Q&A with Dennis Elliot, Director of Energy, Utilities and Sustainability at Cal Poly

Cal Poly San Luis Obispo is a nationally-ranked university known for their philosophy of Learn by Doing. The university is committed to leadership in sustainability in both academics and operations. In April 2017 Cal Poly and REC Solar announced that we are working together to bring a 4.5 megawatt (AC) solar farm to the campus. The 18.5-acre solar farm is slated for completion in winter of 2017. It will include more than 16,000 individual solar panels and will generate over 11 million kWh per year — about 25 percent of Cal Poly’s total needs.

Dennis Elliot Cal Poly client spotlight
Dennis Elliot, Director of Energy, Utilities and Sustainability at Cal Poly

In addition to being headquartered in San Luis Obispo, REC Solar was founded by two Cal Poly grads and currently has many alumni on staff, making this a particularly exciting project for our team.

The leader of the initiative at Cal Poly is Dennis Elliot, Director of Energy, Utilities and Sustainability. We recently interviewed him about the solar farm and other initiatives he is overseeing.

Can you tell us more about what your team oversees at the university?

With three full time staff and five part time student interns, the Energy, Utilities and Sustainability team is responsible for the university’s $10M utility budget and Climate Action Plan, energy and water conservation programs, recycling initiatives, educational outreach, and support of student clubs and curriculum development related to sustainability and climate change.

What went into your planning process when you first started evaluating the solar farm idea?

Very early on, we became aware of the opportunities presented by the RES-BCT program, which is allowing us to develop a much larger solar system than would have been possible behind Cal Poly’s main meter. We spent a great deal of time on site selection and structuring a comprehensive Request for Proposal to ensure a successful project and fair playing field for bidders. We wanted this project to result in a long-term collaborative relationship with the provider to develop academic applications of the solar farm in support of the university’s educational mission and student success.

What advice do you have for other universities that are evaluating and prioritizing renewable energy investments?

Consider the various finance models available from solar providers today – they provide a lot of options to fit your business needs. If you have enough open space, seriously consider pursuing the largest ground mounted array that you have space for to achieve the greatest return on investment. We found the RES-BCT program was a good fit for this project, and specified single axis tracking technology to maximize output from a constrained site, as well as mitigating the risk associated with expected changes in time of use periods and rates in the future.

What excites you most about the solar farm project?

Of course I am excited about how much this project is going to save Cal Poly over its 20 year life, and the huge step we are taking toward our goal of climate neutrality. I am most excited about the academic applications of both the solar farm and an associated hands-on solar engineering lab facility that will be designed and constructed near one of the engineering buildings. The work we do to reduce the university’s footprint is meaningful and important, but using these projects to educate future leaders, decision makers, and technology innovators to confront the challenges of climate change is the real reason we are all here.

How will students and faculty be involved?

We are excited that REC Solar will be hiring some Cal Poly students to help in the design and construction of the solar farm itself. In addition, students and faculty in the Electrical Engineering Department are already envisioning future curriculum and lab experiments to utilize the hands-on solar engineering laboratory to be built in the campus core as part of our world class EE Power Program. We look forward to collaborating with REC Solar for years to come on other curricular and applied research opportunities to use these infrastructure systems as teaching tools.

To learn more about the Cal Poly sustainability efforts, visit https://afd.calpoly.edu/sustainability/.

Q&A with Jana Ganion, Sustainability Director at Blue Lake Rancheria

At REC Solar, we are often fortunate to work with incredibly passionate organizations driven to make an impact in the world. Jana Ganion and Blue Lake Rancheria are a perfect example. REC Solar had the pleasure of building a 500kw solar array as part of a microgrid solution. This solar system, which includes energy storage, is helping power government offices, economic enterprises, and critical Red Cross safety shelter-in-place facilities across 100 acres.

blue lake rancheria client spotlight
Jana Ganion, Sustainability Director at Blue Lake Rancheria
Named a “Climate Action Champion” by the Obama Administration, REC Solar is pleased to help Blue Lake Rancheria achieve their sustainability goals to reduce their energy consumption 40% by 2018.

Tell us a little about Blue Lake Rancheria and what prompted you to consider solar for your tribal community?

