solar thermal applications in the delmarva poultry industry

8/12/2019 Solar Thermal Applications in the Delmarva Poultry Industry

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Solar Thermal Applications in the Delmarva Poultry Industry

Sponsored by the:

Delaware Energy Office

Maryland Energy AdministrationVirginia Department of Mines, Mineral and Energy

United States Department of Energy

Prepared for:

Delmarva Poultry Industry, Inc.Members of the Delaware Million Solar Roofs Coalition

Prepared by:

Mark D . Thornbloom, P.E.Kelelo Engineering

3404 Angelica Street

Cocoa, FL 32926

Phone: 321-537-6808

email: [email protected]

Sandra A.H. Burton, CEM

Mid-Atlantic Million Solar Roofs Coordinator

Enfield Enterprises, Inc.

U. S. Dep artment of Energy

Mid-Atlantic Regional Office

100 Penn Sq uare East, Suite 890

Philadelphia, PA 19107-3396Phone: 215-656-6983


Brian P. Gallagher

Delaware M illion Solar Roofs Coordinator

2100 Lee Highway, #221

Arlington, VA 22201

Phone: 703-524-1249


Sarah L. Buttner

Research A ssociate

Center for Energy and Environmental Policy

University of Delaware

Newark , DE 19716

Phone: 302-286-1118


DATE: April 28, 2006
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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TABLE OF CONTENTS

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

Section 1: Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Section 2: Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2The Million Solar Roofs Initiative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2The Delmarva Poultry Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Section 3: Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Section 4: Solar Thermal Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Collectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Low-Temperature Collectors/Swimming Pool Collectors . . . . . . . . . . . 4Flat-Plate Collectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Evacuated-Tube Collectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Concentrating Collectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Storage Tanks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Solar Thermal Equipment and Installer Certification . . . . . . . . . . . . . . . . . . . . 6Solar Hot Water Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Glycol Antifreeze Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Drainback Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Solar Cooling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Section 5: Poultry Facilities and Solar Thermal Applications . . . . . . . . . . . . . . . . . . . 8Hatcheries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Growers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Feed Mills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Processing Plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Hot Water Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Minimum Daily Usage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Required Water Temperatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Rendering Plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Section 6: Economic Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Software Analysis Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Assumptions and Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Location of Poultry Processing Plant . . . . . . . . . . . . . . . . . . . . . . . . . 12

Solar Radiation and Weather Data . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Groundwater Temperatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Daily Hot Water Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Required Water Temperature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Fuel Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Solar Array Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Balance of System (BOS) Costs and Other Miscellaneous Costs . . . . 15Storage Size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15


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Storage Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Costs Per Unit of Energy Delivered . . . . . . . . . . . . . . . . . . . . . . . . . . 16Financial Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Solar Fraction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Base-Case Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Poultry Process #1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Poultry Process #2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Sensitivity Analyses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Collector Array Tilt and Azimuth . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Impact of Collector-Type on Array Size . . . . . . . . . . . . . . . . . . . . . . 19Cost-Effectiveness of Exceeding a Solar Fraction of 50% . . . . . . . . . 20Storage Size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Discount Rate Sensitivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Sensitivity Analyses for Combinations ofIncentives, Fuel Costs, & Collector Costs . . . . . . . . . . . . . . . . . . . . . 20Best-Case Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Section 7: Examples of Large Solar Thermal Systems . . . . . . . . . . . . . . . . . . . . . . . 26Packerland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Arnold Schwarzenegger Stadium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Phoenix Federal Correctional Institution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Section 8: Financial Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27Federal Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Modified Accelerated Cost Recovery System . . . . . . . . . . . . . . . . . . . 2730% Business Solar Energy Tax Credit . . . . . . . . . . . . . . . . . . . . . . . 28Section 9006 of the Farm Bill Grants and Loans . . . . . . . . . . . . . . . . 29

State Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Delaware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Maryland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31Virginia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Renewable Energy Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Section 9: ESCO/Performance Contracting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Section 10: Environmental Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33Avoided Emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33Value of Avoided Emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Section 11: Conclusions and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Section 12: Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Appendix A: Delaware Million Solar Roofs Coalition PartnersAppendix B: Broiler Production by State, 2004Appendix C: Delmarva Broiler Chicken FacilitiesAppendix D: Poultry Processing Plant Water Use Schematic


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EXECUTIVE SUMMARY

Introduction and Background

In April 2002, Delaware Governor Ruth Ann Minner created the Delaware Energy Task Forcewith instructions to develop an energy plan to address the States long-term and short-termenergy challenges. In September 2003, after more than a year and greater than 100 participants,the Delaware Energy Task Force submittedBright Ideas for Delawares Energy Future to theGovernor. Through the report, the Delaware Energy Task Force summarized and rankedrecommendations from six workgroups investigating specific areas of Delawares energy usage.

Recognizing that boilers and process heating consume greater than one-third of the energy usedin the industrial sector in Delaware, the Diversity of Fuels Workgroup recommended that theTask Force promote the use of solar thermal for industrial applications, particularly in boilerfeedwater preheating.

In response to the Delaware Energy Task Forces recommendation and with funding from U.S.Department of Energys Million Solar Roofs Initiative, the Delaware Million Solar RoofsCoalition (DEMSR) initiated this study on solar thermal applications in the poultry industry inlate 2004. By partnering with the Delmarva Poultry Industry, Inc., the Delaware Energy Office,the Maryland Energy Administration and the Virginia Department of Mines, Minerals, andEnergy, the DEMSR investigated the feasibility and cost-effectiveness of integrating solarthermal into preheating process water in feed mills, processing plants, hatcheries, and renderingfacilities.

The purpose of this study is to investigate and make recommendations regarding: Technical issues related to the installation of solar thermal technologies for poultry facilities. Costs and other economic considerations of solar thermal for specific poultry facilities. Financial incentives available to the poultry industry to install solar thermal. Environmental benefits of solar thermal technologies on poultry facilities.The goals of this study are to educate the poultry industry about solar thermal, to identifypotential cost-effective applications of solar thermal energy in the poultry industry, and tosupport the installation of solar thermal technologies on poultry facilities.

Through the cooperation of energy and facility executives at Allen Family Foods, Perdue Farms,and Tyson Foods, the authors of this report (the investigators) collected detailed information onsystem processes and energy and water usage at poultry facilities on the Delmarva Peninsula.After evaluating potential applications of solar thermal technologies for different types ofpoultry facilities, the investigators determined that preheating water for poultry processing plantswas likely the most cost-effective application of solar thermal in poultry facilities. While theinvestigators also believe that solar absorption cooling could be a cost-effective application forhatcheries, this application was not modeled and analyzed for cost-effectiveness in this report.This could be an area for further investigation.


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Economic Analyses

UsingRETScreen International Clean Energy Project Analysis Software, two solar thermalsystems used to preheat process water in a poultry processing plant were modeled: Poultry Process #1is the modeled optimal size for a solar thermal system likely to be

installed for a typical poultry processing plant as defined by the investigators. PoultryProcess #1assumes a 200,000 gallons per day demand for hot water at 60C (140F),136,000 gallons (515,000 liters) of storage, and 121,000 ft (11,200 m ) of flat plate solar2 2

collectors. This system size delivers 7020 MWh of energy annually and on annual basisprovides 46% of the energy needed to heat 200,000 gallons of water a day a solar fractionof 46%. Other assumptions include total installed system costs estimated at $2,634,602(which is likely at the low end of range of costs), a 10% federal business solar energy taxcredit, and the price of fuel oil at $1.00 per gallon. This scenario yields a simple payback(SPB) of 9.7 years and a pre-tax internal rate of return (IRR) of 10.7%. Using representativethreshold criteria suggested by the investigators,Poultry Process #1 is borderline cost-effective and is not an attractive investment as modeled.

Poultry Process #2is a smaller solar thermal system that is sized to maximize the impact of a$250,000 incentive, available in Delaware, on the cost-effectiveness of the system. Thesystem size is reduced to 24,672 gallons (93,386 liters) of storage and 21,905 ft (2,035 m )2 2

of flat plate solar collectors a size that results in only a 10 % solar fraction and 1535MWh of energy delivered annually and the assumed total installed system costs are$500,062 which is likely at the low end of the range of costs. A 10% federal business solarenergy tax credit and the price of fuel oil at $1.00 per gallon is also assumed. Given theseassumptions, this scenario yields a pre-tax internal rate of return of 23% and a simple payback of 4.5 years. Using the same representative threshold criteria suggested above, thisscenario is above defined cost-effectiveness thresholds and may be an attractive investmentfor many companies.

