Posts Tagged ‘Solar Energy Industries Association’

Renewable Energy Industry Meets Challenges Head On

Thursday, October 27th, 2011

The renewable energy industry is facing serious challenges from competition subsidized by foreign governments and restrictive regulations on the home front.  This was the consensus at the recent Solar Exchange East 2011, attended by academics, solar entrepreneurs, engineers, investors, supporters and government officials at the McKimmon Center at North Carolina State University in Raleigh.

Larry Shirley, director of the Green Economy program at the North Carolina Department of Commerce’s Energy Division, said that “Policies and incentives are the building blocks” for the solar industry.  Participants generally called for an end to government preference for fossil fuels, while critics believe the traditional means of letting private investors and the market dictate the industry’s direction is the optimal policy.

“Subsidies are basically a waste of taxpayers’ money, a form of corporate welfare,” said Roy Cordato, the John Locke Foundation’s vice president for research and resident scholar and one of the critics.  “These (renewable energy ventures) are grossly inefficient.  If they weren’t, they wouldn’t need government subsidies.”

“This is a robust environment,” said Rick Myers, director of the Solar Vertical Market Management program for Siemens.  “The U.S. solar market grew 67 percent, from $3.6 billion in 2009 to $6 billion in 2010.  Solar electric installation In 2010 totaled 956 megawatts.  There’s no doubt the U.S. government needs to get more involved in this effort from a policy standpoint.  The solar panels are 50 percent of the cost for installation and these prices are going way down.  The fact of the matter is the competition is extremely difficult in that area.  It’s coming from the Pacific Rim and China.”

In a related move that boosts renewable energy, a U.S. Treasury Department grant program that pays for up to 30 percent of a solar project’s costs would add 37,394 jobs to the economy in 2012 has been extended for one year, according to the Solar Energy Industries Association (SEIA).  The program, part of the 2009 economic stimulus package, was due to expire at the end of 2011 after an initial one-year extension was passed by Congress last December.  A second extension will boost solar jobs by 12 percent as developers increase installations by 2,000 megawatts, or enough for about 400,000 homes.  More than 100,000 Americans currently work in the solar industry, double the number in 2009, said Rhone Resch, SEIA’s chief executive officer.  “Much of the jobs and industry growth has come out of that program,” Resch said.  “The last thing the government should do in a fragile economy is eliminate a tax break that creates jobs.”

With the grant program, developers can obtain the equivalent amount in cash and write off assets more quickly.  The solar industry has received more money from the grant program than any other renewable energy sectors with the sole exception of wind.  “The (program) has been the most effective policy in driving economic and job growth in the past two years,” Resch said.  “As we continue to slog through a sluggish economy, the tax equity market remains in a much smaller capacity than where it was in 2007.”

Writing for Renewable Energy, Elisa Wood says that “We hear a lot about the job-building benefits of renewable energy when it draws manufacturers and developers to local communities.  Less talked about are those who arrive well before the shovels, steel, factories and jobs.  These are the green-energy entrepreneurs – the creative thinkers and risk takers responsible for the rise of clean energy ventures over the last decade.  Others entering the industry are veterans of energy, finance, agriculture, telecommunications, high tech, science, transportation, construction, nanotechnology and commerce, all drawn by enormous opportunity, as the largest economies in the world spend an expected $2.3 trillion over the next decade to revamp industrial-age energy apparatus into cutting-edge technology.  Green energy entrepreneurs emerge from throughout North America, Europe and Asia, but they tend to congregate in high-tech regions such as Silicon Valley, an area of California becoming as much about energy as it is the internet.  ‘You can’t throw a softball around here without hitting another solar company,’ says Dan Shugar, one of the solar industry’s early pioneers and now chief operating officer of Solaria, a Fremont, CA-based company that makes silicon photovoltaic products.”

Google Goes Green

Wednesday, July 6th, 2011

Google and SolarCity,  a rooftop solar-panel company announced a $280 million investment deal,  the largest such deal for home-based solar power systems in the United States.  The investment gives San Mateo, CA-based SolarCity the funding to build and lease solar power systems to as many as 7,000 to 9,000 homeowners in the 10 states in which it operates.

Established in 2006, SolarCity currently has 15,000 solar projects around the nation completed or under way.  Customers who want to have the firm’s solar system installed at their homes can pay for it up front; however, the majority let SolarCity retain ownership of the equipment and rent back the use of it through monthly solar lease payments.  By financing SolarCity, Google will recoup its investment through those lease payments.  “We hope to be seen as a model,”said Rick Needham, Google’s director of green business operations.  Needham didn’t discuss the deal’s terms, but said “these investments are designed to earn us a good return on our capital.”

“It allows us to put our capital to work in a way that is very important to the founders and to Google, and we found a good business model to support,” said Google’s Joel Conkling.  Google CEO Larry Page wants the firm’s operations to eventually produce no-net greenhouse gas emissions.  To achieve this, Google has invested in wind farms in North Dakota, California and Oregon, solar projects in California and Germany, and the beginning stages of a transmission system off the East coast to encourage the construction of offshore wind farms.  The SolarCity deal is Google’s seventh green energy investment, totaling more than $680 million.

