The Current - December 2009
Articles In This Issue:
- Heading Toward a Bright Future
- The Path Forward
- Maryland: The Sunshine State?
- Knowledge is Power: Training Workshops for Solar Energy Announced
- The MCEC Incubator: Power Source for Emerging Technology
- Energy Wise Info
- Affordable Solar: Moving to the Mainstream
- Sponsors and Partners Wanted
This issue sponsored by:
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HEADING TOWARD A BRIGHT FUTURE
The Maryland Clean Energy Center opened its doors early this summer and began working towards its simply stated goal to “transform the energy economy in the state.”
Created by an act of the General Assembly, the center was mandated to build Maryland’s clean energy economy by supporting technological advances, business development and consumer adoption.
“There was excitement about this bill because it really compliments the governor’s energy initiatives to move us to a clean energy future,” said Del. Dana Stein, a sponsor of the MCEC bill. “The Clean Energy Center provides the needed support to consumers and businesses who want to become more involved in clean energy. We need this infrastructure to get us to the point where we can have major improvements in conservation and renewable energy.”
MCEC’s efforts, Stein said, could deliver tremendous benefits to the state.
A 2006 study by the International Center for Sustainable Development in Gaithersburg noted that clean energy is a $50 billion a year industry worldwide and is growing an additional 30 percent annually. Maryland, the authors noted, has vast untapped renewable energy resources that could satisfy up to 137 percent of the state’s electricity needs. Equipped with excellent research facilities and expertise in biotechnology, Maryland is also capable of becoming a leader in biofuels and generating ethanol that rivals the price of gasoline.
The study concluded that if the state invested $1 million a year in MCEC’s work, it could generate 144,000 new jobs by 2026, $5.7 billion in new wages, $973 million in state and local taxes, and $16 billion in additional gross state product.
“We are committed to making our community a model for developing a 21st century green economy.”
Isiah Leggett, Montgomery County Executive
Announcing the site for the MCEC this spring, Governor Martin O’Malley described the center’s establishment as a “large step towards our goal of creating 100,000 ‘green collar’ jobs by 2015.”
A coalition formed by Montgomery County, the City of Annapolis and the Universities at Shady Grove submitted the best proposal to host MCEC headquarters and became the center’s first working partners. Through that partnership, MCEC will receive $500,000 from Montgomery County over the next three years, office space at the Camille Kendall Academic Center in Rockville and free use of the 500-acre Annapolis National Clean Energy Park.
“Montgomery County, the University System of Maryland and the City of Annapolis offer an unparalleled package of resources, networks and access to federal agencies that will help drive the future of clean energy and green technologies in the state of Maryland,” said Montgomery County Executive Isiah Leggett. “We are committed to making our community a model for developing a 21st century green economy.”
MCEC, Leggett added, will help develop that economy “by promoting and enabling clean technology commercialization, business incubation and workforce development and training. We hope the center will also work to create new funding and business networking opportunities to support clean energy industries, invigorate the research and development community, and deploy programs to promote consumer adoption of energy-efficiency and clean energy technologies and services throughout the state.”
The Path Forward
Maryland Clean Energy Center board members realized the fledgling nonprofit would have to spearhead multiple, disparate efforts in order to build a clean energy economy and concluded those efforts should focus on five priorities.
- Research and Development - “Maryland has strength in research and development with all our academic institutions, federal labs and industry. We have a knowledge economy here,” said MCEC Executive Director Katherine Magruder. Maryland researchers, she added, are already pursuing developments in biofuels, fuel cells, smart buildings, solar power and numerous other clean energy technologies. “MCEC advocates for investment in R&D, including money for pure research and development in addition to funds for proof of concept and market feasibility studies.”
- Technology Transfer - Commercialization and Entrepreneurial Activity – “We are already pushing this agenda through the Maryland Clean Energy Technology Incubator Network,” Magruder said. MCEC is tapping Maryland’s existing incubators along with the state’s ranks of experts in clean energy, technology development and entrepreneurship to create incubator services tailored to help early stage companies in the clean energy sector. The first Clean Energy Technology Incubator is set to open this autumn at bwtech@UMBC.
- Workforce Development - MCEC will work in partnership with the Department of Labor, Licensing and Regulation, the Governor’s Workforce Investment Board and private sector partners to develop specialized training programs to satisfy niche needs within the clean energy sector. Its first program (see “Powerful knowledge,” page X) will educate local government officials responsible for permitting and inspecting solar installations. “We want to fill gaps where workforce training demands are not already being met,” Magruder said.