The cost-effectiveness of the two base-case scenarios described above is understated if the solarsystem is installed before the end of 2007 because the Energy Policy Act of 2005 increased theexisting 10% tax credit for solar energy installations to a 30% credit for the period of January 1,2006 to December 31, 2007. The tax credit will revert back to 10% on January 1, 2008 unlessCongress extends the 30% credit. A bipartisan bill was recently introduced in Congress toextend the tax credit to 2010.

Sensitivity analyses for several factors were run on the two base-case scenarios described aboveto determine which combination of factors would lead to cost-effective applications of solarthermal technologies to preheat process water in poultry processing plants. Following are the

three economic factors that seem to have the largest impact on cost-effectiveness:

Price of Fuel Oil: The assumed fuel for the economic analyses, No. 6 fuel oil with a sulfurcontent greater than 1%, is an inexpensive fuel compared to other grades of petroleum.Average prices for No. 6 fuel oil went from $0.70 per gallon in 2004 to $1.00 per gallon in2005. The assumed fuel cost of $1.00 per gallon (excluding taxes) is somewhat conservativebecause of the 1% escalation factor used in the analyses. Sensitivity analyses indicate thatstarting at about $1.30 per gallon and higher, the price of fuel oil is a primary determinant


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that makes a scenario cost-effective, using the suggested threshold criteria. Incentives: For a smaller solar thermal system, likePoultry Process #2, the incentive

available in Delaware, capped at $250,000, largely determines the cost-effectiveness of aproject. For larger systems, likePoultry Process #1, the Delaware incentive is less importantand the 30% federal business solar energy tax credit has more of an impact on cost-effectiveness. The implication of 30% tax credit is that the cost-effectiveness of a largersystem will be similar whether it is located in Delaware, Maryland, or Virginia. The benefitsof federal tax incentives in the analyses in this report are underestimated because the benefitof a 5-year accelerated depreciation allowed for solar energy property for a company was notcalculated.

Total Installed Costs: The investigators used the measure installed costs/MWh delivered inthe 1st year of service to compare and contrast various installed cost scenarios and does notreflect the actual costs per unit of energy delivered over the lifetime of a solar system (which

year1would be considerably lower). The costs/MWh figures quoted here can ONLY becompared to other scenarios within this report and are meaningless when compared toscenarios outside this report. The assumed costs for the two base-case scenarios are at thelow-end of the range of total installed costs per unit of energy (MWh) delivered in the firstyear of service. The sensitivity analyses in this report suggest that the cost-effectiveness

year1threshold for costs is at about $400/ MWh . Generous incentives can raise the threshold to

year1about $500/ MWh .

The most cost-effective scenarios modeled in this report maximized the incentives ($250,000grant and 30% tax credit) forPoultry Process #2. UsingPoultry Process #2, a modeled Best-Case scenario produced financial results that would be an attractive investment opportunity foralmost any company. However,Poultry Process #2would be a relatively small system so theresulting reduction in fuel oil use and the total impact on the companys fuel oil bill would also

be very small.

Assuming base-case costs and a 30% federal tax credit (and no $250,000 incentive available asis the case in Maryland and Virginia),Poultry Process #1 andPoultry Process #2start becomingattractive investments when the price of fuel oil reaches about $1.30 per gallon. Because ofeconomies of scale, a larger solar system like the one modeled in Poultry Process #1wouldlikely have lower installed costs on per energy unit delivered basis.

If the financial results of installing a solar thermal system for a particular processing plant arenot attractive to a company, an energy services company/performance contracting-type ofarrangement may be a viable alternative to a poultry companys ownership of an installation.

Recommendations

While determining the cost-effectiveness of using solar thermal for a particular processing plantwill depend on a customized analysis, the results of the analyses in this report indicate that solarthermal energy can be a cost-effective application for a poultry processing plant and that usingsolar thermal energy warrants consideration by the poultry industry on the Delmarva Peninsula.Most of the scenarios considered within this report satisfy threshold economic criteria of manycompanies. This type of analysis may be used by a company for a specific site to determine the


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type and size of solar thermal system that both satisfies its threshold economic criteria andmakes a significant impact in its fuel oil consumption. Other factors such as energyindependence, boiler replacement avoidance, and emissions reductions could be added to furtherimprove the economic results.

The investigators believe that the assumptions and analyses used in this study may also beapplicable to other poultry facilities in other regions of the U.S. This report can be used by boththe poultry industry and the solar thermal industry as a basis for determining if solar thermalapplications are appropriate for individual poultry facilities. Interested parties can downloadRETScreen for free and use it to customize their analysis for company and facility-specific data.


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Solar Therma l Applications in the Delmarva Poultry Industry Page 1

Excluding the states on ly oil refinerys oil feedstock, see p . 35 of theDelaware Energy Task Force Repo rt to the1

Governor - September 2003, http://www.delaware-energy.com/download.htm.

The Delmarva Peninsula consists of the parts of Delaware, Maryland, and Virginia between the Chesapeake Bay2

and the Atlantic Ocean.

SECTION 1: INTRODUCTIONOn April 26, 2002, Delaware Governor Ruth Ann Minner created the Delaware Energy TaskForce through Executive Order No. 31. The task force was instructed to develop an energy plan

that would provide the Governor with actions to address the States long-term and short-termenergy challenges. After more than a year and involving more than 100 participants, theDelaware Energy Task Force submitted to the Governor,Bright Ideas for Delawares EnergyFuturein September 2003. The task force identified a key set of strategic options includingdetailed recommendations to assist the Governor in navigating through Delawares energyfuture.

InBright Ideas for Delawares Energy Future, the Delaware Energy Task Force summarizedand ranked recommendations from six workgroups investigating specific areas of Delawaresenergy usage. Recognizing that boilers and process heating consumes 41% of the energy used inthe industrial sector , the Diversity of Fuels Workgroup recommended that the Task Force1

promote the use of solar thermal for industrial applications, particularly in boiler feed waterpreheating.

In response to the Delaware Energy Task Forces report and with funding from U.S. Departmentof Energys (DOE) Million Solar Roofs Initiative (MSR), the Delaware Million Solar RoofsCoalition (DEMSR) initiated this study on solar thermal applications in the poultry industry inlate 2004. In 2004, the poultry industry on the Delmarva Peninsula produced about 8% of all2

the meat-type chickens in the United States. Valued at more than $1.7 billion, broiler chickens,raised for their meat rather than eggs, are the largest segment of agriculture in Delaware,Maryland, and Virginia. By partnering with the 3400 member Delmarva Poultry Industry, Inc.(DPI), the Delaware Energy Office, the Maryland Energy Administration, and the VirginiaDepartment of Mines, Minerals, and Energy, the DEMSR was funded to investigate thefeasibility and cost-effectiveness of integrating solar thermal for the preheating of process waterin feed mills, processing plants, hatcheries, and rendering facilities.

The purpose of this study is to investigate and make recommendations regarding: Technical issues related to the installation of solar thermal technologies for poultry facilities. Costs and other economic considerations of solar thermal for specific poultry facilities. Financial incentives available to the poultry industry to install solar thermal. Environmental benefits of solar thermal technologies on poultry facilities.The goals of this study are to educate the poultry industry about solar thermal, to identifypotential cost-effective applications of solar thermal energy in the poultry industry, and tosupport the installation of solar thermal technologies on poultry facilities.


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Members listed in Appendix A.3

See broiler production by state in Appendix B.4

SECTION 2: BACKGROUNDThe Million Solar Roofs Initiative

Since June 1997, U.S. DOE has supported the MSR initiative to bring together state and local

partners to reduce the barriers to the use of solar energy through education and communityoutreach. The initiatives goal is to facilitate the installation of one million solar energy systemsthroughout the United States. Today, MSR has nearly 100 state and local Million Solar RoofsPartnerships working together to remove barriers, provide solar energy education, and developand strengthen local demand for solar energy.

In 2002, Green Plains Energy, Inc. in cooperation with the State of Delaware Energy Officeresponded to the U.S. DOEs request for state and local partners and established the DEMSR.The DEMSR is a group of Delaware organizations, businesses and individuals working together3

to: Identify market barriers to the installation of solar energy systems. Eliminate market barriers to the use of solar energy through education and community

outreach. Develop and strengthen local demand for solar energy products and applications. Contribute to the National Million Solar Roofs goal by installing at least 500 solar energy

systems within Delaware.

