California: NO on Props 7 & 10

Lessons for Other States

When Hiram Johnson, progressive governor of California from 1911-1917, added the state initiative (plus the referendum and recall) to allow for more "direct democracy", I wonder if he ever thought it would provide an avenue for rich out-of-staters to cash in on the Golden State. Propositions 7 and 10, if passed next Tuesday, could richly swell the coffers of an Arizona and a Texas billionaire. Furthermore, I wonder if he and his contemporaries could foresee California's collective influence on other states.

Proposition 7, the Solar and Clean Energy Act, is described in the CA 2008 Official Voter Information Guide and is supposedly intended to reduce use of coal, nuclear power and offshore drilling by increasing installations of solar and wind power.

However, Prop 7 favors large, utility-scale installations of 30MW or more. Today, 60% of all solar contracts are for smaller PV systems. This could force small renewable energy companies (dealer-installers) out of the California market, reducing competition and jobs. (This can already be seen on large projects where only SunPower, SPG Solar and Sun Edison corner the market.) There is no wording in Prop 7 to limit increases in electricity bills and it allows power providers to always charge 10% above market price for power, stifling competition for more renewable energy. Basically, Prop 7 would make the state more dependent on electricity from Arizona--power produced from coal and nuclear plants. Both state Democratic and Republican parties are against Prop 7 as are the CA League of Conservation Voters, CA Taxpayers Assn, even the state's investor-owned utilities, SCE, PG&E and SDG&E.

Proposition 10, the Alternative Fuel and Renewable Energy Act, is what might be called Prop Pickens. That's because Texas billionaire T. Boone Pickens shelled out $3 million to get this initiative on the ballot. Prop 10 would take some $10 billion CA taxpayer dollars to subsidize large vehicles and trucks to run on natural gas, much of which is sold by, of course, Mr. Pickens. Despite claims to the contrary, the initiative is craftily written to exclude hybrids, plug-in hybrids, electric cars and true alternative fuels like vegetable oil and hydrogen.

Granted, natural gas burns cleaner than gasoline or diesel but it still is a fossil fuel that emits CO2 at combustion. Calling natural gas an alternative fuel is somewhat deceptive when the goal is to eliminate greenhouse gas emissions. All in all, Prop 10 asks $9.8 billion from CA taxpayers: $5 billion in a 30-year bond from state's General Fund to which must added $4.8 billion in interest. This, from a state currently enduring an $8 billion budget shortfall.

Widespread Ramifications

More and more states are adopting clean energy portfolios that mandate less coal- (and nuclear) produced power for more natural-gas produced power. With more utilities switching to natural gas AND an increased demand from the transportation sector, the cost for this resource could become staggering and soon. Higher electricity bills and pricier natural-gas tankfulls are sure to follow.

As the energy paradigm shifts, we must constantly be vigilant of which "green" initiatives support the common good: The green that means clean, renewable energy for everyone or the green that lines the pockets of the supremely wealthy few.

Commentary: Power by the People for the People

Anyone reading this blog is very likely a proponent of solar power. For any sceptics who might happen by, you are certainly welcome. Either way, as a solar professional I have found there are good and not-so-good ways to stimulate solar growth in the United States and worldwide. This election year is proving my point.

Energy has never been more important to developed countries and the very rapidly developing countries of the Far East. Conventional sources of energy production--coal, natural gas, oil, nuclear--are being consumed at alarming rates. These sources get costlier as they get harder to find and mine. They're hard on the environment from which they're extracted; they pollute air and water; and they are downright dangerous to use. They are also controlled by huge conglomerates and utilities that produce and set pricing pretty much as they please.

Solar and wind power offer a rare opportunity for all of us. These truly renewable power sources can help us rearrange the typical utility-ratepayer relationship. Producing power with solar panels on the roof or adjacent lot or parking structure directly gives "power to the people." When connected to the power grid, net metering makes the utility more of a facilitator than a power provider. This sort of opportunity on a mega-scale is rare in history.


So, when voting on issues involving solar or wind power, be wary of who is behind such issues. Oil and natural gas companies and for-profit utilities are getting involved in renewable energy production either for sheer profit motives or government mandates. Overall, this isn't actually bad because it means less fossil and nuclear resources will be consumed. On the surface, the Pickens Plan (wind power) is the perfect example of this (see "Pickens: J.R. Ewing with a Twist?" Sept. 16 posting). But it also means bigtime petroleum billionaires and farflung, impersonal corporations keep control of energy, its distribution and its pricing. Furthermore, while we might assume energy from the sun and wind are cheaper to produce over the longrun, we CANNOT assume these power providers will pass along the savings.

By making direct investments in solar and wind, we are producing reliable power by ourselves for ourselves. We must all try to keep it that way.

