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Solar-energy companies: LIPA cap hurts business

Power lines are seen in Centereach. (Dec. 11,

Power lines are seen in Centereach. (Dec. 11, 2012) Credit: Newsday/Thomas A. Ferrara

Large companies that install residential solar-energy systems say a new LIPA restriction limiting the amount individual contractors can apply for in solar system rebates each month will hobble a growing market.

LIPA a week ago announced a new $75,000 monthly cap on the amount individual contracting companies could apply for in LIPA rebates to offset the cost of systems.

The utility blamed budget constraints for the need to enact the cap, which accompanied a drop in the amount LIPA pays in rebates to $1 per watt from a previous $1.10.

LIPA spokesman Mark Gross said that even as demand for solar grows, "we must still work within the constraints of our budget." He said the $75,000 limit "will help continue to sustain the industry."

While smaller companies that install five to 10 systems a month say they can roll with the change, bigger solar installers, including an influx of national companies that lease systems, called the new rule "devastating."

"I'm flipping out right now," said Mike Bailis, vice president of SUNation of Oakdale, the Island's largest home solar installer.

LIPA rebates subsidize between one-third and one-half of the cost of systems, which can cost as much as $50,000 for the largest home solar arrays. Critics say capping the monthly rebate amount disproportionately hurts bigger companies.

For Bailis, the new $75,000 cap means SUNation, which typically sells 15 to 20 solar systems a month with rebates, will have to trim rebate-based sales to only about seven a month. "My company has just had our legs cut off," he said.

Kelcy Pegler Jr., co-founder of Roof Diagnostics, which in January established a 75-person office for sales and installation of leased solar systems in Bohemia, said his company furloughed 54 workers this week as a result of the move. Plans to hire 45 more workers before year's end also have been put on hold, he said.

"Long Island was our most vibrant market," Pegler said. "As a result of this cap, we instituted immediate furloughs, which started today."

Roof Diagnostics signed up 130 new customers in June alone, Pegler said. He said he believes the new restriction unfairly targets companies that lease systems, and suggested LIPA could more equitably deal with a shrinking solar budget by cutting the per kilowatt rebate.

Gordian Raacke, executive director of Renewable Energy Long Island, a LIPA consultant on clean energy, said the current funding dilemma points to the need for a longer-term fix.

"This is not only an indication that there's a strong market for solar on Long Island, but also that LIPA's solar budget is not adequate," he said. "Going forward they realize they have to either increase the amount of money in the budget or structure the rebate to make the money go further."

Separately on Friday, LIPA announced a plan to contract for an additional 100 megawatts of solar energy on Long Island. The plan would provide enough energy for 13,000 homes, and help LIPA stabilize the grid and reduce peak energy demands by focusing on high-demand areas of the East End, for instance.

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