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Consumers unplug from electric grid as alternative energy gains traction

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Five years ago in the north country, unplugging from the electric grid by installing solar panels was considered a luxury available only to environmentalists or those with padded bank accounts.

Waiting more than 10 years to see a return on one’s investment from energy savings was deemed too risky by the average consumer here, who viewed the concepts of solar and geothermal energy with skepticism.

But as the price of equipment dropped, local energy contractors say, alternative energy projects have become an affordable investment that has gained traction. They say the number of solar and geothermal projects completed in recent years by businesses, municipalities, school districts and residents is evidence of that.

Consumers in the region are now recouping out-of-pocket costs for solar projects in four to six years with energy savings, after factoring in state and federal tax incentives and rebates from the New York State Energy Research and Development Authority. NYSERDA rebates cover up to 40 percent of the total out-of-pocket cost; after the rebates, federal tax credits will cover up to 30 percent, and state tax credits up to 25 percent of the cost.

Today’s average price for a 7,200-watt, roof-mounted solar system to power a house is about $23,400, according to Fourth Coast Inc., a Clayton-based alternative energy firm. A NYSERDA rebate would save about $9,800, dropping the out-of-pocket cost to $13,600. A federal tax credit of $4,080 and state tax credit of $3,400 would then drop the total cost to $6,120. Once installed, the system would save the average homeowner about $960 a year in electricity expenses.

RETURN ON INVESTMENT

John D. O’Connor, owner of Blackstone Electric, used to be ambivalent about alternative energy projects. He thought costs were out of reach for the average business owner and consumer. But the small business, at 17421 Route 12F, Dexter, recently decided to expand into the solar energy market because equipment prices have dropped to a new low. It will begin to sell and install solar modules this fall.

Last week, Mr. O’Connor installed a display of 36 solar panels in front of his business, which is across the street from Watertown International Airport. At about 10 feet tall and 50 feet wide, the 240-watt solar modules will be tilted to the south, toward the airport, to capture the most sunlight. The system will provide all the power needed for the 4,500-square-foot office.

“Early on, people saw these as just a gadget,” Mr. O’Connor said. “There were people willing to do it, but there wasn’t a good return on investment. But as energy prices keep going up, these are getting cheaper. And I think the common customers are going to be the ones on board now. The payback is now about five years.”

The total project cost for Blackstone was about $30,000, but that was decreased by about 70 percent after a NYSERDA rebate, state and federal tax credits and by writing off the commercial equipment as a depreciation expense on federal taxes. Mr. O’Connor expects to recover out-of-pocket expenses after four years of electricity savings.

Along with capturing the attention of airport traffic, he said, the exhibit will enable customers to learn about panels firsthand.

“My Web page will show the whole array and how much energy it’s producing in real time,” he said.

Fourth Coast has been on the front lines of the alternative energy market here since 2008, when owner Augusta Withington launched the small business in Clayton. Robert J. Campany joined Ms. Withington in 2009 as project manager. And the pair of professionals — who previously worked together on municipal projects at Bernier, Carr & Associates — quickly began launching solar and geothermal energy projects in Jefferson, Lewis and St. Lawrence counties. Headquartered at Mr. Campany’s house in Clayton, the business has 15 employees and continues to grow to keep up with rising demand.

“The costs for solar panels keep going down, and it’s more visible than it was before,” Mr. Campany said. “The ‘green’ aspect on the environment used to be the primary reason for these projects, but since we’ve been involved, it’s been the economic benefit. The third reason is the feeling of independence with utility companies. People feel like they’re tied to National Grid when they give up a big check every month.”

Roughly 90 percent of Fourth Coast’s workload involves the design and installation of solar units, Mr. Campany said, and geothermal projects make up the remainder.

For geothermal projects, heat-source piping is installed up to 300 feet underground, sometimes at the bottom of lakes and ponds. Systems take advantage of the ground’s constant temperature to offer heating and cooling services. Although those projects are not eligible for NYSERDA benefits, they may receive a federal tax credit of up to 30 percent of total costs. Because of today’s rising cost of heating fuel, geothermal projects are catching on among people seeking long-term savings.

“Geothermal makes sense, because it is significantly less expensive than propane or fuel oil — from one-third to one half,” he said.

Up-front investments for alternative energy projects still hold some customers back, said Mr. Campany, who takes calls from customers daily. Each client’s situation involves unique variables that affect costs.

“A lot of people would love to do this if they had the capital to get in — it’s such a good return on investment,” he said. “We’re now seeing people borrowing money with home equity rates at 2.99 percent, then paying for projects in four to five years” with energy savings.

BUSINESS BOOM?

People still are getting used to seeing the 200 solar panels on the rooftops of the restaurant and nine-room motel at The Clipper Inn, 126 State St., Clayton, installed by Fourth Coast in January 2012. Owner Michael L. Simpson said last year, the business saved about $10,000 in electricity, money that used to be fed to National Grid. The photovoltaic system has reduced the business’s overall electricity bill by about one-third.

Mr. Simpson said visitors are impressed with savings gained from the 50-kilovolt system, along with the vast number of solar panels powering municipal buildings in Clayton, where the community has been receptive to such projects. He believes their attitudes about alternative energy have improved after seeing the positive results.

“A lot of my customers asked me how well they worked after I put in the panels, and I told them I would have to wait,” Mr. Simpson said. “They’re impressed when they learn electricity was down by $10,000 with the same amount of lights and air conditioning use.”

City Electric Co., a wholesale electrical distributor at 7075 Bradley St., Watertown, supplies contractors with solar panel parts for projects. Sales representative Hilton P. Shattuck, who travels across the region to supply products for electrical contractors, said the number of alternative energy projects in the region has gradually climbed in recent years.

“It’s been a sliding scale,” Mr. Shattuck said. “Five years ago, there were only a few companies producing solar energy; but now a lot of them are seeing this is a viable thing. It’s like the tip of the iceberg, and you’re going to see a lot more of it.”

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