Solar incentives are taking hold
10:46 AM PDT on Monday, September 24, 2007
The future of solar panels for businesses in the Inland Empire looks as bright as the sun that will charge them.
With incentives and rebates in place and more in the works, business owners are finding the transition to sustainable energy more affordable.
By 2010, between 5% and 10% of new non-residential construction starts will be designed using the principles of green building according to McGraw-Hill Construction.
McGraw-Hill forecasts U.S. nonresidential construction starts will be worth approximately $204.5 billion in 2010.
"It can pay off a lot quicker for business than a residential system because there's a 30% tax credit as a business which helps to pay off the out-of-pocket cost of the system," said Thomas Hall, president of Palm Springs-based renewable energy provider Sun Powered.
General Motors Corp. announced a solar power array that will generate about 1.3 million-kilowatt hours of annual electricity and sit atop its 300,000 square- foot Fontana warehouse facility earlier this month.
Macy's will begin switching its 26 stores throughout California from electric to solar starting later this month.
The Westminster store will be the first to be retrofitted with a 294-kilowatt solar power system. Macy's stores in Moreno Valley and Temecula will follow, with an estimated timeline of 12 to 14 months to upgrade all 26 locations.
"California gets much more press, more much info in the media about 'green' than any other state," said Marc Gordon, Macy's vice president of operations. "The state was running a pretty good rebate program and that made it financially viable."
UK-based international retailer Tesco announced a $13 million deal for the installation of what it claims will be the "world's largest" solar roof on its distribution center in Riverside.
"I think there's a couple factors to come into play," said Drew Torbin, sustainability analyst for Denver-based industrial real estate leader ProLogis. "First is obvious environmental consciousness, society is becoming more aware, also from an operation perspective, there's a financial payback, you can fix your electricity cost for so many years."
More awareness
"Energy prices continue to go up and I think people are becoming more and more aware environmentally to mitigate their impact."
ProLogis currently has no solar panels installed on its Southern California property but does presently employ solar energy on some international facilities.
Clients play an integral role in a company's decision to go solar.
"We've had customers come to us for (Leadership in Energy and Environmental Design) certified space," Torbin said. "It says that you understand what is going on with the LEED process and for us it's the cost savings, if we can build a LEED building."
According to the U.S. Green Building Council, the Leadership in Energy and Environmental Design Green Building Rating System is a nationally accepted benchmark for the design, construction and operation of high- performance green buildings.
According to a study done by Network Dodge, a unit of McGraw-Hill Construction, green building operating costs are expected to decrease between 8% and 9% on average while building values are expected to increase 7.5%.
Return on investment is expected to improve 6.6% on green buildings, occupancy is expected to increase by 3.5% and rent is expected to rise 3%, according to the construction industry research firm.
Businesses and public agencies are taking full advantage of the incentives. In the case of one city, the results will pave the way for a greater solar presence in the area.
Partnerships pave the way
Palm Desert partnered with Southern California Edison, The Gas Co. and the Energy Coalition and was granted funding from the California Public Utilities Commission for the city's energy efficiency program.
"The Public Utilities Commission wanted the partnership to put together a roadmap to show other cities how to [conserve energy]," said Patrick Conlon, director of Palm Desert energy management. "One of the major factors is designing a program that could be replicable by other cities."
The goal of the program is to reduce citywide energy use by 30%, or 215 million kilowatt hours, in the next five years.
The program calls for residents to voluntarily switch to energy-efficient air conditioning systems. Conlon said solar panel systems would play a major role in reaching the goal.
"Just as kids today ask their parents what was it like growing up without a cell phone, kids tomorrow will be asking what it was like growing up without solar," Conlon said.
"I see a very good potential for solar out here in Palm Desert. That's really the bottom line: Solar is the future."
The solar panels and energy-efficiency measures will complement each other, Conlon said.
"We advise people it is not prudent to invest $10,000, $20,000, or $30,000 in solar and still have an energy pig for an air conditioner," he said. "Your money will go further if you make your home energy efficient first."
Another program to be presented to the Palm Desert adds incentives for businesses, existing homes and new construction projects to add solar panel systems.
San Bernardino County unveiled its own plan last month to make solar more attractive to builders and developers.
The county waives building permit fees for builders that agree to install solar panels and other energy-efficient systems in the homes.
The goal is to reduce greenhouse gas emissions by 2010.
The Metropolitan Water District is in the preliminary stages of its own solar facility.
The board approved $625,000 and authorized preliminary design of a of a six-acre solar collection field at the Robert A. Skinner Treatment Plant in Winchester.
The estimated total construction cost of the solar facility will be around $8 million to $10 million, including construction and installation of the panels.
The project will be eligible for incentives up to $5 million.
"That's what really drives these projects is getting these large incentives that offsets the capital costs," said John Vrsalovich, senior engineer at Metropolitan Water. "Sometimes it doesn't work out because it doesn't pay itself back for 20 years or so, but we got in under Edison's rebate structure to pay it back in 10 years."
The Securing America's Energy's Independence Act was introduced by U.S. Reps. Michael McNulty, D-N.Y., and Dave Camp, R-Mich., in January.
If passed, the bill will extend the 30% investment tax credit on solar facilities for eight more years.
