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Solar enjoys rapid growth in N.M., U.S.

ALBUQUERQUE, N.M. — PV installations expand rapidly in N.M., across the nation

Copyright © 2013 Albuquerque Journal

Call the good fortunes of Paradise Power Co. in Taos, a small, family-owned solar power and electrical engineering business started in 1979, a reflection of the sea change in the solar industry in New Mexico since 2000.

For 20 years, the company founded by Michael Weinman only provided off-grid solar systems for people in remote places, and it did general electrical contracting work to keep revenue flowing. It averaged a few hundred thousand dollars a year, said Dan Weinman, who took over the company from his father in 1998.

But since 2000, when PPC Solar began offering grid-tied solar systems throughout northern New Mexico, revenue has leaped, reaching $425,000 in 2008, and $2.5 million last year. It opened a new office in Colorado Springs in 2012, and this year, it began serving customers in southern New Mexico.

Amy Biehl Community School recently had 288 photovoltaic panels installed by Consolidated Solar Technologies to provide about 25 percent of the school’s electricity. (Journal File)

Amy Biehl Community School recently had 288 photovoltaic panels installed by Consolidated Solar Technologies to provide about 25 percent of the school’s electricity. (Journal File)

PPC’s rapid growth earned it fourth place on the 2013 Flying 40 list of fastest-growing New Mexico technology companies with under $10 million in revenue.

Weinman said PPC’s good fortune reflects a sea change in the solar industry since 2000, as customer-owned photovoltaic installations and utility-scale solar plants go mainstream.

“It used to be just for people beyond power lines, but today, everyone wants a grid-tied solar system,” Weinman said.

Rapid industry growth

Nationally, residential, commercial and utility-scale solar PV installations are growing rapidly. Solar PV grew by 76 percent in 2012, with enough solar generation in place across the country by last December to supply power to 1.2 million homes, according to the Washington, D.C.-based Solar Energy Industry Association. And, in the first quarter of 2013, solar PV grew another 33 percent nationally compared to the first three months of 2012.

New Mexico’s growth mirrors national trends, although in raw numbers, the local market for residential and commercial installations is much smaller than in states with larger populations.

A total of 24 megawatts of solar PV capacity was installed statewide in 2012, with enough PV generation as of December to power nearly 39,000 homes, according to statistics compiled by Albuquerque-based PV installer Consolidated Solar Technologies.

Sacred Power debuts in Home Depot. (Journal File)

Sacred Power debuts in Home Depot. (Journal File)

At the utility scale, the state’s electric companies are expanding solar-generation capacity. Public Service Company of New Mexico, for example, had 22 MW of PV plant power as of 2012, and this year, it’s adding another 20 MW. First Solar Inc. also will begin building a 50-MW PV plant this year to supply El Paso Electric Co., making it the largest solar plant in New Mexico once completed.

PNM seeing the growth

As for residential and commercial PV systems, the market is still growing at a rapid clip. In PNM’s service territory, 3,300 customer-owned or sited PV systems were connected to the grid as of mid-June, said Kumiko Styes, manager for PNM’s customer solar program. That’s up 27 percent from about 2,600 customer PV systems in October 2012.

“We’re as busy as we’ve ever been,” Styes said. “Lots of customers are applying (for PNM’s solar subsidies), and we’re interconnecting people every week. Interest remains very high.”

Market growth has spurred a vibrant local PV industry, with 61 companies now employing about 1,100 workers around the state, according to Consolidated Solar. They include 32 solar PV installers and 11 manufacturers, plus distributors, project developers and firms that provide financing, engineering and legal support.

Like PPC Solar, many report rapid revenue growth. Consolidated Solar, which had about $17 million in revenue in 2011, has continued to expand by about 30 percent annually.

“We project about that same growth rate for this year and next,” said owner Jerry Mosher. “The industry just seems to be getting bigger, faster and better.”

PV profits for Affordable

Affordable Solar Group, an Albuquerque-based PV installer that also sells PV systems wholesale nationwide, saw its revenue leap from $8.46 million in 2007 to $31.7 million last year. The company has made the Flying 40 list of fastest-growing companies with revenue above $10 million two years in a row and expansion continues.

“We installed about 2.5 MW of commercial and residential PV last year, but this year, we expect to install about 7.5 MW,” said Affordable’s general manager, Ryan Centerwall.

A variety of factors are contributing to growth. Perhaps the biggest is the huge drop in PV prices in recent years, with the average cost for installed systems falling 27 percent just in 2012, according to the Solar Energy Industry Association.

In fact, while subsidies still help to drive residential and commercial markets in many states, including New Mexico, PV prices have declined enough in some places to sustain demand without such incentives.

California, for example, ranked No. 1 nationwide in PV installations in first-quarter 2013, despite exhaustion of rebates for residential systems in at least three utility service territories around the state.

Beyond rebates

In New Mexico, PNM rebates will remain in effect on a sliding scale at least until December 2016. But installers say they believe prices will have dropped enough by then for the market to weather potential elimination of rebates and reduction of federal tax breaks.

They expect “net metering” – through which the utility pays customers for electricity they don’t use from their PV systems – plus the buffer that home-generated electricity offers against rising electric rates to continue to drive demand after 2017.

“We believe the industry will be ready for when rebates end and federal tax breaks drop,” Centerwall said. “We’re planning for continued growth right through 2017.”

Affordable is also betting on a new solar-rental program it began offering New Mexico homeowners in April to further drive residential demand. Such lease programs, which allow people to install solar systems for 25 years with no upfront costs, have helped build markets in other states.

Many more financing options are becoming available for PV systems, reflecting healthy evolution in the solar industry.

“In general, the industry has really matured,” Mosher said. “People are embracing solar a lot more, and banks and other financial institutions are making financing much easier. Solar has pretty much become mainstream.”