SunEnergy1 wants North Carolina to shine in solar power

April 15, 2012 by  
Filed under Green Energy News

MOORESVILLE They’re becoming part of North Carolina’s landscape: long ranks of solar panels, in fields and on rooftops, silently harvesting the sun’s energy.

SunEnergy1 is among the Charlotte-area companies pushing North Carolina to the upper ranks of the U.S. solar industry. Tucked among race shops in a Mooresville business park, the firm specializes in the large, commercial-scale power projects that are propelling the state’s solar growth.

North Carolina firms installed 8 megawatts of solar photovoltaic capacity in 2009, 31 megawatts in 2010 and 55 megawatts last year, ranking eighth in the nation. One megawatt is enough to power about 778 typical homes, but because solar systems produce energy only in daylight their actual output is less than their capacity.

Of the 1,264 North Carolina solar PV systems registered with the N.C. Utilities Commission through 2011, 258 are of commercial size (more than 10 kilowatts or one-hundredth of a megawatt).

And of the 29 megawatts of commercial PV installed in the state last year, SunEnergy1 built 12.

Founder and CEO Kenny Habul, an Australian and former open-wheel racer, came to town in 2006 by way of Toronto. Back home, Habul’s family had decades of construction experience including solar thermal projects. Here he expected to continue his own niche of building luxury homes and “green” structures.

Then the recession hit and, like millions of others, Habul’s plans changed.

“Rather than a sideline business of renewable energy, we decided to make it our core business,” he said. “I’m glad we had some experience from the construction side of things.”

After a few exploratory years, Habul found North Carolina poised to grow its solar industry.

The state adopted a renewable-energy portfolio standard in 2007, requiring utilities to produce a bit of their electricity from solar, wind or organic wastes. The first in the Southeast, the standard created new markets for renewable-energy developers.

“The thing that really kick-started this in our state was the portfolio standard,” said Larry Shirley, director of the green economy at the N.C. Department of Commerce. “That enabled some of our homegrown North Carolina businesses to get up on their feet and start growing.”

Other Charlotte-area solar companies, including Argand Energy Solutions and O²energies, also work on PV projects statewide.

To further stimulate renewable-energy projects, North Carolina offers a 35 percent corporate tax credit that is generous compared to most of its neighbors. The federal government chips in 30 percent tax credits, accelerated depreciation and incentives for developing green energy in rural areas.

Including the tax credits, the N.C. Sustainable Energy Association says, the costs of commercial-scale solar PV systems became competitive with North Carolina retail commercial electricity rates in 2011.

Post-recession costs of land and labor are also low, experts note, and the growing industry has created a corps of experienced installers.

Finally, the price of silicon plummeted. Led by Chinese imports, the cost of solar panels – which account for two-thirds of the expense of PV projects – has dropped 50 percent in the past 18 months.

“That was a game changer,” Shirley said. “The whole effect has been to greatly boost the market and the profitability” of solar companies.

From Concord to Biltmore

The nation’s largest independent shoe retailer, Concord-based Shoe Show, pays close attention to costs, down to the type of light bulbs used in its stores. “That’s just sort of our makeup,” Chief Financial Officer Jack van der Poel said.

When the company considered emission-free power coupled with government incentives, he said, “you sort of run the numbers, and it suddenly makes sense financially.”

The result, completed earlier this year: a $26 million, 5.2-megawatt rooftop solar system on its Concord distribution centers that will sell electricity to Duke Energy and pay for itself in five to six years. SunEnergy1, the contractor, says it is the largest rooftop installation of its kind in the nation.

In January, SunEnergy1 officially opened the first phase of what will be a 20 megawatt, ground-based solar system in Plymouth, N.C., that will be one of North Carolina’s largest. In December, it started up a 1.2 megawatt system at Asheville’s iconic Biltmore Estate.

Biltmore has emphasized sustainability since it opened in 1895, with leading-edge forestry, agricultural and conservation practices. The estate even generated its own electricity in its early years.

“We’ve been studying renewable energy for the last five to 10 years, and as solar became more efficient and took up less of a footprint, it became more attractive to us in the last two years to revisit,” said Chuck Pickering, Biltmore’s vice president of agriculture and government relations.

The six-acre solar farm will generate enough juice for the daytime use of the estate’s Antler Hill Village dining and shopping complex.

$50 million in 2011

SunEnergy1 launched in 2009 with two employees. Now it has 35 office staff and, including contract labor, a workforce of about 130.

The privately held company’s revenues were about $50 million last year. Habul projects 2012 revenues at more than $135 million, with about one-quarter of that from its growing LED lighting division.

The company’s space includes a gym – staff workouts are mandatory – many spools of cable, and an LED lighting test lab.

While he’s grateful for the advantages state policies offer his industry, Habul wants policy makers to embrace the jobs that solar power are adding to North Carolina’s slowly recovering economy.

The 228 N.C. solar firms employed an estimated 1,868 people in 2011, the N.C. Sustainable Energy Association reported in its annual census last November.

“Our revenues last year were very significant, and a large portion of them stayed right here,” Habul said. “We bought our (solar panel) racks down the road from Daetwyler Clean Energy in Huntersville. Bosch Solar Energy, who we’re exclusive with (as panel supplier), is three doors down from us.”

SunEnergy1 has another location advantage: Two influential Republican legislators, N.C. House Speaker Thom Tillis and House Majority Whip Ruth Samuelson, live in Mecklenburg County. Both have visited SunEnergy1’s Mooresville headquarters.

‘Sitting on the fence’

Habul would like legislators to increase the solar mandate in the renewable-energy portfolio standard, a change utilities likely would oppose. The mandate requires utilities to produce 0.2 percent of their electricity from solar power by 2018. Duke Energy, the state’s largest utility, has already met the goal.

The small solar target has depressed the value of renewable energy certificates, which solar system owners can sell to boost the return on their investments. Habul said it has slowed the momentum of solar’s growth.

A “significant number of large companies are absolutely sitting on the fence as to whether to build a system” because of the low REC values, Habul said.

State lawmakers, however, are studying whether to allow third-party sales of electricity, as 21 other states do. Many homeowners in southern California now lease, rather than buy, third-party rooftop solar systems.

North Carolina law doesn’t let a company like SunEnergy1 install a renewable energy system and sell the electricity directly to the homeowner, business or institution that hosts the installation. Only utilities may sell power to consumers.

Expanding who can sell electricity likely would boost the industry, experts say. It could help homeowners who couldn’t otherwise afford to pay for solar systems, advocates say, and institutions such as schools that can’t take advantage of tax credits.

But it’s also controversial and could be frowned on by the N.C. Utilities Commission, which might not want to change the state’s regulatory system, and the utilities that hold monopolies within their service areas.

“The N.C. Utilities Commission would have to believe that it’s in consumers’ best interests, and utilities would have to offer comparable services,” said Miriam Makhyoun, a solar industry specialist at the N.C. Sustainable Energy Association. “There’s no reason why the electric utilities could not provide just as great a service as anyone else. Overall, it would be a win for the consumer.”

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