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Jamaica Insulation & Duct Works pioneers photovoltaic energy in manufacturing
By Oliver Hill, Business Editor
Wednesday, August 26, 2009
Jamaica Insulation & Duct Works completed the installation of an 11 kW photovoltaic system on Tuesday, August 11 in an effort to address high energy costs cutting into the manufacturer's bottom line. The installation was a joint project between a new Kingston-based clean energy company, Renewable Energy Sources, and US-based industry veteran, Sky Energy.
Alfredo Young discusses the merits of photovoltaic technology atop the roof of his manufacturing plant in Half-Way-Tree.
While legislators have yet to implement net metering, a move that would guarantee decentralised clean energy producers a buyer for the excess power they generate and push the market towards similar independent initiatives, the installation at Jamaica Insulation & Duct Works proves that on-site photovoltaic generation is viable, even under existing conditions.
The company's owner and managing director, Alfredo Young, obtained a $10-million bridge loan from Scotiabank and a US$17,500 commercial loan from RBTT to finance the installation as well as working capital needs. Scotia in turn sourced a low-interest loan from the Development Bank of Jamaica (DBJ) to cover the investment under DBJ's $1-billion fund dedicated to renewable energy financing. The total cost of the 11 kW system was US$70,000, or just over
$6 million.
"Without the banks' help, the economy would be crumbling at a faster pace," said Young. "In recent interactions I've been very pleased with the response from the banks in trying to abate the impending recession." Founded in 1977, Jamaica Insulation & Duct Works earns over $50 million in annual revenue, and manufactures air conditioning ducts for entities such as the US embassy and Secrets hotel, which is under construction in Montego Bay. The company has just over
80 employees.
Asked what gave him the conviction to become a pioneer in Jamaica's renewable energy landscape, Young responded, "I didn't say I believe in it, I just don't believe in JPS." Jamaica Public Service (JPS) metre readers have been to the 13-15 Molynes Road manufacturing facility twice since the installation was complete to read their two metres. The digital displays on the four inverters which convert solar energy to electricity, meanwhile count the kilowatt hours generated by the 51 panels sitting on the plant's roof, providing a continuous accounting of the savings that will accrue to the company once the system is paid off. Young hasn't received a JPS bill since the system was installed and thus cannot yet quantify the savings resulting from his investment on a monthly basis, but based on a conservative estimate he said his electricity costs should decline by 70 per cent. "Two things stifle manufacturing growth and production in Jamaica: labour costs and energy costs.
So we are trying to alleviate one of those costs," said Young, noting he was paying on average $130,000 monthly for electricity when the plant was operating at a minimum production level.
The duct-making machinery run on solar energy at Jamaica Insulation & Duct Works.
JPS, in a written response to Business Observer queries, said it supports legislation in the works to implement net billing and
net metering:
"JPS and the Office of Utilities Regulation (OUR) are now finalising plans for a Standard Offer Contract (SOC) to facilitate the implementation of a net billing policy, which will facilitate more local renewable energy projects as part of the effort to reduce Jamaica's dependence on imported oil.
Net billing will allow JPS customers who own renewable energy generators, such as wind turbines and photovoltaic (solar) systems, to generate electricity for personal use, as well as sell excess energy to JPS at wholesale or "avoided cost" prices set by the OUR. In the event that the customer needs to get electricity from the grid, however, he or she will purchase electricity at the existing rates, as outlined in the Tariff Schedule.
"With Net Metering, on the other hand, the renewable energy (wind or solar) that a customer generates for himself is metered, so that any excess electricity that is generated can be credited (or banked) to the customer's account for future consumption. In practice, the meter will spin backward to compensate for any excess electricity generated; or forward, if the customer's private supply is insufficient, and he/she needs additional electricity from JPS. In effect, the customer is selling electricity to JPS at the retail rate."
The inverters which convert solar energy to electricity at Jamaica Insulation & Duct Works.
Perhaps once Young can begin offsetting his ongoing electrical needs met by JPS through net metering, his faith will be renewed in the utility.
Renewable Energy Sources is in talks with three or four other local businesses for photovoltaic installations worth between US$70,000 and US$2 million, said the company's founder and CEO Nicholas Hanna. "You can size the system for any power demand," Hanna said. One potential customer is Burger King Jamaica. Hanna said he is in talks with Burger King's headquarters in Miami to install a small system, similar to Young's in capacity, at a Burger King outlet in Jamaica as a pilot project. Depending on its success, systems would be installed at other restaurants the company operates across the island.
Another potential major customer that has expressed interest is Harbour Cold Storage, which would require a system that produces nearly 500 kW at a price tag of around US$2 million.
The two major challenges Renewable Energy Sources is facing are financing for its potential clients and the lack of net metering legislation, said Hanna, who claimed the $5-million disbursements the DBJ has made available from its renewable energy fund are insufficient for most businesses, and are geared towards residential customers rather than the company's focus market. "The people more eager to reduce electric costs are business people," Hanna stated. He noted that the company has met with the Ministry of Energy and has been assured that it has its support on net metering legislation which is in the works. Minister of Energy and Mining James Robertson could not be reached for comment.
