Plunging solar panel prices and cheap natural gas are putting financial pressure on some players in the solar industry. But the solar installation sector keeps growing and, as Living on Earth’s Ingrid Lobet reports, the latest rooftop systems are bigger than ever.
GELLERMAN: But solar power has been hit hard by the economic downturn and supply of cheap natural gas. And recently, three of the biggest solar manufacturers have announced large layoffs and cutback production. Still, things are bright, and looking up for one sector of the solar industry: corporate rooftop solar. Living on Earth’s Ingrid Lobet reports.
LOBET: The largest rooftop solar system in North America takes up 25 acres on a warehouse in New Jersey. About 23-football-fields. The size is just really hard to take in.
PELTZMAN: Yeah you would have to be in a helicopter.
LOBET: That’s Keith Peltzman, president of Independence Solar. He was an advisor on the project, which provides electricity for a giant chilling warehouse on the Delaware River.
PELTZMAN: A good deal of the produce that is shipped through the eastern portion of the United States comes in through this facility. There are probably only a handful of buildings in the country that could do a solar installation this large.
LOBET: The panels on the roof are sending their nine megawatts into the building. But if they weren’t, they’d power about fifteen hundred homes. For a while, for the handful of people who own buildings this large, the phones were ringing.
PELTZMAN: They were being approached by all these Wall Street hedge funds, private equity investors, who said, “Hey let us lease your rooftop from you. We want to put a solar energy system that we pay for on there.” And after the third or fourth meeting the management of the Gloucester Marine Terminal said, “Hey, why is everyone so interested in our roof for this solar energy? If it’s such a great idea, maybe we should consider doing it on our own without these hedge funds.”
LOBET: For the past couple of years, large building owners have been offered fifty to seventy-five thousand dollars a year to lease their roofs. Here’s why: The last Bush administration began a generous tax credit, thirty percent of everything a business spends on solar is subtracted from its taxes. But for this to be attractive, the company must owe taxes. During the recession, businesses weren’t making any money, and weren’t installing solar. To spur the industry, the Obama administration switched the tax credit into cash. The rooftop gold rush was on.
SKELLENGER: And, what happened is that all these new investors came out of the woodwork.
LOBET: Solar developer Christina Skellenger is with the firm Gerding Edlen. She used the government cash incentive for a rooftop project on the Jersey Garden Mall. The mall was the biggest solar project in the country, for about eight weeks in February and March of this year. Why all these records set in New Jersey? The state also has strong paybacks for solar systems.
SKELLENGER: You’re not capped out on a certain system size. You can make it as large as you want. And for Jersey Gardens, we installed as much as we possibly could on the roof. So we maxed out the roof space.
LOBET: But now the government is no longer offering cash for solar, it’s gone back to giving tax credits. So Christina Skellenger says we may not see as many huge commercial systems.
SKELLENGER: It is significantly harder.
LOBET: Investors too aren’t spending as freely on solar projects right now. But the solar energy trend is likely to continue, even if it’s not as hot. About half the states have clean energy policies that encourage it and the price of panels is at an all-time low. For Living on Earth, I’m Ingrid Lobet.
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