KLAMATH FALLS, Ore. — It all started by updating an out-of-date lighting system. When it was finished, Pepsi Cola of Klamath Falls had installed the Northwest's largest solar electric system, 172 kilowatts at three locations -- a system that will generate all the energy the facilities will use over the course of a year.

A combination of tax credits, financial incentives, attractive loan terms -- and the prospect of eliminating all of their electric bills --attracted Pepsi to solar energy. "The tax benefits for installing a solar electric system are substantial and the prospect of making all the electricity we need is appealing," said John Bocchi, general manager, Pepsi Cola of Klamath Falls. "I don't know why more businesses aren't taking advantage of this. It makes financial sense and it's the right thing to do."

Pepsi Cola of Klamath Falls is a 50-year-old family-owned business. Currently there are eight siblings with ownership in the company.

The package of incentives and tax credits that closed the deal for the Bocchi family included $210,000 in incentives from Energy Trust of Oregon, Inc., $444,412 in Business Energy Tax Credits from the Oregon Department of Energy, an accelerated state and federal tax depreciation schedule and a $950,000 loan from the Oregon Energy Loan Program.

"The owners show great concern for the environment in installing this solar electric project," said Hal Simms, loan officer with the Oregon Department of Energy's Loan Program. "We are pleased that we can assist and look forward to helping other business owners with their renewable energy projects."

Pacific Power was a valuable partner in making this project a reality. "We pre-purchased green tags from Pepsi's solar facility for Oregon Blue Sky customers," said Bill Edmonds, Pacific Power's director of environmental policy. "That helped provide start-up funds for the project." Under the utility's Blue Sky options, Oregon customers voluntarily can purchase one of three renewable power options.

"This project shows that solar is more than a clean resource choice for Oregon's environment, it's a good business decision for Oregon businesses," said Peter West, director, renewable resource program, Energy Trust of Oregon.

The solar installation is actually three systems. An 11 kilowatt system features 64 photovoltaic panels in Lakeview, Ore. A Klamath Falls warehouse produces 29 kilowatts, generated by 165 photovoltaic panels. Excess power generated by the systems flow to the local grid for a credit on Pepsi's bill from Pacific Power.

The 132 kilowatt system at the company's main office and warehouse, Klamath Falls, features building-integrated photovoltaic technology (BIPV), with 1,042 laminated solar panels bonded to the metal roof.

"The material used for building-integrated systems is extremely lightweight and unbreakable, making it a good choice for metal roof structures that cannot hold the weight of more common framed PV panels," said David Parker of Advanced Energy Systems, Eugene, Ore., whose company designed and installed the system.

As a condition of the contracts with Energy Trust and the State of Oregon, solar electric systems receiving incentives and tax credits must be connected to the local utility grid. Bocchi estimates that Pepsi will export about 50,000 kilowatt-hours of electricity per year after satisfying its own internal loads.

In August, Pepsi completed a lighting retrofit at their main warehouse to save more than 30,000 kilowatt-hours of electricity each year, or $1,800 on the firm's annual electric bill. Pepsi received an Energy Trust incentive of nearly $2,000 and Business Energy Tax Credits of $2,300 for a payback of just over one year.