Typically, a rooftop solar system costs $25,000 to $30,000, which is beyond the means of many homeowners.  Instead, solar providers like SolarCity, SunRun and Sungevity pay for the system with money borrowed from a bank or a specially-designed fund similar to the one that Google has created.  The resident then pays a set rate for the power generated which is lower than or approximately the same as local electricity.  Typically, s 5-kilowatt system will generate 7,000 kilowatt-hours of power annually, or about 60 percent of the household’s annual use.  The homeowner buys remaining electric power from the local utility, typically enjoys lower overall power bills and has some protection against potentially higher traditional electricity prices.  Electricity prices have not risen in recent months, but are expected to rise in coming years as the cost of increasingly stringent clean-air regulations are passed on to customers.  If the solar company is to make money and the homeowner save money, there must be a combination of high local electric rates, state and local subsidies, as well as low installation costs.  Then there is the matter of sunshine.  A house with solar panels should have a roof that faces South that is not shaded by trees or other buildings.

You have full flexibility in what you want to pay on a monthly basis,” said SolarCity CEO Lyndon Rive, who pointed out that homeowners are charged only for the electricity the company’s solar panels generate at or below market rates.  If the panels produce more power than the home uses, the consumer gets a credit.  “It’s actually a win-win,” Rive said.  “This industry is going gangbusters despite the economy,” said Danny Kennedy, founder of Oakland-based Sungevity.  According to Kennedy, the lease option his company started offering in March 2010 has pushed sales “through the roof.”  He expects to complete 30,000 leases in 2011, up from 10,000 in 2010.

California and Colorado accounted for more than a third of the residential solar market leases in the 1st quarter of 2011, according to a report from the Solar Energy Industries Association (SEIA).  The growth reflects that of the overall solar panel market, which expanded at an average annual rate of 69 percent since 2000, including 100 percent in 2010, according to SEIA, which expects the market to double this year.

Google has chosen to invest in clean energy projects because of the potential returns and the potential to impact the industry.   “We hope that Google’s leadership in the space will encourage other corporate investors,” Rive said.  There definitely is room for other investors to get involved: Fewer than 0.1 percent of American homes currently have rooftop solar panels, but that number is expected to grow to 2.4 percent by 2020, according to Bloomberg New Energy Finance. It’s highly likely that Google-financed companies like SolarCity will have a role in that growth.

The SolarCity project is not Google’s first venture into the clean energy market.  The firm has invested $168 million in California’s Ivanpah solar farm and another $100 million in the world’s biggest wind farm.  That is the $2 billion Shepherds Flat project,  near Arlington, OR, that will stretch over 77 square kilometers of north-central Oregon and generate enough energy for 235,000 homes.  The project, which will go into operation in 2012, is being developed by Caithness Energy.

Solar Panels Powering More U.S. Homes

Monday, March 21st, 2011

The year 2010 saw 956 megawatts worth of solar panels installed in the United States, providing a cumulative capacity of 2.6 gigawatts – enough to power 500,000 homes. Even though the Solar Energy Industries Association (SEIA) says solar is a fast-growing business, it still provides less than one percent of the nation’s electrical capacity.  In 2010, solar panels were a $6 billion business, a significant increase over the $3.6 billion reported in 2009.  Despite the growth in dollar volume, the global share of American photovoltaic installations fell in 2010, to just five percent of the world’s total from 6.5 percent in 2009.  Although demand is growing in the United States, other countries are adopting solar to the point where they are leaving the United States in the dust.

Not surprisingly, sunny California leads the nation in solar installations.  In second place was Jersey, followed by Florida, Arizona, Nevada, Colorado and Pennsylvania.  The six states accounted for 76 percent of solar capacity installed in 2010.

President Barack Obama is an enthusiastic supporter of renewable energy sources, and Congress extended their federal tax credits, originally set to expire at the end of last year, through 2011.  “This remarkable growth puts the solar industry’s goal of powering 2 million homes annually by 2015 within reach,” Rhone Resch, SEIA president and CEO, said.  According to Resch, “Achieving such amazing growth during the economic downturn shows that smart polices combined with American ingenuity adds up to a great return on investment for the public.  The bottom line is that the solar energy industry is creating tens of thousands of new American jobs each year.”

“Another doubling of U.S. installations in 2011 is likely, even in the absence of a substantial mid-year price decline,” said Shayle Kann, GTM Research’s managing director of solar research.  A Treasury Department grant program, which repays 30 percent of the cost of installing solar panels, boosted the number of projects. The price of installing photovoltaic systems fell by 10 percent for commercial and eight percent for residential consumers last year.  Other countries are cutting their subsidies this year, possibly leading to an Italy, the more suppliers are going to price more competitively in new markets, like the U.S., ultimately growing the market,” Kann said.

In addition to the United States, the leading nations that are adopting solar energy include Germany (9,785 megawatts); Spain (3,386 megawatts); Japan (2,633 megawatts); Italy (1,167 megawatts); the Czech Republic (465 megawatts); Belgium (363 megawatts); China (305 megawatts); France (272 megawatts); and India (120 megawatts).