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PV Industry Leaders See Second Solar Gold Rush

A “second gold rush” for the photovoltaic industry is coming, enabled by the inevitable adoption of distributed generation (DG) solar power on a widespread basis. This was the assessment of Eicke Weber, director of the Fraunhofer Institute for Solar Energy Systems, who chaired a panel on current dynamics in the PV marketplace at the Intersolar North America conference in San Francisco on July 10.

“We are now in the interesting phase,” Weber said, adding that utility prices for electricity from conventional sources, combined with the improving economics of solar power’s levelized cost of energy (LCOE), are pushing solar into the mainstream.

Sharing this outlook, Steve Berberich, president and CEO of the California Independent System Operator (CAISO), said during the panel discussion that the economics of solar power make it competitive with conventional generation sources. Moreover, the policies and market forces that have made it so are expected to continue in the near term. He said detente between utilities and solar customers is needed to move forward.

“Utilities should be agnostic about what customers do [with PV],” Berberich said. “Also, unless customers cut the line, they need to pay for that connection.”

Interesting times can be a curse as well as a blessing, however. Tim Larrison, vice president at Yingli Green Energy Americas, said tariffs on Chinese solar cells are not only imposing additional costs on PV generation, but also squelching innovation by reducing research and development budgets and preventing new technologies from reaching key markets, particularly in the U.S.

“The irrational behavior [on tariffs] has been shocking to me,” Larrison said, especially given the volumes of PV products large Chinese manufacturers represent. “It’s not a good idea to kill the supplier. You need your supplier for the 25 years of the warranty.”

Over and above the effect of restrictive trade policies, Larrison said Chinese solar cell manufacturers have wrung about all of the cost out of their products, and those hoping for additional LCOE efficiencies will have to look elsewhere. Citing his company’s 12 straight quarters of financial losses, he said he could not imagine where such cost savings could come from on the cell production front.

Nevertheless, he remains “very bullish” on the U.S. market - particularly the residential and commercial sectors - which will be a core business for Yingli going forward.

Stefan Rinck, CEO of Singulus Technologies AG, a Germany-based maker of PV production equipment, pointed out during the panel discussion that the same market forces that impelled the boom in Chinese PV production and corresponding drop in module prices were a “disaster” from the perspective of equipment manufacturers. At the same time, he foresees a new wave of capital investment in PV manufacturing, particularly for wafer and cell manufacturers in Taiwan looking to supply the demand for PV in Japan.

At the top of the PV supply chain, Theresa Jester, CEO of Silicor Materials Inc., a supplier of PV-grade silicon, said there is still room to reduce costs in raw materials. Jester pointed to her firm’s plans to build a new silicon processing facility in Iceland as evidence that the global solar marketplace continues to evolve and offer opportunities.

Echoing a theme from an earlier Intersolar panel, CAISO’s Berberich said the development of utility-accessible energy storage is critical to the future development of solar. As DG solar continues to penetrate, the need to handle overcapacity and intermittency will demand sufficient storage resources to take up excess demand and fill in when renewables lag behind. - Michael Puttré

 

Washington Utilities Get Energy Storage Grants

Three Washington utilities have been awarded $14.3 million in matching grants from the state’s Clean Energy Fund to lead energy storage projects with ties to federally funded research at the U.S. Department of Energy’s (DOE) Pacific Northwest National Laboratory (PNNL).

According to the PNNL, the three utility-led projects include the following:

• Spokane-based Avista Utilities received $3.2 million. Its project includes installing a UniEnergy Technologies (UET) flow battery in Pullman, Wash., to support Washington State University’s (WSU) smart campus operations. The PNNL will collaborate with WSU to develop a control strategy for this project. Avista is participating in the Pacific Northwest Smart Grid Demonstration Project and previously received a DOE Smart Grid Investment Grant.
• Bellevue-based Puget Sound Energy (PSE) received $3.8 million. Its project includes installing a lithium-ion battery. As part of a previous project that was jointly funded by the utility, the Bonneville Power Administration, Primus Power and the DOE, the PNNL analyzed the costs and benefits associated with installing energy storage at various sites within PSE’s service territory.
• Everett-based Snohomish County Public Utility District was awarded $7.3 million. Its project includes installing a UET flow battery and a lithium-ion battery. This project builds on experience gained, as well as the equipment and technologies installed, with a DOE Smart Grid Investment Grant.