The Blue Lake Rancheria (BLR) is a federally recognized Native American tribal government and community located in Humboldt County, California. BLR lands consist of about 100 acres spanning the Mad River, in a rural region between the Northern California coastal mountains and the Pacific Ocean. BLR has an aggressive energy development strategy to fulfill several goals: create economic opportunity and clean energy jobs; reduce and levelize costs of energy; reduce and eliminate carbon emissions; support and improve the distribution grid; and provide emergency power. BLR has undertaken several major energy development projects, and has been extraordinarily successful at reaching its resilience goals. As a result, BLR has earned nationwide recognition including 2015-16 White House “Climate Action Champion,” and appointment to the U.S. Dept. of Energy Indian Country Energy and Infrastructure Working Group.

Who or what acted as the primary driver(s) for having Blue Lake Rancheria go solar now?

Going solar fulfills many of our goals mentioned earlier, including providing jobs, reducing our carbon footprint and increasing energy security. At the same time, the cost of installing solar has never been more affordable. The Tribe has looked at numerous distributed-generation energy types, and solar was by far the most cost-effective for us. Ultimately though, solar is clean energy. There are no CO2 or particulate matter or other emissions, which is crucial to public health. And as an industry, the climate benefits of solar have already exceeded the carbon footprint of manufacturing all the components – in other words with carbon lifecycle accounting, from here forward, every solar panel manufactured really does reduce the amount of CO2 and other causes of climate change.

What was important to you in a solar provider and why did you decide to work with REC Solar?

As a tribal government with many overlapping energy needs, the Blue Lake Rancheria required a robust system – one that would be able to function within a community scale microgrid for years to come. In addition to the Tribe’s needs, there are also many stakeholder eyes on this project, on local, state, national, and international levels, including the California Energy Commission as the primary funding agency. We needed the workmanship to be showcase-worthy. REC Solar committed to working with us on complex integration of the solar power within our microgrid, to function with battery storage and other components. And, they designed and implemented the system to be resilient, with multiple inverters, bolstered for a high-hazard earthquake area, and where possible designed to keep operations and maintenance (O&M) costs low. Further, they were competitive in terms of pricing, and were clearly committed partners in working with a tribal government.

Do you see solar as a trend that other tribal nations could leverage?

Tribal nations have and will continue to leverage solar as a part of their energy portfolios. Solar has co-benefits of being very robust over many decades, with low O&M costs, and a high degree of reliability. Many tribes have incredible, global-leading solar resources on their lands, which create favorable development conditions. And solar arrays are a relatively simple way to create electricity for vast areas of Indian Country that are still not connected to a utility grid. The cost of pairing battery storage with solar is plummeting, helping us control the use of solar power and meet some of our specific system requirements. Further, many tribal governments are organizing workforce development and economic enterprise around solar deployment – using solar installations to train tribal members to become installers, engineers, construction technicians, and other related positions. In addition to creating direct clean energy jobs, many tribes have developed utilities and solar enterprises to create exponential economic benefit from their solar strategies. For all these reasons, solar is continuing to trend upward as the most intelligent form of energy.

What are the potential benefits of having solar as part of your energy plan?

We have already seen a wide variety of benefits from focusing on solar as a keystone of our strategic energy plan. On the residential level, we have outfitted a number of homes on the Rancheria with individual arrays. On the community scale, our 500kW solar array is a pillar of our community scale microgrid, and has helped us be on track to save over $200,000 in energy costs annually. We have created clean energy jobs as a result of our use of solar in our energy strategy, and the ultimate benefit is that we will be able to reduce our greenhouse gas emissions significantly for decades to come. New clean energy jobs + emergency power + lower energy costs + climate action = smart.

To learn more about the Blue Lake Rancheria, visit http://www.bluelakerancheria-nsn.gov

Celebrate Earth Day with an Interactive Workbook for Kids

Earth Day was created back in 1970 after a devastating oil spill in Santa Barbara, California. The original intent of Earth Day was to have a day set aside for the public to think and learn about the environment.

At REC Solar, we want to do our part to help educate everyone, including kids, about the environment. In honor of Earth Day, we’ve put together an educational yet fun workbook for kids that explains solar power and renewable energy. Please download and share it with your kids or any kids in your community. Enjoy!

