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Green Business

A Hot Topic

The Center for EcoTechnology has carved out a significant legacy over the past four-plus decades by promoting green energy, waste reduction, and a host of other environmentally friendly initiatives — partly because it effectively conveys how such practices are good for not just the planet, but the bottom line. Two new solar-access projects — one for homeowners, one for businesses that use a lot of hot water — are no exception.

After decades of connecting businesses and homeowners with renewable-energy solutions, the Center for EcoTechnology in Florence keeps coming up with new ones.

Take, for example, a solar-access program specifically for middle-income homeowners, making it possible for qualifying families to procure solar panels and heat pumps with no upfront costs.

“A lot of middle-income homeowners have not been able to take advantage of owning their own solar arrays,” CET President John Majercak said. “They can make a fixed payment for electricity to somebody who owns the equipment, but there are many more benefits to owning the panels.”

To introduce more households to those benefits, CET has worked with UMassFive College Federal Credit Union on a loan product that not only makes it easier to purchase solar panels — CET actually makes the first six payments on the 10-year loan — but includes a warranty on all equipment and labor for the life of the loan.

“This product makes it possible for a homeowner to own the solar panels and heat pumps,” he explained. “We set it up to make sure what they pay on the loan is less than what they’re paying now for heating and cooling, so they see immediate savings, and after 10 years, they own the system outright, so the heating and cooling, when powered by solar panels, is essentially free after that.”

Then there’s a new program that works with businesses that use a lot of hot water — think breweries, hospitals, laundromats, and many others — and connects them with incentives for solar hot water.

Andrew Mankin (pictured) and Gary Happ recently had a solar hot-water system installed

Andrew Mankin (pictured) and Gary Happ recently had a solar hot-water system installed at their business, Barrington Brewery.

“That’s a program available to any business or farm in the state — including multi-family buildings and nursing homes — that use a lot of hot water year-round. It’s a great technology where we use solar panels to heat water, as opposed to make electricity,” Majercak explained. “For folks who use a lot of hot water in their business, it’s a really economic way to make hot water. It’s technology not a lot of people know about, compared to solar panels that make electricity. So we’re doing a lot of outreach and hand-holding, getting businesses to look at the proposals, the free technical assistance, and the incentives available from the state.”

In both cases, CET partners with state agencies like the Department of Energy Resources (DOER) and the Massachusetts Clean Energy Center (MassCEC) to bring the economic and environmental benefits of solar energy to customers who might not have considered them before.

“If we can help someone’s life be better or their business perform better at the same time we’re helping the environment, it just makes so much sense,” he said. “So we’re always pushing harder to make more of it happen.”

Home and Business

In the case of solar hot water for businesses, CET provides solar hot-water installers to get the project done, information on grants and rebates to help cover costs, and step-by-step guidance through the whole process, Majercak said, adding that other businesses that might benefit include hotels and restaurants, car washes, and community centers and resorts with large indoor swimming pools — any business, really, with year-round use of heated water in large quantities.

A solar hot-water system essentially captures heat from sunlight and circulates the thermal energy to a water tank. Solar hot-water systems reduce reliance on traditional water-heating fuels, such as oil, electricity, or propane, saving consumers money on their energy bills. These systems can provide up to 80% of domestic hot-water needs. Incentives of up to $100,000 are available for qualifying projects, Majercak said.

“The technology has been around for a long time — for decades, really — but it’s improved over the past five to 10 years, and word hasn’t really gotten out how effective it is,” he noted. “We’ve helped a variety of different businesses and been very successful saving them a ton of money — things like a multi-family building that has central hot water, or a farm that has a cheese-making factory on the side. It doesn’t cost anything to have us come out and do an assessment and see if it would be a good match for you.”

John Majercak

John Majercak presents information about CET’s impact during the organization’s annual meeting.

Business owners Majercek has spoken with are often surprised at savings they didn’t know existed, he noted.

“There’s so much information out there, but people don’t always think of their energy costs as something that’s controllable — they say, ‘oh, wow, it costs a lot of money to heat hot water, but what can I do?’ They think of it as the cost of doing business, rather than something they can improve on by using new technology.”

The same is true in the residential market, to some degree, he said, but to those who have signed on, the benefits are evident, including, again, step-by-step guidance through the program from CET, the 10-year warranty on equipment and labor, and a reduction in energy costs right from the start along with increased home value — not to mention a 30% federal tax credit and a 10% tax credit from the Commonwealth for solar installation.

While most homeowners know what solar panels do — convert sunlight into electricity to power a house without any pollution or carbon emissions — heat pumps aren’t as commonly understood, Majercek said.

Rather than burning fossil fuels to produce heating and cooling, heat pumps move heat from one place to another — bringing heat into the home in the winter and removing heat in the summer. Advancements in the technology now allow for excellent performance even on the coldest and hottest days of the year.

“This is a great new program,” he told BusinessWest. “The state specifically targeted middle-income homeowners, helping them get financial help and hands-on assistance from us to take advantage of these two technologies — solar photovoltaic panels and heat pumps, which are becoming much more commonplace.”

Even so, he said, many homeowners have been reluctant to pay the up-front costs for energy-efficient technology, which is why the loan product CET is using — ensuring that their costs don’t rise from what they’re already paying — is so attractive.

Some of those who believe in solar power but fear the initial costs sign onto power-purchase agreements with solar-panel owners, he added, “and that’s OK, but they don’t get the benefits of ownership — the tax credits, the renewable-energy credits. They’re missing out on one of the best parts. This program helps them take advantage of that, and it’s affordable for them right from the start.”

A Green Legacy

Connecting individuals and businesses with green energy solutions is a large part of CET’s mission, but that mission has taken many forms since the organization’s mid-’70s inception.

At first, CET focused on energy conservation, in particular partnering with utility companies on the relatively new concept of ‘energy audits,’ whereby a consultant visits a home or business to talk about ways in which their building or operation could be revamped to save on energy costs.

Other early initiatives included the development of a passive solar greenhouse at Berkshire Botanical Garden and Project SUEDE, a program that taught solar energy, energy-conservation theory, and carpentry to unemployed people, who then installed 31 solar space-heating systems in low-income households.

CET still conducts energy audits, helping homeowners and businesses understand the value of sustainable systems and educating them on the incentives available to make changes. But the organization has become much more, expanding its mission into a host of new opportunities, from composting to food-waste reduction.

Paulina Alenkina, a CET employee

Paulina Alenkina, a CET employee, says she’s glad she took advantage of the solar-access program.

Through a program called RecyclingWorks in Massachusetts, CET offers technical advice and assistance to companies regarding recycling and composting waste. In doing so, it has worked with companies ranging from small shops to large entities like Big Y and Titeflex.

Another success story at CET has been EcoBuilding Bargains, which began life as the ReStore in 2001 before undergoing a move and rebranding seven years ago.

In its first incarnation on Albany Street in Springfield, the ReStore dealt in recycled building materials, with the twin goals of saving builders and do-it-yourselfers money while reducing the burden on landfills. A move to Warwick Street in 2011 involved a $900,000 energy retrofit on the existing building on that site — a good example of CET practicing what it preached.

CET is also making an effort to raise up the next generation of green innovators, through a fellowship program it launched seven years ago. Five fellows per year — recent college graduates from across the U.S. — are chosen to work with CET for one year and receive training in environmental science, energy efficiency, waste reduction, and other aspects of green business. They’ve gone on to work at similarly minded nonprofits, and also corporations looking to go green.

Meanwhile, with utility incentives making energy-efficient technology more affordable for Massachusetts businesses, the Center for EcoTechnology continues to works with Columbia Gas and Berkshire Gas to help companies navigate the incentives and options available.

“The state has goals for how much renewable energy it wants to create, and it wants to address climate change and access all the benefits these technologies and services provide,” Majercek said. “Those goals align closely with our mission. We’re trying to bridge the gap between what we’d like to happen and what’s actually happening in the world.

“If we can come in and provide some education and hand-holding to make it simple for people,” he went on, “the technology can ensure that people get benefits, and the environment gets benefits, too. We’re helping people be more comfortable and save money — and saving the planet. It’s a triple bottom line.”

