Integrys sees solar as “an area of growth”
From an interview with Dan Verbanac, president of Integrys Energy Services (parent company of Wisconsin Public Service, De Pere), in the Milwaukee Journal Sentinel:
Q. Let’s shift now to your solar development business. What got that going?
A. We had a power development unit and were looking for niches where we could use our expertise in the power development area. We had done some work putting stand-alone generation in for industrial customers. And so we had this team and, at the time, wind was taking off.
NextEra was one of the big entrants in wind, and they started a group similar to our solar group and built a lot of wind across the U.S. We were a late entrant to that. But we thought renewables, with the greenhouse gas concerns, we thought that long term that could be an area of growth.
We started looking at solar to do a couple projects to understand that business and what it would take to move forward. A lot of states have special carve-outs that require them to do a certain amount of renewable generation from solar. We thought it was a great opportunity.
Today, we have 37 projects that we’ve done in six states, and what we target is commercial buildings. We go to the building owners and we bear the capital costs. We install the solar panels, and we’ll do a long-term power purchase agreement back to the owner of the building – usually 10 to 15 years, typically at rates lower than they’re paying to the utility. Then the solar renewable energy credits we’ll sell back to the state or into the market.
Q. So there’s still a lot of demand out there?
A. Oh, it’s tremendous. We have a pretty good pipeline of opportunities. At the end of 2010, we announced a joint venture with Duke Energy, called INDU Solar Holdings, where we committed to invest $45 million each year over a two-year period – $180 million total in 2011 and 2012 – for solar projects.
We’re starting to bring these projects on right now. So we have two things going. We have projects that we’re doing as Integrys Energy Services and projects that we have under INDU.
One thing that’s happening is the cost of solar panels has come down drastically. Since we’ve been building solar facilities – almost three years now – the cost has come down 40 to 45%. Actually, that’s part of the problem with Solyndra and others going out of business. The problem is that the cost of the solar panels is so competitive that they can’t make it work, can’t compete with China and some of the other lower-labor countries.