Friday, July 24, 2009

Feed in Tarrif Updates

Variations on the policy that jumpstarted Germany’s decade-long boom in rooftop solar systems are taking root in more cities in the United States.
The policy, called a feed-in tariff, offers small-scale producers of solar energy long-term contracts (usually at above-market rates) for the electricity they sell. Last week, the Sacramento Municipal Utility District, which serves 1.4 million people, approved a feed-in tariff that allows homeowners with solar panels a chance to sign up for 10, 15 or 20 years of guaranteed payments. The policy will take effect next January. The city of Gainesville, Fla., adopted a feed-in tariff this spring, as did Vermont. Washington state also has such a policy, and Hawaii is currently considering one.
While feed-in tariffs are most closely associated with solar photovoltaic panels, utilities managing the programs in Vermont and Sacramento will also pay a set price for electricity generated from other renewable sources, like wind.

The Sacramento program is open to homeowners who are not participating in another program, called net metering, which allows anyone whose system is producing more electricity than they need to sell the excess back to the utility, thus reducing their electric bill. But once their bill falls to zero, the homeowner gets no more money from the system.
Jon Bertolino, a spokesman for the Sacramento utility, said that customers with land to spare had been asking whether, if they put up small solar farms, the utility would buy the excess electricity.
As long as they are not part of the net-metering program and not seeking the$2.80$1.90- to $2.20-per-watt ratepayer subsidy for their new panels under the state’s “Million Solar Roofs” program, Mr. Bertolino said, small generators can sell their power to S.M.U.D. The rates would depend on the time of day the power is generated, ranging from a low of 5 or 6 cents a kilowatt-hour to 30 cents on a hot summer afternoon; the size of eligible systems is capped at 5 megawatts (and the program overall has a 100-megawatt cap).
The Vermont law caps the size of individual systems at 2.2 megawatts. Solar energy fetches a fixed price of 30 cents a kilowatt-hour, and other forms of renewables fetch lower rates.

Friday, July 17, 2009

American Clean Energy Act -

With the real estate market in ruins, a full-blown recession laying waste to corporate spending and oil at less than half its 2008 peak, the solar industry that boomed from 2004 to 2007 has recently seen its fortunes reversed. So makers of photovoltaic power cells and their suppliers had reason to cheer when the House passed a global warming bill on June 26. The American Clean Energy and Security Act of 2009 comes loaded with programs designed to boost the nation's use of renewable energy -- and as a result, say analysts at Deutsche Bank, solar orders could grow at close to 30% for the next decade.
At the heart of the new law is a mandate to have the U.S. derive 20% of its electricity from renewable sources by 2020, compared with around 6% today. While some of that can come from energy efficiency measures and other clean sources such as biofuel and wind power, photovoltaics will likely benefit, writes Steve O'Rourke, who follows the industry for Deutsche Bank 

The bill would also introduce a cap-and-trade system that penalizes power generators who don't use renewables, while crediting those that do, allowing both sides to swap credits in lieu of paying fines. Solar would get an extra boost because small, site-specific power generators--a solar array on a building's roof, for example--would get triple the credits.
One overall effect of the bill would be higher electricity rates, which would make solar power more competitive with grid electricity, which currently costs, in general, far less than solar. A move toward electric vehicles, which the bill encourages, could also make electricity more expensive and solar more attractive.
That could result in growth of 27% a year for the next decade, in terms of installed solar capacity, says O'Rourke. The industry has grown at 40% a year for 10 years but Deutsche Bank forecasts it will shrink this year as the recession hampers spending.
Who stands to benefit the most? The current leading makers of solar cells in the U.S., including First Solar ( FSLR - news -people ), Evergreen Solar ( ESLR - news people ) andSunPower ( SPWR - news people ). Applied Materials (AMAT - news people ), create the machines that make solar cells while MEMC Electronic Materials ( WFR - news -people ) produces the ultra-pure silicon wafers that absorb sunlight and turn it into electricity. All have seen their share prices fall precipitously in the last year.
There are some major obstacles for solar power to overcome, warns O'Rourke in his report. First, the bill barely made it through the House, passing by a margin of seven votes; the Senate looks likely to make changes to the bill, especially to the contentious cap-and-trade system. Then there's the labyrinth of state laws and tax credits that could play a bigger role in some places than any nationwide legislation.
In some states that have, or are contemplating, even stricter requirements than the federal government, the impact could be minimal in light of local politics, O'Rourke notes. California is thinking of requiring a third of its power to come from green sources. But other states have no mandates in place and the federal rules could send solar orders soaring there.
Finally, solar power is still a nascent industry, despite decades of booms and busts, and remains highly dependent on subsidies from governments and enthusiasm from investors to develop more efficient products.

Saturday, July 11, 2009

Grants in lieu of Tax Credits -Thank the Maker

U.S. Treasury Issues ITC Grant Guidance, More Stimulus Money to Flow to Renewables

Washington, D.C., United States []
The U.S. Department of the Treasury and the U.S. Department of Energy on Thursday announced that an estimated US $3 billion will be made available for the development of renewable energy projects around the country and made issued the guidance businesses will need to submit a successful application.
"Solar stimulus is ready, set and … coming soon. The Treasury guidelines allow solar developers to prepare formal applications that will be accepted at a later date."

