News Column

Solar Fans Hope Obama Still Can Shine

Nov 23, 2012

Monica Von Dobeneck

solar

Ah, the bright future of solar energy.

When Barack Obama was elected in 2008, environmentalists were thrilled about the prospects for green energy technologies.

Federal tax credits, Pennsylvania's Sunshine grants, green power credits sold to utilities, government loan guarantees and other incentives made the fledgling industries hot commodities.

Then came political gridlock. Many of the incentives expired. The solar energy company Solyndra, which had received government loan guarantees, went bankrupt, fueling a political backlash against green energy. Candidate Mitt Romney called Obama's green incentives "an imaginary world" whose "vision has failed." Natural gas from shale captured the energy limelight.

Now, with Obama's re-election, environmentalists are once again upbeat. Analysts predict a rising market for green energy. The day after the election, coal companies dropped in the stock market while alternative energy companies rallied.

What might come as a surprise to many people, however, is that some solar and alternative energy companies have been doing just fine the past couple of years.

"The stimulus worked," said Michael Drei, marketing director for Jonestown-based Energy Systems & Installation, which specializes in solar photo-voltaic cell services.

The company launched in 2008 with net sales of $300,000, and expects sales of $25 million this year. It went from two employees to more than 50, and moved from a small office to the former state police barracks in Jonestown. It recently acquired Eichelberger Energy Co. in Silver Spring Twp. to expand its presence on the West Shore.

Company CEO Corey Wolff said he wanted to start a business "that has no ceiling" and believes he has found one in the renewable energy field.

There are fewer incentives these days, but the price of renewable energy is cheaper. While a ten kilowatt system cost $50,000 to $60,000 in 2008, it now costs under $30,000, he said.

The company is now installing 1,054 solar panels for Emmitsburg Glass in Maryland at a cost of about $700,000; it would have cost $1.3 million a few years ago, Wolff said.

For some of the company's bigger installations, the cost has come down to $2.20 per watt. If it drops just a few more cents, it will be comparable to coal, he said.

The company's earlier projects were mostly within a two hour drive, and included installations at Hersheypark, the Hershey Technology Center and Country Meadows in Bethlehem.

Now, however, most of the jobs are in other states, which still have incentives like Pennsylvania used to have.

Still remaining for Pennsylvania residents are the 30 percent tax credit for solar energy which expires in 2016, accelerated depreciation, and renewable energy credits which can be sold to utilities. Federal wind energy credits expire at the end of the year. The utility company credits are worth much less than they were a few years ago because of market forces.

A lot of fledgling solar companies in Pennsylvania closed after the incentives dried up, Wolff said. There were probably too many starting up too quickly, creating an oversupply.

Wolff said he kept his business going by moving to other states and expanding into other green technologies. He hopes to offer total energy solutions to companies which could include better insulation, geothermal, efficient lighting, better control systems and more to make the payback on upgrades relatively quick.

Solar energy is still a tiny portion of the energy market -- less than one percent -- but it has become a proven technology and the price is dropping rapidly, thanks in large part to the kickstart in got through the stimulus. It provides four times as much energy as it did at the beginning of Obama's first term. It employs 119,000 people, a 13 percent jump in the past year.

Investment firm Goldman Sachs announced last spring that it would invest or finance $40 billion in renewable energy over the next decade.

And despite the brouhaha over Solyndra, only three of the 26 alternative energy companies receiving loan guarantees from the federal government failed, a very low percentage for tech start-ups.

The idea of solar energy continues to be very popular.

In October, the Solar Energy Industries Association sponsored a survey which showed that 92 percent of people think it is important for the US to develop and use solar power, and that included 84 percent of Republicans. By a 4 to 1 majority, they want the government to support green energy through tax credits and financial incentives.

As recent vicious storms convince more people that global warming is real, more companies are also becoming concerned about the environment.

An article in Forbes magazine talked about the maturing of the solar industry, which means increased competition and stronger companies.

Wolff thinks there is still a place for modest incentives for solar and other green energies. Even though market forces are edging closer to sustaining the industry, it's not there yet. He believes renewables will get more support under an Obama administration.

While "the long-term prognosis for solar is very bright, there are short term challenges," he said. "Solar needed incentives to get off the ground...But ultimately, economics are what drive our program."



Distributed by MCT Information Services



Source: (c) 2012 The Patriot-News (Harrisburg, Pa.)


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