New Jersey, NJ – October 24, 2011 – (RealEstateRama) — With the ongoing dialogue about solar renewable energy certificate (SREC) pricing, or about getting solar installations up and running in time to take advantage of expiring federal incentives, or about the rapidly evolving solar technology itself, where does the humble rooftop fit in? Indeed, those who plan on getting new roofs should investigate the opportunities to offset some – even most – of the cost by including a solar installation as part of the package.
Adam Putter, president of Solar Roof Development of Fort Lee, N.J., has extensive knowledge in the area of solar energy through industry experience and studying the subject in law school. He has consulted on solar projects for a variety of properties, and he offers his views on taking advantage of the opportunities that the broad expanses of commercial roofing provide.
Q: For new construction, or for those replacing existing roofs, do you see a growing number of people considering including a solar installation?
A: The bottom line is, yes, that is indeed the case based on our current experience.
Q: Obviously, the evolving technology is a key factor. What else is driving this trend?
A: In a word, “cost.” To begin with, the prices of solar systems have really fallen, to a large extent because of the competition in the market. So even if someone looked at a solar installation a year ago, the prices have come way down since then, anywhere between 10% and 25%.
At the same time, there are opportunities, if someone needs a new roof, for them to investigate bundling the cost of that new roof into the solar installation. The opportunities are provided by various grant programs and accelerated bonus depreciation. The reality is that if someone is looking to do a new roof, they’re already planning on spending the money. This, then, is a way to really save money on the roof, and save money on a solar installation. The net result is making a nice investment into your building, and possibly getting the whole roof paid for, essentially for free.
Q: What is the basis for being able to bundle the cost?
A: Because certain types of solar panels rely on the reflectivity of the roof, you’re allowed to bundle the cost. Specifically, if you use a white TPO roof, a reflective roof, that will provide the further benefits of cooling the building. Hence, you can also bundle solar costs.
Q: So, in effect, a new roof combined with a solar installation is really part of a larger conservation and cost-saving effort for a company.
A: We, in fact, have become more involved in doing LED lighting upgrades. We take a holistic approach – we look at solar, but we also look at upgrading lighting and electrical equipment. The State of New Jersey recognizes the value of upgrading the efficiency of the electric in buildings, so the state offers certain rebates, and the federal government is offering tax credits for upgrades in energy efficiency as well. Solar is a nice way to help protect against rising energy costs and can save money. If a company can lower operating costs of electric by 80-90%, and the people they’re competing against are paying those high electric costs, that really gives a business a competitive advantage.
Q: Can you provide an example of a recent project you’ve worked on?
A: In Union, N.J., we worked on a 100,000-square-foot building occupied by Kalustyan, an importer/exporter of spices. This particular project involved the installation of a solar system on an existing roof, not a new roof, but the benefits apply in any case. To begin with, their bank accepted their federal Section 1603 grant as a down payment, so they were able to effectively purchase the entire system without putting any money down. The installation cost approximately $2.8 million, so 30% of $2.8 million was the grant/down payment.
The system is approximately 700 KW, and it is worth approximately $100,000 of their electricity. It is anticipated that they could make hundreds of thousands of dollars from SREC credits in the next year. And due to current laws, they were able to depreciate the entire cost of the system within the first year.
Whether it is a case of new construction, or the retrofit of a building’s roof, or even an existing roof that can support a solar installation as is, there are numerous ways in which a solar installation can be highly cost-effective resulting in bottom line improvements for the property and the businesses located there.
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By Adam Putter, Esq., President
Solar Roof Development
