Florida isn't among the top 10 states for solar installations. One company, though, sees a brilliant future in the industry.
Company. Brilliant Harvest Industry. Solar energy, power Key. Industry faces significant near-term challenges.
Bill Johnson likes to compare the solar industry today to the computer industry in the 1990s.
“In 1991, not a lot of people had a personal computer, but by 1999 everyone had one,” he says. “That's kind of what's going on right now in solar. The technology has changed tremendously over the last five years, and the price of that technology has also changed dramatically. The adoption rate of solar PV [photovoltaic] is just skyrocketing.”
There were more than 195,000 solar installations in the United States in 2014, according to the Solar Energy Industries Association, with a new solar project installed every 2.5 minutes.
And that kind of growth is expected to continue, with the association forecasting roughly 20,000 megawatts of solar capacity coming online over the next two years, which would double the country's existing solar capacity.
Johnson sees the realities of that sunny outlook firsthand.
In 2009 he founded Brilliant Harvest, a Sarasota-based business that designs, installs and operates solar systems for residential and commercial clients. Over the past couple of years it has seen annual revenue growth of 300%, and he says sales in the first six months of 2015 already surpassed totals for all of 2014. (Johnson declined to give specific revenue figures.)
The company that began with two employees now has seven, with more likely down the road. “I wouldn't be surprised if in five years we're at least twice this size,” says Johnson. “The amount of potential growth is just massive. Even with the number of solar projects we're doing now, the vast majority of buildings do not have solar today. But they will in 10 years.”
Rebate programs from FPL and other utility companies, plus a 30% federal solar investment tax credit, have helped contribute to Brilliant Harvest's recent growth. And while a solar electric system still boasts a significant upfront cost — around $30,000 for a medium-sized home, says Johnson — it's much cheaper than it used to be.
“The cost of going solar has gone down 50% to 60% in the last five or six years,” says Sean Gallagher, vice president of state affairs at the Solar Energy Industries Association, based in Washington, D.C. “I think that's why we've seen such an explosion of solar over the last few years, because it's become much more affordable.”
Willis A. Smith Construction can attest to that. When the company built its Lakewood Ranch headquarters in 2008, it hired Brilliant Harvest to install a small solar system that provided about 15% of the building's power. In 2013, spurred along by rebates and tax credits, the company again hired Brilliant Harvest to add to the system and make the site a net-zero energy building, both for the benefits of doing so and to obtain data it could apply to its building projects.
“The cost of the system that we initially put in was $7 a watt,” says David Sessions, president and CEO of Willis Smith. “The second system cost about $3 a watt. And the cost is continuing to come down.”
Getting that cost down even lower than it is now will help more people opt for solar, in Sessions' opinion. “The bottom line is that it's a return on investment issue,” he says. The system at Willis Smith — an admittedly large one — cost about $127,000, and it saves the firm about $10,000 a year. So it will be more than a decade before the company recoups its costs, although Sessions says the investment pays off in other ways, from branding to demonstrations.
“Most people are not going to make the investment if they have to wait 13 years to break even,” he says. “It doesn't make economic sense.”
But there will be a point when it does, he thinks. “If the systems can get to $2 a watt, which I could see on the horizon as panels become more efficient, people aren't going to need any type of incentive or rebate,” says Sessions. “They're just going to call up a company like Bill's and say come put this on the roof of my house.”
Gallagher expects prices to keep falling, though at a slower pace since there's already been such a significant decrease. Couple that with geography and solar should seem like a no-brainer in Florida. This is the Sunshine State, after all.
But while Florida ranks third in the nation for rooftop solar potential, according to SEIA, it ranks 14th in installed solar capacity. States ahead of Florida on the installed list include New Jersey, North Carolina, Massachusetts, and New York.
“The way we think of Florida typically is that there's room for improvement,” says Gallagher. “While there's some activity there, there's a lot more that Florida can be doing to improve the solar market there.”
