Updates and Comments

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.

Good News Everybody

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.

Green Wombat has a good short summary, and there’s a little more detail in this article.

I’d be celebrating if I weren’t so busy.

Breaking the model

I was just reading a blog post about the world solar energy market over at Go Green Solar.  Good short post about which countries have the most solar PV and why.  Here’s the summary image of the article:

Installed PV by Country - 2007

Keep in mind that this doesn’t include Solar Thermal, which would change the US and Spanish shares of this chart somewhat.  The fact remains that right now, economics rule solar.  Expensive electricity + Incentives = Booming Solar Industry.

But there’s nothing set in stone about this model.  Electricity prices are going up, the cost of solar is coming down, and the old energy sources are becoming more volatile.  So the current electrical generation model, and the “energy crisis” that politicians love to talk about is very real in the sense that changes are coming, and big ones.  The current subsidies all flow to oil and coal right now, with nuclear and hydro-electric dams getting a meaningful chunk of cash too.

What makes solar and other renewables is that they have the power to break the current model, and soon enough, can break it with or without the subsidies that it’s so clearly dependent on.  That’s what makes our current project at Morgan Solar so exciting – we want to be one of the first companies (but by no means the only one) that crosses that subsidy barrier.

We want to be making solar power systems that cost less than the electricity they produce, and we think we can do it in the next year or two.  Breaking the model entirely, and shaking up the system.  How cool is that?

Also, for those people in Toronto, Tuesday is the first of the OCETA Breakfast Sessions.  I’m going, and I have hopes for these, I know the people that set them up, and I’m expecting the quality to be excellent.

Five More Solar Power Myths

Ok, so here are the other five promised solar energy myths.  See my previous post for the first five.

6 – Solar power can only exist with subsidies/tax breaks

Right now this is actually true in most places for most solar power technologies. There are probably some thin film installations and a few concentrated solar thermal installations that approach cost effectiveness, but in general without some sort of subsidy, solar can’t compete.

Yet.

The reason it can’t compete, yet, is partly because every other form of energy is heavily subsidized as well and partly because true, industry-wide economies of scale haven’t truly kicked in yet. Coal, oil, natural gas, hydro electric, nuclear… all of those industries get money from the government and lots of it. Solar companies would love a level playing field, either remove the subsidies from the competitors (not realistic), or give us a taste. Solar really only needs a little, and the ideal model is based on a feed-in tariff so the subsidies are power output driven.  Traditional energy also has decades, in some cases, centuries of industry establishment, solar is catching up, but it’ll take another few years.

That said, with the price of electricity in many parts of the US expected to double in the next five years, and the price definitely rising rapidly everywhere, combined with the falling price of different solar technologies, solar power won’t even need a level playing field soon enough. In as little as five years, unsubsidized solar will be a cost effective way to generate electricity in many places.

7 – Solar power needs extremely intense sun to work (solar isn’t for Canada, New York, the UK etc)

For now, the real cost considerations for solar are the regulatory environment and the price of electricity. I know this slightly contradicts what I said in myth 6, but note the clever inclusion of the words “for now“.  Barry Cinnamon, the CEO and founder of Akeena Solar, outlined this better than I ever could in this podcast (definitely worth a listen).

If you go to solar conferences, especially conferences in the US South West and California, they’ll show you these beautiful NREL Direct Normal Irradiance (DNI) maps.

NREL Direct Normal Irradiance US Map, original image URL: http://www.nrel.gov/gis/images/us_csp_annual_may2004.jpg

They’ll talk about land speculation in the Mojave desert and write off solar development in the rest of the US.  Here’s Germany’s DNI map:

Germany DNI Map

Germany is the currently biggest solar energy market in the world.  If intense direct sunlight was an absolute requirement for a viable solar market, then that would be impossible.  Spain and Japan also have large and growing solar energy markets, and neither has sunlight like the Mojave. Spain averages between 6.0 to 8.5 kWh/m2/day depending on the region.) In every case it’s not the amount of sun, but a positive regulatory environment, and expensive electricity.

Having lots of intense sun is great, but Ontario up here in Canada is going to out pace many US states for solar (including Southern states), mark my words.

8 – The only viable solar power technology is…

I’ve heard enough versions of this many times, people who latch onto thin film or Concentrated solar thermal and treat all other solar technologies like they’re trivial sideshows or over hyped non-starters. Some people have this weird tendency to latch onto a single metric and then just over simplify the market and dismiss amazing or at least viable technologies.

Thin film is cheap and getting cheaper, but it’s not very efficient and needs lots of space to generate power. Concentrated Solar Thermal can store heat for use later, but needs perfect site conditions or the price goes up. No solar power technology is a one size fits all solution; all of them have their strengths and weaknesses. Basically, I’m not even going to waste my time on this one, if you really think there’s only one “real” solar power technology, then you’re wrong.

9 – Solar is a bad investment compared to other alternative energy sources

This one I’ve heard often, and it’s not as crazy as myth number 8. Solar is still the most expensive, although the degree to which that’s true is less every day.

Most solar technologies are on the high end of the price scale, but solar technology prices are falling fast so the graph below will be out of date very soon (it is already actually).

Costs of Different Renewable Energies in California

ALL renewable energy sources need to be explored, and all of them, including solar, have their strengths and weaknesses. Per watt, wind is cheaper than solar, but wind tends to produce more power in the evenings and at night than in day which doesn’t fit a demand curve as well as wind proponents would like. Geothermal is an excellent source of energy that we should explore more of, but it’s not appropriate for all locations. The beauty of solar, wind, geothermal and other renewable power sources is that once you’ve built the systems, the fuel is free.

As a society, we need all the energy we can get. Look at Google – right now they’re building data centres where the power is, not necessarily where the users are. Power availability is the key driver for them when choosing a data centre location. We need all the power we can get, and renewable energy absolutely has to be part of our power portfolio.

And finally…

10 – Solar power will save us from global warming

If only that wasn’t a myth.

But the truth is that no amount of renewable energy adoption and investment is realistically going to stop global warming. The US and the rest of the West have designed their entire economies around the idea that oil and coal are cheap and unlimited, and that burning them is a good idea. Emerging economies like China and India are working hard to copy the same model.

The fact that neither coal nor oil are unlimited, and that there’s nothing written in stone about them being or staying cheap means that we’ve built everything on a set of false premises. That we’re discovering now that there are long term environmental consequences really just means we need to examine a broken system sooner, and that the system was more broken than we expected.

Solar power and other forms of renewable energy, and the inevitable hydrogen economy that will follow in post oil days will do many things, but only a serious, wide scale and major commitment at a society and individual level will stop global warming (if it isn’t already too late). Renewable energy will help certainly, and solar power has a role to play in the solution.

Global warming is a cultural problem, and technology by itself won’t solve it.