Photo provided
This article was provided by HappyValley Industry, a site powered by Affinity Connection which showcases local technology companies. Read more and sign up for the newsletter at happyvalleyindustry.com.
Between 2020 and 2021, State College-based BAI Group’s revenue from its solar energy segment grew 10-fold, and President Jim Echard predicts the same rapid and significant growth over the next five years. The company, which had its beginnings in waste management, is a key player in the greening of the mid-Atlantic energy industry and continues to serve markets with its expertise.
“It was a turning point for our company,” Echard said of entering the solar market. He expects the company’s solar sales to grow three to four times in 2022 and double again over the next two years to eventually become an eight-figure business for BAI Group.
The right know-how at the right time
The company has always had the expertise to meet the most pressing needs. In 1986, John Blazosky founded the company – Blazosky Associates Inc. – while working as a civil engineer for another consulting firm. At the time, the waste industry was ripe for opportunities for waste management consultants to assist landfill owners in complying with changes to the Pennsylvania Solid Waste Management Act, originally passed in 1968 and amended in 1980. Blazosky’s early customers included landfill owners and mining companies.
To handle the multi-faceted process of locating and permitting a landfill or mine, the company grew to include geologists, environmental engineers, wetland scientists and more. According to Echard, BAI Group still counts mining and waste companies across the state, and particularly in central Pennsylvania, among its top customers. Blazosky’s services have been expanded to include “traditional environmental consulting” including environmental assessments, site investigations, wastewater permits and site remediation. The business also included civil engineering as a standalone service or to complement other service areas.
Echard joined BAI Group in 1998 as Project Manager and worked his way up to VP in 2012, becoming President in 2018. A civil and environmental engineer by training, he studied at Penn State and graduated in 1994 with a master’s degree. Blazosky retired in 2011 and passed on his legacy through an internal sale.
Growing into renewable energies
According to Echard, renewable energy development grew organically from BAI Group’s landfill work. “Energy is not necessarily new to us,” he said. “Over twenty years ago there was a push in waste management to do something with landfill gas other than collect it and incinerate it.” Landfill gas, which consists of methane and carbon dioxide, can be used to generate electricity, power a nearby industry, or cleaned to be sold as “pipeline-quality natural gas,” he said. Blazosky learned through experience to design landfill gas reuse plants. BAI’s expertise expanded to solving the problems associated with the use of this resource.
The Alternative Energy Portfolio Standards Act of 2004 (Act 213) required “electricity distribution companies and power generation suppliers to include a specified percentage of electricity from alternative sources in the generation they sell to Pennsylvania customers.” Here, too, the BAI Group was well prepared with its civil engineering services for customers and evaluated the feasibility of wind tower locations. The company designed the robust infrastructure required to build and operate wind towers.
As it grew into the renewable energy market, BAI Group continued to look for ways to expand, according to Echard. The company wanted to acquire physical assets and maybe even develop a residual income stream to expand its business. The fuse for explosive growth was burning; it was only a matter of time. A seemingly typical call from a salesperson looking for customers was the unexpected accelerator.
Sel Edor attended Penn State University and received his bachelor’s degree in Information Science and Technology in 2009. Even a cursory glance at his LinkedIn profile suggests a strong entrepreneurial bent. Echard described Edor as “foresighted, thinking outside the box, always asking why not?”. ”
Edor was working as a sales and marketing director for a local solar company when he called a BAI Group landfill customer. He proposed the idea of installing a solar system on the landfill. The client sent him to Echard. The two met to discuss placing a solar array at the landfill, but they soon realized there were other options for solar arrays. As BAI Group began investing resources to embrace the opportunities of solar energy, Edor joined the company in 2019 as Renewable Energy Market Director.
Solving the solar problem for medium markets
The solar power generation market can be divided into segments based on performance. Residential and commercial arrays generate up to 250 kilowatts (kW). Commercial and industrial plants generate 2 megawatts (MW) or more. And market or power plant sized arrays generate 20 MW or more.
But in the mid-range between 250 kW and 2 MW, financing projects can be difficult. Larger financial companies such as banks can finance a solar system with more than 2 MW. Banks and solar installers can provide loans for residential and small commercial solar systems. But solar systems for small businesses and non-profit organizations require atypical and well-designed financing arrangements.
Many players are involved in the installation of solar systems, which increases development costs. Also, “Most people don’t understand solar at all. And that’s okay. Neither do I,” Echard said.
BAI Group solves these and other problems for the underserved niche in the 250kW to 2MW range, occupied by small businesses and non-profit organizations such as schools and local governments. Smetric Investment Group is a private investment firm and shareholder of BAI Group. The group provides consulting and financing that enables BAI Group and its customers to build solar systems in this niche.
Vertical integration from inception to financing has enabled BAI Group to reduce its costs to the point where it can directly compete with solar installers. BAI Group presents educational sessions for school boards and other entities to help them understand how solar energy works (or doesn’t work) for them. BAI Group evaluates real estate to determine if it makes economic sense to install a solar system. Then the team explains why it makes sense or not, and advises accordingly.
The company also leverages unique project financing structures to help nonprofit organizations take advantage of tax credits and depreciation by creating a separate entity to own the solar array. After about six years, the array may or may not be sold to nonprofit organizations at a reduced cost, depending on the organization’s goals. Power Purchase Agreements are created to allow customers to take advantage of cost savings from reduced electricity bills. Echard said, “Most of the time we can structure deals in a way that immediately saves the customer money.”
Despite its significant growth in the solar market, the company continues to serve customers in waste management, where it started, as well as environmental permitting, shale gas development and open pit mining.
This story was originally published March 6, 2022 5:00 am.