VIEW WORKBOOK ON YOUR COMPUTER

DOWNLOAD PRINTABLE WORKBOOK

Directions:

  • Print the interactive guide on recycled paper in landscape format, double-sided, with the flip on the short edge.
  • Fold each piece of paper hot dog style and stack the pages in order.
  • Depending on the age of the child, read or help them read through the content on the first few pages.
  • Give the child some crayons or markers and allow them to enjoy the interactive activities at the end of the workbook.
  • After the guide has been well used and loved, recycle it!

Here’s a sneak peek of what you’ll find in the interactive workbook:

REC Solar earth day workbook kids REC Solar earth day workbook kids

Happy Earth Day from REC Solar!

5 Considerations for Auto Dealers Shifting to Solar

The National Auto Dealers Association (NADA) notes that auto dealerships face close to $2 billion in energy costs annually, their third highest operating expense. Many dealerships and auto manufacturers like Honda, Toyota and Ford are investing in a variety of energy upgrades like solar energy, efficient LED lighting, and electric vehicle charging stations.

The National Auto Dealers Association (NADA) notes that auto dealerships face close to $2 billion in energy costs annually, their third highest operating expense.  Many dealerships and auto manufacturers like Honda, Toyota and Ford are investing in a variety of energy upgrades like solar energy, efficient LED lighting, and electric vehicle charging stations.

Today, more automotive dealers are turning to solar as a way to alleviate energy expenditures, which are a direct result of energy-intensive showrooms and lots accompanied by long operating hours. Dealerships are not only looking to reduce their operating costs and boost margins, but also to build a more sustainable business.

When evaluating a car dealership for a solar installation, here are five factors that come into play:

  1. Dealership location 
     
    Is your dealership located in California, Hawaii, New Jersey or New York? Higher energy prices in these states make solar a particularly attractive option for auto dealerships seeking to reduce their electric bills. Contact REC Solar to find out how much your business could save.
     
  2. Quality and size of roof 
     
    Many dealerships have a limited amount of usable roof space, and solar carports or canopy systems could be deployed to provide shade for vehicles and power for EV charging stations.
     
  3. Multiple financing options for dealership-specific needs
     
    There are a range of financing options available to auto dealerships and other business owners that make going solar easier than ever. REC Solar offers financing packages with no upfront expenses, such as solar power purchase agreements (solar PPAs) and solar leases, in addition to cash or loan purchase options.
     
  4. Brand integrity and customer loyalty 
     
    The marketing value of an onsite solar system should not be underestimated, not only as an advertisement for plug-in electric vehicles, but also as a demonstration of the dealership’s commitment to environmental sustainability.
     
  5. Tax incentives 
     
    Combined with lower costs than ever before, the 30% business investment tax credit (ITC) for installing solar is available, but expires at the end of 2016. The window for taking advantage of the ITC, however, is actually much sooner. Unless Congress extends the ITC—which is an open question at this time—business owners should begin planning now for solar projects to be completed by the end of 2016.
     

In a highly competitive market, auto dealers are ideally positioned to benefit from solar in numerous ways. Want to know more about how your dealership can start saving?

Contact us today!

Supermarkets Take a Bite Out of High Energy Costs by Going Solar

One of the biggest challenges facing supermarket proprietors is managing and controlling operational costs. Although labor makes up the biggest portion of those costs, energy use is the next largest expense item. According to an Xcel Energy report, energy accounts for 15% of a supermarket’s operating budget. Refrigeration and lighting consume the most electricity in supermarkets, with air and water heating, ventilation, and air conditioning also adding a significant amount to the monthly bill.

One of the biggest challenges facing supermarket proprietors is managing and controlling operational costs. Although labor makes up the biggest portion of those costs, energy use is the next largest expense item. According to an Xcel Energy report, energy accounts for 15% of a supermarket’s operating budget. Refrigeration and lighting consume the most electricity in supermarkets, with air and water heating, ventilation, and air conditioning also adding a significant amount to the monthly bill.

Increasingly, supermarkets and other large, energy-intensive retailers are turning to solar to cut their electricity costs as well as reduce their carbon footprint and strengthen their sustainability programs.

