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Arizona Utility, Installers
Clash Over Solar

A proposal submitted by the Arizona Public Service Corp. (APS) to state regulators asking for significant fees from customers who install residential solar power systems has drawn immediate and widespread fire from installers and others with a stake in the residential solar market.

The utility says that as a public provider, it has a mandate to provide electric capacity and distribution resources to all customers in its service area regardless of how much residential solar is installed. Furthermore, it argues that the current net energy metering (NEM) plan, which pays customers for solar power they feed into the grid, benefits those with rooftop PV systems at the expense of those without.

Solar installers, providers of popular homeowner solar leasing plans and other industry advocates see APS’ proposal as a threat to the future of residential solar in Arizona. The Arizona Republic reported a coalition of plan opponents rallied at the state capitol July 16 to voice their protests. Opponents say the APS plan, if accepted by the Arizona Corporation Commission, would stop the state’s solar sector in its tracks. Some go so far as to say that killing solar is the utility’s intent.

Industry analysts look at the sharp differences between APS and residential solar installers as part of a larger battle over how to incorporate rising distributed solar capacity into existing power structures - in both senses of the term. According to Fitch Ratings, integrating renewable and energy efficiency policies into an equitable customer rate design remains among the largest challenges facing the U.S. utility industry.

APS maintains it is trying to devise an equitable plan for all its ratepayers. Greg Bernosky, manager of renewable energy programs at APS, says the utility’s proposal reflects the costs and benefits of rooftop solar and NEM programs.

“We recognize that many customers and companies have made a significant investment in solar,” Bernosky says, adding that APS has about 18,000 customers with solar power systems. This capacity, he says, is due in part to NEM’s success in essentially jump-starting the solar industry. Costs for solar have come down, and solar customers no longer need preferred status: “Net metering is not meant to be a permanent state.”

William Craven, a spokesperson for California-based SolarCity and The Alliance for Solar Choice (TASC), an industry group formed in May to promote NEM programs, says APS’ plan is an effort to undermine the adoption of solar power, particularly at the residential level. Other TASC founding members include Sungevity, Sunrun and Verengo.

“What APS has proposed would seriously damage the industry,” Craven says. “The charges, which are estimated at $50 to $100 per month, would negate the customer’s investment in solar.”

Craven says that APS is overlooking the benefits of solar power in reducing and even deferring capital investments in power generation, transmission and distribution. Surplus solar power can be sent to neighbors without having to travel vast distances from remote power stations.

“The power companies have been a monopoly for a hundred years,” he says. “They do not have the incentive to consider the degree to which solar reduces their operating costs. As for solar customers, they ought to be able to bypass infrastructure and be credited for the surplus they provide.”

Quantifying that credit, however, is the rub. Many say the NEM transaction problem is industry wide and not unique to the dispute in Arizona.

“The big question is whether the net metering transaction is equitable,” says Eran Mahrer, executive vice president of strategy and resources for the Solar Electric Power Association (SEPA), adding that individual net metering models around the country are more or less equitable and have to be examined on a case-by-case basis. However, Mahrer points out that the net metering model was developed before solar power achieved its current levels of market penetration among residential ratepayers and is ripe for reform. “Now we are faced with the issue of solving the transaction problem.”

Mahrer, who co-authored a recent SEPA paper, “Ratemaking, Solar Value and Solar Net Energy Metering - A Primer,” says utilities are finding themselves in a position similar to the telecom industry in the early years of deregulation after the breakup of AT&T. Up-and-coming telecom companies had to wage legal battles to gain access to the existing infrastructure.

Arizona could well prove to be a bellwether for the future of NEM programs and distributed solar in the U.S. - Michael Puttré

 

LIPA Unveils 100 MW
Solar FIT Program

New York’s Long Island Power Authority (LIPA) plans to enable 100 MW of new solar capacity through its Clean Solar Initiative-II (CSI-II) program. The feed-in tariff (FIT) comes on the heels of the nonprofit municipal electric provider’s first solar initiative, which called for 50 MW of solar projects and is nearly fully subscribed.

