GRAND RAPIDS — The 308 solar panels installed atop St. James Apartments and Townhomes will help reduce electricity costs included in the rents for residents in the project’s 36 affordable housing units.
The panels should generate 125,000 kilowatt hours per year, covering approximately 40 percent of the building’s annual power consumption. The project, located at 750 1st Ave. NW in Grand Rapids and funded through low-income housing tax credits, also received a federal incentive for the solar panels.
Mike Linsea, project manager and owner of Shelbyville-based Solar Winds Power Systems LLC that installed the solar panels on St. James Apartments, said solar installations have become less expensive in recent years, with savvy developers also layering in federal incentives to reduce costs even further.
That combination of factors has generated the most interest in solar panels since Linsea founded his company 11 years ago.
“People and companies are waking up more and more and giving in to renewables,” Linsea told MiBiz. “It’s that utility offset. A lot of our customers have wanted to do this for a long time, and they’re finally doing it.”
Solar Winds designs and builds solar projects for commercial, residential and light industrial uses. Many of its projects are on individual homes, though as costs for the technology continue to decrease, Linsea anticipates more large-scale projects like St. James Apartments.
The number of solar panel installations continues to grow in Michigan, spiking by nearly 57 percent in 2018, according to the Michigan Public Service Commission. The MPSC runs the state’s legacy net metering program, which allows people to generate their own electricity mainly through solar and wind projects to reduce the energy they buy off the grid. The commission has phased out the program, replacing it with a distributed generation program that shrinks customer credits for the surplus power they generate.
Experts attribute the rise in popularity in solar projects to the dramatic fall in costs to install solar panels. Mike Troupos, an energy engineer at Grand Rapids-based Foresight Management, said a decade ago, the return on investment for solar panels took 25 to 30 years. With advancements in technology and federal incentives, that ROI now comes within four to six years, he said.
Foresight advises companies on energy management, and recently moved from Zeeland to Grand Rapids’ Creston neighborhood. The company has also seen interest in solar projects growing in recent years.
Despite the growth, the construction industry has some catching up to do, Troupos said.
“In a lot of regards, it’s starting to get to the point where it’s getting a little silly not to build solar,” he said. “Some of it is we find the construction industry, though not everyone, is pretty conservative. This can be scary for a developer or a project manager or an engineering firm. Some engineering firms still spec old lighting technology because that’s what they’ve specced for years.”
Foresight is working to educate those types of firms on the benefits of sustainable projects, especially because it is much more cost effective to install solar on a new development versus retrofitting it later, Troupos said.
Another good time to install a solar array comes when installing a new roof.
“Putting a roof on a building is a project that has a cost, but you could get a return on investment for putting a new roof on your building,” Troupos said.
Before investing in solar panels, companies should make sure they are as energy efficient as possible and eliminate energy waste in their buildings, he said, noting that doing so improves the return on investment for solar.
Solar and development
Another recent Grand Rapids development to incorporate solar energy was the Bridge Street Market building at 405 Seward Ave. NW, the attached parking garage and an adjacent building.
The $5 million array includes 1,800 solar panels and was completed in partnership with Consumers Energy and Grand Rapids-based Rockford Construction Co. Inc., which owns the buildings. The installation generates enough electricity to power up to 100 homes.
Consumers installed a nearby 500-kilowatt battery that is used to store power to ensure a flow of renewable energy to customers. Along with the battery, the project included reliability upgrades to the electrical grid surrounding the solar installation.
The infrastructure will provide a benefit to west side clients in the future, said Mike VanGessel, co-founder and CEO at Rockford Construction. The project allowed Rockford to look at its 10 acres of holdings on the west side and “change the dynamics of power,” he said.
“It built a resilient program that attracts new businesses and residents, and makes it more cost effective,” VanGessel said.
VanGessel also expects to see more developments deploy solar panels in the future.
“To think we’re ever going to get entirely off fossil fuels in my lifetime, I don’t know. To have alternative energy I think is a wise thing,” he said. “When we have the chance to do it, we should.”
The solar industry has become more creative in its efforts to make deals happen, said Troupos at Foresight Management.
“In a lot of regards, you don’t have to spend any capital to get solar,” he said, referencing power purchase agreements that let a user purchase electricity generated from solar panels at a set price for a set amount of time to recoup the costs.
The tactic has been popular for nonprofits, which can have solar projects funded by private companies who receive the federal tax credit and bring down the cost of the installation.
The federal government’s investment tax credit had covered 30 percent of the costs of solar projects, but that decreases to 26 percent in 2020. For residential projects, the tax credit will expire in 2022, as lawmakers declined to pass another extension this month. It will still be available for commercial projects such St. James Apartments, which leveraged the credit for its project, but the amount will be significantly reduced, experts said.
MiBiz real estate and development news coverage is sponsored by Rockford Construction Co. Rockford is a nationally recognized construction, real estate development and property management provider, serving West Michigan and beyond for more than 30 years. Licensed in 45 states and ranked by Engineering News-Record as one of the top-200 contractors in the nation, Rockford brings together diverse people and ideas to tackle challenges, changing the creativity, productivity and functionality of built spaces. Visit rockfordconstruction.com for information. This sponsorship is advertising. It has no effect on editorial consideration in MiBiz.