It’s been an incredibly busy week, but here are a couple of things worth noting:
Tyler Hamilton just noted on his blog a labour survey predicting a doubling of solar jobs in Ontario. Good news, link to the survey in his post.
Greentech Media reports that California is thinking of following Ontario’s lead on Feed-in tariffs. I would if I were them. How embarrassing would it be for the US South West to be the second best place in North America to build a solar farm? Seriously though, with the federal Investment Tax Credit and a well designed feed-in tariff, solar farms would basically be licences to print money.
The Green Wombat caught this story: Google is going to map green energy zones. What that means is they’re going to incorporate data like insolation, wind resource and other renewable energy data into Google Earth. Trust me, this is very, very cool. (I’ll discuss it in more detail in a future post.)
I’ve been asked a few times what the current economic situation mean to the solar industry. (It’s amusing that people would think would I know.) My stock answer was that it’ll probably hurt the more marginal propositions, and slow down uptake in areas where there aren’t programs to support solar. The article linked above provides a decent analysis and some of the broad strokes. There will be more pressure from investors to have your ducks in a row and really demonstrate profitability, and home owners might delay upgrades because getting loans becomes harder.
But demand and prices for electricity are going up, resistance to nuclear, coal and natural gas plants are holding, the consequences of carbon are becoming more apparent, consumer demand for clean energy is growing and there is an ongoing boom in innovation in the industry supported by a continuing flow of investment. So… I think the solar industry will weather the current economic crisis.
Put another way, we’ve recieved dozens of meeting requests from people attending the Solar Power International 2008 conference, and we’re a start up still in the prototype phase of product development. We have allot of interesting things to talk about, but I can’t even imagine what it must be like for people with a product already available on the market. I said that 2009 will be remembered as the year of solar, and I stand by it. Good time to be entering the industry.
The Renewable Investment Tax Credit passed in the senate. I guess this is eclipsed by the current credit crisis, but this is good news.
I had a journalist ask me the other day what my opinion was on how the current credit crisis would effect renewable energy companies. At the time I said that shaky, mediocre propositions might not go through, and that some risky projects, especially mega-projects might get cancelled out-right. I believed then (and believe now) that really solid technologies, business models and companies would weather this storm and excellent companies might hardly notice. There are also the companies that Leeman Brothers, Goldman Sachs and others invested in, and I have no idea what this all means to them, but I wish them good luck.
What I’m interested in is how this will effect residential and building integrated solar installation. It seems obvious that if there’s a construction downturn, that less new buildings with solar will be built, but if that’s the case, then that de facto means that more people, companies and institutions will be looking at the buildings they’ve got and thinking about staying for the long haul. I think that companies that can offer a really attractive offer for solar energy installations will come out of this really well. If a company knows it’s not moving for a decade or longer, added efficiency upgrades to their current facilities makes sense.
Right now I think solar hot water companies are going to boom because the cost versus benefit really makes sense there, and I think that home solar will have a short term lull, followed by a subsequent boom starting next year. I said that 2009 will probably be the solar year, and I stand by that.
Also, I visited Upper Canada Solar Generation Ltd in Brockville, ON last week, and they have got some interesting things going on. They showed me their test facility and their system using Enphase Micro-inverters. I have to say, I was very impressed, definitely worth checking out.
Sorry for the few updates last week, quite busy over here, but more coming this week. Peace.
The Renewable Energy Investment Tax Credit (ITC for short) has passed, and better, it’s been renewed until 2016, and they increased the caps on how much you can claim for the credit. This is great news, but especially for solar energy as dozens of very large products were waiting to see if that went through or not. It also looks like some of the wish list items got through including raising claimable amounts for individuals, making the extension 8 years instead of 8 one year extensions, and allowing for some retroactive credits for facilities already already producing power. We’ll have to wait and see for all the details, but this is good no matter how you slice it, and this will drive up demand for solar energy drastically.
Mark my words, 2009 will be remembered as the Renewable Energy Year in the US. If you weren’t sure if you were going to just into the market before, now is definitely the time.
Great long weekend, and we’re going to be having an interesting week. More on that later, I assure you.
The announcement I mentioned on Friday is still on track, but I want to have everything sorted before saying anything, so it’ll be a little later this week, Thursday probably. It’s pretty cool though. For now I wanted to comment on a couple of goings on in the solar industry:
Solar Power Conf & Expo 2008 changes name to Solar Power International 2008. It’s still the same conference, we’re still going to be exhibitors there, and we’re still sponsoring the event, it’s just changed names. On that note, our exhibit will be the first completely public look at our panels, and we’ll have live data from the demonstration facility available via the web.
We simply cannot pretend, as Senator McCain does, that we can drill our way out of this problem. We need a much bolder and much bigger set of solutions. We have to make a serious, nationwide commitment to developing new sources of energy and we have to do it right away.
Sadly, he also says:
Now, increased domestic oil exploration certainly has its place as we make our economy more fuel-efficient and transition to other, renewable, American-made sources of energy.
