Solar Too Popular For Its Own Good | Funding dries up – businesses, communities left hanging
Up until a few weeks ago, the town of Leicester had big plans for its three public school buildings.
With a rebate through the state’s Commonwealth Solar program as incentive, the town had planned to lease the roofs of three school buildings to a private contractor to install solar panels.
But Leicester was a victim of Commonwealth Solar’s own popularity. The $68 million in state funding set aside for the rebates — which was expected to last until 2012 — was exhausted in October.
“The frustrating thing for the communities was all the time that went into putting this together,” said Robert Reed, Leicester’s town administrator. “It gets frustrating when you’re first in-depth experience turns out to be a dead end.”
The Commonwealth Solar rebates were based on a dollar-per-watt calculation that took into consideration a variety of factors including the type of building and the property value. The town was counting on the rebate to total about 60 percent of the $1 million project’s cost, or $600,000, according to Selectman Lee Zagorski.
Solar Exuberance
At the time of Commonwealth Solar’s launch in January 2008, 5 megawatts of solar power had been installed in Massachusetts. The goal of the program was to increase the total solar power usage in the state to 27 megawatts by 2012. To facilitate that, the state set aside $68 million—$40 million from the Renewable Energy Trust and $28 million from the Department of Energy Resources’ Alternative Compliance Payment fund—to reimburse those willing to invest in solar energy.
According to Carter Wall, executive director of the Massachusetts Renewable Energy Trust, which administers the solar rebate program, the demand far exceeded expectations.
“The success of the program speaks for itself,” she said. “We’ve gone from having 50 solar installers in the state when we launched the program to over 200 now.”
But Wall’s positive spin is little solace to Leicester officials.
“On one hand, it’s difficult to be critical because they made something available, but it certainly seems like it could’ve been managed a bit better,” said Reed.
According to Wall, when the program approached the $50 million mark in rebate awards, notification was sent out that changes to the rebate structure would soon take effect. But that notification inadvertently caused a surge of applications worth more than $20 million, which surpassed the total amount of money still available.
Now the Massachusetts Renewable Energy Trust has gone begging to refill Common-wealth Solar’s rebate coffers.
She said that the DOER has applied to the U.S. Department of Energy to reallocate some of the state’s stimulus funds to a solar rebate program. She also said that a second solar rebate program, Commonwealth Solar II, will launch early next year.
More Casualties
The town of Leicester is not the only prospective solar energy adopter to miss the boat on the state’s first rebate program.
R.H. White Construction Co. in Auburn was reviewing a number of its properties as potential sites when news came that the rebate program was over.
“As much as we want to be good environmental citizens, at the end of the day, there’s a financial decision that needs to be made,” said Phil Cyr, R.H. White’s vice president of business development, explaining that the forecasted return on investment would be extended by an estimated 16 years without the rebate.
“At that point, it probably doesn’t make sense for us to proceed,” he said.
Dr. Robert Davis, the co-owner of Ashland Animal Hospital, said that he had a design for a solar system, a draft of the proposal written and all the financials worked out when news broke of the rebate program’s termination.
Channel Sun Solar Power Systems of Westborough had done all of the work for Davis leading up to the rebate program’s termination.
Patrick Hurley, Channel Sun’s vice president of sales and marketing, said that essentially all of the company’s business is on hold. Even so, he remains optimistic.
“We’re not losing sleep because of this,” he said. “This sudden eclipse of the rebates has thrown a wrench into some of the transactions that we’re working on, but the big picture still looks fantastic.”
While the Massachusetts Renewable Energy Trust is developing new rebate programs and other financial incentive plans for those hoping to adopt solar energy, its primary goal right now is devising a way to satisfy the businesses that have already submitted applications on time.
Because the trust received a bulk of applications that exceeded the remaining available funding through the rebate program, it stands to reason that some businesses that thought they were in the clear may come to find that they’re also out of luck.
At deadline for this publication, the Massachusetts Renewable Trust was attempting to finalize a plan that would accommodate as many of the applicants as possible, but the specifics have not been worked out yet.
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