It’s not unusual when cruising around central Maryland to drive past the home of an owner who has taken advantage of the state and federal tax incentives and installed solar panels on their roof. And it’s not hard to thumb through a directory that lists numerous companies that have invested in the trend.
Home and business owners who are on the fence about making their own investment may soon become part of the action. That’s because of the Dec. 31, 2016, deadline to take advantage of state and county tax incentives (at which point the federal credit becomes a permanent 10% commercial credit, with residential expiring completely) that is looming.
Whether the state incentive will be extended beyond 2016 is anyone’s guess. But while the solar energy market only accounts for about 1% of usage at present, it’s also primed for investment and growth, sometimes in unpredictable directions.
For instance, would you have ever thought that a local company would be selling coated windows that capture energy from the sun?
John Conklin is president and CEO of Columbia-based SolarWindow Technologies, which manufactures and markets panes with “a first-ever transparent coating that collects solar energy.
“There are no toxic metals or [organic photovoltaics]” used in manufacturing the promising technology, “with earth abundant elements and organic polymers, which are key,” he said. “Everything used is in a liquid form, which allows us to produce the energy on glass in ambient conditions. We don’t need expensive high pressure or energy intensive processes that can lead to high production costs.”
Conklin thinks “solar will produce a broadstroke, as renewable energy will be extremely important for the world,” he said; and despite the fact that solar energy accounts for just a sliver of the total energy usage in the U.S., brighter days lie ahead.
“It’s eventually going to be a multi-billion-dollar industry,” he said. “Today, we’re under 1%, with oil, coal and natural gas accounting for 85%. But know that the sun’s energy is a tremendous resource.”
While he and many others feel that the solar market will boom, there are still two key circumstances to address.
“For one, we can’t just look at renewable/solar as the ‘be-all.’ We need to see the trend from the perspective of consumption versus generation,” Conklin said. Then comes distribution. “The infrastructure is rather old, and we know that energy companies around the world are looking at upgrading.
“We can look at the grid in different ways,” he said, “One is as a solar [photovoltaic system], just for [a given] community; we’re also looking at [expansive] solar farms in Utah or in California.”
Richard Deutschmann, manager, solar PV development-federal solutions group, with Columbia-based Ameresco, made the point that solar energy has become cost-competitive in many markets in the U.S., including Maryland.
However, there are other drivers that could expedite a bright future for solar, including state Renewable Portfolio Standards, the huge amount and lower cost of investment capital flowing into the renewable energy sector, and the prospect of complying with the Clean Power Plan to reduce carbon emissions.
“Even in the scenario of expiration of the investment tax credit, we believe that solar will continue to grow exponentially during the next decade, after a drop-off in early 2017,” said Deutschman. “The commercial market continues to grow rapidly, especially in the municipal, educational, retail and technology sectors. As commercial and institutional entities continue to learn that solar can save money on utility bills and help comply with sustainability goals, the market will continue on that growth trajectory.”
Also keen on solar’s rise is Jose Ramos, chief marketing officer with Columbia-based Direct Energy Solar (DES), which was founded as Astrum Solar in 2007 and purchased by DES in July 2014.
“Solar has been growing dramatically,” Ramos said. “In the last year, we’ve doubled our employee roster to nearly 600, with many based in Columbia at our corporate headquarters,” he said. “We’ve doubled our revenues in 2015 and are looking to do so again next year.”
DES operates about a dozen locations throughout the U.S. and plans to open four more before the end of the year, notably in California, Massachusetts and New York.
Safe at Home
While no one knows if Maryland’s tax incentive (the Maryland Energy Administration did not respond to several requests for comment for this story) will be renewed, Ramos made a couple of predictions as we head toward 2016. “I think with the 30% federal tax credit winding down, many people will finally pull the trigger and go for it,” he said, noting the additional credits that are available in many states.
The cost of a system “depends on the way that the user buys it,” Ramos said. “They can pay cash, or get loans or leases. The average system costs about $30,000 without any credits or any other state or local assistance.”
For instance, in New York state, the 30% discount from the feds, combined with the state incentive, make the final cost about $12,000.
Also, know that everyone ends up with a different number of 3-foot by 5-foot panels on the roof. “Our average homeowner gets 32 panels on the roof,” said Ramos, noting that they are made by manufacturers from “all over the world, and there are some technical and generational differences.
“So,” he said, “[Consumers] have many choices. Only the most sophisticated customers know the nuances.”
Like Deutschmann, Ramos is predicting “a good year in 2016, but [it] is still somewhat tentative due to the [possible] end of the tax credits. But also bear in mind,” he said, “that utilities are raising their prices, and there will be certain states that continue the tax credits, whether the federal government does or not.”
That point also can be applied to several Maryland counties: Howard has a $1,500 capped credit and Anne Arundel offers $2,500, with lesser value prevailing.
While the future looks bright, the idea is to make progress now while benefiting future generations. Conklin is enjoying his gaze at both horizons.
“I think you’ll see more solar farms in the future, but they can’t interfere with aesthetics or nature. You can determine environmental impact and if the placement is right,” he said. “Developers [see sidebar] need to seek input and comment from the public to achieve the right balance.”
That approach was taken by Bith Energy, which built the new solar farm at Nixon Farm in West Friendship, much of which is being used by Columbia Association (CA).
“We’re the off-taker for 2 megawatts (mw) of the 10 mw installation,” said Jeremy Scharfenberg, CA’s energy manager. “It’s one of the first such projects in the BGE servicing area and employs Virtual Net Metering.”
BGE credits CA, which has a 20-year purchasing agreement, with 100% of the power at the Columbia Gym and the Columbia Athletic Club. The deal “provides 25% of our power as a company and [constitutes] 5% or our monthly overall bill,” Scharfenberg said.
Many observers in the industry are looking to get as many commercial and residential customers into similar scenarios as soon as possible.
Noting that the solar industry currently “employs more than 200,000 people in the U.S. who would likely be severely impacted by allowing this tax credit to expire,” Deutschmann offered sentiments that are shared with many people with who are involved in this burgeoning industry.
“We believe it would be short-sighted to eliminate this important tax credit at a time when the industry is [creating] jobs across the country,” he said, “and when the cost of solar is finally coming down to the point where consumers and public entities can reduce their utility bills by going solar.”