February 25, 2013
Massachusetts

Expert sees some clouds on horizon for solar market

By Katina Caraganis | 02/25/2013 | www.sentinelandenterprise.com

LUNENBURG – The apparent collapse of negotiations to bring a solar project off Chase Road is indicative of how the once-hot solar market is cooling off, an experts in the field say.

The market for solar projects is changing, said Steven Strong, president of Harvard-based Solar Design Associates, whose work includes working with contractors, architects, and developers throughout the process of building a renewable energy project.

Strong said one of the biggest stumbling blocks for developers is the incentives once available to them aren’t as available anymore. Those include solar renewable energy certificates through the state, or SRECs, tax breaks from local municipalities and rebates from the state.

“The market is cooling off. The incentive programs that have been set up were not that well thought out, and they’ve dropped off,” said Strong, who was named an environmental “Hero for the Planet” by Time Magazine in 1999 and 2001. “Some people will ask why we’re subsidizing solar, especially because the economy is so bad. All of the power sources are heavily subsidized.”

Because individual states, and the nation as a whole, are looking for ways to decrease their dependency on fossil fuels, developers looking to build solar renewable energy projects often get tax breaks, expedited permitting processes in local municipalities, and other subsidies to make developing these projects more manageable.

Liability is an issue with solar developers, too.

Strong said other sources of energy, like nuclear power, are covered by the 1957 Price Anderson Act, which governs all liability-related issues from all non-military nuclear facilities. Under the act, enacted in 1957, there is a no-fault insurance type system which helps protects the general public.

If there were a nuclear incident, the cost of the clean-up, up to a certain amount of money, is funded by the industry. Anything above that is covered by the federal government.

“All the liability is covered. If this went away, nuclear plants would close down tomorrow because no private insurer would touch that. Those risks are real, and when they happen, they destroy a company financially,” he said.

Developers looking to bring solar panels or wind farms to a community must take on much of the liability themselves, which can deter them from progressing.

“The reason the solar and wind industry is subsidized more than other forms of energy is to create a level playing field, and that’s not something people realize or care to know,” he said.

The other thing that has stalled developers over the past couple of months is a lack of adequate space to bring projects. The more attractive sites, Strong said, have already been taken, and for some developers, going through a lengthy process for properties close to a neighborhood or wetlands may not be worth the benefit they get through incentives.

In the case of the two proposed solar projects in Lunenburg, the out-of-state developers targeted pieces of property zoned residential, and neighborhoods came out to fight the move, saying it wasn’t right for an industrial project to be placed in a neighborhood.

“The easy or attractive sites have been taken so the sites that remain are more challenging,” he said. “Site development costs are higher, or the attitude of the town is not conducive to the developer.”

Plans for a project off Chase Road broke down after developer MASS PV1 changed terms under which the town would purchase net metering credits generated by a half-megawatt solar farm on commercially zoned portion of the land. Selectmen agreed to purchase the credits, and were told by MASS PV1 they had until Feb. 13 to decide if they wanted to purchase net metering credits generated on the residentially zoned portion of the property. The initial price of the credits was 9 cents, which was proposed last year, but the town was told the price of the credits had nearly doubled since then.

Scott Fenton, a Worcester attorney representing MASS pVA, said the price of the credits drastically increased because the market for them had changed.

Lunenburg resident Dave Prokowiew, who worked alongside a lot of his neighbors to draft a new solar bylaw, said that this is an ever changing field.

“I believe the real payoff for our efforts is embodied by the new bylaw, which balances the rights of residents to a safe environment for their children and themselves, with the misguided political efforts made by the state to encourage renewable energy development even to the exclusion of zoning enforcement,” he said.

He said that something needed to be done and if projects are no longer viable, or the market conditions are changing for developers, then so be it.

“If we’d done nothing, we’d be looking at a sea of solar panels in this field already, we’d have allowed them to bully up to accept their industrialization of our neighborhood, and the folks on Chase Road would be looking out their back windows at a sea twice as large,” he said.

Selectmen Chair Dave Matthews said this week that if markets are changing for developers, it can only mean good things for the town. He said that as energy costs go up, if the town can still benefit from buying net metering credits at a low rate, there will be the potential for cost savings.

URL to article:  https://www.wind-watch.org/news/2013/02/25/expert-sees-some-clouds-on-horizon-for-solar-market/