North Bay installers hurry to fill orders before end of year
[caption id="attachment_28044" align="alignright" width="360" caption="The IRS tax credit or cash grant enabled Redwood Hill Farm in Sebastopol to purchase a rooftop solar system installed by Sun One."][/caption]
NORTH BAY – Solar installers are reeling under an avalanche of orders for commercial solar systems as the year draws to a close.
Coming down to the line are the IRS tax credits or cash grants that face an extension challenge in the lame duck Congress.
The federal incentives, which provide a tax credit or a cash rebate for 30 percent of commercial solar installations, were granted a year’s extension by the Senate last week. The industry last week was holding its breath while the tax bill is scrutinized by the House.
“The cash-instead-of-tax credit has been the single most effective incentive for mid-sized businesses to install solar,” said Peter Renfro, general manager for One Sun in Sebastopol.
For local wineries and operations like dairy Redwood Hill Farm, the cash grants have made the difference between solar and no solar, he said.
“Very few mid-size companies have the tax burden to take advantage of the 30 percent tax credit, but cash within 60 days of completion is a real motivation.”
A backlog of orders from companies unwilling to chance the expiration of the grants is good news for local installers, who have seen residential jobs slow.
The Sonoma County Energy Independence Program suffered a one-two punch when it had to withhold loans from properties that were underwater in order to sell bonds, its primary source of funding. Then mortgage insurers Fannie Mae and Freddie Mac declared they wouldn’t touch a property with a mortgage-trumping energy improvement lien.
“That really damaged the residential solar market,” said Nate Gulbransen, whose company Westcoast Solar Energy in Rohnert Park was formed to take advantage of SCEIP.
But commercial projects such as Westcoast’s recent deal with Multi-Contact USA in Windsor and Aristo, Battaglini and Schug wineries in Sonoma County have more than made up for the drop-off.
“We have 10 jobs in the pipeline now because of the IRS cash grant’s possible expiration. By the end of this year we’ll have booked our entire year’s schedule for 2011,” said Mr. Gulbransen, adding that he’ll grow his 20-employee staff to deal with the orders.
SPG in Novato has “50 to 100 projects we need to start before the end of December,” said Jennifer Monteleone, vice president of strategic marketing.
“The instability of the cash grants is a major driver. Also, our commercial projects are trending larger.”
SPG just completed a 3 megawatt project for the utility district of Sacramento.
SPG, founded as a residential installer, now only does commercial projects.
“Operationally, commercial is more efficient,” she said.
If the federal cash grants receive an extension, a trend toward commercial work by North Bay solar companies may gain momentum.
Stellar Energy of Rohnert Park, owned by Japanese industrial giant Itochu, recently won a contract with the Pittsburg School District for a large installation.
SolarCity, headquartered in Foster City with a North Bay presence, recently signed a contract with Wal-Mart, despite its reputation as the largest residential installer in the U.S.
“The margins are low so you have to build many more projects,” said Mr. Renfro. One Sun, with its roots in construction and electrical work, has always focused on commercial.
His company just won a contract with Constellation Brands to put solar on its Estancia Winery in Soledad and Ravenswood Winery in Sonoma.
“Manzana Products in Sebastopol, Redwood Hill Farm and the Sonoma County Juvenile Justice Center projects are due to the IRS cash grants,” he said.
“We’re hopeful. Things look positive for an extension.”
