Solar program loses shine
State program cuts killing solar plans for Valley Steel Stamp
Recorder/Paul Franz VSS owner Steve Capshaw uses CNC, computer numerical control, machines in his Greenfield shop to machine metal parts for his customers. Purchase photo reprints »
GREENFIELD — Installation of the first private large-scale solar project to be approved under the town’s new solar ordinance may take longer to complete than originally expected, if it gets built at all.
A statewide incentive program, which would have saved VSS Inc., formerly known as Valley Steel Stamp, about $550,000 to install a solar array on its property in the industrial park, is no longer available, although a new version of the program will begin early next year, according to the state.
Steven Capshaw, owner and president of VSS, said his plan is to install a ground-mounted solar array that would produce about 335 kilowatt-hours of power each year, a third of what the company uses now.
VSS is a precision machine shop specializing in making complex machined components for major manufacturers in industries like aerospace and oil production.
Capshaw said when he made the decision to install the array, the company was going to save about $550,000 over 10 years, because of the energy credits the project would have earned under the state’s Solar Renewable Energy Certificate (SREC) program. It would have saved another $300,000 initially through a similar federal investment tax credit program.
But the state changes, as proposed at the moment anyway, would cut about $200,000 of the tax breaks for VSS, which would kill his solar project, for which he intended to borrow about $1 million to build, said Capshaw. Yet, he’s hoping that lobbying the state agencies involved and with assistance from local state legislators, the incentives can be restored to a point that the project makes financial sense again.
He said “I can’t put my family or my business at risk” with government incentives that don’t make financial sense.
Massachusetts had to terminate its program, which began in 2010, because it was overwhelmed by interested investors and had reached its limit earlier than expected, according to Michael Judge, associate renewable portfolio standard program manager for the state.
“We had an onslaught of applications in May and June and that caused a dilemma,” said Judge. “But, the state is going to continue providing some help between now and the beginning of the new program.”
Judge said the original program supported qualifying projects that were going to produce up to 400 megawatts of power — the state apparently never expected so many to apply and qualify.
He said a version of the original program will continue until the next one begins early next year, but will only qualify projects that produce up to 100 kilowatts of power each year.
“We didn’t want to see the program come to a grinding halt while waiting for the next phase, so we found a way to allow smaller projects to get help until then,” said Judge. “Those wanting to install larger arrays, like VSS, could do their projects in phases and most likely qualify this time around and next time.”
Therefore, he said, VSS, for example, would have to install part of the array now and finish the project next year, if it qualifies.
“The state came to realize that the original project may have be slightly over-incentivized. But even if there isn’t as big an incentive for companies like VSS, it will still be a viable economic opportunity for them,” said Judge. He said the state is creating new rules as quickly as possible for the new program.
Capshaw said when he heard the state program had reached capacity this year, he felt like the rug had been pulled out from under the company. He had already spent about $10,000 for engineering and the solar company involved, Northeast Solar of Hatfield had spent about $20,000, he said.
“We had spent a year planning this project and then found out we wouldn’t have the opportunity for state support,” said Capshaw. “We’ll wait and see what the state decides.”
He argued that the incentives have to be a better deal than simply putting a million dollars in federal treasuries investments.
In the meantime, Capshaw went before the Planning Board to get the entire project OK’d so that he can move forward when he hears from the state.
The VSS solar project, as originally proposed, has been approved by the town’s Planning Board, with a few minor conditions.
“I can’t think of a better place for it,” said board member Linda Smith before the unanimous vote was taken.
Capshaw said his hope is to eventually install 1,100 panels on two acres of his 4-acre property in the industrial park. The array would sit adjacent to the plant.
“This project won’t impact our neighbors,” said Capshaw. “We’re just trying to do our part and become a ‘greener’ business.”
Judge said the solar renewable energy credits are available to commercial and industrial businesses, nonprofits, schools, government entities, agriculture and institutes.
The SREC program is governed by Massachusetts General Law Chapter 25A, Section 11F.
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