All Aboard

Businesses can also boost the new solar-access program for middle-income homeowners simply by letting their employees know it exists, he added. “Many businesses have lots of employees that fall into the middle-income bracket and would be able to benefit from the program. We can provide information for companies: newsletters, posters, lunch-and-learn presentations for employees and staff. Businesses can help employees go green and save money; it’s an easy thing to promote, and a win for any employee who would qualify.”

Such initiatives have been a win for CET as well, which not only reached but surpassed its program goals in the most recent three-year period.

“That’s exciting,” he said. “Everyone who works here is extremely motivated by our mission and the impact we can make.”

Joseph Bednar can be reached at [email protected]

Green Business

Fueling Interest

Jim Cayon says he’s just looking for some opportunities

Jim Cayon says he’s just looking for some opportunities to show what the Environmental Engines products can do.

Jim Cayon says he’s looking for an opportunity. A chance. A break. An open door.

He probably used all those words and phrases as he talked with BusinessWest about relatively new and occasionally misperceived products and his ongoing quest to prove that they work, can save users money and substantially reduce pollution. To do that, he needs an opportunity to demonstrate all his technology could do for them.

The company is called Environmental Engines, and it offers motor oils with a 30,000-mile lifespan, Cayon claims, as well as advanced protection technology (APT), a synthetic metal treatment that’s been proven to substantially decrease friction. The result is a reduction in damaging harmonics and wear on the engine as well as transmissions, which improves performance and fuel efficiency while significantly lowering carbon emissions.

It can do this, he said, for cars, trucks, motorcycles, buses, boats, you name it.

Cayon, who handles the Northeast sales region for the Nevada-based company and was an exhibitor at last fall’s Western Mass. Business and Innovation Expo, told BusinessWest that he’s been approaching various businesses and municipalities to consider his oils and treatments as a solution in further reducing maintenance costs and emissions. (The lubricants alone reduce related expenses and dirty-oil waste by two-thirds or more, he claims).

And for the most part, he’s still looking for an entity to take that chance.

And he understands, generally, why that is.

Many businesses with fleets, not to mention and municipalities are loyal to the products they’re already using — and are contractually obligated in some cases — and these factors make it difficult to avail themselves of such opportunities, said Cayon, based in Easthampton.

“It’s human nature to resist change, yet on the other hand, there is some preconception about what the Environmental Engines products are or aren’t,” he explained.

“They’ve already made up their minds,” he went on, adding that the motor oil industry isn’t easy to break into because of brand loyalty and long-standing relationships. “In many cases, they think they know what is — they think it’s that thing they’ve heard or read about that doesn’t work — and so they don’t even want to consider trying it.”

Cayon doesn’t give up easily, and he’s working hard to make it as simple as possible for those he’s talking with to put the company’s products to work. And he brings with him what he considers some very compelling arguments, not just about the APT ceramic protection and motor oils, but also about how they would fit in nicely with many companies’ ongoing efforts — and missions — to become more ‘green’ and Earth-friendly, but also more bottom-line conscious.

At present, Cayon has been focusing much of his time and energy on getting the ear of area municipalities, many of which are actively engaged in efforts to become ‘green’ and energy efficient, and not just because it’s the right thing to do. There are frequently considerable cost benefits to doing so as well.

“If everyone in this half of the state were to use our on-time engine treatment, in terms of cars, light trucks, and motorcycles, we’re talking about the elimination of up to 1.5 billion pounds of regional vehicle emissions every year. The impact is profound if I get to that level, but …”

Cayon noted that the Pioneer Valley Planning Commission has, among its many goals, a desire to reduce carbon emissions in this by 80% by 2050. And then he threw out another number that should get someone’s attention.

“If everyone in this half of the state were to use our on-time engine treatment, in terms of cars, light trucks, and motorcycles, we’re talking about the elimination of up to 1.5 billion pounds of regional vehicle emissions every year,” he told BusinessWest. “The impact is profound if I get to that level, but …”

He didn’t finish, but made it clear that he would like to start with at least one city, town, or large business fleet and expand from there.

He has extended invitations to every community in Berkshire, Franklin, and Hampshire counties, with Hampden and most of Worcester County to follow.

What he’s sending them is a fairly comprehensive explanation of how APT ceramic protection works, and how it could change the equation for the municipality in question.

Here is how it works. APT is a nanotechnology that permanently embeds into the metal parts within an engine to form what Cayon called a “microceramic seal” on all metal parts within an engine. Indeed, these treatments can be applied not only to engines and transmissions, but hydraulic systems, fuel pumps and injectors, drive trains, air conditioning systems, power steering systems, and more.

Elaborating, Cayon said APT molecules are able to penetrate sludge and residual buildup on surfaces without the use of solvents. It forms a ceramic shield that protects the engine from heat, allowing for exceptionally high temperatures without any damage and metal wear. Once bonded, the surface is smooth with fewer pores for particulates to latch onto, said Cayon, therefore repelling potential carbon buildup back into the lubricant stream, where it is cleaned by vehicles’ inline or bypass filtration system.

“The two major benefits are emissions reduction and better engine responsiveness — which is going to be correlated somewhat with fuel efficiency,” he explained. “And the responsiveness factor is important; if you have vehicles you’re relying on like ambulances, fire trucks and police cruisers, for example … those are vehicles that need to be performing at a very high level.”

That’s the message Cayon is trying to convey to potential clients of all kinds in both the private and public sectors. There are many challenges to getting that message across, but he’s going to keep trying, because if they do listen, they will likely be compelled to respond to what they hear.

Like he said, he’s looking for a chance, an opportunity to become the solution for companies looking to reduce their carbon footprint as well as motor oil costs. But the real opportunity could come to those who open their doors to it.

Green Business Sections
Hadley-based Venture Has Big Plans for ‘Small Wind’

Patrick Quinlan, left, and Bill Stein

Patrick Quinlan, left, and Bill Stein, with an HR-3 model wind turbine outside their Hadley facility.

When Patrick Quinlan and Bill Stein went about the task of assigning a name to the company they started in 2012 to design, build, and service small wind turbines, they quickly settled on ‘Black Island.’

That phrase may not mean much to most people — Quinlan joked that many who hear it think it has something to do with pirates — but it does resonate with those who know their geography. Or their wind power.

Black Island, so named because of a distinct lack of snow — there is also a White Island nearby that obviously has some — is in the Ross Archipelago in Antarctica. It is home to a major U.S. telecommunications center, and is among the most climatologically inhospitable places in the world.

The official population is zero, and for good reason — actually, several reasons. The island is often visited by category-5 hurricane winds exceeding 150 mph, temperatures regularly dip south of 40 below zero, and the island is in absolute darkness for almost half the year.

For nearly three decades now, the facility there — America’s South Pole communications link to the world — has been powered in part by several of the so-called HR-3 (3-kilowatt) series of small wind turbines built by a Vermont-based company called Northwind Power Co, later renamed Northern Power Systems.

It was this product that Quinlan and Stein were recruited to essentially reintroduce to the market — Northern exited this stage in favor of ‘big wind’ products several years ago — by the National Renewable Energy Laboratory (NREL). This was an entrepreneurial challenge they accepted, in part because they were both unemployed at the time, but also because they’ve been working in wind power throughout their careers and saw vast potential for products that fall in the category of what the industry calls ‘small wind.’

These would be units rated at under 10 kilowatts, said Quinlan as he spoke with BusinessWest in the company’s R&D facility in the ironically named Propeller Building on River Drive in Hadley. And there is growing demand for such products among commercial, industrial, and even residential users, he noted, adding that a study conducted by Navigant Research revealed that the market for small wind turbines will double to $3.3 billion annually by 2018.

An installation crew

An installation crew is seen with one of the HR-3 models in operation on Black Island in Antarctica.

There will likely be many competitors for that growing pie, but Black Island, which also plans to develop a 1-kilowatt version of the HR (high-reliability) product, will be well-positioned, he noted, steering the conversation back to Antarctica and the brand name chosen for this venture. That remote location has become a proving ground of the highest magnitude for the HR series of products, he said, adding that the company uses a photo of an installation on that South Pole outpost, along with the slogan “Toughest Wind Turbines on the Planet,” in its marketing materials.

