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Guide Helps Regulators
Weigh Distributed Solar

Net energy metering (NEM) is the third rail of solar politics. Time and again, a utility approaches its state regulators with a proposed modification to the existing NEM program, and advocates in the solar sector rip into the studies and calculations underpinning the proposal as “flawed” and “out of date.”

The most recent outbreak of charge and counter-charge occurred in California with the public utilities’ release of a draft report on the costs of NEM for the California Public Utilities Commission. The report claims NEM will cost $1 billion a year by 2020 and be borne mostly by non-solar ratepayers. The document produced an immediate, negative reaction from the solar sector in the state, which had just celebrated a shaky victory in the passage of a law that preserves NEM - for now.

Similar stories are playing out in Colorado and Arizona.

“The problem comes down to valuation,” says Karl R. Rabago, principal of Rabago Energy LLC and co-author of a new guide for state utility regulators, published by the Interstate Renewable Energy Council (IREC), on whose board he sits. “Regulators need to figure out what distributed solar generation’s value is and how to compare competing views.”

The IREC report outlines the experiences of 16 regional and utility-specific distributed solar generation studies that were summarized recently by the Rocky Mountain Institute. With these lessons learned as a base, the report proposes a standardized valuation methodology for public utility commissions to consider implementing in future studies.

“It’s probably fair to say that if you don’t want to do solar, that’s a pretty easy paper to write,” says Jason Keyes, a partner at law firm Keyes, Fox & Wiedman LLC and co-author of the report. Keyes, who represents the IREC before state utility commissions, says utilities in different regions of the country vary greatly in how they evaluate the benefits and costs of NEM. Regardless, nearly all of these calculations are restricted to generation, transmission and infrastructure.

“By and large, utilities are not looking at the societal value of solar at all,” he says. “Our guidebook is an attempt to put a number on those values for regulators to consider. The goal is to come up with a standard methodology.”

Rabago points out that the role of state utility regulators is to set rates that are in the public interest. Utilities do not necessarily take the public interest approach because this has not been their function. However, the solar sector is producing value that regulators may not have much experience in processing.

“IREC is involved in state rule-making,” he says. “It is filing comments that are part of the record in states where NEM is an issue. We want to help fill the shelves of the essential library on this issue.”

Although the IREC report focuses on NEM, this is because of its ubiquity, rather than because of any preference.

“We’re agnostic about the policy,” Keyes says. “However, it would be foolish to throw it out while you are experimenting with where to go next. It would be a fundamental policy fail to remove NEM before you had a well-defined alternative to transition to.”

According to Eran Mahrer, executive vice president of strategy and resources for the Solar Electric Power Association (SEPA), the issue comes down to determining the value of a distributed solar resource. In light of increasing adoption, regulators are forced to consider that value.

“There are the practical costs, upon which the utility industry has been built,” Mahrer says. “These produce rates for a transaction based exclusively on electron flow. Then there are the policy drivers of economic development, job creation and reducing carbon emissions, which have become a part of this same conversation. These are not typically attributes captured within the utility business.”

Mahrer, who co-authored a SEPA report on NEM valuation, says in the future, there may be opportunities for solar customers to enjoy rates based on “non-traditional” transactions that take into account the benefits of utility services to the customer, as well as the benefits distributed solar provides to the electric system, including energy production capacity, reliability services, power quality and voltage support. - Michael Puttré

 

Global Solar Installs
To Hit Record In 2014

A new report from IHS Inc. forecasts that global photovoltaic installations will rise at the fastest pace in three years in 2014, exceeding 40 GW for the first time and generating installation revenue of more than $86 billion.

Annual solar installations are predicted to reach 41 GW in 2014, firmly marking the end of the solar sector’s two-year slowdown. IHS stands by its earlier prediction that installations this year will amount to 35 GW.

PV installations in 2014 will rise by 17% - an increase from 15% in 2012 and 13% in 2013, the new report says. 2014 will bring the highest rate of growth since the 35% increase in 2011. Market revenue in 2014 will amount to slightly less than the all-time high of $89 billion set in 2011.

Despite continued cuts to government incentives in mature PV markets, all major global regions - Europe, the Middle East, Africa, the Americas and Asia - will expand their solar installations in 2014, IHS says, adding that the growth represents a significant turning point for Europe, which suffered a steep decline in solar installations in 2012 and is set for another drop in 2013.

Although IHS forecasts that European installations will return to growth in 2014, Europe’s share of global installations will continue to slide as it is outpaced by Asia and the Americas. Europe’s share is expected to fall to 29% next year, down from 57% in 2012. Meanwhile, Asia’s share will increase to 48%, up from 29%.

IHS predicts that the fourth quarter of this year will close with the highest number of quarterly installations in two years. The report forecasts 9.8 GW of PV installations will be completed during the fourth quarter, compared to 8.5 GW in the second and third quarters and 7 GW in the first quarter.

