Why Solar for Poultry Operations? - Santrev › wp-content › uploads › 2019 › 07 › ... · the poultry sector via the Poultry Digest in June 2019 •Headed by Justin Brown

Why Solar for Poultry Operations?

S a n t r e v S o l a r

S o l a r E n e r g y S p e c i a l i s t s

Agenda

• Introductions

• Why Solar Energy in the Poultry Game is a compelling fit

• Santrev Solar & Solar Choice – our recent launch

• The Opportunity for Poultry Farmers

• Mogumber – a showcase for Solar Energy

• Santrev Solar Process and Outcomes for the client

• Images of Mogumber

• Testimonials

• Procurement options reviewed – outright purchase, leasing and PPA

• Q&A

• How to get started

One Integrated Team

Luke Trevanion

Director

Santrev

Justin Brown

CEO

Santrev Solar

Jeff Sykes

Chief Strategist

Solar Choice

Erich Illemann

Sales Manager

Santrev

Why Solar Energy for Poultry Operations

Solar Energy…..the enabler• Poultry farms are ideal for solar energy because peak

demand (load) = optimal solar generation during the day

• Increasing consumer demand and awareness of carbon emissions on poultry operations is influencing purchasing decisions

• Globally solar systems particularly solar arrays have fallen in price together with generous government subsidies making solar energy investment highly attractive

• Payback periods of < 4 years entirely feasible for a standard 6-8 shed broiler farm

• Positive cashflow for the operation from Day One under all procurement methods

30 minute interval data highlighting shed load profile

driven by bird cycles throughout the year

Consumer Awareness in the Poultry Sector

Consumer Awareness in the Poultry Sector and Behaviors Consumer led change in Poultry practices

• Consumers of poultry are increasingly aware of Poultry practices and demanding action across the supply chain across a range of motivations -> see Buyer Behavior heat map

• This consumer action at the Retail end is both an opportunity and threat to the Supply Chain

• Increasingly consumers care about Poultry operations carbon footprint and more importantly its actions to offset carbon emissions

• Processors and Aggregators have a marketing opportunity to differentiate their product in consumers’ minds by indicating a carbon offset on their products

Local Food Consumers: How Motivations and Perceptions Translate to Buying Behaviourhttp://www.choicesmagazine.org/magazine/article.php?article=109AAEA – Agricultural & Applied Economics Association 2008

http://www.choicesmagazine.org/magazine/article.php?article=109

Historic Price Index – Construction Costs (VIC)

100kw Solar System Prices - VIC• Prices per Watt installed have fallen 40c or

26% in 5 years – now stabilizing

• Cost reduction has been largely driven by China’s dominance of solar array production and its dumping of panels on world markets

• Government subsidies remain attractive with some reduction in FIT as State govt budget’s strained

• Through our competitive tender process we are able to frequently beat the current market index for solar installations (EPC) e.g. MOG was installed for 91 CPW

Our Recent Launch

Santrev Solar• Recently launched by Santrev and announced to

the poultry sector via the Poultry Digest in June 2019

• Headed by Justin Brown in partnership with Luke Trevanion

• A response to Grower concern to take back control of escalating energy bills

• Poultry operations well suited to solar energy production given day time load demand profile

• Highly attractive government STC’s and LGC’s coupled to tier one solar systems

• Investment paybacks < 4 years

• Early interest is encouraging and validates our mission

Powerful Combination for the Poultry Sector

Santrev Solar and Solar Choice• Solar Choice – the largest commercial solar broker

in Australia with hundreds of commercial installations facilitated or developed

• Santrev Solar leverages the Santrev Shed construction pedigree to introduce solar energy solutions to the poultry grower and integrator market

• Providing End to End “turnkey solutions”

• From 100KW to 1 MW system capability

• Australia wide

• Bringing together Santrev’s poultry reputation with Solar Choice’s commercial solar broker expertise for powerful combination and force for change

Experience in Poultry and Other Ag Sectors

What We Do For Our Cl ients – An Integrated Approach

Data Gathering

Data Analysis

Business Case

System Design

Tender Management

Tender Eval & Award

Procurement

Installation

Commissioning & Start Up

Post Installation Support

We gather up the energy data (bills, 30 second interval data)

Engineers evaluate the Farm’s load profile across the bird cycles to forecast system requirements