And while there aren’t many, if any, other places like Black Island, reliability, in general, has been an issue with small wind turbines, said Stein, adding that the Black Island product distinguishes itself in this regard due largely to a spring-damper system called VARCS (variable-angle rotor-control system), which enables the turbine to handle high winds by pitching the rotor upward into a helicopter position when winds are strong.

“The demonstrated survivability of our H-3 wind turbine is exemplary, and uniquely distinguishes our design,” he said, adding this competitive advantage is important because demand for such turbines will be great in areas where competitively priced solar power is not practical — like Antarctica and other places that don’t get much year-round sun.

The current business plan calls for the company to build a small number of 3-kilowatt wind turbines in the Hadley facility — it has already filled a few orders from the U.S. Air Force — and eventually scale up production of those units, most likely in conjunction with Greenfield-based Applied Dynamics, while also introducing the 1-kilowatt unit capable of powering a home or small business.

“We’re leveraging the great reputation of the HR series to build a very solid, practical wind turbine that we think will be attractive to everybody, because small wind does not have a great reputation for reliability otherwise,” said Quinlan. “And there are so many great applications for small wind.”

For this issue and its focus on green business, BusinessWest examines an emerging local company that is looking to make a powerful statement in an intriguing and potential-laden industry.


Turns for the Better

Quinlan told BusinessWest that naming a wind-turbine company Black Island is similar in many ways to a carmaker naming one of its products after a racetrack where it has enjoyed great success — and that has happened many times over the years, with the Dodge Daytona, Chrysler Sebring, and Pontiac LeMans, among others, coming to mind.

That’s how powerful a statement he believes the brand name makes, and how much it resonates with the company’s audience.

“Among the people who purchase small wind turbines, they know about the Black Island facility and respect what’s happened there,” he said. “In many instances, people have called them legendary wind turbines because they’re so anomalous in their reliability.”

Quinlan and Stein have been telling the Black Island story repeatedly over the past few years as they’ve taken their venture off the drawing board and into reality and worked to differentiate themselves from what they call “commodity small wind turbines.” For example, there was the presentation given before the Mass. Clean Energy Center (MCEC), which eventually gave the partners a $150,000 grant to help get the planned 1-kilowatt unit off the ground.

In addition to lessons learned in the climate of Antarctica, Quinlan and Stein told the MCEC — as they have other groups and BusinessWest — that, when it comes to small wind turbines, there is a lot of “junk” out there.

“In short, small wind turbines are disappointing customers,” Quinlan explained. “There is a strong need for a cost-effective, reliable, and productive alternative that is dependable.”

All those words could be used to describe the original HR-3, he went on, adding that the product had made a name for itself in Antarctica and other remote locations, so much so that the National Renewable Energy Laboratory launched a search for a company that would service existing models and create what amounts to the next generation of the product.

It focused its efforts on Stein and Quinlan, two veterans of what could be the called the wind-power movement, who are now partnering with Lawrence Mott, an engineer on the originally built HR-3, on the Black Island venture

Quinlan is the former associate director of the UMass Wind Energy Center and has been involved with wind power for more than 30 years. He worked at Southern California Edison and AeroVironment Inc. on wind-turbine testing and in-field troubleshooting, and worked with individual electric cooperatives and municipal utilities across the West on wind-power projects. In Washington, he served as a renewable-energy expert as a Congressional fellow, working for the ranking member of the House Science Committee, and then as ASME White House technology fellow supporting the presidential science advisor at the Office of Science and Technology Policy.

Stein, meanwhile, is a former senior research fellow at the UMass Wind Energy Center who also began work in the field in the early ’80s.

He started building wind turbines at Clark University, worked at Natural Power Inc., a wind-instrumentation company, and started his own wind-power company, Astral Wilcon, a manufacturer of 8- and 15-kilowatt residential-sized wind turbines. He worked briefly at MIT’s Fusion Energy Laboratory and at Yankee Environmental Systems, where he developed meteorology instrumentation.

With $180,000 in funding from the NREL, the partners eventually set up shop in Hadley and contracted with the agency to design and then test a modified HR-3 at Texas A&M University’s Alternative Energy Institute. During those tests, the turbine ran flawlessly, said Quinlan, adding that, since then, the company has produced a handful of the units and sold two to the Air Force.

It hopes to secure more orders at the Small Wind Conference in Stevens Point, Wis. later this month, he went on, adding that the partners project sales of perhaps 20 units this year.

The company also sells new and refurbished parts  for the roughly 100 legacy HR-3 units still operating around world, mostly in remote locations such as mountaintop installations and offshore oil rigs, said Quinlan, adding that this component of the business provides a steady cash flow that makes the venture less of a business risk.

Looking forward, the partners are optimistic about scaling up production of the HR-3. Quinlan projects sales of the $39,000 turbines possibly reaching 100 units by next year.

“We’re targeting organizations that highly value reliability,” he said, adding that failures in the field can be extremely expensive and disruptive because getting service is so difficult and time-consuming. “This includes government agencies that have telecommunications networks, telecom companies that have microwave towers, oil and gas companies, and microgrids — small, self-contained utilities.”

Meanwhile, climate change may create business opportunities in another of the world’s most remote outposts — the Arctic, he explained.

“The Arctic will soon be navigable,” he told BusinessWest. “And there’s a lot of interest in setting up telecommunications systems there to support ship traffic, and that could create opportunities for us.”

The partners are also optimistic about development of the 1-kilowatt model now on the drawing board, with a prototype expected soon.

That product will compete with solar and other options for the business of those willing and able to use renewable energy to power their homes and businesses, said Stein, adding that, while solar has become an attractive option now that the price tag for such installations has come down in recent years, there is, and will continue to be, decent demand for wind power.

That’s because there are some places where solar is not a viable option, and where wind is, because it’s plentiful, said Quinlan.

“We’re looking at the windy states — the whole center of the country and the coasts,” he said, adding that preliminary projections forecast first-year sales of perhaps 1,000 units, and 5,000 annually within a few years.

Demand may be bolstered by growing need among businesses, government operations, schools, and other facilities to continue operating after a weather disaster or power outage, he went on, adding that small wind can provide that capability.


Gust in Time

When Quinlan and Stein were asked if they’ve been to Antarctica to see their product in action, they both enthusiastically said ‘no,’ although Stein admitted that it might be fun to go there — “for a few days, maybe, and at the right time of year.”

There are no plans for such an excursion, or to visit any of the other remote locations where the company’s turbines are in operation or will soon be put to use.

“We know what these units can do — we don’t need to go to the South Pole,” said Quinlan, adding that pictures from such outposts will suffice.

But Black Island will always be a big part of this company. As Quinlan said, it has been a proving ground, and because of that it is now a brand name — one that is expected to do big things in the world of small wind. n


George O’Brien can be reached at [email protected]

Green Business Sections
Amherst Farmer Refines Method of Growing Plants Without Soil

Joseph Swartz

Joseph Swartz shows off the roots of lettuce plants growing hydroponically in his greenhouse at Swartz Family Farm in Amherst.

Imagine growing 120,000 pounds of food each year without any soil on top of public housing in the Bronx.

Although the idea may sound farfetched, it’s not a fantasy. Instead, it’s one of many projects that Joe Swartz of Swartz Family Farm in North Amherst has accomplished in recent years.

Swartz is a master hydroponic gardener who has taken the industry to new heights. In fact, the New York City farm he designed for Skytop Vegetables was the first in the nation to be grown on top of a public-housing structure. “I did the early sketches on my kitchen table in Amherst,” he said, as he talked about the 8,000-square-foot rooftop farm that opened in February 2013, and provides fresh, nutritious vegetables to residents of the building and neighborhood as well as patrons of nearby restaurants and markets.

Swartz has gained international recognition as an expert in hydroponics, which is a method of growing plants without soil. They are planted from seeds in holes set in plastic containers and thrive on a nutrient solution dissolved in water that runs beneath them and is recycled after the plants take what they need from it.

