Archive for May 30, 2013

Utilities weigh getting into solar installation business

Some U.S. utilities are looking at getting into the solar rooftop business as the installations are creating an increasing threat to their business model.
The Wall Street Journal reported companies such as American Electric Power co. and Southern Co. are looking at making the move.
Arizona Public Service Co. has only a rooftop program for government and schools. Salt River Project has built a large solar system and allowed people to buy into it instead of getting rooftop solar.

original article

update: An appropriate quote from an article in the Forbes article: “The electric utility business model is broken. Rather than burn the Earth in political battles over net metering, we should be reimagining the regulatory compact between utilities and ratepayers and regulators.” to which I say Amen.

Tennessee Senators – Level the Playing Field of the Master Limited Partnership Legislation

Senator Alexander is quoted in a National Journal article as acknowledging climate change and the need to reduce carbon pollution. Two of his “four grand principles” includes ending the obsession with taxpayer subsidies and strategies for expensive energy and allowing marketplace solutions to create an abundance of clean,cheap, reliable energy. Right now taxpayers are subsidizing energy sources including all fossil-fuels and one wonders if our two senators are willing to eliminate all subsidies for all energy sources. The United States taxpayer is fossil fuels’ largest benefactor at $502 billion in 2011. That $502 billion is just over 3% of the US economy, currently being given away to big fossil fuels companies. Now let’s talk about leveling the playing field for energy choices based on Senator Alexander’s desire for clean, cheap, reliable energy. Depends on how you choose to compare these choices. For example, the industry uses “Grid Parity.” “Grid Parity” is defined as the point when PV-generated electricity becomes competitive with the retail rate of grid power. TVA has stated that it expects grid parity for solar in the valley by 2016. With the cost of solar energy decreasing and the cost of traditional power increasing, the abundance of clean, cheap, reliable energy will favor renewables after 2016 which is less than 3 years away.

Then there is the “Levelized cost of energy” (LCOE). LCOE is the minimum price at which energy must be sold for an energy project to break even. Typically LCOEs are calculated over 20 to 40 year lifetimes, and are given in the units of currency per kilowatt-hour, for example USD/kWh. Solar’s LOE uses a life of 20 years. We know that is an understatement for the useful life of solar based on monocrystalline silicon based panels. First, the panels are warranted to have a 80% output at the end of 25 years. Second, studies of 30+ year old panels showed no degradation. A more rational life of the premium solar panels should be either 30 or 40 years in life. This drastically reduces the LOE for solar.

We can further decrease cost of solar by giving it the same tax benefits as all the other energy fuels. This can be done by including renewables in the recent legislation offered in the house and senate. In the senate the legislation is called “The Master Limited Partnerships Parity Act.” The Master Limited Partnership includes all fossil-fuels but not renewables. Both houses have bi-partisan support for the addition of renewables. In a Duke study, a baseline LCOE for all energies included in the MLP showed a decrease in LCOE of 5 cents per kilowatt-hour without federal tax credits. In addition the inclusion of renewables in the MLP legislation would reduce the cost of financing of renewable energy projects by that same 5 cents per kilowatt-hour. Today,the cost of financing makes up an ever-greater fraction of the total cost of renewable projects by as much as 50% according to Brookings.

Should the federal government continue research into solar photovoltaics? The answer is yes. The aim should be to increase the efficiency of future solar systems while keeping close control of the cost of manufacturing.

Senators Alexander and Corker, support the Master Limited Partnership Parity Act and hold to Senator Alexander’s principal of to create an abundance of clean,cheap, reliable energy.

Master Limited Partnership Parity Act – What It’s All About

In the race to capture the economic benefits of the growing clean energy sector, the Master Limited Partnership Parity Act would provide an opportunity for U.S. businesses to mobilize private capital and better compete. It would provide the same tax treatment for investments in clean energy and fossil fuels . Sen. Chris Coons (D-DE) introduced the bipartisan bill today with original co-sponsors Jerry Moran (R-KS), Lisa Murkowski (R-AK), and Debbie Stabenow (D-MI). Congressmen Ted Poe (R-TX), Mike Thompson (D-CA), Peter Welch (D-VT), Chris Gibson (R-NY), and Cory Gardner (R-CO) co-sponsored companion legislation in the House.

“We applaud this bipartisan group of co-sponsors on the introduction of the Master Limited Partnership Parity Act,” says Phyllis Cuttino, director of Pew’s clean energy program. “Our research indicates that nations with consistent, transparent clean energy policies do better in attracting private investment.”