We prepare a business case and present to the client to

demonstrate the potential of solar $

Engineers finalize the “to be built” solar system design optimizing

system size with load profile

We conduct a tender on your behalf of up to 9 installers who bid for your

work to drive the best outcome

We evaluate the tender responses comparing apples with apples to

identify the preferred sub-contractor

We award the EPC contract to the preferred sub-contractor and manage the solar installation on the Grower’s behalf

We supervise & oversee the installation of the solar system on site through our project

management services ensuring the installer is kept to account on your behalf

We ensure the project is delivered on time, on budget and commissioning and start up are

completed to the Grower’s satisfaction

We are the Grower’s first port of call if the system is down or under-performing which we monitor through our remote diagnostics system ensuring

your ROI is achieved over many years

Santrev Solar’s costs are built into the final

CPW

Mogumber Showcase

Project Precis• Mogumber 2 hours North of Perth. W.A

• 3 x 8 shed poultry Greenfields site operated by SBT Properties

• Contracted to the processor for 10 years

• All 3 farms currently operating

System Requirements• 3 x Fronius Eco 27 KW solar inverters per farm

• 303 x 330-Watt Trina poly panels per farm (3 x farms)

• 10kW – Ground Mount for bore pump

• 30kW – Roof Mount for Maintenance Shed

• Installation to start early Mar 19 and finish < EOFY @ bird cycles

Mogumber – Process and Outcomes Data Gathering

Data Analysis

Business Case

System Design

Tender Management

Tender Eval & Award

Procurement

Installation



Our energy data analysis utilised 30 minute interval data for the farms to estimate future energy consumption when farm is at full capacity

Our analysis referenced average sunlight data from Wannamal weather station and knowledge of pricing across similar projects


Data Analysis

Business Case

System Design

Tender Management

Tender Eval & Award

Procurement

Installation



Business Case

A business case was developed to identify Return on Investment and Payback metrics matching the load profile to the best system size to optimise returns using Tier 1 equipment with 10 year warranties for inverters and 25 year warranties for panels

Expected Cash Flows - Cash Upfront

Year 0 Year 1 Year 2 Year 3 Year 7 Year 10 Year 20 Total Years

Costs

Total project cost (ex GST) $310,500

Benefits

Energy bill reduction* $88,492 $88,122 $87,749 $86,209 $85,008 $80,783 $1,694,870

Tax benefit from depreciation $8,004 $8,004 $8,004 $8,004 $8,004 $8,004 $160,075

Net Cashflows $310,500 $96,496 $96,126 $95,752 $94,213 $93,012 $88,787 $1,544,445

*Conservatively assumes zero increase in energy prices

Investment Appraisal

Energy Price Inflation 0%

IRR 31%

Payback Period (years) 3.2

Energy Appraisal

Suggested system size 340 kW

Average daily output per kWp 4.40 kWh

First year output 545,709 kWh

PV offset rate 0.2051$ /kWh

Total Carbon Emission Offset 17,285 t

3.2 Year Payback!

Offsetting 17,000

tonnes in GG

emissions


Data Analysis

Business Case

System Design

Tender Management

Tender Eval & Award

Procurement

Installation



Competitive Tender

We accessed solar choice’s curated network which includes almost all the major commercial installers in Australia to ensure the best value for money and technical solution for MOG. We conducted a national tender on behalf of the client and received 9 bids.


Data Analysis

Business Case

System Design

Tender Management

Tender Eval & Award

Procurement

Installation



Tender Evaluation and Award

Along with the client we evaluated the bids using the same evaluation criterion for all 9 bidders

The installers were awarded the contract as sub-contractor to Santrev Solar.

Flexible approach Highly

Recommended!

#1


Data Analysis

Business Case

System Design

Tender Management

Tender Eval & Award

Procurement

Installation



Procurement, Installation and Commissioning

Santrev Solar oversaw the project ensuring the sub-contractor met schedule milestones and bird cycle windows. Project expertise was applied utilising a high level EPC schedule, cost management, RACI & weekly project meetings & status report for all stakeholders.


Data Analysis

Business Case

System Design

Tender Management

Tender Eval & Award

Procurement

Installation



Final Result

On June 12th all 340kw systems went live and started generating solar energy for the client creating nearly $100,000 per annum in energy and tax savings for the Owners with a System Payback of 3.2 Years!!