- Economic Development and Job Creation - MCEC was structured specifically so it could spark economic development in the clean energy sector. “We can pull stakeholders together, advance policy creation, and coordinate appropriate project partners.” Magruder said. “The organization has the ability to issue bonds to finance business development projects.”
- Consumer Adoption - “I think this is really the foundation of all of the above,” Magruder said. “The more we can push or pull the market to purchase clean energy services and products, the more successful we will be at all of our other priorities.” MCEC is currently working on a consumer loan program to better enable consumers to make energy efficiency improvements and install clean energy generation systems. Look for details in a future newsletter.
Meet the Clean Energy Center Staff
Meet the MCEC Board of Directors
MARYLAND: THE SUNSHINE STATE?
When officials at the University of Maryland Eastern Shore saw their annual electricity bill jump by $1 million, they began searching for ways to stabilize costs. They concluded that the best and quickest solution would be a huge, solar development.
Falling costs for solar installations, rising rates for electricity from the grid and new financing options and government incentives for clean energy projects are compelling more institutions, companies and homeowners in Maryland to invest in solar energy. Industry officials predict the number of residential installations in the state will more than double this year while new institutional and commercial installations will boost total solar facilities in Maryland from 2.7 megawatts currently to more than 6 megawatts in 2010.
University of Maryland Eastern Shore (UMES) will play a major role in that expansion.
In August, UMES and Beltsville-based SunEdison unveiled plans to construct the largest solar installation to date in Maryland – a 2.1-megawatt solar field on 20 acres of university land. The UMES-SunEdison solar power service agreement spares the university from covering any of the capital costs for the installation. Instead, UMES signed a 20-year agreement to buy power from the field at pre-determined rates.
The contract will provide electricity to UMES at below-market rates for the first three years and could save the university money over the life of the contract if utility rates continue to rise, said Dr. Ronald Forsythe, UMES’ vice president for technology and commercialization.
“We had to stabilize our energy costs,” he said. “One thing about our campus is we serve a very large population of lower income students so any kind of spike in pricing is really tough on them.”
The university, Forsythe added, is also trying to “serve as a role model for businesses in the area on how to do cost-effective solar.”
The financial case for solar energy got stronger in the past year for businesses and homeowners.
“The tremendous drop in the price of solar installations combined with the tremendous increase in government incentives have made this a very favorable market for going solar,” said Scott Wiater, president of Standard Solar in Gaithersburg.
For example, a typical 6 kilowatt system can cost a homeowner from $30,000 to $45,000, depending on the site requirements, Wiater explained.
That homeowner, however, could qualify for up to $10,000 in grants from the state, a federal tax credit equaling 30 percent of the system’s cost and possibly a property tax credit from their local government. Combined, those incentives could cover 40 percent of the price of the solar system.
The installation would enable the homeowner to sell Solar Renewable Energy Certificates (SRECs) to power utilities. (Utilities buy SRECs to help meet the state’s renewable energy portfolio requirements.) While the market rate for SRECs varies, Wiater estimates the 6 kilowatt system would enable the homeowner to earn about $2,600 a year from SREC sales.
Finally, the homeowner would also see their monthly electricity bill fall and realize savings of roughly $1,400 a year, Wiater said.
Those numbers add up to “a relatively quick payback on a solar system,” he said, adding that homeowners typically realize a 10-15 percent annual return on their investments in solar systems.
The new economic argument for solar has boosted business at Maryland solar companies. Standard Solar crews installed more than 1 megawatt of residential capacity in the first eight months of this year, compared to 480 kilowatts for the entirety of 2008. Chesapeake Solar in Jessup has seen its orders for residential systems grow to nearly four times the volume it handled last year.
Consequently, Maryland’s solar industry, which began with a photovoltaic manufacturer in Frederick, now employs more than 1,000 people.
Residential solar even became part of a high-profile project this summer. While rehabbing a working-class home in Hyattsville, the crew of the television show “Extreme Makeover, Home Edition” installed photovoltaic panels as well as a geothermal system to cut the home’s energy use by 70 percent.
“We’re trying to make the case that solar is for everyone,” said Peter Lowenthal, executive director of the Maryland-District of Columbia-Virginia Solar Energy Industries Association. “It’s for affordable communities, for big box retail stores and malls, as well as for the farmer who wants to put it in his field.”
The federal government’s decision this year to permit businesses to receive a cash grant, rather than a tax credit, for 30 percent of the cost of solar installations has made solar more attractive and economical for companies with little tax liability, Lowenthal said.
