Pending energy bill seen as vital to future of state’s solar industry

There’s a joke going around the Connecticut solar industry these days: They ought to start a shuttle service between here and New Jersey. The thing is, no one’s really laughing at it.

Some five years after Connecticut established the most generous solar incentive program in the country, spurring the growth of dozens of solar companies and hundreds of jobs, New Jersey may be what’s keeping those companies and jobs alive.

The state subsidies that make installing solar power affordable are all but used up in Connecticut, forcing companies to turn to other states in the region, New Jersey chief among them, for income. Their only hope for resurrecting business in Connecticut is the energy bill passed in the just-ended legislative session, but not signed by Gov. M. Jodi Rell.

The controversial bill reorganizes utility oversight and contains several components that aim to jump-start the languishing solar industry, which many believe may not survive in Connecticut without the legislation.

solar 5-21-10

Workers install solar panels on a bulding at Rumsey Hall in Washington Depot, one of the last commercial projects funded by the state before money ran out (Alteris Renewables)

“I haven’t met one person working in the solar industry who believes that it can,” said Chris Phelps, program director of the advocacy group Environment Connecticut. “Without this bill they’ll either be out of a job or working in Massachusetts or New Jersey this time next year — period.”

Less than two years ago Connecticut was the place to be if you were in or wanted to be in the solar business. A group of Connecticut Clean Energy Fund programs operating since 2005 was providing large rebates to residential and commercial solar electricity projects in addition to whatever federal tax credits were available.

Under the programs, Clean Energy Fund president Lise Dondy said, the fund provided nearly $74 million to 176 commercial solar projects and nearly $36 million to more than 1,440 residential projects.

People like George Keithan, president of Consulting Engineering Services — the mechanical and electrical engineering consulting firm he founded in Middletown in 1994–decided about three years ago he wanted a piece of the exploding solar action.

“The incentives are fabulous. This is a growing industry. We have got to be there,” Keithan recalled thinking. “It probably wasn’t a year later that everything just crashed.”

No more money. The rebate programs were so successful they ran out of funds years earlier than anticipated. The residential program ran out in late 2008. Homeowners were steered to a new solar lease program, but that recently also used up its funding (a little extra money was eventually found for the original residential rebate plan). More critical for people like Keithan, the commercial program for big-ticket installations at businesses, schools and government buildings ran out of money in early 2009.

“We saw the commercial side of the business just stop,” he said. “Full brakes.”

Since then there have been no new commercial solar projects contracted in Connecticut. Twenty-nine commercial projects, requesting funding totaling $10.5 million, remain on a waiting list. With nothing to sell, solar companies have begun laying off sales people. Installers finish project backlogs before they too face layoffs. The state’s industry – once considered among the top three in the nation-has slid to No. 9, according to the most recent report by the Solar Energy Industries Association, as Connecticut companies head for the exits.

“Most of the players in Connecticut have opened offices and begun moving personnel and equipment into other states and are looking at this bill as a reason to stay here,” said Michael Trahan, executive director of Solar Connecticut, an industry trade group. “Sooner or later it’s not going to make any sense for solar companies to leave a footprint here.”

Trahan and others point out that when companies go, it also means other states get training and expertise that Connecticut paid for. It hinders development of the construction and engineering jobs that go hand-in-hand with the solar industry. And it effectively ends any bid for the coveted prize: solar manufacturing companies right in the state, which can help lower costs.

Maryland-based SunEdsion, the largest solar operator in the country, finances, designs, constructs, owns and operates solar systems on behalf of host customers. It had planned to make its Rocky Hill office with nine employees, into a regional headquarters with a staff of 20. But only Fred Zalcman, SunEdison’s director of government affairs, remains in the state while SunEdison’s New Jersey office is up to 30 employees.

“We’re going great guns in New Jersey and doing a lot of work in Massachusetts,” Zalcman said. “Unless and until Connecticut revives its solar program, we would regard the state as off-limits.”

Ron French, solar division president of Alteris Renewables, the largest Connecticut-based renewable energy company, called the situation “distressing.” He said the company headquarters are likely to remain in Wilton, but they’ve recently opened offices in New Jersey and Pennsylvania with Connecticut employees who were able to make the move, and bought ISI Solar in New York.

“We’ll do our best to stay here. I can’t speculate on exactly what we’ll do, but we do have to make a profit,” he said. “We still think that Connecticut is a great state for solar – high electric rates, plenty of sunshine, a population that’s very aware of the environmental issues.

“We are just hoping there’s the political will power.”