The Delmarva Poultry Industry

In 1923, the Delmarva Peninsula saw the launch of the modern poultry industry when CecileSteele of Ocean View, Delaware began raising flocks of broilers and selling them forconsumption as young birds. Prior to Steeles involvement, most chickens were raised for eggproduction alone. Since then, the production of poultry has become a highly automated process.From start to finish, the poultry companies on the Delmarva Peninsula and elsewhere in the U.S.,are vertically-integrated operations owning breeder flocks, hatcheries, feed mills, grow-outoperations, and processing plants.

Still major players in the poultry industry, Delaware, Maryland and Virginia rank in the top tenor eleven in terms of broiler production and pounds of meat-production. The rest of the top-tenpoultry producing states are mostly Sunbelt states like North Carolina, Georgia, Alabama,Mississippi, Arkansas, and Texas. There are four poultry companies that operate on the4

Delmarva Peninsula: Allen Family Foods, Mountaire Farms, Perdue Farms, and Tyson Foods.

SECTION 3: METHODOLOGYThe focus of this study was to investigate cost-effective uses of solar thermal in agricultural andindustrial applications. After an initial discussion with the DPI, growers poultry houses andbreeder facilities were ruled out due to limited hot water needs. Hatcheries, feed mills, andpoultry processing plants were identified as facilities that had more potential for solar thermalapplications. Three of the four poultry companies on the Delmarva Peninsula participated in thestudy: Allens Family Foods, Perdue Farms, and Tyson Foods.


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Christensen, Craig B. and Greg M. Barker. Ef fects of Tilt and Azimu th o n Annua l Incident Solar Radiatio n for5

United States Locations. Proceedings of Solar Forum 2001: Solar Energy: The Power to Choose April 21-25, 2001 ,

Washington, D C.

The authors of this report (the investigators) held conference calls with poultry companies andsubmitted data requests on energy and water use at plants. Each company narrowed their siteselection to best fit the criteria for solar thermal. Next, the investigators made on-site visits tonine facilities consisting of hatcheries, feed mills, rendering plants, and processing plants tobetter understand their operations. During the on-site visits, the investigators met with energyand facility managers to further discuss plant processes, collect detailed information on energyand water usage, and visually examine plant processes and identify ways to reduce the thermalloads or make them more efficient by using solar energy.

SECTION 4: SOLAR THERMAL TECHNOLOGIESSolar thermal technologies use direct heat from the sun, concentrating it in some manner toproduce heat at useful temperatures. Uses of solar thermal technologies include: Heating water for domestic hot water. Preheating boiler and process water used in commercial and industrial applications. Producing steam for electrical generators. Space heating. Heating water for absorption refrigeration/air conditioning applications. Heating water for swimming pools.The two applications of solar thermal most appropriate for use in poultry facilities preheatingprocess and boiler water and solar absorption cooling are described in more detail below.

COLLECTORS

While applications of solar thermal may have different end uses, the one thing all solar thermaltechnologies have in common is an apparatus that will collect the suns radiant energy. Solarcollectors absorb the radiant energy of the sun and change it into heat energy.

To maximize energy production, collectors should face south, but southeast or southwestorientations result in only small collection efficiency reductions. For the most annual energygain, fixed collectors are usually tilted at an angle equal to the latitude of the site. This angle5

points the collectors directly toward the sun in the spring and the fall when the sun is at itsmidpoint position in the sky. Energy from the low winter sun and the high summer sun is notcollected as efficiently, but the average yearly collection of energy is maximized. If an end useof solar thermal is seasonal, collectors are tilted from latitude to maximize energy collection collectors should be tilted as little as 15 degrees less than latitude for energy maximizationduring the summer and tilted as much as 15 degrees more than latitude for energy maximizationduring the winter. Collectors can be mounted on building roofs or on the ground that is freefrom shade.

The range of solar thermal collectors can be loosely grouped according to operating temperatureranges. Unglazed and glazed flat-plate collectors are generally used for low and intermediate-temperature applications. Evacuated-tube collectors and concentrating collectors are usuallyused for higher temperature applications.


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Low-Temperature Collectors/Swimming Pool Collectors

Low-temperature collectors, also known as unglazed flat-plate collectors, can increase watertemperature to as much as 15 to 20C (27 to 36F) over the ambient air temperature. Thesecollectors have a relatively simple design: they consist of a black plastic absorber with flowpassages; have no glass cover; no insulation; and no expensive materials such as aluminum orcopper. They are less efficient in collecting solar energy when outdoor temperatures are muchlower than the desired temperature, but are quite efficient when outside air temperatures areclose to the desired water temperature. They are also usually less expensive than other solarcollectors.

These features make them highly suitable for swimming pool water heating and other uses thatrequire only a moderate increase in temperature. Heating swimming pool water with solarenergy is much more cost-effective than using natural gas or electricity to heat pool water. Solarpool heating is by far the most prevalent use of solar thermal technologies in the U.S.

Flat-Plate Collectors

Glazed flat-plate collectors(see Figure 1) can heat waterto operating temperatures of48.8 to 60C (120 to140F), although somehighly efficient models canperform reasonably well attemperatures above 200F.The most common use is forheating domestic hot water,

but there are numerouspreheat applications forindustrial process heat aswell as for space heating.

This type of collector is an insulated metal box with a glass or plastic cover and a dark-coloredabsorber plate. The cover may have a glazing that is transparent or translucent. The glazingallows sunlight to strike the absorber plate but reduces the amount of heat that can escape. Thesides and bottom of the collector are usually insulated to minimize heat loss. The absorber plateis usually black because dark colors absorb more solar energy than light colors. Sunlight passesthrough the glass and strikes the absorber plate, which heats up, changing solar radiation into

heat energy. The heat is transferred to the liquid water or an antifreeze solution passingthrough the collector.

Evacuated-Tube Collectors

Evacuated-tube collectors (see Figure 2) are rows of parallel, transparent glass tubes. Eachevacuated and pressure proof glass tube contains an absorber covered with a selective coating.Sunlight enters the tube, strikes the absorber, and heats a liquid flowing through the absorber. Aheat pipe collector incorporates a special fluid which begins to vaporize even at low

Figure 1


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temperatures. The steam rises in theindividual heat pipes and warms up thecarrier fluid in the main pipe by meansof a heat exchanger. The condensedliquid then flows back into the base ofthe heat pipe. Because the sunlight isabsorbed in a vacuum, convective heatlosses are minimized or eliminated.Sunlight is also perpendicular to theglazing for most of the day due to thecircular shape of the evacuated tube.This characteristic may allow the tubesto perform well in both direct anddiffuse solar radiation (i.e., cloudydays).

The high temperatures more than76.6C (170F) evacuated-tubecollectors can achieve, combined with the fact that evacuated-tube collectors are usually moreexpensive than flat-plate collectors, make them more appropriate for applications such ascommercial and industrial hot water heating, steam production, and solar air conditioning.

Concentrating Collectors

Concentrating collectors use mirrored surfaces to concentrate the sun's energy on an absorbercalled a receiver. Concentrating collectors can achieve higher temperatures than evacuated tubecollectors. But unlike evacuated-tube collectors, they can do so only when direct sunlight is

available. The mirrored surface focuses sunlight collected over a large area onto a smallerabsorber area to achieve high temperatures. Some designs concentrate solar energy onto a focalpoint, while others concentrate the sun's rays along a thin line called the focal line. The receiveris located at the focal point or along the focal line. A heat-transfer fluid flows through thereceiver and absorbs heat.

Concentrators are the most practical in areas of consistently high amounts of direct solarradiation, such as the desert southwest United States. Concentrators are used mostly in utility orcommercial applications because they are expensive and because the trackers (to follow the sunthroughout the day and year) need frequent maintenance.

STORAGE TANKSMost solar thermal applications require water tanks to store the collected thermal energy. Inmany residential and other small non-residential applications, specialized 80 or 120-gallon hotwater tanks with built-in heat exchangers are used. For larger systems, multiple manufacturedtanks can be used or tanks can be built on-site to best match the needs (e.g., insulated oruninsulated) of the particular solar thermal application.

Figure 2


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SRCC website http://www.solar-rating.org/6

See http://www.nabcep.org/7

SOLAR THERMAL EQUIPMENT AND INSTALLER CERTIFICATION

The Solar Rating and Certification Corporation (SRCC) , established in 1980, is an independent,6

nonprofit organization that creates and implements solar equipment certification programs andrating standards. It is the only organization that rates and certifies solar thermal energyequipment used throughout the United States. For residential solar domestic hot waterapplications, the SRCC certifies entire systems; the collectors, controls, sensors, fluids, heatexchangers, pumps, plumbing, piping, and tanks have to meet or exceed minimum standards.For larger commercial and industrial applications of solar thermal, the SRCC only certifiescollectors. SRCC certification of equipment is required for some state and federal incentives(see Financial Incentives below).

