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Business and Sustainability

Reading

Solar Power Shines


by Debbie Mytels
(Originally appeared in Timeline #59 September/October 2001)

Larry Hassett had no idea that his desire for an electric-powered delivery truck would lead to a doubling of his hardware store business. Yet that's been only one outcome of his decision to "go solar." The more predictable outcome of his installing an array of photo- voltaic (PV) collectors on his store's roof-top this spring was a credit on his June electric bill of $6,148!

It all started when Hassett applied for an award as the first certified "Green Business" in Santa Clara County, the heart of Silicon Valley. The award, which his Palo Alto Hardware store subsequently won, required evaluating all aspects of the business for its ecological impact. Hassett was concerned that his delivery truck was creating air pollutants and adding CO2 to the greenhouse effect, so he decided to get an electric vehicle and charge it from photovoltaic panels on the hardware store roof.

Hassett's first stop was at Palo Alto Utilities, a municipally-owned system which offers a 50 percent solar rebate program similar to that of California's major utilities. Because the system would be installed in a highly visible location, the city utility decided to exceed its cap of giving rebates only up to 10 kW of capacity. So Hassett began designing a system that would power not only an electric vehicle, but provide all his power needs.

The next step was to choose the panels. After interviewing a number of PV panel manufacturers, Hassett decided on a system made by Siemens. His reasoning: While several companies put out catalogs of good solar components, putting together a complete system of PV panels, inverters, and mounting hardware can be a complex and daunting task. "With most companies," he said, "you really need to talk with a specialist who can custom-engineer a system for you." Siemens, on the other hand, offers a generic system with uniform modules that can be easily sized to different needs.

Hassett ended up buying a $220,000 system capable of generating 30kW, more than enough power to cover his store's needs during the long, sunny, summer days. With his store's electric meter running back-wards, the excess power would feed back power into the city's utility grid, accumulating credits to offset his usage bill in the winter. It took four weeks to install the 432 PV panels, including the inverter which changes the DC current the PV panels generate into AC current the store uses. Finally, in mid-March, Larry accepted a $110,000 rebate check handed him by Palo Alto Utilities at a gala "Flip the Switch" party attended by city dignitaries, local business leaders, environmentalists, friends, and passers-by.

Considering his electricity bill last year of $600-700/month, Hassett estimates he will save $7,000 a year for a 15-year payback on the whole system, at present rates. As rates are likely to go up, his payback period will actually be shorter. But a payback calculation is only part of the financial picture. Hassett points out that one's tax liability can be reduced dramatically by using the five-year accelerated depreciation schedule for capital equipment costs. Plus, he notes, there's a 10 percent Federal tax credit for businesses installing solar systems (and this can apply to a home office, too, he adds).

In addition to its being a sound financial investment, Hassett notes that the huge amount of publicity his solar installation has generated has resulted in a new line of business for his store: selling PV panels. He liked the Siemens system so well that he worked with them to further refine their retail package, and now within the first year, "We have become a major retailer of solar cells." Where Palo Alto Hardware did about $3 million in sales last year, he sees it doubling to $6 million in 2001. The fact that California's energy crunch has been in the headlines recently didn't hurt, Hassett adds: "When we started, the headlines weren't there, but as rates go up, these products become even more attractive."

There is other good news for solar. The new pre-engineered systems are easier to install: about 40 percent of the solar systems Hassett sells are installed by homeowners themselves. In many areas, building permit fees for installing alternative energy systems are being reduced. Hassett also advocates other regulations to help jump start the shift to solar, such as a "no net energy gain" policy that would require all new construction (or significant remodels) to generate their own power.

The market for PV systems will also grow with more streamlining of products, Hassett believes. "Solar installations used to be a time sponge, but with the development of package systems, anyone on my staff can provide you with a system. You pick up a package and everything is there. There's no need for electrical engineers to sell this product."

A different kind of benefit also comes from Hassett's venture into solar energy: continuation of a family business. A few years ago, when Larry Hassett inherited the hardware business started by his father in 1957, his son Eric was just in his teens. Today, 24-year old Eric has become manager of Palo Alto Hardware's solar department, climbing up on roofs, taking solar system measurements, handling State rebates, and reviewing utility bills so homeowners can determine the right package for their needs.

While some define success in business as "a healthy bottom line," Larry Hassett looks beyond monetary profits and strives for a healthy "triple bottom line," one that enhances people, planet, and prosperity. Hassett also has a sense of pride in serving his community. "It's really more than just having a zero bill. I'm a generator during the time that the city considers most critical, from 9 a.m. 'til 6 p.m. It feels good to know I'm doing my part so others will have power. And it's proof that what's good for our Earth can also be good business."

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