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Funding and Implementing a Solar Photovoltaic Array for a Small-Scale Greenhouse

Travis Kurtz

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1. Introduction

Electricity is one of the most coveted commodities in today’s society, and is being consumed at

higher levels year after year. As a matter of fact, electricity use has increased every year since

1949 except for 1974 and 1992 (Wampler, 2011). The increase in consumption coupled with a

decrease in the natural resources used to create electricity means that it is necessary to identify

and adopt viable alternatives to traditional sources of energy production. Solar photovoltaic

panels are the most accessible and widely applicable source of renewable alternative energy, and

as such should be utilized when possible to reduce reliance on conventional energy, especially in

industries that rely on energy usage.

Agriculture has always been a resource-intensive industry, and for any indoor agricultural

system electricity is among the most important resources. Greenhouses in particular rely on the

ability to create and sustain an artificial environment in which plants can be grown both for

educational purposes and for food production. To create these environments, there is a large

amount of climate control that is required, and there are often small hydroponic systems as well.

These facets require constant electricity, much of which can be supplied by a solar PV array.

University gardens and greenhouses are also spaces where an intersection of the

community can gather to promote the sustainability of their organization.  These same

universities are also beginning to institutionalize sustainability and pursue projects that benefit its

three major pillars.  One type of project that can fulfill environmental, social, and economic

sustainability objectives is the implementation of solar energy for various on-campus services.

Uhl and Anderson (2001) believe it is the responsibility of universities to pursue such projects:

“To set a wise example, universities must move beyond excessive and exclusive fossil-fuel

energy dependence to an energy system that is nonpolluting and generated from renewable

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resources (e.g., hydropower, wind, solar, geothermal)” (p. 37).  At the intersection of the campus

garden and the need for projects that promote the pillars of sustainability is a small-scale array of

solar PV panels that will reduce the energy costs of the greenhouse and contribute to the overall

sustainability of the garden.

2. Literature Review

Basics of Solar Energy

Solar photovoltaic energy has been in the spotlight of alternative energy since the 1970’s, and

has only seen increasing popularity since that time.  One of the primary arguments in favor of

solar power is the abundance of solar radiation, “Solar energy offers the highest energy density

among all the renewable energy resources (a global average of 170 W/m2). The amount of solar

energy received by the Earth every minute is greater than the amount of energy from fossil fuels

consumed each year worldwide” (Yusof, Mydin, & Azree, 2014, p. 121). The total solar

radiation intercepted by the earth is approximately 1.8x10^11 MW (Parida, Iniyan, & Goic,

2011).  Although it is not possible to harness the entirety of this potential energy, there will be no

shortage of energy available in the short or long term.

A great advantage of solar arrays is their long useful life.  It is generally accepted that a

solar panel will last 20-25 years before it becomes necessary to replace them (Squatrito et al.,

2014; Swift, 2013; Yusof, Mydin, & Azree, 2014).  This long useful life gives solar panels ample

opportunity to pay back the cost within the period and begin to be a financial benefit for its

owners. Aside from determining the useful life of the panel there are a variety of calculations

that should be made in order to maximize the output of the solar panels. One of the most

important calculations to complete before the implementation of a solar panel is the solar

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insolation of a given location, because the amount of sunlight in different regions varies

drastically (Swift, 2013).  There are also basic calculations that must be completed in terms of

the directional orientation of the solar panels.  For any location in the northern hemisphere, the

solar panels must be on a south-facing surface to receive the most sunlight.  “The optimum slope

angle of the collectors should be selected based on maximizing solar energy absorption”

(Farzaneh-Gord et al., p. 71).  This optimum slope is the product of a simple calculation based on

the average height of the sun in the sky, which is the variable that impacts the angle of impact of

the sun’s radiation upon the earth’s surface.

