Shopping under solar power

Commercial solar power developer Safari Energy has built 60 solar projects in New Jersey, including an installation at the Mall at Short Hills shopping center, a 3.49-MW solar project whose 9,000 solar panels span 225,500 square feet across the mall's roo

By Diane Mettler

It's quite a milestone: Safari Energy LLC is celebrating 60 commercial solar power projects completed in New Jersey.

"We've done over 400 projects all over the country, and about 15 to 20 percent of them are in New Jersey," said Safari's co-founder and managing director John Nordeman.

Nordeman attributes the large number of New Jersey projects to the progressive politics of the state and its focus on moving their energy-generating mix to renewable energy over the last decade—specifically emphasizing solar power. In addition, the high electricity prices have encouraged New Jersey to look at alternative energy methods, and with a large number of big open rooftops, it makes sense to go with solar.

There are four components that Safari Energy looks for in a potential project, and three of them must be met for success, said Nordeman. "The building must have solar potential, the price of electricity is high, a progressive solar-focused incentive policy is available, and of course, plenty of sunlight. New Jersey may have 25 percent less sunlight than other areas of the country, but the other three components are strong."

Fifteen of the company's solar projects are at premier shopping destinations, including the Mall at Short Hills, where a 3.49-MW solar rooftop and parking deck system was completed in January 2019, both on time and on budget.

The Mall at Short Hills, a high-performing, well-positioned shopping center, is just the type of leading asset that is commonly found in Safari's broad portfolio of projects. Working with the center, Safari was able to provide a customized solution, including the installation of 9,000 high efficiency LG NeON solar modules as well as Solectria and Solar Edge inverters.

"The Mall at Short Hills has an incredible amount of available solar area," said Nordeman. "The rooftop offered hundreds of thousands of square feet that are perfect for the installation of solar parking canopies that will ultimately save the center a great deal of money, while also honoring the environment."

Although Safari often incorporates storage batteries into solar projects, adding them to the Mall at Short Hills project was not economically feasible. "Batteries could have been utilized, but it would have been dilutive to the project's economics," said Nordeman.

Safari team members from finance, development, and construction management are each assigned to a third of the project. During pre-development, there are several components to manage: detailed design and engineering, legal, tax, and financial structuring, utility interconnection and permitting. After six months of predevelopment work in these areas, the Mall at Short Hills project took 10 months to complete.

Fifteen of Safari Energy's solar projects are at premier shopping destinations, including the Mall at Short Hills in New Jersey, where a 3.49-MW solar rooftop and parking deck system was completed in January 2019, both on time and on budget.

"We're experts at the permitting and the utility interconnection process, but where Safari really differentiates itself is in the areas of finance, tax, and legal structuring. In short, we provide an optimal financing solution as well as lay the groundwork for how the system is owned and managed by the owner," said Nordeman.

"Some buildings might have 10 or 15 utility meters," he added. "Where possible, Safari builds a virtual metering system designed to physically touch just one meter, but then structures the arrangement with the utility so a client gets credit for the complete series of the meters at the property."

The large-scale installation at the Mall at Short Hills was challenging and required a very detailed phasing and coordination plan. Naturally, this required excellent teamwork between the Safari Energy folks, the property team, and the installers selected for the project.

"No matter where we are installing, or the size of the project, Safari uses a scientific method to manage how an installation is going to be done to ensure the highest standards are met," said Nordeman. "This can only be done with open lines of communication and making sure at every turn that the installers are getting clear directions, while the client's expectations are also being met."

The Mall at Short Hills project and 59 other New Jersey projects are now complete, and Safari also monitors the performance of the systems and handles maintenance for almost all of its customers.

In New Jersey, solar power generates renewable energy credits (SREC) per kilowatt hour of energy produced. These SRECs command a high price and can be sold to entities that must comply with the state's renewables portfolio standard (RPS). For a project like the Mall at Short Hills, SRECs unlock an additional revenue stream that enables the project to earn a higher return on investment.

