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Solar energy industry is flourishing in Mass.

Incentive programs are fueling a boom for alternative energy source in the Bay State

Workers from Solect Energy Development installed solar panels on a commercial building in Northborough.

JOANNE RATHE/GLOBE STAFF

Workers from Solect Energy Development installed solar panels on a commercial building in Northborough.

Massachusetts is no California when it comes to sun. But that isn’t stopping the solar energy industry from flourishing here.

Massachusetts, better known for long, cold winters, gloomy springs, and gale-driven nor’easters, is undergoing an unlikely solar power boom, attracting solar companies from around the country that are installing systems for homeowners, businesses, and institutions.

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Only California has a better solar market than Massachusetts, which tied Hawaii in rankings by Ernst & Young, the Big Four accounting firm that tracks the alternative energy industry. Massachusetts was the only northern state to crack Ernst & Young’s top 10, beating Florida (the Sunshine State), Arizona (home of the Sun Devils), and New Mexico (sun symbol on the state flag).

“It’s not a matter of how sunny it is,” said Michael Bernier, a senior manager at Ernst & Young. The “thing Massachusetts has been really good at is setting up an environment that helps renewable energy projects get done.”

That environment starts with New England’s traditionally high energy costs that can make photovoltaic systems more competitive here. Meanwhile, the falling solar panel prices, which have plunged more than 50 percent in the past two years, have combined with solar-friendly local policies to make solar installations even more attractive to homeowners and businesses.

In the past two years alone, solar energy-generating capacity in the state has more than doubled to 105 megawatts, ­according to the state Department of Energy Resources. That’s enough to power at least 15,750 homes.

The number of solar installation firms in the state has also exploded, to nearly 200 last year from about 43 in 2007. In total, state energy officials estimate that more than 1,300 solar energy firms — installers, manufacturers, and others — operate in Massachusetts, employing about 14,000.

In the past two years alone, solar generating capacity in Mass. has more than doubled, officials say.

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SolarCity of San Mateo, ­Calif., a six-year-old installation company with 1,800 employees nationwide, entered the Massachusetts market in early 2011. The company installs solar panels at no cost to customers, then sells them power generated by the system, which SolarCity continues to own. The company is then able to take advantage of federal and state subsidies.

Ed Steins, SolarCity’s regional director, said the company already services more than 800 residential and commercial buildings in Massachusetts and has tripled its local staff to 45 from 15 since September.

Among SolarCity’s customers is Tom McDougall, 53, of Whitman. SolarCity installed a 6-kilowatt system on the roof of McDougall’s two-story Colonial. Since the system began operating in February, McDougall said, he has cut his electricity bills in half, paying SolarCity about $60 a month for electricity, compared with the $115 a month, on average, that he paid his utility.

“I’m starting to reap the benefits of it,” McDougall said.

The state has done much to promote growth in the solar sector as it chases a goal of installing 250 megawatts of solar generating capacity by 2017, enough to power at least 37,500 homes.

For example, the state offers rebates averaging about $2,000 per installation through programs such as Commonwealth Solar, which is funded at about $1 million a quarter through a state energy fund.

In addition, Massachusetts has created a market for solar renewable energy credits, which solar project owners can sell to power plant operators to meet state regulations aimed at reducing greenhouse gases.

The money from those sales helps further lower the cost of solar power.

Such policies have made solar economically competitive in the state, despite less than optimal sun, said Jim Dumas, principal at Solect Inc., a Hopkinton company with 10 employees. Solect is currently installing a 475-kilowatt solar system atop a commercial building in Northborough.

John Parsons, president of Parsons Commercial Group, one of the Northborough building’s owners, said a federal grant subsidizing 30 percent of the project’s cost made solar panels “very attractive.”

“We’re basically going to resell the power to our tenants at a discounted rate,” Parsons said. “It’s a win for us because it’s an income stream, and at the same time we’re doing something environmentally positive.”

Municipalities are also making solar power more attractive. In Boston, the city has cut permit fees for solar installations by about 70 percent, said James W. Hunt III, the city’s chief of environmental and energy services.

The permit application process can also be completed online, Hunt said, saving installers time and money.

These efforts are part of an initiative to get 25 megawatts of solar installed in Boston by 2015. “We’ve been working with industry to make Boston one of the clean energy capitals of the country,” Hunt said.

Vivint Solar, a Utah-based installer that entered the local market earlier this year, said it has found permitting projects in Boston and other Massachusetts cities so easy that it is already planning to expand its workforce here to handle a growing list of projects. Vivint Solar has 35 employees in the state, said president Tanguy Serra, but is likely to need “a couple hundred employees pretty quickly.”

“Boston has a highly sophisticated permitting process. You can get your permit practically the same day, and you can do it online,” Serra said. “In other places like Woburn, Lowell, they’re not online but they are nonetheless very fast.”

Richard K. Sullivan Jr., the state’s secretary of energy and environmental affairs, said the state also has benefited from the diversity of its solar industry, which includes panel makers, solar equipment manufacturers, and installation firms.

“The jobs that are being created in the industry are high-end research and development jobs, but they’re also green collar jobs [for] installers, maintenance, and sales,” Sullivan said.

Take PanelClaw, a nearly five-year-old North Andover company that makes the racks to which solar panels are mounted. Its employees range from warehouse operators who ship and receive products to a PhD who oversees engineering, said president Costa Nicolaou.

“There are now almost a million solar panels installed with our product around the world,” Nicolaou said.

Despite such success, Nicolaou acknowledged that solar energy still needs subsidies and other friendly policies to make it competitive with traditional power generators and utilities. But, he said, the sector is maturing quickly.

“We are so close to having an industry that can stand on its own feet,” Nicolaou said, “and can become truly global.”

Erin Ailworth can be reached at eailworth@globe.com. Follow her on Twitter @ailworth.
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