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Currents Fall 2009: Attracting force

Pennsylvania should diversify energy incentives it offers companies if
it wants to attract commerce, some area business owners said.

Pennsylvania should diversify energy incentives it offers companies if it wants to attract commerce, some area business owners said.

The commonwealth typically gives more incentive money to companies that produce equipment to save energy or generate alternative energy, such as solar or wind power.

But more incentives need to go to end users of those products, business owners said. Programs that benefit end users mostly help companies that install energy-efficient lighting, said Rich Wurzbach, president of York Laboratories. The company helps businesses reduce energy consumption.

“Certainly there is money to be saved with (lighting), but what’s next? We would like to see more focus in terms of technology support,” Wurzbach said.

The commonwealth has the third highest number of clean-energy jobs in the U.S., according to a report released in June by the Pew Charitable Trusts. Pew is a Philadelphia-based nonprofit focused on improving public policy, informing the public and stimulating civic life, according to its Web site. Pew’s report concludes that a clean-energy economy stimulates job growth.

The most recent numbers in the report are from 2007, however. And the state’s average clean-job annual growth-rate from 1998 to 2007 was negative 0.48 percent, according to the report titled “The Clean Energy Economy.”

There are other incentives out there besides lighting, but companies like York Laboratories have had to seek them out. York Laboratories has done a good job finding state money, Wurzbach said.

The company has received funding through the state’s Keystone Innovation Zone (KIZ) program for its Grease Thief invention. The program provides businesses with ongoing funding for product development, training, marketing and patent applications.

The Grease Thief helps companies monitor the condition of lubricants in electric motors that run high-efficient heating, ventilation and air conditioning (HVAC) systems, Wurzbach said. The better the condition of lubricants, the less energy the motors use, he said.

The company also does thermal imaging scans of facilities to pinpoint heating and cooling losses businesses, and it conducts other tests to help manufacturers keep machinery running efficiently.

Wurzbach said he didn’t know how much York Laboratories has received through the KIZ to date. But the company recently sold a $90,000 tax credit it received through the program, he said.

The state Department of Environmental Protection (DEP) runs three energy efficiency programs and the Commonwealth Finance Authority operate several, said Dan Griffiths, DEP deputy secretary for energy and technology deployment.

Businesses that install solar hot water or photovoltaic (solar) systems can get up to a 30 percent discount for smaller systems from the state, and about 20 percent for installing bigger systems, Griffiths said. There is a federal tax credit that also provides another 30 percent discount for solar installations on which small businesses can take accelerated depreciation, he said.

The state ended the last fiscal-year with a $3.2 billion budget deficit and budget negotiations could interfere with some energy incentives, Griffiths said. If Senate Bill 850 gets approved during budget negotiations, two energy efficiency programs for small businesses and another for homeowners will get cut, he said. Other initiatives not funded by the budget will not be affected, he said.

Gov. Ed Rendell announced his Energy Independence Strategy in 2007 that put $650 million into the clean energy economy, Griffiths said. The state has made strides in attracting solar- and wind-power manufacturers to the state, he said. Pennsylvania is working to attract solar manufacturers as the price of solar installations continues to come down, which will help offset rate increases when rate caps are taken off electricity providers at the end of this year, Griffiths said.

York County-based precision metal stamping company Die-Tech Inc. has benefitted from the state’s clean-energy efforts. Die-Tech cashed in on a DEP Small Business Energy Efficiency Grant program so the company can install energy-efficient lighting in its facility.

The program provided grants to small businesses to pay for 25 percent — up to $25,000 — of the cost of buying energy-efficient equipment or adopting energy-efficient practices, according to DEP. Earlier this year, the state awarded Die-Tech a $13,324 grant for installing lighting in 63 lighting fixtures, according to an e-mail from PK Dennis, Die-Tech’s marketing director. Die-Tech’s LED project is expected to save the company $1,370 annually, Dennis said.

The grant program is now closed. The state was prepared to open a second round of funding in July if the money was included in the state budget, according to DEP. But the General Assembly and Rendell had yet to adopt a budget as of press time.

Die-Tech looked into installing a solar photovoltaic system last year, but ran into a wall because of the cost, said Richard W. Dennis, company president.

Even at a discounted rate, it would have cost $1 million to install the system and there were no state programs to help offset the cost, Dennis said. The system would have cut 10 percent of the company’s annual electricity usage, which isn’t practical compared to the cost, he said. However, within the past few months, the state has unrolled several new programs.

“There were new programs announced about two or three months ago and we have been looking at the financial impact of those. We are at the point where one of our concerns is that solar is still really a supportive strategy. I guess that’s our frustration,” Dennis said. “I believe we have an issue with the burning of fossil fuels. We need to be looking at alternatives. We still don’t see a replacement strategy.” 

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