Industrial Manufacturing and The New Energy Imperative: Tackling Rising Energy Costs with Hybrid Solar Combined Heat and Power

By Emily Norcross, Founder and CEO, Green CHP

The manufacturing industry, a key driver of economic growth, is currently grappling with the challenges posed by rising energy costs. As energy-intensive processes become increasingly costly, manufacturers are seeking innovative solutions to not only cut operational expenses but also align with sustainability goals. One transformative approach is the integration of solar-based combined heat and power (CHP) technology. 

The Impact of Rising Energy Costs on Manufacturing

Energy efficiency has gained prominence as a critical focus for manufacturers worldwide. According to the United States Department of Energy, industrial energy costs can constitute approximately 10% of a manufacturing company's operating expenses. As hot water and power demands surge, the manufacturing sector faces increased pressure to minimize its carbon footprint, comply with stringent regulations, and stay competitive in the market.

Implementing energy-efficient practices presents a multifaceted solution for manufacturers. Beyond the immediate cost savings, embracing energy efficiency initiatives allows companies to contribute to a sustainable future by curbing greenhouse gas emissions and conserving natural resources. Governments globally are enforcing stricter regulations on energy consumption, making it imperative for manufacturers to align with these standards.

Strategies to Maximize Energy Savings

Manufacturers are increasingly embracing innovative strategies to simultaneously reduce energy costs and advance environmental sustainability. Three primary approaches have emerged as key pillars in this endeavor: energy autonomy, market-based solutions, and electrifying operations. These strategies collectively represent a holistic approach for manufacturing companies to not only optimize energy usage and costs but also align with broader sustainability objectives. By strategically implementing these approaches, companies can not only achieve cost savings but also align themselves with the evolving landscape of sustainable and efficient energy consumption.

Embracing Energy Autonomy 

The quest for energy autonomy is a calculated undertaking aimed at reducing dependency on traditional grid power. Manufacturing entities can accomplish this by erecting on-site renewable energy sources, such as solar arrays, partnered with energy storage solutions. By generating a segment of their power on-site, businesses can reduce network fees tied to grid use. Also, this strategy helps curb environmental compliance charges and penalties, and bolsters resilience amid possible grid disturbances.

Leveraging Market Interactions 

Involvement in demand response initiatives lets firms modify their energy usage according to grid circumstances, earning rewards for load diminution during peak periods. Moreover, manufacturers can scout opportunities to vend surplus energy generated on-site back to the grid or neighboring enterprises, while leveraging tax credits and renewable energy certificates (RECs) to craft new revenue streams. 

Electrifying Operational Processes 

By electrifying operational processes, manufacturing entities contribute to the collective shift towards an electrified energy system. This might involve adopting electric heating systems or electrifying industrial workflows. Beyond cost savings, electrifying operations positions the firm as an engaged player in the wider movement towards sustainable and electrified energy solutions.

Solar Thermal PVT Technology      

The integration of solar power and thermal Photovoltaic-Thermal (PVT) technology into a Combined Heat and Power (CHP) system marks a significant advancement in sustainable energy solutions. This innovative approach not only harnesses the benefits of traditional CHP systems but also capitalizes on the abundant and free energy provided by the sun.

Solar Thermal PVT panels represent a cutting-edge development in renewable energy technology, offering a dual-purpose functionality that sets them apart. Unlike traditional photovoltaic (PV) panels that solely generate electricity, Solar Thermal PVT panels combine PV cells with solar thermal collectors, allowing for the simultaneous production of both electricity and thermal energy within a single integrated system.

The PV cells in the Solar Thermal PVT panels capture sunlight and convert it into electricity, contributing to the overall power generation of the system. Simultaneously, the solar thermal collectors efficiently absorb heat from sunlight, harnessing this thermal energy for various applications. This unique dual functionality makes Solar Thermal PVT panels particularly versatile and effective in maximizing energy capture.

The absorbed heat can be utilized in diverse heating applications, adding a valuable dimension to the CHP system. Common applications include providing hot water, pre-heating water for steam-based processes, or supporting space heating in industrial and commercial settings. The synergy between electricity generation and thermal energy capture in Solar Thermal PVT panels enhances the overall operational efficiency of the system.

The integration of solar thermal PVT technology into a CHP system brings about several advantages. Firstly, the solar energy contribution reduces the reliance on conventional fuels for heat input, thereby decreasing the environmental impact associated with fuel consumption. This not only aligns with sustainability goals but also positions the system as a cleaner and more eco-friendly energy solution.

Secondly, the simultaneous production of electricity and thermal energy increases the overall efficiency of the CHP system. By utilizing the sun's energy for both electricity generation and heat capture, Solar Thermal PVT panels enhance the system's performance.

This integrated energy solution, offered by companies like Green CHP, leverages hybrid thermal solar panels to deliver significant benefits:

• Cost Reduction: Solar-based CHP solutions lower both hot water and electric power costs. By utilizing renewable energy sources, manufacturers can achieve operational efficiency and witness a substantial reduction in their total energy expenditure.