Swartz has 28 years of experience in operating a year-round, pesticide-free, hydroponic vegetable-and-herb facility in Amherst. It’s a field he entered long before most people thought about where their produce came from and environmental concerns created a demand for locally grown vegetables and fruits.

As a result, Swartz has become a leading expert in hydroponic system design, high-end crop production, biological pest control, system troubleshooting, and much more, and has spoken all over the U.S. and in many foreign countries about his groundbreaking work.

“It’s very gratifying, and when I think of the evolution of all that has happened in the industry since I began my farm, it’s mind-boggling,” he said, adding that he gave a recent lecture at a national conference in Las Vegas and was just invited to speak at a major agricultural conference in England.

The concept of transforming unused rooftop space into a hydroponic garden has many environmental benefits, which include water conservation. “All rainwater that strikes a flat roof has to be channeled into the city’s stormwater systems, and most systems in U.S. cities are completely overwhelmed; one inch of rain that falls on an acre equates to 27,000 gallons of water,” Swartz explained, adding there are more than 15,000 acres of rooftop space in New York City alone.

“But a rooftop greenhouse has gutters on all sides, and rainwater is sent into an underground tank, where it is filtered, cleaned, and used for farming,” he went on. “So it allows us to take a waste product and convert it into food in a very sustainable manner.”

Benefits also accrue from the fact that a rooftop greenhouse shares synergy with the building. Sun that hits the roof and requires the building to be cooled is absorbed by the crops, which also absorb heat from the building in winter, preserving it rather than having it simply go into the atmosphere, Swartz said.

In addition, the system takes heat from the building’s smokestack and uses it to heat the greenhouse. “It capitalizes on heat that is normally wasted. Plus, the greenhouse has thermal curtains that hold the heat in at night. So it’s a win-win situation for the building owner and the owner of the garden,” he told BusinessWest. “It also produces jobs for local residents without many job skills and allows people in the neighborhood to get fresh, nutritious food that doesn’t have to trucked in from thousands of miles away.”

And rooftop gardens, which are rapidly expanding across the country, also provide inner-city children with agricultural knowledge. “We worked with a local school in the Bronx, and a frightening number of children thought milk was made in a manufacturing plant. They had no concept that it came from an animal,” Swartz said. “And most of the people in the neighborhood got their food from a small convenience store and did not have access to nutritious, locally grown vegetables and herbs until the garden was created.”


Growing Venture

Swartz Family Farm has been in business for 100 years, but Swartz likes to keep a low profile, and there are no signs to mark the entrance to his home, greenhouses, and acreage on 11 Meadow St.

“My grandfather Joseph and his wife Anastasia purchased 40 acres and started this farm after they came here from Poland in 1919,” he said. The couple grew mixed vegetables and tobacco and raised their family on the site.

Swartz’s father and uncle took the farm over in the ’50s and turned it into a large-scale potato-growing operation. In addition to growing potatoes on their farmland, they rented land in Hadley, Amherst, Sunderland, Hatfield, and South Deerfield; at the peak of their business, they were raising 300 acres of potatoes.

But his uncle died in 1970, and in the ’80s, the price of land became exorbitantly expensive due to extensive residential development in the area. “As my father got older, he scaled back to the 40 acres here.”

Swartz was in high school when he realized farming his family’s land on a seasonal basis was not a viable option because the economy was booming and seasonal help and additional farmland for crops were unavailable. “So I decided I had to look at a small-scale, very intensive type of agriculture,” he said.

His interest in controlled environmental agriculture, or hydroponics, began in 1985 when he was a student at the Stockbridge School of Agriculture at UMass Amherst. He learned the system had been pioneered in Holland and had expanded to the United Kingdom and Spain, where hydroponic greenhouses were operational year-round.

“The same nutrients you would normally apply to a field are dissolved in water,” he noted. “The plants take what they need, and the rest is recaptured and reused. It only requires 10% of the water needed for conventional agriculture, so it is a very environmentally friendly form of agriculture.”

However, the university did not have a program where Swartz could learn how to implement this growing method on a large scale. But he was fortunate enough to meet a retiree living in Ashby, Mass. who was running a small greenhouse growing hydroponic flowers. He had been the lead associate at Cornell University’s research center on Long Island, was originally from Holland, and had pioneered a large portion of the hydroponic technology that was being implemented in the U.S.

Swartz received valuable guidance from him on how to produce a premium product year-round inside a greenhouse on his property.

But when he began building a greenhouse on his family’s land and shared his plan with local farmers, they thought the idea was ridiculous.

“I was considered a crackpot. We have a very tight-knit agricultural community in the Valley, and no one understand why I would grow produce in water when there was beautiful soil here,” he recalled. “But for me, it was a necessity.”

The day after Swartz graduated from UMass, he began working in his new, 5,000-square-foot greenhouse. “At that time, there were 13 hydroponic farms in the state, and today we are the only one of them that is still in operation — we have the longest-running hydroponics farm in the Commonwealth,” Swartz told BusinessWest, adding that he also grew seasonal vegetables on the farm’s 40 acres and sold them to traditional markets.

But his greenhouse thrived. “In my first year, I produced more than 80,000 heads of Boston lettuce in it. In a field, you only get 5,000 heads per acre, and you can only plant one crop. But I was able to plant year-round,” he said, explaining that he devised a system where he was continuously harvesting and reseeding in different sections of the greenhouse.

Paradigm Shift

Swartz has continued to produce hydroponic crops at Swartz Family Garden for 30 years. Lettuce has always been a staple, but after his initial success, he built two other greenhouses and soon was shipping 300 cases of sweet basil a week to 42 Whole Foods stores across the Northeast.

About 15 years ago, when hydroponics became more well-known, Swartz delved into consulting work, which was a natural transition, although he continued farming his own greenhouses. “There were very few experts in the U.S. back then, and there wasn’t much information about how to grow hydroponically on a sustainable, commercial scale,” he said.

Over the past five years, as awareness and concern about the environment escalated, the demand for local products began to rise.

“Public awareness changed buying habits, and the demand for urban agriculture began to grow,” Swartz said. “It was a paradigm shift because, before that, food was produced on large commercial farms which were often not even in this country.” In fact, when he first began to sell Boston lettuce, there was nothing but iceberg lettuce in the stores, and there was no demand for any other variety.

About four years ago, Swartz was approached by two men who were starting a company called Sky Vegetables. “They wanted to take the concept of urban agriculture one step further and build commercial farms on flat city rooftops, because there is so much of that space that is unused,” he said.

He became their director of farming, and in 2009 began designing a hydroponics rooftop garden for a new LEED Platinum-certified building in the Bronx that would be used for public housing. Arbor House was completed in 2012, and the rooftop farm opened in February 2013.

“The space was leased for $1 for 99 years, and lettuce and cooking greens such as chard, kale, sweet basil, upland cress, and baby bok choy are grown there. Sky Vegetables operates the farm independently, and the building’s residents have the opportunity to get food from it via a community-supported agriculture program,” Swartz said.

Today, his wife, Sarah, operates their hydroponic farm in Amherst, which sells produce to local vendors such as Atkins Market. Swartz left Sky Vegetables six months ago to consult full-time with growers across the globe. He just finished an ongoing project in Kuwait and is going to Dubai to assist a large-scale farm in replicating a hydroponics system in Singapore. “I need to fine-tune the system before they can expand and replicate it,” he explained.

Limitless Potential

Swartz has more than 49,000 hours of greenhouse production time and has also done consulting work in a variety of settings. This year he has already been to Nassau, Bahamas; Santa Cruz, Calif.; Atlanta; Halifax, Nova Scotia; and Las Vegas.

“Hydroponic gardens range from simple, home-built systems that are outside, to conventional greenhouse systems, to very high-level, computer-controlled greenhouses, to a garden in Nova Scotia that grows without sunlight inside a warehouse, using LED lighting,” he explained. “It’s a 100% controlled atmosphere — and the final frontier is space.”

Indeed, he noted that a colleague, Gene Giachumelli, professor of Agricultural and Biosystems Engineering and director of the Controlled Environment Agriculture Center at the University of Arizona, is designing a hydroponics food-production system for outer space, where one of the challenges is zero gravity.

