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Solar installation at Gloucester Marine Terminal nearing completion

by Daniel Jalil | October 10, 2011

The Gloucester Marine Terminal in Gloucester City, NJ, expects the new large photovoltaic solar installation on the roofs of two of its main buildings, which it announced undertaking June 21, to be fully operational by Oct. 31.

Workers and officials at the Gloucester Marine Terminal in Gloucester City, NJ, overseeing the installation of a solar energy system, which began in June and is expected to be completed by Oct. 31.

Leo Holt, president of Holt Logistics Corp., which owns the terminal, told The Produce News in mid-September that at that point, the roof had been fully replaced and the photovoltaic panels were all installed. On Sept. 22, he said, "The balance of it is the connections of the inverters. That is the device that turns direct-current power that is generated by the panels into [alternating current] like we have in our houses, and that feeds it right into the meter." That work was partially complete in mid-September and the system was yielding about 25 percent of its potential power output.

At a cost of about $42 million, "It has been one of the few projects that you see of its scale that is on time and on budget," Mr. Holt said.

Asked why the terminal undertook the sizable project, Mr. Holt said, "We had a lot of [financial] people knock on the door and say, 'We can do this for you, and we will sell you electricity at a discount,' or even more importantly in our business or any other business is being able to predict on the long-term your electricity or energy cost. Se we looked at that, we listened to a variety of people. And these were mostly hedge funds and financial people who have been dominant in that area. Our business is very much the marine terminal and warehousing business -- there is no mystery for us as to what we do and what we do well. So that is why we engaged some very solid folks and they came forward with some ideas, and those ideas were well received. So we decided to do it ourselves and as a result we have something we believe is a good investment, has a long life and can help us keep our costs down in the long term, and that is what it is really all about. And at the same time, we got a brand-new roof on our facility -- that's always a good thing when you are in the business of storing people's product. It is really about having a dependable and predictable electricity cost. When you are in a competitive environment and someone doesn't have that, then you get an advantage."

The terminal handled the project itself rather than accept a third-party's offer to execute it for them. The process can be complicated not just because of the nature of the physical components and work but also due to the numerous financial incentives from state and the federal government. Mr. Holt explained, "There are a variety of [financial] incentives that are available. It all changes state to state. California and New Jersey are probably the states where it makes the most sense, and that is because of a combination of federal tax credits and the [Solar Renewable Energy Credits]. The federal government piece of it is very cut and dry because it is part of the tax code -- section 1603 of the U.S. tax codes. So if you comply, then you quality. The state component of it, we have a state public utilities board -- [the Board of Public Utilities] in New Jersey led by a guy named Lee Solomon -- very easy to work with. And then we have in this part of New Jersey our utility, who is essentially a service partner and a service provider, PSE&G, and they have been very good to work with. But it is a very detailed process. So we engaged very good council for it, who specializes in this and also a consultant -- a brilliant young man, who has a company called Independence Solar, Keith Peltzman. Having the right consultant and the right legal advice and accounting advice is critical to a large-scale project."

The actual installation was performed by another company. "We used a company that is called SunPower," he said. "SunPower is part of the huge French energy company called Total, and they are based in California. They are very much leaders in the American scene."

Determining the size of the project was probably the easiest decision for Holt Logistics Corp. "The size of the project was driven by available roof space," Mr. Holt said. "We maximized every square inch that we possibly could." That amounted to 1.1 million square feet. The 27,528 solar panels should satisfy about 80 percent of the terminal's entire electricity needs, generating a little more than nine megawatts of power, and the difference will be met through traditional means.

The sun does not always shine, so the panels do not always produce the power the facility needs. "The interesting thing about these solar projects is they use a concept of reverse metering," Mr. Holt said. "So we generate a lot of power in the summer and get a credit, and then when we draw electricity in the winter, we use up that credit." There is more sunshine in Gloucester in the summers than the winters. During the times that the PV system is generating more electricity than the facility is requiring, "electricity flows into the grid.; vice-versa, you get power. Then the difference is ultimately reconciled with PSE&G."

The life expectancy of the project is between 15 and 20 years, but Holt Logistics expects the payoff period to see a full return on its investment from the resulting cost savings on electricity expenditures to be less than half that.

Furthermore, Mr. Holt said, "The output is measured and [the solar panels] usually perform somewhere between 90 [percent] and 105 percent of the output capacity depending on obviously the sunshine. Philadelphia [which is within sight of the terminal] is actually in a pretty good place for what they call radiance, which is the measure of sunlight in a given area."

Maintenance of the installation is expected to be minimal, Mr. Holt said. "Maintenance on solar is relatively low. The panels are very passive; it is more making sure that any debris or any other issues [are addressed]. So we have a good maintenance and repair contract that is part of the entire program. And so we will have someone go on the roof. But really, it is inspections and checking, but everything today is laptop-driven."

The system's first trial by fire was early in its life -- before it was even fully operational. "We actually had a little bit of a test called Hurricane Irene [at the end of August]. We had just finished the panel installation and at the end of the day, not from anything to do with the installation, we had three panels crack out of 27,500 from debris that was flying. So even with the winds and the rains and everything else, it worked just fine."

There is a phase two of the project that Holt Logistics Corp. plans to undertake "once we get this up and running, sometime in 2012 we will start the permitting and planning for. It won't be as large as this. And then we are standing by to see if other states where we operate like Pennsylvania will eventually develop energy policies that make it cost effective to deploy full PV technology. These are places where we have warehouses and other electricity demands, and we think it is very worthwhile to utilize this approach."

The phase two project will likely be three megawatts to four megawatts in size and will be on the roofs of other buildings with available roof space at Holt Logistics Corp.'s Gloucester Marine Terminal.

Mr. Holt said, "We think whether you are in New Jersey or Pennsylvania, Delaware or anywhere else in the country, we think that for big public warehouses, this is very much the way to go because you have roof space that is unused, it is not earning anything and at the same time, if we as a nation can reduce the amount of product that is being required -- the product in this case being electricity -- that reduces our overall dependence on a variety of sources of energy. And this is something that at the end of the day is free."