Solar power business heating up
“I build buildings, and I own buildings, and I could see this was the next great thing,” Prost said.
The Prost family has been in the construction business for eight generations, and Vaughn, who lives in Columbia, now runs Prost Builders, a company based in Jefferson City with more than 60 years of experience building schools, churches and commercial facilities and renovating historic buildings.
Prost and Steve Ellebracht met at the University of Missouri, where Prost earned a bachelor’s degree in engineering before heading out of state to get a master’s degree; Ellebracht earned his master’s degree in chemistry before heading off to Dow Chemical.
Today, Prost, Ellebracht and Joe Rybak are partners in a company that designs and installs solar electric systems that turn the sun’s energy into electricity using photovoltaic systems — solar cells connected to create a solar module.
The company employs five people including Prost and expects to be in a hiring mode within the next few months to double the workforce.
How it works: The company makes money two ways. First, a system can be purchased and installed by a business owner or homeowner, which Prost said is much like designing and constructing a building for a client. The client owns it and uses the electricity it generates.
Or a company can have a system installed for free through a Power Purchase Agreement and buy the electricity produced from Missouri Solar for 20 percent less than the rate charged by the local investor-owned utility, such as AmerenUE or KC Power and Light. It’s like leasing a system. Missouri Solar earns money from selling the electricity generated and from rebates received from the investor-owned utility, which is required to buy a certain percentage of power from renewable sources. This arrangement is not possible in Columbia because Columbia Water and Light does not have the same solar incentives as the investor-owned utilities.
How can a system such as a Power Purchase Agreement make money for Prost’s company? After all, they’re installing the system for free. Prost said the business model is based on energy costs rising while the costs for producing renewable energy decline, which creates a profit for Missouri Solar Applications.
Missouri Solar Applications is benefiting from Proposition C, which passed in 2008 and requires investor-owned utilities to buy 15 percent of their energy demands from renewable resources by 2021. Other incentives such as the 30 percent federal tax credit help, too.
The new company is headquartered in Jefferson City and has a branch office in St. Charles.
At first, Prost said, trying to sell solar electricity generating systems was slow going. People thought it sounded flaky, and there weren’t many examples to point toward. Now, however, more companies and residents are taking an interest, he said. The company has a demonstration site in Columbia, located behind the Westlake’s on Worley Road at the city’s West Ash Pumping Station. The site is a partnership with Dow Chemical, Missouri Solar and the city of Columbia. The city is receiving the 5 kilowatts of power being generated, which is roughly enough to power an average home. Missouri Solar plans to install another array of solar shingles, a $50,000 project with the capacity to provide 11.8 kilowatts of power, later this fall if the City Council approves the $50,000 project.
The company has installed systems in Michigan, Jefferson City and the St. Louis area, and Prost said he expects business to continue to ramp up.
He said that as energy costs continue to rise, eventually the costs of renewable energy such as solar power, even without tax credits and rebates, will equal the cost of fossil fuel, a point referred to as grid parity. In some states, such as California, it already has happened, Prost said. He’s betting that will happen in Missouri as well.
The potential for his newest company, Prost said, is “straight up and vertical.”