The cost of solar installations, he added, “has fallen as the market has grown and that goes across the board from hardware costs to installation costs. It is a savings of probably 20-30 percent over the last two years.”
Furthermore, power purchase agreements, like the deal struck between UMES and SunEdison, have become more prevalent, said Mike Hartley, a clean energy program manager with the Maryland Energy Administration. Under those agreements, a third-party investor purchases the solar installation from the solar company then sells the generated power to a customer, like UMES, through a long-term contract. The arrangement enables the customer to tap into a solar facility without having to shoulder the installation costs.
“Whenever somebody who is interested in solar, realizes they don’t have to spend money up front,” Hartley said, “you usually hear a sigh of relief.”
KNOWLEDGE IS POWER: TRAINING WORKSHOPS FOR SOLAR ENERGY ANNOUNCED
A new training program promises to educate county officials about solar energy and improve government systems that have sometimes caused delays and cost overruns in solar installations.
Syn-Dex Consulting, a renewable energy business development firm based in Alexandria, and the Maryland Clean Energy Center have teamed up to develop and host workshops primarily for building inspectors and county permitting officials.
Many local government officials have had little or no exposure to photovoltaic systems, said Kerinia Cusick, a renewable energy consultant with Syn-Dex. Consequently, some inspectors are uncertain of how to properly and safely inspect a rooftop system while permitting officials are unsure of what requirements and processes apply to solar installers.
“When a contractor goes to get a permit for a solar job, it can be a process fraught with inconsistencies,” Cusick said.
Some installers have seen officials swing back and forth between requiring an electrical permit to requiring a full building permit plus architectural elevation drawings, she said. And those fluctuations have delayed installations and generated additional costs, ranging from $500 to $2,000.
“In the end, this lack of experience directly translates into a real cost for the consumer,” Cusick said.
Vanessa Duetschmann – operations manager for the Mid-Atlantic region of groSolar, the parent company of Jessup-based Chesapeake Solar – said some jurisdictions require pricey documentation, such as stamped engineering drawings that cost $500 apiece. Meanwhile, the process of obtaining permits in some jurisdictions can tie up groSolar’s project managers and electricians for days.
“It poses a real business challenge when we are trying to manage the permitting and inspection processes efficiently so we can get our customers’ systems installed in a timely manner,” Deutschmann said.
Syn-Dex’s planned workshops should “make permitting officials and inspectors comfortable with solar, which in turn will ensure the process runs smoother and solar installation costs in Maryland decrease,” Cusick said. Beginning this autumn, Syn-Dex will organize a series of half-day and full-day workshops to help local government officials develop appropriate, professional and safe processes to ensure that solar systems are properly permitted and installed. Participants will discuss regulating standards, electrical permits, building permits, interconnection agreements and the contents of a "good" permitting package. They will also perform a “virtual inspection,” receive an inspection checklist and learn about key safety considerations that require additional focus. Howard County officials have already gone through a similar process, said Don Mock, the county’s chief of plan review. Planning and zoning officials collectively set permitting requirements for solar installations, then sent building inspectors to training sessions.
That planning, Mock said, was essential in preparing county staff to process mushrooming requests for solar permits and inspections. The county, he said, awarded less than $70,000 in tax credits for solar and geothermal installations in 2007. In the first eight months of this year, it awarded almost $250,000.
Cusick is also encouraging solar installers to attend the Syn-Dex workshops. “We hope to train key installers from all the local companies so that installers and permitters (and) inspectors have a similar understanding of the processes and requirements.”
Cusick said the training program could eventually expand to include specialized training for firefighters. “The firefighter is used to coming to a house that is on fire and throwing the main circuit breaker to disconnect the house from the grid. But if there is a solar system on top of the house that is still generating electricity, that’s a definite concern and firefighters need to know how to respond to that situation appropriately.”
For more information about dates and enrollment, contact Deborah Parrish at 410-738-6282.
THE MCEC INCUBATOR: POWER SOURCE FOR EMERGING TECHNOLOGY
The Maryland Clean Energy Center has partnered with bwtech@UMBC to support early stage companies working with clean energy technologies and advance green job creation in the state.
The Maryland Clean Energy Technology Incubator@bwtech (CETI) is the first site in a planned statewide network of clean energy incubators, which are designed to strengthen the state’s “Smart, Green and Growing” energy economy.
