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Friday, 30-Aug-2013, 6:59 am -04:00

Charlotte Business Journal, 8-30-13

By John Downey

Applications for N.C. solar projects have exploded, and companies such as Strata Solar and SunEnergy1 are leading the way with proposed projects valued at more than $1 billion.

That is a pipeline for construction stretching into late next year. Some of the projects will fall by the wayside. But industry executives say there is real movement.

SunEnergy1 Chief Executive Kenny Habul says investor interest in financing N.C. solar energy projects is rising sharply. That has allowed his Mooresville company to propose $328 million worth of new solar construction this year.

That includes nine projects proposed in the last six weeks. Those projects alone are worth a total of $186 million, based on estimates SunEnergy1 has submitted to regulators.

“We have partnered with investment houses and financial institutions outside the state that find value now in the N.C. solar markets,” Habul says, explaining the sudden spike in proposed construction.

Blair Schoof, vice president of marketing for Strata, says the Chapel Hill-based company has tapped into national financial markets for some time. And he expects “others are benefiting from our development of the solar market here in terms of outside financial interest and investment in N.C. projects.”

Strata has 11 projects under construction — all about 5 megawatts. Schoof says the company expects to start construction on 30 projects by year end.

Schoof says Strata may have filed applications for as many as 50 solar projects this year — many of which will be built next year and possibly beyond that.

Strata keeps its cost estimates confidential. But based on national and N.C. averages for utility-scale solar construction, the 439 megawatts of proposed capacity in those filings could easily be worth more than $1 billion.

That includes three 75-megawatt projects Strata has proposed. Strata filed for the most recent one, the Wiggins Mill Farm in Wilson County, on Aug. 16. None of those projects are likely to be completed in 2013.

Jason Epstein, executive vice president of Baker Renewable Energy in Raleigh, says the lift in the industry is palpable.

Baker Renewable works primarily as a construction contractors for solar projects. That differs from Strata and SunEnergy1, who are developers as well as contractors.

Epstein’s company has 21 megawatts worth of projects in the works. Five years ago, he notes, a 100-kilowatt project was considered large, and it cost $8 to $10 per watt. Now large projects are 6 to 20 megawatts and cost less than $2 per watt, he says.

And investors are catching on.

“I think it’s a combination of a rebound in the overall economy in the country, a good marketplace for solar in North Carolina and the dramatic reduction in buildout costs,” Epstein says.

Joel Olsen, CEO of O2 Energies Inc. in Huntersville, sees a downside to the increased interest. The N.C. solar industry has largely been established by local companies. As the state attracts more attention, it brings in out-of-state developers as well as investors. Many tie up sites — as well as regulators’ time — on projects that have a small chance of being built.

“They are just increasing the pipeline without the financial structure or their feet on the ground in terms of getting things done,” Olsen says.