Archive for Global

MAJOR FUNDING Through Micro-Investments

The new July/August issue of Solar Today contains an article by TSEAs Technical Director offering a new idea for a solar program within TVA. Micro-investments allow anyone to invest in a project because the cost of a single share is affordable. A recent micro-investment concept was developed by Muhammad Yunus, a Bangladeshi banker who won the Nobel Peace Prize in 2006 for his work in creating economic and social development for the poor. A similar concept, savings bonds, was used in the United States and other countries to finance costs for World War I and World War II. During World War II, half the U.S. population purchased approximately $186 billion in savings bonds. This investment accounted for nearly three-quarters of total federal spending from 1941 to 1945 — all from families whose average wage was $50 per week.

The Tennessee Solar Energy Association (TSEA), an ASES chapter, has as its mission the promotion of the widespread use of solar energy in the state of Tennessee. Unlike most states, Tennessee is served entirely by electric distribution companies who purchase power from the Tennessee Valley Authority (TVA). The TSEA will use the concept of micro-investment to provide opportunities to all ratepayers to invest in solar projects in Tennessee. The success of our endeavors in Tennessee will mean that the concept can easily be duplicated in other states.

Financing solar projects through micro-investments offers many advantages. First, consumers and businesses would neither have to finance nor build their own solar projects on their properties. This eliminates three barriers they often face: (a) unsuitable properties for solar because of trees or rooftop alignments; (b) building permits and grid interconnections; and (c) large financial investments with long payback periods. Second, by opening investment opportunities for all ratepayers, a micro-investment plan should attract customers who otherwise would or could not have considered their own solar projects. Third, micro-financing can be used for large solar projects to benefit entire communities, taking advantage of the lower overall costs of large-scale projects. Finally, micro-investments would provide large sums to utilities and other solar companies who might otherwise not be able to finance a solar project.

Proving the Model at TVA
In the Tennessee Valley, TVA is a closed system in which all 155 distributors buy power from TVA, making it an ideal utility for studying this micro-investment model. Moreover, as a federal power authority, TVA plays an important role in the Tennessee Valley as the regional stewardship agency and supplier of public power. TSEA envisions that TVA would establish a micro-investment program, achieving even greater economies of scale than the individual distributors could achieve.

A 2012 Hart Research survey, funded by the Solar Energy Industries Association, found that 92 percent of voters “believe it is important for the United States to develop and use solar power.” TVA, serving 9 million people in the Tennessee Valley, can play a large role in finding the relationship between how much the public says it wants solar energy and how much the public is willing to invest.

TVA’s aging coal-fired plants are more than 50 years old and are depleting TVA funds to meet increasingly strict air-quality standards. As a result, the TVA has little funding available for solar energy. Although TVA has a renewable energy program known as Green Power Providers, which provides long-term power purchase agreements, the program has not produced a bankable level of funding that has resulted in loss of jobs and statewide solar installers to look elsewhere for work. The small amount of funds allocated for the program were absorbed in the first trimester of this year.

As a federal authority, TVA is in an ideal position to undertake a micro-investment program. Under the TVA charter, the president can direct the U.S. Department of Energy to provide support and resources as requested by the TVA board, which is directed to make studies “in the application of electric power and a better balanced development of the resources of the region” (Tennessee Valley Authority Act of 1933, Section 10). Furthermore, TVA pays no property tax, has a plethora of sites where large solar installations can be located, knows where in its power system to best locate large solar farms to provide the greatest ROI, has the staff to manage the program, can handle the procurement actions and can set aside a percentage of the installations for local installers. Thus TVA can avoid all the soft costs that ordinarily burden solar purchasers. In addition, its purchasing power, backed by the aggregated micro-investments, will produce the lowest cost through competitive bidding.

I suggest to all our members and readers of this column to join ASES and help promote solar energy in their region.

Read the article and the entire Solar Today magazine

Outlook: Solar Panels for 36 Cents Isn’t As Low As You Think

The global PV industry’s recent past has seen wafer, cell, and module suppliers at the mercy of an inhospitable supply-demand imbalance throughout the global market. With supply consistently 200% of demand annually, c-Si module prices have fallen approximately 70% in two years. One positive externality of this cutthroat pricing is that manufacturing costs have fallen in line with pricing declines. This is mostly because pricing for key inputs further up the value chain has also fallen as a result of overcapacity and consequent margin evaporation.

Back in 2009/10, industry roadmaps were targeting $1.00/W module costs as a medium-term goal. With best-in-class Chinese producers approaching costs of $0.50/W in 2013, yesterday’s goals are no longer relevant today. However, as noted, the majority of cost reduction over the last two years has been driven by declines in consumables prices. This state of affairs has left both manufacturers and their customers with considerable uncertainty, and there is currently little consensus on what is a realistic goal for the module supply chain to set for itself over the next three to five years. This 112-page report on the latest in c-Si PV wafer, cell, module, and materials technology is the most recent analysis from GTM Research’s flagship supply-side practice, and aims to provide a competitive outlook on the leading technology and cost trends through 2017 across the global PV supply chain. The report explores existing and innovative technology advancements in ingot growth, wafer slicing, cell processing, and module assembly, as well as their impacts on efficiencies and manufacturing costs.