Katherine Magruder, executive director of MCEC, said the center “is striving to partner with energy experts throughout the state in order to fulfill its mission of growing Maryland’s clean energy economy through related economic development and job creation.”
bwtech, Magruder noted, has a proven track record of growing technology companies at its research facilities and business Incubator and Accelator at University of Maryland Baltimore County. Consequently, the partnership helps fulfill MCEC’s objective to “draw from the depth and variety of research presence in the state and use the incubator network to move discoveries from the bench to the bank.”
CETI will provide services specifically tailored to the needs of companies working with solar power, wind power, geothermal, hydro-power, biofuels and energy conservation and storage technologies. Tenants will receive affordable office space as well as assistance with business plans, marketing and management of intellectual property. A part-time Entrepreneur-in-Residence and an advisory board of experienced researchers and executives in the clean energy sector will also advise and assist tenant companies.
David Fink, director of entrepreneurial services at bwtech, said the facility will also help early stage clean energy companies tackle the challenge of securing funding, both from government sources and angel investors.
“My sense is there is going to be some money leaving the healthcare field and moving into the energy field in the near future,” said Fink, a 20-year professional with stem cell technology companies. “There is less of a regulatory environment in energy than there is in healthcare and some other technology fields. And I think investors are starting to see opportunities in clean energy. I think this is going to be a really high-growth field.”
CETI tenant companies will have the opportunity to collaborate with UMBC faculty and students and benefit from UMBC’s existing strengths in environmental sciences. bwtech@UMBC already hosts the headquarters of the U.S. Geological Survey’s Maryland-Delaware-District of Columbia Water Science Center. Officials from bwtech@UMBC and the Maryland Institute for Policy Analysis and Research at UMBC are currently working to establish an Office of Energy Policy to serve as the primary center for energy policy research in Maryland.
“bwtech@UMBC is delighted to establish this groundbreaking incubator,” said Ellen Hemmerly, executive director of bwtech@UMBC Research and Technology Park. “Maryland is positioned to become a leader in bioscience and environmental technologies, and we are excited to be a part of it.”
Initial funding for the CETI will be provided by MCEC, bwtech@UMBC and a grant from the Baltimore County Department of Economic Development.
“bwtech@UMBC has been a leading generator of jobs and revenue for Baltimore County for nearly two decades,” said David Iannucci, the county’s executive director of economic development. “The Clean Energy Technology Incubator will only increase its economic impact on the region.”
MCEC Board Chairman Ken Connolly said, “We are grateful to Baltimore County for their willingness to support this partnership with funding and certain this relationship will be successful for all involved.”
MCEC officials hope to replicate this incubator model in partnerships with other jurisdictions and their economic development agencies. Jill Sorenson, an MCEC board member, is chairing a steering committee to build the Maryland Clean Energy Incubator Network.
ENERGY WISE INFO From Pepco and Delmarva Power
PHI PARTNERS WITH DOE ON 2009 SOLAR DECATHLON
PHI Technology, Engineers, Provided “Tie-Breaker” for Competition
From Oct. 9 to Oct. 18, a “village” of futuristic homes on the National Mall welcomed visitors from across North America and around the world. The Solar Decathlon, sponsored by the U.S. Department of Energy (DOE), drew applications from an international roster of cross-discipline (engineering, architecture and communications) student teams seeking to represent their university. Their entries showcased creative approaches “to one of the biggest challenges we face—an ever-increasing need for energy,” according to the DOE program guide. And Pepco, a sustaining partner for the event, provided key leadership and volunteer support to make this year’s event a reality.
At the opening ceremony, Joe Rigby, Chairman, President and CEO of Pepco’s parent company, Pepco Holdings, Inc. (PHI), shared the stage with DOE Secretary Steven Chu. “I am pleased to be here to help kick off what promises to be an inspiring look at the fulfillment of a promise, the promise of solar power. Throughout the next several days, we will see the tangible results of technology that moves us closer to a more reliable, economic and environmentally sustainable electric grid,” he said.
Twenty teams competed in the categories of architecture, market viability, engineering, lighting design, communications, comfort zone (maintaining comfortable temperature and humidity), hot water, appliances, home entertainment, and – new this year - net metering.
“This competition to build zero carbon homes has been a tremendous undertaking and we have seen terrific efforts by all the teams,” Deputy Secretary of Energy Daniel Poneman said.
PHI supplied the expertise and the net meters, which recorded both the electricity drawn from Pepco’s grid and the amount generated by each team’s solar power array. PHI engineers oversaw installation of necessary electric infrastructure and of bi-directional meters by Pepco’s Meter Services, and supervised power monitoring and distribution testing.
