Del Monte Foods to Save $25 million with SunPower Solar Solution

There is a lot to understand when doing your first solar installation. One of the best things SunPower offered was that they had experience helping companies find a financially viable way to make an environmentally responsible investment.”

– Scott Butler, Vice President of Operations & Technical Services, Del Monte Foods

Del Monte Foods, with its environmentally conscious heritage that dates back to the California Gold Rush era, is one of the country’s largest and most well-known producers, distributors and marketers of premium quality, branded food and pet products for the U.S. retail market. The company understands that as an agriculturally-based company, its success is intertwined with the natural endowments of the earth. As such, Del Monte has had a long-term commitment to environmental practices, and has been a “quiet leader” in sustainable and green initiatives. The company further solidified its environmental stewardship with the installation of SunPower® solar rooftop arrays on both its Hanford and Kingsburg, California plants, in late 2008. This combined 1.9 megawatt solar rooftop installation is currently the largest of its kind in California’s Central Valley.

Solar Ambitions

Del Monte’s quest for solar began in 2004 after a group of Del Monte engineers attended a Photovoltaic (PV) seminar sponsored by Pacific Gas & Electric Co. Although the team liked what they heard, Scott Butler, VP of Operations and Technical Services at Del Monte, says the Company was initially apprehensive about the upfront investment cost. “We never had any doubts about the environmental or operational benefits of solar, but we had questions about whether we could make it work economically,” he notes. Butler credits Richard Koch, the Chief Engineer at Del Monte’s Hanford processing plant, for keeping the company’s solar focus alive. “Rich championed for solar power as available and necessary alternative energy source. And, given the economic and environmental implications of intensive energy use, the Del Monte management team started looking more closely at which financial options might be available to make it happen.”

Making the Numbers Work

After a cross-functional analysis was conducted by several divisions of Del Monte and SunPower’s structured finance experts, Butler and David Withycombe, Vice President of Operations, determined that entering into a solar lease agreement would enable the company to implement a solar solution while providing the company with a strong financial return. “The advantage to us was that our financier would pass along the 30% solar investment tax credit (ITC), and we would benefit directly from the PG&E rebates associated with our solar system. We’d get the direct energy savings benefits, as well as own the renewable energy credits (REC’s)," Withycombe says. "We’d additionally have the option to buy the solar system at the end of the lease term. However, due to its long life expectancy,we may choose to just renew the lease."

The SunPower Advantage

Upon launching its solar initiative, Del Monte sent out RFP’s to six solar providers. At the end of the evaluation period, Butler says, SunPower offered the best turnkey solution with the technological and financial expertise the company sought. "SunPower was more vertically integrated than other vendors, which means they have total control over the entire process from product manufacturing to installation. We were also confident that SunPower would complete the project before the December 31st ITC deadline. Plus, no other vendor had prior experience with installations of this magnitude, while SunPower could point to several in California, and across the country." Withycombe adds that Del Monte expects to enjoy significant energy cost reductions in the future: "With California Solar Initiative (CSI) incentives of $.022/kilowatt-hour (kWh) gene-rated, during the first five years of our solar investment we anticipate total rebates of an estimated $3 million."

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Project Overview
Body: 

Location:    Production Facility Hanford, CA
Completed:    December, 2008
Installation Type:    Commercial Roof
System Size:    1,172 kWp
Number of Panels:    6,400
Products:    SunPower® Roof System

Location:    Production Facility Kingsburg, CA
Completed:    December, 2008
Installation Type:    Commercial Roof
System Size:    759 kW
Number of Panels:    2,680
Products:    SunPower® T10 Solar Roof Tile System

Subhead: 
Benefits
Body: 
  • Will reduce harmful carbon emissions by more than 95 million pounds over the next 30 years, which is equivalent to planting 9,800 acres of trees or not driving almost 1 billion miles on California roads
  • Delivers savings of an estimated $500,000 in year one, and will provide an estimated $25 million in electricity cost savings over the systems’ 30-year lifetime
  • Provides a significant hedge against rising utility rates
  • Contributes to Del Monte’s continuing commitment to sustainability and environmental practices