California Solar Startups Might Get Help in Unlikely Places

SAN FRANCISCO — California’s solar power market and its startups stand to gain from utilities making a direct play into renewable energy development, a prominent industry representative said in an interview yesterday.

Sue Kateley, executive director of the California Solar Energy Industries Association, said she welcomes Pacific Gas & Electric Co.’s decision this week to launch a five-year effort to build and own solar-run power plants totaling 250 megawatts. The deal, she said, is a sign that the state’s installers, distributors and manufacturers could find enough work to weather the economic downturn.

“It’s a win-win on either side,” said Kateley, who represents solar companies all along the supply chain.

San Francisco-based PG&E has backed its ownership plans with a second track under which the utility intends to help finance another 250 MW of development. PG&E CEO Peter Darbee said the company expects to spend $1.4 billion to see the entire 500 MW online by 2015.

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Cost of Solar Installation has Fallen in the Past Decade

The cost of installing solar panels on homes and businesses plunged 27.6 percent from 1998 through 2007, according to a new study that questions some of the conventional wisdom about solar power’s price.

Researchers at Lawrence Berkeley National Laboratory examined the costs of 37,000 photovoltaic systems across the country and found the average price fell from $10.50 per watt in 1998 to $7.60 per watt in 2007. Those averages include residential systems as well as larger arrays installed on businesses and do not take into account financial incentives from the federal or state governments.

Smaller, home-size systems averaged $8.30 per watt in 2007, which was more than the average at commercial installations. At that price, a typical 3-kilowatt residential solar system would cost $24,900.

The study’s findings, released Thursday, contain one surprise.

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Mergers Underway in Home Solar Installation Market

The home solar installation market will see fewer but larger players as the pace of mergers and acquisitions accelerates, industry insiders forecast.

Wednesday, a New England solar installer announced an aggressive move into sunny California, acquiring the residential-installation portion of Borrego Solar Systems, a San Diego County company with three Northern California offices.

GroSolar, based in White River Junction, Vt., will emerge from the deal as the fourth-largest residential solar installer in the United States, and its chief executive said it hopes to rival industry leaders SolarCity of Foster City, Akeena Solar of Los Gatos and REC Solar of San Luis Obispo.

“California is 70 percent of the solar market,” said Jeff Wolfe, GroSolar’s CEO. “We’ve very consciously grown our business. We wanted to be firmly established before we entered the fray here.”

The move follows the recent merger of two other solar companies, Regrid Power of Campbell and Real Goods Solar of Hopland.

“The market is definitely showing signs of commoditization,” said Tom McCalmont, the Regrid Power executive who is now CEO of Real Goods Solar. “This happens in all markets as they mature.”

Installing rooftop solar systems continues to be a booming business in the state. Twice as many megawatts of solar power went online in 2008 as in 2007, according to a recent report by the California Public Utilities Commission.

In all, 158 megawatts of solar power were installed in 2008, up from 78 megawatts in 2007. Since the California Solar Initiative was launched in early 2007, the state program has received 18,290 applications for solar project rebates.

GroSolar started as an installer in 1998, and began distributing panels to other installers in 2004, Wolfe said. It received venture funding in 2006, and added commercial installations to its residential and distribution business in 2008.

The company now does home solar installations in nine states and has 200 employees. It will absorb 65 workers from Borrego.

Borrego Solar Systems, based in El Cajon, will move away from residential installations to concentrate on commercial and government solar projects, which make up 75 percent of its business, CEO Mike Hall said.

“When we looked forward at how to scale the business, we needed to start thinking about megawatts, not kilowatts,” Hall said.

Borrego will focus on projects generating from 200 kilowatts to 3 megawatts, with a special emphasis on schools and low-income and multiunit housing projects. It will keep a Bay Area presence, opening an office in the East Bay in the near future, Hall said.

GroSolar will keep Borrego’s locations in San Jose, Berkeley and Petaluma, and plans to drop the Borrego name in about four months, Wolfe said.

Financial terms of the deal were not disclosed. Both companies are private.