AZ Solar Contractor Sizes Up SD Conference

Mark Holohan, president of Code Electric in Phoenix, Arizona, said last week's Solar Power International 2008 conference in San Diego showed the incredible globalization of solar power.

"European [solar] companies are expanding to America and there's an increasing supply coming from the Far East," said Holohan, whose company is a leading installer in Arizona. He said the state of the global economy and Europe's reduced feed-in tariffs will slow solar's growth from the recent 40% but he still projects worldwide growth at 30%. The recent extension of the solar investment tax credit in the U.S. will have a lot to do with it.

"Also, the tax law has changed to include [for profit] utilities so solar could see a sizable increase from power producers, as well," said Holohan. He sees significant growth for the Arizona solar market spurred by last May's decision by the state Corporation Commission (which regulates Arizona's public utilities) to support more renewable energy funding.

Holohan noticed a marked increase in thin-film products, especially in amorphous silicon. Holohan was this writer's mentor when he ran UniSolar's residential sales program in San Diego beginning in 2002. (UniSolar is still the country's largest manufacturer of flexible amorphous silicon PV.) After successfully administering the project for two years, he was promoted by UniSolar to commercial sales director for Southern California. Among other installations, he sold the 1MW PV laminate installation at the General Motors western supply depot in Rancho Cucamonga, California and a 700kW PVL system on the Long Beach Convention Center, site of Solar Power International 2007.

Holohan's offers advice to homeowners and businesses contemplating installing PV systems.

"Solar [as an investment] is still the right thing to do," he contends. "Incentives are dynamic so always take action to secure them for yourselves. It doesn't make sense to wait for a breakthrough because the incentives for solar are always more dynamic than the technology."

In the Phoenix area, Holohan can be contacted at markh@code-electric.com.

SD Solar Conference Draws a Record 22,500

Second in a two-part series

As invariably happens in San Diego when it hosts a world-class event, the weather was clear and warm for Solar Power International 2008 which ended yesterday. While the Stock Market had its second crazy week of mostly Dow Jones downers, the solar industry showed renewed vibrance as 22,500 visitors from over 70 countries attended the nation's premier solar conference, 10,000 more than last year's event in Long Beach.

Governor Arnold Schwarzenegger made an appearance despite the a deepening California budget shortfall and the nationwide financial malaise.

"Of course we are now facing tough economic times, but that's why we need to focus on solar and [the environment]," he said. "We should not listen to those who say [that] should take a back seat. That's just plain wrong."

Always looking for an excuse to come to San Diego, the governator continued.

"Let me tell you, in San Diego 80 percent of the people voted for me in the recall," Schwarzenegger said, referring to the election in 2003 in which Californians voted to recall his predecessor, Gray Davis, and to replace him with the actor. "The other 20 percent never forgave me for my movie, "Hercules in New York," which is completely understandable."

Sharp Solar announced offering a new thin-film panel beginning next August. Thin-film PV invariably is cheaper to produce than crystalline modules and less expensive on the market. However, the sales rep from Japan I spoke with said Sharp's thin-film entry will be priced about the same per watt as its popular average-grade (13.7%) silicon panel until volume production reaches its peak.

DH Solar of Prairie du Chien, Wisconsin, had an outside exhibit showing a 16-panel array on the company's Horizon-to-Horizon Sun Tracking System. It's the first sizable tracking device this reporter's seen that can be used at home or for small business with some extra space for the ground-mounted system. Advantages of tracking are as much as 40% higher output than fixed mount; the system need not go on a roof, maintaining architectural aesthetics; and the system can be placed to avoid any shading issues. For more information go to www.dhsolar.net.

Finally, of particular interest to me was what appeared to be an ultra-shiney sausage that was six feet long and seven inches in diameter. In fact it was a pure-silicon ingot or "boule" (see picture) that would be cut into ultra-thin wafers for use as photovoltaic cells or semiconductor chips for computers, watches or other electronics applications.

The normal process of "growing" a silicon ingot is interesting. A seed crystal on a rod is dipped into a crucible of molten silicon and spins it into a cylinder similar to spinning cotton candy around a paper cone. As the seed is extracted from the crucible the silicon solidifies and eventually a large, circular boule is produced. A semiconductor crystal boule is normally cut with a diamond saw into circular wafers (like cutting salami) and each wafer is polished for the fabrication of semiconductor devices or photovoltaic cells. Ingot production takes about 1.5 days and cutting/polishing the wafer chips takes eight days. Finding high-quality silica (sand) plus the long, somewhat complex process keeps crystal silicon panels costly which is why more thin-film combinations are being tested and marketed.

Solar Power International 2009 will be held at the San Jose Convention Center next October 19-22.