The “Solar Means Business 2014” report published by the Solar Energy Industries Association (SEIA) reveals a growing number of U.S. commercial operations adding solar systems to their property, plant and equipment assets. Listed among the leading solar adopters are some of the most recognizable names in the supermarket sector, including Whole Foods, Safeway, and Stop and Shop, as well as many big-box retailers with embedded grocery stores, such as Walmart, Target, and Costco. Other market chains that have cut their energy costs by going solar at retail outlets and logistics centers include Albertsons and Fresh and Easy.

“This growing adoption of solar by the commercial sector is predominantly the result of consistent price declines,” the SEIA report notes. “The average price of a completed commercial photovoltaic (PV) project in Q2 2014 has dropped by 14 percent year over year and more than 45 percent since 2012. As solar prices continue to fall, more businesses in more states turn to solar to cut operating costs.” Since those statistics were issued, the average price of completed commercial PV installations in the United States has continued to decline each quarter.

In addition to the decreasing costs of PV equipment, innovations in financing—from solar power purchase agreements (solar PPAs) to solar leases to commercial solar PACE loans—provide an additional incentive for supermarkets to switch to solar. Full-service solar installation companies like REC Solar now offer these types of financing programs—in addition to accepting cash purchase plans–that help make it possible for supermarkets to take a bite out of their utility bills from day one of their PV system’s operational lifetime.

A sample supermarket case study reveals that if a 300-kilowatt (KW) rooftop solar system were installed on a market in Anytown, California, the PV power plant would generate approximately 500,000 kilowatt-hours (KWh) of clean electricity per year, offsetting about 80% of the store’s energy needs.

Keep in mind that this quote is an example. The ultimate costs and savings for a specific supermarket project will differ based on many factors, such as utility rates (including peak demand charges), hours of operation, shading, and type of financing.

The entire commercial solar process—from site evaluation to financial qualification to permitting to the actual construction of the PV array and interconnection to the grid—typically takes 4-6 months. As an experienced commercial solar installer, REC Solar has built more than 65 supermarket and grocery store PV systems in multiple states over the past decade.

Whether you run a grocery store with multiple locations or are the proprietor of a local organic green grocer, now is the time to get a free solar evaluation from an experienced commercial solar installer. By working with REC Solar, you’re able to compare flexible financing options to identify the best approach to meet your financial and sustainability goals with solar energy.

Windset Farms Harvests the Sun and Saves Thousands of Dollars in Energy Costs with Solar

An ever-growing number of U.S. farmers and agribusiness owners have decided to integrate solar power systems into their operations. This movement has been fueled by a combination of factors, including significant price drops in solar installations; subsidies and other incentives available at the local, state and national levels; attractive financing options; and a general awareness of the long-term cost saving and sustainability benefits of producing your own energy.

An ever-growing number of U.S. farmers and agribusiness owners have decided to integrate solar power systems into their operations. This movement has been fueled by a combination of factors, including significant price drops in solar installations; subsidies and other incentives available at the local, state and national levels; attractive financing options; and a general awareness of the long-term cost saving and sustainability benefits of producing your own energy.

One of the latest agricultural operations to take advantage of solar’s savings is Windset Farms, which runs a large hydroponic greenhouse complex located in the sun-kissed Santa Maria Valley in northern Santa Barbara County.  Windset is well known for growing GMO-free tomatoes, cucumbers and other produce year-round.

Adding to its sustainability commitment, Windset Farms recently commissioned REC Solar to install a 1 MW flat-rooftop solar photovoltaic (PV) array built on its shipping and packing building. Completed and interconnected to the grid in August 2015, the installation now generates an estimated 1,662,100 kilowatt-hours (kWh) of energy annually, saving the company more than $245,000 per year in electricity costs.

“As a greenhouse grower, we do require a large amount of energy, and we like to offset that energy use and reduce our carbon footprint,” said Tim Thornton, facilities manager at Windset Farms. “In working with REC Solar, every one of my goals has been met a hundred percent.”

Naturally, Windset Farm sought to maximize the return on its solar investment. REC Solar designed the PV system to maximize long-term value with a particular eye on offsetting peak commercial electricity rates.

The final installation, comprised of 4,032 high-quality photovoltaic panels, features tailored design and engineering solutions for each of the building’s two primary roof slopes.