“It’s a very interesting industry, and hydroponics is the safest food-production method possible,” Swartz said, as he stood on his family farm, gazed at his greenhouse, and recalled his own history.

“My father and many other people thought I was crazy when I started this. But I have taken the farming techniques I developed in the Valley and am working with growers across the globe today,” he said, adding that pesticides are not needed, and “you cannot get safer food products.”

That endeavor has no limits, and Swartz will continue to grow his own business as well as help other people across the world create farms without soil, sunlight, and other factors — in the process transcending what any farmer could have imagined several generations ago.

Green Business Sections
Gold Circuit E-Cycling Carves Out a Unique Niche

Matt Pronovost

Matt Pronovost says the mission at Gold Circuit E-Cycling is controlled growth.

Matt Pronovost calls it his “museum wall.”
It’s little more than a few wooden shelves in the back of the room cluttered with what could only be described as electronic artifacts, especially if you’re under age 40. There are a few 8-track players in the mix, two movie projectors, a ’60s-era console television (a model that sat on the living room floor), a turntable, an old Atari system, several beta camcorders and transistor radios, and maybe a half-dozen rotary telephones of various colors and shapes.
And then, there are the computers, most with brand names and model numbers that achieved fame (or infamy) but disappeared from the landscape decades ago. A Commodore 64 sits between a Digital UT102 and a Radio Shack TRS-80 Model III microcomputer. All three probably came out of the box 30 years ago, and they certainly look their age.
Pronovost said it takes something really unique to make the wall these days — like the old washboard and basin that came in a few weeks ago — partly due to the fact that he’s just about out of display space. But it’s mostly because he’d rather devote his time to the 99.9% of the stuff that comes in his door that he doesn’t even think about keeping.
This is what Gold Circuit E-Cycling is really all about.
This bin of circuit boards

This bin of circuit boards is one of many crowding the floor at Gold Circuit E-Cycling.

It’s a three-year old enterprise devoted to the recycling of computers and electronic equipment, an intriguing and fast-growing venture now occupying roughly half of one of the dozens of buildings comprising the sprawling Ludlow Mills complex. And it would seem to be the right business in the right place at the right time.
Indeed, as technology advances at a rate so rapid that it seems like a 40-inch flatscreen TV or five-year-old PC might soon be candidates for the museum wall (and there are more than a few of both on the floor waiting to be dismantled and recycled), area business owners and residents are increasingly challenged by the question of what to do with yesterday’s electronics as they acquire tomorrow’s products.
And Gold Circuit was created to provide an answer.
“Increasingly, people are realizing that there’s a solution to their problem, and it’s not the garbage can,” said Pronovost, adding that the business of e-cycling, as it’s called, is not exactly new, but it is picking up steam in the Northeast after migrating from the West Coast (as many trends do) a decade or so ago. “We’re here to help people make the responsible choice when it comes to unwanted electronic equipment.”
This venture, which recorded 25% growth in its first full year in business and will likely double its volume this year, collects or ‘demanufactures’ computers, electronics, batteries, home appliances, lawn equipment, metal furniture, copiers, printers, medical equipment, power tools, tires, fluorescent bulbs, styrofoam, pellet-fuel bags, and more, and sells the parts and material for scrap, thus keeping such items out of the waste stream.
There are charges for some products that are dropped off at the facility — anything with glass or refrigerant, for example, and tires as well — but many items can simply be left free of charge. And the company is making it even easier by staging collection events, such as one held recently at East Longmeadow High School.
Several dozen pieces of equipment arrive at the Gold Circuit facility each day, meaning the company is already essentially at full capacity in a 15,000-square-foot location it moved into just last year after outgrowing its original, 6,000-square-foot home in the Ludlow Mills complex.
When, how, and where the company next expands is a critical question, said Pronovost, adding that at present, the goal — and the challenge — is controlled, smart growth.
“I don’t want to grow too fast because expenses can really take off if you’re not careful,” he explained. “Like any business, we have to stay within ourselves and expand in a smart way.”
For this issue and its focus on green business, we look at a company that is certainly larger than the sum of all those parts amassed on the Gold Circuit floor.

Here’s the Breakdown
As he gave BusinessWest a tour of his facility, Pronovost stopped briefly at the museum wall — he tried, unsuccessfully, to find a date on that washboard — but quickly moved on to several large cardboard boxes, each destined for a vendor that would recycle the material in question and/or extricate the more valuable materials from them.
There was one for clean (as in unpainted) aluminum, a material that will fetch 65 cents a pound, he said, and another for ribbon wire, most of it from PCs. Three boxes contained low-grade, medium-grade, and high-grade circuit boards, respectively, designations that indicate that amount of gold in each one. And there were others for everything from transformers (separated by size) to plastic (one for lighter colors and one for black).
Meanwhile, there was a huge box filled with Styrofoam that was used to keep many of these products safe in their boxes. Sold by the bale, this material has a number of potential future uses, said Pronovost, especially as a composite material used in everything from furniture to picture frames.
How he came to be an expert on the future lives of such materials — and to create a business focused on e-cycling — is an intriguing story based on the most basic principles of entrepreneurship: seeing a need and creating a service to meet it.
“To be honest, I pretty much fell into this,” he explained, while retracing a career that started with work supporting those using computers, not breaking them down into component parts.
He started in what he called the “desktop-support field,” working at MassMutual for a few years before moving to a firm in Connecticut where he handled hardware setup and configuration work, as well as equipment auditing. As that company was repeatedly sold to larger corporations, with each transaction accompanied by a change in equipment, Pronovost segued into resale of the old hardware and, eventually, into selling parts and material for scrap, an operation carried out in-house.
“I had the right background to distinguish whether the parts I was looking at had value outside of scrap — whether they could be wholesaled out or brokered out, whether we tear it down or not tear it down,” he noted, adding that he quickly moved up the ranks within this division. “I made the transition from technician into sales, and was doing well with generating revenue.”
However, the Great Recession changed the equation quickly, he went on, adding that he was one of many to be laid off and forced to settle on a new career path. His was entrepreneurship.
“I decided to do it myself,” he said, with the ‘it’ being e-cycling. “I could see that there was a lot of opportunity, especially here in Western Mass.”
Elaborating, he said that there were, and still are, national outfits that would work with large corporations, such as MassMutual and Aetna, to help them scrap electronic equipment, but such operations historically haven’t had much interest in small businesses or residents. Meanwhile, some communities had collection operations (most of them pricey) at their transfer stations, he went on, but there was a definite void in service to large portions of the local market, and this was the need he set out to address with Gold Circuit.
He opened the doors in October 2010 and started small, handling the bulk of the work, including most of the demanufacturing, himself. Growth, he noted, has come through awareness — of both his company’s services and the need to seek out earth-friendly ways of dealing with yesterday’s electronic devices.

Hard-driving Entrepreneur

Employees at Gold Circuit

Employees at Gold Circuit ‘demanufacture’ a wide array of computers and electronics, with parts and materials sold as scrap.

