Although the sun made only occasional appearances last week, its usual omnipresence in Florida was one of the underlying factors that brought a consortium of European businesspeople to St. Petersburg. Their purpose: to explore the possibility of investing in a solar farm and accompanying solar panel factory in Pinellas County.
Although the project would be expensive (like all energy startups), advocates say the price of solar is going down dramatically while the price of other forms of energy is inevitably going to rise. And if a group of German and Austrian executives experienced in such activities is considering such a major investment in North America, well, why not St.Pete?
The genesis of last week's events goes back two years, when Jeff Adams, vice president of the Tampa-based construction company Griffin Contracting, learned about European interest in a solar farm in either Canada, New Jersey or Florida. Flash forward to this past winter, when Griffin met with St. Pete-based marketing consultant Mario Farias.
Farias' company has worked on other green energy projects in Pinellas, such as PACE energy retrofit and property improvement programs. He says that after doing some due diligence on the solar farm idea, he bought in totally to the concept, and paved the way for the three-day visit of the consortium.
Speaking to CL from his car just before the Europeans came to town, Farias was on maximum overdrive, exclaiming that in addition to the 260 direct jobs that would come if a solar field were built in St. Pete, an additional two or three indirect jobs would result from those specific positions. "So potentially just the initial stage could employ 1,000 people," he gushed, referring to plumbers, roofers and electricians and others who could be needed in the production of such a plant.
Whether or not that number is remotely accurate, the idea that Pinellas County could host more energy efficient/renewable energy businesses is an attractive one, even more so in this dire economy. That's why nobody was more energized to roll out the proverbial red carpet than the St. Petersburg Chamber of Commerce.
Local lawmakers were also brought in for discussions. County Commissioner Ken Welch says, "I'm excited about the prospects of anything that we can do on clean energy." However, as he and other officials contacted for this story acknowledge, a lot of details — such as financing and environmental concerns — need to be worked out.
So what is a solar farm?
A large piece of land on which panels are built that absorb energy, which can then be dispersed from a single power plant to thousands of homes. A potential site being floated for such a farm is the Toytown section of St. Pete, but that has yet to be confirmed (the area has been mentioned in connection with a number of potential developments, leading one local official involved in the talks last week to question its viability).
In addition to the solar farm, the group wants to set up a manufacturing plant in Midtown to build the solar panels. The Sierra Club's Cathy Harrelson, who has been working with Farias, calls the plant the "real meat" of the proposal since it would create more jobs in that economically depressed area.
Solar farms don't have a lot of history in Florida. Most notable is the DeSoto Next Generation Solar Energy Center in Arcadia, a 25-megawatt facility run by Florida Power & Light. That was paid for with millions from the federal stimulus plan, which led to President Obama visiting the facility in the fall of 2009.
Also in 2009, a 16-acre solar farm was built on the campus of Florida Gulf Coast University in Fort Myers. Last fall a 15-megawatt solar farm opened up in Jacksonville. And earlier this year Lakeland Electric announced that they would be working with SunEdison, a Maryland-based company, to install 18,000 solar panels at a 45-acre solar farm to be built at Lakeland Linder Regional Airport.
Why not more? Well, such plants aren't cheap — and the Florida Legislature hasn't been as forthcoming with incentives for private investors as other states. For instance, New Jersey hs approved financial incentives that allow individuals and businesses to recover the full cost of installing rooftop solar panels over five years.
Last year the Florida Legislature failed to renew a property tax exemption for homeowners who installed solar PV or solar thermal water heating in their homes.
Also, a program that offered residents a $4-a-watt rebate, capped at $20,000 for homes that installed home solar power systems and $100,000 for businesses, ran out of money in late 2009, and no new funding has been extended toward it.
Florida is also behind many other states in not having a Renewable Portfolio Standard (RPS), which would require public utilities to produce a certain percentage of renewable energy sources by a certain year (a Bradenton-based group is attempting to put a constitutional amendment on the 2012 ballot requiring this).
But another factor that complicates things is the power company in town, Progress Energy. City Councilman Karl Nurse says the company has "no interest in facilitating" the project.
According to Suzanne Grant,a spokesperson for Progress Energy, the price per kilowatt of solar power is 30 cents, but the utility is only allowed by the Public Service Commission to charge customers 11 cents per kilowatt of any kind of power.
But everyone else contacted by CL for this story disputed that 30-cent figure, though experts say the cost of solar energy depends on both the amount available and the size of the project (i.e. small projects in Alaska are more expensive than large projects in Florida).
For example, the municipal utility in Gainesville has a standard-offer contract for solar power. They're currently offering 24 cents per kWh for large projects.
Jon Butts, the host of a WMNF program on sustainabile living and the owner of a solar power array on his barn in Plant City, says that if the investors were to sell their energy through Progress immediately, they would take a financial hit, but only in the short term. That's because most energy consultants say that grid parity (when the price of solar comes down to what other sources of power cost) is only two or three years away.
David Fishel is a senior energy analyst for RLF, a design and architecture firm based out of Winter Park. He says the price of solar is going down around 10 percent a year, and predicts that within the next five years, it will be cheaper to do solar than burn fossil fuels.
According to the Solar Energy Industries Association, the solar industry grew 67 percent in 2010 — faster than any other U.S. industry.
Fishel says 2009 was when the trend started moving in solar's favor. "The technology is getting better, the incentives really help drive the technology." Those incentives include a 30 percent tax credit from the federal government through 2016. "They're coming up with better manufacturing processes and better materials that make it cost-effective."
But what to do now about Progress' intransigence? Jeff Adams from Griffin Construction diplomatically said Progress officials were "very open-minded" in their one meeting with the consortium last week. But the Europeans indicated they were prepared to go ahead with their plans without the involvement of the local energy giant.
But that means they'd only be creating panels for individual homes and businesses, not nearly as lucrative an endeavor as producing energy for the grid and powering thousands of homes.
But there is another factor: Progress is about to be taken over by Duke Energy out of North Carolina. Duke, unlike Progress, has participated in solar projects.
Karl Nurse says the solar deal is complicated but "doable," but a new problem is how many tax incentives might be available in the future.
As mentioned above, a Treasury cash grant program was instituted that would give producers a direct grant of 30 percent. "That's because typically solar developers don't make a lot of money or have much tax appetite so they don't have taxes to offset a credit, and they sell that tax credit to a financial investor," says Richard Caperton, a senior policy analyst with the Energy Opportunity team at the Washington D.C.-based Center for American Progress. He says that during the height of the financial crisis, there was little demand for buying or selling such credits, so a cash grant was provided.
But that grant is slated to end later this year, while a Loan Guarantee program that has allowed the Energy Department to distribute billions of dollars to private companies expires on September 30 and currently has less than 25 percent of its funds remaining.
Tampa-area Democratic Congresswoman Kathy Castor says it's extremely important to maintain incentives for solar, especially in comparison to how the government subsidizes other sectors of the energy economy. "Big oil gets massive subsidies," she says, and mentions the cost to repair Progress Energy's nuclear plant at Crystal River, now estimated to be nearly $2 billion.
"If we can take just a part of that investment and put it toward jobs, you begin to expand the market. Hopefully we make these panels in America. That's been part of the push because it's going to be that clean energy sector that I believe will help us pull us out of this recession."
That's been the contention of President Obama as well, who earlier in his administration hoped that 20 percent of all energy produced in the U.S. would be alternative by 2035. Though that lofty and worthy goal now looks a little utopian, the project in St. Pete could be one small step toward getting there.
This article appears in Jul 7-13, 2011.