Lewiston industrial roofer IRC installed solar panels on roofs all around New England — multimillion-dollar, multi-megawatt projects — but never converted its own headquarters to solar.
Until last week.
Time and price were finally right.
Leaders of Saint Dominic Academy in Auburn started contemplating solar power two years ago. In December, they installed a $325,000 system that’s expected to almost halve the school’s energy bill.
And with a pair of awards last month, the Maine Public Utilities Commission spurred more than $100 million worth of investment in two commercial solar projects expected to power thousands of homes within two years.
Solar power remains a tiny fraction of the energy market in Maine, but there’s no question that business is booming here.
Converts cite the environment, the savings, even the pope.
“Yes, it’s less expensive to pull oil out of the ground and light it on fire, there’s no question,” said Kurt Penney, a business development executive at Industrial Roofing Companies, which includes IRC’s Solar Roof Systems. “And yet, that’s not really a sustainable future.”
At his company, solar system costs have dropped 70 percent in six years. The upfront investment is expensive but increasingly within reach.
“It’s an exciting time,” he said. “If you look back eight years, (the solar industry) would be hardly recognizable from what it is today. We all feel like eight years from now, it may be the same thing, that this will be de rigueur: You build a house, you’re going to figure out which way the sun is shining.”
December surprise
To set the solar scene, Maine has 18.6 megawatts of installed solar capacity; 33 states have more, 16 less, according to the Solar Energy Industries Association. (Within New England, everyone is ahead of Maine — Massachusetts by leaps and bounds. See graphic.)
In 2013, 42 Maine companies worked in solar (installers, parts manufacturers, lawyers). That’s now up to 50 and those companies employed 400 people in 2015.
Put in perspective, solar represents less than 1 percent of the power mix in Maine. There’s 70 times more wind here and 200 times more hydropower, according to data from the U.S. Energy Information Administration.
Solar energy and other renewable energy sources in the U.S. received a boost in 2006 with a 30 percent federal investment tax credit, which was due to expire in 2016. In what Bloomberg News called a surprise move, Congress extended that tax credit in December so it now stretches through 2019 with a three-year step-down after that, leaving people like Penney to believe, with prices falling and the tax break secure, the time for solar is now.
“It’s a whole new conversation; it’s a whole new world out there,” he said. “Those of us in the solar industry were very concerned (about the expiring tax break) — 30 percent off the top is a pretty significant number to start your spreadsheets.”
In 2013, 23,020 Maine tax returns, or 3 percent of all returns, claimed the tax credit for renewable projects like solar, IRS spokesman Michael Dobzinski said.
Why that 30 percent matters so much: Residential systems start around $10,000.
Fortunat Mueller, co-founder of ReVision Energy in Portland, the state’s largest solar installation company, said his company handled between 600 and 700 projects last year.
“Company-wide, we installed as much solar in 2015 as we did in 2013 and 2014 combined,” said Mueller. “Most of our customers are shooting to capture between 60 to 80 percent of their total electric load with the solar. Sometimes you run out of roof before you can do that, or sometimes you run out of budget.”
A typical 16-panel residential system costs between $12,000 and $14,000 and will generate 4,000 watts a month, enough to cover two-thirds of the average Maine household’s monthly energy use, Mueller said.
The savings payback to cover that investment can be 11 years or fewer, depending on the home, according to Mueller.
Five years ago, that same system cost $20,000-$25,000.
The cost of silicon in the panels has “come down dramatically,” Mueller said. “The biggest thing is the maturation of the industry and scale. A lot of (the panels) are also being made in cheaper places around the world than they used to be. They used to all be made in Germany. Now they’re all made out in Asia.”
At IRC, which is the only firm in the state exclusively installing panels on commercial roofs, business has been similarly brisk.
“In the past seven years, we’ve more than doubled the number of employees and more than tripled our revenues — it’s been a good run,” said President Mike Davis. “(We’re) targeting nearly a 50 percent growth this year over last year in our solar business.”
The new $75,000 solar array covering its 10,000-square-foot warehouse roof on Ferry Road is expected to pay for itself in five years, after which Davis expects the company’s energy bill to be cut in half.
“The payback reached a point that we were comfortable with making the investment,” he said.
In the past 18 months, his company has installed 6 megawatts of commercial solar in several projects, much of it in Massachusetts, a solar powerhouse. That state has the sixth-most installed solar in the country, according to the Energy Information Administration, a distinction spurred by a slate of state-specific incentives.
There’s an argument that Maine’s solar market could grow faster if Maine were a little more Massachusetts.
