Rooftop solar panels a renewable investment for businesses

For Jim Judd, installing rooftop solar panels at his San Miguel winery, J&J Cellars, was strictly a matter of mathematics. He had 144 panels installed on the roof of the barrel storage room Aug. 1. They will provide enough energy for both the tasting room and the production of the wine and save him an estimated $25,000 a year on electricity costs.

“Longterm, it’s the kind of decision you have to make,” he said. “It’s done everything I hoped it would.”

Although the biggest growth in rooftop solar is in the residential market, an increasing number of businesses, schools, churches and nonprofits are installing solar panels. Forty-two nonresidential solar systems have been installed in the county since 2007.

Their reasons are the same as homeowners’ — saving on energy costs and reducing their impact on the environment.

Wineries, in particular, are turning to solar power, even though the economy is struggling, said Kristian Emrich, vice president of Solarponics, the Atascadero company that installed Judd’s system.

“They (wineries) have been one of the hardest-hit industries in this economy, but we have seen a resurgence within the last six months of wineries going solar,” he said.

There are several reasons for this, Solarponics President Mike Emrich said. The main one is that wineries are investing heavily in a green image.

While wine grapes are the biggest component of the county’s agriculture and a popular tourism draw, they also have their environmental costs. These include using scarce ground water for irrigation and displacing wildlife habitat.

“They are trying to be as sustainable and conservation-minded as possible,” said Mike Emrich, Kristian’s father.

Wineries also rely heavily on electrical equipment, particularly during the fall harvest, so the savings a solar panel system can bring are significant.

Wineries have an advantage. Their large, low buildings often sit exposed to the sun in the middle of vineyards.

Judd used a little foresight and constructed his winery buildings so that their roofs face the sun. He’s now ready to install 20 to 50 percent more panels.

The solar incentives for businesses are similar to those available to homeowners — an upfront state rebate coupled with federal tax credits.

Businesses have an additional incentive option of accelerated depreciation.

Tax laws often allow a credit or deduction based on the expectation that an asset declines in value over time. But typically, that tax break has to be spread out over the course of a few years.

Accelerated depreciation allows businesses to get the tax benefit on solar panels upfront and helps cover the cost of the investment, Emrich said.

And it’s not just businesses. The San Luis Coastal Unified School District has announced plans to install carport-like structures with solar panels on top of them at campuses.

The district estimates it could save from $6 million to $8 million in energy costs over the next 20 years. Some trees in parking lots would have to be removed.

But businesses also face obstacles to going solar. Credit is hard to get, and the 30 percent federal tax credit is of little use to a business that is making little or no money because of the recession.

“A lot of businesses don’t have the revenue to pay for solar,” Mike Emrich said.

And again, there’s the expense. Tolosa Winery recently installed ground-mounted solar panels at its San Luis Obispo and San Miguel vineyards, costing $3 million and $6 million, respectively.

The winery expects to take six and a half years to pay for that investment using accelerated depreciation and electrical savings.

“It makes sense to use the clean, renewable resource of the sun to power our business,” said Bob Schiebelhut, Tolosa Winery co-owner.

Another factor that businesses take into consideration when installing solar is selecting a vendor. Judd liked Solarponics’ reputation.

The company has been in business since 1975 and is the longest continually owned and operated solar company in the state. During that time, Judd has seen many ups and downs in renewable energy.

“Thirty-five years later, solar is still a fringe business,” he said.