Solar Installations Move Onto Commercial Buildings
Solar installations on home rooftops have actually declined in the past two quarters but commercial buildings are picking up the slack. New capacity on residential buildings (the dark blue portion at the bottom) has remained steady between 55 and 65 megawatts for direct current over the past two years. But commercial installations (the medium blue in the middle) have progressed steadily from 60 MW in Q1 2010 to 200 MW in Q2 2011. There was a burst of utility construction in Q4 2010 (the light blue portion at top), but utility orders have been erratic and have only exceeded 50 MW in that one quarter.
Homeowners are probably still having trouble meeting the price, which still ranges from $35,000 to $45,000 for a system that may provide 50-75 percent of home demands. Equipment to convert from DC to AC power must also be purchased. Even with generous federal tax credits, this still constitutes a $20,000 investment that may take a decade to recover. Commercial buildings are finding the investment much easier to justify. Toys ‘R’ Us recently announced the installation of a 5.4-MW solar system on the 20-acre roof of its distribution center in Flanders, New Jersey. A retailing center in Secaucus in the New Jersey Meadowlands will also get a solar rooftop. The Flanders installation will provide 72 percent of the building’s electricity at a savings of $366,000 a year in utility costs. Two energy companies, Energy Conversion Devices and Constellation Energy are providing the construction costs and Constellation will maintain the PV panels and sell electricity to Toys ‘R’ Us on a 20-year power purchase agreement.
The burst in utility construction came mainly in response to the California mandate that utilities get 30 percent of their electricity from renewable sources by 2020. Several major solar installations were planned for the California and Arizona desert. But these projects have already bogged down over environmental objections and cost problems. With costs still prohibitive for most homeowners and large-scale utility projects creating their own problems, rooftop installations on commercial buildings may be the way forward for solar.