Alternative Energy in Campus Gardens

Many colleges already utilize various types and scales of renewable energy in their campus

gardens.  At the University of Montana Western, the campus garden now has two new

greenhouses with fully integrated wind and solar energy systems and over 20 plots producing a

variety of fruits and vegetables (University of Montana Western, n.d.).  The Metropolitan

Community College in Omaha, NE has a similar setup, with a solar lab and an adjacent

greenhouse and aquaponics system that utilize the lab’s solar power and solar heat collection

(Solar power, 2013).  A third example of campus gardens that utilize alternative energy is the

University of Louisville, where students purchased used PV panels and refurbished them to be

functional for use for the greenhouse.  Previously, the greenhouses had been inactive due to their

air circulation fans being inoperable (Clark, 2012).  Each of the above examples show the

various ways in which solar energy can be effectively utilized by a campus garden to improve

their operations.  Although these gardens all use solar PV as the main source of renewable

energy for their garden operations, there are other options such as wind energy and passive solar

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heating.  These three types of renewable energy make up the majority of renewable energy

systems that are utilized by small-scale campus gardens.

Benefits of Having a Solar Greenhouse

The primary benefit afforded by a solar PV array is to lower the cost of energy consumption for

the greenhouse.  However, “Every system which is proposed to be employed in industry has to

be evaluated whether or not is able to add benefits to the investors. There are several techniques

that could be employed for evaluating the effectiveness of the proposed systems such as simple

payback ratio method, Internal Rate of Return (IRR) and Net Present Value (NPV)” (Farzaneh-

Gord et al., 2013, p. 70).  Of the methods mentioned above, Net Present Value is the most

commonly used because it discounts future cash flows to their present value, giving a more

accurate picture of the true costs and potential benefits of a project.  However, Squatrito et al.

found that through all three methods of analysis solar greenhouses in warm climates have high

levels of economic convenience due to large savings on energy expenditures (Squatrito et al.,

2014).  The fact that all methods point to solar greenhouses being a positive investment shows

that in today’s economic climate there is very little debate as to the cost-saving benefits afforded

by utilizing solar energy.

Another benefit gained by creating a solar greenhouse is supporting the consumption of

locally grown food as opposed to supporting conventional agriculture, which has far-reaching

environmental justice implications. Uhl discusses university food practices, saying:

“The purchase of food at American universities is typically based on least-cost and convenience criteria, not on intelligent responses to ecological problems. Few significant measures are taken to address distances involved in food transport, unsustainable farming practices, excessive food packaging, unethical treatment of farm animals, and unjust labor practices, all of which must be considered in the promotion of a sustainable food system.” (Uhl & Anderson, 2001, p. 38)

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Implementing solar panels so as to help ensure the sustainability of a greenhouse shows a strong

implicit support of small scale, sustainable agriculture, as well as the better labor and operational

practices that are associated with it.  The environmental justice aspect of such a project cannot be

overlooked, as the industrial agriculture system is rife with injustice.  Pinderhughes states,

“Recent research on sustainable agriculture in the U.S. has revealed that although crops are being

grown with less toxic inputs, on many of these farms farm workers continue to be terribly

exploited. Similarly, some offer workers part-time work employment in order to avoid providing

benefits to workers” (Pinderhughes, 2006, p. 63).  Though campus gardens are small, projects

such as this show that many universities are concerned with creating justice for members of the

global community, not just the individuals at that institution.

Models for Capturing Solar Energy

Though the most commonly used method for capturing and utilizing solar radiation is through a

roof-mounted array of photovoltaic panels using silicone crystals, this is not the only model.

There are many different materials that are used in the production of solar panels, however

silicone is by the most commonly used material for the cells themselves.  Thampi et al. (2014,

p.3) write “Mono-crystalline silicon cells have the highest efficiency among all Si commercial

cells, reaching 20-25% power conversion efficiency range under direct AM1.5G standard

sunlight irradiation conditions.” Parida (2011) also believes that silicon will remain the dominant

material for photovoltaic applications, while thinner wafers and ribbon silicon technologies

continue to be developed. Even within silicon, however, there are varying technologies such as

amorphous silicon and crystalline silicon, which has mono and multi-crystalline forms. Each of

these different types of silicon cells has varying costs and efficiencies (Parida, Iniyan, & Goic,

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2011). Outside of Si, the most common types of cells are made from cadmium telluride (CdTe)

and cadmium sulphide (CdS). These technologies have shown attractive features when used in

large area applications, which makes this a less viable option for an array that would be used for

a small-scale greenhouse (Parida, Iniyan, & Goic, 2011).

