The energy crisis of the late 1970s and early ‘80s was a period of economic turmoil in the United States, but for Mike Bailis, it was when the idea of solar power began bouncing around in his head. As oil prices reached $39.50 a barrel - $114.40 in today’s dollars when adjusted for inflation - and the Iran hostage crisis dominated the nightly news, Bailis realized solar power was a way to keep energy dollars at home.

Thirty-five years later, Bailis and his partner, Scott Maskin, have built SUNation, the largest solar panel installation company in Long Island, N.Y. The pair founded the company in 2003 after the local power utility, Long Island Power Authority (LIPA), began offering rebates to customers who installed solar systems. Maskin is a master electrician who was already running an electrical contracting business and Bailis was working for an HVAC company, so SUNation started as a part-time business.

The first year, the company installed only four systems. But consumer interest in solar continued to grow and SUNation’s sales doubled each year. The part-time business soon consumed Maskin and Bailis’ attention and became a full-time operation. By 2007, SUNation exceeded all other contractor installations in LIPA’s territory and it remains the market’s No. 1 installer today. “We’ve exceeded the expectations of our clients and

that’s why we’re successful,” Bailis says. As SUNation became a larger player in the

market, it began to attract more attention from solar system manufacturers. In 2008, the company became an authorized dealer for SunPower, a leading manufacturer of residential and commercial solar systems. Bailis says this helped propel the company even further ahead of its competition. “To be a SunPower dealer was very special because they had very high qualifications,” he explains. SUNation is now recognized as a SunPower “Elite” dealer, signifying that the company is in the top 5 percent of SunPower sellers and installers in the entire country.

In addition to SunPower, SUNation sells high-quality systems made by LG, Hanwha Q CELLS and Solar Edge. Most modules come with a 25-year warranty, Bailis says, and are designed to ward off natural deterioration caused by water permeation and other weathering. But to Bailis, the effort put into the installation is as important as the product itself. A properly installed system will generate more power

over time and keep wiring organized and clean looking. To guarantee the work is clone to its standards, SUNation uses its own internal crews for each project. “I’ve always believed that it’s so important to have a top-quality installation that works so well that all your clients will do is talk and rave about you,” he says.

The solar industry’s growth appears as limitless as sunshine. In 2013, SUNation installed 195 systems. This year, the company expects to install about 600 residential and commercial arrays that will generate a combined 6 MW of power. “We’ve been expanding like crazy,” Bailis says. Since 2014, the company has grown from 35 to 65 employees, and to accommodate the expansion SUNation has purchased a 20,000-square foot facility for warehousing and office space.

The typical home system ranges from 5 kW to 15 kW and still represents most of SUNation’s activity. “We’ve made our name in the residential market because that’s where the market allowed us to expand over the last 13 years,” Bailis says. Although most customers

As seen in…

Sun-Powered GrowthSUNATION’S REPUTATION FOR QUALITY SOLAR SYSTEM INSTALLATIONS

HAS MADE IT A LEADER IN THE LONG ISLAND MARKET

Becoming an authorized SunPower dealer helped propel SUNation’s growth.

631-750-9454 • www.sunationsolarsystems.com

are homeowners, the company has seen an uptick in commercial installations because the federal tax credit for solar panel installations is scheduled to expire at the end of 2016. One such project was a recently completed 828 kW system with more than 2,600 roof panels for the Perfume Center of America, a perfume wholesaler located on Long Island.

Industry Disruptions Since the beginning, SUNation has sold

systems to homeowners and businesses. The ownership setup offers the most advantages, Bailis says. The typical return on investment is 6.1 years and owners continue to see energy savings long thereafter. So when the leasing model emerged as a no-cost alternative for installations, Bailis dismissed it, figuring customers would rather have the full benefits and higher quality of the ownership model. “I haven’t made a lot of mistakes, but that was one of them,” he now admits.

The leasing model eliminated the upfront cost to customers while lowering their monthly energy bills - albeit not as much as ownership. For many, it was a question of improved cash flow more than long-term benefits, Bailis found. SUNation now offers both the ownership and leasing model, providing customers with a choice, with leasing making up about 5 percent of its installations.

An emerging funding model is property assessed clean energy (PACE) financing. Using PACE, municipalities issue bonds to raise money for the installation of solar panels or other clean energy improvements to homes. The municipality then provides a loan to the homeowner, who repays the amount through an increase on their property assessments for a set number of years.

“We expect ownership funding mechanisms to become more prevalent than leasing going forward, however, we expect operating leases to become the primary mover of commercial systems,” Bailis says.

Legislation - or the lack of it - on Capitol Hill could further change the direction of the solar industry, even as it approaches widespread acceptance. The Solar Investment Tax Credit (ITC) subsidizes the adoption of solar systems by providing homeowners and businesses with a 30 percent federal tax credit for residential or commercial arrays. Homeowners can also take a 25 percent tax credit on their state income taxes, creating a benefit for both solar companies and customers.

According to the Solar Energy Industries

Association, the ITC has helped solar installations grow by more than 1,600 percent since it was implemented in 2006. However, the tax credit will end next year unless Congress extends it, creating uncertainty in the solar industry.

Bailis is hopeful Congress will come to a bipartisan agreement to maintain the ITC in some way. Without an extension, projects that begin after June 2016 may not finish before the end of the year and would not qualify for the credit. Bailis says simply changing the law to cover projects started in 2016, not just those completed, would give companies like SUNation an extra six months of sales. Without the tax credit, he warns 100,000 people could lose their jobs as the industry trims down in response. “I don’t believe anyone that gets into office is going to jeopardize this industry,” Bailis says. “It’s too important now.”

With companies such as Elon Musk’s SolarCity and Vivint Solar raising the profile

of solar power, Bailis believes the industry is here to stay. SUNation’s current market may be limited to the 25-by-70-mile area of Long Island, but within that space there is plenty of work. Of the 1.1 million ratepayers on the island, Bailis estimates that 10 percent could receive a reasonable return for installing solar panels, creating 110,000 potential customers. The market has only 20,000 installations so far, leaving plenty of room to grow. “Under that circumstance, why do I need to go anywhere else?” Bailis asks.

Interest from the local government level is also fueling the company’s growth. In September, the town of Brookhaven, N.Y., selected SUNation as the exclusive installer for its residential and business group purchasing program.

As the industry matures, Bailis expects a service market to emerge for systems that will lead to sustained business without needing to expand to new regions. “We expect to do very, very well in our one island here,” he says.

“We’ve exceeded the expectations of our clients and that’s why we’re successful.”

Growing interest in solar power has allowed SUNation to nearly double in size since 2014.