Data Analysis

Business Case

System Design

Tender Management

Tender Eval & Award

Procurement

Installation



Internet Enabled System Performance Monitoring

Internet enabled Fronius inverter app enabling performance monitoring from anywhere around the world!


Data Analysis

Business Case

System Design

Tender Management

Tender Eval & Award

Procurement

Installation



Testimonials

The Owners of SBT Properties were delighted with the results and happy to recommend Santrev Solar’s service.

“As energy costs continue to rise, Solar power could potentially deliver long term cost savings to our business. Our suppliers have designed the solar system to suit our business needs and size, using top quality products with comprehensive warranties. We are looking at a payback period of 3.2 years. Investing in solar power not only reduces monthly operating costs and improve margins but helps us being environmentally and socially responsible. A business’ decision to go solar is both a “gain and give” situation.Moreen Manjita Administration -Mogumber

“By investing in solar we can help our business in many ways. First, and most importantly, we could boost our bottom line with savings on electricity and operating costs. Our system designers have advised that day time running cost can be greatly reduced as well as lowering demand charges for the size of business we operate. Going Solar isn’t just a financial decision, we are responsible for the influence we have on the environment, switching our business to the commercial solar panel strengths our commitment. Solar panel systems are a smart capital investment for any business. They have short term payback period, provide steady financial return and very little ongoing maintenance.”Tony Young Director –Western Riverlands Poultry, Mogumber Farm

Solar Energy Procurement Options

Outright Purchase

•Ownership of the system with no ongoing payments or interest

•Easy to understand with no 3rd party financiers involved

•Tax Depreciation of 5% per annum a tax offset

Operating Lease / Rental Agreement

• Repayments fixed through length of contract

• Repayments potentially tax deductible

•Ownership transfers at end of the lease along with benefits of free energy

Solar Power Purchase Agreements PPA

•No upfront investment

• Preserves Gower’s capital for redeployment elsewhere in the operation

•Immediate energy savings and free cashflows

•No risks of ownership or maintenance (borne by 3rd party owner)

Cons• Large initial capital expenditure • Growers may have competing capital priorities

Cons• No ownership until rental period/payments & terms met• Transfer of ownership at end of lease can be uncertain• Asset and Liability of solar investment appear on Grower’s balance sheet

Cons• No ownership during term of PPA• Minimum feasible system size 100KW+

Solar Energy PPA Model

Solar Power Purchase Agreement How it works? A financier provides the funds and owns the system for the duration of the contract, after which the Grower would assume ownership. The PPA provider charges only for the energy which is generated by the system, meaning they have a responsibility to ensure the system installed is high quality and well-maintained. The PPA Provider assumes ownership of all risk relating to operating a solar system including maintenance, product warranties, installation workmanship during the lifetime of the contract.

Benefits of a Solar PPA • No capital expenditure required • Instant energy bill savings from completion of installation • Energy costs remain an operational expense, with associated tax benefits • All operational and maintenance costs and risks remain with the system owner during the duration of the contract • System owner applies high standards to quality of system and workmanship to ensure minimal maintenance costs

Solar Energy PPA Model versus Other Options

PPA Contract Term 2 x 100kw systems

Upfront Cost Rate First Year Saving 20-Year Saving

Cash Upfront ($220,000) $63,345 $1,337,481

5 Year Lease $0 7% $22,520 $1,268,797

10 Year PPA $0 12.5c per kWh $17,102 $1,019,962

15 Year PPA $0 11.6c per kWh $20,068 $828,509

Assuming 2 x 8 shed broiler farms in SEQ

SEQ Poultry Grower can save $20,000 a year with no upfront costs and no operational risk

How To Get Started

• Head to our website www.santrev.com.au/santrev-solar

• Enter your contact details which will be sent directly to Santrev Solar for engagement

• Email [email protected] or call Justin on 0404 703 118

• Start the conversation NOW. Take back control of your energy costs today and enjoy the benefits of free energy and cash!

mailto:[email protected]

Documents

Why Solar for Poultry Operations? - Santrev › wp-content › uploads › 2019 › 07 › ... · the poultry sector via the Poultry Digest in June 2019 •Headed by Justin Brown