Solar industry booming, but problems loom

Solar power is a booming business in the U.S., according to a report released today by GTM Research and the Solar Energy Industries Assn. (SEIA). The study said there were more domestic solar installations completed in the third quarter of this year than during all of 2009.

"The U.S. solar industry is on a roll, with unprecedented growth in 2011," said Rhone Resch, president and chief executive of SEIA, at an event announcing the release of the report. "Solar is now an economic force in dozens of states, creating jobs across America."

SEIA is the national trade association of the U.S. solar energy industry, and it has 1,100 member companies.

Some 449 megawatts of power were installed in various parts of the U.S. in the third quarter in a variety of projects that ranged in size from large, utility-scale facilities to small residential systems, the report said. One MW or megawatt is the equivalent of 1 million watts of power.

The record third quarter, which was a 140% increase over the same period a year ago, also boosted the number of domestic solar installations in 2011 past the 1,000 MW mark, surpassing the 887 MW completed during all of 2010. The projects contributed to the 100,237 solar related jobs in the U.S., a figure that has doubled since 2009, SEIA said.

The bulk of those third-quarter installations were in California, which accounted for 44% of the total or nearly as much as the next six states combined. California has 25,575 solar-related jobs, or more than one-quarter of the national total.

But the report also warned that the U.S. solar industry faces considerable uncertainty in 2012 and beyond because of the coming expiration of the Section 1603 Treasury Program. SEIA said the program had awarded over 3,600 grants totaling $1.5 billion for more than 22,000 individual solar projects in 47 states, as of November of this year.

SEIA also said that 1603 Treasury program supported over $3.5 billion in private investment. But the program expires at the end of the year, which has many in the industry worried and clamoring for an extention.

"Our industry needs stable policy on which to make business decisions, said Resch, later adding, "To keep the industry growing and creating jobs in the U.S., we need Congress to extend the 1603 program. The 1603 program has done more to expand the use of renewable energy than any other policy in U.S. history."

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 Buffett venture could boost solar industry

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— Ronald D. White

Photo: Ivanpah Site Compliance Manager Douglas Davis talks to reporters during Phase 1 of the 370-megawatt Ivanpah Solar Electric Generating System construction project, currently underway in California's Mojave Desert. The domestic solar industry is booming, but advocates say problems loom. Credit: Josie Lepe / San Jose Mercury News / MCT

Buffett company purchase gives solar industry big boost

Warren Buffett’s MidAmerican Energy Holdings company has agreed to buy a giant, 550-megawatt photovoltaic farm currently under construction in San Luis Obispo County for $2 billion, giving a huge boost to the solar industry that could spur investment by other major players.

The "utility-scale" facility MidAmerican is purchasing is being built by First Solar Inc. of Tempe, Ariz. A spokesman for First Solar, Alan Bernheimer, said the farm would produce enough power to provide for the energy needs of 160,000 California homes. But the investment had deeper meaning for an industry that still has only a small footprint in the nation's energy mix and has been battered by recent bankruptcies.

"In a lot of ways, this is classic Warren Buffett," said Bruce Bullock, executive director of the Maguire Energy Institute at Southern Methodist University. "He comes in to an industry that is starving for capital investment. At the same time, this is something that also tells people it's time to take solar power seriously."

Solar power currently provides just 1% of the nation's renewable power generation, according to the Energy Department. But it is also the nation's fastest-growing energy generation platform, said Michelle Kinman, a clean-energy advocate for Environment California.

"Solar is a sound investment," Kinman said, "a fact bolstered by MidAmerican's announcement today."

Others thought it was a little too early to get excited.

"It's one purchase of one very large system," said Paula Mints, a market research analyst and director in Navigant Consulting Inc.'s energy practice. "If he [Buffett] continues to invest in this sector, it will be significant."

Bernheimer of First Solar said the the project was being built on 3,500 acres of unproductive farmland and would average about 400 construction jobs over the course of its development. Construction is expected to be completed by 2015, but the facility is expected to begin producing power for Pacific Gas & Electric sometime next year.

Berkshire shares fell 1.1% after the announcement, while First Solar shares climbed 7.7% to $49.65.

