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Mercom Capital Forecasts Big Year For Solar

The global solar energy sector is set to install 54.5 GW of new solar capacity in 2015, says a new report from Mercom Capital Group.

Although the retrenchment and downward revisions were evident in many key markets last year, much of this can be seen in the light of organizational issues that attend a ramp-up in capacity. Raj Prabhu, CEO and co-founder of Mercom Capital, says the fundamentals of many key solar markets in the world are quite strong.

“Last year, China didn’t meet its goals, and it has revised its initial estimates by a large margin - almost 2 GW,” Prabhu says. “On the one hand, it makes us wonder what the data quality is like. On the other, it suggests that Chinese authorities are not fudging numbers. They are going back and being realistic.”

Prabhu points out that the fundamentals of China’s solar market are more important than administrators struggling to get their numbers straight. In addition, efforts to emphasize distributed photovoltaic power - which, in China, is defined as 20 MW and smaller - so as to avoid having to invest significantly in new transmission infrastructure may have caused confusion among provincial authorities tasked with making the distributed projects happen. Although the central government produced a set of guidelines, Prabhu says, these came out too late in the year to be much good.

This year, China has a goal of deploying 18 GW of new solar capacity. That’s a lot. Especially considering that last year’s deployment estimates have been revised downward to about 10.6 GW.

“They could get up there, but 18 GW still seems pretty aggressive,” Prabhu says. “At the same time, I think that right now, everything is in place. Policies are in place. All of the provinces understand what they are supposed to do.”

One of the reasons the long-term prospects for solar in China appear so favorable is that solar seems to fit so naturally into the country’s plans to handle its environmental and pollution problems. Although solar deployment in China may have started as a way to support domestic PV manufacturing in the face of a global collapse in prices, problems with air quality and the environmental impact of coal-fueled power generation also arose essentially at the same time.

“China, then, ends up doing solar for the right reasons,” Prabhu says. “People are unhappy with air quality. There are protests. They have a basic problem, and solar and wind are going to be the solutions.”

By comparison, the environmental argument in the U.S. is more challenging because visible air quality is much less of an issue. Other environmental reasons for replacing fossil fuels with renewable energy - namely, carbon emissions - are a harder sell. Nevertheless, regulatory requirements such as the U.S. Environmental Protection Agency’s Mercury and Air Toxics Standards (MATS), which takes effect this year, will have a definite effect on solar deployment, Prabhu says.

According to Mercom’s report, the U.S. Energy Information Administration (EIA) is expecting at least 13 GW of coal-fired generation to retire this year. MATS mandates stricter emissions standards on coal power plants. Many older and smaller plants will not be cost-­effective to retrofit with the appropriate technologies. The EIA says nearly 60% of new generation this year is expected to come from wind and solar.

Mandates and regulations will continue to be important in the U.S. solar market, Prabhu says, particularly with the federal investment tax credit likely to drop from 30% to 10% at the end of 2016. However, equally important are the financing innovations and willingness of capital to invest in solar projects through vehicles such as funds and yieldcos.

“We watch the financial side very closely,” Prabhu says, adding that Mercom also produces quarterly reports on financing activity in the renewable energy market. “Unlike some strong solar markets, like China and Japan, the U.S. does not really have a national goal for deploying solar power. In the U.S., the cost of finance has always been a big part of the success. The U.S. has been at the forefront of the financing side.”

Some of the difficulties in certain key solar markets, such as Japan and Germany, have stemmed from generous incentives that have ended up making solar too expensive. As these incentives are revisited and new means of financing are developed, Prabhu expects growth in these markets to get back on track. - Michael Puttré

 

‘Community Resilience’ Microgrids Are Coming

A new report from Navigant Research says so-called “community resilience microgrids” (CRMs) are expected to become a $1.4 billion-a-year industry by 2024.

Propelled by concerns over grid reliability and security in the wake of extreme storm events and possible terrorism, CRMs include systems specifically designed to promote grid resilience within communities backed by specific government programs that provide funding and regulatory support.

This support is a major factor in promoting the spread of CRMs in the coming years, Navigant says. Worldwide revenue from CRM implementation is expected to grow from $163 million annually this year to $1.4 billion by 2024. Some microgrids may serve multiple purposes, ranging from increasing reliability to renewables integration, as well as economic optimization.

