By Adam Putter, Esq., President
Solar Roof Development
New Jersey, NJ – June 13, 2011 – (RealEstateRama) — The solar energy market in New Jersey has experienced tremendous growth and maturity in the past few years. Indeed, the industry continues to emerge as a business unto itself.
The statistics are dramatic. The New Jersey solar market’s installed photovoltaic (PV) capacity grew from 57 MW in 2009, to 137 MW in 2010, and recently passed 300 MW – that’s a more than 400 percent increase in just over two years. And, according to Michel DiCapua of Bloomberg New Energy Finance, construction of new solar rose from approximately 10 KW per month for most of 2010 to 18 KW per month from December 2010 through today.
Altogether, 72 MW of solar was installed in New Jersey between December 2010 and March 2011, according to Mr. DiCapua, and the build rate in December 2010 was 155 percent greater than the average for the previous 11 months of the year. The robust numbers add up to the fact that New Jersey now ranks a strong second nationally only to California in installed solar, a remarkable achievement given the Garden State’s relatively diminutive size compared to the Golden State.
To be sure, much of the growth that occurred in the latter stages of 2010 came in anticipation of the end of the federal cash grant on December 31. Of course, as widely reported, Congress extended the Renewable Energy Grant program, which provides 30 percent cash rebates for qualified projects, at least through the end of 2011. Known as the Section 1603 Grant, the program was enacted as part of the American Recovery and Reinvestment Act of 2009.
The 30 percent grant is in lieu of certain tax credits, although projects are still eligible to depreciate 100 percent of the system, less half of the cash grant or investment, for qualifying energy systems put into service between September 8, 2010 and December 31, 2011. An additional benefit is that the banks are more willing to lend with the grant as a down payment, so in effect, commercial companies can purchase the equipment with no money down.
The State of New Jersey also has excellent solar energy incentives, including rebates based on energy efficiency measures and solar renewable energy certificates (SRECS) that can be utilized as a recurring revenue source to help finance projects. According to the Solar Energy Industries Association, New Jersey also ranks second nationally only to California for grant-related solar projects, receiving 164 grants totaling $241 million in investments and $72 million in funding in the past year.
If you combine those incentives with the federal grant program, coupled with the vast improvement in solar technology, there are some very compelling reasons to take a serious look at a solar installation right now. Indeed, given long-term uncertainties regarding incentives (i.e., they may not be around forever), an argument could be made that 2011 could be the best possible time to explore solar projects for commercial and industrial buildings.
The evaluation process, which is highly complex, should begin right now, while property owners can still take advantage of the available subsidies, as well as current market trends and demand involving the sale of SRECs. It is important for property owners and managers to evaluate their long-term energy opportunities and liabilities, with energy prices expected to rise tremendously in the next two decades, and with the incentives currently in place.
The payback of a solar or energy-efficiency project can be very quick, but more importantly the benefits will accrue to property owners for 25 years or longer—literally for the life of a building. With the coming rise in energy prices, many businesses may not be able to survive, so doing something now can help businesses avert the problems that could arise in the future.
Certainly, given the economic cycles, some companies will not even look at “going green” if it doesn’t make some economic sense. Businesses are built to make money, and this is no different. But economic is but one issue in the larger solar scheme of things.
I don’t believe this is merely a “trend”—it’s much more than that. There are economic benefits to the state as well, over and above cutting energy usage and improving the carbon footprint. As we speak, the Board of Public Utilities and other state agencies are actively seeking to boost the entire solar supply chain within New Jersey. In other words, there is substantial economic benefit to be derived from not only installing solar energy in New Jersey, but also having the product itself manufactured within the state. Jobs are at stake, and it is a key element in the larger scope of solar evolving as a business unto itself.
As our world changes, being energy efficient and having a plan for a business’ energy needs will be absolutely imperative, and an energy plan will be integral to success for businesses in the next decade. The subsidies may not be as good in the future as they are today, but the need to protect businesses from rising energy costs will certainly be there.
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About Solar Roof Development
Media Contact:
Evelyn Weiss Francisco: evelyn (at) caryl (dot) com, (201) 796-7788, www.twitter.com/carylcomm