This article was taken verbatim from this site

TVA Cuts Back on Bellefonte Nuclear Plant While Residential demand spurs U.S. solar installations in 1Q13

The nation now exceeds 8.5 GW of cumulative installed solar electric capacity, of which 7.9 GW is PV. Solar nearly made up half (48 percent) of all new electric capacity installed in the U.S in 1Q13. Meanwhile in an effort to revive the stalled build at the Bellefonte nuclear power plant, the Tennessee Valley Authority is trimming the project’s budget by 64 percent and cutting 530 jobs at the facility, The budget for Bellefonte is being cut from $182 million to $66 million. According to the AP, the massive cutbacks call the entire future of the project into question.
The cutbacks come on top of a spate of bad news for the nuclear industry, culminating in the announcement last week that Southern California Edison was permanently closing the long-troubled San Onofre nuclear plant.

U.S. solar energy installations totaled 723 megawatts (MW) from January through March, a 33 percent increase from a year ago and the solar sector’s best-ever first-quarter performance. Residential solar installations rose 53 percent year-on-year to 164 MW, with the utility segment more than doubling to 318 MW. Third-party-owned solar residential systems made up two-thirds of all residential PV installations in California (exceeding non-residential for the first time), and 86 percent of them in Arizona. Residential solar has managed to expand, at times well into double-digits, for 12 of the past 13 quarters. The only top-tier residential market to shrink in 1Q13 was Arizona, which fell 9%. Average PV system costs were $3.37/W, a 24 percent drop over the past year, though that’s about 10 percent higher than the previous quarter because of fewer utility-scale projects coming online. Residential systems fell about 16 percent Y/Y (2 percent Q/Q) to $4.93/W, non-residential also fell 16 percent Y/Y (8 percent Q/Q) to $3.92/W, and utility system prices declined 26 percent Y/Y but only 6 percent Q/Q to $1.12/W. Note that there’s an especially wide range of installed PV prices by state, anywhere between $3-8/W.

Risks to distributed generation of solar PV are threefold, say SEIA and GTM Research:
Net metering revisited. As distributed generation expands, utilities are seeking to revise, cap, and even remove net metering. This will take different forms in different regions — and varying degrees of resistance or acceptance — but it will have major implications everywhere.
Utility electricity rate structures. How utilities set up their tariff structures, incorporating time-of-use pricing and fixed or volumetric charges, will have a significant impact on the economics of solar energy systems. “While net metering is currently a more public battleground, we anticipate that rate structures will soon follow behind,” they say in the report.
Who’s going to pay for it? Distributed generation could require more than $48 billion of investments from now through 2017 — far exceeding what’s been provided to date. There will be a need for new sources of capital, new financing models (think REITs and MLPs, and crowdfunding and community solar), and new investors in existing structures (tax equity). “Project finance could serve as a significant bottleneck to growth over the next four years,” they write.

original articles here and here

Why Master Limited Partnerships are a Lousy Policy for Solar, Wind, and Taxpayers

SLevy comment: This post is to present the rationale for not including renewables in the Master Limited Partnership legislation. So we have both pro- and con- arguments on proposed legislation so that you, the reader, can provide your opinion as to whether our federal legislature representatives in both houses should or should not support the MLP parity act. Send in your comments and we will post them on our site.

Master Limited Partnerships (MLPs) operate like publicly traded corporations, with publicly traded stock, but don’t pay income taxes. Most folks who’ve touted expanding MLPs to include renewable energy projects see this move as “leveling the playing field.” And it will. It will allow big energy corporations to avoid paying taxes on their renewable energy projects just like they do for pipelines. First, there are many powerful, regulated industries that would love a bite at this apple, like the existing electric and gas utilities. The cost to taxpayers from letting these hogs get to the trough is likely much, much larger than the opportunity for renewable energy. These big industries – with huge lobbying budgets – are not likely to miss the opportunity.

But even more important, the extension of MLPs to renewable energy is likely to reinforce centralized, corporate control of the energy system. Right now, renewable energy – particularly solar – is transforming the energy system. It’s turning energy consumers into producers, re-routing energy dollars back into community economies, and giving cities and towns more control over their energy future. Half or more of new solar power in the U.S. is being put on the rooftops of homes and small businesses. New community solar policies (like one just adopted in Minnesota!) are giving even more Americans a chance to have skin in the energy game and share in the profits of a transition to renewable energy.

The average American isn’t going to be a shareholder of a Master Limited Partnership, but they probably will pay a share of phantom taxes in their electric and gas rates if MLPs are expanded to other energy industries. Even if Congress miraculously limits the MLP expansion to just the renewable energy industry, subsidiaries of most of the large corporations in the energy business (Shell, BP, Exxon) are building wind and solar projects. These subsidiaries would certainly be reorganized as MLPs, giving them a tax advantaged opportunity to crowd out competitors (like community solar or other distributed generation) AND make larger profits off their renewable energy business.

John Farrell authored the original article

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.

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

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.

original article

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