News
Sun Shining Somewhere
February 2, 2011
| We thought we were clever, attending NAIOP's solar powerseminar in hopes it would warm us up. Turns out, we weren't alone. Yesterday, a standing-room crowd showed up for info on solar grants, tax incentives, and lowering energy costs. |
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| Craig Tateronis, managing partner of Prince Lobel Renewable (a meeting sponsor, and unit of Prince Lobel Glovsky & Tye) says the real estate community is waking up to solar as a revenue stream?when there aren't a lot of great alternatives for people?s money.? Solar projects can generate income through the sale of SRECs (solar renewable energy certificates), the currency of the state cap and trade-style program between private owners and/or developers and utilities. They can pay for themselves quickly by using public incentives. In fact, the feds extended an expiring cash grant program through 2011. Within 60 days of launching a solar facility, a building owner qualifies for a federal rebate of 30%of the system cost. Also, private solar programs can lower energy costs or enable owners to sell energy to tenants rather than have them purchase it elsewhere. |
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| We snapped Craig and Novogradac?s Tony Grappone (standing), a CPA tax specialist who explained that an owner can depreciatethe entire cost of a solar installation in its first year of operation rather than the fifth. Craig says this has huge cash value for corporate investors. Tony says that as long as a solar project?s numbers work, using clean power can allay owner concerns about how utilities use their rate-payer income and help owners attract tenants for whom being green is non-negotiable. Depending on investment goals, the structure of a solar deal may be apartnership flip, sale leaseback, or lease pass through. |
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| Cummings Properties' Ernie Agresti says Phase I and II of the rooftop solar array at the company's mixed-use office complex in Woburn has saved $5,000 more than anticipated in its first full year of operation. With Phase III, completed three weeks ago, the solar system generates 40% of the electricity needed for the common areas. Trade Center 128 installed solar, and during a downturn it attracted new tenants, helping to lease the complex's 500k SF. Ernie tells us that when Cummings researched wind, ?the payback wasn't there.? For solar though, he expects energy savings to pay for installation cost within five years and ?gravy? for the remaining 15 years of the system?s life. |