Using an old laptop as an example, Pronovost said there is a good deal of scrap value in such devices, and his company has become adept at squeezing every cent from them.
“The screen, if it’s unbroken, can be torn down and reused,” he told BusinessWest. “The main [circuit] board probably has the most scrap value in that laptop, but the hard drive comes out to be shredded, and there’s a lithium battery — and right now, lithium is one of those commodities that’s sought after. Everything has scrap value.”
On the day BusinessWest visited the operation, there were several dozen old laptops awaiting their fate. A few of them might actually be sold to resellers if they are in very good condition, said Pronovost, as will the various pieces of equipment — computers, printers, VCRs, phones, air conditioners, toaster ovens, and more — crammed into the 20 or so large boxes on the shop floor.
This is a busy time of year — good weather inspires people to clean out their homes and businesses, apparently — and the floor is crowded with “inventory,” he went on, adding that Gold Circuit currently has several days worth of devices to demanufacture, and more comes in every day.
Pronovost has tweaked his original business plan slightly, but for the most part, the document’s projections for volume, or weight (400,000 pounds of material in 2012), revenue, growth, and employment have been on the money.
They were based on a number of factors, but mostly the incredibly fast pace of progress with computers, cell phones, and other electronic equipment, and the market for used items — or the lack thereof, as the case may be.
Indeed, he said that PCs more than seven years old, and some much younger than that, have little value other than as scrap when their owners decide to upgrade. And the same is largely true for today’s televisions.
“The older ones, those 20 or 25 years old, are still working,” said Pronovost with a laugh. “The newer HD models … they don’t work. And when they break, you generally have to replace them.”
This phenomenon is one of the many factors contributing to the company’s impressive growth rate, he continued, adding that others include everything from a lack of competition locally to strong word-of-mouth referrals, to heightened efforts in recent years to market the company.
But much of it comes down to partnerships, or working with a host of constituencies, from individual communities to area colleges and universities, to encourage responsible disposal of unwanted electronic items.
When the town of Longmeadow opened its new high school, Gold Circuit took roughly 12,000 pounds of old computers and other electronic equipment from the old one free of charge, said Pronovost, adding that another example of such partnership-building was the recent collection drive at Holyoke Community College to benefit a scholarship fund at the school. Participants paid a small fee to organizers to have everything from an old cell phone to a garage-cluttering air conditioner hauled away by Gold Circuit.
Such events are win-win-wins, said Pronovost, noting that the scholarship fund grows, the planet benefits because such items don’t wind up in area landfills, and Gold Circuit gains some invaluable exposure.
Looking ahead, he said the company, which now has four full-time employees, and several part-timers, will continue its efforts to chart steady but controlled growth.

Parting Thoughts
Pronovost said his museum wall often generates interest and conversation.
“People will say, ‘holy smokes, a Commodore 64 — I had one of those back in…,’ and they start adding up in the years,” he said, adding quickly that, while nostalgia is fine, it’s not what this business is all about.
Instead, it’s about meeting a growing need among area businesses and communities, and a desire to do the right thing when it comes to disposing of old equipment, styrofoam, and more.
“People are learning … they’re understanding that you can’t just throw things like this away,” he said, sweeping his hand across the shop floor. “And we’ve become an answer to their problem.”

George O’Brien can be reached at [email protected]

Green Business Sections
‘Going Green’ Investment-tax Credits Have Many Benefits

Kristi Reale, CPA, CVA

Kristi Reale

‘Going green’ is a term that is rapidly gaining momentum in our economy. No longer an ideal for just the early adopters or the environmentally conscientious, going green, or investing in processes, equipment, and energy that are environmentally sustainable, is becoming a distinctive tool for many businesses.
Customers like to see that their products were made in a green environment, prospective employees see energy-efficient and environmentally sustainable workplaces as being preferable to the traditional workplace, and, more than anything, companies are choosing to do business in an environmentally sustainable way — a triple bottom line. And as the trend to go green becomes more and more prevalent in our economy, there is a lot of information suggesting that the fiscal and tax benefits of investing in green energy and equipment are significant. However, these benefits are not always clearly outlined in black and white. It’s important to understand how the credits work and, more importantly, how they apply to you and the investment that you’re planning to make.
Income-tax credits are direct reductions of a taxpayer’s income-tax liability. Generally, the investment-tax credit permits a reduction in tax liability based upon the taxpayer’s qualified investment in certain kinds of property placed in service during the taxable year. Thus, the investment credit is an incentive device, intended to stimulate the purchase or modernization of certain kinds of productive assets. This intent is achieved by permitting the purchaser or constructor of qualified property to reduce their federal income-tax liability by a percentage of the amount they spend for the assets. To this extent, it departs from the concept of a tax imposed on net income.
Form 3468 is used to claim the investment-tax credit. Investment-credit property is any depreciable or amortizable property that qualifies for the rehabilitation credit, energy credit, qualifying advanced coal project credit, qualifying gasification project credit, or qualifying advanced energy project credit. The energy credits are detailed below.
You cannot claim the credit for property that is:
• Used mainly outside the U.S.;
• Used by a governmental unit or foreign person or entity;
• Used by a tax-exempt organization unless the property is mainly used in an unrelated trade or business;
• Used for lodging or in the furnishing of lodging; or
• Property that has been expensed under section 179 accelerated depreciation.

Energy Credits
The business energy credit is either 10% or 30% of the basis of energy property placed in service during the tax year. To qualify as energy property, the property must meet the performance and quality standards that have been prescribed by regulations in effect at the time the property is acquired; be depreciable or amortizable property; be constructed, reconstructed, or erected by the taxpayer; or acquired for original use by the taxpayer.
Energy property that qualifies for the 30% credit is listed at Internal Revenue Code §48(a)(2)(A)(i), such as:
• Solar: the credit is equal to 30% of expenditures with no maximum credit and includes equipment that uses solar energy to generate electricity or heat and cool a structure.
• Fuel cells: the credit is equal to 30% of expenditures with no maximum credit; however, the credit is capped at $1,500 per 0.5 kilowatt of capacity.
• Small wind turbines: the credit is equal to 30% of expenditures with no maximum credit for small wind turbines placed in service after Dec. 31, 2008.
Other energy property qualifies for the 10% credit, such as:
• Geothermal systems: the credit is equal to 10% of expenditures with no maximum credit and includes geothermal equipment and heat pumps used to produce, distribute, or use energy derived from a geothermal deposit.
• Microturbines: the credit is equal to 10% of expenditures with no maximum credit; however, the credit is capped at $200 per kilowatt of capacity.
• Combined heat and power: the credit is equal to 10% of expenditures with no maximum credit, and applies to property placed in service after Oct. 3, 2008.
The basis of the energy property must be reduced by 50% of the energy credit determined. The business energy credit is not allowed for any portion of a property that also qualifies for the rehabilitation credit. Energy property that qualifies for a grant under §1603 of the American Recovery and Reinvestment Act of 2009 is not eligible for the energy credit for the tax year the grant is made or any subsequent tax year.

Renewable-energy Facilities
On Feb. 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009. The purpose of the act was to preserve and create jobs, promote economic recovery, and invest in infrastructure that will provide long-term economic benefits. Provisions in the recovery act allow for irrevocably electing an investment-tax credit under §48 rather than a production tax credit under §45 for specified renewable energy facilities.
These provisions allow the taxpayer to make an election to receive an income-tax credit calculated at 30% of the cost of the qualifying property in the year it is placed in service, as opposed to the production-tax credit claimed over a 10-year period based on the electricity produced.
To qualify, this property must be tangible personal property (not including a building or structural components); constructed, reconstructed, or acquired by a taxpayer; depreciable; and for original use. The taxpayer must make a separate, irrevocable election for each qualified investment-credit facility.

Credit Recapture
Recapture of either all or a portion of the credit applies if, in the first five years, the investment-tax-credit property is disposed of, the use of the property changes so it no longer qualifies, the business use of the property decreases so it no longer qualifies, leased property is returned to the lessor, or the taxpayer receives §1603 grant money for the property.
Some exceptions to the recapture are death of the taxpayer, transfer between spouses in a divorce under §1041, and a mere change in the form of business in which the property is retained as investment-credit property, and the taxpayer retains a substantial interest in the business.
In summary, these credits appear extremely favorable. However, there are limits that apply, such as passive-activity limitations for certain pass-thru entities, basis limitations, and the effect of alternative minimum taxes.
Before embarking on projects based solely on the benefits of credits, you should consult your tax advisor. n

Kristi A. Reale, CPA, CVA is a senior manager with the Holyoke-based public accounting firm Meyers Brothers Kalicka, P.C.; (413) 322-3533; [email protected]

Green Business Sections
Recent Developments Spur New Solar-energy Projects In Massachusetts

Nicholas Lata

Nicholas Lata

Massachusetts has experienced rapid growth in its solar-energy sector in recent years.  The total capacity generated by solar energy in Massachusetts has doubled in the last two years, reaching 105 megawatts (enough to power more than 15,000 homes) in 2012, a figure that is forecasted to quadruple by 2020.
Massachusetts’ renewable-energy sector now employs more than 64,000 people statewide (including nearly 10,000 in Western Mass.) and is projected to grow 15% per year. Massachusetts is now considered to be one of the best states in the country for solar development, a phenomenon driven largely by the state’s numerous initiatives to promote clean, renewable energy.
What follows is a rundown of these incentives and other issues involved with the development of solar-energy projects.