Proper installation of solar thermal equipment is also important to ensure the systems operate attheir maximum efficiency. Currently, there are few state and no national quality credentialingand certification programs for solar thermal professionals. Dealers and installers are generallytrained by the manufacturer whose product they are marketing. However, the North AmericanBoard of Certified Energy Practitioners (NABCEP), a volunteer board of renewable energystakeholder representatives, is developing a program for solar thermal installers. In 2006,NABCEP plans to launch a certification program for solar thermal installers similar to its SolarPV Installer Certification.7

SOLAR HOT WATER SYSTEMS

Solar hot water heaters can be either passive or active. Passive systems have no pumps and useconvection to move water or a heat-transfer fluid through the system. Since passive systems areusually not practical for larger systems, all the systems discussed below are active systems.Active systems use electric pumps to circulate a heat-transfer fluid. Active systems are moreexpensive than passive systems but are also more efficient. Because the pumps in active systems

use electricity, they will not function in a power outage unless there is a photovoltaic circulatoror back-up generator.

Solar water heater systems are also characterized as open-loop (also called direct) or closed-loop(also called indirect). Open-loop systems circulate process or potable water through a collectorand this water is then used directly for end-uses. These systems are most often used wherefreezing temperatures do not or rarely occur or where local water quality is not an issue. Sincetemperatures on the Delmarva Peninsula drop well below freezing numerous times each winter,open-loop systems are not appropriate for this area.

Closed-loop systems pump a heat-transfer fluid through collectors. The heat-transfer fluid can

be distilled water or a nontoxic glycol antifreeze solution, however, glycol antifreeze is a slightlyless efficient heat-transfer fluid than water. Heat exchangers transfer the heat from the fluid tothe intended end-use: water, air for space heating, or a refrigerant for solar absorption cooling.Double-walled heat exchangers prevent contamination of potable water.


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Closed-loop systems are used in areas subject to sustained freezing temperatures because theyallow good freeze protection mechanisms. The two freeze-protection methods most appropriatefor the climate of the Delmarva Peninsula are pressurized glycol systems and drainback systems.

Glycol Antifreeze Systems

A nonionic water-glycol antifreeze solution circulates in a closed-loop system. Advantages ofthis type of system are that it offers excellent freeze protection, the sloping of collector fields isless critical, and pumps can usually be sized only for hydronic circulation, meaning smallerpumps, and less parasitic energy. Disadvantages of glycol systems include: lower heat transferefficiency compared to drainback systems; the greater maintenance needed to monitor antifreezequality the stagnation of some antifreeze mixtures at high temperatures and exposure to airmay cause the glycol to breakdown; and the glycol may need to be changed every few years.

Drainback Systems

This type of system uses a non-pressurized, closed loop that circulates aheat-transfer fluid. The fluid is forcedthrough the collectors by a pump and thenis drained by gravity to the storage tankand heat exchanger. When the pumps areoff, the collectors are empty, therebyproviding freeze-protection. Theadvantages of drainback systems include:excellent freeze protection when properlyinstalled; an inexpensive and effectiveheat transfer fluid (water); and water

generally is not in the collectors duringstagnation so it is not lost and thus does not need to be changed as often as in other systems.Disadvantages of these systems are: the solar collectors and all piping exposed to weather mustbe located above the drainback tank; the collector and piping must be properly sloped; thecollector field must be checked periodically for settling (i.e., poor drainage); the drainback tankmust be sized and insulated sufficiently; and the pumps usually must be larger than forcirculating loops meaning larger parasitic losses. However, in large systems in moderatelyfreezing climates, these issues may be easier to address than in other situations.

If a system is properly designed and installed according to the design, then either a glycol ordrainback design would be an effective system for the process applications and geographic

locations considered in this report.

SOLAR COOLING

While absorption cooling does not enjoy the widespread familiarity in the U.S. that vaporcompression cooling does, absorption cooling is the first and oldest form of air conditioning andrefrigeration. The technology is commonly used in large industrial facilities where wasteprocess heat is available. In recent decades, small units (10 tons and up) have becomecommercially available.

Figure 3: Drainback System.


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An absorption air conditioner or refrigerator does not use an electric compressor to mechanicallypressurize the refrigerant. Instead, the absorption device uses a heat source, such as natural gasor a solar collector array, to evaporate the already-pressurized refrigerant from anabsorbent/refrigerant mixture. This takes place in a device called the vapor generator. Althoughabsorption coolers require electricity for pumping the refrigerant, the amount is very smallcompared to that consumed by a compressor in a conventional electric air conditioner orrefrigerator and is within the realm of possibility for solar electric pumps.

Where cooling is required, single-effect absorption chillers use solar thermal heat atapproximately 87.7C to 93.3C (190 to 200F) to provide process cooling at 7.2C (45F).Waste heat at about 29.4C (85F) is either used elsewhere in the preheat process or is rejectedto a cooling tower. The system provides the best cooling when it is needed most when the sunis high and hot. Solar absorption cooling is more cost-effective than using solar photovoltaics topower vapor compression systems, and it can compete with conventional cooling technologiesespecially when time-of-use rates and peak-demand price spikes are taken into consideration.Single-effect absorption coolers are the best match for use with flat plate solar collectors. It isalso possible to produce ice with a solar powered absorption device, which can be used forcooling or refrigeration.

Europe leads the world in solar cooling with over 45 solar cooling installations to date. Anotable installation is the EAR Tower in Pristina, Kosovo. Installed in 2002, this system useshighly efficient flat-plate collectors to power 60 tons of LiBr-water absorption chiller capacity.The solar system meets 75% of the cooling load, 20% of the heating load, and 100% of the hotwater load for the office building. In the U.S., experimental systems have been operating forover a decade at the University of Puerto Rico in Mayaguez and at Bergquam Energy Systems inSacramento, California. In 2004, the Audubon Society commissioned a commercial system to

provide 100% of the cooling needs for a nature center outside Los Angeles using evacuated-tubecollectors and a 10-ton chiller. The system displaces 15 kW of peak utility demand and thecenter is not susceptible to blackouts. Other solar cooling systems include a solar adsorptionsystem commissioned in Canada in 2005 and three absorption systems planned for 2006commissioning two in Florida and one in Arizona.

SECTION 5: POULTRY FACILITIES AND SOLAR THERMAL

APPLICATIONSSolar thermal technologies are the most cost-effective when: There is a consistent daily and year-round hot water demand. Hot water consumption is significant. The water temperatures required and methods used to heat water match the capabilities of

solar thermal technologies.The investigators used these criteria to assess the potential application of solar thermaltechnologies for poultry facilities.

For the purposes of this study, the answer to the age-old question what came first, the chickenor the egg? is easy. Its the egg! Because the investigators did not investigate the energyusage of breeder facilities, hatcheries are the first poultry facilities to be discussed.


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See http://ceep.udel.edu/publications/2005_06.htm9

See Appendix C.10

See Appendix D for processing plant schematic.11

See Appendix C.12

Growers were not a subject of this study. For more information on possible solar applicationsfor growers, please see The Potential for Solar Electric Applications for Delawares PoultryFarmsby the Center of Energy and Environmental Policy at the University of Delaware.9

FEED MILLS

Feed mills process ingredients such as grains, soybean meal, vitamins, and minerals into pelletsthat are formulated for the 4 or 5 different phases of a chickens growth. There are 10 feed millson the Delmarva Peninsula.10

Feed mills usually operate 5 days a week and use about 20,000 gallons of water per day to make162.7C (325F) steam. The steam adds moisture to the feed so that pellets can be formed.Solar thermal could be used to preheat boiler feedwater. This application would be a goodcandidate for evacuated tube collectors because of the higher temperatures needed.

Using solar thermal to preheat boiler feedwater for feed mills is unlikely to be a cost-effectiveapplication at this time. However, as the price of fuel oil rises, the economic viability of thisoption will improve. Another possible application for feed mills would be to use solar thermaldrying technologies to dry the feedstock prior to it entering the feed mill. Solar drying offoodstuffs and feedstock is one of the humankinds original uses for solar energy but has beenneglected in modern society in favor of fossil-based drying. Advances in the technology andrising fossil fuel costs may lead to renewed interest. This application was not analyzed by theinvestigators as part of this study.

