Connecticut, the prodigal son of the solar industry, is returning.
Once a solar hotbed because of its state government programs, Connecticut’s attraction as a solar state waned in the past five years as funding ran dry and businesses sought sunnier pastures.
But with passage of a new solar credit program creating more stable ratepayer funding for renewable energy projects, Connecticut is again one of the more progressive states in the nation in encouraging solar development.
“Anybody who is paying attention to the solar industry in North America knows a program is about to be implemented in Connecticut,” said Michael Trahan, executive director of industry group Solar Connecticut, Inc.
Solar installation companies are looking at opening Connecticut offices; workforce development programs have begun, so technicians can get the proper certification to make solar projects eligible for state and federal funding.
Of the many aspects of the comprehensive energy policy bill passed by the legislature in June, the ones exciting the solar industry are the ZRECs and LRECs, or zero-emissions and low-emissions renewable energy credits.
Under the ZREC and LREC program, commercial energy projects powered by sources with no carbon emissions (solar, wind) and low carbon emissions (fuel cells, biomass) earn credits.
These credits are purchased by utility companies using ratepayer money, and the developers of the projects get help offsetting the higher cost of using renewables for electricity. To start, ZRECs will earn $350 per megawatt while LRECs will receive $200.
The utilities such as Connecticut Light & Power and United Illuminating use the credits to meet their state-mandated renewable energy goals. The state wants 20 percent of electricity to come from Class I renewables, such as solar and wind, by 2020. The costs of meeting these goals are included in the rates the utilities charge their customers. Rate structure is negotiated by the Department of Energy & Environmental Protection.
Under the energy bill, the electric utilities are required to enter into 15-year contracts to provide funding for these renewable projects. Each year, the utilities must spend $8 million annually on ZREC projects — not just solar, but all zero-emission renewables. That will grow to $48 million per year by 2017. And there’s another $20 million for LREC projects.
Under the previous system operated by the Connecticut Clean Energy Fund, the state government allocated a certain dollar amount toward renewable projects each year; and when the money ran out, projects stopped being funded.
Although the ZREC and LREC program won’t be up and running until late summer 2012 at the earliest, Solar Connecticut has received inquiries about the opportunities in Connecticut. In attending a Solar Energy Business Association of New England meeting in Massachusetts this month, Trahan was mobbed by Massachusetts solar installers who want to stay informed on the implementation progress of Connecticut’s programs. This is a reversal of the previous three years where Connecticut installers bemoaned the lack of funding to stay viable as companies.
One company not waiting for the program to be implemented is Danbury’s Seaboard Solar LLC. The company has more than doubled its workforce in anticipation of the added work.
Founded in 2008 as Solair Development, the company installed 1 megawatt of solar on properties owned by CEO Stuart Longman, but proceeded to perform installations exclusively in New Jersey, as that state had a more aggressive government solar subsidy program. The company has 15 megawatts of New Jersey solar power either installed or in the pipeline.
Because of the new program, the company reopened its Danbury office, relaunched as Seaboard Solar and increased its workforce from four to nine employees.
“We are very, very optimistic about the future of solar in Connecticut,” said Joseph Rio, Seaboard managing partner in charge of finance and administration. “I’m very impressed with the thoughtfulness of the Connecticut program.
“This will create a fair amount of economic activity,” Rio said.
The key to the Connecticut program is the ZRECs provide a steady source of income for solar projects, so banks will have much less risk when approving loans, Rio said.
Based on the ZREC and other aspects of the comprehensive energy bill, Seaboard is remaking itself as an energy company, with division to perform energy efficiency audits, utility bill reviews and solar projects.
Even though the full implementation of the Connecticut programs is a year away, Seaboard wants to stay ahead of the pack, Rio said.
“We want to become absolutely second-to-none in understanding state and federal incentives,” Rio said.
To train the renewable energy workforce, the Industrial Management & Training Institute in Waterbury opened a solar workshop July 20 so electricians can get the proper training to become certified in various renewable technologies, including solar electric, solar thermal and wind. The certification is necessary for projects to become eligible for state and federal funding.
“We feel it is the future of the industry for electricians,” IMTI president Janice Shannon said.
IMTI, which trains 120 students at its Waterbury location and another 90 in New York City, first started converting its Waterbury facility for solar two years ago. Its system includes 10 working solar electric panels that power the third floor of the building, as well as separate installations for students to practice on.
“Eventually, we want to solarize the whole facility,” said Louis Reyes, IMTI vice president for energy systems training. “We are waiting for the new state program to get up and running.”
