Archive for PV

Wal-Mart completes first stage of Solar RFP

Today Wal-Mart Stores, Inc. announced a major purchase of solar power from three solar power providers, BP Solar (NYSE:BP), SunEdison LLC, and PowerLight, a subsidiary of SunPower Corporation (NASDAQGM: SPWR), for 22 combined Wal-Mart stores, Sam’s Clubs and a distribution center in Hawaii and California.

Back in December, when Wal-Mart first put out the RFP, I predicted that SunEdision would participate, and that the solar utility model (where you don’t own the panels, but rather contract for solar power) would continue to gain steam. I think we can take this to mean that BP Solar, Powerlight, and SunEdison are very serious about pursuing this model, and also that they are serious about supplying solar power at a reasonable price. Otherwise, they wouldn’t be doing business with Wal-Mart.

For more of my thoughts on this business model, see my original article.

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Inverter Stocks: A Backdoor to Solar and Wind

My column on AltEnergyStocks.com this week is about the companies that make the inverters which transform the DC or wild AC current produced by solar panels and wind turbines (respectively) into the type of AC power used by the grid. It begins:

    Whenever there is a gold rush, the people who make the real money are seldom the gold miners, but rather the suppliers to the miners that come home with the lion’s share of the profits. This is not because there is not an incredible amount of money to be made in mining gold, but because the nature of a gold rush is that too many optimistic miners are encouraged by the early profits of a few to rush to pursue too few opportunities.

    To many, the rush into solar stocks seems to be just that sort of gold rush. The boom in solar IPOs certainly reminds me of the type of feeding frenzy in which incautious investors are likely to get burned. And we are also seeing some other signs of rampant speculation, where investors are buying poorly managed (or even dishonest) companies with almost the same fervor of well managed ones. There’s little doubt that the future is bright for solar power, but picking solar companies that are going to survive and thrive in that bright future is becoming increasingly difficult in an increasingly crowded field.

    In a gold rush like this one it makes more sense to look at the suppliers.

Click here to read the rest of the article.

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Colorado News: Doubling of Colorado’s RPS

Colorado House Bill 1281, which doubles Colorado’s Renewable Portfolio standard (RPS) (as well as the solar set-aside) passed the state Senate on Friday, and is certain to be signed into law by state lawmakers.

Here’s how the new requirements stack up against the old Amendment 37 requirements (passed by a popular vote in 2004.)

rps.GIF
Not exactly a “doubling,” but is there a better way to describe it?

“A37” are the old requirements for investor owned utilities (affectionately known as IOUs,) “HB 1281” are the new requirements for IOUs, and “Co-ops” are the new requirements for Rural Electric Co-ops (which previously had an opt-out, although a few decided not to opt out.)
The opt-out contained a provision that each Co-op’s members (i.e. customers) vote to opt out, which most of them proceeded to do (one exception is Holy Cross, which chose not to opt out, however, this has led to some contention with Xcel as to whether or not their existing power purchase agreement with Xcel included the renewable energy credits (RECs) associated with Xcel’s generation of electricity from renewables… since both utilities use these RECs to meet their requirements.)

While the opt-out elections all seem fair and democratic, that is before you realize that all the information most members were getting was coming from their co-op’s management. This is fine with progressive co-ops like Delta-Montrose and Holy Cross, but when it comes to troglodytes such as the management of the Intermountain Rural Electric Association (IREA), it’s a little more Orwellian.

In the recent House and Senate hearings, IREA was arguing for another opt-out from HB 1281, arguing that IREA’s members had voted against it in the first election, and that it would force IREA to raise rates (despite the fact that the bill specifically states that rural co-ops only have to meet its requirements if they can do so with less than a 1% rate increase (the more stringent requirements for IOUs can be met with an up to 2% rate increase.) In some ways IREA’s failure to get their opt-out into HB 1281 was due to their own maneuverings. In response to IREA’s funding of a global warming skeptic this summer led many of IREA’s members to wonder what else Stan Lewandowski was doing with their money that they did not know about. They founded IREA Voices to try to get a greater say in how their customer-owned utility is run. (If you know anyone who lives in IREA territory (just south of the metro Denver area, make sure they know to vote for the IREA Voices candidate in their district. (Mike Kempe, Mike Daniels, or Jake Meffley, if one appears on the ballot that came with their last IREA bill.) If you don’t live in thier districts, they are funding their campaigns out of their own pocket, plus any donations. Help out if you can!

It’s ironic that co-ops, which supposedly exist to serve the best interests of their members (as opposed to shareholders) are often the laggards (and in IREA’s case, even deniers) of the environmental effects of our reliance on coal for electricity. I believe that Stan Lewandowski believes he is doing the right thing by trying to keep rates down, and damn everything else, but in the end, the farmers he feels he is serving will be the ones who suffer some of the worst effects of global warming.

Anyway, it looks like momentum is finally on the side of those of us that realize the magnitude of the disaster facing us, but time is also of the essence, and the faster groups like IREA Voices can catalyze change, the better for all of us.

So let’s cheer Colorado’s doubling of the Renewable Portfolio Standard, but let that one victory inspire us for the struggles ahead. We’re a long way from the time when we can declare victory and go home.