	The The Mall at Short Hills, a high-performing, well-positioned shopping center, is just the type of leading asset that is commonly found in Safari Energy's broad portfolio of projects. Working with the center, Safari Energy provided a customized solution, including the installation of 9,000 high efficiency LG NeON solar modules as well as Solectria and Solar Edge inverters.

Looking ahead at the solar industry, Nordeman likes what he sees and is thrilled that it is becoming the fastest growing segment of energy generation and composition in the U.S.

"In the U.S., there are now more solar projects than any other type of energy project, and yet we have not reached 10 percent penetration of the market's potential." In fact, wind and solar make up more than 76 percent of planned new electricity generation capacity in the U.S. in 2020, according to the U.S. Energy Information Agency (EIA), with fossil fuels representing less than a quarter of planned new capacity. Solar alone made up 40 percent of all new electric capacity added in 2019 according to the EIA, which was the largest such percentage in history.

To date, 2020 is bearing out this growth. There were more solar projects installed in the U.S. in the first quarter of 2020 than any previous start to the year. According to an S&P Global Market Intelligence report with the Solar Energy Industries Association (SEIA), almost 2 GW of utility-scale solar and more than 1.6 GW of residential solar were installed in that time, beating out the previous best first quarter by more than 1 GW.

While the pandemic is expected to have introduced a slowdown in the second quarter, the future for solar is bright, so to speak. SEIA and others project that an additional 10+ GW will be added by the end of 2020, increasing total solar capacity nationally by more than 30 percent.

With such rapid growth, it might be easy to think that soon enough, all available space for commercial solar power will be used up. However, that seems highly unlikely according to recent research. The addressable market for commercial solar is also sizeable, creating a healthy runway for companies like Safari Energy to develop more large-scale solar projects.

According to solar industry analysts at Wood Mackenzie, only 3.5 percent of commercial buildings currently have solar panels. While not all the remaining 900,000 buildings would support solar, the analysis shows that once that factor is taken into account, enough capacity remains for adding approximately 145 GW of solar on the nation's commercial rooftops.

To put that into perspective, that's the same as nearly 300 utility-scale projects, but all contained on the rooftops of businesses across the country.

Some states, like New Jersey, are aggressively encouraging this kind of growth. Most states have set an RPS, which is a legally binding target to have a certain amount of renewables generating electricity in the state by a certain date.

In the case of New Jersey, the goal is to have electricity generated 100 percent from carbon neutral sources by 2050. In the state's Energy Master Plan, released earlier this year, it includes a goal that would add 950 MW of solar to the state every year through 2035.

New Jersey's SREC program served to support these goals and is currently being revised to meet the newest targets. The interim program allows several projects that were not previously economically viable to be financially possible. Safari Energy has seen several businesses revisiting plans for solar and finding that there is now a much stronger business case to be made.

At the federal level, there is also the Investment Tax Credit, which has been in place since 2006, offering residential and commercial properties a 30 percent tax credit applied for solar systems. However, at the end of 2019, the program was not extended at then-current levels, and the benefit has begun to decrease. For projects started in 2020, the credit available is only 26 percent, and with the current schedule, is slated to continue declining to 22 percent in 2021 and 10 percent in 2022 for commercial projects.

Fortunately, the IRS has included "safe harbor" stipulations that allow businesses to keep the tax credit of the year in which construction is started on a project. Construction in this case can mean physical construction or incurring a percentage of the total project cost. Several solar developers have adopted strategies to help their clients pursue the ITC benefits available in these provisions, including acquiring and storing photovoltaic panels for rapid deployment on solar projects.

Nordeman's deep interest in solar and devotion to Safari comes from having co-founded the company in 2008. In 2018, the company became a wholly owned subsidiary of PPL and acts as its renewable energy platform. Safari develops projects that PPL owns as well as those owned by others, like the Mall at Short Hills.

"As we celebrate 60 projects in New Jersey, we are pleased to be placing our special stamp on the industry while contributing to the long and respected history of PPL," said Nordeman. "Together, we will continue to serve customers and generate renewable power—one project at a time."