-- Rhone Resch, CEO, SEIA
Funded through the American Recovery and Reinvestment Act (Recovery Act), the program will provide direct payments in lieu of tax credits in support of an estimated 5,000 bio-mass, solar, wind, and other types of renewable energy production facilities.
The Recovery Act authorized Treasury to make direct payments to companies that create and place in service renewable energy facilities beginning January 1, 2009.
In previous years, the tax credit has been widely used. It is considered a successful incentive for encouraging the development of renewable energy. In 2006, approximately $550 million in tax credits were provided to 450 businesses.
To expedite implementation of the program, Treasury and Energy have made available the terms and conditions, guidance, and a sample application so that companies can prepare successful applications in advance of the launch of the web based application in the coming weeks – yet another tool designed to facilitate the timely flow of program funds to eligible businesses.
Reaction to the announcement within the renewable energy industry was positive accross the board on Thursday.
“Solar stimulus is ready, set and … coming soon. The Treasury guidelines allow solar developers to prepare formal applications that will be accepted at a later date. Once Treasury begins accepting grant applications, the solar industry will create tens of thousands of jobs and spur investment in the clean energy economy,” said Rhone Resch, CEO of the Solar Energy Industries Association (SEIA).
The American Wind Energy Association (AWEA) also welcomed the announcement from the Obama Administration.
“As with all industry, the economic conditions of the past eight or nine months have held US back. We believe these grants will help get our companies back on track, create more jobs, and balance our electricity portfolio with clean, renewable energy. The implementation of this program for renewable energy will be a welcome boost, just when we all need it,” said Denise Bode, AWEA's CEO.
VA Stimulus Money to Include Renewables
In addition to the guidance being issued for Treasury grants, the Department of Veterans Affairs (VA) is targeting nearly one-quarter of its $1.4 billion in funds from the American Recovery and Reinvestment Act to investments in clean energy generation and energy conservation.
VA will direct more than $68 million to renewable sources, including solar, wind and geothermal energy and has dedicated nearly $238 million toward retrofitting existing buildings to use energy and water more efficiently.
Those efforts, planned for 16 states and Puerto Rico, include solar-powered electricity and hot water energy systems at VA hospitals in Arizona, Texas and southern California; geothermal energy in Idaho; and wind turbines in several states.
To use energy and water more efficiently, facilities are replacing or upgrading windows and roofs; upgrading lighting to more efficient types; automating lighting controls and energy management systems; installing low-flow faucets and toilets and other water-conserving equipment; installing variable-volume air handling units; and enhancing boiler control systems and tune-ups.
"These measures, identified through regularly scheduled energy audits, facility condition assessments, and ongoing monitoring by energy engineers and other staff, are important steps in 'greening' VA," said Secretary of Veterans Affairs Eric K. Shinseki. "In conjunction with the investments in clean energy generation and other green projects that VA is making through its Department-level Green Management Program, these retrofits are key steps in reducing VA's environmental footprint."

Tuesday, July 7, 2009

CA Solar Market Doubling Every Year Despite Recession

California’s new solar capacity project almost doubled last year, a better-than-expected performance as the state aims to reach 3,000 megwatts from solar panels by 2017.
California added 156 megawatts in 2008, compared to 81 in 2007, despite the global recession. Energy officials expect another 150-plus megawatts added this year.
The state announced a far-reaching $3.3 billion effort to install 3,000 megawatts of new grid-connected solar panels by 2017, with the aim to curb development and production costs. The California Public Utilities Commission accounts for two-thirds — or $2.2 billion — of the budget with a goal of installing 1,940 megawatts as part of the 10-year California Solar Initiative program.
The California Solar Initiative has installed 13 percent of the goal for the 10-year program, with another 8 percent in applications pending during the first two years.
“This program is delivering on California’s commitment to the solar industry, which has an absolutely essential role to play in our efforts to address climate change,” CPUC president Michael Peevey said in a news release.

Friday, July 3, 2009

VC investments up in solar

Massachusetts, United States []
Greentech Media Inc. this week released quarterly data showing that venture capital investment in green technologies totaled US $1.2 billion in 85 deals in the second quarter of 2009. This is up from $836 million in 59 deals in the first quarter of 2009.
“The recent quarter’s balanced distribution of sectors that attracted capital underscores cleantech’s breadth and diversity of opportunity, one of the key drivers behind why cleantech remains an enduring area,” said Ira Ehrenpreis, General Partner at cleantech VC, Technology Partners.
Solar power was once again the leading investment segment at more than $330 million. Unlike previous quarters – the second quarter saw a much more balanced distribution across the various sectors with a marked increase in automotive (more than $202 million) and energy storage (more than $180 million).
One of the drivers for steady second quarter venture investment was the promise of stimulus monies offering startup investors a non-dilutive funding source. Meanwhile, early-stage and late-stage investments dominated, while mid-stage funding was harder to come by, and the average round sizes were slightly smaller. There were no giant $100 million+ solar or biofuel rounds as in 2008. For a full breakdown, see the image above.