Massachusetts Incentives
The Massachusetts solar market is driven by a statutory requirement for utility companies to generate a percentage (7% in 2012) of their electricity from renewable sources. This figure is scheduled to rise 1% per year until 2030, when it will reach 25%.
Utility companies that fail to generate sufficient electricity from renewable sources are required to pay a fine equal to $600 per Megawatt hour (MWh) the utility company falls below the requirement. In lieu of paying this fine, utility companies may purchase solar renewable energy credits (SRECs) from solar developers. Eligible solar developers receive one SREC for every MWh of electricity generated. Solar developers seeking to earn SRECs must apply through the Mass. Department of Energy Resources, and certain restrictions apply.
In 2011, solar developers produced only one-third of the 78,577 SRECs demanded by utility companies. As a result, there was a ready market for SRECs, which traded at approximately $550 per credit. The proliferation of solar development caused the supply of SRECs to exceed demand in 2012. In response, most solar developers have begun entering into futures contracts with utility companies, assigning all SRECs earned in the future for approximately $200 to $250 per SREC.
Finally, for projects that produce more electricity than is consumed on site, Massachusetts provides two options for solar developers to market excess electricity. The first is simply to sell the excess electricity to the local utility at the ‘dump rate’ (about $0.035 cents per kilowatt hour, or kWh). The second is to apply for net metering with the state Department of Public Utilities (DPU). Net metering entitles the solar developer to sell the electricity at a slight discount below the market rate to electricity consumers, typically at a slight discount below the market rate, which is usually $0.12 to $0.15 per kWh for commercial consumers.
A recent DPU order added a few wrinkles to the process for qualifying for net metering, particularly where the property being developed consists of multiple parcels of land.

Federal Incentives
The federal government allows an investment-tax credit equal to 30% of the investment in qualifying solar-energy property. Combined with accelerated cost-recovery rules under the tax code applicable to solar-energy property, this may allow solar developers to operate tax-free for many years.
The issue for many solar developers is that they do not have sufficient income to monetize the full value of the credits and deductions. Many solar developers have sought to bring in outside investors with greater ‘tax appetites,’ which has led to the formation of joint ventures and other arrangements.

Development Issues
On its face, Massachusetts law exempts solar-energy systems from local property taxes. Recently, however, several bills have proposed carving large-scale commercial systems out of the exemption, particularly ground-mounted systems. Although none of the bills passed, the state Department of Revenue has taken the position that systems are exempt only if all of the electricity is used on site.
In response, many developers have either sought properties occupied by businesses with great energy needs (i.e. manufacturers) or negotiated payment-in-lieu-of-taxes (PILOT) agreements with towns in order to fix payments over the lives of projects. In addition, landowners selling or leasing land which is currently taxed as agricultural or forest property to solar developers may be subject to conveyance taxes, rollback taxes, and a town right of first refusal.
Meanwhile, Massachusetts law prevents towns from passing zoning bylaws that preclude the installation of solar-energy systems. Initially, developers interpreted this law to provide as-of-right siting for solar projects, which would allow projects to progress without the issuance of special permits.
Nevertheless, most towns have interpreted the as-of-right siting to apply only to small, roof-mounted systems, and have passed zoning bylaws that restrict the installation of larger, ground-mounted systems (especially systems exceeding 250 kW). Even where a friendly bylaw is in place, the permitting phase for large-scale projects generally takes at least six months.  Robinson Donovan is currently assisting a national solar developer in the development of a proposed 14-MW solar-energy system on 160 acres of land in Monson.

Project Economics
In general, the cost of installing a solar-energy system is based on its energy-generating capacity, ranging from under $3 per watt for large-scale commercial systems to as much as $6 per watt for smaller residential systems. Although the amount of electricity generated by solar-energy systems is relatively low compared to the investment required, projects can be profitable when incentives are taken into consideration.
When SREC values were at peak levels in 2011, solar projects frequently had rates of return in the range of four to six years. Returns have declined to where rates of return in the range of seven to nine years have become more realistic. Returns may be substantially lower for projects which fail to qualify for SRECs and/or net metering, as described above.
Nevertheless, with the Bay State’s commitment to renewable energy, it is likely that solar incentives are here to stay. Furthermore, advancements in solar-energy technology are simultaneously reducing costs and creating new applications.

Nicholas Lata is an associate with the Springfield-based law firm Robinson Donovan. He has been involved with several projects involving solar power; [email protected]; www.robinson-donovan.com

Green Business Sections
Scuderi Group Continues to Seek Its Next Breakthrough

A prototype of the Scuderi split-cycle engine.

A prototype of the Scuderi split-cycle engine.

Changing the world isn’t easy. But the Scuderi family never expected that it would be.

“Our biggest hurdle, basically, was getting the engine to work. That took a lot of engineering,” said Bill Wrenn, director of marketing for the Scuderi Group, the West Springfield-based company that has spent the past decade attempting no less than a revolution in energy-efficient automotive technology.

“We first fired it up on June 25, 2009; that’s when we got the prototype up and running for the first time,” Wrenn continued. “And that really was the biggest question leading up to that point: will this work? Well, it not only works, but it has worked a lot better than anyone had thought originally.”

The promise of the Scuderi split-cycle engine, as it’s called, is that it could dramatically increase the efficiency of a machine — the internal-combustion engine — that has been notoriously resistant to such efforts in the more than 130 years since it was invented.

It all began in the mind of Carmelo Scuderi, who developed the concept shortly before he died in 2002. His sons — Sal, Stephen, and Angelo — have spent the years since honing the idea, raising millions of dollars in research funding, and preparing to market the final product. They were aided in building a prototype by Southwest Research Institute in San Antonio, Texas., and have since opened offices in the automotive hotbeds of Germany and Japan, making the Scuderi brand an international presence.

But the amount of hype surrounding the engine has some wondering when it might finally appear in a marketable vehicle. To which Wrinn urges patience, while fully acknowledging the complicated nature of the Scuderis’ efforts.

“Anyone who’s not skeptical about this engine doesn’t understand the complexity of the combustion engine,” he told BusinessWest. “It’s not like trying to build new office furniture and sell it; these are very scientific processes we’re working on.”

But he pooh-poohs any notion that the auto or energy industry has hindered progress on a more energy-efficient machine. “We’ve had no visits from men in dark blue suits telling us to go away,” he said with a laugh. “But the attraction has varied from continent to continent and continues to change.”

 

Change Resistant

The first four-stroke piston engine was developed in 1876, and remains the primary design of engines today. And despite the myriad changes to automotive technology over the past century-plus, the efficiency of this engine design has remained largely unchanged. Specifically, it operates at about 33% efficiency, meaning that only one-third of the energy in each gallon of fuel is used to power the machine, and the rest is lost through friction and heat.

The Scuderi Group believes their model could finally change that equation. They note that the heart of the internal-combustion engine is a piston connected to a crankshaft, moving up and down in a cylinder through the intake, compression, power, and exhaust strokes. In a typical four-stroke cycle engine, power is recovered from the combustion process in these four separate piston strokes within each single cylinder.

The Scuderi split-cycle engine changes the heart of the conventional engine by dividing the four strokes of this cycle over a paired combination of one compression cylinder and one power cylinder. Gas is compressed in the compression cylinder and transferred to the power cylinder through a gas passage.

The gas passage includes a set of uniquely timed valves, which maintain a precharged pressure through all four strokes of the cycle. Shortly after the piston in the power cylinder reaches its top, center position, the gas is quickly transferred to the power cylinder and fired (or combusted) to produce the power stroke.

By splitting the strokes of the cycle over a pair of dedicated compression and power cylinders, the design of each cylinder can be independently optimized to perform the separate tasks of compression and power.

Stephen Scuderi briefs Japanese media about the Scuderi split-cycle engine.