Finally, on a lighter note, since I just got an iPhone, I thought I would point people to this Solar Powered iPhone Case. I want one (and the reviews are surprisingly positive).
This turned into a longer post, so I’ve cut it in two. The second part will come out tomorrow.
The organizers did an excellent job of putting together the conference, and the quality of the speakers was outstanding. In particular, Travis Bradford of the Prometheus Institute, Hal LaFlash from PG&E and Dr. Fred Morse from Abengoa were excellent. Some interesting take aways from the conference:
Grid parity – It’s coming sooner than people thought, with realistic dates ranging from 2011 to 2015. This is because:
The price of electricity is rising faster than expected, with the price of electricity predicted to double in the next five years.
And the price of solar power installations is falling faster and faster.
Renewable Investment Tax Credit (ITC) – The ITC is really important, and it would be a major failure of leadership in the US Congress to see it die. See my previous post on the importance of the ITC. The consequences of a failure to renew this tax credit will mean hundreds of thousands of lost jobs in the US, electricity costing more in the long run, higher CO2 emissions and basically, solar in Europe and Asia pulling further ahead of a lagging US industry. It will mean the difference between a booming industry and a flat one.
Tracking - Utilities love tracking PV applications. Tracking means more total power output for a system, but more importantly, it means more power output during the later afternoon and evening when peak demand hits. See slide:
The Investment Tax Credit is the major US Federal incentive for Solar Energy in the US. The most basic description of it would be that it’s a 30% tax credit on the installation of a Solar Power system. The credit is worth up to $2000 for individuals, and with no cap for businesses provided they have sufficient tax liability. It’s currently valid through to the end of 2008, and is up for renewal right now.
But, it’s completely bogged down in partisan politics and it’s starting to look like it’s not going to go through (article dated Sunday, July 20, 2008). Basically, the Republicans want to kill it more than the Democrats want to save it. While at Intersolar 2008, almost every speaker raised the importance of the ITC to the US Solar Energy Industry. The general consensus was that without it, solar would grow in the US but slower, and with European and other non-American Solar Energy companies pulling further ahead of their American competitors.
Here are some articles and analysis that summarize different view points rather well:
No Tax Credit, No Solar Power – A the title is alarmist, the article is specifically about two Abengoa projects that could be halted without the ITC. Good analysis though and worth reading.
Finally, a quote from Dr. Fred Morse, senior adviser of U.S. operations for Abengoa Solar, from this Greentech Media Q&A.
Q: Many companies expect a one-year extension to pass before the renewable-energy tax credit expires at the end of the year. Will that be enough to keep CSP moving forward?
A: A one-year extension is of zero value. It takes about four to six years to get a CSP plant sited, permitted, built and up and running. The [investment tax credit] only applies when the plant comes online. And, if you want to finance the plant today, the banks … won’t finance the project unless the [credit] will be there when it’s needed.
So what does all of this mean for the solar energy industry in general? Well, it looks bad, but the reality is that it’s “less good”. Basically, even without the ITC, analysts predict a record year for Solar in California and the rest of the US, if it passes with the 8 year extention that Democrats want, then it will be a banner year. Or put another way, it weeds out the mediocre projects and the mediocre companies. Solar investment will still be in the Billions this year and more solar farms will be built this year than last year.
Signs of a booming industry example:
Q1 2008 Solar Investment is already 30% over Q1 2007 – Source Cleantech.com
States are moving in to fill the funding gap, especially California and parts of New England
Electricity is expected to double in price in the next five years while Solar energy prices continue to drop.
Not to say that the Solar Tax Credit isn’t essential for many US companies and many solar projects, but the industry in general is doing great.
More details available from the Solar Energy Industry Association (SEIA Solar Tax Credit pdf file) and if you’re trying to do research and want as thorough a description as possible, check the Database of State Incentives for Renewables & Efficiency’s (DSIRE) Federal Incentives Page.
Ok, going to start summarizing what I’ve learned here tomorrow and going to be posting a few things here, some of which will appear on the other blog as well. Couple of quick notes – some that I’ll flesh out in more detail later:
Everyone is worried that the ITC won’t get renewed or utilities will be left out. Basically, if that happens, the solar industry in the US isn’t going to grow as explosively as people are predicting.
The price of solar cells is falling faster than many people predicted.
People are expecting electricity prices to double in the US in the next 5 years.
Which means grid parity in some regions is closer than many people think.
Most of the breakthroughs that people are really triumphing are incremental not transformative.
The state of the art of BIPV isn’t as impressive and I’d think – it seems to be surviving as a niche on the basis of the high barriers to entry.
I’ll definitely provide more detail on all of these points and more. Below is a very cool slide from one of the presentations about predicted growth in several solar markets.
Solar Growth by Region
I was a little surprised to see the expected market growth in Korea and Greece, although both markets have interesting challenges. Korea’s growth is based on very aggressive government incentives and deployment, but is focused on local job creation which will prove a barrier for overseas companies. Greece’s electricity market is heavily regulated and setting up power there is a bureaucratic nightmare.
