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Solar home business shining in Maryland

It might not seem to be a bright investment right now, after weeks of seemingly endless clouds and rain, but solar panels are popping up on rooftops all over Maryland.

With government help in the form of tax credits and grants, companies making equipment available through long-term lease and economies of scale bringing prices down, the industry is seeing steady and continuing growth in demand for drawing power from the sun.

And Maryland is among the states experiencing a rapid expansion, with an increasing number of companies getting into sales, installation and leasing of the panels to homeowners and businesses.

Nationwide, installations have grown by 69 percent in the last year. Maryland ranked eighth in the nation from April through June of this year — the most recent quarter for which data is available — ahead of such larger and sunnier states as Texas and Florida.

"We've seen tremendous growth," says Kevin Lucas, director of energy market strategies for the Maryland Energy Administration.

It's a big jump for a state that only a few years ago was generating virtually no solar energy. The amount of photovoltaic generating capacity installed on homes has mushroomed this year, from 0.6 megawatts overall in the first three months to 2.5 megawatts by the end of June, according to the industry association.

Industry officials and analysts say the surge stems from a drop in the costs of the panels and a bevy of incentives to buy them, including a 30 percent federal tax credit, state grants and property tax breaks in some Maryland localities.

And solar panels earn their owners renewable energy credits, which may be sold to utilities, which then may apply them toward the amount of renewable energy the state has required that they produce.

Maryland lawmakers have set a goal of getting 20 percent of the state's power from renewable sources by 2022, with at least 2 percent coming from solar energy. That requirement, says MEA's Lucas, is also helping fuel the surge in solar installations.

The state has nearly 30 megawatts of solar generating capacity installed, but it has a long way to go to reach the 1,000 to 1,200 megawatts that would be needed to reach its goal.

The state provides grants of up to $10,000 to help homeowners buy photovoltaic systems, using funds generated by the sale to utilities of permits to release climate-warming carbon dioxide from their coal-burning power plants.

The energy administration has helped underwrite 2,275 systems so far, awarding $11.4 million to date. Most are tied to the electric grid, which reduces the amount of power that must be bought from local utilities.

Lucas said the advent of opportunities for Maryland homeowners to lease rather than buy a solar system has helped spur that growth.

Depending on their size, residential photovoltaic systems can run from $9,000 to $30,000 and even up to $50,000. Such steep upfront costs have deterred many.

In the past year, a handful of companies has begun offering homeowners the option to lease rather than buy.

Under the lease plans, customers may put as little as nothing down and still realize reductions in energy costs. Their monthly payments decline — and their savings go up — the more they pay at the outset.

"We see this as a really good market," said Lee Keshishian, regional manager for SolarCity. Based in San Mateo, Calif., the firm began peddling solar in Maryland this year. It has since been joined in offering leases by two other Callifornia-based firms, SunRun and Sungevity, and BGE Home, a home energy and improvement offshoot of Baltimore Gas and Electric Co.

Other companies that sell photovoltaic systems have found different ways to get consumers over the upfront cost hurdle. Though the tax credits and grants help reduce overall price of going solar, it can take a purchaser a few months to a year to receive those benefits. One, Solar Energy World, based in Elkridge, offers consumers zero-interest, 12-month loans to bridge the gap.

Like the leasing companies, Solar Energy World has seen its two-year-old business grow. Geoff Mirkin, one of four partners in the firm, says it's been doing 30 to 40 residential installations a month lately.

As the number of solar installations has grown, the industry is generating jobs. SolarCity's Keshishian estimates he's hired 30 people, mainly installers, since setting up shop in Maryland, and hopes to have 50 total on board by year's end. Nationwide, more than 100,000 workers are employed making, selling or installing and maintaining systems, according to industry figures.

"It remains to be seen how big this thing can be," said Mike Smith, vice president of green initiatives for the Constellation Energy Group.

Constellation, which had concentrated until recently on building commercial solar systems, just started work on its first utility-scale project, a 16.1-megawatt "solar farm" at Mount St. Mary's University in Emmitsburg. Counting that, the company has installed or is building about 25 megawatts in the state, and its capacity nationwide is 100 megwatts.

While the bankruptcy of the photovoltaic panel maker Solyndra has triggered investigations and political charges about the more than $500 million in federal loan guarantees offered the firm, industry executives say it's not indicative of the overall vitality of the industry. Competition is intense and global, they say, and some companies are going to fail.

"The Solyndra thing is great for us," Solar Energy World's Mirkin says, because it has put solar power in the spotlight and gotten people thinking about it. "Sometimes even negative press is good press."

Richard Maranto isn't put off by the California firm's closing. The 60-year-old software business owner signed up recently to put a 7.6-kilowatt system on the roof of his split-foyer home in Middletown.

Maranto, a member of Frederick County's sustainability commission, said he's been considering going solar for a long time and even helped organize a public tour this weekend of solar-powered homes and businesses in Western Maryland.

He said he's been impressed by the decline in the costs of the panels in recent years and the growth of government incentives. It was the advent of leasing, though, with the ability to reduce the still-hefty upfront cost of solar panels, that got him off the fence and onto his roof.

Signing on with SolarCity, Maranto chose to prepay the full 20-year lease rather than make payments over time, which cut his costs. He says the deal locks in his per-kilowatt-hour rate for electricity generated by the panels at about 30 percent below today's standard rate charged by his utility, Potomac Edison. And the rooftop array should provide about 80 percent of the electricity he consumes in his all-electric home, he said.

Maranto says he's just waiting now to have his system installed, and planning to put his place on next year's solar home tour.

tim.wheeler@baltsun.com

By the numbers

Residential solar photovoltaic grants awarded by Maryland Energy Administration

Year (fiscal) …. Number of grants … Amount paid

2005 19 $56,172

2006 43 $127,588

2007 47 $147,246

2008 166 $870,039

2009 240 $1,945,473

2010 462 $2,937,073

2011 939 $4,171,117

2012( todate) 359 $1,125,248

Total 2,275 $11,379,955

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