand the installed cost of larger Solyndra, Inc. photovoltaic (PV) panel based rooftop installations. As a privately owned company, LPS Industries declined to share financial details regarding the 704.34 kW (kiloWatt) Solyndra system at the time. The incentive picture was obscured by the shift of New Jersey’s Clean Energy Program to the Solar Renewable Energy Certificate (SREC) financing model and partial project financing through the PSE&G Solar Loan Program. Solar loan program details are only shared between PSE&G (Public Service Electric and Gas Company), a subsidiary of Public Service Enterprise Group Inc. (NYSE:PEG), and the New Jersey Board of Public Utilities (NJBPU).

LPS Industries, Moonachie, New Jersey USA
LPSaerial In “A Solar Installation Spree as the Deadline for Federal Grants Approaches” by Alison Gregor for the NYTimes (cited in Extend the Treasury Grant Program for Solar and Renewables through 2016), LPS discusses the cost of the Solyndra system:

Incentives have greatly shortened the period of time that owners must wait to break even on their investment. LPS Industries, a packaging maker in Moonachie, N.J., worked with Solis Partners to install a system on its 165,000-square-foot rooftop last June at a cost of $5.7 million. Adding in federal and state incentives, LPS anticipates payback in about five years, said Madeleine Robinson, the company’s chief executive.

Ms. Robinson said she had been so pleased with the solar installation — for which she received her 30 percent Treasury grant about 20 days after installation — that she would like to install a solar farm on adjacent vacant land owned by LPS. The 704-kilowatt system on the roof at LPS now provides almost 25 percent of the company’s energy, saving about $10,000 to $20,000 monthly, she said.

Per the US Department of the Treasury, LPS Industries was awarded a $1,504,388.00 Treasury Grant on July 13, 2010, for the 704.34 kW installation. At 30%, the grant implies a total project installation cost of about $5.01M (million) or $7.12 per DC Watt conflicting with the $5.7M NYTimes figure. Since “Cool Roofs” (“a new white, reflective ThermoPlastic Olefin (TPO) roof” according to the Solyndra Case Study) are supposed to be ITC (Investment Tax Credit) or Treasury Grant eligible, I’ll assume other project or roof improvements on the order of $0.685M were not allowed.

Frito-Lay, Modesto, California USA
Frito Lay Solyndra Installation - Modesto, CA(3) With “Frito-Lay Modesto Powers Facility With Help From the Sun”, I thought Frito-Lay North America, the $13 billion convenient foods business unit of PepsiCo, Inc. (NYSE: PEP), would be willing to discuss the financial details of their 1 MW (MegaWatt) Solyndra PV rooftop system. After all, a multi-million dollar PV system is not material to PepsiCo’s financial statements.

At first, the PepsiCo Media Team seemed responsive in keeping with their world leading brand. However, it took seven (7) weeks of reminders and prodding to get a few simple questions answered and even then one of the answers was wrong. While PepsiCo claimed ownership of the Frito-Lay PV system, the Media representative was not aware the project leveraged a Performance-Based Incentive (PBI).

I originally thought the project was in the service territory of PG&E (Pacific Gas and Electric Company), a PG&E Corporation (NYSE:PCG) subsidiary. In fact, Frito-Lay belongs to the Modesto Irrigation District (MID), and the MID Solar Photovoltaic (PV) Incentive Programs are offered outside of the California Solar Initiative (CSI). I learned the Frito-Lay PV system qualified for a $0.233 per kWh (kiloWatt-hour) PBI paid over 10 years though “capped at 50% of eligible project costs and subject to funds availability.” Since then, the MID PBI incentive has declined to $0.133 per kWh.

PepsiCo acknowledged the MID incentive when I brought it to their attention, but refused to confirm the amount and declined a request for an interview. The PepsiCo spokesperson said:

Yes we are receiving a rebate from MID.  As standard practice we don’t share/provide financial numbers.  I’m not sure if that information is public but if it is perhaps MID can give you the amount.

And so ended an eight (8) week “dialog” with PepsiCo that took as long as the Frito-Lay Solyndra PV system installation.

Information tidbits gathered from various confidential sources have converged towards the Frito-Lay installed system cost.

  • I heard Solyndra was selling below cost to be market competitive in a $4.50 to $5.50 price per Watt band.
  • The project would hit the MID PBI incentive cap in the seventh year.
  • The system generates approximately 1539300 kWh of electricity annually.

Taken together, the data points indicate an installed project cost of just over $5M or about $5 per DC Watt.

My constructive suggestion to PepsiCo is to dedicate a spokesperson specialist or hire a PR firm with a cleantech practice to deal with green and sustainability issues and professionally handle requests from those pesky niche bloggers.

Solyndra Fab 2, Fremont, California USA
Solyndrafab2 Upon searching the California Solar Statistics website for CSI applications using Solyndra panels, I noticed seven (7) entries for 1.23 MW Reserved Reservations by Panelized Solar in the Fremont, California area. Panelized Solar and Solyndra confirmed only two installations, the completed PV system on the roof of Solyndra Fab 2 and a planned installation on a backend building. By the way, Panelized Solar also installed the Frito-Lay 1 MW PV system.

The CSI application data lists the 1.23 MW Solyndra Fab 2 installed system cost as almost $6.88M translating to $5.58 per DC Watt or $6.20 per AC Watt. The CSI PBI incentive is at Step 8 or $0.05 per kWh paying Solyndra an estimated $409,124 over five (5) years.

To put the above Solyndra system pricing in perspective, I hear a 1 MW rooftop PV system is getting installed for $3.80 or less in the California market these days. Solyndra’s pricing for their own 1.23 MW system seems to confirm the Frito-Lay system was sold at a loss and does not bode well for the profitability of the Southern California Edison (SCE) Rooftop Project awards covered in SCE Solar Rooftop Project awards and Solyndra too.

One comment

  1. tesla_x says:

    Ed,

    What is the construction status of the new Solyndra Fab and where has all that DOE $$$ gone?

    Pretty much all but ~$100M of the money I hear ?

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