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CitizenRE leaked memo

Looks like I’ve been out of the CitizenRE loop.  According to this leaked memo it looks likely that they’ll pull their whole MLM (multi-level marketing) scheme because they won’t be able to build enough volume of panels to satisfy demand.  Will current signees get their panels?  Possibly.  But as I said in response to an earlier controversy, PV is not a great financial investment, and there are green things you can do with your money that have much better returns.  So if you’ve already signed a FRA, I say wait and see (unless some other outfit comes along with panels in hand to offer you a rental agreement.)  If you have not yet signed, it does not look worth the bother.

 I still believe that the rental/utility model is sound… we just have to wait until the technology and production capacity of PV are such that they will actually be able  to deliver enough systems to homeowners.

I do think there will be other companies offering the rental model to homeowners in the next few years, but it will probably be much smaller scale, and locally based in states with high incentives.   They’ll probably also charge higher rates for the electricity to make up for their higher per unit cost (compared to CitizenRE’s rosy projections.)

I hope the rental model (or the PV industry as a whole) will not be tarred by association.  At least MLM could not exactly lose much in terms of reputation. 

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Visual Comparison of Electricity Generation Technologies

I just put together a couple graphs for a talk I’m giving on Monday to give people a visual feel of the various technologies for generating electricity.  These come with a gigantic caveat: the numbers are far from precise.

With changing technologies, it’s impossible to represent any of this with a single number anyway.  I’m trying to show how the technologies compare to each other, and I used four parameters:

  • Cost ($/MWh),
  • Availability (better the closer the profile of the technology matches a normal demand curve (wind is bad, baseload is okay, dispatchable is best, solar),
  • Emissions (and I count waste storage when it comes to nuclear),
  • Bubble sizes represent the size and durability of the resource (I’ve tried to combine in one number how much power we can get from the resource, but also how long supplies of fuel will last.) 

In both charts, the “best” technologies are in the upper left (low cost, low emissions, and available when we need them.)

I know that I’m going to upset a lot of people because I was too harsh with their favorite technology, so feel free and comment on the numbers I’m using, but also please provide references for where you get your numbers.  Most of these are off the top of my head, so their accuracy is admittedly questionable.   Here are the numbers I used to make the graphs.

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CitizenRE:REvisited

There is an excellently researched article on CitizenRE (also see my previous blog entry which has been in my top posts constantly since January) on Renewable Energy Access by Jeffery Wolfe of groSolar.  As the CEO of a solar installer/distributer, he is rightly worried about CitizenRE’s ability to cannibalize his business…. especially if they sign a bunch of people up, and then go bust.

This is a valid concern, both for groSolar and those of us who want the solar industry as a whole to grow and succeed.  My thought on this is if you are seriously considering installing solar on your home yourself, you should go ahead and buy it from an established solar contractor.  There are many uncertainties with CitizenRE, and the most surprising result would be if they actually get their plant running and start installing solar on people’s homes on time in late 2007.  If they do get everything working, 2009 or 2010 before a customer sees his/her solar panels is much more like it.

That does not mean, however, that no one should sign up.  As I constantly point out, rooftop PV is a lousy investment for an individual from a financial standpoint.  If you have a mortgage, do yourself a favor and use that $8,000 you were thinking of spending on PV and pay down your mortgage instead.  If you really want to spend money to do something for the planet, give your friends some CFLs, get an efficient car, use public transit, or, use that money to buy the stock of carefully selected renewable energy companies or income funds.  Buying stocks always puts your money at risk, but it will take 20-30 years to even recoup your investment when you put up a PV system.  You can do all these things in addition to signing up with CitizenRE (or future companies which I expect will be offering PV via the rental model within a year.)  If they actually come through with the panels they have promised, you and the environment will be even better off.

One other counter to Mr. Wolfe’s argument is that CitizenRE management thinks that they will eventually be up and running, and they are spending money to support the marketing effort get FRA’s signed.   It will probably take a lot longer than they are saying (these things always do) but they clearly think that they have a decent chance at pulling it off eventually.

Other good blogs to read up on CitizenRE: SolarKismet, Sietch Blog.  They’re both quite skeptical, and I think that’s healthy.  For myself, I consider money spent on solar panels to be money that could be better spent on other green endeavors.  So what if the skeptics are right?  If I want to invest in solar, I’ll buy a portfolio of the better solar manufacturers out there: they’re volatile, but I expect the payback to be a lot shorter than the 20-30 years I expect from PV on my roof.  In the meantime, signing up with CitizenRE costs me nothing.

Disclosure: I have signed up as a CitizenRE distributor.  To date, I have not signed a single FRA (Forward Rental Agreement) because I have better uses for my time than sales.    The CitizenRE links in this blog are referral links For Frank Knight, who has agreed to make a donation to an environmental charity if CitizenRE actually pulls it off and you click through one of the links here.

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Canadian RE picks

There’s a good rundown of public Candian Renewable energy companies in the Globe and Mail today by Richard Blackwell.  They mention all of my favorite Canadian companies, and even one I had not yet heard about.logo

One note, there are several Canadian Income Trusts listed.  These are currently very volatile because of changes in thier tax status.  The extra volatility will undoubtedly lead to some excellent buying opportunities, but they are much more volatile than your standard income investor is probably ready for.  Where once I might have bought them for my more conservative clients, now I’m looking at them for my more aggressive clients.

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