On the west-facing slope, REC Solar deployed flush-mounted panels with a custom racking solution, increasing energy generation on bright California summer afternoons. On the east-facing slope, the team installed a second array of southerly tilted panels, helping to ensure strong year-round system performance. The design not only provides Windset an optimal combination of energy generation and value, it also avoids penetrating the building’s roof, reducing long-term maintenance costs.

“REC Solar helped us overcome some unique construction challenges, like high winds and site access restrictions,” explained David Wesley, director of projects at Windset Farms. “To top it off, the system was easy to finance and helped us save thousands of dollars on our energy bills immediately.”

 

Over the years, REC Solar has designed and installed solar on more than three dozen farms, wineries, and food and beverage facilities in California. Each installation is unique, with some facilities looking to offset their energy costs for water pumping and others seeking to lower their electricity bills for cold storage and tourist operations.

“Since we work with our customers from start to finish, we can provide tailored financing, design and operations and maintenance (O&M) options that help each business meet its energy savings targets,” said Ryan Park, director of business development at REC Solar.

Solar technology is an obvious decision for organizations like Windset Farms, which already employs a variety of energy-efficiency and sustainability technologies, including water collection and recycling, carbon-neutral biomass burners, and heat-loss prevention screens. The added economic and environmental benefits beautifully complement the organization’s long-term financial and sustainability goals.

“Windset Farms is already a clear leader in sustainability practices, and we’re pleased to help them to extend their leadership even further,” Park noted.

When a plentiful harvest of the sun’s energy combines with the high yields of a well-run sustainable agriculture operation, the results are as satisfying as the taste of a fresh tomato on a sweltering summer afternoon.

In Puerto Rico, Solar Saves a Food Distributor Over 40% Per Year in Electricity Costs

It used to be that Puerto Rico’s high utility rates were accepted as the cost of doing business on an island dependent on imported oil for electricity generation. But as solar energy prices have fallen, Puerto Rican businesses now have a way to significantly reduce their PREPA electric bills for 20 years—or longer—by installing a solar PV system. A great example of a Puerto Rico business saving with solar is Ballester Hermanos. This food, wine & spirits distributor, established in 1914, had been paying nearly $72,000 a month in utility charges.

It used to be that Puerto Rico’s high utility rates were accepted as the cost of doing business on an island dependent on imported oil for electricity generation. But as solar energy prices have fallen, Puerto Rican businesses now have a way to significantly reduce their PREPA electric bills for 20 years—or longer—by installing a solar PV system. A great example of a Puerto Rico business saving with solar is Ballester Hermanos. This food, wine & spirits distributor, established in 1914, had been paying nearly $72,000 a month in utility charges.

With a long history on the island, Ballester Hermanos was used to Puerto Rico’s high cost of energy, but it wanted to find ways to increase its profitability by reducing operating expenses. Since power was a significant cost, Ballester Hermanos researched installing solar and realized that it was not only affordable, but would reduce their annual electric bill by a projected savings of over $100k in 2015 and up to $200k per year by 2040.

Solar PPA Financing is Key

The biggest obstacle for most businesses wanting to go solar are the upfront costs. While solar can provide a positive ROI and IRR and a 5 to 10 year payback with a cash purchase or loan, many businesses prefer to preserve their capital and credit lines for reserves or for other building projects and capital investments.

For those businesses that want to go solar without the high upfront costs, many opt for a “solar power purchase agreement,” or “solar PPA.”

Working with Yarotek LLC, a solar PPA provider and solar project developer, Ballester Hermanos paid nothing upfront for their 874 kW DC solar system, which consists of over 2,500 high efficiency solar panels installed on the distributor’s expansive warehouse roof.

With the solar PPA, Ballester Hermanos doesn’t actually own the solar system. Instead, it’s actually purchased, owned, and maintained by the solar PPA provider. In exchange, Ballester Hermanos pays the PPA provider a significantly reduced kilowatt-hour rate for the solar electricity generated from the solar system for 20 years.

So, it’s as if Ballester Hermanos contracted with a less expensive utility, except this utility’s power plant is actually located on the company’s roof instead of at a diesel power plant miles away.

