Aug 19 - The Knoxville News-Sentinel
Going green may be gaining traction among businesses, but investing in
technologies such as solar is still a bit far out for most companies.
Ed Zubko, owner of Green Earth Services, installs photovoltaic and solar
thermal water-heater systems for residential and business customers -- that
is, he's making lots of pitches to businesses, hoping they will see the
light.
A handful of local companies -- a software developer, a golf course, an
environmental contractor, an auto parts manufacturer -- are currently
considering solar systems, but none has yet committed, Zubko said.
"It's people who are interested in being first in their industry," he said.
"They're interested in the green exposure this will give them."
Zubko said the technology does require some serious capital outlay, but the
systems are expected to last more than 40 years.
And a ream of tax incentives and state and federal grants and loans -- some
set to expire at the end of this year if Congress does not intervene -- can
make the leap more financially palatable.
The combination of state and federal programs and tax credits, Zubko said,
could whittle the cost of a $200,000, 21-kilowatt system by tens of
thousands of dollars and allow businesses to borrow the needed capital at
very favorable terms. In addition, the system could produce several thousand
dollars' worth of electricity per year -- he estimates $5,000 annually for
the 21-kilowatt system -- thanks to TVA's Generation Partners program that,
through local distributors, pays 15 cents (for residential and small
commercial participants) to 20 cents (for larger commercial) per kilowatt.
Solar thermal water heaters are a lesser-known and less expensive way to
take advantage of solar power for purposes of reducing power demand, Zubko
said. The systems deliver a savings from 60 percent to 90 percent on
water-heating bills and typically pay for themselves in less than two years,
he said.
Other qualifying technologies include solar space heat, solar thermal
electric, solar thermal process heat and hybrid solar lighting, the
specialty of another local company, Sunlight Direct.
On the federal side, the economic stimulus act that gave American consumers
a little more money to blow on gas and groceries also allows businesses to
accelerate depreciation on 50 percent of the adjusted basis for solar and
other renewable-energy systems installed this year. A business energy tax
credit offers a $500 credit per half-kilowatt of power generated by 30
percent of the system. This credit also expires at the end of the year.
Work is ongoing in Congress to extend the tax incentives, and the National
Governors Association in July sent a letter to House Majority Leader Nancy
Pelosi and others, asking them to extend the tax provisions for at least
five years.
Orders are lagging for manufacturers such as Sharp Solar in Memphis because
businesses don't want to commit to post-2008 investments should the tax
benefits not be renewed, said Tennessee Sen. Bob Corker when asked about the
potential for renewing the credits.
"Businesses are suffering right now," he said.
Corker said measures that have been introduced to extend the tax breaks have
been defeated for a variety of reasons, from opposition to a loophole that
provided advantages to hedge funds to political wrangling.
But Corker said negotiations are ongoing to iron out differences over the
tax extender. "I think it will be taken care of," Corker said.
The U.S. Department of Agriculture's Rural Energy for America Program offers
a grant that can cover up to 25 percent of the cost of renewable-power
systems to companies in rural areas. The program also offers guaranteed
loans.
For entities qualified to sell power, the Department of Energy's Renewable
Energy Production Incentive program offers financial incentives for
renewable-energy electricity produced and sold by eligible
electric-production facilities, including nonprofit electric cooperatives,
public utilities and state governments.
In Tennessee, the Small Business Energy Loan program has dispersed $12
million, primarily for energy-efficiency improvements, but solar projects
qualify, said Ryan Gooch, director of energy policy for the state of
Tennessee.
A newer grant program Gooch described as more of a pilot initiative has
provided five grants for solar installations to Tennessee businesses. Mellow
Mushroom restaurant was a local recipient of $20,000, with the rest of the
projects in Middle Tennessee, he said.
Gooch said the grant program is continuing to take applications, although an
energy task force set up by Gov. Phil Bredesen is currently evaluating the
program for improvements along with other solar incentive programs still in
the early discussion stages. Gooch said he expected the grant program will
be reactivated by the end of the year.
"The solar discussion, I would say, hasn't been completed yet. We're kind of
in the early stages of that," he said.
Knoxville's early and only business adopter of solar so far used tax credits
and grants to help fund the solar installation, which has helped the company
convey its philosophy to customers and the community, said Jeremy Garcia,
general manager of the Mellow Mushroom's Farragut location. The solar panels
are on the Cumberland Avenue restaurant.
"The tax credits and the grants really were the impetus to start
investigating (solar technology)," he said. "It made financial sense for us.
In the same way, it also made ethical sense for us because we're a company
that strives (to be) green."
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