A new solar boom is upon the Northeast U.S., according to the “2015 Solar Economy Barometer” from financial services firm Wiser Capital. Over 274,637 commercial buildings in the Northeast fit the site parameters required for a mid-scale commercial solar facility that collectively could produce 94,733 MW of renewable energy. In turn, this untapped market potential translates to approximately $67.5 billion in investment opportunity for the entire region.
“Many people assume that a sunny state like Texas or Florida are automatically a good market for solar, but that’s simply not the case,” said Nathan Homan, Executive Director, Wiser Capital. “Adequate sun for solar electricity exists across the US. The Northeast is a prime market for solar due to available commercial roof space, higher than average utility rates and regional incentives.”
Given their geographical size and land development characteristics it’s not surprising New York, Pennsylvania, and Massachusetts hold the highest number of commercial buildings with solar potential. But available roof space does not make a market in and of itself. With consideration for costs and incentives, New York and Massachusetts will lead the new solar energy boom in the Northeast.
The 2015 Solar Economy Barometer reveals that 29.71% (28,401 MW) of the commercial buildings optimal for solar in the Northeast are located in New York, and 17.09% (15,975 MW) in Massachusetts. It defines a mid-scale commercial solar facility as being between 50kW to 2MW and on average capable of housing a 350kW system.
Solar opportunity in the Northeast.
Northeast solar boom will deliver huge energy cost savings to corporations
The 2015 Solar Economy Barometer also reveals that the Northeast’s commercial solar potential stands to deliver huge cost savings to corporations in these states, as well as environmental benefits.
According to the 2015 Solar Economy Barometer, in Massachusetts a typical 350kW system that covers 80% of electricity use for a commercial entity consuming approximately 38,500kWh/month would achieve cumulative savings of $999,763 over a 25-year period. This is helped given the strong SREC (Solar Renewable Energy Credit) market in Massachusetts, and the considerably lower escalator rates of a solar PPA (power purchase agreement) over historical utility cost increases.
In New York a typical 350kW system in ConEdison territory would cover 80% of the electricity use for a business consuming 43,000 kWh/month due to greater solar access but would require a lower cost to install than Massachusetts to achieve cumulative savings of over $1 million during a 25-year PPA term. While New York doesn’t have an SREC market, the project is aided by a three year performance-based incentive.
“The untapped solar potential, now being made possible by strong policies and unlocking the mid-scale commercial solar investment market, stands to deliver significant electricity cost savings and electricity price certainty to corporations in the Northeast,” Homan continued. “We expect to see considerable movement, growth and activity in the mid-scale commercial solar space in the coming year as corporations look to take advantage of the environmental, and now even more compelling economic benefits.”
Total investments required for Northeast solar boom and strong returns
In addition to vetting commercial buildings’ feasibility for solar development and identifying savings for corporations over a 25-year period, the 2015 Solar Economy Barometer concludes the total investment potential in the Northeast market is $67.5 billion, with New York alone representing a potential of $20 billion and Massachusetts requiring $11.5 billion.
Homan further comments: “In order for these mid-sized corporations across the Northeast to generate significant savings on their electricity usage, you first need to attract investor interest. Our study demonstrates that this region has a strong mix of returns, real estate, stable metering, enticing incentive policies and the needed solar assets to make for a strong opportunity.
Research methodology
In compiling the 2015 Solar Economy Barometer Wiser Capital’s Markets and Origination team analyzed the solar economy in nine Northeast states: New York, Pennsylvania, New Jersey, Massachusetts, Connecticut, Maine, New Hampshire, Rhode Island, and Vermont. It analyzed data from Open PV, GreenTech Media, the EIA’s Annual Electricity Report, SREC markets in each state and proprietary data from Wiser Capital’s platform. The analysis looked at historical trends and proprietary Wiser Capital data to extrapolate and estimate the current mid-scale commercial solar market potential.