If approved by Congress, this tool could lower financing costs for clean energy projects, some by as much as 50 percent, according to Recycled Energy Development, a waste energy power producer. The market value of the master limited partnerships has grown to about $370 billion The bill is supported by clean energy businesses (PDF), labor and environmental groups, and policy organizations.
A master limited partnership is a business structure that has the tax advantages of a partnership but whose ownership equity can be traded as easily as public stock. Energy projects qualifying as a master limited partnership have access to low-cost capital and liquid investment opportunities as well as a relatively high rate of return for investors. Master limited partnerships have existed since 1981 and are available to investors in fossil-fuel extraction and pipeline projects.

By expanding the list of qualifying projects to include solar, wind, geothermal, and other clean energy and transmission technologies, renewable-power projects could access new financing markets, thereby increasing investment and deployment of these clean technologies.

original article

Returns on investing in solar has banks and investors funding distributed solar

SLevy: Distributed solar is disruptive to electric distributors, especially in regions with high power rates. Solar will accelerate installations, a fact that must be factored into the future business plans of our distributors here in the valley. To support this statement Edison Electric Institute recently published a report entitled “Disruptive Challenges: Financial Implications and Strategic Responses to a Changing Retail Electric Business.” TSEA offers distributors its services in understanding the impact and has suggestions towards solutions to avoid faced with unpleasant alternatives.

There were a record number of solar panels installed in the U.S. on rooftops and on ground-mounted systems in 2012. Now both traditional financing companies and new types of investors are starting to get in on the trend of providing the funds for the high upfront costs of installing solar panels, in exchange for making some money back several years down the road. But the potential to make money in this way has only just started.

Solar leases are a contract between the building owner and SolarCity, whereby SolarCity pays the upfront cost of installing the system, owns and maintains the panels, and the building owner pays for the monthly electricity for the power from the panels over around 20 years. As Ucilia noted on GigaOM Pro today, the residential solar leasing market alone is expected to grow from $1.3 billion in 2012 to $5.7 billion in 2016, according to GTM Research.

SunPower said earlier this month that demand for its residential solar leases is far greater than the money available to finance them.

It’s not just banks and corporate do-gooders that want the opportunity to make a decent return — some 10 to 12 percent in some cases. Crowd-funding is starting to appear as an interesting blip on the radar. Startup Solar Mosaic says that it’s now raised $1 million from its crowd-funders for its solar panel systems, which offer around a 4.5 percent annual yield.

original article

A Second California City Establishes a Solar Mandate

SLevy: The price of electric power in parts of California is as high as 35 cents per kilowatt-hour. A strong motivation for solar whereas Tennessee has a lower price of electricity at the present. The motivation here in Tennessee is improved air quality and a buffer against future costs with other forms of electric power generation.

The town of Sebastopol, in the apple- and grape-growing rolling hills of western Sonoma County, is following suit with a much more aggressive ordinance, suggesting that solar-by-fiat might be more viable as policy. In Sebastopol, a system would also qualify if its output meets three-quarters of the building’s electrical load on an annual basis. The ordinance also includes a provision that allows officials to exempt buildings from the requirement if a site isn’t conducive to solar, but a fee or other energy-saving measures could be required.

Mayor Michael Kyes told the Press-Democrat in nearby Santa Rosa that Sebastopol, with a population of around 7,500, already had some 1.2 megawatts of installed solar capacity. “This ordinance will add to it,” the mayor said. According to the Press-Democrat, there was a citizen objection to the solar requirement registered at the Sebastopol Council meeting; someone said “mandatory sort of implies coercion” (a sentiment it’s hard to argue with). But of course all manner of building requirements are essentially coercive, and Councilman Robert Jacob seemed to capture the sentiment of the town leaders when he said that “this ordinance is not only cost-saving…it’s the responsible thing to do.”

original article

Why is SunPower Doing So Well While Others Fail?

SLevy: Every solar investor wants to maximize its return on investment. In my judgement the reason for Sun Power’s success is they provide a product with the greatest return on investment over the long term. What I mean by long term is tens of years and beyond. Their panels produce the highest output power per area of any other manufacturer. We know that the life of the premiere monocrystalline panels is beyond 40 years. Using 40 years in computing the Levelized Cost of Energy results in more realistic results in cost per kilowatt-hour.

PV energy provider (PVEP) SunPower has revealed that demand exceeded its ability to supply product and services in the first quarter of this year.

The PVEP reported that it had exceeded revenue, gross margin and earnings forecast for the first quarter of 2013, while generating significant free cash flow of US$216 million, including lease financing, which was sold out in the quarter.

