# The Advantage of Local Warehousing Across the US: CED Greentech Case Study

We know that altering your regular processes is a big change to make and that no good business owner would make it without looking at it from all angles. That’s why our team has developed the below case study.

For these cost examples, we will use a \$100,000 order of solar panels to get all of our calculations.

Let’s first start with the holding of equipment costs. The square footage per pallet we are using is 23.09 sq ft and the holding cost per sq ft for a year is \$6. This is the cost of the space that the pallet takes up. If we multiply 6 by 23.09 then we get the total cost per pallet in a year, which would be \$138.54. An order of \$100,000 worth of solar panels would equate to roughly 23 pallets to hold all of them. If you multiply \$138.54 by 23 you get a cost of \$3,186 per year for holding \$100,000 of panels. One thing to note about holding costs is that they are annual; once you have the pallets and the space for them, the cost doesn’t fluctuate.

Labor costs on the other hand are much more volatile and have the possibility of significantly rising and falling depending on a host of factors. For simply unloading the pallets from 2 trucks worth of panels (based again on \$100,000 worth of panels) we’d expect it to take 3 employees a collective total of 2 hours and 30 minutes to unload the material. With an assumed labor cost of \$25 per hour, this gives us an unloading cost of \$187.50. This does not even include the time it takes to prepare the pallets once they have arrived at their destination. With 23 pallets to prepare, we estimate it would take 2 employees 50 min to prepare 1 pallet. Using the same assumed labor cost, the estimated cost to prepare all 23 pallets would be \$966 total. With ongoing projects throughout the year, this \$966 labor cost would recur and the total annual costs would increase with each order of 23 or more pallets of product.

The next two factors we will examine are obsolescence and spoiled goods costs. In both cases we will assume that in this \$100,000 order, 667 modules are being held at a single time. For the obsolescence cost, assuming 1% of the modules are unsold in the month, that leaves roughly 6 unsold modules in a month on average. If 35% of those 6 panels suffer from obsolescence and become outdated, that leaves you with about 2 panels that are obsolete per month. This misleadingly small loss does add up to unnecessary waste that you can avoid. The same goes for spoiled goods cost, if you suffer 0.02% of spoiled goods for a monthly shipment of 667 modules, you’re losing ~1 panel per month. Again, this is a cost that can be avoided by storing your equipment with CED Greentech.

The final cost to consider is insurance costs. The monthly cost to insure \$100,000 worth of panels can vary but a standard monthly cost is around \$100.

If you combine all of these potential savings together, it becomes clear that warehousing your solar panels at CED Greentech can serve as a crucially strategic step for your PV business. Even without including a dollar value for the obsolescence and spoiled goods costs, anticipated savings of over \$1,500 per month and much more throughout the entire year will make CED Greentech an asset of growth for your team. Contact your rep today to talk about storing your solar equipment at your local CED Greentech location!

Published
5 months 1 week ago
Written by
Luke Godburn
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Local Solar
cost comparison
Equipment Storage