BOSTON – The expiration of federal tax credits brought on by the “fiscal cliff” negotiations of 2012 produced a dramatic drop in national wind energy installations in 2013 and the effects ripped all the way to a wind turbine testing center in Charlestown, the center’s director told a state board Tuesday.
Rahul Yarala, executive director of the Massachusetts Clean Energy Center Wind Technology Testing Center, told the Clean Energy Center Board Tuesday that federal tax policy disrupted spending and development in the sector. The testing facility, located at a former parking lot, offers certification tests for turbine blades up to 90 meters in length.
As part of negotiated compromises made by Congress in 2012, the federal wind investment tax credit expired at the end of that year, causing uncertainty in the national wind energy market only a year after Massachusetts officials marked the opening of the test center.
The rush to get projects qualified for the credit caused developers to push projects that would have been built in 2013 ahead to 2012 and to put off longer-term planning, according to center spokesman Matt Kakley. The tax credit is back in place for 2014.
Yarala said only one gigawatt of new wind energy production was installed in the U.S. last year. He expects around five gigawatts this year. The tax uncertainty caused many smaller and foreign investors not to pursue new installations in the U.S., Yarala said, leaving industry giant GE with 90 percent of a greatly reduced market.
A chart provided by the WTTC shows wind installations surging in the year before the tax incentives expired, nearly doubling from fewer than 7 gigawatts in 2011 to over 13 gigawatts in 2012.
Center CEO Alicia Barton, after hearing the report, agreed that the state is “subject to the global dynamics of wind industry.”
Wind Programs Director Nils Bolgen expects the New England wind industry to pick back. A large swath of ocean off the state’s coast is expected to be offered for lease as early as this year, according to Bolgen. The 742,000-acre zone 14 miles south of Martha’s Vineyard would more than double the acreage available for federal offshore wind energy projects, according to a June release from Gov. Deval Patrick’s office announcing the proposed sale notice for the area. Bolgen told the board the area could be divided into four or five subleases.
Energy and Environmental Affairs Secretary Maeve Vallely Bartlett said the industry and sector as whole should see an uptick once Cape Wind, the massive offshore energy development planned off the coast of Cape Cod, goes online.
“When Cape Wind gets built, we’re all going to do a lot better,” she said.
Two investment opportunities were pitched to the board at the meeting. Both were met with initial approval from the board, granting staff the authority to pursue the investments.
Essess INC of Boston requested an investment of $600,000 from the center, through its Investments in the Advancement of Technology Program. The company offers what they call “scalable thermal imaging technology” which helps to identify weak points in a building’s energy efficiency envelope.
Using SUVs mounted with thermal cameras and other specialized equipment, the company can scan large areas and determine a building’s energy loss from the outside. The company then calculates the magnitude of the energy leaks, estimates the cost of investment in correcting the problem and provides specific, actionable suggestions for building owners.
With a slogan of “tap into savings,” the company was founded by Sanjay Sarma, a key figure in the development of the widely used radio frequency ID technology and spun out of an MIT project in 2011. Essess employs around a dozen people in the state, a figure which CEO Tom Scaramellino expects to triple over the next two years. According to Scaramellino, the company has tested their technology by analyzing military bases through several Department of Defense contracts.
Scaramellino showed the panel a map of Cambridge, which he said two Essess vehicles scanned in about eight hours at a cost of less than $1,000 in labor and gas. The result showed several hundred buildings in Cambridge colored blue, for efficient, and red, which showed signs of energy loss. According to Scaramellino, an analysis of the same area using traditional thermal methods would have costs millions of dollars.
A second pitch came from EnergySage Inc. of Cambridge, which bills itself as the “Kayak or Expedia of solar.” The company offers an online portal where consumers can get quotes on solar installations for homes or businesses. Customers can request and compare quotes from solar installers on an “apples to apples” basis to help determine the best and most cost effective way to add photovoltaic technology to buildings.
The company says its service appeals to installers by reducing sales lead times from an average of nine months to six weeks and simplifies things for consumers. A brief prepared by the center says that “by reducing customer acquisition costs and decreasing the complexity of purchasing solar, EnergySage has the potential to drastically reduce costs and expand the market.”
The company operates in 26 states and has agreements with over 160 installers. They are asking for a $500,000 investment through the center’s Investments in the Advancement of Technology Program.
The panel voted to approve several projects under the center’s jurisdiction to enhance Massachusetts’ stake in the clean technology field. The board voted to approve appropriations of $2.5 million for the offshore wind program, which allows for grant awards to other projects in amounts between $100,000 and $300,000. The panel also approved $1.5 million for the Innovate Mass. program, which helps to commercialize cleantech projects and aid in further financing.
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