Solar power becomes affordable option
East Bay Business Times - by Katherine Conrad
Building owners desperate to reduce soaring energy costs and avoid blackouts need only look to the sun for their energy needs as rebates and technology have made solar power not only more dependable, but affordable as well.
Those interested need to act quickly because time and money are running out. Deadlines loom for applying for rebates from the state and local utility companies, and the pot of rebate money is emptying.
The third reason to get moving on solar is that the businesses that manufacture the technology to convert the sun's heat into electricity are experiencing an unprecedented onslaught of interest from mainstream customers. In other words, customers need to get in line for solar power.
"It's finally reached the point where it's cost competitive," said Bo Harmon, a spokesman for BP Solar, which is on the verge of opening a manufacturing plant in Fairfield to make Thin Film, a substance used to coat windows to produce energy from the sun's heat.
"Before, it was the committed environmentalists or people who wanted to be independent of the grid for whatever reason," Harmon said. "Now it makes sense to use solar power."
To help convince businesses and residents to take the solar plunge, the California Energy Commission is offering rebates to those who install energy-efficient equipment: photovoltaic solar cells, small wind turbines, fuel cells and solar thermal electricity systems. The federal government is considering a tax credit as well, but nothing is definite.
"Here's the really cool thing, the California Energy Commission almost doubled the rebates available to use this technology. The rebates pay for up to 50 percent of the costs of the systems," crowed Dan Shugar, CEO of Berkeley's Powerlight Corp., which supplies photovoltaic solar panels for roofs. "No wonder we're experiencing this phenomenal explosion. This year in response to the energy crisis, our growth has accelerated. We're tripling our numbers."
Last month, the state increased rebates by $1.50 to $4.50 a watt, or up to 50 percent off an eligible renewable system's purchase price, whichever is lower. Another $750 is available for battery storage systems.
"There's a huge interest from commercial businesses in installing solar energy because the state energy commission just recently increased the rebates," said Tor Allen, founder of the Rahus Institute, of Martinez. "It really makes a lot of sense."
Another step designed to make commercial businesses sit up and take notice was the decision by the Energy Commission to extend "net metering" to large businesses. Net metering allows the customer who is generating electricity through solar panels or wind turbines to "sell" excess energy back to the utility company.
"If you put a solar electric system on your roof and it goes through the meter, it literally spins the meter backwards and the power goes back to grid," Allen explained. "In the past, that wasn't the case."
Sandy Miller, at the California Energy Commission, said that two months ago the commission agreed to raise the amount of power that could be produced by renewable energy systems and sold back to the grid from 10 kilowatts to 1,000 kilowatts.
"In April, we upped the amount to 1 megawatt or 1,000 kilowatts. That opens the door to virtually everybody; an industrial customer could do net metering," Miller said. "But it's only for a limited time, only until 2003. For those who sign up for it, you get net metering until 2003; then it goes back down to 10 kilowatts unless the Legislature changes the law."
Now that the floodgates have opened, the state has about $50 million left to pay in rebates, Miller said. The fund started at $54 million when it was passed in 1998 under the deregulation legislation, and in April another $22 million was added to the pot. Miller said the state has paid out about $25 million in rebates since the program started in 1998 $17 million since Jan. 1.
"We see accelerated activity as people find out about the program. Right now we have in the neighborhood of $40 million for small systems (10 kilowatts) and $10 million to $11 million for larger systems. That $10 million won't go too far. We're going to use that money up fast."
In other words, act now.
"Bottom line, a lot of people are looking at solar, both businesses and residential customers. Before the energy crisis, even with the rebates, it would take 20 years for a system to pay off. Now with the higher rebates and higher electrical rates, that's been cut down to 10 years. For businesses, it could be shorter than that because they can buy a bigger system at a cheaper rate, plus they can take advantage of accelerated depreciation. It's very cost effective."
Again, though, promptness is the key. With all the interest in solar, there's a shortage of product, and industry suppliers say they are three to four months behind schedule.
BP Solar plant manager Douglas Skinner can attest to that. He's busy trying to hire enough people to fill the orders.
"We're starting shipments to selected customers right now," he said. "According to the production schedule, I'm sold out through the second quarter of 2002. My problem right now is trying to get the volume up."
The Fairfield plant will open later this summer with about 200 employees and the ability to expand if the markets indicate the need.
"We're seeing the industrialized developed world as the future of solar industry. The huge potential market is in the developed world," Harmon said.
Reach Conrad at kconrad@bizjournals.com or 925-59801427.
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