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North Bay Business Journal

Monday, March 3, 2014, 5:30 am

Powering the Bottom Line: Labcon discovers financial, marketing benefits of solar

The message: ‘Come to Sonoma County and harvest the sun.’

By Andy Ferguson

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    (Editor’s note: This new column, Powering the Bottom Line, was developed in collaboration with the Sonoma County Climate Protection Campaign. This column and future ones will deal with how business can harness renewable energy resources.)

    “We harvest the sun to make products,” says Jim Happ, president of Labcon in Petaluma. He radiates enthusiasm due to his company’s profitable adoption of solar powered manufacturing.

    “I think the local business message should be ‘Come to Sonoma County and harvest the sun.’”

    Powering the Bottomline by Andy FergusonLabcon, a maker of plastic labware used in pharmaceutical and biotechnology laboratories, installed an 800 kilowatt solar panel array in 2011 to help power their injection molding production lines. The successful results led them to install another 73-kilowatt capacity system over their shipping dock within two years.

    “Clean power is really good for business,” says Mr. Happ. “Besides big savings in production costs, we differentiate ourselves by being a green business. Our share in overseas markets has shot up as a result. In Japan, our business has grown 400 percent in two years because of the Fukushima nuclear disaster. They want to buy green. We’ve also gained an advantage in Germany, another tough market, because they are interested in buying from a clean tech supplier.”

    Labcon’s green experience may serve as a model for businesses striving for a competitive edge. Whether in the manufacturing or service sectors, offering “green” sets a company apart, and is therefore becoming a part of many successful business strategies.

    But even without the green marketing boost, using solar has paid handsomely for Labcon.

    “Because of energy savings the whole thing really hasn’t cost us anything,” says Mr. Happ.  “Our payback period is seven years. Then we’ll effectively be earning $15,000 per month in energy savings alone.”

    Before they installed the solar array, Labcon embarked on an aggressive energy efficiency campaign, investing $5 million in new equipment that saved money on energy and turned out product faster. They cut their energy use per case of product by 60 percent and received a return on this investment in less than two years. The savings in production costs have helped them sell product in a competitive international market.

    One key to Labcon’s success has been the tiered rate system that allows the company to utilize its own self-generated power during high rate daytime sunlight hours, then continue to operate machines at a reduced rate during off-peak hours when there is no sunshine on their panels.

    “With a well designed feed-in rate, generating electricity could become an income stream for us. So the incentive to go green may be even greater in the future,” Mr. Happ said. The “feed in” rate is the amount the utility company pays Labcon for extra energy they generate.

    Mr. Happ is following the development of Sonoma Clean Power with interest. He wants to know what incentives the local power authority will offer producers of excess power.

    Even without such incentives installing solar panels can be a paying proposition, but there are certain conditions necessary to make the change to business energy self-sufficiency.

    “You need to own your building. Obviously you’re not going to invest in a solar array for a building you are leasing,” says Mr. Happ.

    Andy Ferguson is an international clean energy consultant, andyf@sonic.net. For information about this column, contact Barry Vesser of the Climate Protection Campaign, 707-525-1665, ext. 113, bvesser@climateprotection.org.

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