Solar Show Is Big, Energized; Trends Emerging

Part 1 of a two-part report

Solar Power International '08 in San Diego has been a good conference and exhibition so far, but aside from being noticeably larger than last year's show in Long Beach, most of the exhibition's content was existing or modified versions of existing technology. Still, there were some new things and I could see trends shifting.

The opening plenary sessions featured some heavyweights including Gen. Wesley Clark (ret.), Sen. Maria Cantwell (D-WA), Nasdaq OMX CEO Robert Greifeld, and of course, San Diego Mayor Jerry Sanders. Their comments likely can be found elsewhere on the Internet.

During the first day of exhibiting on Tuesday, interest seemed heightened by the extension of the federal solar investment tax credits included in the Emergency Economic Stabilization Act of 2008 which passed and signed into law Oct. 3. (See story below.)

There were a couple of innovative solar panel variations that caught my eye. A Japanese maker Kaneka showed a prototype of a hybrid panel using both amorphous silicon (a-Si) and crystal silicon solar cells. The idea is to reduce cost per watt, of course, but also kick up the efficiency over a straight a-Si panel. Although the company intends to market the hybrid panel next year, no spec sheets were available at this time. Lumeta Solar of Irvine, CA offers the PowerPly, a 4 x 8 foot 380W crystalline panel that adheres to virtually all flat roof types (commercial or industrial applications). By sticking to roofs it eliminates racking and roof penetrations while it reduces installation time as much as 50%. The PowerPly uses a transparent Teflon cover sheet instead of glass thus reducing weight, heat build-up, and chances of cracking. At only 1 cm thick, water ponding on a roof is minimized.

Coincidentally also from Irvine, is a product that has to go in the "Wow" category. It's the Fisker Karma hybrid sports car with an optional, full-length solar roof. The Karma will do 0-60 mph in 5.8 seconds but only has a 50-mile range per charge on lithium-ion batteries. To be offered fourth quarter next year, the Karma will be built in Finland and priced at $80,000. (Evidently, the car moves so quietly the company will be offering optional interior and exterior speakers with a menu of "car noises." I kid you not.) Although the Karma exhibit was small and cluttered, it was hard to miss.

As for trends, I noticed several more thin-film companies exhibiting beside the grandpa of thin-films, UniSolar. These included Opti-Solar, Applied Materials (selling turnkey thin-film fabrication units) and Ascent Solar. First Solar, Miasole and Nanosolar were absent for reasons of their own. Thin-film PV breakthroughs in various configurations are definitely reducing PV costs per watt; in some cases low enough to make the lower efficiencies--characteristic of thin-film PV--a non-issue.

Another trend is towards more concentrating solar variations but CPV is targeted for huge utility-grade projects.

Incentives, Oversupply Could Mean Great Solar Deals

Now that the federal solar investment tax credit has been extended (see Oct. 5 post below), it's time to size up what your state has in the way of incentive for photovoltaic (PV) systems. This information and more can be had at the Database of State Incentives for Renewables & Efficiency (DSIRE) compiled by North Carolina State's Solar Center. For further reference see Related Links at the beginning of this blog.

Besides the federal tax credit available in all 50 states and territories, eleven states provide incentives from both state and utility resources. These states are California, Florida, Indiana, Maryland, Massachusetts, Minnesota, Oregon, Pennsylvania, South Carolina, Wisconsin and Wyoming, plus the U.S. Virgin Islands. New Jersey had an attractive PV rebate program but ceased taking reservations in August. Details for each program are delineated at the DSIRE site. The remaining of states fall under three categories: state-only incentives; utility-only incentives; or neither incentive programs underway (the federal tax credit still applies.)

OK, but how would an average homeowner or business owner put this into perspective? For the sake of simplicity and the range of PV installation prices around the country, let's figure a price of $9 per AC watt installed. This includes all engineering and design, permitting, panels, inverter, racking, AC/DC disconnects (where required), and installation (labor). A typical family in California can use a 4kWAC system. At $9/watt the gross price (less sales tax, if not exempt in your state) is $36,000. The federal solar tax credit of 30% reduces the cost by $10,800 and an average rebate now is around $2.50/watt or $10,000. Net cost after incentives would be $15,280 or about 42% of the original cost. As a business investment, rebates are taxed as income by the IRS but not, to my knowledge, for individual homeowners. Also, in California a PV system is not added to your home's assessed value for property tax purposes. It is suggested to consult with an attorney or CPA about this issue if you're in another state.

PANEL PRICES COULD DROP

Last Monday Goldman Sachs downgraded the stock of both First Solar and SunPower, two of the nation's leading solar panel makers. The reasons Goldman Sachs gives are oversupply issues and a lack of European subsidies.

