Sunday, August 22, 2010
Edward Fischer of Pompton Lakes finally got solar panels this week on his tidy, 1950s Cape Cod with sky blue shutters.
He had been trying for nine years to figure out how to afford them. But two years ago he gave up when he was quoted an out-of-pocket price — with rebates — of $30,000.
Then, he read a newspaper article in January about a California company that had a better method for financing solar power.
"I called them in a flash, and when they said it was going to cost me $600 I said, ‘Hallelujah, my dream of having the power meter go backward was finally going to be granted,’ " Fischer said.
New Jersey is the hottest place in the United States for solar energy these days, and it is not because it is so sunny. The Garden State’s progressive clean energy laws and high electricity costs make it the best place to install solar power because systems can pay for themselves in less than five years — faster than any state in the nation.
Mercury Solar Systems, one of the larger solar installers in New Jersey, built the array on Fischers’ steep roof. But the financing, insurance and maintenance was handled by SunRun, the California-based company that caught Fischer’s eye.
The state’s burgeoning solar industry is attracting the attention of companies from around the country, especially from California, which has long been the nation’s largest solar market. Its 66,000 solar installations dwarf New Jersey’s 6,500 projects.
In the past year, established San Francisco-area solar companies like SunRun, Tioga Energy and One Block off the Grid have been partnering with local installers and bringing new methods for financing solar to New Jersey.
"SunRun and One Block off the Grid are pursuing alternative business models," said Justin Barnes, a solar policy analyst at the N.C. Solar Center in Raleigh, N.C. "They figured out all the details in California, and now they are looking into new markets to make money."
Since January, when SunRun started operating in New Jersey, the company has had a 60 percent growth rate each month, completing nearly 500 deals, said Lynn Jurich, co-founder and president. The 3-year-old firm owns the solar panels, and sells the power back to the homeowners.
In December, San Mateo-based Tioga Energy won a $22.3 million contract with its partner, SunDurance Energy of South Plainfield, to build a solar project at 19 municipal and school buildings in Morris County. Tioga will own and maintain the equipment and sell the energy back to the county. The county will buy the power for less from Tioga than it would pay the local utility.
The financing arrangement is complex, as it combines power purchase agreements from Tioga and low-interest bonds issued by the Morris County Improvement Authority. That allows the county to benefit from federal tax incentives and save $3.5 million in electricity costs over the next 15 years.
"Being in the solar industry, I talk about policy a lot and I regularly point to New Jersey for having the very best policies for renewables," said Marc Roper, vice president of sales and marketing for Tioga, who formerly lived in Hunterdon County. "The market creates competition so consumers are not paying more than they need to, and it lets us plan for the long term."
New Jersey is a leader among states from Arizona to Massachusetts, which are using a solar renewable energy credit systems to encourage property owners to invest in solar. New Jersey’s solar renewable energy credits are the most generous in the nation, giving homeowners $655 for every megawatt of sun power they generate. That’s more than twice the amount for any other state.
"The California gold rush is a solar credit story," said Gary Lakritz, president of Knollwood Energy in Chester Township, an energy credit financial advisor. "I have a lot of customers investing in solar wondering whether to go to Pennsylvania or New Jersey, and I always recommend New Jersey because of the price of the credits."
New Jersey’s solar credits can be traded on an exchange. One of the largest online marketplaces for New Jersey’s solar credits, SRECTrade, is based in San Francisco.
It was formed three years ago by Stanford University business school graduates who saw the opportunity in trading SRECs — solar renewable energy credits. SRECs from 15 states are sold through the auction site, but New Jersey’s make up the bulk of their business.
While New Jersey is the second-largest solar market in the U.S. for installations after California, it lags behind the West Coast state considerably in solar product manufacturing. Petra Solar of South Plainfield is the only producer of solar panels here.
Petra Solar is best known for providing solar panels for utility poles to PSE&G for a large program that will generate 40 megawatts of energy, enough to power 40,000 homes a year. The 4-year-old firm has grown from 14 employees last year to 140 this year, and has raised $54 million in the past three years, all from sources outside of New Jersey.
"We are the only manufacturer in New Jersey, and we need a lot more," said Shihab Kuran, president of Petra Solar. "We need a supply chain."
Recently Kuran, who has made a number of deals this year for sales outside of New Jersey, has been able to turn the tables on the California invasion into the Garden State.
"We opened an office in California earlier this year, in Santa Monica," said Kuran. "We are exporting a unique product invented here to California."