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— Ronald D. White

Photo: Investor Warren Buffett is moving into solar power in a big way. Berkshire Hathaway's MidAmerican Energy holdings company has agreed to buy First Solar Inc.'s 550-megawatt solar farm in San Luis Obispo County for $2 billion. Credit: Nati Harnik / Associated Press

Biofuels, wind power show gains, but hurdles remain

Biofuels and wind power are having the biggest new impact in American power generation, according to a report released today by the U.S. Energy Department. Consumption of biofuels has risen 16-fold since 2000 and wind power use has seen an eight-fold increase during the same period.

Among renewable energy sources, only solar power is rising faster, the Energy Department said. But solar and photo-voltaic power are still the smallest contributors to the nation's energy needs, accounting for just 1% of the renewable total.

Hydroelectric power remains the biggest resource, at 31% of all renewable energy produced in the U.S., but it is not a growing resource. Wood is next, at 25%, followed by biofuels (23%), wind (11%), waste (6%), and geothermal (3%). Altogether, renewables account for 8% of U.S. energy production.

The Energy Department said that improved technology was part of the reason for the growth in electricity generation from wind power, which rose from about 6 billion kilowatt-hours in 2000 to about 95 billion kilowatt-hours in 2010. But the Energy Department also cited the importance of financial incentives in the form of federal production tax credits and grants.

The American Wind Energy Assn. is lobbying Congress to extend the tax measures amid partisan political wrangling over the issue, fearing the industry's ability to thrive without them.

Biofuels have made a huge splash recently. Earlier this month, Continental Airlines Flight 1403 made history when it landed at Chicago's O'Hare airport as the nation's first biofuel-powered revenue generating passenger flight. Alaska Airlines this week launched a round of 75 flights it said would be powered by biofuels.

But the biggest hurdle for renewables is cost. For 11 days of biofuel-powered flights, Alaska Airlines purchased 28,000 gallons of biofuel for a whopping $476,000. That works out to about $17 a gallon or about six times more than what it would have paid for regular jet fuel.

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--Ronald D. White

Photo: Turbines line the hillside at First Wind's power project in Sheffield, Vt., which is ready to generate power after an eight-year planning and building process. Photo credit: Toby Talbot/AP

California lifts suspension of green energy tax credit

Members of a state commission unanimously voted to lift a month-long suspension of an alternative energy-related tax credit that had been imposed following the bankruptcy of Solyndra, a politically connected California solar panel company.

The California Alternative Energy and Advanced Transportation Financing Authority, after reviewing its operations and the granting of $25.1 million in sales tax credits to Solyndra, concluded it could tighten the way it handles applications.

Joe DeAnda, a spokesman for the commission's chairman, state Treasurer Bill Lockyer, called the program "transparent and accountable." But he noted that "we can improve the way we evaluate applicants."

Solyndra, which used a $535-million federal loan guarantee to open a factory in Fremont, Calif., filed for bankruptcy protection Sept. 6. The announcement set off a political controversy in Washington, with allegations that the Obama administration pressured U.S. Department of Energy officials to approve the assistance despite warning signs that the company was in trouble.

California's support for Solyndra was much smaller than the federal government's. Solyndra was one of 26 companies that have participated in the California program.

State Sen. Alex Padilla (D-Pacoima), who held a hearing on the Solyndra case as chairman of the Energy, Utilities and Communications Committee, said he supported the state commission's decision to restart the tax credit. At last week's hearing, a number of executives from solar panel manufacturing companies praised the tax credit for making it possible for them to build and operate plants in California.

"The facts provided at the hearing show that the program is working as intended," said Padilla. "California-based green jobs are being created."

The state Legislature will act to improve oversight of the alternative energy tax credit, Padilla said, "but we must not let the failure of one company deter us."

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-- Marc Lifsher

Photo: Workers install solar panels at the Sacramento Municipal Utility District. Credit: Rich Pedroncelli/Associated Press

California drops to No. 2 in energy efficiency rankings

The American Council for an Energy-Efficient Economy's latest assessment of the states, released Thursday, showed California edged out of first place for the first time in the five years that the rankings have been conducted.

The council's State Energy Efficiency Scorecard showed Massachusetts in the top spot, edging out California with a score of 45.5 out of a possible 50 points. California had 44 points, then there was a drop to New York in third with a score of 38, followed by Oregon (37.5). Washington, Vermont and Rhode Island were next with identical scores of 34.

