On any sunny day at the Pennsauken Landfill, 13,000 solar panels sit quietly atop 15 acres of sealed-up garbage, pumping out the power.

 

When finished in February, it was called the biggest solar project east of the Mississippi.

But not for long. Work began in March on an even bigger spread, a 16.5-acre array of 17,000 panels next to the GROWS Landfill in Lower Bucks.

 

And this week, the Atlantic City Convention Center announced plans for panels atop its roof, in what executives say will be the largest single-building solar-energy project in the United States.

 

With solar energy on the rise, there’s likely no end in sight to the leapfrogging claims of “biggest.”

 

The nation and the region are seeing a burst in solar-power projects, especially in New Jersey, now the nation’s second-largest solar market after California.

 

The newest incarnation are mini-power plants, like those above, that power energy-hungry facilities or just feed the electrical grid.

 

Long built by idealists, these solar systems now can pay for themselves in less than five years, at least in New Jersey, where incentives are high. Energy costs also can be locked in, insulating companies from future price hikes.

 

“This is just the beginning of a huge potential,” said Steve Gabrielle, who helps develop renewable energy projects for PPL Corp., the utility that owns the Pennsauken installation.

 

Solar companies are scouting the region’s rooftops and vacant land, intent on moving quickly if Congress decides to extend a tax credit, enabling firms to recoup 30 percent of a commercial system’s cost.

 

New Jersey’s rebates for homeowners and businesses this year are oversubscribed. Applicants are being put in a queue for next year’s funds.

 

Growth has lagged so far in Pennsylvania, but that could change quickly. Incentives are being debated in the Pennsylvania legislature that could reenergize the state’s lapsed rebates.

 

One financial benefit of solar is its predictability. The system has a set cost up front; after that, the fuel – sunlight – is free.

 

That allows solar generators to offer long-term contracts for energy prices to large customers. For instance, much of the power from the Pennsauken array goes to a nearby customer, the Aluminum Shapes foundry.

 

The Atlantic City project will be built and owned by Pepco Energy Services of Virginia, which has a 20-year contract to sell the power back to the Convention Center, saving it about $4.4 million in energy costs.

 

These “power purchase agreements” are the financial backbone of many new deals. They allow firms to do what they do best under their roofs, while solar companies reap the potential from atop their roofs.

 

Those who have watched the growth – such as Philadelphia’s Andrew Kleeman, who left the real estate consulting and investment world last year to begin a solar-power company, EOS Energy Solutions – have noted how even the key players’ clothing has changed. “It’s gone from sandals to suits,” he said.

 

Kleeman, one of many, says he is “prospecting” and has a pipeline of projects where the building owners have pledged to go solar “as soon as the numbers line up.”

 

The cost of solar is decreasing due to new technologies and larger systems. At the same time, the cost of traditional nonrenewable sources is escalating wildly.

 

“Those lines are going to cross in the next couple years,” Kleeman said.

 

Besides its environmental benefits, solar energy bolsters the regional power grid by making the most energy when the need is greatest – those sunny summer afternoons when air conditioners are sucking maximum juice.

 

Nationwide, solar remains tiny. It is one-fifth the size of wind power, accounting for a fraction of 1 percent of the nation’s energy supply.

 

But solar installations grew by 45 percent in 2007. Much of the growth was due to what the Solar Energy Industries Association dubbed a “big-box boom” among companies that included Safeway, Whole Foods, Staples, Target, Home Depot, Macy’s, Wal-Mart and Best Buy.

 

The boom is further fueled – or perhaps forced – by 27 states that have annually raised requirements for the percentage of energy coming from renewable sources, such as wind or solar.

 

Utilities can either generate the power or buy credits issued to others who generate the power. The price of these credits is expected only to grow, making the deals more attractive to solar developers.

 

What makes the Mid-Atlantic region so attractive to solar developers is that several states, including Pennsylvania and New Jersey, have made specific requirements for solar.

 

Solar proponents think there is so much potential here that the organizers of a national conference on solar power opted to bring the event to Philadelphia next year.

 

“We specifically chose that location because we see Mid-Atlantic as an emerging market for solar,” said spokeswoman Monique Hanis of the Solar Energy Industries Association.

Others credit steeply rising energy prices in this region for propelling solar here beyond other parts of the country.

 

That said, Pennsylvania and New Jersey are worlds apart in solar energy production.

 

New Jersey has already had robust solar development because of financial incentives. As of March, more than $220 million in state rebates had helped build nearly 3,000 systems, capable of delivering 54 megawatts of power. New construction in 2007 was 114 percent greater than in 2006.

 

When the conglomerate Cox Enterprises decided to look into solar power, it wound up putting 705 panels – enough to power 12 homes – atop the roof of an auto-reconditioning shop in Bordentown owned by a division, Manheim, a car auction dealer.

 

“New Jersey had the most attractive incentives of all the states in the union,” said Cox vice president Mike Mannheimer. “It had, by far, the best return for us financially.”

Although he refused to give a financial breakdown of the incentives, Mannheimer said he expects the $1 million system to pay for itself in 41/2 years.

 

“These systems don’t cost much to maintain. They just crank away.”

 

Until now, Pennsylvania hasn’t even been counting systems. Production estimates range up to about two megawatts, enough to power 300 homes.

 

That could all change with legislation being hammered out in Harrisburg. Plenty of rooftop projects await the outcome.

 

One is Stable Flats, a 70-unit residential development in Northern Liberties where plans call for a $2 million, 260-kilowatt system to make the power.

 

It’s scheduled to be completed in 2009. But that hinges in part on a state rebate that will bolster a $700,000 economic-development grant, said developer Tim McDonald of the group Onion Flats.

The solar firm will still own the panels. It will get the federal tax credit, sell the solar credits to utilities, and provide residents with low-cost power.

 

“Building sustainably,” McDonald said, “doesn’t have to cost more money.”

Would you like to know more about solar opportunities in New Jersey and Pennsylvania? You may email george@hbsadvantage.com

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