Many out-of-state companies win in state’s commercial renewable energy program

The long-awaited list of energy companies that applied for and won clean energy projects through the state’s revamped commercial renewable energy incentive program shows a hefty chunk of the work could send a lot of the money out-of-state. (The lists are here: CL&P ZREC-LREC applicant.pdf, and here: UI ZREC-LREC applicants.xls.)

The program, known by the nicknames ZREC and LREC for zero- and low-emissions energy projects, is administered by the state’s two utilities – Connecticut Light & Power and United Illuminating. CL&P and UI buy the power generated by the various projects under 15-year contracts using ratepayer funds. Over the current six-year life of the project plus the contract terms, this is a $1 billion program.

Under the original program rules, information about who had applied for projects and who had won was kept secret. But last month, the Public Utilities Regulatory Authority finally agreed to alter those rules, pushed by the industry group Solar Connecticut and the Office of Consumer Counsel and ultimately propelled by a Freedom of Information Act request by the Hartford Business Journal.

Until the list’s release, all that was known was that 101 projects had been accepted: 87 ZRECs, all of which are solar and 14 LRECs, all of which are fuel cells.

SunEdison – headquartered in Missouri and California – appears to be the big winner with 23 zero-emission projects. That’s more than 25 percent of all ZRECs. At least six of SunEdison’s installations will go on Kohl’s stores.

SolarCIty, a national company with a large Connecticut presence, also won multiple projects, as did a few in-state companies including Altus Power and GRE. But the listing showed that GRE applied for many more projects than the half-dozen it won. And the local company Mercury Solar Systems, which applied for many projects, won none.

For several companies with Connecticut names, it was unclear whether they indeed exist here in any form other than for the temporary purpose of applying for the projects.

“I wasn’t entirely surprised not to see as many Connecticut-based solar businesses on the list,” said Mike Trahan, executive director of Solar Connecticut.

Trahan said companies already doing large commercial installations have access to the best pricing. “In a competitive situation those businesses that are able to receive economies of scale are going to be able to come up with a low bid number,” he said.

Dennis Schain, a spokesman for the Department of Energy and Environmental Protection, which oversees the program, said the key factor in the selection is price. “It’s the best return for ratepayers, even with out-of-state companies,” he said. “It will create jobs here and over time Connecticut companies will become more engaged.”

Trahan said he’s optimistic that SunEdison will do as it has in the past and contract out work to Connecticut workers. “The ideal situation is it’s a Connecticut company with its own workforce and they’re getting the work and the money circulates around here,” he said. “Obviously that didn’t happen.”

On the positive side, Trahan said the project prices are low, and with a wealth of dozens of projects: “a lot of solar panels are going to get ordered and that’s going to drive their price down.”

A concern all along had been that the big national players would bring their buying power and existing clients – like SunEdison with Kohl’s and a company called Solar Star with five Macy’s stores – to bear and push smaller local solar contractors out along with smaller businesses in search of renewable energy.

The low emissions side of the program may be especially disappointing to the Connecticut-based fuel cell industry, long regarded as the world’s leader. While several companies manufacture fuel cells here, almost all the fuel cell projects went to Bloom Energy, one company that is not here. Its headquarters is in California, and its East Coast office is in Delaware.

Most of the fuel cell projects also are for major companies: at least five WalMarts, four AT&T offices and one for a Staples.

The fact that the ZREC and LREC program is funded with ratepayer money is still something that weighs on Trahan and the way this first round of projects has turned out. There should be some return on investment for those who are paying for it, he said.

“The purpose of program as stated several years ago was that it was supposed to have an impact on the Connecticut economy,” he said. “The problem that remains is that there is no good way to tell whether the program is having a local impact.”

 

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