According to the PNNL, results from these Washington-based demonstrations are expected to contribute to national energy storage efforts.

 

Indiana Michigan Power Banks On Solar

Indiana Michigan Power (I&M), a utility serving more than 582,000 customers in Indiana and Michigan, has announced its plans to build and operate five solar generation facilities as a pilot project. The company says this will add another emission-free source of power to its generation portfolio, which already includes nuclear, wind and hydro.

If approved by the Indiana Utility Regulatory Commission, the Clean Energy Solar Pilot Project will have a combined generation capacity of about 16 MW, producing energy equivalent to powering more than 2,500 homes for a year, the utility says.

I&M’s Clean Energy Solar generation facilities will be located in different areas of the company’s service territory in the two states. Construction is tentatively scheduled to begin in early 2016, with completion expected later that year. The utility notes the $38 million project would result in a minimal impact on customer rates of less than 1%.

I&M operates 3,595 MW of coal-fired generation in Indiana, 2,110 MW of nuclear generation in Michigan and 22 MW of hydro generation in both states. The company also provides its customers with 250 MW of purchased wind generation.

I&M says it will also use the solar pilot project as an opportunity to study firsthand the various facets of designing, constructing and operating a utility-scale solar facility. According to the utility, being owner and operator of the solar facilities will enable I&M to become proficient in operating solar generation and integrating it reliably into the transmission grid.

 

DOE Offering $4B In New Loan Guarantees

The U.S. Department of Energy (DOE) has issued a loan guarantee solicitation, making as much as $4 billion in loan guarantees available for innovative renewable energy and energy-efficiency projects located in the U.S. that avoid, reduce or sequester greenhouse gases.

According to the DOE, this solicitation is intended to support technologies that are catalytic, replicable and market-ready. Although any project that meets the appropriate requirements is eligible to apply, the department has identified five key technology areas of interest: advanced grid integration and storage; drop-in biofuels; waste-to-energy; enhancement of existing facilities, including micro-hydro or hydro updates to existing non-powered dams; and efficiency improvements.

Currently, the DOE says its Loan Programs Office (LPO) supports a diverse portfolio of more than $30 billion in loans, loan guarantees and commitments - supporting more than 30 projects nationwide. The projects that the LPO has supported include one of the world’s largest wind farms; several of the world’s largest solar generation and thermal energy storage systems; and more than a dozen new or retooled auto manufacturing plants across the country, the department adds.

 

CEFIA Launches New Loan Program

The Connecticut Clean Energy Finance and Investment Authority (CEFIA) has launched a loan bundling program to residents who complete more than one approved energy-efficiency and clean-energy improvement.

The Smart-E program offers discounted rates from 2.75% to 2.99% to finance a selection of improvements, including installing a solar photovoltaic energy system, converting from oil to natural gas and adding insulation.

Smart-E loans are available in five-, seven-, 10- or 12-year terms. Lenders participating in the program include Coreplus Federal Credit Union, Eastern Savings Bank, Quinnipiac Bank & Trust Co., Thomaston Savings Bank and Union Savings Bank.

 

Northeast Gains
Renewables Momentum

Combined, northeastern U.S. states added more than 800 MW of new renewable energy capacity in 2013, mostly from solar installations, and the region serves as a model for why carbon-limit policies can benefit clean energy. That is according to the American Council On Renewable Energy’s (ACORE) recently released Northeast Region Report.

The first in a four-part series covering all 50 states, the report focuses on the renewable energy sector in the 11 northeastern states (Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Delaware and Maryland) plus the District of Columbia. ACORE says the report is a review of state energy policies and programs, investment, and market openness as they relate to the current state of renewable energy and its potential for further growth.

The report says the Northeast region also accounted for nearly $1 billion in renewable energy asset finance, venture capital and private equity investment in 2013. Many states - notably New York and Massachusetts - maintained their renewable energy policy leadership, incentivizing even greater private-sector investment in the industry. And while states across the U.S. have begun considering whether to limit or repeal their net energy metering policies, Vermont quadrupled its net metering cap in early 2014 with significant bipartisan support, the report adds.

 

Renewables To Dominate Energy Investment

Bloomberg New Energy Finance (BNEF) says it expects $7.7 trillion to be invested globally in new generating capacity by 2030, with 66% of that going to renewable technologies, including hydro.

