Make hay while the sun shines

Posted by:
Peter Belisle
Energy and Sustainability Services, President

Solar power capacity in the U.S. doubled in 2010 and broke the one-gigawatt mark for the first time, according The Solar Energy Industries Association in a report that estimates capacity could double again in 2011. Falling solar installation costs and enhanced efficiency are helping to drive the market, but the biggest factor may be government incentives at the state and federal level.

Two federal actions in December—one allowing companies to depreciate100 percent of renewable energy costs in 2011 and the other an extension of the 30 percent Treasury Grant for solar installations for another year—effectively reduce microgeneration costs to a fraction of what the market alone would suggest. Owners tend to look at energy features in terms of return on investment (ROI) or internal rate of return (IRR), and by those measures solar is looking good.

The trick is to act fast, and most owners aren’t prepared to do that. The incentives require renewable energy to be in place by the end of the year, which means making a decision within a few months. Solar installations aren’t a one-size-fits-all solution. There are own-versus-lease considerations, questions about whether unused energy can be sold to area utilities and financing hurdles. The condition of a property’s roof can make or break a deal—an roof in need of replacement can actually help a deal, since solar power companies will replace the roof in lieu of rent. My point is that there is a discovery process, and not a lot of time.

As you might guess, I wouldn’t be bringing this up if Jones Lang LaSalle didn’t have a robust system in place for getting to the best opportunities for property and portfolio owners. Whereas owners are hearing from solar companies trying to sell their specific solution, our approach is to guide owners through the planning and implementation to get them the best result.

To read more about the solar opportunity and how to seize it at my debut blog post on Commercial Property Executive’s blog, From The Inside, click here.

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