Bright days for solar energy

Oct 6 - McClatchy-Tribune Regional News - John Murawski The Cary News, N.C.

The solar panels take up just a fourth of the warehouse roof here, yet this midsize solar farm generates more electricity than its owner, OFM, needs to run its furniture import business.

So the family-owned company uses the solar panels as a profit center and sells electricity to Progress Energy.

A 250-kilowatt solar farm like the one atop OFM's warehouse would have generated awe just a few years ago, but today Progress buys power from several solar farms four times as large or bigger. The OFM project, displayed to public officials last month, is a case study of how state and federal incentives for green energy have spawned a mini-boom in solar power in this state.

"We produce more energy than we use," said OFM chief executive Abel Zalcberg. "It's just a beautiful thing. Besides what it does for the environment, it's a great business opportunity."

By the end of the year, electric utilities and other suppliers of retail electricity will have to rely on solar energy for 0.02 percent of all retail electricity sales. Progress Energy, Duke Energy, as well as the state's rural cooperatives and municipal power agencies, say they expect to exceed the minimum requirement of the state clean energy law.

"Everyone has a reasonable approach," said James McLaw horn, director of the electric division in the Public Staff, the state's consumer protection agency in utility matters. "They've either acquired enough renewable energy certificates or are on track to do so."

By 2018, the solar requirement increases by tenfold, to 0.2 percent of energy sales.

Power providers in the state are contracting with dozens of state-subsidized solar farms like the one at OFM, which began generating solar power in August and will begin turning a profit for OFM in several years. Zalc berg expects his rooftop power plant to generate more than $1 million for his company over two decades.

OFM imports furniture made in Mexico, Taiwan and China, and resells it to wholesalers, retailers and online vendors. The company employs 33 people.

OFM's solar farm cost $1.4million to build, but more than half that cost is covered by state and federal incentives. Right off the bat, OFM received an incentive check of about $400,000 from the federal government, 30 percent of the cost of the project. North Carolina will reimburse OFM for about 35 percent of the cost of the solar farm in the form of state tax credits over seven years.

Tax break, too

Additionally, renewable energy qualifies for accelerated depreciation, which has the effect of reducing OFM's taxable income and will lower the company's tax obligation by about $170 million over two years, Zalcberg said.

Then there's the business of selling power to the power company. OFM is selling electricity from its solar farm to Progress for 18 cents a kilowatt hour, a premium price approved by state regulators to promote solar energy. At the same time, OFM is paying only one-third of that price for the power it buys from Progress.

The effect is that instead of paying a utility bill, OFM will receive $60,000 yearly from Progress over its 20-year contract with the utility.

Comparing solar power to conventional power plants is imprecise because solar farms operate only when the sun shines. OFM's 250 kilowatt facility generates enough electricity to power about 150 homes at peak output, or about 50 homes when nighttime and cloudy days are factored in.

Zalcberg plans to add solar panels to his company's facility in Apex. He has also caught the green bug in other ways, and next year will sell furniture stuffed with foam made from the castor bean and upholstered with material made from recycled plastic bottles.

john.murawski@nando.com or 919-829-8932