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BizTalk: Solar pioneers see business evolving through innovation, hustle

Adam and Nathan Rizzo came early to the solar industry.

The brothers founded SolarLiberty in Amherst 12 years ago, and since then, the company has grown to more than 60 employees and has installed 25 megawatts of solar-generating capacity at more than 1,100 sites in the Buffalo Niagara region and throughout the state.

Next year, the brothers hope to install 50 megawatts of solar capacity as consumers scramble to install systems before the 30 percent federal tax credit for solar installations is eliminated for residential customers and slashed for commercial customers at the end of 2016.

Q: How did Solar Liberty get started?

A (Adam Rizzo): Nathan and I formed the company in 2003. I had just recently graduated from the University at Buffalo law school, where I studied environmental law. Nathan had just graduated from SUNY Fredonia.

I had studied different environmental statutes and realized that the way electricity is produced in the U.S. is mainly from coal-fired power plants and that the Clean Air Act only allows for penalties after there is a violation. I realized there had to be a better way to produce electricity and that’s when I became more involved in studying renewable energy.

What really captured my attention was the solar energy field: that you could have a solar energy system on your roof that made no noise, had no moving parts and would produce electricity where it was needed. That really captured my attention. So Nathan and I started to discuss different business models about how we could be involved in the solar energy market.

We started the company basically with a credit card and a desktop. We realized there was a booming solar market in Germany at the time, so we started to purchase solar panels and resell them to solar installers in Germany because the supply had not kept up with the demand in Germany. They needed more solar panels than they could get, so German companies were coming to U.S. companies to buy panels.

Q: Why did German companies have to go to U.S. companies to buy panels?

A (Adam Rizzo): We started off slowly, but as we built our business quickly, we entered into master distribution agreements. One of our early partners was General Electric. They were producing solar panels in Delaware and they gave us the rights to distribute the equipment. The German customers came to us and we sold them GE panels.

It was a great model for us because we were able to sell to German customers who had been doing solar for many years already. We were able to learn a tremendous amount from them to see how they were installing and building systems. It allowed us to build our capital in the company so we could enter into the distribution side of the business.

Q: Was it always the plan that you would get into the installation side of the business?

A (Adam Rizzo): I’d like to say it was. We’ve been able to adapt to the changing conditions of the solar industry. Nathan began installing residential systems in 2005, and we realized that it was a great business model.

We’ve continued to do the distribution, but we also realized there were great New York State incentives available through the New York State Energy Research and Development Authority. There were customers in our market who wanted to go solar. The people who were contacting us for installations knew quite a bit about solar already.

Q: Explain how a solar energy system is viable in a place like the Buffalo Niagara region, where it’s perpetually cloudy from November through March.

A (Nathan Rizzo): Power production from a solar system is a bell curve throughout the entire year. It produces much more during the summer, it dips down in late fall and winter and it picks back up in early spring.

After installation, a utility company installs a bi-directional, or a net meter. It measures the flow of electricity both coming into the home from the utility and leaving the home via the production of the system. For every kilowatt hour of production, the utility company basically credits you the delivery and all of the supply costs. Everything except the basic service charge.

To create a system that will produce 100 percent of a customer’s electric consumption, in the summer months, you’re producing much more credits that you’re consuming. Those credits will carry you through in the winter time. You’re basically creating a banking mechanism where you’re using them throughout the cloudy and snowy months.

Q: What about nonresidential markets?

A (Adam Rizzo): The next segment we really started concentrating on, after residential, was nonprofit installations. NYSERDA was giving, and continues to give, good incentives for nonprofits. So we were able to approach some of the nonprofits in our area and ask them if they wanted to go solar.

One of the first entities we worked with was the Buffalo Diocese. We were able to work with them and installed solar systems on 65 different schools and buildings. The majority are schools.

We approached the United Way and said we had a program to bring solar to nonprofits. We had a meeting, and that led to more than 200 nonprofits that we’ve installed solar systems for in our area. Every dollar that they save on utility costs is more money that they can use for their programs.

We also bid on projects through the New York Power Authority and one of the projects was at the University at Buffalo and its solar array. We’ve probably done 30 or 40 projects with the Power Authority. That took us to being more of a statewide installation company.

Q: How much work do you do with governments?

A (Nathan Rizzo): We’ve done over 90 municipal projects throughout the state, in places like Amherst, Clarence, Evans, Brant, West Seneca, Newfane.

Q: Why did you branch out into making your own mounting equipment?

A (Nathan Rizzo): When we started working on all these flat-roof projects, it created a need for ballasted racking systems, where the systems are weighted down with concrete cap locks, as opposed to making penetrations into a roof. When you’re working on a flat roof, penetrations are really a no-no.

We started working around with a couple different prototypes and we got it to a point where we developed a system that went up in a flash. We were using it in-house, but in 2011, we said this product has helped us so much, it’s got to work for other installers. We started selling our mounting equipment throughout the entire world. We have systems as far away as Japan, South America, the Netherlands, New Zealand and throughout the United States.

Q: What do you call that business? Where do you manufacture?

A (Nathan Rizzo): Dynoraxx. We contract manufacture here in Buffalo.

Q: How fast can you go with this racking system?

A (Nathan Rizzo): Extremely fast. It doesn’t require any tools. It cut our installation times by half or two-thirds. Time is money.

Q: Do you do utility-scale projects?

A (Adam Rizzo): We’re doing a 2-megawatt installation at the Cummins Engine Plant in Jamestown. Cummins Engine had no out-of-pocket costs to build this system. We worked with investors to build the system, and Cummins is charged a reduced rate for their electricity over a 20-year term.

Another project we turned on late last month at the Rochester Institute of Technology. Later this year, we’ll be building a 10.6-megawatt system on Long Island. That will be our largest system and the second-largest in the state, with 45 acres of solar panels.