Gov. Paul LePage doesn’t see it that way.
“It always comes down to the price that you pay for it,” said Patrick Woodcock, director of the Governor’s Energy Office. “The details are important when you say, ‘Are you supportive of hydro?’ or, ‘Are you supportive of wind?’ Well, what is the price the developer wants to sell the power for? The governor’s position has been that he’s technologically neutral and price-sensitive.”
When crafting an energy rebate through Efficiency Maine, which draws funding from all electric ratepayers, the goal is to benefit the most people, he said. “I think everyone would agree that we don’t want a solar policy that just the affluent benefit from.”
“Massachusetts has virtually no wind installed; we have more than half of all the wind installed in New England in the state of Maine,” Woodcock said. “If they’re going to look at renewables, they’re not going to put a wind tower up on Beacon Hill in Boston. So I do push back on, ‘Is Maine falling behind on installations?’ I think a better metric is, ‘What is our total renewable portfolio in comparison to these other states?'”
In 2014, 60 percent of Maine’s net electricity generation came from wind, hydro, biomass or solar, according to the Energy Information Administration. Less than 10 percent of Massachusetts’ did.
Even with no Maine incentives, with the federal incentive in hand, Maine is poised to take a giant leap on the commercial front.
On the horizon
The Maine Public Utilities Commission in late December ordered Central Maine Power and Emera Maine to enter long-term contracts with Dirigo Solar and a Clear Energy-Cianbro Development Corp. partnership, launching both of those commercial solar developments.
Clear Energy and Cianbro are teaming up on a 9.8-megawatt project above Belfast that will cover 50 acres with solar panels, according to a spokesman who declined to reveal the size of the investment.
It’s expected to be online before the end of the year, powering “a couple thousand homes.”
Meanwhile, the $100 million Dirigo Solar project is massive — up to 75 megawatts spread out among solar farms around the state — and led in part by a Bates College graduate.
The Clear Energy/Cianbro project was awarded under the state’s renewable energy pilot program; price was a factor, but so was source.
For the much larger Dirigo Solar project, the contract was cost-driven. The sun won the day.
“They were competing against any kind of project, not necessarily a renewable. Could have been gas, could have been hydro, whatever,” said PUC spokesman Harry Lanphear.
Maine ratepayers are forecast to save between $3 million and $26 million over the life of that 20-year contract.
Dirigo Solar spokesman Ted O’Meara said the project is expected to cover 500 acres around the state in solar panels (more formally known as “photovoltaic arrays”); potential sites have been identified in each county. Details are expected later this year and the entire project is expected to come online by the end of 2017.
A new company, Dirigo Solar is headed by Brian Murphy and Nicholas Mazuroski, a Bates College grad. Quadrupling the amount of solar power in the state is the company’s first major project.
In Auburn, St. Dom’s wrapped up the largest solar project so far in the Twin Cities last month: 350 panels on its academic building roof. For the next six years, the panels are officially owned by ReVision Energy, which receives the credit for the tax break and will charge St. Dom’s 11 cents per kilowatt-hour of electricity in a purchase power agreement, according to Carl Young, the school’s director of operations. (St. Dom’s has been paying CMP between 10 and 15 cents.)
In year seven, St. Dom’s will buy the system for $170,000, Young said. He hopes to launch a fundraiser with families adopting a panel for around $400 each.
Over the system’s 40-year life, “we anticipate that it is going to satisfy about 40 percent of our energy needs with solar,” Young said.
The school spends on average $48,000 a year on electricity. At current rates, the savings would be $18,000 a year.
“We feel that as a school, as an academic institution, part of our mission is to teach kids to be responsible with the environment,” Young said. “The pope’s encyclical said that the Catholic church needs to be responsible for the environment and so this is part of meeting that mission. The third part is operating costs. It reduces the operating costs and reduces our dependency on CMP.”
Jeff Marks, executive director of the Environmental & Energy Technology Council of Maine, is hosting a forum on Feb. 3 in Hallowell to dive into all things solar, including an upcoming report from the PUC on an increasingly contentious issue called “net metering,” the system of mostly smaller, residential solar systems feeding surplus electricity into the grid, banking it and drawing the credit down later.
Right now, homeowners receive back one kilowatt-hour for every one they bank. Utilities argue that they’re shouldering costs and want to see a change in that one-for-one rate.
The forum also will explore smaller commercial projects proposed in places including Gouldsboro and Winslow.
“I think generally the future for solar in Maine is getting a little brighter,” Marks said.
kskelton@sunjournal.com
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