How much less expensive? Solar PPA rates will vary by project, but for Ballester Hermanos, after all incentives were applied, their solar PPA electricity rate came out to being over 40 percent less than the normal PERPA utility rate, and will offset about 37 percent of Ballester Hermanos’ old bill for next 20 years.

Because the solar PPA provider owns the solar system under the solar PPA arrangement, it also takes care of all of the solar system’s maintenance and repairs, though typically there are few. They will also pay the costs to remove the solar system after the 20-year contract has ended. Alternatively, Ballester Hermanos may elect to purchase the solar system for a pre-negotiated residual value price.

As the solar project’s owner is the solar PPA finance provider, it will apply for and receive all available rebates and tax credits, reducing its own upfront costs for financing the solar system.

Nevertheless, over the 25-year financing agreement, the solar installation is expected to save Ballester Hermanos millions of dollars over the life of the contract.

Other Considerations for Commercial Solar in Puerto Rico

While commercial solar PPA’s are very common today, other factors will determine whether a solar PPA or any solar installation is right for a particular business.

To qualify for the solar PPA and any associated incentives, the business will need to have a good credit history and as with Ballester Hermanos, have been operating for a reasonable number of years in Puerto Rico.

Also, solar PPA structures can vary by the business and by the rebate received from PREPA, as well as available U.S. tax credits. Your financier will incorporate these financial benefits into their rate, but keep in mind that Puerto Rico’s incentive system is complicated and has limited funding, so not every applicant will receive a rebate or have incentives incorporated into their solar PPA rate.

Business owners should also note that Ballester Hermanos is just one solar example. Your company’s solar system’s size, cost, and savings will depend on many factors, including available roof space, energy usage, rate structure, and the rebate awarded, which can vary by project.

Beyond the financial aspects of installing solar, there may also be physical considerations, such as the age and condition of the building’s roof and the building’s utility interconnection infrastructure.

Some buildings in Puerto Rico might not meet the island’s latest 2014 building codes, so a structural capacity check will be performed before moving forward with the installation. Additionally, because strong winds are a threat to solar systems during Puerto Rico’s hurricane season, quality solar installers like REC Solar should design and engineer systems that can withstand hurricane-force winds up to at least 150 mph and ensure that the roof is not only structurally sound, but also water proofed around any solar-related roof attachments.

Overall, installing commercial solar in Puerto Rico can generate substantial cost savings with solar PPA financing and an experienced solar installer. Consult with REC Solar to get a physical and financial evaluation to find out if installing solar is a good match for your Puerto Rican business.

Duke Energy is Investing in REC Solar to Grow the Commercial Solar Market

We are very excited to announce that as of February 6, 2015, REC Solar and Duke Energy, the nation’s largest electric power holding company, have partnered to bring you more affordable, simple solar solutions for your business. Together we have launched a $225 Million project investment fund to finance solar projects nationwide. This enables REC Solar to be a one-stop source for Engineering, Procurement, Construction AND Financing of your solar projects.

We are very excited to announce that as of February 6, 2015, REC Solar and Duke Energy, the nation’s largest electric power holding company, have partnered to bring you more affordable, simple solar solutions for your business. Together we have launched a $225 Million project investment fund to finance solar projects nationwide. This enables REC Solar to be a one-stop source for Engineering, Procurement, Construction AND Financing of your solar projects.

REC Solar is now in a strategic position to own and operate commercial solar energy systems, selling energy to business, non-profit and government organizations throughout the United States.

In addition to providing the project fund, Duke Energy has invested heavily in REC Solar, taking a majority ownership position. This ensures that REC Solar will have the capital required to fund significant growth in the coming years, as well as the financial strength and stability that our customers demand from an energy services provider.

“We plan to extend the benefits of clean, distributed energy solutions to previously underserved small and medium-sized businesses,” said Allen Bucknam, chief executive officer, REC Solar. “The Duke Energy relationship realizes our strategy to be the one-stop shop for commercial solar by securing a predictable and streamlined customer financing process.”

Partnering with Duke Energy Renewables, REC Solar will offer simplified customer financing, including leases and power purchase agreements, which will provide customers with immediate savings with little to no upfront costs.

Read more about Duke’s investment in the full press release.

