Saturday, August 18, 2012

Solar Installers Eye Booming Market in New York City

With New York, New Jersey and the federal government providing an array of incentives, solar firms now face rivals of every stripe -- from builders to plumbers, from electricians to HVAC contractors -- who all started doing solar installations during the building slump. While government incentives and utility company rebates power a sunny view for panel installers. However, will the market deliver?

Last year was one of ups and downs for Soly M. Bawabeh, president of Brooklyn-based solar installer Solar Rainbow Services. Tapping relationships in his family's commercial real estate development business to sell large-scale solar electric systems, his five-employee firm picked up lucrative clients such as Jordache Enterprises and commercial property firm Aetna Realty.

With sales humming, Solar Rainbow acquired a stake in More Core Commercial Roofing in Monmouth County, N.J., last summer, simplyfing the process of marketing solar panels to clients already doing roofing work.

However, a federal cash grant for installing those panels expired at year's end, leading some customers to back out. Mr. Bawabeh is hoping Congress reinstates it. He's grateful, meanwhile, that many of his 2-year-old firm's customers met a deadline to be grandfathered.

“We have a lot of work in the pipeline,” said Mr. Bawabeh, whose given name is, coincidentally, Solar. He projects $20 million in sales this year.

With New York, New Jersey and the federal government providing an array of incentives, however, Mr. Bawabeh faces rivals of every stripe, from builders to heating, ventilation and air-conditioning contractors, who started doing solar installation during the slump in building.

Bigger players are circling. Sungevity, a 200-person solar-panel installer based in Oakland, Calif., is talking to customers in Brooklyn. “The activity we're seeing now is nothing compared to what we'll see in the next year or two,” said co-founder Alec Guettel.

Meanwhile, Solar Universe Network, a national solar-panel franchise based in Livermore, Calif., with territories in New Jersey and Pennsylvania, is also eyeing New York, which has high utility rates and attractive incentives. It is on the hunt for owners of service businesses with sales backgrounds who could do well in the solar field.

“Some of our best franchisees are guys who did custom car interiors,” said Chase Sorgel, director of marketing and customer acquisition for Solar Universe Network.

New York State has 375 registered solar installers, following a big upswing in 2009, according to the New York State Energy Research and Development Authority. With NYSERDA-funded training programs in more than 20 community colleges, vocational schools, union halls and elsewhere, and another 13 locations being set up, more installers will be hawking their services this year.

Clean-energy jobs

The Brookings Institution last summer ranked New York the top city in clean-energy jobs, with 152,034. The 786 solar photovoltaic jobs in 2010 were a tiny fraction of them, but were up from 252 in 2003.

New Jersey, which has robust solar policies, dwarfs Gotham in solar capacity, but some see the city's potential.

Antenna Group, which bills itself as the nation's largest clean-technology public relations practice, announced an expansion from San Francisco to New York last April.

“The New Jersey incentives are creating a lot of opportunity,” said General Manager Caroline Venza. “It's only natural that you see that activity extended to New York.” All this action, though, raises the specter of hope outstripping reality.

“Will the market go away or collapse? I don't think that will happen,” Mr. Sorgel said. He anticipates that larger players will dominate, however. “The small guys will find it harder and harder to compete.”

The biggest factor fueling the growth is a requirement that New Jersey energy utilities help the state meet a mandate, passed three years ago, to fill 22.5% of its power needs with renewable energy by 2021.

For each megawatt of solar energy they generate, companies and residents earn solar renewable energy credits, or SRECs, which they can sell to utilities. Required to generate a set amount of renewable energy each year, utilities can purchase the credits to meet the minimum.

“That drives the market,” said Michele Siekerka, assistant commissioner for sustainability and green energy at the New Jersey Department of Environmental Protection. “You've got folks out there saying, 'I need to buy SRECs. Who's got them?' ”

Also fueling the burgeoning local industry are three incentive programs in New York state encouraging installations in residences, businesses and nonprofits. Another initiative, launched in 2011, is pouring $150 million over five years into projects in which large companies will use solar energy, with $125 million targeted for New York City and southern Westchester County. NYSERDA is paying 50% of project costs up to $3 million per site. Many solar installers handle the paperwork needed for customers to collect on the incentives.

On top of this, the federal Department of Energy announced in 2010 it had committed more than $200 million to fostering research and development in solar energy and water power.

Solyndra got its infamous $535 million loan guarantee from the DOE to finance construction on a solar manufacturing plant in Fremont, Calif., before declaring bankruptcy last August. Although the Solyndra debacle has raised skepticism about publicly financed solar projects, expectations in the industry for the New York region remain undiminished.

New York City indeed could be a great spot for solar—on all those building rooftops.

But, will the market deliver?
 

2 comments:

  1. Thank god for solar energy, where would our planet be in 20 years from now if we didn't learn how to utilize the sun for energy? Its a scary thought.

    -Sharone Tal
    Solar Installer Boston

    ReplyDelete
  2. hi. well said. it is very important that we move on to green energy source. also strict laws should be enacted to promote green power for commercial institutes and also homes. fit laws should be made more flexible.

    Solar Installers NewYork

    ReplyDelete