PROCESSING PLANTS

Processing plants are where chickens are killed and processed for consumption. After a bird iskilled, the carcass is:

Put on a conveyor. Drained of blood. Feathers, feet and head are removed. Eviscerated internal organs pulled for inspection by USDA. Chilled to 4.44C (40F), usually by immersion in a chilled water bath, to inhibit bacterial

growth. Packed whole or cut into parts for distribution.Plants operate under USDA Pathogen Reduction rules and industry guidelines to improve themicrobiological quality of the product. Prior to the chilled water bath, the carcasses are subjectto semi-scalding water four times for defeathering, a whole bird wash, evisceration, and a finalbird wash. There are 10 processing plants on the Delmarva Peninsula.11 12

Hot Water Demand

Processing plants have large daily hot water demands. Heated water is used in the plants forevisceration, sanitation during processing, and the daily cleanup of the plant. The processing


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plants on the Delmarva Peninsula seem to beoperated in a similar manner: two processing shiftsper day, Monday to Friday; a nightly cleanup shift;and a Saturday shift if product demand dictates.Plant cleanup occurs six to seven times per week.For sanitation requirements, plants have to becleaned within a certain number of hours prior to thestart of a processing shift (i.e., a plant that is idle onSunday is required to be cleaned on Sunday nightbefore a Monday morning shift).

Minimum Daily Usage

While none of the visited plants sub-metered water usage, plant personnel estimated that thedaily cleanup of the plant represented at least 50% of daily hot water consumption. Hot waterconsumption differed for each plant the investigators visited, but all the processing plantsexceeded 200,000 gallons per day. Discussions with the poultry industry suggest that aminimum usage of 200,000 gallons of hot water per day would be typical for most processingplants in the U.S.

Required Water Temperatures

All the processing plants the investigators visited use groundwater. Groundwater temperatureson the Delmarva Peninsula usually range between 12 to 16C (54 to 62F) depending on the timeof year and depth of well. Temperatures required in plants range from 51 to 54C (124 to 130F)for the semi-scalding (evisceration) process to 60C (140F) for plant cleanup.

The daily hot water demands, the pattern of water consumption, and methods of heating water in

processing plants are a good fit for the capabilities of solar hot water heaters. Processing plantspatterns of water use moderate hot water demands during the day and heavy night usage match fairly well with solar hot water heaters production that peaks in the afternoon. The needto raise the relatively consistent temperature of groundwater about 47C (85F) allows solarthermal technologies to operate on the most efficient part of their curve for most of the time thatthey preheat the water. Preheating means the boilers work less and less fossil fuel is consumed.In cases where a boiler is undersized or production has increased, the solar system would besized to make an additional boiler unnecessary. The investigators determined that preheatingwater for poultry processing plants was likely the most cost-effective application of solar thermalin poultry facilities.

RENDERING PLANTS

Rendering plants process poultry byproducts (e.g., feathers and bones) into protein, fat, or bonemeal for use in pet food and other products. Basically, the rendering process is the grinding andcooking of byproducts at high temperatures to separate fats and proteins.

Rendering plants use make-up water for the boilers to make steam for the cooking process.Solar thermal could be used to preheat make-up water for steam in rendering plants but this usemay not be an optimal use of solar due to the small amounts of water used, variable loads, hightemperatures, and existing opportunities for other heat recovery schemes.

Figure 4: Photo courtesy of Allen Family Foods,

(http://www.allenfamilyfoods.com/oper/qal.html)


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See http://sel.me.wisc.edu/fchart/new_fchart.html13

See http ://sel.me.wisc.edu/trnsys/default.htm14

More information on RETScreen can be found at http://www.retscreen.net/15

SECTION 6: ECONOMIC ANALYSISThe financial impacts of solar thermal installations on poultry facilities will be the primary factoron which poultry companies decide whether to install a solar system. A goal of this study is to

provide the poultry industry with a realistic assessment of the economics of using a solar thermalsystem at a poultry facility.

This economic analysis focuses on using solar thermal to preheat water for poultry processingplants because this application of solar thermal was identified by the investigators as the mostpromising for the Delmarva poultry industry. The following analysis is based on: data fromthree of the four poultry companies on the Delmarva Peninsula; on-site visits to poultryprocessing plants; databases in a software analysis tool; cost estimates from solar contractors;and the investigators solar industry experience.

SOFTWARE ANALYSIS TOOLS

The investigators considered using three widely-used software analysis tools to estimate loads,system sizing, costs, and provide an economic analysis for solar thermal technologies TRNSYS, F-Chart, and RETScreen. F-Chart may not be appropriate for this analysis because itis designed for residential systems. TRNSYS is a very robust software tool but its economic13

analysis is limited and it requires fairly extensive engineering knowledge to operate thesoftware. RETScreen is used because it provides a broad technical and economic analysis that14

can be applied to non-residential systems for pre-feasibility applications. Although it allows theuser to control a large number of parameters, it also has suggested default values for many ofthose parameters and usually provides a wide range of default values with some justification forthe ranges suggested. Like most software analysis tools, its user-friendliness may result in aprecisely inaccurate result, i.e., an inexperienced user may pick a value for a parameter that leadsto a result that is precisely wrong. However, if the user has some experience with the industryunder consideration and with solar energy, RETScreen can be used with great effect.

TheRETScreen International Clean Energy Project Analysis Softwareis a free software tooldeveloped with the contribution of numerous experts from government, industry, and academia.The software can be used worldwide to evaluate the energy production, life-cycle costs, andgreenhouse gas emission reductions for various types of energy efficient and renewable energytechnologies. The software also includes product, cost, and weather databases.15

ASSUMPTIONS AND INPUTS

A RETScreen user can use the product, cost, and weather databases included in the software ormanually adjust these databases. Below is a discussion of the inputs into the analysis and wherealternatives to RETScreens assumptions were used.

Location of Poultry Processing Plant

The assumed location of the processing plant is Georgetown, Delaware, the centrally located seatof Sussex County. Four of the ten processing plants on the Delmarva Peninsula are located in


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Sussex County, with another one just over the county line in Milford, Delaware. Two plants inMaryland are located in Caroline and Talbot counties which are adjacent (i.e., in terms oflatitude) to Sussex County.

Solar Radiation and Weather Data

To paraphrase a political clich, all weather is local. The amount of solar energy received by theearth at a particular location is highly variable both in time and space (from location to location)due to localized conditions such as cloud cover and pollution. The data available to preciselydetermine solar radiation at a particular location is limited. For example, whereas the NationalRenewable Energy Laboratorys (NREL) National Solar Radiation Data Base is a 30-year recordof the radiation received at 239 locations across the U.S., none of the 239 locations are on theDelmarva Peninsula. Therefore, the estimates of the amount solar radiation for this analysis maynot exactly match actual results.

For this analysis, the data from Wilmington, Delaware (latitude of 39 44) is used because it isthe closest location to Georgetown with NREL data. To give some perspective on Georgetownslocation (38 40), it is about 70 miles south of Wilmington. Salisbury, Maryland (38 21), alocation of another processing plant, is about 95 miles south of Wilmington. A plant located inthe Virginia portion of the Delmarva Peninsula at Temperanceville (37 53) is about 130 milessouth of Wilmington. Another plant is located in Accomac, Virginia which is about 15 milessouth of Temperanceville. These sites are all very close to the same latitude and should receiveabout the same amount of solar energy. However, as shown in a sensitivity analysis below,Washington, DC, which is south of Wilmington, receives nine percent less solar radiation on anannual basis than Wilmington probably due to cloud cover variations. The investigatorsbelieve that use of the data for Wilmington, from the weather station designated WBAN#13781,is an appropriate proxy for the Delmarva Peninsula that may yield slightly conservative results

for the amount of solar radiation used in the cost-effectiveness analyses.

The appropriateness of the RETScreen radiation data, derived from a 10-year satellite record,was validated by comparing the RETScreen data against NRELs data. As seen in Table 1,RETScreen radiation data matches very closely to NRELs WBAN#13781 for zero and forlatitude tilt. RETScreen slightly under predicts WBAN data for latitude tilt, which allows for aconservative radiation estimate.

