Meanwhile, solar firms say it’s only a matter of time for added demand
By Loralee Stevens, Special to the Business Journal
NORTH BAY — The housing slump has taken its toll on green construction and a glut of Chinese panels has dimmed the solar industry some, but local companies with water management tools say business is flowing along smoothly.
“We just had the best fourth quarter we’ve ever had and 2011 was the best year,” said Paul Ciandrini, president and CEO of HydroPoint in Petaluma.
The company’s WeatherTRAK systems use sophisticated data gathering and moisture sensing technology to automate landscape irrigation.
Conservation and management is becoming standard in the building industry, he said. But new home construction only represents about 2 percent of HydroPoint’s business currently. Municipalities and large commercial projects account for the bulk of the company’s customers.
“As water becomes scarcer and more expensive, people are starting to think in terms of a smart water grid, similar to the smart energy and communications grids. Supply, end use and disposition of water will only become more important as time goes on,” said Mr. Ciandrini.
“Since we’re in the end use area, and our technology saves money, we’re well positioned for the future,” he said.
KriStar Enterprises, a Santa Rosa stormwater erosion control company, is also enjoying strong sales growth, according to CEO Doug Allard, who also founded Cudo Stormwater Systems.
He attributes KriStar’s growth in large part to an increase in the enforcement of environmental regulations as well as an overall awareness of water quality issues.
”The irony of the present market is that the growth drivers and growth impeders both hinge upon the new green and sustainable regulations. They’re perceived as — and in some cases are — very cost prohibitive for new development,” he said.
However, companies like KriStar, which have tailored their offerings to meet the new regulations, are in a good spot if and when that development takes place.
“We’re optimistic about our continued growth,” he said.
Things are a little less bright for the solar industry, in particular residential solar, although there are exceptions in advanced technology makers like Enphase Energy, which is expanding in Petaluma.
In Sonoma County installers suffered a double blow with the expiration of tax credits and cheap Chinese solar panels lowered profit margins.
“Also, the federal tax credit for commercial solar projects is still pending renewal, so as an industry we’re struggling on three fronts,” said Nate Gulbransen, president of Westcoast Solar Energy in Rohnert Park.
He and his team have launched a home energy-efficiency arm, HomeStar, both to diversify their offerings and to help homeowners qualify for funding by proving that solar will provide the necessary 10 percent gain in efficiency.
“The solar installation business has become very complex, with complicated financial models. My own background in mortgage lending is coming in handy. But we’re not harvesting sunlight any longer so much as we’re harvesting funding,” he said.
Locally he’s seen an uptick in business as the unusually mild winter has people thinking about air conditioning several months sooner than they ordinarily would.
“Our phones are ringing earlier than they ever have, and that’s good news,” he said.
Gopal Shanker, president of renewable energy consulting firm Récolte Energy in St. Helena, is optimistic the solar industry will pick up again.
“Solar is in a change phase, but overall trends support my confidence. Regulatory and legal matters are moving in the right direction, although the utilities want to control how renewable energy is deployed,” he said.
China’s aggressive move into solar panel manufacturing and the subsequent global glut is not an entirely bad thing, Mr. Shanker believes.
“It’s exerted a downward pressure on the cost of solar just in time to balance out the dwindling rebate programs.”
The North Bay continues to be a leader in solar development and deployment, he said.
“We just have to keep up the pressure on agencies and utilities for incentives such as net metering, which makes the economics of solar much more compelling,” said Mr. Shanker.
Sustainable building, a sector that relies heavily on new construction, is understandably the hardest-hit in the green technology industry.
According to Robert Massaro, founder and CEO of design/build and real estate development company Healthy Buildings in Napa, the downturn has spurred interest in smaller, more energy-efficient homes.
“But who’s building them? Our business is currently all in multifamily units and commercial buildings. Until mortgage lenders loosen up — and I believe they’re starting to — financing will continue to be hard to get,” he said.
The main attraction of sustainable building is always cost, not the idea of green technology, he said.
“Saving money is the driver to our industry, and funding is the barrier right now.”
Elizabeth Durney, a senior green building consultant for Kema Sustainable Buildings and Operations in Cotati, said her company is putting more and more focus on building owners and managers, helping them to comprehensively manage energy, water and waste for portfolios of buildings.
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