SunPower noted that due to several massive PV power plant projects in full swing in the US, strong demand for lease financing rooftop business in the US and ongoing PV module partnership success in Japan that was set to continue throughout the year, it was sold out for the year.
Management noted that its project development business was on course to provide US$3.5 billion in revenue and approximately US$1 billion in gross margin from 2013 through 2016.
Importantly, SunPower said that during the first quarter, the company was awarded 65MW of rooftop projects in France during a recent tender process, which had been supported by majority company owner, Total.

With demand increasing, SunPower said that it increased cell production in the quarter to 208MW, up 36% from the previous quarter. SunPower recognised 172MW of sales, while it shipped 186MW. Total module production capacity remained at 1.2GW. Full capacity was expected to be reached in the second half of the year.

original article

The level of carbon dioxide reached a concentration not seen on the earth for millions of years.

Scientific instruments showed that the gas had reached an average daily level above 400 parts per million — just an odometer moment in one sense, but also a sobering reminder that decades of efforts to bring human-produced emissions under control are faltering.

The best available evidence suggests the amount of the gas in the air has not been this high for at least three million years, before humans evolved, and scientists believe the rise portends large changes in the climate and the level of the sea.

Carbon dioxide rises and falls on a seasonal cycle, and the level will dip below 400 this summer as leaf growth in the Northern Hemisphere pulls about 10 billion tons of carbon out of the air. But experts say that will be a brief reprieve — the moment is approaching when no measurement of the ambient air anywhere on earth, in any season, will produce a reading below 400.

“It feels like the inevitable march toward disaster,” said Maureen E. Raymo, a scientist at the Lamont-Doherty Earth Observatory, a unit of Columbia University.

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REAP funding of $70 million annually through fiscal-year 2018

Solar PV for farming

note from SLevy: At this moment TVA is no longer accepting applications for its Green Partners program for this year. The alternative for installers is to:
1. look for work out of state
2. look for niche applications which could include: agriculture, highway signs, corrosion protection, outdoor displays, medical equipment support, mobile emergency power support, military installations and developers who want to sell solar assisted homes without TVA support.

U.S. Sens. Al Franken, D-Minn., and Tom Harkin, D-Iowa, introduced energy legislation on Monday to be included in the 2013 Farm Bill.

According to Franken, the Rural Energy Investment Act will help farmers, ranchers and rural communities by encouraging the growth of agricultural energy technologies, including biofuels and renewable energies.

The proposal includes the Rural Energy for America Program (REAP), which Franken included in the 2012 Farm Bill that passed the Senate. Franken says the program helps agriculture producers and businesses in rural areas invest in energy efficiency and renewable energy projects so they can cut electricity bills and earn additional income by selling the energy they produce.

original article

Solar farm project launches in Kingston, TN

PHOTO BY BOB FOWLER

KINGSTON — This city is getting into the solar power business, and it’s not costing taxpayers a dime, Mayor Troy Beets said.

In a cooperative venture with a Nashville company, 200 solar panels are being installed behind the city’s water treatment plant on Highway 58 South, the mayor said after a brief ceremony Tuesday at the facility.

Another 800 panels will be put in place in July on a 1.38-acre tract of city-owned land off James Ferry Road near the plant.

“Our only skin in the game is the property,” Beets said.

Combined, the 1,000 panels should generate the equivalent of enough electrical power to operate the water treatment plant, which has about a $6,000-a-month electric bill.

Full Article

New Music City Center Solar Project

LightWave installs 211 kW Solar on New Music Center

Construction on the $585 million facility began in January 2010 and was completed on April 30, 2013. The Music City Center totals 2.1 million square feet, double the space available in the current convention center. Already more than 100 meetings and 800,000 room nights have been booked.

Project completion will be celebrated on May 19 and 20 at the Music City Center Grand Opening with Nashville Mayor Karl Dean. Celebration includes open house tours, free street party and concert featuring Sheryl Crow, The Time Jumpers with Vince Gill, Fisk Jubilee Singers, and more. Major Dean will give his State of Metro address on Monday, May 20 at 10 a.m.

LightWave Solar recently completed the installation of a 211 kilo-watt (kW) solar system for the Music City Center, and it is the largest solar installation in Nashville.

Installed within the guitar shaped structure on the roof, the system consists of 845 solar panels and four inverters weighing 1,800 pounds each. The system will generate approx. 271,000 kilowatt-hours per year, enough electricity to power the electric vehicle charging stations and lighting for the building. Over 25 years, the clean electricity will offset nearly 5,000 tons of carbon dioxide emissions, the equivalent of taking 920 cars off the road.

original release