Solar Power Pencils Out for this California Dairy

March 18, 2015 08:06 PM
Solar Power Pencils Out for this California Dairy

Producer Jared Fernandes has saved $125,000 in his operation’s first year of solar power.

California dairy producer Jared Fernandes and his four brothers are so pleased with the results of the solar panel system they constructed on their Fern Oak Dairy in December 2013, they’re adding a second solar facility.

“In the first year, the system has saved us $125,000 in utility costs,” Fernandes said today, speaking as part of a solar power panel at Western United Dairymen’s (WUD) 2015 annual convention in Yosemite, Calif.

In the year it’s been in operation, the 1 MW solar facility has “done exactly what it said it would do,” in output and savings, added Fernandes.

The Fernandes brothers operate three dairies and milk 6,500 cows in the Tulare-Tipton area of the San Joaquin Valley.

Their operation is one of six California dairies that have installed solar power, said Cara Gillen of the U.S. Environmental Agency, who joined Fernandes as part of the workshop session. Another 12 Golden State dairies are slated to install solar power facilities over the next year, she added, which will produce 180 MW.

Economic incentives, long-term energy price stabilization and environmental benefits are driving the solar power interest among dairies.

“If 50% of California’s dairies installed solar, it would produce 450 MW of energy,” Gillen said.

More Economic Now

Fernandes said he was first approached about solar power for his dairy six to seven years ago, but with an $8 million price tag, the project didn’t pencil out. Since then, solar power installation and equipment costs have dropped, making the renewable energy system far more feasible.

In 2013, the Fernandes family obtained three bids to construct a solar facility and ran the numbers again. “This time they penciled out,” Fernandes said.

The dairy’s initial solar project is a tracking system of 3,600 panels covering 5 acres. The cost initially was projected at $2.9 million with a rebate of 3.5 cents for every kWh the project produces. The Fernandes clan chose leasing over purchasing for the original project as well as the one now under construction. In the leasing deal with Farm Credit for the dairy’s first solar facility, the project’s tax credits went to the financial institution, but the Fernandes brothers saw their interest rate lowered to a negative 2.5%. That lowered the overall cost to $2.6 million, Fernandes said.  Moreover, because it supports government renewable-energy goals, the project did not raise property taxes.

The dairy sells its “low voltage” solar power to Southern California Edison, and buys back power from the utility. The power exchange works out in favor of the dairy.

Fernandes also likes the public relations aspect of the solar project. “It shows we’re sustainable,” he said.

Fern Oak Dairy's second solar project should be completed late this year.

What to Keep in Mind

Mike Pezone of PG&E, California’s largest utility, rounded out the panel. When he asked the audience of about 35 dairy producers how many were interested in adding solar power to their operations, a third of them raised their hands.

Fernandes urged those considering solar power to seek bids. He said $1 million separated the high from the low bid on his project. Producers should also be aware there are likely to be infrastructure upgrades and utility interconnection costs they’ll have to pay. The Fernandes brothers spent $100,000 to improve infrastructure as part of their dairy's original solar construction.

About 300 California dairy producers and industry representatives are attending WUD’s annual meeting, which ends Friday.

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