The scores were based on weighted criteria that gave more credit to states that offered utility and public benefits funds and also had the best efficiency programs and policies (20 points possible). That was followed in importance by transportation, building energy codes and state government initiatives.

California finished first or second in every category including the one gauging appliance efficiency standards, where it tied for first.

ACEEE representatives said the report card showed that many states were taking the problem of energy efficiency seriously in spite of a sour economy and severe budget constraints.

“Energy efficiency is America’s abundant, untapped energy resource and the states continue to press forward to reap its economic and environmental benefits,” said ACEEE Executive Director Steven Nadel.
“The message here is that energy efficiency is a pragmatic, bipartisan solution that political leaders from both sides of the aisle can support. As they have over the past decades, states continue to provide the leadership needed to forge an energy-efficient economy, which reduces energy costs, spurs job growth, and benefits the environment,” Nadel added.

There was some irony in the report. The state with the lowest ranking, North Dakota, with a mere 2.5 points out of 50, is the state with the nation's fastest growing crude oil production.

See more on the ACEEE Scorecard.

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— Ronald D. White

Map: The ACEEE ranked the states in terms of their efforts to improve energy efficiency. The nation's leaders are clustered on the West Coast and in the Northeast. Credit: American Council for an Energy-Efficient Economy

UC Davis' 'zero net energy' West Village opens this weekend

UC Davis West Village is set to officially open this weekend in what the campus administration claims will be the nation's largest so-called "zero net energy" community.

The "zero net" part means that West Village's goal is to consume only as much energy as it can generate.

UC Davis officials said that this would be accomplished by applying technologies including solar-reflective roofing, radiant barrier roof sheathing and extra insulation. Energy-efficient exterior lighting fixtures, indoor occupancy sensors and “daylighting” techniques are expected to require about 60% less energy than standard lighting.

A Web-based tool will allow energy monitoring by unit and a smartphone app will let residents turn off lamps and plugged-in electronics remotely. A four-megawatt photovoltaic system is expected to meet the energy needs of the first 1,980 apartment residents and commercial spaces.

“UC Davis West Village illustrates our commitment to cutting-edge research in sustainability and the value and impact of public-private partnerships,” said UC Davis Chancellor Linda P.B. Katehi. “The success of these partnerships demonstrates what can be achieved when innovations in design, science and engineering come together for the public good.”

West Village's initial $300 million phase includes 315 apartments, 42,500 square feet of commercial space, a recreation center and village square. Eventually, it's planned to include 3,000 people in 662 apartments and 343 single-family houses.

UC Davis officials said that the project is a collaboration between UC Davis and West Village Community Partnership, LLC, a joint venture of Carmel Partners of San Francisco and Urban Villages of Denver. The developer has a 65-year ground lease with the university for the project.

“UC Davis West Village is a visionary model for integrating pioneering sustainable principles with high-quality living environments, creating an eco-friendly lifestyle for students, faculty and staff,” said Nolan Zail, senior vice president of development at Carmel Partners.

UC Davis officials said that PG&E, Chevron Energy Solutions, Energy+Environmental Engineering and Davis Energy Group, together with UC Davis faculty and staff, played key roles in the zero net energy planning and feasibility studies.

In its Zero Net Energy Action Plan, released Sept. 1, 2010, the California Public Utilities Commission called for shifting all new residential construction in California to zero net energy by 2020, and all new commercial construction by 2030.

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Seattle's green energy building

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--Ronald D. White

Photo: UC Davis' energy neutral West Village complex official opens this weekend. Photo credit: UC Davis.

 

Solyndra bankruptcy is aberration, solar power executives say

National media "chatter" surrounding the much-publicized bankruptcy of Fremont, Calif., solar panel producer Solyndra Inc. and the loss of $535 million in federal loan guarantees is hurting more successful renewable energy companies and obscuring the new industry's success, solar executives said.

In a conference call Thursday, members of Californians for Clean Energy & Jobs, a coalition of green businesses and environmentalists, said they wanted to put the Solyndra scandal into context. The controversy led to high-profile hearings in Congress and widespread Republican party criticism of the Obama administration.

The solar executives stressed that solar panel costs have plummeted, fueling increased residential and commercial demand for renewable energy. Additionally, the solar industry has come up with creative financing programs that allow homeowners to get off the utility electric grid without having to invest large amounts of money in buying rooftop solar systems.

