In the past, 10% of Central California Almond Growers Association’s expenses were attributable to the cost of electricity. As customers of Pacific Gas & Electric the we have desired a hedge against the skyrocketing costs of electrical power. As such, a business decision was made by the Board of Directors to contract with Cenergy Power, LP to construct photovoltaic systems at our Kerman site to provide some predictability for planning and budgeting in our future. In the spring of 2016, a Stage 1 fixed solar array was installed. Since energizing this first array the implementation of solar has clearly demonstrated the financial merits to our business model. Since the project came online the cost of solar panels has decreased and there have been significant technological improvements to nearly all components utilized within a solar field. Recently, on October 30, 2019 a second Stage 2 solar tracker system of nearly equivalent size was put into operation.
CCAGA annually utilizes 4 megawatts of power to run our shelling operations, offices and shops at our Kerman location. The solar power generated by our photovoltaic system will offset 70% of the Associations power needs in the future. Both projects indicate a positive Return on Investment for our Association members after the second year of operation.
Both Stage 1 and Stage 2 sites have been financed as lease arrangements with Farm Credit leasing. The Stage 1 site is a ten-year lease and the Stage 2 site is a 7-year lease. In 2026 both arrays will be fully owned and operated by the Association and free of any financial obligation.
An important project is in the works! Recently, the Association's Board of Directors approved a Management recommendation to modernize Kerman Plant #1 by the 2020 processing season. Roughly 20% of the existing equipment will be utilized. However, 80% will be new state of the art hulling and shelling machinery that will improve our overall efficiency, while maintaining a focus on quality of product.
The modernization will help us improve overall operations in three ways:
• Overall efficiency will be improved by 36%, while maintaining quality. The quantity of kernels shelled on an hourly basis will increase from 8,800 lbs. per hour to 12,000 lbs. when the modernization is completed.
• An additional inshell line will be incorporated into this plant that will take substantial pressure off Kerman Plant #3, which is the only sheller presently that is capable of running inshell. This means we will be able to complete annual inshell operations sooner and allow K-3 to focus a greater part of the season on shelling.
• The modernization will also include a Hash clean up line. Hash is a by-product of the shelling industry that includes sticks, hulls, shell, etc. Within a hash sample are also bits and pieces of almonds (sometimes splits and doubles) that fall through the screens but still have value. As a Cooperative, this product belongs to our members and if we can improve the product to a higher level of edible meats then we will be able to increase this important by-products value.
Construction has already begun on pieces of equipment we can install before the 2019 season that will not affect the overall operation of the older plant in the season to come. The new modernized plant will help us meet the challenges that lay ahead with a tidal wave of almond production that is in our future.
The Association contracted with Cenergy Power, LP to construct a 1 mega-watt fixed solar array that came on line on May 2, 2016 and has operated exceedingly well for three years. This stage 1 solar field offsets 70% of the power generated by Kerman Plant #3 and has been an overwhelming success. The construction process was flawless, and we have met or exceeded our initial projections in each year of power generation. Since the project was installed the cost of solar panels has decreased and there have been technological improvements to nearly all of the components utilized in a solar array.
These facts are compelling, and they suggest that a second mega-watt should be considered to help us offset 70% of the power needs of Kerman Plants #1 and #2. Recently, the Board of Directors approved an additional 1-megawatt stage 2 solar site adjacent to our stage 1 site. Once again, we have contracted with Cenergy Power, LP for the construction of this facility. This time, instead of a fixed array we will be utilizing a tracker system. CCAGA has entered into a seven-year lease agreement with Farm Credit Leasing and the project should be operational in the early late spring of 2019.