Jul 29 - McClatchy-Tribune Regional News - Carol Fletcher The Record, Hackensack, N.J.


A new state law has installers of renewable energy projects worried.

They say the measure requiring them to pay prevailing wage -- essentially union levels -- to workers on so-called green projects will lift labor costs, make the companies less competitive with larger businesses that can afford higher pay and slow the state's growing renewable energy industry.

The legislation was signed July 15 and requires workers on non-residential projects that get Board of Public Utilities funding assistance, or require BPU approval, be paid prevailing wage.

Small installers and makers of solar systems and wind turbines say they are the ones that will be hurt, because many large businesses already pay union wages or hire union workers. In response, several say they will join or support the 72-member trade association, the Mid-Atlantic Solar Energy Industries Association (MSEIA), if it follows through on its statement to challenge the legislation.

"It's certainly going to affect us," said Wayne Pfisterer, president of Pfister Energy solar and wind turbine installers in Paterson, because about 90 percent of his projects are in the private sector. "What is really going to be affected are small to midsized businesses that don't typically work in that environment [hiring an electrical union.]"

He estimates as much as 50 percent of his project work could "dry up and go away" if the bill affects business the way he anticipates, he said. The company's average project costs about $250,000, and he's estimated overall project costs could increase as much as 30 percent as a result of the bill.

Of the trades, renewable energy projects mostly require electricians, roofers and mechanics, said Pfisterer. Electricians in Bergen and Passaic counties earn between $73 and $88 an hour and roofers $49 to $51, according to the state Department of Labor and Workforce Development Web site. Local electrical unions didn't return calls for comment.

Pfisterer also is concerned he may lose projects to businesses that employ union members because he can't hire the lower-paid apprentices that those companies can.

Other installers with many commercial customers are equally worried this may squeeze companies of their size out of the market while substantially slowing the growth of renewable energy in the state.

"Gearing all incentives [from the BPU] in the renewable energy industry on using union labor is a big mistake," said Bruce Neely, regional manager for solar installer American Energy Technologies Inc. in Wayne.

Installers say the law could stifle renewable energy projects because most installations depend on BPU financial incentives, particularly Solar Renewable Energy Credits, a credit-for-power system tracked by the BPU. Companies publicly sell or trade credits based on the power they generate. BPU spokesman Doyal Siddell said SRECs are considered incentives and the public will be able to comment on the law once it publishes a draft of the regulations before they are adopted.

"SRECs are a key component to making a project pay," said Neely. "We are reliant on the income from production on those [solar] arrays [installations]."

Southpole, the clothing manufacturer that hired Pfister Energy to install solar panels on its Fort Lee headquarters, expects to receive $10,500 in SRECs per year, according to facility manager Andrew Suh.

The law doesn't change anything for upcoming solar projects that Bergen County's second-largest commercial developer, Hartz Mountain Industries Inc. of Secaucus, is planning as part of its green initiative, said Hartz spokesman Ron Simoncini. The first is a solar installation atop the Meadowlands Exposition Center, which hires union workers.

"The anticipation was that all these projects would pay prevailing wage," he said.

One of the bill's co-sponsors is state Sen. Loretta Weinberg, a Democrat from Teaneck. She said that though workers needed to be paid enough to live in the high-expense metropolitan area, "if we see there is any adverse effect on our small businesses, we would take another look at the requirement."

Ethan Horvitz, owner of Alternate Energy and Ecology Co. in Wyckoff, installs solar systems for electricity and water heaters to warm swimming pools. He said higher labor costs will affect the number of projects statewide.

"If demand goes down, the manufacturers still need to make money, so they may increase costs a little to cover losses," he said. "That could impact material costs and leave us with a tremendous supply of materials."

Additionally, say installers, higher total project costs will likely mean commercial customers will have a longer wait to see a return on renewable energy projects. That could also discourage clients or delay projects. Ultimately, they said, the law will hinder the state from fulfilling its Energy Master Plan goals for energy reduction and investing in clean energy technologies and businesses.

Dolores A. Phillips, executive director for MSEIA, said the industry intends to litigate, and several installers say they will join in or support the action.

"This bill will erase a lot of the good things put in place by the state and the BPU in the last few years," said Pfisterer. "We certainly intend as an industry not to lie down but are intent on fighting this."

E-mail: fletcher@northjersey.com

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