Hot on the heels of Connecticut”™s newest energy bill, the solar industry is fast adding a complex array of financing options for businesses and homeowners to add panels ”“ before the incentives reach their sunset.
As of this month, the Connecticut Clean Energy Fund was folded into the newly created Clean Energy Finance and Investment Authority, which the state claims is the first of its kind in the nation. As part of the law creating the authority, the Connecticut General Assembly also authorized incentives supporting the installation of up to 30 megawatts of photovoltaic systems in Connecticut, as well as a renewable-energy credit program that rewards solar panel operators for each megawatt-hour of electricity they produce.
Even as lawmakers finalized the new incentives, Wilton-based Alteris Renewables Inc. was finalizing its sale to Colorado-based Real Goods Solar Inc., creating a company with operations from New England to California.
During the past few years, the Northeast solar industry has focused like a laser on New Jersey, which like California created sufficient incentives to spark a mini gold rush of sorts. Installers”™ attention is now shifting to New York, Massachusetts, Rhode Island and Connecticut, which have their own incentives in place or near completion even as those in New Jersey, California and Pennsylvania ebb, according to Shayle Kann, managing director of the solar practice for GTM Research in Boston.
“Perhaps the most interesting and important trend in the residential market in the U.S. remains the growth of third-party financing,” Kann said, speaking this month during a conference call hosted by the Solar Energy Industries Association (SEIA). “This is a model that has only really been available in the U.S. since early 2009 and we have just a few companies that have pioneered it and expanded it such now that it is available in most major state markets, and that is really driving a lot of this growth.”
Count Danbury-based Seaboard Solar L.L.C. among those innovators. Previously known as Solaire, for the past few years the company has been performing most of its work in New Jersey, according to CEO Stuart Longman. That has changed with the passage of the Connecticut law, and he says the company has tripled in size to a dozen employees in the past few months. Within five years, he thinks, Seaboard Solar could employ 60 people.
Seaboard Solar”™s business model essentially boils down to leasing commercial rooftops, installing solar panels on them and then selling the electricity back to building owners at a discount from prevailing electric rates. The company is looking for analysts who can understand the ins and outs of solar legislation and building codes in various states.
“My hope is that states expand the requirement,” Longman said.
Despite the lingering effects of the recession, the solar industry had its best-ever first quarter as installations increased to 250 megawatts of installed capacity, according to SEIA. The increase corresponded with a continued drop in the cost of photovoltaic components ”“ 15 percent on a year-over-year basis ”“ and with an extension of a U.S. Treasury program allowing tax credits for the purchase of solar panels and attendant systems, which spurred additional installations in the first quarter to help overcome the otherwise dampening effects of a snowy winter.
“For those (who don”™t follow) solar regularly ”¦ pay close attention to the U.S. solar market this year,” Kann added. “This is going to be a time when we see enormous changes, a lot of growth, new things going on in terms of project financing, securitization of assets ”¦ Everything that comes with the maturation of a sector is going to be compressed into a very short period of time over next year, year and a half, in the U.S.”
So if they are selling power back to the building, does that mean they are at least paying for all of the installation up front?