There are also two primary models for the placement of solar panels, roof-mounted and

ground-mounted. In the case of Squatrito et al. (2014) Italian farmers have embraced the use of

both roof-mounted and ground-mounted PV panels to provide power for their farms. However,

the ground-mounted panels took up .1% of all the agricultural surface area in Italy, which led to

a ban on incentives for ground-based solar arrays on agricultural soil. Meanwhile, roof-mounted

solar projects showed a 29% increase in solar capacity from 2011 to 2012 (Squatrito et al.,

2014). The fact that ground-based panels are showing little growth, while roof-mounted systems

increased capacity by such a large margin in one year suggests that it is not worth using the

agricultural land area for solar panels if mounting them on a roof is a viable option.

Paying for a Solar Greenhouse

Like any form of technologically advanced alternative energy, funding a small-scale PV project

will be quite costly.  Ideally the solar panels will pay for themselves through energy savings, but

there is still the problem of paying for the panels and the installation costs up front.  Luckily, the

cost of solar energy has been steadily decreasing over the years.  As one study states “The price

US residential consumers pay to install rooftop solar PV (photovoltaic) systems has plummeted

from nearly $7 per watt peak of best-in-class system capacity in 2008 to $4 or less in 2013”

(Frankel, Ostrowski, & Pinner, 2014, p. 1).  This downward trend in peak cost per watt makes

solar an increasingly attractive option for lowering energy costs.  However, in order to determine

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the true value of a solar PV system there is more information that must be known. According to

Swift, “The information needed for analyzing a solar PV system investment decision can be

divided into four general categories. These are:

Cost of electricity: The electricity costs, both present and future, that will be saved by installing a solar PV system.

Sunlight: The amount of sunlight, or solar insolation, available to provide power for the solar PV system.

PV system costs and performance: The cost and performance of photovoltaic panels and related components of the solar energy system.

Financial incentives: The tax and other incentives provided by federal, state, and local governments, and by utility companies” (Swift, 2013, p. 138-139).

All of the above calculations are necessary to determine the period of time after which the solar

panels will have paid back their cost.  This is crucial in determining the attractiveness of a

potential project.  Once the appropriate calculations have been made, there are many avenues

that can be pursued for paying the upfront costs.  

Incentives for Implementing Solar PV

One of the driving forces behind the increasing use of solar PV energy is the wide range of

financial incentives that are available to consumers. The state of Texas has many types of

residential and commercial financial incentives, ranging from corporate deductions to local loan

programs to the largest category, utility rebate programs. There are also rules, regulations, and

policies designed to support solar usage, such as building energy codes, green power purchasing,

and net metering (Texas Solar Rebates and Incentives, 2014). These incentives are

representative only of the efforts made by local governments and organizations, but there are

also many national programs, such as the 30% federal tax credit offered by the Department of

Energy. This tax credit is designed to promote the installation of residential solar arrays, and

according the Department of Energy “A taxpayer may claim a credit of 30% of qualified

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expenditures for a system that serves a dwelling unit located in the United States that is owned

and used as a residence by the taxpayer”. There is no maximum credit for any systems installed

after 2008, but this program ends at the end of 2016 (Department of Energy, n.d.).

Another method of funding solar projects is soft money, such as national, local, or private

grants and other types of external funding. The Department of Energy suggests several avenues

for finding the appropriate funding needed to complete solar projects, which include the State

Energy Program, NREL Renewable Energy Project, and EERE technology innovation portal

(Department of Energy, n.d.). These sources of government support include competitive and

formula grants, project level finance, and technologies available for licensing through the

Department of Energy. When combined with local sources of funding and support, these options

give ample resources to those attempting to undertake solar energy projects.

3. Justification

The reasons for undertaking this project can be broken down into its contributions to the pillars

of sustainability, and the benefit to the school’s green marketing strategies.  In terms of carbon

footprint reduction, solar panels are a clear choice. Southwestern University already receives

much of its energy from renewable sources, and this would further its commitment to clean

energy.  Completing this project will greatly increase Southwestern’s social sustainability by

promoting the value of small-scale and local agriculture as a viable food source as opposed to

industrial agriculture, and by substituting some of the vegetables used in the cafeteria for our

own crops.  As Pinderhughes states, “It is very clear that moving away from polluting work and

towards environmentally restorative work will bring significant changes and immediate benefits

to workers, communities, and society at large” (62).  Finally, this project will increase the

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economic sustainability of Southwestern University by covering a portion of the energy costs for

the building with the highest energy usage per square foot of any building on campus.