Table 1: Comparison of Solar Radiation [kWh/m /day], RETScreen to NREL2

RETScreen at 0 tilt WBAN#13781 at 0 tilt RETScreen at latitude tilt

WBAN#13781

at latitude tilt

January 2.03 2.0 3.47 3.4

February 2.86 2.9 4.15 4.2March 3.90 3.9 4.65 4.8

April 4.91 4.9 4.96 5.2

May 5.65 5.6 5.10 5.4

June 6.24 6.2 5.35 5.6

July 6.08 6.1 5.33 5.6

August 5.45 5.4 5.25 5.5

September 4.39 4.4 4.91 5.1

October 3.29 3.3 4.44 4.5

November 2.18 2.2 3.53 3.5

December 1.75 1.7 3.08 3


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Actual days with assumed load will be slightly less because individual plants Saturday schedule vary and holiday16

closings.

Based on the Energy Information Agencys data for residual oil with sulfur content greater than 1% :17

http://www.eia.doe.gov/emeu/mer/pdf/pages/sec9_7.pdf

Weather data in RETScreen was checked against published NREL weather data for the samelocation. RETScreen average monthly temperatures for Wilmington match to within 0.2C ofWBAN#13781 from NREL. WBAN#13781 shows a daily minimum/maximum range for eachmonth of about 9 to 11C, fairly evenly spaced around the daily average.

Groundwater Temperatures

The Delmarva Peninsula is a flat coastal plain with deep layers of sediment. Groundwater is thesource for all potable water uses on the Delmarva Peninsula. Compared to surface water,groundwater temperature tends to be much less variable on an annual basis, especially in deeperaquifers. One processing plant the investigators visited is connected to a municipal water utilityand the remainder have private wells.

RETScreens temperature range of 7.7 to 16.6C (46 to 62F) for groundwater in Delaware is thetemperature range used in this analysis. Based on measured temperature data for a shallow wellon the northern part of the Delmarva Peninsula, this range seemed to be a reasonablegroundwater temperature profile for Delaware.

Daily Hot Water Demand

As discussed in Section 5 above, the minimum daily hot water demand for a poultry processingplant is assumed to be at least 200,000 gallons per day (gpd). This daily usage is also assumedto occur 365 days a year.16

Required Water Temperature

As discussed in Section 5, the uses of hot water in processing plants require water to be heated totemperatures between 51 to 60C (124 to 140F). The cleanup process is the largest portion ofthe daily hot water demand and requires the highest temperature 140 F. Therefore, it is

assumed that 200,000 gpd of groundwater, at temperatures of 7.7 to 16.6C (46 to 62F), isrequired to be heated to 60C (140 F).

Fuel Costs

No. 6 fuel oil is the fuel of choice for poultry processing plants on the Delmarva Peninsula foruse in boilers to heat water. No. 6 fuel oil, also known as Bunker C or residual oil, is a verythick almost tar-like oil. The sulfur content of No. 6 fuel oil, which may impact the price of theoil, can range from 0.5% to 2.0%. No. 6 fuel oil with a 2% sulfur content appears to be the mostwidely used grade by the Delmarva poultry industry and some No. 6 fuel oil with 1% or even0.5% sulfur content may be used to meet emissions quotas. Some plants use more expensive No.4 fuel oil and some facilities may also use natural gas or propane on occasion.

For the cost-effective analysis, No. 6 fuel oil is the fuel assumed to be used in processing plants.According to the U.S. DOEs Energy Information Agency, the average price (excluding taxes) toend-users for No. 6 fuel oil for 2004 was $0.692 per gallon and for 2005 was $0.981 per gallon.17


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Since August 2005, the average price (excluding taxes) of No. 6 fuel oil has been above $1.00per gallon. Reflecting these recent trends, the assumed cost of No. 6 fuel oil is $1.00 per gallon(excluding taxes) with an annual escalation rate of 1%.

Solar Array Costs

RETScreen suggests the Heliodyne Gobi 410 as a default collector, allowing the programmer toaccess a representative flat-plate collector performance curve and size. The choice of collectorcan be easily adjusted by selecting from a menu of other manufacturers and collectors. Note thatthe choice of the Gobi 410 is for access to an actual collector efficiency curve for representativeenergy performance analysis only; collector cost data discussed below is based on industryaverages and does not necessarily represent cost data for the Gobi 410.

Solar collectors are the majority of the costs of a solar thermal system. The cost of the array offlat-plate collectors is usually represented in $/m or $/ft . While RETScreen lists costs of $1802 2

to $310/m for flat-plate collectors, the investigators believe that the costs could be as low as2

$130/m based on industry data from recent years and based on the expected economies of scale2

for the relatively large systems modeled in this study.

To evaluate recent cost trends for solar thermal installations, the investigators contacted severalsolar thermal contractors for cost estimates for the two solar systems modeled below. Theestimates received were higher in cost than $130/m . These higher estimates maybe the result of2

solar contractors that lack experience in large-scale installations and a tendency by solar thermalcontractors to overestimate costs for pre-feasibility estimates. The higher estimates may alsosimply reflect increases in materials and costs industry-wide. Nevertheless, the evaluation ofrecent cost trends indicates that $130/m appears to be the low-end of the price range for solar2

collectors.

Balance of System (BOS) Costs and Other Miscellaneous Costs

In small systems such as residential and small commercial, collectors are typically mounted on aroof. Sometimes the collectors double as an awning or window shade, or as a shading device ina parking lot. There can be energy-efficiency and even aesthetic benefits to these mountings thatare difficult to measure in an economic analysis. However, for purposes of the analysisdescribed in this report, the investigators believe that a ground-mounted solar system (e.g., in afield) is likely to be more cost-effective than a system installed on a plants roof or as a shadingdevice in a parking lot due to the fact that less hardware is required. Using guidance fromRETScreen, materials are assumed to cost $40/m and ground-mount installation (no cranes) and2

pipe installation are assumed to cost $20/m . However, BOS costs may vary widely depending2

on the type of collector installed. RETScreen suggestions for contingencies, feasibility studies,development, engineering, and training are used in the analysis.

Storage Size

Storage size can be varied significantly depending on how the system is designed. RETScreenssuggested ratio of 45.9 liters/m (which is about 1 gallon per square foot) is used for the analysis.2

It may be more cost effective in an actual installation to size the storage to meet a certainminimum load or to cover planned outage time for routine maintenance of a plants boilers.


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Storage Cost

Using the RETScreen data, un-pressurized concrete underground tanks are assumed to cost$0.28/L and un-pressurized polyethylene (PE) tanks are assumed to cost $0.18/L. Insulatedunderground un-pressurized concrete tanks are assumed to cost $0.28/L to $0.45/L. RETScreencosts seem to be a bit high a sampling of PE tank product literature found $0.15/L ($0.13/L for12 or more) for 10,550 gal/40kL PE tanks with maximum temperatures of 60C (140F).However, the investigators are using RETScreen suggestions to be conservative.

Costs Per Unit of Energy Delivered

While the costs of the various components of a solar thermal system will have a significantimpact on the total installed costs, it is the cost per unit of energy delivered that ultimately drivesthe cost-effectiveness of a solar system. For the analyses in this report, MWh is the unit ofenergy reported. Other units of energy, such as BTUs, can be used and reported by RETScreen.

Financial Indicators

RETScreen calculates several financial indicators for each scenario modeled and the followingare the indicators that are presented in this report: Pre-Tax Internal Rate of Return (IRR) or Return on Investment (ROI) represents the true

interest yield provided by project equity over its life before income tax. The investigatorsassumed 15% to be a threshold projects with an IRR below this amount are not consideredto be an attractive investment. Individual companies may have a higher IRR threshold.

Simple Payback (SPB) represents the length of time that it takes an investment to recoup itsown initial costs. The investigators assumed that a SPB above 8 years would not be likely tobe an attractive investment for most companies and a SPB below 5 years would be anattractive investment for most companies.

Net Present Value (NPV) is the value of all future cash flows, discounted at the discount rate,

in todays currency. The NPV is shown in this report because assumptions such as thediscount rate, energy cost escalation rate, and inflation rate impact the NPV but notnecessarily the IRR or SPB.

Benefit-Cost (B-C) Ratio is the basic measure of cost-effectiveness a B-C ratio above 1.0is profitable over the life of a project and below 1.0 is not profitable.

The investigators assumed that IRR and SPB are the primary screens used to evaluate projects bycompanies. RETScreen calculates several more financial indicators that are not presented in thisreport but may be of value to a RETScreen user such as year-to-positive cash flow.

Solar Fraction

The solar fraction (SF) is the percentage of the energy load that is provided by sunlight. For

example, inPoultry Process #1below, a 46% SF could be visualized in simplified terms as the200,000 gpd of 60F groundwater that flows thru the solar system and is heated up by an averageof 36.8F. A fossil fuel boiler then heats this 96.8F water to the required water temperature of140F and provides 54% of energy needed on annual basis to the heat the water.