Unlike the original program, CSI-II applications will not be on a first-come, first-serve basis. LIPA will examine eligible proposals on technical grounds and the bid price for offered electricity. In order to meet CSI-II requirements, a PV installation must be larger than 100 kW and no larger than 2 MW while interconnecting at a distribution voltage of no higher than 13.2 kV.

When CSI-II passes a period of public comment as per state regulations and if it is subsequently approved by LIPA’s board of trustees, the FIT application submittal process would commence at 8:00 a.m. Sept. 30 and would end at 5:00 p.m. Jan. 31, 2014.

Michael Deering, LIPA’s vice president for environmental affairs, told Solar Industry that lessons learned from the original CSI program informed the structure of the second.

“With CSI-I, we were overwhelmed, frankly,” Deering says. “As soon as it opened up at eight o’clock in the morning, we were swamped with online applications.”

Another reason to avoid the ticket-window approach is that some larger proposals with more challenging interconnect requirements ended up behind smaller, easier ones in the queue. Deering says he wants to make sure LIPA is able to give proposals all of the technical assistance they require to be successful in an efficient manner.

The first CSI program was organized by installation size into three tranches - essentially of small-, medium- and large-scale capacity. About a quarter of the smallest tranche - 5 MW of PV capacity for systems larger than 50 kW up to and including 150 kW - is still available, although Deering says he expects it to be filled before CSI-II comes online. The CSI-II program dispenses with carve-outs.

An interesting aspect of CSI-II is that those signed projects located on Long Island’s South Fork east of LIPA’s Southampton substation will receive a premium of $0.07 per kWh over the agreed rate. The premiums will go into effect if a total of at least 40 MW of projects are signed in the area. The policy reflects both the growing electricity demand and LIPA’s desire to minimize the capital costs required to meet it.

“Load growth, particularly at peak times, is a serious issue on the South Fork,” Deering says, observing that the Hamptons are one of New York’s most desirable summer holiday destinations. “The added value of solar is that we can defer transmission and distribution costs.”

Deering says the goal of CSI-II is to promote solar power and grow the solar sector on Long Island while providing for load growth in an efficient way.

LIPA says CSI-II will be one of three clean energy projects to be released before the end of the year. A second is to be another FIT to allow for wind, fuel cells and other renewable resources to fill an additional 20 MW block of renewable energy. For the third, LIPA is preparing a request for proposals for up to 280 MW of renewable energy.

- Michael Puttré

 

OPA Offers 951
Small FIT Contracts

The Ontario Power Authority (OPA) has offered 951 new Small Feed-In Tariff renewable energy contracts, representing 146.5 MW of power. Most of the contract offers are for solar photovoltaic projects.

Over 98% of the successful applications received municipal council support resolutions. The contract offers include 934 solar PV projects, 16 bioenergy projects and one hydropower project.

These contracts are being offered to successful applicants who applied during the Small FIT application period from Dec. 14, 2012, to Jan. 18, 2013. The OPA was authorized to offer up to 200 MW of contracts to these applicants; the remaining 53.5 MW of capacity will be added to the procurement target for this fall’s Small FIT application period.

Small FIT projects are generally those with a capacity of more than 10 kW and up to 500 kW.

As of the OPA’s most recent FIT program quarterly report, updated March 31, the OPA had contracts for 1,706 FIT projects, representing 4,541 MW. Of these, 616 projects had been completed and were delivering electricity to Ontario’s grid, with the rest in development.

Ontario’s FIT Program, enabled by the Green Energy and Green Economy Act of 2009, is a guaranteed pricing structure for renewable electricity production.

“The FIT Program is helping to transform our electricity system to be cleaner and more sustainable, as well as provide opportunities for more Ontarians to participate in the clean energy economy,” says Colin Andersen, CEO of the OPA.

 

U.S. Surpasses 10 GW
In Installed PV

Solar photovoltaic installations in the U.S. have broken through the 10 GW barrier, following strong market deployment since the start of 2010, according to a new report from NPD Solarbuzz. During the first half of this year alone, more than 1.8 GW of new solar PV capacity was installed across the nation.