This project will also provide a highly visible display of solar energy production, which

not only benefits the university’s image, but also provides a benefit to the company we partner

with.  Not only will the greenhouse benefit from the energy produced by the panels, but also it

will overtly promote the university’s commitment to clean energy and showcase our relationship

with one of the area’s solar technology providers.  The connection to the local renewable energy

community is crucial, because it helps to set the precedent for collaboration between institutions

of higher education and renewable energy companies in central Texas. Building such a

relationship is simply one more area in which Southwestern can be one of the leading liberal arts

institutions in the south.

4. Methods of Data Collection

Creating an accurate estimate for this solar PV project is reliant primarily upon using the correct

numbers for utility rates, usage rates, methods of funding, total cost of the project, and size of the

array. Texas Solar Power Company provided a basic estimate of the size and cost of this project.

Based on the their estimates, it would approximately cost $3,500 per KW of installed capacity.

To offset the full electrical load of the greenhouse, the array must produce 8.519 KW over

24,024 hours of use per year, which amounts to 29,330.24 KWh of direct current (DC) electricity

each year, which must be converted to alternating current (AC) before it can be used to power

electrical appliances. A commonly used conversion rate from DC to AC is .77, so this must be

taken into account when calculating the size of the array. The average Peak Solar Hours for

central Texas are estimated at 5.5 hours per day, which when multiplied by 365 equals 2007.5

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useful hours of sunlight per year. To calculate the KW needed to fully offset the greenhouse’s

max load, I divided the 29,330.24 KWh by .77, to account for the conversion from DC to AC,

and then by the 2007.5 hours, which yielded an array of 18.97 KW.

Due to the fact that data has not historically been collected from the sub-meter attached to

the greenhouse, I was forced to calculate the usage rates and overall electrical load of the

greenhouse based on the needs of the appliances and approximated annual hours of use. To

determine the amount of energy needed for the large heaters and coolers, I used units called

Cooling Degree Days (CDD) and Heating Degree Days (HDD). Using 75o F as the baseline

temperature at which the greenhouse must be held steady, I then calculated the number of days

per year in which the temperature would be above or below 75o F based on historical weather

data. With this data, I then counted the number of days the coolers and heaters would be

required, and then used the assumption that on days they are needed the heaters and coolers

would be run for 12 hours, which resulted in the calculation of KWh, as shown below in Table 1.

Table 1-Usage Rates of Greenhouse AppliancesKW Hours/yr KWh/yr

Swamp Cooler (2) 3.778 2,628 9,928.58Window Unit 1.601 4,380 7,012.38Heaters (2) 2.88 3,876 11,162.88Headhouse Lights 0.24 4,380 1,051.20Hydroponics 0.02 8,760 175.2Max Load (KW) 8.519 24,024 29,330.24

Financial Benefit Analysis

The formulas that will be used to conduct the Cost-Benefit Analysis are Net Present Value

(NPV) and Internal Rate of Return (IRR). The NPV formula is used to discount future cash

flows in order to determine their current value, which is useful in assessing the benefits of a

project that will provide cash flows over many years. The equation for NPV=Rt /(1+i)t where t

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is the time of the cash flow, i is the discount rate, and Rt is the net cash flow at time t. If the

NPV is positive then the solar array will likely have positive financial returns. The equation for

the IRR is equated from the cash flows when the NPV equals zero (Wampler, 2011). Both NPV

and IRR can be calculated quickly and accurately using Microsoft Excel.