Although CRMs tend to garner the widest public support of any microgrid segment, the report says, they also face the highest regulatory barriers because they require significantly more buy-in from diverse - and often unsophisticated - stakeholders. This tends to lengthen their development cycle.

Furthermore, CRMs are not likely to be financed on a purely commercial basis - meaning that public-­private partnerships will be a factor in how the market evolves, Navigant concludes.

“CRMs are plowing new ground in terms of customer relationships to host distribution utilities,” says Peter Asmus, principal research analyst with Navigant Research. “They represent the epitome of community idealism when it comes to the concept of grid resilience as well as, potentially, the ultimate threat to utilities.”

 

Poll Shows Support For Solar Incentives

A national poll of U.S. homeowners commissioned by Clean Edge Inc. and SolarCity says that 74% of those surveyed favor continuing federal tax incentives that support the growth of the solar and wind industries.

The survey, conducted by Zogby Analytics, finds strong support for the incentives on a bipartisan basis, with 82% of Democrats, 67% of Republicans and 72% of independents expressing such support.

Nearly nine in 10 respondents said renewable energy was important in the U.S. When homeowners were asked to pick which specific energy sources were most important to the nation’s future, solar (50%) and wind (42%) led the rankings, followed by natural gas (33%).

Solar power was the top choice among all major demographic groups, including Republicans, Democrats, independents, conservatives, liberals, city and rural dwellers, and youth and the elderly.

Additional findings in the report include the following:

• Cost savings trump environmental concerns, with “saving money” (82%) topping the list as the primary reason for purchasing cleantech products and services;
• When making investment decisions, a majority of homeowners say that they consider the social and environmental impact of their investments (52%); and
• Support for natural gas and nuclear energy sources declines significantly with younger respondents.

In addition to analyzing the results from the public survey, the report also looks at clean energy adoption rates in the U.S. through the end of 2013. The 11-year compound annual growth rates for the purchase of clean energy products and services continue to be in the double digits, with LEED-certified projects at 56%, solar photovoltaics at 52%, hybrid electric vehicles at 24% and utility-scale clean electricity generation at 20%.

“There’s a misconception that the nation is divided on its attitudes toward clean energy, but our research shows this to be false,” says Ron Pernick, managing director of Clean Edge and the report’s lead author. “There is broad support for renewables across the political spectrum.”

For example, opposition to solar fees charged by utilities is higher among Republicans (66%) than Democrats (59%), he adds.

Overall, 1,400 U.S. homeowners participated in the survey. Respondents were randomly selected to answer questions about renewables, energy efficiency, clean transportation, green investing, conventional energy sources, electric utilities and other related topics. All interviews were completed in late January 2014. The margin of error for the survey is +/- 2.7 percentage points.

 

Panasonic And PNC Bank Financing Solar

Panasonic Eco Solutions Canada Inc. has partnered with PNC Equipment Finance, a part of PNC Financial Services Group Inc., to offer a financing platform for solar photovoltaic projects of at least 500 kW in Ontario, Canada.

The financing platform allows PNC Equipment Finance to provide long-term debt programs in conjunction with Panasonic’s project development; engineering, procurement and construction; and operations and maintenance services. The platform also enables PNC Equipment Finance to use Panasonic’s solar production guarantee and credit rating to secure long-term debt.

“One of the biggest challenges we have seen in developing smaller to midsize solar PV projects is securing competitive long-term debt financing for long-term assets like solar installations,” says Walter Buzzelli, managing director of Panasonic Eco Solutions Canada. “Panasonic and PNC Equipment Finance help potential projects and system owners that are usually overlooked.”

 

RadianGEN Opens
Rochester Office

Radian Generation LLC (RadianGEN), a provider of solar and energy storage asset management and advisory services, has opened an office in Rochester, N.Y.

The company says the new office will support its business efforts in the northeastern U.S. and Ontario. Heading the Rochester office will be David Neale, who joins RadianGEN from EnergyWise Partners, a software services company.