• Renewable Energy Transition: With an increasing emphasis on decarbonization and sustainability goals, solar-based CHP facilitates a seamless transition towards renewable energy sources. This ensures that manufacturing companies align with environmental compliance and emissions targets.

• Financial Incentives: Solar-based CHP solutions enable manufacturers to leverage federal and state carbon credits and tax incentives. This not only supports compliance but also creates new revenue streams, enhancing the financial performance of manufacturing operations.

• Seamless Integration: The hybrid thermal solar panels seamlessly integrate with existing infrastructure, ensuring a smooth transition to a hybrid solar water and power system. This minimizes disruptions during the implementation phase, allowing for a straightforward shift from conventional energy sources to a sustainable alternative.

Case Study: Manufacturer Achieves Full Return on Investment in Less Than 7 Years

ARPA, operating in over sixty countries, serves as a benchmark in collaborative engineering, design, manufacturing, and system integration. Their clientele includes demanding entities like the UN, NSPA/NATO, and defense ministries, showcasing a robust international presence. ARPA's core business in camp infrastructures, covering areas such as food, logistics, accommodation, health, water, waste management, energy, and telecommunications, is evolving towards sustainable solutions. This positions ARPA as a leader in engineering and the circular economy, aligning with the United Nations Sustainable Development Goals.

ARPA’s manufacturing facility located in La Muela, Zaragoza (Spain), successfully implemented an innovative energy solution by installing 112 hybrid solar panels. The project, which leveraged abora hybrid panels, yielded significant energy cost savings and demonstrated a remarkable return on investment.

The amortization period for the installation was notably short at 6.6 years, highlighting the efficiency and financial viability of the project. This meant that ARPA achieved a full return on their investment in under 7 years, making the initiative not only environmentally sustainable but also economically sound.

The hybrid solar panels served a dual purpose, functioning both for photovoltaic (PV) electricity generation and heating applications. This multifunctional approach highlighted the versatility and adaptability of the technology to meet different energy needs within the manufacturing facility.

One of the key environmental benefits was the substantial reduction in carbon emissions. The hybrid panels contributed to avoiding 59,360 kgCO2/year in emissions, aligning with ARPA's commitment to sustainability and environmental responsibility.

In terms of energy production, the solar panels demonstrated impressive results. The total electrical production from the panels amounted to 39,756 kWh/year, contributing to the facility's electricity needs. Additionally, the thermal production reached 146,479 kWh/year, displaying the hybrid panels' effectiveness in meeting heating requirements.

This case study serves as a testament to the positive impact of adopting renewable energy solutions, not only in reducing operational costs but also in significantly lowering carbon emissions. ARPA's experience highlights the feasibility and success of incorporating hybrid solar panels as a strategic energy solution for manufacturing facilities seeking both economic and environmental benefits. 

The Promise of a Sustainable Future

The manufacturing industry finds itself at a critical juncture, grappling with the dual challenges of surging energy costs and the pressing need for envrionmentally sustainable practices. At this time, solar-based combined heat and power (CHP) technology emerges as a revolutionary solution, presenting a multifaceted approach to address the industry's pressing concerns.

This innovative technology promises a range of substantial benefits for manufacturers, including      a pathway to cost reductions by optimizing energy use and harnessing the power of renewable resources. Solar-based CHP systems facilitate a transition to renewable energy, marking a significant step towards a more sustainable and environmentally friendly manufacturing process.

Financial incentives further sweeten the deal for manufacturers adopting this transformative technology. Leveraging solar-based CHP solutions allows companies to tap into federal and state incentives, such as carbon credits and tax benefits. This not only supports compliance with environmental regulations but also creates new revenue streams, enhancing the financial performance of manufacturing operations.

By embracing such forward-thinking and innovative solutions, manufacturers have the opportunity not only to mitigate the challenges posed by escalating energy costs but also to position themselves as leaders in environmental sustainability. The adoption of solar-based CHP technology reflects a commitment to a more energy-efficient and greener future for the industry, aligning with global efforts to combat climate change and foster sustainable industrial practices. As these manufacturing leaders pioneer the way forward, they set an example for the broader industry, inspiring a shift towards environmentally conscious and economically viable energy solutions.

Free Custom Energy Audit and Cost Reduction Report

For a more precise evaluation of the portion of energy costs linked to hot water within a particular context, it is advisable to consider variables such as the system type and efficiency, local energy pricing, and facility usage patterns. Green CHP offers a complimentary audit and a comprehensive report on potential cost savings and return on investment (ROI). Reach out directly to our Chief Commercial Officer, Glyn Strong, at glyn.strong@usgchp.com or visit http://www.usgchp.com for further assistance.

About Emily Norcross

Emily Norcross is an accomplished executive leader and corporate strategist with a talent for organizing and scaling small businesses. Emily's background is in software as a service for the homeland security and emergency management fields, where she successfully grew a tech startup to achieve revenue maturity, profitability, and successful sales. After more than 15 years of experience helping organizations respond to sustainability priorities, Emily is committed to helping Green CHP and its customers explore new opportunities in sustainability and pioneer new strategies to reduce their carbon emissions and minimize energy expenses. Emily and her family reside in Colorado, where they enjoy backpacking, kayaking, and other mountain adventures.