Table 2-NPV AnalysisYear Year System cost Annual Cash Flow Cumulative NPV

0 2015 $ (66,410.61) $ (66,410.61) $ (66,410.61)1 2016 $ 0.00 $ 3,153.00 $ (63,257.61)2 2017 $ 0.00 $ 3,153.00 $ (60,104.61)3 2018 $ 0.00 $ 3,153.00 $ (56,951.61)4 2019 $ 0.00 $ 3,153.00 $ (53,798.61)5 2020 $ 0.00 $ 3,153.00 $ (50,645.61)6 2021 $ 0.00 $ 3,153.00 $ (47,492.61)7 2022 $ 0.00 $ 3,153.00 $ (44,339.61)8 2023 $ 0.00 $ 3,153.00 $ (41,186.61)9 2024 $ 0.00 $ 3,153.00 $ (38,033.61)10 2025 $ 0.00 $ 3,153.00 $ (34,880.61)11 2026 $ 0.00 $ 3,153.00 $ (31,727.61)12 2027 $ 0.00 $ 3,153.00 $ (28,574.61)13 2028 $ 0.00 $ 3,153.00 $ (25,421.61)14 2029 $ 0.00 $ 3,153.00 $ (22,268.61)15 2030 $ 0.00 $ 3,153.00 $ (19,115.61)16 2031 $ 0.00 $ 3,153.00 $ (15,962.61)17 2032 $ 0.00 $ 3,153.00 $ (12,809.61)18 2033 $ 0.00 $ 3,153.00 $ (9,656.61)19 2034 $ 0.00 $ 3,153.00 $ (6,503.61)20 2035 $ 0.00 $ 3,153.00 $ (3,350.61)21 2036 $ 0.00 $ 3,153.00 $ (197.61)22 2037 $ 0.00 $ 3,153.00 $ 2,955.3923 2038 $ 0.00 $ 3,153.00 $ 6,108.3924 2039 $ 0.00 $ 3,153.00 $ 9,261.3925 2040 $ 0.00 $ 3,153.00 $ 12,414.39

As shown by the table above, based on the parameters provided for the greenhouse project this

solar array will yield a NPV of $12,414.39 over a period of 25 years. Based on the most

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conservative estimate that the cost of the project would be entirely funded internally, the IRR

would be 1.36%. This also assumes that the university’s utility contract will remain at the same

rate over the entire warranty period of the solar array. Because the IRR is above zero, and there

is no applicable discount rate, this shows that the project has a net financial benefit. However,

the possibility of greatly increasing the IRR exists if any external funding is acquired to lower

the cost of the project to Southwestern University. It is very likely that for this project to

succeed, much of the funding will need to be from sources other than the school’s budget, which

will greatly increase the IRR realized by the university.

5. Implementation

The final step of installing this project is beyond the purview of my role in creating this proposal

and will ultimately be done by a solar company hired by the university. However, with regard to

the timeframe for installation there are further considerations that must be made. If it is more

desirable to implement the entire system at one time, the acquisition of funding becomes a much

more pressing need, as this is not a cheap project. The other viable option is to install this

project in pieces, and over time reach the goal of offsetting the entire electrical load of the

greenhouse. While this method would make paying for the project much simpler, it would also

mean that the payback period for the project would be altered because we would not receive the

benefits of the full solar capacity in the first few years.

Once a method of installation is chosen, the solar power company will have to

collaborate with members of physical plant and facilities to make sure that the system is installed

in a manner that does not conflict with the current electrical system or affect the integrity of the

building on which it is installed. This will include the installation of the panels on the roof of the

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studio arts building, the installation of the underground conduit to run the power down to the

greenhouse, the switchover mechanism for the night time when the solar panels are not

producing power, and the associated metering to measure the power production.

6. Conclusion

In a time when the need for sustainable practices is at an all-time high, a project with such

clearly defined benefits is worth pursuing. The tangible energy savings of $3,153 annually alone

makes this an attractive project, but the positive NPV and IRR without any soft money or further

cost reductions should make this a high priority initiative. In addition to the economic benefits

received by Southwestern University, adding this aspect to the continually increasing

sustainability of Southwestern as an institution will allow the university to attract the best

possible students and become a leader among its peer institutions.

The precedent for this type of project has been set repeatedly by schools across the

country, and in order for Southwestern University to realize its full potential as an Institution of

Higher Education, it must be willing to undertake and realize the long-term benefits of projects

such as the implementation of a solar array to reduce energy needs. Continued collaboration

between an Environmental Studies student, physical plant, and the Texas Solar Power company

will provide the simplest path to funding and implementing this particular solar PV array to

offset greenhouse energy use.

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