In a new report, the company says that out of the $5.1 trillion to be spent on renewables, Asia-Pacific will account for $2.5 trillion, the Americas $816 billion, Europe $967 billion and the rest of the world - including the Middle East and Africa - $818 billion.

The report says fossil fuels will retain the biggest share of power generation by 2030, at 44% - albeit down from 64% in 2013. Some 1,073 GW of new coal, gas and oil capacity worldwide will be added over the next 16 years, excluding replacement plants. The vast majority will be in developing countries seeking to meet the increased power demand that comes with industrialization, as well as to balance variable generation sources such as wind and solar.

Notably, the report expects solar PV and wind to increase their combined share of global generation from 3% last year to 16% in 2030.

With regard to the Americas, the report says the next decade and a half will see renewable energy raise its share of electricity generation capacity from 7% in 2012 to 28% in 2030 (excluding the contribution of hydropower), while the share of coal-fired capacity will fall from 21% to 9%. According to BNEF, North, Central and South America will add 943 GW of gross new capacity by 2030, including replacement plants. Some 522 GW will be added in the U.S., 341 GW in Latin America and 80 GW in Canada.

The report says this will equate to $1.3 trillion of investment in new power generation capacity, with the largest single slice of that ($314 billion) going to gas-fired plants, followed by rooftop solar photovoltaics ($231 billion) and onshore wind ($200 billion). There will be smaller slices of investment going to nuclear (almost all in the U.S.), hydroelectric (mainly in Latin America), biomass-to-power, offshore wind and large-scale solar.

 

NextEra’s Spin-Off Raises $443M In IPO

NextEra Energy Partners LP (NEP), a renewables spin-off company of NextEra Energy Inc., has raised approximately $442.7 million in its previously announced initial public offering (IPO).

NextEra Energy Inc. formed NEP as a yeildco entity that would own, operate and acquire contracted clean energy projects through its limited partner interest in NextEra Energy Operating Partners LP. According to a U.S. Securities and Exchange Commission filing NextEra announced in May, NEP will initially have interests in 10 North American wind and solar projects totaling about 990 MW.

BofA Merrill Lynch and Goldman, Sachs & Co. acted as joint book-running managers and structuring agents for the IPO, and Morgan Stanley acted as a joint book-running manager.

 

Conergy Closes $60M Bank Guarantee

Conergy Group, a global downstream solar company, has closed a $60 million bank guarantee facility for an expansion of its solar projects business by up to 400 MW.

Deutsche Bank arranged the facility, and Tennenbaum Capital Partners LLC financed it.

To date, Conergy says its engineering, procurement and construction business has been responsible for solar plants totaling 650 MW worldwide, and its operations and maintenance business has managed 300 MW of assets for 200 customers.

Conergy, which is backed by majority shareholder Kawa Capital Management, says the new bank guarantees will enable it to accelerate its participation in high-growth markets, expanding project capacity supported by bank guarantees by up to 400 MW.

 

juwi Cuts 400 Jobs
In Shake-Up

Germany-based renewable energy developer juwi group has announced a comprehensive restructuring and cost-cutting program that will lead to about 400 job cuts globally.

Specifically, juwi cites past amendments to the German Renewable Energy Act and changes to other energy-related policies in Germany. The company says such reforms virtually ceased the development of large-scale solar PV plants in the country, as well as led to a temporary withdrawal of investor confidence in new wind energy projects.

In 2013, juwi says its revenue declined roughly 30% to around EUR 710 million, mainly due to the collapse of the German solar market. The company notes that the loss in sales volume could not be completely consolidated through the expansion of wind energy and the business abroad.

 

BayWa Buys Martifer
Solar USA

Germany-based BayWa r.e. has acquired troubled solar developer Martifer Solar USA Inc.

Martifer Solar USA, which filed for Chapter 11 bankruptcy in January, is a subsidiary of Portugal-based Martifer Solar. In a notice, parent company Martifer SGPS says the $7.6 million acquisition has been approved by a bankruptcy court in Nevada, and BayWa r.e. is buying the majority of the assets of Martifer Solar USA.

BayWa r.e., the renewable energy arm of BayWa AG, says that although it is already active in the U.S. wind farm development and PV trade segments, this buy will now allow the company to venture into the country’s solar development business. S