“The new office, together with our eastern data center in Charlotte, N.C., will be integral to continue expanding RadianGEN’s asset management services throughout New York and the New England regions - bringing our analytical focus to ensure solar owners’ and investors’ profitability in states where operational performance is key,” says Chad Sachs, CEO of RadianGEN.

 

Utility Solar Over 5% Of Calif. Electric In 2014

According to a report from the U.S. Energy Information Agency (EIA), California has become the first state with more than 5% of its annual utility-scale electricity generation coming from utility-scale solar power, defined as projects of 1 MW or larger.

The EIA says California’s utility-­scale solar plants generated a record 9.9 million MWh of electricity in 2014 - an increase of 6.1 million MWh from 2013. California’s utility-­scale solar production in 2014 was more than three times the output of Arizona, the next-highest state, and more than all other states combined, the EIA says.

The report cites several large solar plants that were phased into operation in California during 2014, including the 550 MW Topaz and 550 MW Desert Sunlight photovoltaic power plants, as well as the 377 MW Ivanpah and 250 MW Genesis concentrating solar power plants. In total, nearly 1,900 MW of new utility-scale solar capacity were added, the EIA says, bringing the state’s utility-scale capacity for all solar technologies to 5,400 MW by the end of last year.

 

Borrego Expands O&M Business

Borrego Solar Systems Inc. has expanded its operations & maintenance (O&M) services beyond engineering, procurement and construction (EPC) customers to all commercial-scale solar PV assets.

According to CEO Mike Hall, the company is now offering O&M “on a stand-alone basis for commercial customers and large [independent power providers] with multi-MW portfolios.”

Every O&M customer receives year-round, 24-hour system monitoring managed by Borrego Solar’s System Performance Group. There are three components to the company’s support network: on-the-ground O&M staff, the Systems Performance Group and the selected data acquisition system platform.

Borrego Solar’s O&M portfolio recently surpassed 150 MW of capacity under management. In addition, in 2014, Borrego Solar doubled its O&M portfolio from the year before.

 

Silicor To Buy SMS Siemag Equipment

California-based solar silicon producer Silicor Materials Inc. has signed a factory development contract with Germany-based engineering firm SMS Siemag.

The contract is in support of Silicor’s commercial-scale silicon plant in Grundartangi, Iceland.

Under the terms of the agreement, SMS will supply all equipment and factory design services for the plant, including the associated engineering drawings and documents, supplies, and technical and installation support necessary for the completion of the project. The Iceland plant is expected to be the first in a series of facilities that Silicor will build with SMS.

“We’re taking meaningful steps to get this plant off the ground in an aggressive time frame, and the progress we’ve made in just a few months underscores our commitment to both the Icelandic community and to our customers,” says Theresa Jester, CEO of Silicor Materials.

 

NREL Releases PV
Quality Guidelines

The U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) has released an updated proposal for an international quality standard for photovoltaic module manufacturing.

The document is intended for use by PV manufacturers when producing modules on an industrial scale so they can increase investor, utility and consumer confidence in system performance. NREL hopes to supplement the existing International Standards Organization (ISO) ISO-9001 certification in the application of International Electrotechnical Commission standard 61215.

Sarah Kurtz, a research fellow at NREL and one of the authors of the technical report, says recent research on 50,000 PV systems has found that just 0.1% of all PV systems were affected by damaged or underperforming modules, and less than 1% experienced hardware problems each year.

“Even so, with manufacturers feeling pressure to lower prices, it is essential that quality be maintained and assured,” Kurtz says. “The new guidelines help to ensure that quality is not compromised for lower-priced modules and make it easier for PV customers to assess the expected quality.”

 

GDF SUEZ Donates RECs To Aquarium

GDF SUEZ Energy Resources has recently donated renewable energy certificates (RECs) to the New England Aquarium in Boston.

This is the seventh consecutive year the company has donated RECs to the nonprofit. The gift matches 100% of the aquarium’s estimated annual electricity usage.

Each Green-e REC represents the environmental attributes or benefits associated with a specific quantity of energy generated from a renewable source, such as solar or wind.

Nigella Hillgarth, president and CEO of the New England Aquarium, says the REC gifts enable the facility to reduce its carbon footprint.