The Perfect Storm: Why Now is the Time to Seize the 30% Credit on Commercial and Industrial Solar

Although the 30% business investment tax credit (ITC) for installing solar expires at the end of 2016, the window for taking advantage of the ITC is actually much sooner. Unless Congress extends the ITC—which is an open question at this time—business owners should begin planning now for solar projects to be completed by the end of 2016. Combined with lower costs than ever before, businesses are seeing a perfect storm of conditions that make now an ideal time to go solar.

Although the 30% business investment tax credit (ITC) for installing solar expires at the end of 2016, the window for taking advantage of the ITC is actually much sooner. Unless Congress extends the ITC—which is an open question at this time—business owners should begin planning now for solar projects to be completed by the end of 2016. Combined with lower costs than ever before, businesses are seeing a perfect storm of conditions that make now an ideal time to go solar.

You might think that 2 years is a long time to pull the trigger on going solar, but like any large commercial or industrial upgrade, solar projects can take 1 to 2 years to complete and go online. Here’s why:

1) Commercial solar evaluations and decisions take months.

While some business owners can make a snap decision to go solar, we’ve found that most businesses typically need 1-3 months to complete the process. That includes learning about all the options and assessing solar’s value to the business, while waiting on several solar providers to prepare and revise comprehensive quotes. Regardless of whom you choose as your commercial solar partner, they will need to analyze utility charges and rates, the times that your business uses the most energy, roof integrity or existing site condition, and utility connection infrastructure.

The location and type of business also matters. Solar installed on a plot of land for an agricultural facility and solar installed at a hotel or shopping center with a solar carport each have specific considerations that a solar provider will have to evaluate for an optimal proposal and design.

Similarly, if you own multiple retail locations, or have multiple buildings on a single industrial campus, each potential site will need to be assessed for generating the most solar electricity at the lowest cost.

As a result, the solar evaluation process alone can take several months, and that inches everyone closer to the 2016 completion deadline to qualify for the 30% ITC.

2) Solar financing takes months.

Unless you intend to pay for your solar installation with cash, there are many financing options to consider when installing solar. Loans, solar power purchase agreements, solar leasing agreements, and commercial solar PACE loans may all be viable financing options, so your provider needs time to prepare and present these options so that you can choose the best financing option for your business. At REC Solar, we’ve found that this process typically ranges from 1-3 months.

Once you choose the best option to finance your solar installation, the financing partner will need time to go over the proposal and qualify your company. That can also take several months, depending on the size and cost of your commercial or industrial solar installation.

3) The solar permitting process varies wildly.

The solar permitting process is notoriously variable. Consequently, depending on your city and type of installation, the plans may need to be inspected and approved by several local authorities, potentially including the building department, the utility, the fire department, as well as environmental agencies.

After submitting plans, changes to solar designs are sometimes required by each agency, and subsequently, installers must resubmit plans. Even when plans are perfect the first time, the municipal engineering departments that approve solar designs for permitting are frequently overwhelmed and understaffed. Fortunately some cities are developing streamlined best practices for solar permitting, though today those are few and far between.

This unpredictable solar permitting process can range from 10 minutes in San Francisco to 6 months in Denver. This uncertainty can further extend the project development phase, before breaking ground on the project, bringing the 2016 deadline to qualify for the solar ITC even closer.

4) Solar installations take up to six months.

Once you’ve been through evaluation, design, engineering, procurement of equipment, and permitting, you’re finally to the second to last step: The actual installation.

A good solar installer needs to plan and schedule a time that is most convenient for you and your operations, avoiding any decrease in productivity or interrupting normal business.

Aside from the scheduling, the larger and more complex the installation, the more time it will take to complete. Yet even a relatively small 100-250 kW solar installation can take 1 to 3 months to construct. As we noted before, each site is unique and may require upgrades to infrastructure, trenching and concrete, roofing adjustments, or utility interconnection upgrades.

A large 1 MW and above solar installation can take 2 to 6 months to complete construction, which includes the last step: final inspections and approvals from the utility and other local permitting authorities.

5) Add it all up, and the solar process can take up to two years

While some installations can take just a few months, larger and more complex installations can run up to two years. The solar industry is innovating new systems to streamline this process in the future. But today, businesses stand to benefit by planning ahead and seizing the ITC today.

Will the Solar ITC be extended by Congress?

