Sunnyside Startups

Producing solar energy requires clear skies, but for Springfield area solar installation companies, the current climate is just right for producing increased business.

“It is going gangbusters,” said Missouri Sun Solar LLC spokesman Jason Fulp. “Right now, there are a lot of strong incentives for people to consider.”

Opportunity blossomed this year following the Missouri Supreme Court’s requirement Joplin-based Empire Electric District Co. pay rebates to customers installing solar systems. The current rate is $1 per watt up to $25,000 for applications filed prior to the end of the year.

Of 164 projects underway at Houston-based Missouri Sun Solar, 143 are for Empire Electric customers. With 98 installations already under its belt and more orders expected, the company is close to doubling the 145 projects completed in 2014 – it’s first year in business. Fulp said revenues last year were roughly $2 million, and Missouri Sun is on track to grow tenfold this year.

The solar industry climate has birthed a new solar division of Sunbelt Environmental Services Inc. Manager Ken Clem said he is designing and planning the first round of five projects due to begin in the coming weeks – one of which is for an Empire Electric customer. Also, 6-year-old Skywire Electrical Systems LLC has three residential projects in the Empire zone, said owner James Bartley.

Empire Electric spokeswoman Julie Maus said as of July 31, the company approved $2 million in rebates based on 137 applications for systems installed by mid-2016. She said 37 customers filed prior to the state court’s final ruling in mid-May for systems already installed. While the total represents less than one-tenth a percent of Empire’s Missouri customer base – roughly 154,000 people – all customers cover the utility provider’s rebate costs through higher power rates.

Maus said Empire isn’t providing solar power because the company doesn’t consider it a cost-effective investment. Meanwhile, new installation companies are striking while the incentives are still attractive.

“A lot of these solar installation companies that have popped up or moved in to our area to capitalize on this rebate program haven’t been in business for very long,” Maus said.

Business to business
While residential installations are the predominant sector in the solar industry, businesses are noticing potential for offsetting utility costs through the renewable resource.

In August, Missouri Sun Solar completed installation projects at Sherwood Elementary School, Mercy Hospital in Joplin and Hammons Products Co.’s walnut processing plant in Stockton. Keen Eye Antique Mall in Ozark and Ozark Valley Inn in Branson also have contacted the company about future projects.

“They aren’t as intimidated by it as they might have been 10 or 20 years ago,” Fulp said.

At Mercy’s Joplin hospital, rebuilt after the 2011 tornado, solar panels in the shape of a cross generate 25.5-kilowatts of power. Next, Missouri Sun Solar plans to install panels on A&B Cycle Inc. and five of six Myer Hotels Inc. properties in Branson.

A&B Cycle owner Chris McNeese said between the 30 percent Solar Investment Tax Credit and five years of tax depreciation, his $153,000 rooftop system will cost $60,000 out of pocket. He projects to break even in 15 years, but if the system works for 40 years as expected he can look forward to saving 25 years’ worth of electricity bills – currently between $800 and $1,000 per month.

“If I can be paying for a solar array rather than paying (City Utilities of Springfield), that’s an investment,” McNeese said, adding for A&B there is also a marketing advantage. “All things being equal, I think our customers would choose a green bike shop over one that isn’t.”

Fulp estimated Myer Hotels would save roughly $45,000 per system through rebates, credits, grants and the five-year tax depreciation.

“What made solar make sense was a combination of the Empire Electric rebate, federal tax credits and rural (U.S. Department of Agriculture) grants,” said Myer Hotels’ Operations Vice President Gail Myer, declining to disclose project costs.

Breaking even
The ultimate decision for a business or homeowner to take the financial plunge comes down to the cost of the installation versus future savings, and how each intends to use the system.

Manufacturers, for instance, have a harder time justifying the investment.

“The systems aren’t quite to the point where they can power big industrial machines, but they can still offset a large part of the bill,” Fulp said.

The average 11-kilowatt residential system installed by Missouri Sun Solar costs between $20,000 and $30,000, and Fulp estimated average annual savings at $4,000. At Skywire, Bartley estimates turnkey installations for residences start around $20,000 and go up to $50,000.

Factoring in the federal tax credits and Empire rebate where applicable, Fulp said Missouri Sun Solar projects residential customers to break even on their investment in four to six years. Skywire Electrical estimates between six and eight years.

“Empire customers have the advantage over everyone else as long as the rebate is there,” Bartley said, adding it’ll take one customer in the Ozark Electric Cooperative district a dozen years to break even.

Bartley anticipates Skywire will continue to receive business from Empire customers next year when the rates drop to 50 cents per watt, before tapering off and eventually expiring by 2020. The federal tax credit expires at the end of 2016.

“We know there is a lot of demand and interest for it,” Sunbelt’s Clem said. “There’s enough business out there to keep us all busy.”