N.J. Companies Take Advantage of Grants, Incentives to Cut Energy Costs
Published: Sunday, December 19, 2010
Madeleine Robinson faces electric bills each year that approach seven figures.
As CEO of a manufacturing plant in Moonachie, she was searching for a way to cut her costs but couldn’t afford the $6 million price tag to outfit her 165,000-square-foot roof with solar energy technology. Then she came across a federal cash grant that would pay for 30 percent of the work and state subsidies that would nearly cover her construction loans.
“We scrape for every penny,” said Robinson of LPS Industries.
“The grant was a bird in the hand and, under this climate, with not knowing what’s going on with the taxes, it just was a good situation,” she said.
Construction took six months and already she is saving 25 percent on energy bills. Robinson now wants to add panels to the 5.5 acres of adjacent land she owns.
Companies in New Jersey have responded so enthusiastically to this Treasury Department program that the state is ranked second in the nation for grant-related solar projects, behind California.
Some 164 grants have been distributed in the Garden State since it went into effect last year, totaling nearly $241 million in investments and $72 million in funding, according to the Solar Energy Industries Association, a trade group in Washington, D.C. Nationwide, there have been nearly 1,200 projects and $1.4 billion invested, and 20,000 jobs created.
Those projects have totaled more than 90 megawatts of power in New Jersey this year, up from 57 megawatts last year and 23 in 2008, according to the group. Ninety megawatts can power about 18,000 homes.
The program was set to expire on Dec. 31, which triggered a mad dash to install solar systems before the deadline and resulted in shortages of some equipment. But, late Thursday night Congress approved a one-year extension that was included in the tax package bill President Obama signed Friday.
“It’s going to be a boon for the industry,” said Jamie Hahn, managing director of the Manasquan-based Solis Partners, which builds solar systems. The grant will allow companies who waited until the last minute this year to go forward with their plans in the coming months.
“I think we’re looking potentially at one of the best solar years that we will have had to date,” Hahn said.
The cash grant allows a small-business owner to build its own system instead of buying energy from a third party. Companies that invest in solar energy can also receive Solar Renewable Energy Certificates, a state subsidy.
“Who benefits the most is the entity or person who owns that system,” Hahn said. “They get a very attractive return on their investment.”
In the case of Hartz Mountain Industries, which owns nearly 200 office buildings throughout New Jersey, outfitting its flat roofs with solar panels was a no-brainer. The Secaucus-based company has installed eight systems since last year and has plans for at least three more next year. Tenants can choose to buy solar energy instead of traditional, and a company official said prospective tenants are asking whether their building will have the panels.
“Our mantra from the beginning was, ‘We’ll do anything that makes economic sense,’ ” said Lawrence Garb, an executive vice president.
The company has spent nearly $30 million on the projects but expects to fully recoup those costs through the cash grant program, the state’s energy credits, tenants paying directly for these alternative energies and depreciation in taxes, Garb said.
“It’s a win-win-win in the sense that it’s an economic win for us, an economic win for the tenants, and a win for the environment,” he said.
There are some downsides to the program, however. The administrative paperwork is daunting, with a lengthy application and progress reports that must be filed annually to the government, Garb said. So many companies jumped at the grant, that some manufacturers are facing a backlog in stock.
To address that issue in New Jersey, some buildings are using a technology that uses photovoltaic cylinders instead of the traditional flat crystalline panels. These Solyndra systems weigh less and air can flow between the rows, a bonus in the windy areas throughout the state. And, snow can’t build up on the racks.
Mark Norkus, vice president of the Foodtown grocery stores, began exploring solar energy to offset his high refrigeration and lighting bills, but his roof couldn’t support traditional panels. He installed Solyndra racks on six stores in Ocean and Monmouth counties instead, and said he has seen a 5 percent to 10 percent decrease in energy costs, a “significant” adjustment from bills that were in the tens of thousands of dollars each month. The company expects to pay back its loans within eight years.
“Without the grant and the incentives, it would not have happened,” Norkus said.
Plus, the new technology has boosted morale among employees.
“I think everybody likes working somewhere where they know it’s a little more environmentally conscious,” Norkus said. “You don’t see them on a day-to-day basis, but people do know about them, and we update our employees in our newsletter about what’s going on and how much energy we’ve saved.”
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