BASE-CASE SCENARIOS

Two solar thermal systems used to preheat process water for a poultry processing plant aremodeled below. Poultry Process #1optimizes the size of a solar thermal system to be installedfor a poultry processing plant with a minimum daily hot water (60C/140F) demand of 200,000


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gallons. Poultry Process #2adjusts the size of the solar system to maximize the incentiveavailable in Delaware. For comparison purposes, these two base-case scenarios could also becharacterized as a large system (Poultry Process #1) and a small system (Poultry Process #2).

Poultry Process #1This analysis was run assuming a demand of 200,000 gpd of hot water at 60C (140F).Usually, about a 50% SF ensures that the collectors are never underutilized, even during thesummer months. RETScreen considers this when recommending a system size in this case itrecommended a SF of 46%.

Table 2: System Sizing forPoultry Process #1

Solar Fraction 46%

Collector Type & Number 3000 4'x10' flat plate collectors

Array Size 11,220 m (120,771 ft )2 2

Annual Solar Energy Delivered 7,020.41 MWh

Storage Size 514,998 liters (135,883 gallons)

The collector array for this system would cover about 2.77 acres of collector field. Anappropriate-sized parking lot or field (or combination thereof) adjacent to a processing plant willbe necessary to accommodate this large system. For storage size, RETScreen assumed 26 tankswith capacities of 20,000 liters (5,283 gallons) would be needed 6 concrete underground tanksand 20 PE tanks. The type of tank specified can vary widely. If multiple unpressurized tanks arespecified, it is assumed that they would be the same or a lower cost than the 26 tanks.

Table 3: Costs forPoultry Process #1Solar Collector Costs $ 1,458,600

Other Array Costs $ 214,867BOS Costs $ 675,666

Other Costs $ 285,469

Total Installed System Costs $ 2,634,602

As discussed above, the costs modeled forPoultry Process #1are likely at the low-end of therange of costs per energy unit (MWh) delivered.

A summary of the financial indicators calculated forPoultry Process #1are shown in Table 4.This cost-effectiveness analysis was run using the assumptions noted above, RETScreensdefault values for other parameters, and a 10% federal tax credit. As discussed below in the

Financial Incentives section, a 10% tax credit, worth $263,460 for this scenario, is the minimumincentive available in all three states on the Delmarva Peninsula.

Table 4: Financial Summary forPoultry Process #1

IRR/ROI 10.3%

SPB 9.7 years

NPV $58,152

B-C R atio 1.02


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These financial results forPoultry Process #1are unlikely to convince a poultry company toinstall a solar system due to the $2 million price tag and financial results that are below thresholdlevels assumed by the investigators. Fuel costs higher than $1.00 per gallon would make thissolar system more cost-effective. Incentives beyond the 10% federal tax credit, could also makethis solar system a more attractive investment for a poultry company.

Poultry Process #2

The Green Energy Program, available to customers in Delmarva Powers service territory inDelaware, provides grants up to 50% of the installed costs of solar thermal systems. The grantsare capped at $250,000 per facility which means that the project costs over $500,000 are noteligible for a grant. So, in order to maximize the impact of the available grant on system cost-effectiveness, a project should be sized so that the total installed costs are as close to $500,000 aspossible. The system sizing for Poultry Process #2 was adjusted to maximize the grant.

Table 5: System Sizing forPoultry Process #2

Solar Fraction 10%

Collector Type & Number 544 4'x10' flat plate collectors

Array Size 2,035 m (21,905 ft )2 2

Annual Solar Energy Delivered 1,535.25 MWh

Storage Size 93,386 liters (24,672 gallons)

Table 6: Costs forPoultry Process #2Solar Collector Costs $ 308,902

BOS Costs $ 124,740

Other Costs $ 66,420

Total Installed System Costs $ 500,062

The smaller collector array ofPoultry Process #2results in less energy delivered only 1,535MWh annually compared to the 7,020 MWh inPoultry Process #1. As modeled,PoultryProcess #2 delivers about 15% less energy thanPoultry Process #1for each dollar spent reflecting a slight benefit for the economies of scale for a larger system likePoultry Process 1.

The results for the financial analysis onPoultry Process #2, calculated with a $250,000 grantand 10% federal tax credit (total incentives of $275,006), is shown in Table 7.

Table 7: Financial Summary forPoultry Process #2IRR/ROI 23.0%

SPB 4.5 years

NPV $138,436

B-C R atio 1.28

As modeled,Poultry Process #2would likely be an attractive investment to some companies. Inaddition, for companies that are unfamiliar with solar thermal technologies, a smaller project likePoultry Project #2could be more attractive investment until they become more comfortable with


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solar thermal technologies. Because solar thermal installations are usually expandable, acompany could choose to make a smaller initial investment in a system such asPoultry Project#2and then expand the system later. However, financial incentives may not be available for theexpansion phases of a project and the total costs for a multi-phase project would likely be higherthan for single, one-time installation.

SENSITIVITY ANALYSES

A number of sensitivity analyses were performed to determine how different factors impact thecost-effectiveness ofPoultry Process #1andPoultry Process #2. For reference, Tables 8 and 9have the constant parameters, unless otherwise noted, used in the analyses described below.

Table 8: Constant Parameters, Unless Otherwise Noted, forPoultry Process #1Cost of No . 6 fuel oil $1.00 Annual electricity consumed 67.25 MWh

Debt ratio 0% Specific yield 626 kWh/m 2

Retail price of electricity $0.10/kWh System efficiency 38%

Energy cost esca lation rate 1.0% Solar fraction 46%

Inflation 2.0% Annual Renewable heat delivered 7,020.41 MWhDiscount rate 10.0% Initial costs $2,634,602

Project life 25 years Incentives/grants $0

Collector area 11,220 m Annual costs/debt $7,8252

Storage capacity 514,998 liters Annual savings $253,532

Table 9: Constant Parameters, Unless Otherwise Noted, forPoultry Process #2Cost of No . 6 fuel oil $1.00 Annual electricity consumed 14.70 MWh

Debt ratio 0% Specific yield 755 kWh/m 2

Retail price of electricity $0.10/kWh System efficiency 46%

Energy cost esca lation rate 1.0% Solar fraction 10%

Inflation 2.0% Annual Renewable heat delivered 1,535.25 MWh

Discount rate 10.0% Initial costs $500,062

Project life 25 years Incentives/grants $250,000Collector area 2,034.6 m Annual costs/debt $5,8702

Storage capacity 93,386 liters Annual savings $55,443

Collector Array Tilt and Azimuth

The tilt of solar collectors can be varied from the latitude (39:30) down to 20 and up to 40before losing just over 3% (0.02MWh/m /yr) of solar radiation in the plane of the collectors. In2

addition, the azimuth can be varied +/-15 before losing about 1.6% (0.01MWh/m /yr) of solar2

radiation. These relatively small losses in power allow some flexibility in siting the array.

Impact of Collector-Type on Array Size

To determine if the use of different types of collectors would change the size of the solar array inPoultry Process #1, three other collectors in addition to the Heliodyne Gobi 410 were modeledwith RETScreen.

Table 10: Impact of Collector-Type on Array Size forPoultry Process #1Type of Collector # of Collectors Array Size

Heliodyne Gobi 410s 3,000 11,220 m 2

SCP Typ A 1,280 13,696 m 2

Swiss Solar Tech Multisol M240 5,400 10,800 m 2

Thermom ax Solamax AST50 2,096 14,944 m 2


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As shown in Table 10, array sizes do vary depending on the type of collector used. However,the differences in array sizes are not significant enough to have a real impact on the area neededfor an installation.

Cost-Effectiveness of Exceeding a Solar Fraction of 50%

Doubling the size of the collector array ofPoultry Process #1to 6,000 collectors and doublingthe storage size to 1,030,000 liters does not improve the cost-effectiveness of the system. Thissystem size has a 72% SF and delivers 11,082 MWh of solar energy but the SPB is 2 yearslonger than in the base case ofPoultry Process #1. This unattractive result is because on somedays the energy delivered by collector array would now exceed the assumed daily load (200,000gallons per day) and the array would be underutilized.

