Solar troubles flare up
Popularity rising, but tariffs, change in law could blunt momentum
Even as the solar energy industry started the year with its best performance ever by one key measure, a new federal tariff, reduced tax credits and a major change in Connecticut policy has many worried the state will lose momentum in convincing homeowners to tap the sun’s energy.
In January, the Trump administration enacted a 30 percent tariff on imported solar cells and modules, with the tariff ebbing in steps to 15 percent in 2021. In May, the General Assembly changed the state’s rules on net metering, which allow homeowners to reap benefits from excess electricity generated by photovoltaic systems.
With the new state rule to apply only to homes that install systems beginning in 2019, Connecticut installers expect a boost in business this year to get their homes qualified for net metering ahead of next January. After that, they are unsure what to expect, particularly with a 2022 sunset for existing federal tax credits that currently cover 30 percent of the cost of an installation.
The changes come even as the U.S. solar industry accounted for 55 percent of all new U.S. electric generation capacity installed in the first quarter of 2018, well ahead of the 40 percent figure the industry put up in 2016 that represents the previous annual record.
“The easiest way to think about net metering is ... like rollover minutes for your phone — if you produce more energy than you need, that energy gets metered back to the grid and you build up credit,” said Tom Wemyss, founder of PurePoint Energy in Norwalk. “It’s a big loss for the ratepayers that would want to go solar.”
Like PurePoint, the Danbury-based Ross Solar Group subsidiary of Con Edison is seeing increased interest from homeowners who hope to get in under the wire this year, with a typical photovoltaic installation taking up to four months to plan, and a day or two of work required to install.
“This is a major incentive that is going away — just as people are learning about it,” said Stephan Hartmann, residential sales manager for Ross Solar. “It can have a compounding effect for decades to come.”
California mandates solar
This week, the Solar Energy Industries Association and GTM Research published a report suggesting the tariffs would not have a major impact on the 2018 market, with distributors and installers having stocked up on solar panels in advance of the tariffs kicking in.
While U.S. sales were up 13 percent in the first quarter from a year earlier, several developers have already canceled large-scale projects as a result of the tariffs, according to SEIA and GTM. That suggests a longer-term impact on the industry, even as it got a boost on another front in May after the state of California created a new mandate that all newly built homes include solar energy panels, as well as apartments and condos up to two stories in height.
Bill Giglio, co-owner of SunWind Solutions in Fairfield, has yet to see any early impact to residential sales as a result of the tariffs, but confirmed the effect is already being felt on the commercial and utility side, with
Connecticut’s new net metering rules now coming into play.
“There are headwinds,” Giglio said. “It hasn’t been implemented yet — but there are headwinds.”
‘No longer an alternative energy’
If that is the case, there are new wrinkles in solar generation that could spur demand, as well, according to Jim Blansfield, owner of Blansfield Builders in Danbury, including newfangled batteries to store electricity generated by the sun; and solar shingles from Tesla and other producers.
“(Battery storage) will be a game-changer for people building homes because then they can pretty much get off the grid,”
Blansfield said.
After each of Connecticut’s punishing storms the past several years, homeowners have put in calls to Sound Solar Systems in Greenwich to inquire about installing solar as a way to dodge outages, according to Kira Savino, head of operations for Sound Solar. While a solar array and battery cannot run a home’s systems similar to a generator, Savino said that call has resulted in people taking a closer look at the opportunities.
Savino said her company has been shifting its focus the past several years to commercial property owners, which she attributed at least in part to sophisticated marketing efforts by national solar leasing compa-
nies efforts to market to homeowners by canvassing neighborhoods and running workshops in partnership with Connecticut town halls.
Whether by national installers or locally owned companies, the message is getting out. Despite the headwinds of the tariff, tax credit reductions and net metering, Sun-Wind’s Giglio thinks the solar panel market is poised to increase in coming years.
“I think solar panels are here to stay,” Giglio said. “It’s no longer an alternative energy — it’s much more mainstream.”
Includes reporting by Chris Bosak.