No funds yet for Pa. solar plan

April 6, 2009

Lawmakers allotted $100M in July for the program. It’s been stalled in Harrisburg.

Way before “going green” became the crusade it is today, Collegeville contractor Jon Costanza built one of the first solar-powered homes on the East Coast.

That was in Haverford in 1972.

He has waited since then for the industry to catch fire and believed, in July, that the Pennsylvania legislature had at least struck the match.

It had approved Gov. Rendell’s $650 million Alternative Energy Funding Act, which allotted $100 million for a new solar initiative. The Pennsylvania Sunshine Program would provide rebates of upward of 35 percent to homeowners and small businesses to offset the cost of buying solar systems, much as New Jersey does.

With Sunshine’s birth, “we immediately started hiring,” Costanza, president of Sunpower Builders, said last week.

One big problem: Funding for the program still has not materialized. That has delayed the installation of possibly thousands of residential solar systems and the hiring of countless people to do that work, just as Pennsylvania tries to recast itself as a leader in green technology – both as a consumer and innovator.

“If the incentive money doesn’t start flowing, we’re going to have to start laying off instead of hiring,” said Costanza, whose Sunpower Builders now has 12 employees.

While lauding Rendell for the Sunshine Program, Costanza’s daughter Kira, who works in the family business, said: “Until we see those dollars going into the rebate program . . . it’s just words.”

She said that about 40 contracts between Sunpower and potential customers sit in a drawer while the Sunshine funds remain stalled in Harrisburg.

At Heat Shed Inc., twice as many contracts are on hold as customers wait for Sunshine help, said Catherine Neil, who, with her husband, Charles Reichner, owns the Quakertown company.

In their barn sits more than $200,000 worth of solar panels, and on their answering machine is a new message saying they are not taking any new customers right now.

At Center City-based Eos Energy Solutions, formed in June 2007, two part-time employees would go full time and four additional hires would be made as soon as Sunshine funds became available, said Andrew Kleeman, managing partner.

“We just need to get the ball rolling,” he said of the Sunshine Program. “It’s been a long time coming.”

The wait could be nearing an end. At least partially.

The Commonwealth Financing Authority, the state agency that is tasked with floating bonds to finance the program, is next scheduled to meet April 13. A $100 million bond issue is on the agenda for consideration by the agency’s seven-member board, said executive director Scott Dunkelberger. Three members are from the Rendell administration: the secretaries of Banking, Budget, and the Department of Community and Economic Development. The others are appointees from each of the four legislative caucuses.

“I’m optimistic,” Dunkelberger said of the chances of the board’s voting in favor of issuing the bond.

But not all of that $100 million would go to the Sunshine Program, he said. The authority intends to float a number of bonds over time to finance the $500 million portion of the $650 million Energy Funding Act for which it is responsible, Dunkelberger said.

Next week’s bond vote, he said, is to cover the cash-flow needs “we see for the next six to 12 months.” How much will go to Sunshine, he said, will depend, in part, on how many applications are received by the Department of Environmental Protection, the administrator of the program.

DEP’s Web site has registered more than 4,600 requests for information about the program, said John Hanger, the governor’s acting secretary of DEP. (Guidelines are due out in about a month.) A New Jersey program in effect since 2001 has paid out more than $253 million in rebates, grants, and other forms of funding for 3,689 solar projects that have created a total of 76 megawatts of installed capacity, according to the state Board of Public Utilities.

Among those most “impatient” that the program is not up and running yet is Rendell, Hanger said. As someone who spent 10 years as head of the advocacy group PennFuture in “a huge battle” to get state money appropriated for solar power, Hanger said he “would have liked the bonds to be issued yesterday.”

“We have a program ready to go . . . one of the biggest solar programs in the country,” Hanger said.

He attributed the delay to the economic crisis that has rendered the bond market an unfriendly place until recently. He also noted that establishing guidelines for the entire Energy Recovery Act programs “does take some time. I have to emphasize here, we’re creating a program from scratch.”

Sunshine “will put more than a thousand Pennsylvania folks to work,” Hanger said, contending that the solar industry has the potential to be to Pennsylvania “what steel and coal were . . . in the 19th and 20th centuries.”

In general, Sunshine reimbursements are expected to cover up to 35 percent of the costs of project design, installation, and equipment, according to DEP. With those grants and federal tax credits, “we can probably reduce the sticker price of a solar system by about 45 percent,” Hanger said. An average 5-kilowatt residential system costs $35,000 to $40,000.

The state expects that $100 million would enable the Sunshine Program to last three years. One benefit of the funding delay, Hanger said, is that the cost of solar panels has dropped about 25 percent since November, so “the money will go even further than if this money was spent in July.”

Still, Craig Flaxman, 49, a restaurateur from Montgomery County, is making no commitments on proposals by Heat Shed to add a solar-electric system to his 25-year-old geothermal home in Worcester Township. Estimates range from $39,000 to $73,000, depending on the size he selects.

His frustration over the lack of Sunshine funds grows each day.

“Obama is out there touting alternative energy as the way to go,” Flaxman said. “So what’s going on?”

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