The robust performance in the fourth quarter conforms to the industry’s seasonal pattern of a solid finish every year, IHS says. The surge in installations in the fourth quarter is driven by incentive cuts that go into effect at the end of each year. Individuals and organizations typically rush to complete their solar projects while government subsidies are still in force.

IHS says China will be the primary driver of this year-end rush, with more than 2 GW of installations projected to be completed in the fourth quarter.

 

Solar To Add More MW
Than Wind This Year

Bloomberg New Energy Finance (BNEF) predicts that 33.8 GW of new onshore wind farms, plus 1.7 GW of offshore wind, will be added globally in 2013. This compares with its median forecast of 36.7 GW of new photovoltaic capacity.

This year is set to be the first in which PV has added more MW of capacity than wind, BNEF says. In 2012, wind - onshore and offshore - added 46.6 GW, while PV added 30.5 GW - record figures in both cases. But this year, the market analysis firm says, a slowdown in the world’s two largest wind markets, China and the U.S., is opening the way for the rapidly growing PV market to move ahead.

Despite the change in rankings for this year, the maturing sectors of onshore wind and PV will contribute almost equally to the world’s new electricity capacity additions between now and 2030, BNEF says. It forecasts that wind will expand from 5% of the world’s total installed power generation capacity in 2012 to 17% in 2030. PV, from a lower base of 2% in 2012, will grow to 16% by 2030.

Furthermore, after years of oversupply and consolidation, technology suppliers in both sectors may see a move back to profit this year, BNEF says.

 

Solar Sees $207M
In VC Funding In Q3

Global venture capital (VC) funding in the third quarter of this year (Q3’13) totaled $207 million, up slightly from the $189 million raised in the second quarter (Q2’13), says a new report from clean energy consulting firm Mercom Capital Group LLC. VC funding was distributed across technology groups, with PV companies receiving the most at $57 million.

Total corporate funding in the solar sector - including VC, debt financing and other equity financings raised by public companies - was $2.18 billion, compared with $915 million raised in Q2’13. Mercom says the significant increase was due to public companies taking advantage of rising market values.

Mercom says the largest VC deal in Q3’13 was the $39.9 million raised by Solexel, a developer of high-efficiency crystalline-silicon solar cells and modules. Investors included Technology Partners, DAG Ventures, Northgate Capital, GSV Capital, KCPB Holdings and SunPower.

Other significant deals include the following: Concentrated solar power project designer and developer eSolar raised $22 million from Oak Investment Partners; Clean Power Finance, a provider of third-party financing for distributed PV projects through its software platform, raised $20 million from the United Arab Emirates-based UAE Fund; HelioVolt, a manufacturer of thin-film solar modules, raised $19 million from SK Group; and Dyesol, a manufacturer of solar cells using dye-sensitized PV technology, raised $16 million from Tasnee, a Saudi Arabia-based diversified conglomerate.

 

Trackers To Hit 7 GW
Per Year By 2020

According to a new market report published by Transparency Market Research, global solar tracker annual installed capacity was nearly 1.19 GW in 2010 and is estimated to approach 7 GW per year in 2020.

Increasing use of photovoltaics is enhancing the demand for solar trackers to increase the efficiency of solar arrays. Single-axis trackers have dominated and accounted for 94% of the market in 2010, the report says. Utility applications are expected to account for the majority of tracker installations by 2020.

According to Transparency Market Research, Europe has led the global solar tracker market in terms of annual installations, accounting for 62.47% of the overall market in 2010. Spain, Italy, Germany and Greece - the key regional markets in Europe - are expected to experience a surge in solar tracker demand, due to a favorable regulatory scenario, huge subsidies and high potential. In North America, annual solar tracker market installations are estimated to approach 2.17 GW in 2020. The Latin America solar tracker market is expected to reach 1.74 GW in 2020.

 

N.Y. Streamlining
Solar Permitting

The New York State Energy Research and Development Authority (NYSERDA), New York Power Authority (NYPA) and City University of New York (CUNY) have developed a unified solar permit for New York State that aims to reduce costs for solar projects by streamlining municipal permitting processes. The unified solar permit is part of Gov. Andrew Cuomo’s NY-Sun Initiative.

NYSERDA and NYPA provided funding to CUNY to survey municipal officials to understand the photovoltaic permitting costs, procedures and issues, as well as develop the permit. The standardized permit is expected to cut costs by creating a uniform permitting process in municipalities across the state. NYSERDA says work to chart the current permit processes involved feedback from municipalities, the New York Conference of Mayors, the Association of Towns of the State of New York, utility companies, PV installers and other stakeholders.

Municipalities that adopt the unified permit and procedures are eligible for between $2,500 and $5,000, depending on population, through NYSERDA’s Cleaner, Greener Communities program to implement the new procedures. Applications will be accepted until Sept. 30, 2014, or until funds are exhausted.

 

Florida Utility Unveils
New Solar Programs

Florida Power and Light Co.’s (FPL) Office of Clean Energy says it is offering approximately $9 million in rebates for residential and business customers who wish to install solar water heater or solar photovoltaic systems. The utility also says it is launching solar installation programs for schools and disadvantaged homeowners.

