August 12, 2012

Program Brings Sunny Summer To Solar Installers: Winning Contractors Enjoy A Boost

Photo/Edd Cote
Anthony Gaspari (left) and Kyle Senecal of Astrum Solar work on a roof installation in Wayland. The couple who purchased the system will receive a rebate from the Solarize Massachusetts program, which has meant business for area solar companies in the past year.

Kim and Mark Reichelt spent years weighing the cost of a solar panel installation at their Wayland home against the energy savings and reduced carbon footprint they'd achieve by harnessing power from the sun instead of the electric grid.

The rewards sounded appealing but the installation wasn't going to be cheap. The couple found themselves disagreeing on what to do.

"My husband wanted to go ahead with the installation, even if it wasn't economically attractive. I wanted to do the right thing environmentally, but I didn't want to do it if it was just silly economically," Kim Reichelt said.

Thanks to a state-funded program called Solarize Massachusetts, the Reichelts found a solar photovoltaic (PV) system that satisfied both their sensibilities.

Solarize Massachusetts, administered by the Massachusetts Clean Energy Center (MassCEC ), offers solar PV installations at a discounted rate through a tiered pricing system. Installers have agreed to put in systems at discounted rates; the more people that sign up, the cheaper it becomes for everyone. And the MassCEC issues rebates to customers to cut the cost of installation, based on the size of the system. That's on top of the state and federal incentives available to most renewable energy customers.

And those who generate their own power receive solar renewable energy credits, or SRECs, which they can then sell back to the grid. A total of $14 million has been allocated for Solarize rebates, though the amount to be paid out will depend on how many customers sign up.

Last summer, a pilot program resulted in 165 installations in a handful of communities. As a result, the MassCEC, a quasi-public agency responsible for the state's green energy initiatives, selected a number of local solar PV installers to continue the project this year on a larger scale .

Jumpstarting An Industry

After applying through a formal request-for-proposal process, the winning installers — including some in MetroWest — are enjoying an uptick in business. They say the benefits could reverberate far beyond the life of the program.

Projects are taking place in towns designated as "green communities" by the state, and residents of those towns, including the MetroWest communities of Acton, Shirley, Wayland, Sudbury, Hopkinton and Mendon, can apply for installations until Sept. 30.

For installers, the program has meant a busy summer of site visits, information forums and installations. Dan Greenwood, vice president of SolarFlair Inc. of Framingham, said his company is conducting between 15 and 20 site visits per week at the homes of interested residents.

Between Hopkinton, Mendon and Arlington — the three towns for which SolarFlair was selected to install systems — Greenwood thinks there could be as many as 300 signed contracts by the program deadline on Sept. 30.

"It will probably end up being about 40 percent of our business," Greenwood said.

Astrum Solar, a Maryland-based company with offices in Hopkinton, installed the solar panels on the Reichelt's roof at the end of July. It is among the first installations completed in a slew of projects in the works through the Solarize program.

The company was chosen to conduct installations in six towns, including Wayland and Sudbury. Michelle Waldgeir, vice president of marketing at Astrum, said the short-term boost to business is undeniable. But she thinks the exposure it garners for the company is the most important aspect.

"In every market we've been in, once you get over that hurdle from being that novel thing to becoming mainstream...the entire category grows exponentially," Waldgeir said.

Astrum sold about 20 systems in Wayland, Sudbury and Lincoln by mid-July, which is about the number of installations completed in the same area in all of 2011, Waldgeir said. Waldgeir believes when people see solar PV systems installed at neighbors' homes, they will follow suit and business will boom.

"Solar is a great deal, even if you didn't have this extra special discount," Waldgeir said. "The key in solar is there is low awareness about how accessible and affordable it is."

Still, the upfront cost is considerable, even with help from the Solarize rebates. For example, the Reichelts' system cost $14,500 up front, and they expect a maximum rebate of around $2,000.

But the cost of installation for Solarize customers is lower than average, according to state officials, because companies had to submit competitive bids to get the work.

Solar energy is still a fairly novel concept locally and nationally. In the Bay State, renewable energy, including solar, wind, water and wood-burning power, accounts for a small portion of the energy market.

As of July, 10.5 megawatts of PV installations qualified for SRECs in the 41-town MetroWest area, according to state records.

According to the U.S. Energy Information AdminBTUs consumed in 2009: a small figure compared to the 1,426 trillion BTUs consumed that year. Petroleum and natural gas still dominate the electricity generation market.

Andy Brydges, senior director of renewable energy generation at MassCEC, said the Solarize program is meant to increase the visibility of solar energy, and to make it easier for people to make the switch to a power source with which they have little familiarity. Rebates for installation are a temporary perk.

"Really, the goal is to simplify the process," Brydges said.

By designating one contractor per town, Brydges said customers get a sense that due diligence has been done for them. That, coupled with the rebate and other incentives, will hopefully entice a large crop of residents to sign up.

Grants' Life Span Unknown

But how long can contractors like Astrum and SolarFlair rely on this steady stream of business generated by Solarize Massachusetts? Brydges said the program has a lot of potential, although perhaps not in its current form.

Rebates may not be available beyond this year, he said. But public outreach efforts — which cost $2,000 per year for each town and include public forums and printing of marketing materials — may continue. And SRECs, which actually generate income for system owners as well as federal incentives, makes the investment worthwhile, Brydges argues.

Greenwood, the SolarFlair vice president, isn't relying on the Solarize program to continue funding installation rebates past 2012. If the program is successful this year, he thinks word of mouth will suffice.

Mark Durrenberger, president of Hudson-based New England Clean Energy, agrees. He doubled his customer base after performing 72 installations in Harvard during the 2011 pilot program, and he said that's where the real value of the Solarize program lies.

"Now we have a lot of very happy customers out there recommending us, which is phenomenal," Durrenberger said.

Though rebates may not last, incentives for generating solar energy will likely be around for years to come.

The state Legislature passed an energy bill at the end of July that, among other things, raises the amount of renewable energy utility companies must buy back from those who generate it from 3 percent to 7 percent by 2016.

State Sen. James Eldridge, D-Acton, said raising the cap was essential, as some utility companies were close to reaching the 3-percent threshold, which could have excluded future renewable energy customers from incentives.

Eldridge said increasing the net metering cap was popular in his district. But ratepayers who do not generate renewable energy bear the cost through a surcharge on their utility bills, which is used to support green energy incentives.

The surcharge has raised some controversy among ratepayers who feel they're being unfairly burdened with the cost of elective green energy programs.

Brydges, of MassCEC, acknowledged the concerns, but he said the impact to ratepayers is unclear, as many factors affect the cost of the surcharge.

Eldridge believes promoting energy independence is worth the cost.

"Obviously, embracing alternative energy, long term and short term, we're embracing reducing energy costs...and reducing dependence on foreign oil," Eldridge said. n

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