"Solar power is becoming more affordable every day," with costs down 30% in the last year, said Arno Harris, chief executive of Recurrent Energy in San Francisco, a large developer of solar photovoltaic panel projects. "We need to look beyond the failure of one company and see the tremendous success."

Solyndra, whose high-tech plant was visited by President Obama, Vice President Joe Biden and former California Gov. Arnold Schwarzenegger, made less than two-tenths of 1% of solar panels on the market, said David Hochschild, vice president of Solaria Corp. in Fremont, which makes photovoltaic modules. The solar industry, he said, has grown by an average of 65% per year the last decade.

Sungevity Solar Home Specialists of Oakland has tripled the number of employees to 300 this year, said President Danny Kennedy. The company puts solar systems on homes without requiring any upfront payments from customers. It then leases the equipment, usually at far less cost than the electric bills they used to get, Kennedy said.

"This is a very affordable way for consumers to control costs at home, particularly in this uncertain environment," said Lynn Jurich, president of SunRun Inc. of San Francisco, which also installs and leases home solar systems.

Despite its growth and success, the solar industry still needs support from government in the form of tax credits, loan guarantees and subsidies, the executives said.

"Those programs are critical in generating success," said Hochschild. "Solar is on the cusp of playing a large role in mainstream markets."

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-- Marc Lifsher

Photo: Solar panel construction at the Sacramento Municipal Utility District in 2009. Credit: Rich Pedroncelli / Associated Press.

 

California treasurer: Put renewable-energy tax exemption on hold

The head of a California panel that hands out sales tax exemptions to renewable-energy manufacturing companies wants to suspend the program in the wake of the Solyndra scandal.

State Treasurer Bill Lockyer said he will ask fellow members of the California Alternative Energy and Advanced Transportation Financing Authority at a meeting Tuesday to not approve any new applications for exemptions from paying California sales tax. The exemptions are aimed at encouraging the purchase of equipment used to make solar panels and other energy-saving projects.

The program was authorized last year by the Legislature when it passed SB 71 by Sen. Alex Padilla (D-Pacoima).

A decision on the request is not likely to be made before late October, a spokesman for Lockyer said.

"SB 71 created a tax exemption for businesses that requires a level of transparency and public accountability rarely, if ever, seen in California or anywhere else," said Lockyer in a statement released by his office. "But every government program can be improved."

He added that "in light of recent events"-- the potential loss of a $535-million federal loan guarantee to Solyndra, a bankrupt Fremont solar panel manufacturer -- "we owe it to the taxpayers to see if there is more we can do to make sure we don't give their money to companies headed for a fall or companies that take California's money and run to other states to create jobs."

Lockyer's authority had approved $37 million worth of sales tax exemptions for Solyndra, but the company only used $25.1 million to buy equipment before it closed.

The authority approved 32 sales tax exemption applications, valued at $104 million, of which $31.4 million was used, the treasurer's office said.

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Photo: President Obama talks with Solyndra Chief Executive Chris Grommet during a visit to the company's factory in Fremont on May 26, 2010. Credit: Alex Brandon / Associated Press

Solyndra execs won't answer questions during hearing [Updated]

 
Solyndra Inc.'s chief executive and chief financial officer will invoke their 5th Amendment rights and not answer questions during a Friday hearing before a House investigative committee, their attorneys said.

Attorneys for Solyndra CEO Brian Harrison and W.G. “Bill” Stover, the company’s chief financial officer, sent letters to the House Energy and Commerce Committee’s investigative subcommittee Tuesday saying the two executives would not answer any questions during the hearing.

“I have advised Mr. Harrison that he should decline to answer questions put to him by this subcommittee based on his rights under the Fifth Amendment,” Harrison’s attorney, Walter F. Brown Jr., said in a letter to Rep. Clifford B. Stearns (R-Fla.), the committee’s chairman, and Rep. Diane DeGette (D-Colo.).

“This is not a decision arrived at lightly, but it is a decision dictated by current circumstances,” Brown said in the letter.

Agents with the FBI and Energy Department’s inspector general executed a search warrant at Solyndra’s Fremont headquarters on Sept. 8, two days after the company declared bankruptcy despite receiving $528 million in federal loans. The FBI and Energy Department have declined to say what prompted the investigation or who it is targeting.