We hope so! Solar advocates in Washington DC are doing their best to convince Congress to extend the solar ITC by another year or more. However, many believe that this extension is unlikely, especially given the fact that the wind industry lost their own subsidy extension fight.

If nothing is done, the 30% ITC will sunset into a 10% credit. That’s better than nothing, but it’s certainly not better than the full 30%.

The window to take advantage of the 30% ITC for solar is quickly coming to a close – especially for larger installations. If your business is sincerely interested in going solar, now’s the time to start the discussion.

UPDATE 12/2015: The Solar Investment Tax Credit has been extended! Learn more about how changes to the ITC will benefit commercial solar in 2016 and beyond.

 

 

The “Other” Type of Commercial Financing: Pace

When a retail store, winery, or factory thinks about going solar, they often finance through a solar power purchase agreement (solar PPA). Both allow your business to go solar with no up front costs. But if you’re in California, there’s new way to finance solar with no upfront cost, and it’s called Property Assessed Clean Energy or “PACE.”

When a retail store, winery, or factory thinks about going solar, they often finance through a solar power purchase agreement (solar PPA). Both allow your business to go solar with no up front costs. But if you’re in California, there’s new way to finance solar with no upfront cost, and it’s called Property Assessed Clean Energy or “PACE.”

PACE is a win-win for both the business that wants to go solar and the PACE lender. It’s a win for the business because it can own a solar system with no upfront costs, get free electricity for 20 years, plus receive any available solar rebates and tax incentives. It’s a win for the lender because the PACE loan is paid back through a special tax assessment on the business’s property, which makes the loan extremely secure, even from bankruptcy.

PACE commercial financing programs differ slightly from state to state, but the concept is generally the same. Here are some commercial PACE basics:

PACE legislation—which must be approved by individual counties in every state—allows private lenders to create a bond fund specifically for solar and energy efficiency loans. The legislation also allows the lenders to collect loan payments through a special tax assessment on the business’s property.

Because it’s a special tax assessment, the solar loan is extremely secure, since tax assessments must always be paid, regardless of bankruptcy. That’s great for the lender, but what are the advantages if you’re a business that wants go solar? Actually, there are plenty.

The advantages for businesses include:

  • No upfront costs. Just like a commercial solar PPA or a solar lease, your business gets to go solar and save money on electricity without any upfront costs.
  • Easier credit. Because PACE is secured through a special tax assessment, it’s much easier for your business to be approved for a PACE loan than an unsecured loan. That means that new businesses without a long credit history or have low real estate equity due to the recession may still be eligible for a PACE loan.
  • You own the solar system. With a solar PPA, you’re only renting the solar system for 15 to 20 years. You do save on your electricity bill with solar PPAs, but not as much as when you own the system. Plus, when you own the solar installation, you get to keep it running for as long as it lasts—typically 25 to 30 years, or even longer.
  • You get to keep the rebates and tax incentives. If your city or state has any solar rebates, you get to keep that cash, plus any tax incentives, such as the 30% Federal Investment Tax Credit. With a solar PPA, the PPA company owns the system, so it keeps the tax incentives, rebates, and any other incentives.
  • It’s a long-term loan. PACE loans can very by the lender, but they’re typically a 20 year loan. That makes your payments small, and they should equal an amount less than your old annual electricity bills, especially when you include the free solar electricity savings.
  • The special tax assessment is transferrable. What if you sell your business or want to move your business to another location? The special tax assessment will be transferred to the new property owner, who will continue to make any remaining payments through the special tax assessment—and continue to receive the free electricity through the solar panels. In short, the solar system always stays with the original PACE property until the loan is paid in full.

Like any loan, there is interest, and the rate will vary based on the PACE lender and the state. To qualify for a commercial PACE loan, you must own your property and be a for-profit business. Consequently, municipalities and non-profits are not eligible for PACE loans.

PACE programs are available throughout the entire state of California, and there are a number of lenders. Other states have been slower to adopt PACE, but that’s changing. There are now 29 states that have PACE legislation in place. To see if there’s an active PACE program in your area, check out www.PACEnow.org.

Not sure if PACE or a solar PPA is right for your business? Contact REC Solar and we’ll go over the available commercial PACE programs in your area and discuss whether PACE or a solar PPA or a solar lease is the best option for you.