State’s solar push could spur LightWave

Premium content from Nashville Business Journal – by Linda Bryant

Date: Sunday, December 20, 2009, 11:00pm CST

 

LightWave Solar’s Miles McCrickard and Steve Johnson work on an installation project.

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The growth of the solar power industry is fueling the success of a solar installation startup company in Nashville.

LightWave Solar Electric LLC, launched in 2006 from Steve Johnson’s barn, has grown from first-year revenue of $450,000 to $2.7 million in 2008. Johnson started the business because he believes in the environmental and economic benefits of solar power, but he didn’t plan on the industry growing as fast as it has in the past two years.

Not long after LightWave’s launch, Hurricane Katrina hit and gas prices eventually topped $4 a gallon. Renewable energy moved front and center as a national issue and the state made significant progress on plans to become a solar power leader. The announcement of the multi-billion-dollar Hemlock Semiconductor plant in Clarksville was another boon, Johnson said.

“I was really very lucky,” Johnson said. “The timing was great. It took us about six months to get organized. Then we started seeing a lot of pent-up demand.”

More demand for solar meant the price for installation started to go down, although it’s still more expensive than traditional energy such as electricity and gas. Meanwhile, the government jumped in with incentives to encourage commercial and residential builders to use solar energy.

LightWave Solar is one of only a handful of solar installers statewide, Johnson said.

The company has worked on everything from small off-the-grid projects to large installations, such as the solar energy project at Oak Ridge National Lab, the second largest solar installation in the state, as well as the $25 million Franke Foods headquarters in Smyrna, Tennessee’s largest private business solar energy installation.

According to a case study published on LightWave Solar’s Web site, the Franke installation will offset energy costs by about $13,000 a year.

Early adopters of solar power are typically people who embrace alternative energy as a lifestyle, Johnson said.

“I have always loved the idea of getting electrical energy from the sun,” Johnson said. “The sun is very democratic in nature. Your fuel is delivered for free. You don’t have to pay your enemies for your own fuel.”

By the end of the year, LightWave Solar will have installed 500 kilowatts of solar generating capacity, and they expect to install another 500 kilowatts in 2010 alone. The company is anticipating expansion in the first quarter of 2010.

Johnson, 59, said the growth of the industry is promising but still fledgling compared to traditional energy installations.

“It’s a new industry, so I wouldn’t say the market is huge. However, it’s growing and there’s plenty of excitement right now,” he said.

There are several government-based incentive programs available to bring costs down for commercial and/or rural applications of solar energy in the state. They include a Tennessee Clean Energy Technology grant, which will cover up to 40 percent of a solar system with a cost up to $75,000 of a commercial installation.

Congress also established this year a federal tax credit good through 2016 that covers 30 percent of the total cost of a system. That amount is deducted from income taxes owed. Businesses or farms in rural areas also can take advantage of grants from the Rural Energy for America Program, which covers up to 25 percent of a project.

Congress extended the 30 percent federal tax credit until 2016 this year, a move Johnson said will “stabilize the industry.” Still, he said Tennessee is behind other states when it comes to incentives for residential construction. About 20 states have removed sales tax on solar installations. “We just need a more well-thought-out extensive incentive program for residential installations,” Johnson said.

Additionally the Tennessee Valley Authority, responsible for electricity generation in Tennessee and surrounding states, operates the Green Power Switch Generation Partners. The third-party program lets customers with green energy power systems buy back power at a premium rate. LightWave Solar is active in the program and has been responsible for half of all the Generation Partners solar installations in the TVA region, which includes Tennessee and part of Alabama, Mississippi, Kentucky and small slices of Georgia, North Carolina and Virginia.

Matt Kisber, commissioner of the Tennessee Department of Economic and Community Development, said the state’s strategy is to attract big solar projects, such as Hemlock, and then to “aggressively market Tennessee across the renewable value chain to suppliers and customers.”

“Gov. Bredesen understood several years ago that with the cost of fossil fuel-based energy rising, the economic winners … will be those states who take forward-looking steps to broaden their sources of energy to include renewables and biofuels,” Kisber said.

Kisber noted that in 2009 The Pew Center for the States named Tennessee one of the three leading states in the United States in terms of the potential growth of green energy jobs. Still, Johnson is quick to point that solar power has yet to “go mainstream.”

According to the Energy Information Administration’s most recent numbers, Tennessee tripled shipments into the state of solar thermal collectors, the panels that capture the sun’s rays for heating water, between 2006 and 2007. That 2007 number was more than 9,000, and behind many states, such as Virginia, which shipped 248,267, and New Jersey, which shipped 448,696.

Lessons Learned