Stover's attorney, Jan Nielsen Little, said in a letter to the committee that the criminal investigations prompted the decision for Stover to decline to testify. Stover still intends to appear at the hearing, Little said.

"Under these circumstances, Mr. Stover must invoke his rights under the Fifth Amendment of the U.S. Constitution," Little wrote. "It would be irresponsible for anyone in his position not to do so."

Solyndra was the first recipient of Energy Department loans under the Obama administration intended to spur economic growth and create jobs through investments in green technology. To date it is the only Energy Department loan recipient to cease operations.

[Updated at 2:37 p.m. Solyndra released a statement that acknowledged the executives' plans to take the Fifth, but said the company "is not aware of any wrongdoing by Solyndra officers, directors or employees in conjunction with the DOE loan guarantee or otherwise, and the company is cooperating fully with the office of the United States Attorney for the Northern District of California in its investigation." The company also said it "believes that the record will establish that Solyndra carefully followed the rules of the competitive application process, starting in December 2006 under the Bush administration and continuing under the Obama administration."]

[Updated at 4:09 p.m. Stearns and Rep. Fred Upton (R-Mich.), chair of the House Energy and Commerce Committee, released a joint statement criticizing the executives for choosing not to answer their questions. "Who exactly are Solyndra's executives trying to protect and what are they trying to hide?" the statement said. The Solyndra executives will still be asked to attend the meeting and will be sworn as witnesses, despite the announcement that they won't answer questions, the statement said. "We would encourage Mr. Harrison and Mr. Stover to reconsider this effort to dodge questions under oath and hide the truth from those American taxpayers who are now on the hook for their $500 million bust," Stearns and Upton said.]

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-- Stuart Pfeifer

Photo: FBI agents leave Solyndra with boxes of records during a Sept. 8 search. Credit: Associated Press

Renewables are the world's fastest-growing energy source

The good news: renewable energy -- in the form of solar power, wind, hydroelectric and other types -- is the world's fastest-growing energy resource. That's according to the U.S. Energy Department's International Energy Outlook 2011, released this week.

The not-so-good news: World dependence on fossil fuels will remain, largely because of tremendous leaps in demand from China, India and other emerging economies. That increase in demand will be so great, Energy Department analysts say, that renewable energy will see only a slight increase in its share of the world's energy sources, rising from the current 10% to 14% in 2035.

Global use of petroleum and other liquids is expected to soar from 85.7 million barrels a day in 2008 to 112.2 million barrels a day in 2035. The energy outlook report said that increase will primarily come in transportation, "where, in the absence of significant technological advances, liquids continue to provide much of the energy consumed."

Linda Doman, international energy analyst for the Energy Department, said that the outlook is not so much a prediction of where energy use will really be by 2035, but a projection of where it could be if current technology and governmental policies remain unchanged over the next 25 years.

Doman added that, despite the relatively small increase in the share of renewables in the outlook report, her agency still considered the development of alternative energy as second in significance only to the ravenous growth in energy demand from China and India and other countries.

Still, Doman said, "you won't get something like 50% of your energy from renewable sources unless something big changes, unless there is a technological epiphany."

-- Ronald D. White

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Caption: Mirrors reflect the sun, concentrating its energy into a transom of pipes, at Ausra Inc.'s Kimberlina Solar Thermal Energy Plant in Bakersfield. Credit: Robert Gauthier / Los Angeles Times

Wall Street: Dow up, gold down, Citigroup-SEC talks, rogue trader

  

Gold: Trading at $1,790.50, down $36. Dow Jones industrial average: Up 72.58 points to 11,319.31.

Citigroup talks. The Securities and Exchange Commission reportedly is negotiating with Citigroup Inc. on a potential settlement calling for the bank to pay more than $200 million for questionable mortgage-bond deals.

Rogue trader. Investment bank UBS warned that an employee's unauthorized trading could cost it more than $2 billion.

Groupon IPO. The daily deals site is proceeding with its delayed initial public offering, which now may take place in late October or early November.

Solyndra battle. Washington lawmakers are fighting an increasingly heated battle over the Fremont, Calif., solar equipment maker that failed after getting a federal loan.



-- Walter Hamilton

Photo: On Wall Street. Credit: Stan Honda / Getty Images