PHI also hosted three workshops for customers and building industry professionals: Making Smart Choices To Manage Your Electric Bill; Solar Panels and the Smart Grid; and Benefits of the Smart Grid.
Net Metering Decides the Winner
New to this year’s competition, the Net Metering Contest was worth 150 points toward the final results and was the contest category with the highest number of possible points. It was the final category in the competition, and it produced a nail-biting finish. The three leading teams - universities from Darmstadt (Germany), Illinois and California, were virtually neck-and-neck until the net metering scores were in. While 14 of the teams gained 100 points for achieving a net energy consumption of zero for producing at least as much energy as the house needed - overall winner Team Germany captured an additional 50 points for producing surplus energy, over and above that needed for the house, which was fed back into Pepco’s grid.
Customers Encouraged to Join “EnergyWise”Programs
PHI’s central role in the Solar Decathlon showcased the company’s leadership toward a greener energy future. Many customers expressed an interest in adopting “net generation/net metering” technology. Becoming a “net metered” customer is just one of the opportunities to conserve energy and lower their electric bills that Pepco and Delmarva are offering Maryland electric customers under the Energy Wise program. Customers can find out more by visiting https://energywiserewards.delmarva.com/; https://energywiserewards.pepco.com/; or https://energywiserewards.PHI.com/.
Pepco and Delmarva Power, public utilities owned by Pepco Holdings, Inc. (NYSE: POM), provide safe and reliable energy to approximately 719,000 customers in Maryland. PHI welcomes the opportunity to join the Maryland Clean Energy Center in providing Maryland electric customers with the information they need to conserve energy, lower their electric bills and help create a clean and safe environment for Maryland. A member of the Maryland Green Registry, PHI is ranked number 134 in Newsweek magazine’s Greenest Big Companies in America, published October 2009.
AFFORDABLE SOLAR: MOVING TO THE MAINSTREAM
The Maryland, DC, Virginia Solar Energy Industries Association held their annual conference December 3-5 in Gaithersburg and celebrated the growth of solar energy in Maryland. Solar Energy Focus Conference: Fall 2009 is MDV-SEIA’s premier event, and this year MDV-SEIA was able to host over 300 attendees and lead ground-breaking discussions on our local solar industry.
MDV-SEIA and its members convened for lively discussions about the state of the local industry and statewide issues for the industry to address during the annual meeting. SEFC: Fall 2009 honored guests included Congressman Van Hollen, Dr. Byrnes, Jigar Shaw, Secretary Sanchez and Senator Garagiola.
The conference also featured two exciting exhibit halls and honored the 2009 Solar Champions: Mt. Pleasant Solar Cooperative President Anya Schoolman, The Honorable Isiah Leggett, and William B. Rever III of BP Solar.
MDV-SEIA is proud to have the support of local solar and energy organizations and companies, such as the Maryland Clean Energy Center for this event.
SPONSORS AND PARTNERS WANTED
What is the greatest challenge facing the Maryland Clean Energy Center as it attempts to promote the development, commercialization and adoption of clean energy? Del. Dana Stein of Baltimore County offers a one-word answer: “Funding.”
The center obviously needs to tap new funding sources in the midst of a tough economy in order to launch key programs, said Stein, who co-sponsored legislation to create MCEC.
Startup funding for MCEC came in the form of a $500,000 grant stretched over three years from Montgomery County and a $400,000 loan from the Maryland Energy Administration. Now the center is looking for new partners.
MCEC is hoping to attract private investment into a business development fund and proof of concept fund, and is seeking foundation partnerships to help build awareness about the value of clean energy to Maryland’s environment and economy.
But MCEC is also seeking sponsorships for programs and events. Such sponsorships, Magruder added, could directly benefit donors.
“Being affiliated with the Maryland Clean Energy Center makes a statement that you are concerned about the environment and you want to advance a new energy paradigm,” she said. “That sends a good message to the consumer audience.”
Montgomery County Del. William Bronrott who also sponsored the MCEC legislation, describes the newly formed center as “a small, several-celled entity that is going to need a lot of care and feeding to get off the ground.”
“It’s great to pass a bill and attend a signing ceremony but all of us are going to have to continue to work together to make sure the center gets the support it needs to accomplish its mission,” Bronrott said. “We know the center is going to be very important to creating new jobs and encouraging investment, innovation and business growth in the state’s clean energy sector. The potential here is unlimited.”