By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Caribbean Bottling Company yesterday revealed it aims to slash annual energy costs by up to 30 per cent via a $1.8 million solar system, with installation work to kick-off this month.

Walter Wells, the local Coca-Cola bottler’s chief executive, told Tribune Business that its solar photovoltaic (PV) investment was expected to “pay for itself” within six to seven years.

Part-financed by a $1 million loan from an Inter-American Development Bank (IDB), Mr Wells said the system - which will be fitted to a portion of Caribbean Bottling’s 92,000 square foot roof - was likely to cut the company’s yearly energy bill by $250,000-$300,000.

He explained that Caribbean Bottling, assisted by the Inter-American Investment Corporation (IIC) financing, was effectively “hedging our bets” over the likelihood of increased future energy costs and the impact on operating expenses.

Acknowledging that the anticipated energy cost reduction would make the company “marginally more competitive” versus rival overseas manufacturers, Mr Wells said the solar PV system would also boost profitability “from a return on investment standpoint”.

“We’ve paid a deposit for the equipment and it is now being shipped,” the Caribbean Bottling chief told Tribune Business of the solar PV system. “I’m told it is on the way to us now, and I expect them to start installing it on our building later this month.

“We hope to complete it before the end of this year. It should hopefully generate between 25-30 per cent of our requirements. It pays for itself in around six-seven years, and has a life expectancy of between 20-25 years. It will also reduce our carbon footprint; all those good things.”

The IIC, whose loan for the project was approved in late 2016, said it would also produce environmental benefits by slashing carbon dioxide emissions by 24,530 tonnes over a 25-year period.

“The project will result in the addition of 1,153 kW (kilowatts) of solar photovoltaic panels on the rooftop of Caribbean Bottling’s factory,” the IIC said. “The total project cost is of approximately $1.8 million, which is the total cost of the solar PV system.

“The system will be one of the first and the largest solar PV installations in Bahamas, and will reduce carbon dioxide emissions by 24,530 tons over 25 years of operation through displacing electricity from the grid.”

Caribbean Bottling is the second Bahamian company to be approved for an IIC renewable energy loan in recent months, as Arawak Port Development Company (APD) has also received $3 million to install a solar PV system on its roof and change-out its terminal lights.

APD has also expressed interest in becoming an independent power producer (IPP) through the installation of another solar PV system on its Gladstone Freight Terminal, although this will likely not occur until it can sell power back to the BPL grid.

And Mr Wells’s comments on the projected energy savings will especially resonate with many Bahamian businesses and households given the 49.7 per cent year-over-year increase in Bahamas Power & Light’s (BPL) fuel charge - a revelation that has added to concerns about the utility’s ability to provide reliable, consistent power supply.

The Caribbean Bottling chief said the IIC itself approached the company on the solar PV concept, having assisted a South American bottling company to undertake a similar project.

“They are very much into sustainability,” Mr Wells said of the IIC. “We were weighing the pros and cons, because they unfortunately asked us at a time when electricity prices were at their lowest level for several years.

“We were concerned that what goes down will go back up at some point. We were hedging our bets, but even with electricity costs where they are today, it’s a worthwhile investment. If current energy trends continue, the payback may not be seven years - it may be five years.”

Mr Wells said that while Caribbean Bottling’s energy costs would be lowered, it came “at the expense” of a $1.8 million investment. This meant it had to weigh the likely returns very carefully.

“If you don’t have to spend that $1.8 million, it makes a huge difference,” he added. “It does help to make us marginally more competitive, but at the expense of having to take out $1.8 million to do so.”

Caribbean Bottling will have to pay interest on the debt financing until it is paid back, and Mr Wells explained: “We’re really hedging our operating expenses for the future given that there is a likelihood the cost of electricity will rise, so this brings an element of stability to our operating costs, so that we don’t have a complete shock or surprise.”

Mr Wells ranked energy costs alongside labour and raw materials as Caribbean Bottling’s greatest expense, estimating potential cost savings from the solar PV system as being “in the range of $250,000-$300,000 annually”.

He added that solar PV required a “massive roof” to be successful, adding that Caribbean Bottling’s fitted the bill as it covered two acres or 95,000 square feet.

Suggesting that the company could eventually become an IPP, Mr Wells said: “At some point, as we progress and are able to sell power back to the grid, when we are not working at weekends, for example, that could be another potential benefit.

“We’re certainly not factoring that in at this time. I suspect that as we evolve that could become a reality at some point in the future.”