Sometime this summer, what had been 17 acres of useless space atop a capped landfill on Holyoke Street in Ludlow will start generating 2.7 megawatts of power with solar panels. And sometime this fall, kiosks in each of Ludlow’s schools will start showing students in real time just how much power the landfill solar array is generating and how that energy gets translated into dollars.
The Massachusetts solar renewable energy credits program is prompting a boom in solar projects in the state like the ones in Ludlow. But the program is so successful, it may be running out of juice.
According to the Natural Resources Defense Council, solar power typically costs between 12 cents and 30 cents per kilowatt hour. Ron Gerwatowski, a senior vice president at utility company National Grid, said the going rate for power is more like 7 cents a kilowatt hour and most of that power, in New England anyway, is generated by burning natural gas.
Wind power is cheaper than solar power, at about 10 or 12 cents per kilowatt hour on land and 18 cents to 20 cents per kilowatt hour for the offshore Cape Wind project, Gerwatowski said.
He said other energy sources are subsidized as well and these solar subsidies are serving to get the industry up and running.
The price difference comes because solar systems are not as efficient as other forms of generating power, said Paul Bachman, director of research at Suffolk University’s Beacon Hill Institute. Also, solar generators must pay for land or roof space on which to set up the solar arrays, deals like the one with the town of Ludlow.
The Natural Resources Defense Council said in a news release that the price of solar power is coming down and will match the market price by 2018 as the panels and other equipment get more efficient and cheaper to install.
In the meantime, solar power depends on state and federal incentives, Gerwatowski said.
Chief among them is the state’s solar renewable energy credit program, or SRECS in power parlance. The state program requires utilities to buy solar renewable energy credits from owners of solar-generating sites. The sale of the credits help spur the development of the systems, said Michael DiMauro, coordinator of the solar program at Ludlow-based Massachusetts Municipal Wholesale Electric Co.
The problem is, the program has been a little too successful. There are more solar credits on the market than demand from utilities, so the price at auction has fallen from about $500 to about $200 now.
That drop in price, for example, has made it hard for Westfield to get solar developers interested in two city-owned sites it would like to develop at its landfill and north of the Barnes-Westfield Regional Airport, said Westfield development officer Jeffrey R. Daley.
Dwayne Breger, director of the renewable energy division of the state Department of Energy Resources, said state officials are working to change and update the incentive program. But he expressed satisfaction that solar power projects are still being built in Massachusetts “basically as fast as anyone can design them.”
Earlier this month, the Patrick administration announced that the state has already surpassed the governor’s goal, set in early 2007, of installing 250 megawatts of solar power generating capability by 2017, beating the deadline by nearly four years. There was only about 3 megawatts of generating capacity when Patrick took office in 2007. The new goal is to have 1,600 megawatts installed by 2020, enough power to serve 37,000 homes for a year, according to the state.
According to the Patrick administration, nearly 5,000 clean-energy companies in Massachusetts employ more than 71,000 clean-energy workers.
“Currently, the industry is very strong. Business is very good,” said Greg Garrison, owner of Northeast Solar in Hatfield. “The state has made a concerted effort to bring distributed generation to our grid.”
Besides the solar credits, the state gives a $1,000 state tax credit. The federal government gives a tax credit of 30 percent of installing a solar system, as well.
Coupled with the reduced utility bills because a family or business is generating its own electricity and revenues from selling unwanted power back to the utility, a household or small commercial solar system can pay for itself in five to seven years. Without the incentives, it might take 15 years to make enough electricity to justify the expense.
DiMauro pointed to another benefit of solar power: diversifying the state’s energy resources. Natural gas, for example, is starting to get more expensive because pipelines into New England are taxed.
“We never used to have a summertime demand for natural gas, so the price fell,” DiMauro said. “Now, there is a demand because of an electrical demand.”
DiMauro said the sun shines brightest on those warm summer days when air conditioning demand is highest. “It’s great to have a power source that peaks on sunny days,” he said.
Jim Kinney is a staff reporter at The Republican of Springfield, a publication that is affiliated with the Boston Business Journal.