By using larger solar cells, the Glaxo project will produce up to 3.1 megawatts of electricity on eight acres of flat roof, nearly twice as much power per square foot as a 20-megawatt solar project announced this month on a 100-acre New Jersey farm.
"This is an iconic project," said Larry Brown, vice president of North American supply for GlaxoSmithKline Consumer Healthcare. He said Glaxo plans solar arrays for the company's three other U.S. distribution centers and its offices in Pittsburgh.
Brown said the project was motivated by a Glaxo corporate mandate to reduce greenhouse-gas emissions, as well as an attractive array of state and federal incentives.
The project will receive $4.1 million in federal tax credits and a $1 million grant from the Pennsylvania Commonwealth Financing Authority.
In addition, Glaxo will receive Solar Renewable Energy Credits (SRECs) from utilities for the 3.4 million kilowatt-hours of power the panels are expected to produce. Utilities are required to buy the credits under state mandates to buy an increasing amount of renewable power. The utilities pass the higher costs on to customers.
The Glaxo project is expected to supply all the power used by the distribution center, which now pays a $400,000 annual bill.
With the incentives, the project is expected to pay off in five years, Brown said.
"Without the incentives, frankly, we'd be looking at a 15-plus year payback, and we would be hard-pressed to make it work," he said.
Brown said Glaxo could install the panels without having to reinforce the roof's structure - the 11,000 panels weigh 330 tons, not counting the metal mounting racks. Glaxo has a 12.5-year lease on the building.
The 280-watt panels are produced by Suntech Power Holdings Co. Ltd., a Chinese manufacturer that last month opened a factory in Arizona.
State and federal incentives have triggered a massive push to install more solar capacity. Area corporations such as Nestlé Waters and Air Products & Chemicals Inc. are installing panels, as well as government agencies such as Colonial Elementary School of Plymouth Meeting, the Tioga Marine Terminal, and the Philadelphia Water Department.
The Solar Energy Industries Association says that 339 megawatts of solar photovoltaic projects were installed in the United States in the first half of this year.
But some traders say so many solar projects are coming online that the Pennsylvania market for renewable credits is at risk of softening, which means that projects like Glaxo's may not generate as much income as expected.
"I think there's a risk of saturation right now," said Yuri Horwitz, chief executive of Sol Systems L.L.C., a Washington energy-trading firm.
Contact staff writer Andrew Maykuth at 215-854-2947 or email@example.com.