The report says the U.S. is the fourth country in the world to reach the 10 GW milestone of installed PV capacity, preceded only by Germany, Italy and China.

In fact, solar PV has been one of the fastest-growing energy sources in the U.S. over the past six years, with a compound annual growth rate of over 50% since 2007, the report adds. NPD Solarbuzz predicts cumulative solar PV installations will increase an additional 80% over the next 18 months, surpassing 17 GW by the end of 2014.

According to the report, the rapid uptake of solar PV in the U.S. is being driven by dramatic solar system price declines observed since 2011. Average installed system prices in the U.S. have fallen from around $6/W two years ago to approximately $4.25/W for residential installations and $3/W for large utility-scale PV projects today.

“U.S. solar PV market growth has been stimulated by an increased range of solar incentive programs at the state level,” explains Christopher Sunsong, analyst at NPD Solarbuzz. “While the Far West and Mid-Atlantic states dominate the 10 GW installed, the Southwest and Southeast regions have recently made strong contributions. Other regions, however, such as the Great Plains and Great Lakes, remain largely undeveloped, creating further market upside going forward.”

Solar PV installations in the U.S. have seen significant growth since the start of 2010; 83% of the 10 GW were completed within the past 14 quarters, the report notes. Almost 1,400 solar PV installations in excess of 500 kW in 39 different states are providing 5.4 GW of capacity, and nearly 40% of that capacity is within California.

 

Renewables Outpacing
Coal, Oil And Nuclear

Renewable energy sources, including wind, solar, biomass and geothermal, accounted for 24.93% of all new U.S. electrical generating capacity installed in the first six months of this year for a total of 2,144 MW, according to the Federal Energy Regulatory Commission’s latest Energy Infrastructure Update report.

Thus far this year, renewables provided more new generating capacity than did coal (1,579 MW - 18.36%), oil (26 MW - 0.30%) and nuclear power (0 MW - 0.00%) combined. However, natural gas dominated the first half of 2013 with 4,852 MW of new capacity (56.41%).

Among renewable energy sources, solar led the way for the first half of 2013 with 94 new “units” totaling 979 MW followed by wind with eight new units totaling 959 MW. Biomass added 36 new units totaling 116 MW, while water had eight new units with an installed capacity of 76 MW and geothermal steam had one new unit of 14 MW.

For the month of June alone, six new solar projects in North Carolina and one in New Mexico came online with a total capacity of 15 MW while a single 4 MW hydropower project was also added. No new capacity was reported for the month for natural gas, but coal and oil had additions of 618 MW and 26 MW, respectively.

For the first half of this year, compared to the first half of 2012, new capacity from all sources declined by 16.16% (from 10,259 MW to 8,601 MW). However, solar capacity grew by 3.70%, while natural gas capacity increased by 12.47%. Water power saw a more than tenfold increase from 7 MW in the first six months of 2012 to 76 MW thus far in 2013.

Renewable sources now account for nearly 16% of total installed U.S. operating generating capacity: hydro - 8.52%, wind - 5.17%, biomass - 1.31%, solar - 0.48%, and geothermal steam - 0.33%. This is more than nuclear (9.05%) and oil (3.51%) combined.

 

Analyst: U.S., China Lead
Cleantech Investment

According to Bloomberg New Energy Finance (BNEF), global investment in clean energy was $53.1 billion in the second quarter of 2013 (Q2’13), up 22% from the first quarter of 2013 (Q1’13) thanks to an upturn in the financing of wind and solar projects and a 170% surge in equity funding for specialist companies on public markets.

BNEF says the Q2’13 rebound was led by the U.S., which saw investment jump 155% compared to a weak first quarter to reach $9.5 billion. China saw investment increase 63% to $13.8 billion. Cleantech investment in South Africa went from almost nothing in Q1’13 to $2.8 billion in Q2’13.

However, Europe, for many years the mainstay of clean energy activity worldwide, saw investment fall 44% compared to Q1’13, reaching just $9.5 billion - that continent’s lowest quarter total in more than six years, BNEF says. The downturn in Europe helped ensure that global investment in clean energy in Q2’13 ended up 16% below the figure for the second quarter of last year.