Applications for the solar rebate program opened Oct. 15. Rebate reservations for the available funding will be issued on a first-come, first-served basis.

In addition, FPL plans to install solar arrays at nearly 100 public schools and other educational facilities throughout its territory while also helping more than 400 families in need by installing solar water heater systems in homes being built or refurbished by Habitat for Humanity and other nonprofit organizations.

All of these projects are part of a pilot program approved by the Florida Public Service Commission.

 

Canadian Solar Launches
U.S. Solar Financing

Canadian Solar Inc. has launched its Canadian Solar Residential Financing Program that targets the U.S. market. The program is being launched in partnership with Massachusetts-based Admirals Bank.

Under the program, customers will be able to borrow up to $40,000 for a residential solar installation, subject to credit approval.

The program has a “step down” feature that enables customers to monetize solar tax credits, rebates and other incentives associated with ownership of their system. They can then pay that amount into the principal balance and then re-amortize the loan.

 

Vermont Co-op Seeks
Reduced Net Metering

The Vermont Electric Cooperative (VEC) has filed a tariff request with the Vermont Public Service Board (PSB) seeking approval to resume NEM installations.

In July, VEC reached a cap established by the Vermont legislature that requires utilities to allow NEM systems to be installed in their service territory up to a limit of 4% of the utility’s peak demand. The legislature has given the PSB authorization to raise the cap after analyzing the costs and benefits of these systems. Until it receives authorization to exceed the cap, VEC has stopped approving new NEM system applications.

Under the current rules, VEC members who install NEM systems receive incentivized, above-market credits from VEC for the electricity that is generated. VEC says the cost of this subsidy is borne by non-net metering members in their electric rates.

At the 4% level, this cross-subsidy costs non-net metering members about $580,000 per year, the co-op adds.

According to VEC, the incentivized rates require the cooperative to credit NEM at $0.20/kWh produced. VEC’s tariff filing with the PSB proposes that the credits be adjusted to $0.125/kWh for a 10-year contract or $0.158/kWh for a 20-year contract.

However, Renewable Energy Vermont (REV), a nonprofit renewable energy trade association, is not pleased with VEC’s proposal.

“The Vermont Electric Co-op proposal regarding net metering drastically undervalues the full benefits of renewable net metering, including its recent role in deferring one transmission upgrade representing a savings of $250 million to all Vermonters,” says Gabrielle Stebbins, executive director of REV.

 

Applied Materials And
Tokyo Electron To Merge

California-based Applied Materials Inc. and Japan-based Tokyo Electron Ltd., both manufacturers of photovoltaic, semiconductor and flat-panel display manufacturing equipment, have agreed to merge via an all-stock combination that values the new company at approximately $29 billion. The merger, which has been approved by the boards of directors of both companies, is subject to approval by shareholders and review by regulators. The companies expect the transaction to close in 2014.

In their joint announcement, the companies stressed they would focus on opportunities in the semiconductor and display industries. There was no comment on the future of each company’s PV manufacturing equipment business if and when the merger goes into effect.

The company will have a new name, dual headquarters in Tokyo and Santa Clara, a dual listing on the Tokyo Stock Exchange and the NASDAQ, and will be incorporated in The Netherlands.

 

SEIA: U.S. Firms
Invest Big In Solar

The Solar Energy Industries Association (SEIA) and the Vote Solar Initiative have released their annual report identifying major commercial solar projects and ranking America's top corporate solar users.

The report found that Walmart remains America's commercial solar leader, with 89 MW at 215 locations. The top 25 companies, ranked by installed capacity, are Walmart, Costco, Kohl’s, Apple, IKEA, Macy’s, Johnson & Johnson, McGraw Hill, Staples, Campbell’s Soup, U.S. Foods, Bed Bath & Beyond, Kaiser Permanente, Volkswagen, Walgreens, Target, Safeway, FedEx, Intel, L’OREAL, General Motors, Toys "R" Us, White Rose Foods, Toyota and Dow Jones & Co.

Combined, the report says, these top 25 companies have deployed 400 MW of solar capacity - a 33% increase from one year ago.

"The list of companies moving to clean, affordable solar energy reads like a 'Who's Who' of the most successful corporations in America," says SEIA President and CEO Rhone Resch.

 

SolarCity To Acquire
Zep Solar For $158M

SolarCity Corp. has entered into an agreement to acquire California-based photovoltaic mounting provider Zep Solar Inc. for approximately $158 million. Upon close of the acquisition, Zep Solar will operate as an independent business unit of SolarCity.

The purchase price is payable in shares of SolarCity common stock and subject to reduction for the amount of net indebtedness of Zep Solar as of the closing. The transaction is expected to be completed in December, subject to customary closing conditions.

After the close of the acquisition, SolarCity and Zep Solar plan to market and sell Zep Solar products in Australia, Germany, Japan and the U.K. S