One issue holding back solar power's growth is Florida's policies on third-party ownership of solar. In many other states, consumers can sign solar arrangements similar to leasing a car. That way, instead of an individual having to make the sizable initial cash outlay for the system, a third party can install the panels on a home- or business owner's rooftop. The third party can then sell the power generated back to them, which would be less expensive than traditional electricity. It provides a lower-cost entry point for people interested in solar energy — but it's currently illegal in Florida.
A grassroots citizens group called Floridians for Solar Choice, which Johnson supports, is working to get an amendment on the 2016 ballot to change that. As of early October, the group had more than 250,000 signatures and endorsements from a variety of organizations. And the Florida Supreme Court recently approved the ballot language on the proposal.
Big utilities companies like FPL aren't crazy about this idea, saying it would allow unregulated solar companies to act as electrical utilities. Some of those entities back a group called Consumers for Smart Solar that's put forward a competing potential amendment, which has gathered the 68,314 verified petitions required to trigger a review by the Florida attorney general and Supreme Court.
The two groups will continue to hash out the issue, and it could potentially be on the 2016 ballot. “The Floridians for Solar Choice ballot measure is pretty strong, and the competing one backed by the utilities is pretty deceptive and demonstrates that they're not big supporters of the solar industry,” says Gallagher. “It's hard to predict what we're going to see on the 2016 ballot, given the intensity of the utilities' opposition. They're still pretty powerful in the state and have a lot of money to throw around.”
Consumers for Smart Solar spokeswoman Sarah Bascom sees it differently. She says the Floridians for Solar Choice amendment skimps on state and local regulations, among other flaws.
“Our amendment was made necessary by their amendment and is written to protect consumers,” says Bascom. “We believe their amendment would come at great risk and expense to Florida consumers, particularly our seniors. We don't think Floridians should have to sacrifice basic consumer protections just to enjoy greater access to solar energy.”
A Bright Future?
Johnson worked in telecomm in Chicago and Denver before his family moved back to Sarasota in 2002. (He and his wife grew up in the area.) He sought to start a business and got intrigued by solar through a remodeling project at his own home.
“I love puzzles and problem solving,” he says. “I needed something that would allow me to do the cerebral side of things but also the physical side of things because I also like to work with my hands and build things. The solar industry really allows me to scratch both of those itches.”
Brilliant Harvest hasn't done a lot of traditional marketing, instead mostly relying on social media, word of mouth and customer referrals. “We get most of our clients by references, and it's because we do really good work and are very attentive to clients' needs,” says Johnson.
The installation process is getting faster as panels become easier to put in place, allowing the company to work more efficiently and handle more installations. Technology also makes things easier. “We can fully monitor systems remotely via the Internet and can actually see the individual performance of each panel on a rooftop,” says Johnson.
He expects a day when solar becomes an almost de facto component of Florida building, and he's helping firms like Wills Smith get prepared for the point when it does.
“One of the things we talk about with architects and builders is if you're in the process of designing any building today, even if you don't do solar right now, it's going to have solar on it,” he says. “I tell people solar is coming. It's not a question of if, it's a question of when. And the question we have to ask in Florida is, do we want to be a leader in the field?”
The biggest holdup for the solar industry in the quest to gain more customers has been the cost of installation — perceived and reality.
That's why Sarasota-based Brilliant Harvest created a financing program to help customers spread out the investment required to install a solar system. “There's no question that the capital cost of the system is a lot of money, and, frankly, a lot of people don't have the capital upfront to be able to buy the system outright,” says Brilliant Harvest founder Bill Johnson.
“But they can certainly make the payments.”
The federal government's 30% investment tax credit for solar systems on residential and commercial properties has also helped customers make the numbers work, but it's only in effect through Dec. 31, 2016. At that point it drops down to 10% for commercial systems and nothing for residential.
The solar industry is working to get that credit extended to prevent a sharp drop-off in activity. “I do think the industry needs it for a few more years, and there would be a hiccup in the industry if it expired fully at the end of next year,” says Johnson. “But even if it does expire, it's not the end of the world. By 2020 solar's going to be a no-brainer just by itself, with no incentives at all.”