Storage Size

Poultry Process #1assumes 45.9 liters of storage is needed for each m of collector (about 12

gallon per square foot). This storage size results in the system delivering 7,020.41 MWh/yr ofsolar energy. If a higher storage size is used, for example 757,000 liters (200,000 gallons) or67.48 L/m , the system delivers 7,255.33 MWh or a 47% SF. Thus increasing storage by as2

much as 50% only increases the solar fraction by a percentage point. Depending on the cost ofstorage, this would probably not result in improved economics. However, if there is ever anydowntime when the plant is offline for holiday or maintenance, then increased storage makesmore economic sense. This is because the solar array would be able to continue to collect andstore heat even when the process plant is down. Most designers of solar thermal systems willconsider this and specify one or two days of storage. The optimum storage size will depend onsite-specific data such as anticipated sequential days of downtime and installed cost of storage.

Discount Rate Sensitivity

To demonstrate the impact of the assumed discount rate on cost-effectiveness, sensitivityanalyses using different discount rates for Poultry Process #2 are shown in Table 11.

Table 11: Discount Rate Sensitivity forPoultry Process #2Discount rate 6.0% 8.0% 10.0% 12.0% 14.0%

Pre-tax IRR/ROI 20.7% 20.7% 20.7% 20.7% 20.7%

SPB 5.0 years 5.0 years 5.0 years 5.0 years 5.0 years

NPV $443,971 $325,104 $235,651 $167,032 $113,430

(B-C) Ratio 1.89 1.65 1.47 1.33 1.23

The results in Table 11 indicate that the discount rate impacts NPV and the B-C Ratio, but itdoes not impact the IRR and SPB. If the NPV is an important financial factor for an individualcompany, then using the appropriate discount rate in a customized analysis for that company willbe necessary.

Sensitivity Analyses for Combinations of Incentives, Fuel Costs, and System CostsEffective January 1, 2006 until December 31, 2007, the federal business solar energy tax creditincreases from 10% to 30% of total installed costs. Because the tax credit rate returns to 10% in2008, the analyses below are run with both a 10% and 30% tax credit and the tax credit is


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calculated on the costs remaining after Delawares Green Energy Program grant has beensubtracted from the total installed costs (for more detail on the tax credit and the Green EnergyProgram, see Section 8: Financial Incentives).

As discussed above, the assumed cost of No. 6 fuel oil for base-case scenarios is $1.00/gallon(excluding taxes) with an annual escalation rate of 1%. Recent trends in oil prices suggest thatthe prices will not return to pre-2005 levels for the foreseeable future. Therefore, the sensitivityanalyses on No. 6 fuel oil price are skewed toward higher prices. The results of the analyses onfuel price are shown in Table 12 and Table 13.

Table 12: Sensitivity Analyses for No. 6 Fuel Oil Price & Incentives for Poultry Process #1

10% Federal Tax Credit($263,460)

No. 6 Fuel Oil Price $0.90/gal $1 .00/gal $1.10 /gal $1.20/ga l $1.30 /gal $1.40 /gal

Pre-Tax IRR/ROI 9.0% 10.3% 11.6% 12.8% 14.0% 15.2%

SPB 10 .8 yea rs 9.7 yea rs 8.7 yea rs 8.0 yea rs 7.4 yea rs 6.8 yea rs

NPV $ (192 ,691) $58 ,152 $308,995 $559,837 $810,680 $1,061 ,523

B-C Ratio 0.93 1.02 1.12 1.21 1.31 1.40

$250,000 Green Energy Program Grant and 10% Federal Tax Credit($488,460)


Pre-Tax IRR/ROI 10.2% 11.6% 13% 14.3% 15.6% 16.9%

SPB 9.7 years 8.7 years 7.9 years 7.2 yea rs 6.7 yea rs 6.2 years

NPV $32 ,309 $283,152 $533,995 $784,837 $1,035,680 $1 ,286,523

B-C Ratio 1.01 1.11 1.20 1.30 1.39 1.49



Pre-Tax IRR/ROI 12.2% 13.8% 15.3% 16.8% 18.3% 19.7%


NPV $334,230 $585,073 $835,916 $1,086,758 $1,337,601 $1,588, 444

B-C Ratio 1.13 1.22 1.32 1.41 1.51 1.60



Pre-Tax IRR/ROI 13.6% 15.3% 17.0% 18.6% 20.2% 21.8%


NPV $509,230 $760,073 $1,010,916 $1,261,758 $1,512,601 $1,763,444

B-C Ratio 1.19 1.29 1.38 1.48 1.57 1.67


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The results in Table 12 suggest the cost-effectiveness threshold for larger projects, likePoultryProcess #1, appears to be a combination of a 30% tax credit and No. 6 fuel oil prices in the $1.10to $1.30 per gallon range and above. In addition, because Green Energy Program grants arecapped at $250,000 and a 30% tax credit is worth considerably more than that amount on largeprojects, the cost-effectiveness of larger projects will be similar in all three states on theDelmarva Peninsula with or without a Green Energy Program grant.

Table 13: Sensitivity Analyses for No. 6 Fuel Oil Price & Incentives for Poultry Process #2



Pre-Tax IRR/ROI 9.5% 11.0% 12.4% 13.8% 15.2% 16.6%

SPB 10 .2 yea rs 9.1 yea rs 8.2 yea rs 7.4 yea rs 6.8 yea rs 6.3 yea rs

NPV $(127,552) $(86,564) $(45,577) $(4,589) $36,399 $77,386

B-C Ratio 0.74 0.83 0.91 0.99 1.07 1.15



Pre-Tax IRR/ROI 20.4% 23.0% 25.5% 28.0% 30.6% 33.1%


NPV $97,448 $138,436 $179,423 $220,411 $261,399 $302,386

B-C Ratio 1.19 1.28 1.36 1.44 1.52 1.60



Pre-Tax IRR/ROI 12.8% 14.6% 16.3% 18.1% 19.7% 21.4%


NPV $(27,539) $13,449 $54,436 $95,424 $136,412 $177,399

B-C Ratio 0.94 1.03 1.11 1.19 1.27 1.35



Pre-Tax IRR/ROI 26.2% 29.4% 32.6% 35.9% 39.1% 42.3%


NPV $147,461 $188,449 $229,436 $270,424 $311,412 $352,399

B-C Ratio 1.29 1.38 1.46 1.54 1.62 1.70

The most attractive financial results in Table 13 are the scenarios run with the $250,000 GreenEnergy Program grants which show very favorable results even with low fuel oil prices as well


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as for higher fuel oil prices when the federal tax credit is 10%. However, similar to the results inTable 12, the cost-effectiveness threshold forPoultry Process #2in Table 13 appears to be acombination of a 30% tax credit and No. 6 fuel oil prices in the $1.10 to $1.30 per gallon range(with no Green Energy Program grants).

As discussed above, the assumed costs per unit of energy (MWh) delivered in the base-casescenarios are likely to be at the low end of the range of probable costs. To determine how theinstalled costs per unit of energy (MWh) delivered in the first year of service would impact thecost-effectiveness ofPoultry Process #1,a range of costs (assumed to produce the same amountof energy annually 7020 MWh) and selected incentives are analyzed in Tables 14 and 15.

The investigators used the measure installed costs/MWh delivered in the 1st year of service to compare and contrast various installed cost scenarios and does not reflect the actual costs perunit of energy delivered over the lifetime of a solar system (which would be considerably lower).

year1The costs/MWh figures quoted here can ONLY be compared to other scenarios within thisreport and are meaningless when compared to scenarios outside this report. The assumed costsfor the two base-case scenarios are at the low-end of the range of total installed costs per unit ofenergy (MWh) delivered in the first year of service.

Table 14: Sensitivity Analyses for Total Installed Costs & Incentives for Poultry Process #1

(Assumptions include $1.00 per gallon No. 6 fuel oil and 7020 MWh delivered annually)

30% Federal Tax Credit

Total Installed Costs $2,634,602 $3,251,702 $3,992,222 $4,732,742 $5,473,262

year1Costs /MWh Delivered $375.30 $463.21 $568.69 $674.18 $779.67

Incentives/Grants $790,381 $975,510 $1,197,666 $1,419,822 $1,641,978

Pre-Tax IRR/ROI 13.8% 10.8% 8.3% 6.5% 5.0%

SPB 7.5 years 9.3 years 11.4 years 13.5 years 15.6 years

NPV $585,073 $153 ,102 $ (365,262 ) $ (883 ,626) $ (1 ,401,990 )

B-C Ratio 1.22 1.05 0.91 0.81 0.74

$250,000 Green Energy Program Grant and 30% Federal

solar thermal applications in the delmarva poultry industry

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