Stephen Scuderi briefs Japanese media about the Scuderi split-cycle engine.

The Scuderis have called the engine “disruptive technology,” meaning it has the potential to shake up an industry. Wrenn said the family has been pleased with the engine’s performance so far.

“To put it in perspective, we’re at the genesis of a new thermodynamic process, a new way of creating combustion that has never been discovered before,” he said. “We’re discovering interesting new facts about the engine’s potential ability to do certain things and how much power it can produce.”

Since the prototype was completed, Wrenn said, “we’ve spent a lot of time collecting statistics and measurements and simulating how the engine would work in typical vehicles. One test took a typical European economy-class vehicle — these are some of the most efficient vehicles in the world — and, with the Scuderi engine, took the car through a typical drive cycle in various driving modes. What we found was, where normally those cars would get 52 miles to the gallon, the Scuderi engine got more than 65. On the emissions side, we emitted 85 grams of CO2 per kilometer, compared to a conventional engine with 104 grams per kilometer.”

Beyond the basic concept, the company is generating additional energy savings from an innovation it calls the air hybrid, in which it stores energy as compressed air during braking and feeds it into the combustion cylinder when the car is accelerating. Electric hybrids also use braking force to store energy, but in a battery, and the Scuderi Group points out that batteries are costly, heavy, and wear out — and are hazardous to dispose of.

Sal Scuderi told the Wall Street Journal recently that the company is getting close to licensing its technology for production, but scoring an automotive customer is challenging. “You can’t beat [incumbent engine designs] by a little bit. You have to beat them by a lot.”

The test Wrenn cited may fall under the ‘little bit’ category, but, “since then, the data has gotten even better,” he told BusinessWest. “Since then, we’ve made tweaks on our valve systems, and we’ve found that we can manipulate it even more, increasing power and also bringing down fuel combustion. That has been an extremely exciting discovery.”

 

The Next Phase

Wrenn said the Scuderi family is fond of the quote often attributed to Mahatma Gandhi: “first they ignore you, then they ridicule you, then they fight you, then you win.”

“We’re definitely going through those stages right now, and we’re turning a corner where it’s becoming more accepted,” he said. “It’s been really interesting.”

For example, “our engine has applications in other industries,” he noted. “I think everyone has associated us with the automotive industry. Yes, it’s a car engine, but we are now being looked at as a solution not just for automotive applications, but power generators, compressed-air energy-storage solutions, and distributed power.”

He said the Scuderi Group has negotiated with multiple manufacturers in more than one industry and could be close to a licensing deal, although he could share no details yet. But he said the confidence of the family in their father’s dream has never wavered.

“As new discoveries have created new opportunities for success, we’re even more excited about it,” Wrenn said, adding that one of the most intriguing parts of the process has been opening up the concept to engineers of all stripes.

“The family chose long ago to begin to promote the technology, but at the same time it’s being developed, we wanted to bring the engineering community along for the ride,” he explained. “We’ve always known that, once the engine starts to get worked on by the greater engineering community around the globe, they’re going to discover a few new things and make it better. We think that’s fascinating and a great thing.”

In other words, the biggest news with the Scuderi split-cycle engine is still a ways down the highway — and this globetrotting family is enjoying the ride.

 

Joseph Bednar can be reached at [email protected]

 

Green Business Sections
PeoplesBank Branch Achieves Gold Status for Green Design

The branch pre-treats stormwater runoff

The branch pre-treats stormwater runoff with a landscaped and vegetated rain garden, so that about 80% of suspended solids in the water are removed on site before entering the stormwater system.

In the world of banking, the terms green, silver, and gold have always signified wealth. But locally PeoplesBank is changing that perception — and President Doug Bowen says the institution, and its customers, are richer for it.

Peoples made news in 2011 when its new branch on St. James Avenue in Springfield received Silver certification from Leadership in Energy and Environmental Design (LEED), a program of the U.S. Green Building Council that promotes energy-efficient and ecologically friendly construction across the country.

This summer, PeoplesBank exceeded that benchmark with its new branch on Memorial Avenue in West Springfield, to which LEED has awarded Gold certification, only the second community-bank branch in Massachusetts to achieve that status. Bowen says it won’t be the last.

“For years, PeoplesBank has been supporting the community in a variety of ways. That’s what community banks do,” Bowen said. “We have taken that thought — supporting the community — and extended it to the environment.

“These green branches, built in a very responsible way, are a natural progression for us,” he added, noting that customers have been receptive to a host of environmentally conscious efforts — including the bank’s financing of more than $50 million in wind, hydroelectric, and solar-energy projects throughout the region.

“They’re a key part of why we do this. It’s a value that’s important to our customers, and whenever we can, as a company, we try to align our corporate values with those of our customers, community, and employees.”

 

On Point

LEED operates on a system of points, which developers amass with each ‘green’ feature implemented in a building project. Among the amenities at the new PeoplesBank branch in West Springfield are:

• A healthy interior space that utilizes low-VOC paints, coatings, adhesives, sealants, furniture and carpets. VOC stands for volatile organic compounds, which can be unhealthy to breathe in;

• Improved indoor air quality using high-efficiency air filters and dedicated room exhaust systems;

• Cool-roof materials that reduce the amount of solar heat absorbed and radiated back into the environment;

• Increased natural daylight in the building, reducing the need for interior lighting;

• Installation of recycling bins for metal, plastic, glass, paper, and cardboard;

• Drought-resistant landscaping and irrigation systems to reduce water consumption;

• Systems that reduce clean-water usage by more than 44%;

• Energy-saving HVAC and lighting systems; and

• More than one-third of all building materials were extracted, harvested, recovered, or manufactured within 500 miles of the project site, reducing the need for fossil-fuel-consuming transportation.

The building also scored points for replacing an existing structure, rather than using undeveloped land, Bowen explained.

“West Springfield is not a new construction,” he said. “We used the footprint of a building which had been at that location, and when you reuse land, reuse an existing property, you’re keeping waste and demolition material from landfills. In fact, we recycled 95% the [demolition] material that was there. By reusing materials and recycling, it certainly reduces the impact on the landfill, and that gets greater credit in the LEED process.”

Because the building operates more efficiently than a conventional bank branch, the improvements will pay off over time in cost savings. That’s true of the St. James Avenue site as well, but the West Springfield site went beyond that first LEED project in other ways, contributing to its Gold status.

“Here, we’ve got a rain garden that collects water runoff, and we’ve got drought-resistant landscaping. Those were two features not fully implemented with St. James Avenue,” Bowen said. “And then we’ve got the usual high-efficiency water, and we’ve made strategic use of lighting, which reduces utility costs. And the low-emitting paint is also a green element — all these things make buildings better and healthier for people to work in.”

 

LEED by Example

Ludmilla Pavlova-Gillham, chair of U.S. Green Building Council, Massachusetts Chapter, West Branch, noted that PeoplesBank is in many ways a community organization with responsibilities in its cities and towns. “It is a bank that supports local investment is already tied to the community in a big way. So when then choose to do something better, everyone benefits.”

The bank’s environmental investments have far-reaching effects, Bowen said. For instance, the hydroelectric power generation financed by Peoples will help supply energy to the Massachusetts Green High Performance Computing Center in Holyoke.

“We want to bring that care for the environment into our core banking activities,” he told BusinessWest, and so the green branches are an expression of that.”

Expect such branches to become the norm, too, as PeoplesBank expands. It has already broken ground on a new branch in Northampton which will seek LEED certification, and another to follow in Wilbraham will do the same.

“We’re committed to building all our branches green” going forward, Bowen said. In addition, the bank is installing electric car charging stations at its West Springfield and Northampton locations, as well as its corporate headquarters in Holyoke — reflecting what the president calls a green-centric culture throughout the company.

“We have an active environmental committee that runs an Earth Day Fair every year, in addition to many other activities, to keep us focused on being green at home and work,” he said.

“Being green and doing business in an environmentally friendly way and supporting energy efficiency and community efforts that accomplish these same efforts — that’s all part of our values. That’s where our passion lies, and it’s that passion that makes PeoplesBank unique.”

Joseph Bednar can be reached at [email protected]