Parker House Warehouse Case Study

166.78 kW Roof Mounted Solar Power System Installation

solar dot background

Project Highlights

Parker House Furniture (Eastvale, California) will enjoy these benefits:
6-7 years

Payback Period

US $26,000+

Annual Savings

US $1,839,00+

25 Years Savings

Project Details

US $375,255

Maintenance

2.5 months

20,000 sqft

On-grid

166.78 kW

6.568,431 kWh

262,737 kWh

3 SMA Technologies inverters, 2 STP-50-US-41& 1 STP-33-US-41 models

538

Dehui Solar DH60M 310W

October 2021

81,830 kilograms

Company & federal tax credits

Project Overview

Parker House Furniture is a family-owned wholesale furniture resource that offers dealers and their customers a variety of stylish furniture that they design. Driven by a commitment to make their company operations more environmentally-friendly and reduce their rising utility costs, they wanted to install a solar system that could meet most of their energy needs.

The solar system has three inverters because larger solar projects often require multiple inverters to handle the capacity of the solar panels. As the size of the system increases, so does the power output, which requires the use of multiple inverters to efficiently convert the solar-generated DC (direct current) power into usable AC (alternating current) power. The system also powers an EV charging station with two outlets. 

Financing and Tax Incentives (USD)

Total Project Cost:

$375,255

Federal Tax Credit (30%):

$112,576

Federal Depreciation Credit (35%):

CE

Net Investment:

UL 61730:CSA

Total Project Cost:

$375,255

Federal Tax Credit (30%):

$112,576

Federal Depreciation Credit (35%):

CE

Net Investment:

UL 61730:CSA

A federal depreciation tax credit, also known as the Modified Accelerated Cost Recovery System (MACRS), is a tax incentive provided by the U.S. government to encourage investments in certain types of assets, including renewable energy projects like solar installations. It allows businesses to recover the cost of qualifying assets over a specified period through annual deductions on their federal income taxes. 

Solar energy property is classified as a five-year property under MACRS, meaning it can be depreciated over a five-year period using an accelerated method, which allows for larger deductions in the earlier years of the asset’s life. Whatever savings they get each year they will write off the tax.

After the project cost is recouped, they have another 18 years to use the solar system.

Utility Savings

US $1,839,000 in Utility Savings Over 25 Years

One major challenge Parker House has is the rapidly rising electricity rates in California. Within one year, the average rate went from $0.03 kWh to $0.12 kWh in 2021.

Fortunately, the installation of the solar system has greatly offset the rising costs as soon as it was installed. 

2023: $26,000 in Utility Savings

2023 was the first year that all three inverters were fully operational for the whole year. The solar system saved Parker House over $26,000 in utility costs for the year by producing 204,574 kWh of electricity.

Top 3 Months That Produced The Most Electricity From Solar In 2023

Month

kWh Produced

Eliminated Utility Cost
($0.13 kWh Rate)

April

26,803 kWh

$3,484

March

20, 320 kWh

$3,484

May

19,793 kWh

$3,484

Projected 2024 Savings: $47,052

In 2024, the average commercial utility rate increased to $0.23 kWh. Even assuming that the total annual solar electricity production remains the same as 2023, which was 204,574 kWh, this would provide $47,052 in utility savings for 2024, which is almost double the savings in 2023.

Projected Total Savings Over 25 Years: $1,839,000

Assuming the total annual solar electricity production remains the same at 204,574 kWh and with a compound annual growth rate (CAGR) of 4% in electricity rate increase from the 2024 rate of $0.23, the estimated cumulative savings for the 23 years remaining in the lifespan of the solar system is at least $1,839,000.

Offsetting Utility Costs While Increasing Energy Consumption

Until May 2021, the average kWh remained at $0.03 until July 2021 where it jumped to $0.11 kWh, which almost doubled their monthly bill, adding over $3,000 on average per month on their bills. During a few months of 2021, the monthly consumption was over 30,000 kWh. When the solar panel system was fully operational in October 2021, it immediately began significantly reducing the utility costs, especially as the energy consumption level increased.

In 2022, Parker House began operating at night time, which has increased their monthly consumption to over 40,000 kWh some months. Without the solar system in place and with increasing rates, the company would be paying almost double the amount in their monthly utility bills.

Below are the costs of consuming electricity from the utility company at the various rates.

Year

Consumption in a Month

Electricity Generation Rate

Cost of Electricity Generation
(Without a Solar System)

2020

26,300 kWh

0.03

$789

2021

26, 300 kWh

0.11

$2,893

2022

30,000 kWh

0.12

$3,600

2023

40,000 kWh

0.13

$5,200

2024

40,000 kWh

0.23

$9,200

Project Challenges

In 2022, one inverter was getting overcharged and it automatically shut down for safety reasons so that the system does not get overloaded. It took five months for the factory to fix and replace the inverter. Meanwhile, the other two inverters continued to work and produce electricity.

Whenever a commercial project is complete and the inverter is turned on, it takes about a week to adjust to the system. We monitor the performance for up to two weeks, check back in two months, and then every three months we do another check. For all commercial projects, we fix and replace any parts as needed with no additional cost for the first year to ensure that the system is running smoothly. 

Project Monitoring

We provide a user-friendly online portal for Parker House to monitor the status and benefits of the solar system anytime. If there’s any problem that comes up, such as the inverter being down, the system will immediately notify the company and they can call UVcell to address the issue.

Property Type

The project will unfold in three distinct phases for optimal efficiency and impact. Initially, 600 kW of solar panels will be installed atop the facility’s roof.

 

The subsequent phase involves developing a solar array of approximately 7 MW on a lot across from the main building, which will also mark the commencement of the Alternative Fuel Station.

The final phase will concentrate on completing the installation on an additional parcel of land. These phases will be executed in a seamless, continuous operation to ensure timely progress and integration.

About The Installer & Financer

Solar panel installers are pivotal in the deployment of solar energy systems, proficiently assessing sites, designing optimal configurations, and ensuring safe installation. They integrate seamlessly with existing infrastructure, adhere to regulations, and offer maintenance, bolstering efficiency.

 

Financers are pivotal in the solar industry, offering funding and assistance for renewable energy adoption. They structure financing like loans and PPAs, making solar accessible. By evaluating feasibility and ROI and navigating regulations, they drive the transition to sustainable energy systems.