BNEF says the figures, drawn from its database of deals and projects worldwide, show that global investment of $53.1 billion in Q2’13 was up from $43.6 billion in Q1’13 but down from $63.1 billion in the second quarter of 2012 (Q2’12).

Financing of utility-scale projects such as solar parks and wind farms represented the biggest category of investment between April and June, BNEF says. This was $31.9 billion in Q2’13, up 39% on the first quarter but down 21% from Q2’12. Among the projects financed were MidAmerican Renewables’ 681 MW Solar Star photovoltaic project in California, at $2.5 billion, and EDF’s 299 MW Blackspring Ridge wind farm phase one in Alberta, Canada, at $588 million.

Investment in small-scale PV projects of less than 1 MW continued to be another busy area of activity - accounting for $17 billion of outlays in the second quarter, in line with Q1’13, but down 15% from Q2’12, largely because of reductions in the cost of PV panels, BNEF reports.

 

DOE, NREL Building
New Research Center

The U.S. Department of Energy (DOE) and the National Renewable Energy Laboratory (NREL) are collaborating to build the Energy Systems Integration Facility (ESIF) in Golden, Colo. ESIF will focus on utility-scale clean energy grid integration. Congress provided $135 million to construct and equip the user facility.

The DOE says the 182,500-square-foot ESIF, located at NREL’s campus, will house more than 15 experimental laboratories and several outdoor test beds, including an interactive hardware-in-the-loop system that lets researchers and manufacturers test their products at full power and real grid-load levels. The facility will also feature a supercomputer that can support large-scale modeling and simulation.

Colorado-based Advanced Energy Industries has signed on to work at ESIF developing improved solar power inverters.

 

REC To Separate Solar
And Silicon Businesses

Norway-based Renewable Energy Corp. ASA (REC) says it will divide the company into two entities, launching the silicon and solar divisions as independent, listed companies.

REC says launching the separate entities will be done through a financial transaction where the company offers 100% of the shares in REC Solar to the existing REC shareholders. In the transaction, REC Solar is valued at €102 million, and it will apply for a listing on the Oslo Stock Exchange. REC says the solar panel company will be debt free. After the transaction, REC ASA, which will focus exclusively on the silicon business, will hold net debt of about €216 million. The transaction is pending approval by the REC shareholders and bondholders.

The announcement to launch the new solar and silicon companies coincides with REC releasing its second quarter results. Revenue from the quarter was reported at €203 million, up 21% from the previous quarter. REC reported earnings before interest, taxes, depreciation and amortization of €20 million in the second quarter, up from €6 million in the previous quarter. The company says its second quarter performance was marked by increased demand and higher selling prices.

REC says that after a transition period, it will significantly downsize its corporate headquarters in Sandvika, Norway, with corporate functions for the solar business transferred to the new head office in Singapore, while those of the silicon business will move to the U.S.

 

CALSEIA Names New
Executive Director

The California Solar Energy Industries Association (CALSEIA) has appointed Bernadette Del Chiaro as its new executive director.

“California is the top market for solar energy in the country, and CALSEIA’s ongoing involvement with legislative and regulatory proceedings will benefit significantly from Bernadette’s long-term engagement in these areas,” says CALSEIA Chairman Rick Reed in a statement.

Previously, Del Chiaro was director of clean energy and global warming programs at Environment California, a citizen-based environmental advocacy organization, where she is credited with managing numerous clean energy initiatives and standards at the state and local levels. Del Chiaro holds a bachelor of science degree from the University of California at Berkeley.

Del Chiaro tells Solar Industry she is looking forward to taking on the mantle of executive director of a solar organization in the nation’s foremost state for solar power.

“California is on the national stage when it comes to solar,” she says. “It is a prime place to lead the way.”

Del Chiaro attributes much of California’s leadership position in the solar sector to policymaking among elected officials, particularly with regard to the state’s renewable portfolio standard. She says one of her priorities going forward is developing distributed PV in California, where she says she sees tremendous opportunities for collaboration. - Michael Puttré S