GroSolar is well-positioned to become a large player in rooftop installations, Hall said. “My prediction is that there will be a couple of large, national residential integrators (installers),” he said, “but probably just a couple. There are economies of scale when you’re the biggest.”

Right now, seven to 10 companies are trying to become large national or multi-region players.

A 2008 study from the state’s community colleges found more than 700 companies were installing solar in California, but the head of the California Solar Energy Industries Association noted that the top 50 companies do the lion’s share of installations.

“It would not be surprising to see more mid- and large-size contractors start to merge,” said Sue Kateley, CalSEIA’s executive director.

Still, new companies continue to enter the solar market - especially in the down economy, when general contractors and roofing companies are adding solar to their portfolios, she said.

“One theory is that 20 years down the road, we might be looking at solar as similar to the heating-air conditioning model with large, franchises like Carrier, Trane and Lennox, and then a number of small, independent companies,” Kateley said.

Matt Nauman
San Jose Mercury News

California’s Renewable Energy Goals Feasible

California’s goal of getting 33 percent of its electricity from the sun, the wind and other renewable sources by 2020 might be more feasible than previously thought, according to a new government report.

If all the renewable power projects proposed in the state last year were built, California would easily surpass that goal, according to a report issued Wednesday by the California Public Utilities Commission. All told, those projects would generate 24,000 megawatts of electricity, enough for 18 million homes.

That’s on top of the renewable power already flowing in California. According to the report, solar plants and wind farms built in California during 2008 can generate 516 megawatts of electricity, roughly as much as a midsize, fossil-fuel power plant. The previous year, the state only added 113 megawatts of renewable power.

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President Obama’s Stimulus Package Gives a Boost to Clean Energy

Among the incentives, the plan will allow developers of renewable-energy projects to swap tax credits for cash grants.

The renewable-energy sector got a lift from the economic stimulus package signed Tuesday, with a fix to a crucial tax issue that had stalled projects nationwide.

Solar and wind companies said it could take several months for the legislation to get portions of the industry moving again. But some players are already gearing up for growth.

SolarCity, a Foster City, Calif., company that’s one of the nation’s largest residential solar firms, will end a hiring freeze in place since December and begin seeking more installers immediately, said Chief Executive Lyndon Rive.

“We should be adding 16 or so crews over the next few months,” Rive said. “This is a great step toward resolving our challenges.”

The American Recovery and Reinvestment Act will invest nearly $79 billion in renewable energy, energy efficiency and green transportation, according to a final tally of the legislation by the nonprofit Environment California.

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Obama Signs Stimulus Packed With Clean Energy Provisions

President Barack Obama signed the $787 billion stimulus package today, and the clean energy industry - among the biggest winners - is celebrating.

The signing ceremony was heavily loaded with solar symbolism: Mr. Obama signed the bill after touring the Denver Museum of Nature and Science, which has solar panels on its roof. He was also introduced by Blake Jones, head of Namaste Solar Electric, a Colorado company that installed solar panels on the governor’s mansion there.

“It’s an investment that will double the amount of renewable energy produced over the next three years,” said Mr. Obama, who also promised that the bill would help “transform the way we use energy.”

The text of the bill is posted by the House Appropriations Committee here. This detailed summary is particularly helpful.

The provisions include:

* A large sum for energy efficiency, including $5 billion for low-income weatherization programs; over $6 billion in grants for state and local governments; and several billion to modernize federal buildings, with a particular emphasis on energy efficiency.

* $11 billion for “smart grid” investments.

* $3.4 billion for carbon capture and sequestration demonstration projects (otherwise known as “clean coal”).

* $2 billion for research into batteries for electric cars.

* $500 million to help workers train for “green jobs.”

* A three-year extension of the “production tax credit” for wind energy (as well as a tax credit extension for biomass, geothermal, landfill gas and some hydropower projects).

* The option, available to many developers, of turning their tax credits into direct cash, with the government underwriting 30 percent of a project’s cost.

