Guests at EdgeWater Farm Bed and Breakfast in Phippsburg appreciate the 84-degree water in the 12- by 38-foot indoor swimming pool. The temperature’s not as comforting for the owners, however. They’ve been heating the pool with expensive fuel oil.
This fall will be better. On the pool building’s south-facing roof, 10 solar collectors are capturing heat from the sun and warming the inn’s water. The system is designed to cut oil consumption by 500 gallons a year.
These savings won’t come cheaply. The system costs $19,000, a big investment for a six-room inn. But the owners, Bill and Carol Emerson, knew they’d be able to slash $6,575 off the top with federal and state tax incentives. They also knew the equipment qualified for accelerated depreciation, so they could write off the cost on their taxes over five years.
Bottom line for the Emersons: They figure their investment in solar hot water will be paid back in roughly seven years, sooner if oil prices rise above $2.50 a gallon.
Oil prices may be falling now, at least temporarily. But overall high energy costs and new tax policies mean thousands of Maine businesses that use lots of hot water or electricity could benefit today from solar power. Few do, however.
One reason, according to Erika Morgan, executive director of the Maine Energy Investment Corp. in Brunswick, is that most small business owners aren’t plugged in to the changing economics of solar energy, particularly for commercial applications. In many cases, these incentives can cut the initial cost by 40 to 50 percent, Morgan said.
Morgan wants more Maine business owners to consider solar. Her nonprofit organization recently won a $42,000 state grant to develop a program that helps businesses calculate the solar potential for their enterprises. The program, which will kick off later this year, is aimed at restaurants, hotels and inns, hospitals and medical clinics and assisted living facilities.
This program has a second goal. Maine supports a cluster of roughly 15 solar equipment installers. They’re very busy now, riding a national wave of interest in reducing dependence on petroleum fuels.
But most of their customers are homeowners, who eat up plenty of marketing time and, in the end, buy relatively small systems. The program aims to boost commercial solar equipment sales to half of all revenue by 2009. That would also help the fledgling industry survive an inevitable downturn in homeowner interest, Morgan said, when the current round of tax incentives expires.
Systems that turn sunlight into electricity and thermal energy have gotten more efficient in recent years, but tax incentives remain a key ingredient to their economics. The installed cost of a photovoltaic, or solar electric, system large enough to power an average home is in the $30,000 range. A thermal system that can heat a home’s water runs around $8,000. These costs can rise considerably in a business, depending on the size needed to meet demand.
Goverment tax policies enacted over the past two years help lower these costs.
Among them is a 30 percent federal tax credit. It’s capped at $2,000 for homes, but there’s no limit for business. A state incentive for solar thermal systems offers a 25 percent rebate, up to $1,250. A companion rebate for solar electric systems is calculated on a per-watt basis, for a maximum of $7,000.
Heating water is perhaps the most common and affordable application for solar.
Hot water demand is high in a hospitality setting such as EdgeWater Farm, with a swimming pool, guest rooms and kitchen. Heating water in a typical home, by contrast, accounts for only 15-20 percent of the overall energy load.
“Businesses stand to benefit from solar more than homeowners,” said Bill Behrens, co-owner of Energyworks in Liberty.
Behrens, who installed the system at EdgeWater Farm, is expanding his 12-employee company into Portland next month to handle a growing list of projects in southern Maine. Most are home installations, though. He’d like to find more commercial accounts, but finds solar awareness a hurdle. “Most business owners,” he said, “have their noses to their own grindstones.”>/p>
Complicating the issue, said Naoto Inoue, co-owner of Solar Market in Arundel, is how small business owners tend to view payback. Many feel they can’t justify an investment that won’t pay for itself within a few years.
And when it comes to utility bills, Inoue said, they apply a simplified formula that figures the cost of energy today, rather than what it’s likely to be in the near future.
Getting over these upfront capital costs is the biggest hurdle to winning more commercial contracts, agreed Chris Straka, owner of Ascendant Energy Co. in Owls Head.
Choosing solar energy, Straka said, is like getting a fixed-price contract for 20 years. The energy is free. The problem is amortizing the cost of equipment and installation. The way to do it, he said, is to use tax incentives and creative solutions such as equipment lease-back programs to put the monthly financing payments on par with a monthly utility bill.
“Solar is really becoming like motherhood and apple pie,” Straka said, “but the financial markets haven’t caught up to it.”>/p>
Without help from a program like the one being developed by the Maine Energy Investment Corp., business owners interested in solar energy must have the savvy to tap in to a range of financing options.
In Hallowell, Scott Cowger recently won a $41,500 rural development grant from the federal government to help pay for a large installation on his Maple Hill Farm inn and conference center. The grant will pay a quarter of the $166,000 bill for a system designed to handle most of the hot water demand and 25 percent of the electric load. By taking advantage of other federal and state tax incentives, plus a program that rewards solar electric generators, Cowger estimates that his investment will be paid back in four years.
A former state legislator, Cowger also is aware of a low-interest loan program available through the state. It offers 3 percent financing for energy investments. That’s how he plans to finance much of the outstanding balance.
Many business owners, though, will appreciate help from the online solar calculator being developed by Maine Energy Investment Corp. Modeled after similar calculators, such as www.solarminnesota.org, the Maine site will let businesses estimate costs, benefits, payback and return on investment. It will provide comparisons based on Maine utility and fuel costs and contain updated information on tax rebates and other incentives.
Links to local solar sources and businesses also will be included. Maine Energy Investment Corp. also plans to work with trade groups, such as the Maine Innkeepers Association and Maine Restaurant Association, to present short workshops on suitable solar technologies and equipment.
At EdgeWater Farm, Carol Emerson said, the process of thinking about alternative energy had a side benefit. Prior to buying their hot water system, the couple put up window insulation, adjusted room temperatures and took other steps to cut the inn’s total energy bill by roughly one-third.
“It has already saved us money,” she said.