DBJ director Barclay Ewart, meanwhile, told the Business Observer there was no $5-million cap on funds from the renewable energy fund, but rather that those seeking capital from the facility would be awarded through their commercial banking relationships based on standard eligibility criteria. Young, who claimed he was cleared for the loans based on his "winning personality" as well as the company's track record, said the availability of financing was a crucial factor in his decision to invest in solar power.
http://www.jamaicaobserver.com/magaz...THE_FUTURE.asp
By Oliver Hill, Business Editor
Wednesday, August 26, 2009
Jamaica Insulation & Duct Works completed the installation of an 11 kW photovoltaic system on Tuesday, August 11 in an effort to address high energy costs cutting into the manufacturer's bottom line. The installation was a joint project between a new Kingston-based clean energy company, Renewable Energy Sources, and US-based industry veteran, Sky Energy.
Alfredo Young discusses the merits of photovoltaic technology atop the roof of his manufacturing plant in Half-Way-Tree.While legislators have yet to implement net metering, a move that would guarantee decentralised clean energy producers a buyer for the excess power they generate and push the market towards similar independent initiatives, the installation at Jamaica Insulation & Duct Works proves that on-site photovoltaic generation is viable, even under existing conditions.
The company's owner and managing director, Alfredo Young, obtained a $10-million bridge loan from Scotiabank and a US$17,500 commercial loan from RBTT to finance the installation as well as working capital needs. Scotia in turn sourced a low-interest loan from the Development Bank of Jamaica (DBJ) to cover the investment under DBJ's $1-billion fund dedicated to renewable energy financing. The total cost of the 11 kW system was US$70,000, or just over
$6 million.
"Without the banks' help, the economy would be crumbling at a faster pace," said Young. "In recent interactions I've been very pleased with the response from the banks in trying to abate the impending recession." Founded in 1977, Jamaica Insulation & Duct Works earns over $50 million in annual revenue, and manufactures air conditioning ducts for entities such as the US embassy and Secrets hotel, which is under construction in Montego Bay. The company has just over
80 employees.
Asked what gave him the conviction to become a pioneer in Jamaica's renewable energy landscape, Young responded, "I didn't say I believe in it, I just don't believe in JPS." Jamaica Public Service (JPS) metre readers have been to the 13-15 Molynes Road manufacturing facility twice since the installation was complete to read their two metres. The digital displays on the four inverters which convert solar energy to electricity, meanwhile count the kilowatt hours generated by the 51 panels sitting on the plant's roof, providing a continuous accounting of the savings that will accrue to the company once the system is paid off. Young hasn't received a JPS bill since the system was installed and thus cannot yet quantify the savings resulting from his investment on a monthly basis, but based on a conservative estimate he said his electricity costs should decline by 70 per cent. "Two things stifle manufacturing growth and production in Jamaica: labour costs and energy costs.
So we are trying to alleviate one of those costs," said Young, noting he was paying on average $130,000 monthly for electricity when the plant was operating at a minimum production level.
The duct-making machinery run on solar energy at Jamaica Insulation & Duct Works.JPS, in a written response to Business Observer queries, said it supports legislation in the works to implement net billing and
net metering:
"JPS and the Office of Utilities Regulation (OUR) are now finalising plans for a Standard Offer Contract (SOC) to facilitate the implementation of a net billing policy, which will facilitate more local renewable energy projects as part of the effort to reduce Jamaica's dependence on imported oil.
Net billing will allow JPS customers who own renewable energy generators, such as wind turbines and photovoltaic (solar) systems, to generate electricity for personal use, as well as sell excess energy to JPS at wholesale or "avoided cost" prices set by the OUR. In the event that the customer needs to get electricity from the grid, however, he or she will purchase electricity at the existing rates, as outlined in the Tariff Schedule.
"With Net Metering, on the other hand, the renewable energy (wind or solar) that a customer generates for himself is metered, so that any excess electricity that is generated can be credited (or banked) to the customer's account for future consumption. In practice, the meter will spin backward to compensate for any excess electricity generated; or forward, if the customer's private supply is insufficient, and he/she needs additional electricity from JPS. In effect, the customer is selling electricity to JPS at the retail rate."
The inverters which convert solar energy to electricity at Jamaica Insulation & Duct Works.Perhaps once Young can begin offsetting his ongoing electrical needs met by JPS through net metering, his faith will be renewed in the utility.
Renewable Energy Sources is in talks with three or four other local businesses for photovoltaic installations worth between US$70,000 and US$2 million, said the company's founder and CEO Nicholas Hanna. "You can size the system for any power demand," Hanna said. One potential customer is Burger King Jamaica. Hanna said he is in talks with Burger King's headquarters in Miami to install a small system, similar to Young's in capacity, at a Burger King outlet in Jamaica as a pilot project. Depending on its success, systems would be installed at other restaurants the company operates across the island.
Another potential major customer that has expressed interest is Harbour Cold Storage, which would require a system that produces nearly 500 kW at a price tag of around US$2 million.
The two major challenges Renewable Energy Sources is facing are financing for its potential clients and the lack of net metering legislation, said Hanna, who claimed the $5-million disbursements the DBJ has made available from its renewable energy fund are insufficient for most businesses, and are geared towards residential customers rather than the company's focus market. "The people more eager to reduce electric costs are business people," Hanna stated. He noted that the company has met with the Ministry of Energy and has been assured that it has its support on net metering legislation which is in the works. Minister of Energy and Mining James Robertson could not be reached for comment.
DBJ director Barclay Ewart, meanwhile, told the Business Observer there was no $5-million cap on funds from the renewable energy fund, but rather that those seeking capital from the facility would be awarded through their commercial banking relationships based on standard eligibility criteria. Young, who claimed he was cleared for the loans based on his "winning personality" as well as the company's track record, said the availability of financing was a crucial factor in his decision to invest in solar power.
http://www.jamaicaobserver.com/magaz...THE_FUTURE.asp