Kate Galbraith
The New York Times

Solar Water Heating Incentives May Be On The Way

Ninety percent of the hot water that pours from Californians’ bathroom and kitchen taps is warmed with natural gas, but all those hot showers come with a cost. Burning natural gas pumps out hundreds of thousands of tons of greenhouse gas emissions each year — and that’s in the state of California alone.

Capitalizing upon the state’s goals to reduce greenhouse gases to 1990 levels by 2020, the California Solar Energy Industries Assn. recently released a study to demonstrate the environmental and financial values of replacing natural-gas water heaters with those that are powered with solar energy in the hopes its study will greenlight a potential $250-million consumer rebate program in the state.

The consumer rebate program is part of AB 1470 — a 2007 law that charged the California Public Utilities Commission with conducting a pilot project to determine if solar water heating is cost effective enough to implement the rebate program, which would provide financial incentives for the installation of as many as 200,000 solar water heaters. A typical residential solar water heating system costs $6,500. Read more

Danville’s Athenian School Turns on New Solar Panels

Officials at the Athenian School have given themselves the top grade for a new solar power system they say will save money and the environment.

The private school in Danville on Wednesday launched its new power system - a baseball field-sized array of panels shaped into the letter “A” on the school’s hillside.

The 220-kilowatt system consists of 1,300 photo voltaic panels that cover 30,000 square feet, according to the school. It will provide half of the school’s electricity needs. It was designed and installed by REC Solar and Mitsubishi Electric and financed through a power purchase agreement with Tioga Energy that the school expects will save about $250,000, or 15 percent of annual energy costs, over 20 years.

The school said over the course of the 20-year agreement, the array will cut out the generation of nearly 12,800 pounds of smog-producing emissions and 66 million pounds of carbon dioxide.

Eric Louie
San Ramon Valley Times

Act Solar Receives 8MW Order for PowerString From Pacific Power Management

Act Solar’s Optimization Solution Boosts Power Output and Extends Life of PV Systems

Act Solar, Inc., a power management company that provides optimization solutions for solar power plants, has received an 8MW order for PowerString from Pacific Power Management, a full service commercial solar provider. Act Solar’s flagship product, PowerString, improves array performance by 6-11% using its patent-pending Injection Boost^TM technology. Extensive field tests and historical modeling have shown that PowerString will cumulatively deliver 40-80% more power over 20-40 years of operations.

“We have a great deal of experience as a solar systems provider and that experience is one of our key competitive advantages,” said Mark Frederick, Managing General Partner of Pac Power. “We are deploying Act Solar’s technology because it enables us to instantly improve system performance, increase the ‘power density’ of our arrays and deliver lower cost solar power, thus strengthening our competitive position. PowerString further protects our investments by assuring optimal performance in the real-world environment of commercial installations.”

“The solar industry is now focused on ensuring maximum performance of PV arrays,” said Act Solar CEO Andrew Foss. “PowerString ushers in the next phase of efficiency and cost reduction by further lowering generation costs and assuring maximum power output over the life of the array. Solar system integrators, operators and financiers will substantially lower their generation costs-per-kWh by deploying PowerString.”

Act Solar products and services dramatically lower the cost of solar generated electricity over the life of a system by allowing each module in an array to perform at its maximum potential, regardless of asymmetric electrical conditions caused by shading, soiling, ground faults, etc. Wireless management features further lower costs by eliminating design constraints and providing full system monitoring, analysis and unmatched diagnostic reporting.

Act Solar

BrightSource Announces Big Solar Energy Deal With Southern California Edison

BrightSource Energy of Oakland scored another big deal in California today, announcing a contract to supply Southern California Edison with solar energy from remote desert generating plants — enough to power 845,000 homes.

The deal for 1,300 megawatts of renewable energy is believed to be the biggest contract for so-called solar thermal power, which uses heat from the sun to create steam to spin electric turbines.

The agreement calls for a series of seven plants to be built in far-flung areas of southeastern California over the next seven years. If approved by regulators, the first 100-megawatt facility would be constructed in the Mojave Desert near the San Bernardino County community of Ivanpah. That plant could be operational by 2013.

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