It was post-recession in late 2008 and Powell, then a residential builder, was in his home office in Moorestown lamenting how much construction work had dried up. He looked out the window at the solar panels on his roof, "and thought, ‘I bet there's a market for that.'?"
That wasn't as obvious a prediction as it might seem today, with New Jersey now second in the nation in solar-energy production. At the time, Powell was the rare homeowner who had taken the solar leap — one he said was based "on faith." Not the religious kind, but trust in a mechanical engineer brother-in-law with a reputation for thorough research.
Soon after Powell Energy & Solar L.L.C. had completed its first residential job in Moorestown, "people in my church expressed interest in putting solar on the church roof," Powell recalled.
He partnered with another parishioner at St. Peter's Episcopal Church in Medford to form a power purchase agreement, or PPA, to pay for the 50,000-watt system that went live in April 2010 and to sell the energy it produces to the church.
Since then, Powell's PPA has reached agreements with another seven houses of worship — with opportunities to do many more.
"There are churches all over the place crying for solar," he said, attributing that to two primary reasons: tight finances and a spiritual obligation to be better environmental stewards.
The problem for Powell is that the financial challenges now tormenting the solar market are interfering with his new business niche — where clients are cash-strapped nonprofits that need options other than paying for solar systems up-front.
"We are running out of equity to do it," Powell said recently.
When he first got into the business, solar renewable energy credits were a hot commodity. The so-called SRECS are sold by generators of solar power to utilities and other power providers under government mandate to offset their carbon production. But an overabundance of solar, fueled by government funding incentives that have since expired, has delivered a big chill to the SREC market.
For solar-system investors like Powell, it has been an unsettling ride of highs near $700 and lows near $85. The spot-market SREC price is currently around $150 in New Jersey.
"We're putting our personal cash in," Powell said of the PPA business model. "The value of the solar credits does not sustain the debt service."
He made those comments at Cherry Hill Unitarian Universalist Church, where he was showing off a recently installed 103,000-watt, roof- and ground-mounted solar system. Less than a week later, the New Jersey Assembly last Monday took a step that might improve business prospects for Powell and other solar contractors. It passed S-1925, a bill designed to increase demand for solar energy and establish a more predictable SREC pricing schedule that Gov. Christie is expected to sign. Powell said he was "elated" by the bill's passage, but concerned it didn't address enough.
"The bill failed to introduce any meaningful throttle mechanism to control the pace of solar construction if it gets overheated again," he said in an e-mail Tuesday.
The pace of solar-installation projects at religious institutions has slowed substantially from six years ago when financial incentives were plentiful and "we had 24 different houses of worship go solar in New Jersey," said Stacey Kennealy. She is sustainability director at GreenFaith, a national nonprofit based near New Brunswick that provides guidance on religious environmental work.
The situation has been less challenging for wealthier congregations, Kennealy said. There, affluent members have formed limited liability companies that fund the solar projects, making use of the sale of SRECs and tax credits that are not available to the churches themselves because of their tax-exempt status.
"Investors can make money off the project, the congregation gets the solar panels, and in some cases the investors will just give over the solar system," Kennealy said.
Powell took it one step further by creating a company offering PPAs, which assume the up-front costs of installation and for the life of the contract, typically 15-20 years, offer discounted electric rates. St. Peter's opted for a contract that requires it to pay electric rates equal to what the utility company would charge so it can take ownership of the system faster — in eight years, Powell said.
A church committee of engineers and accountants found the PPA alternative appealing because it would not require any payment at installation and, after the church takes ownership of the system, will result in annual savings of $10,000 to $15,000 and free up resources for future ministry, said the Rev. Canon Donald Muller.
No wonder he braved heights in April 2010, allowing himself to be hoisted high in a bucket truck to sprinkle holy water on the solar panels, which were arranged to include a cross-shaped clearing. Through prayer Muller implored God to "receive this solar power system which we offer and grant that it may … benefit your church, preserve your creation, and minister grace and joy to those who benefit from its use."
At Cherry Hill Unitarian Universalist, Greg Newcomer, project manager for its solar project, said the decision to go solar was both a spiritual choice "as part of the interdependent web of all existence of which we are a part," and a practical one: "We have to watch our pennies."
From its 441 panels producing power since February, the church is expecting yearly savings of $11,000, Newcomer said.
Powell said his focus on religious facilities is motivated by "a sense of doing the right thing." But reality is "we have to put food on the table and shoes on the baby."
So he is currently seeking other investors — while praying the SREC market improves.