Solar Energy Industry Says It

Solar Energy Industry Says It's on the Rebound

Jul 14 - Daily Journal of Commerce (Portland, OR)

To most Oregonians in the solar energy business, the selection of Portland as host city for the National Solar Energy Conference served as proof that others in the industry approve of the state's solar practices.

But many industry representatives at Solar 2004 say the choice of Portland does not mean the state is where it can or should be. While they insist the business is moving forward, most say it can do more - and that it's only now getting back on track after the solar industry crash of the mid-1980s.

If the crash hadn't happened, we'd probably be where Germany is, and Japan, said John Patterson, president of Mr. Sun Solar in Portland. Just 1 percent of energy generated in Oregon is solar. In Germany, the world leader, the number is about 10 percent.

When Patterson founded Mr. Sun Solar in 1980, the solar water heaters he installed were easy money, he said. At the behest of President Jimmy Carter, Congress passed a 40-percent federal tax credit on solar water heaters before Patterson opened shop, and the state of Oregon soon followed with its own 25-percent credit. Portland General Electric joined in, offering solar water heater users a $300 rebate.

The federal tax credits ended up being worth about $1,600 to consumers, Patterson said, and the state credit gave them another $1,000. In addition, any veteran with a GI loan could obtain another tax credit for the purchase of a solar heater.

Potential buyers were everywhere in Oregon, Patterson said. Solar water heaters sold themselves, he said, and Mr. Sun Solar was doing 100 installs a year.

And then, in 1985, the market disappeared.

Carter's tax credits expired in 1985, and President Ronald Reagan didn't renew them. Reagan then eliminated the GI credit as well.

The easy money dried up overnight, Patterson said, who in 1985 performed only six installations.

Not 60, he said. Six. Everybody got out of the solar business, except for the true believers.

Without tax rebates or incentives, consumers couldn't justify buying expensive solar energy systems, Patterson said. Mr. Sun Solar and many other solar system installers offered lifetime warranties, and in 1985 and beyond, the industry was almost exclusively a service one, he said, with installers spending their time servicing heaters they sold years ago.

Patterson stuck with solar because somebody had to service those old installs, he joked, and because he believes renewable energy is important.

He's glad he stuck with solar.

Business has finally turned around, Patterson said, because of newly expanded state incentives and the work of the Energy Trust of Oregon, a nonprofit solar energy advocate that has been offering individuals and businesses financial incentives for using solar power since its inception in 2003.

Oregon's state tax credit has risen from $1,000 to as much as $1,500 for homes that have solar systems producing at least 200 watts of energy. The state Department of Energy is now offering low- interest loans to homes and businesses looking to go solar through the State Energy Loan System.

At The Energy Trust, word of mouth has spread quickly since about June of last year, said Peter West, the organization's director of renewable energy, and Energy Trust now hopes to dole out almost $3 million in 2004 to individuals and businesses who show faith in solar energy.

Sometimes you get nervous when you throw a party. You're afraid that nobody will come, West said. But people are noticing. Our goal is to turn solar into an everyday thing. The biggest barrier to solar is the cost - you're buying 20 years of your power up front. Now, the price of installation has dropped.

Advocacy groups like the Oregon Solar Energy Industries Association and the Solar Energy Association of Oregon are seeing movement forward, thanks to the Energy Trust's financial incentives and the National Solar Energy Conference's presence in Portland.

I think a lot of people, one, don't think you can have solar work in Oregon, and, two, they don't know where to get the tax credits that are available, said Solar Energy Association of Oregon Director Heather Campbell. This conference is going to really impact things. We've had so many people come up (to the association's booth) and ask how they can help and how they can get involved.

While Mr. Sun Solar isn't installing as many solar water heaters as it was in the early 1980s, business has rebounded. Patterson says he installs about 50 heaters per year now and expects to get back to 100 in another two or three years. In 2004 alone, he's seen a spike in business - proof, he said, that the industry is on its way back.

I haven't done any advertising this year, he said, and I've already had a better year than last year. People that know about the technology are espousing it and promoting it. I just sense that there's a market ready to spring forward.

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