"The risk of oversupply in the solar market will soon become a reality as considerably less generous demand subsidies take hold just as a wave of supply and tight financing hit the market," said Goldman Sachs analyst Michael Molnar in a client note. "We believe that liberal subsidies of the past in markets like Germany and Spain are unlikely to be replicated in the future given fears of their ultimate cost in a bad world economy."

"We strongly believe that SunPower and First Solar are two of the best solar companies in the world and that both will be part of the growing solar industry for years to come," Molnar wrote. "However, in our view, even these companies will face headwinds in a market that is oversupplied with modules." (greenstocksgeneral.com, Oct. 7)

So this winter or spring could be an ideal time to go solar because panel pricing could be the best ever so far. But as a fellow solar associate of mine said today everything could be in good supply next year except money. Still he says, if you have it solar power is a great long-term place to put it.

Notorious Bill Extends Solar Tax Credit

Just when it looked like the sun would set on the federal solar investment tax credit, it will live on to see another day--make that eight more years. The tax credit for wind was extended a year.

The House of Representatives passed the Emergency Economic Stabilization Act of 2008, Friday, October 3, by a vote of 263 to 171. Less than two hours later, President George W. Bush signed it into law. The Senate had already passed it on Wednesday. Of course, the full intent of the legislation was welfare for Wall Street but banks will afford to make business loans to rev up American capitalism on Main Street. Extending the solar/wind tax credits also makes the bill more palatable.

"I am pleased that the bill includes an extension of tax cuts for clean renewable energy that will create and save half a million good-paying paying jobs in America immediately," said House Speaker Nancy Pelosi of California.

The one-year production tax credit extension also applies to other energy sources such as geothermal; closed-loop biomass; hydropower; landfill gas; and trash combustion facilities. It also creates a tax credit for a new energy production category - marine renewable - which is energy derived from waves, tides, and currents.

Furthermore, the measure boosts the tax credit limitation for fuel cells from $500 to $1,500 per half kilowatt of capacity.

Renewable energy purists must shudder at another part of the bill. It also provides tax credits for advanced coal electricity projects with highest priority given to projects with the greatest separation and sequestration percentage of total carbon dioxide emissions at a cost of $1.4 billion over 10 years. This writer believes the technology and time it takes to sequester CO2 at a coal-fired power plant would more efficiently be spent on truly renewable forms of energy generation, like solar, wind, geothermal, biomass conversion and marine methods. Like Halloween, Congress and the White House feel they must spread the goodies around.

"This bill is a major step in our long journey toward energy independence and ensures that solar energy will be a significant part of America's energy future," said Rhone Resch, president of the Solar Energy Industries Association, which lobbied long and hard for the tax credit extensions during the previous 18 months.

Resch said 60,000 Americans currently are employed by the solar energy industry.

"This long-term extension of the solar tax credits will create a domestic solar industry with hundreds of thousands of jobs while providing clean, affordable, carbon-free energy to millions of American families, businesses, and communities," said Resch.

The bill extends the solar investment tax credit for eight years the 30 percent tax credit for both residential and commercial solar installations. The $2,000 cap for residential solar electric installations is eliminated and so is the prohibition on utilities from benefiting from the credit. When the tax credits first were enacted by the Energy Policy Act of 2005, the solar industry experienced unprecedently growth. In fact, the amount of solar electric capacity installed in the United States during 2007 was double that installed in 2006.

"This bill puts the sun to work for every American," added Resch. "And by 2016, we expect solar energy to be the least expensive source of electricity for consumers."

Sunset for Solar Investment Tax Credit? An Update

The U.S. Senate has included the critical clean energy tax incentives--including an eight-year extension of the 30% investment tax credit and removal of the residential $2000 cap--in the bailout package. the Emergency Economic Stabilization Act of 2008. This would adds a significant job development enhancement to the package--according to a study by Navigant, roughly 1.2 million. Now the bailout would provide greenbacks for Wallstreet, but also green jobs for Mainstreet, where it's also critical. The bill will likely pass the Senate tonight, but prospects in the House are much more uncertain.

Since 2007 when the House majority re-instituted a pay-as-you-go or pay-go approach to expenditures and tax credits, Democrats targeted such credits for oil and gas be re-directed to solar and wind. The Senate and White House have balked for over a year on this version of HR 6049 (and various other bills intended to do the same).

The current extension attempt being included to the "Wall Street bailout" is still not fully funded in this new Senate version. This writer believes it should be passed anyway for the sake of keeping solar and wind vibrant, foster more jobs and continuing reduction of greenhouse gases in the process. Hopefully, as soon as next spring, the issue will be re-addressed by a more progressive House (and White House) that will more forthrightly reduce or eliminate oil and gas tax credits in favor of solar and wind tax incentives.