Rising With the Sun
The renewable energy market is about to hit new highs, with Tucker Crawford’s South Coast Solar at the forefront
New Orleans homes aren’t known for their energy efficiency. Far from power-sippers, the meter dials on many historical homes spin like roulette wheels during the sweltering summer months as owners crank up the air-conditioning to keep cool.
Insulation and better weatherization can help, but some homeowners take it much further by enlisting the same force that spikes energy usage—the scorching summer sun—to reduce their power bills.
Rooftop solar panels can generate enough electricity to slash utility bills in half, depending on the size and configuration of the system. In new energy-efficient homes, the savings can even approach 100 percent, meaning the house generates the same amount of power it uses in a month.
“We have quite a few people who are in a net-zero energy-consumption house,” says Robert Suggs, chief operating officer of New Orleans–based South Coast Solar LLC.
The company is a leading supplier of solar energy solutions in the Gulf South. Formed two years ago, South Coast is capitalizing on what many say is the next big technology boom: renewable energy. The company started with four investors and one employee in 2008. It’s grown to 34 full-time workers.
“In our first year, we did about $1.4 million in sales,” Suggs says. “In 2009, we did close to $5 million, and this year we are projecting being anywhere from $10 million to $20 million [in sales].”
But that number could more than double if the company gets several lucrative government contracts that are in the works, says CEO Tucker Crawford.
What’s driving the growth? Several factors, including aggressive tax incentives for solar systems, post-Katrina reconstruction and increasing consumer awareness about “green” energy. But the hands-down, number one reason for most consumers are the savings, Crawford says. The state and federal tax incentives can pay for as much as 80 percent of the cost of a system.
“We are the best state in the country [for solar tax credits],” Crawford says. “We have the most aggressive 50 percent tax-credit rebate in the country.”
The credit goes beyond income tax savings. If you spent more than your state tax liability on the system, Louisiana will actually give you a cash rebate on the difference so that the savings equal the full 50 percent. The federal tax incentive is 30 percent of the cost and both programs can be combined.
South Coast is also working with local banks to provide financing for homeowners, so they don’t have to pay the full cost until they get the full benefit of the tax incentives. The program, which acts as a bridge loan, covers most of the upfront costs of buying a system.
“That has allowed us to get more sales in,” Crawford says. “We have aligned ourselves with several lending institutions. This is much more common on the West Coast, but it is migrating this way. And the more traditional banks are entertaining the idea of doing it.”
Crawford says it’s tough to come up with an average savings or price for a solar package because both depend on the home’s size, age and average energy usage. A 3,000-square-foot home in New Orleans that is 100 years old could be using as much as 5,000 kilowatt hours (kwh) a month in electricity, whereas a newer, tighter-sealed home of similar size on the North Shore could use as little as 1,000 kwh each month. Obviously, more-efficient homes can benefit from smaller systems, but the monthly utility savings can vary from 30 percent to up to 100 percent, depending on average energy usage.
Factoring in the tax credits, total cost could range from about $1,800 for a solar hot water heating system to as much as $6,000 for a larger solar power system. “The return on investment is directly affected by how much you spend,” Crawford says. “So the more you spend, the more you save on energy.”
Installation is also a factor. Ideally, panels work best facing south, so they get morning and afternoon sun. Installers can place them on the east or west pitch, but the east side’s morning sun is preferred. “It’s typically cooler in the morning compared to the afternoon,” Suggs says. “We like to size systems that are facing due south at a 30-degree tilt or a 7/12 [roof] pitch.”
South Coast has its own installation crews and doesn’t subcontract any of the work. Crawford says that allows the company to maintain high standards for customer service and quality control.
Crawford thinks South Coast will continue to grow to keep pace with demand for solar power. He sees big potential ahead. International research firm Lux Research predicts the U.S. solar market will grow to a $39 billion industry within the next five years.
“We’re at the tip of the iceberg. Renewables are about to be a huge, huge industry,” Crawford says. “I would equate this to the period back in 1995 [just before] the Internet boom.”