Correction to This Article
An earlier version of this story incorrectly said the solar panels were installed on a 1,100-square foot house. They were installed on the 1,100-square foot roof.

Government incentives give solar energy a boost

By Danielle Douglas
Monday, July 19, 2010

Back in March, Shelley Cohen and Mike Gala sent out a request to contractors to submit proposals on their project: to have solar panels installed on the roof of their colonial home in the District. Four companies responded, but one stood out: Astrum Solar.

"We were looking for the most comprehensive proposal and that's what we found with Astrum," said Cohen, a renewable energy project developer at Ameresco. "Astrum offered a full turnkey [approach]. They do the interconnection, the install and take care of the energy credits."

Last week, Astrum Solar, which is based in Annapolis Junction, completed the installation of an 11.96 kilowatt system on the 1,100-square-foot roof of the couple's home -- the largest residential system in D.C. The company says the 52 photovoltaic panels should generate 13,754 kilowatt hours of electricity a year, meeting 75 to 85 percent of the home's electricity needs.

The Cohen and Gala project is one of 500 installations Astrum has slated for completion this year, according to the company's president, Vadim Polikov. "The solar market is incredibly vibrant and exciting," he said. "The market, especially in the U.S., has probably tripled in size just about every year."

About 72,939 photovoltaic systems have been installed in the United States in the past decade, according to the federal government's Open PV Project. The Solar Energy Industries Association, a trade group, recorded a 37 percent increase in installations in 2009. Much of that expansion was attributed to an uptick in residential projects.

Since its inception in 2007, Astrum has primarily installed residential and small commercial solar panel systems. To meet demand, Astrum has in the past year doubled its office and warehouse space in Maryland and upped its employee roster to include more than 75 engineers, project managers, sales consultants and installers. Polikov declined to divulge the company's earnings but said they have grown substantially year-over-year.

As it did with the Cohen-Gala project, Astrum walks its customers through every part of the installation process, from pricing estimates to filing permits. One of the company's more notable services is selling homeowners' solar renewable energy credits to utilities, which can use them to comply with municipal mandates on clean power.

"It behooves installers, like Astrum Solar, to add value by being involved in all aspects of the sale," said Eric Wesoff, an alternative energy analyst at GTM Research. "Next to purchasing the house, buying solar could be one of the largest expenditures for homeowners."

Trading the value of their credits upfront shaved 25 percent off of Cohen and Gala's installation bill. That deduction, coupled with a 30 percent federal tax credit and a District grant that covered another 35 percent, left the family with just 10 percent of the $65,000 bill.

All of the eight mid-Atlantic markets that Astrum operates in offer some form of tax incentives or rebates. Polikov said the District has the most generous incentives on the East Coast. With the cost of solar installation averaging $20,000 to $40,000 depending on roof size, inducements are crucial to expanding the domestic solar industry.

Stimulus funding, providing more than $271 million for solar energy investment, made it more cost-effective for homeowners to tap into the energy of the sun. Polikov credits the federal grants with the increase in business Astrum is seeing in states like Pennsylvania and Virginia. "We have ramped up a lot because of incentives," Polikov said, noting that prior to the flow of federal dollars, the company was averaging a few hundred installations a year.

While the United States has become an important player in the global solar industry, it pales in comparison to European countries with markets that have extensive government incentives. Analysts estimate that the United States accounts for about a 15 percent market share, while Germany, the largest consumer of solar technology, averages 50 percent.

Wesoff expects those percentages to change as the cost of supplies declines and more U.S. state governments adopt programs like the enticement-laden California Solar Initiative. "It comes down to incentives and policy, or in some cases, renewable portfolio standards" that utilities must meet, he said.

Beyond government initiatives, Polikov believes customer referrals will help drive the solar market. Shelley Cohen certainly plans to advertise her solar roof. "You can live an urban eco-lifestyle and be as green as you want to be. The resources are there; the services are there," she said. "We hope to set the example for people who are interested in" solar energy.

© 2010 The Washington Post Company