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Updated: 1 year 32 weeks ago

To Microinvert or To Power-Optimize, That Is the Solar Question

Mon, 10/22/2012 - 12:00

SolarEdge, Tigo, and other power electronics companies’ devices optimize direct current (DC) produced by a solar module and, incorporated into what SolarEdge calls Smart Modules, feed power to a companion inverter designed to convert the optimized DC into alternating current (AC) for transmission.

SolarBridge, Enphase Energy (NASDAQ:ENPH), Enecsys and other power electronics companies’ microinverters put the entire power conversion system on each panel, making what SolarBridge calls an AC module, because it sends its own AC electricity into the transmission system.

“The hardware components and software by which the system adjusts voltage to find the PV system’s maximum power point is known as the maximum power point tracker (MPPT),” GTM Research explained in its last report on the inverter market. “Traditional PV system topologies limit maximum power point tracking to the inverter level.”

Microinverters and embedded power optimizer topologies relocate the MPPT to the level of the module. That allows monitoring of individual modules for electrical safety issues, theft, shading, and soiling. It increases system performance but adds cost. “Cost and increased performance must be balanced,” GTM Research explained.

The DC optimizer approach beats microinverters on both cost and performance, SolarEdge North America General Manager John Berdner said. “It is extremely difficult to attach a microinverter to the laminate,” he explained. “You end up heating the cells.”

SolarEdge’s topology “is very high efficiency -- 98.7 percent average efficiency and 99.5 percent peak efficiency. Whatever is not efficiency is heat -- in our case, 1.3 percent average heat, and less than that under peak conditions. Microinverter solutions are in the range of 93 to 95.5, maybe 96, percent average efficiency best-case, so 4 percent of the module’s output needs to be dissipated as heat.”

Enphase PR Manager Kady Cooper rejected Berdner’s claim. “Enphase believes there is no technical reason to not have a frame-attached microinverter on a module.”

SolarBridge Marketing VP Craig Lawrence agreed. “It depends on how you mount it and how the inverter is designed,” he explained. “We mount with an air gap between our microinverter and the back sheet,” he said. “And we have designed the inverter so it directs heat away from the module.”

Lawrence said thermal chamber and rooftop data back his claim. “The impact of the microinverter on the temperature of the cells,” he said, “is not zero, but it is not a significant impact on the module’s performance.”

Losses in transmission to central inverters, Berdner said, are also “typically lower in a DC-based topology because the DC voltage is higher than the corresponding AC voltage.”

But, Lawrence pointed out, “a DC optimizer only does a part of the inverter’s function. It is not actually converting the DC to AC, which is where you lose all of your efficiency. The inefficiency still lives in the central inverter that you still need to have.”

Without a microinverter, Lawrence said, “you still have high-voltage DC on the roof. And you still have a single point of failure at the central inverter. With a microinverter, if you do have a module or inverter failure, it only impacts that particular module -- it doesn’t take down the whole system.”

For the best microinverters, Berdner said, “overall wiring and conversion losses are about a half percent to 1 percent less efficient than a DC optimizer with a separate inverter.”

On cost, Berdner acknowledged, microinverters beat SolarEdge’s topology in small systems. “When you get to 50 kilowatts, we are 35 percent lower cost. For large-scale systems, we are less than half the cost of a microinverter-based solution.”

“Our solution is geared toward distributed generation, not utility-scale,” Lawrence admitted. “Central inverters are so cheap, when you are at the one-megawatt scale, the benefits you get from the microinverter aren’t enough to make up for that cost differential.”

That was Berdner’s point. “If you buy one microinverter, the cost is X. If you buy 1,000, the cost is 1,000X. Fundamentally, the costs are linear.” With the SolarEdge topology, central inverters do more cost-effective service in larger systems. Also, “you eliminate the added cost for mounting an external device and you eliminate the cost of redundancies in the system like cables and connectors.”

Enphase Energy Commercial Product Manager Gene Choi disagreed. “If we compare on a strict inverter-to-inverter pricing scenario, this seems valid. However, if we look at the total cost of ownership of the PV system, microinverters come out on top for larger systems. We see installs in the hundreds of kilowatts because of the value microinverters bring to the total cost of ownership.”

“I think you will see DC optimizers getting used in very large systems,” Lawrence said, but “costs of microinverters are dropping, and the power rating is going up. Right now you do get a scale cost advantage on very large systems. Microinverters have only been around for about three years and they now account for over 30 percent of all U.S. residential installations. It is a better solution for residential rooftop systems.”

Leading inverter makers and traditional PV system topologies continue to dominate the marketplace, according to GTM Research, because established companies like SMA and Power-One (ETR:S92) (NASDAQ:PWER) are seen as more bankable due to their reliability records and existing distribution channels.

Bidgely, Home Energy Disaggregator, Lands $3M

Mon, 10/22/2012 - 00:06

Imagine being able to figure out just how much power in your house is being used by the TV, versus the refrigerator, versus the washer and dryer, versus the air conditioning and lights and everything else -- not by attaching a sensor to each device, but through data and analytics.

That’s the basic concept behind “energy disaggregation,” or taking some single measure of building power, then studying it to find “signatures” that show when individual appliances or systems are turning themselves on or off, or cycling into different states of power use.

We’ve seen a host of technologies aimed at accurately delivering this kind of whole-building disaggregation, usually by measuring fluctuations in household current voltage or frequency from plug-in sensors inside the home. Contenders include an Intel Labs technology now being tested in Texas, another being developed by Belkin via its acquisition of startup Zensi, and another from U.K. startup Navetas, which landed an investment and partnership with smart meter giant Sensus earlier this year.

Sunnyvale, Calif.-based startup Bidgely is tackling the disaggregation challenge a bit differently. The startup says its “deep pattern recognition” software can deliver appliance-level energy consumption data, using nothing but the kilowatt-hour measurements of household power use from a smart meter.

To prove the accuracy of its analytics, Bidgely -- which means “electricity” in Hindi -- has been working with the Electric Power Research Institute, as well as with Stanford University, on a multifaceted consumer energy research project it’s undertaken for the Department of Energy’s ARPA-E program. 

On Monday, the company announced its first round of venture funding with a $3 million investment from Khosla Ventures. It’s an interesting move from a VC firm that hasn’t invested in smart grid or home energy management. Indeed, founder Vinod Khosla has publicly questioned other smart grid investments, and has specifically questioned whether or not smart meters should be considered a “smart grid” investment at all. 

Shirish Sathaye, partner at Khosla Ventures, noted in an interview last week that Khosla hasn’t dismissed the value of smart meters. Rather, he said, “We’re saying, smart meters are nice, but they don’t solve all our problems,” he said. Bidgely, with its ability to accurately go beyond meter readings to diagnose specific appliance-level energy issues, could help extend the basic meter-reading function to more valuable analytic capabilities, he noted.

The new funding from Khosla will help expand the startup’s work to more partners, as well as allowing it to roll out a series of applications for delivering the insight its analytics engines provide, Prateek Chakravarty, Bidgely's vice president of product sales and business development, told me in an interview last week.

“The first application we’ve built is a highly personalized recommendation engine,” he said. The system compares an individual household’s disaggregated energy use to weather, real estate and other datasets to figure out whether a home is wasting energy and, if so, where the waste is occurring (here’s a demonstration dashboard to show some of the options being presented to customers).

Bidgely has been testing these abilities with individual households that are using home power sensors like The Energy Detective or Blue Line Innovations, and has also inherited many former customers of Google’s defunct PowerMeter program, Chakravarty said.

But Chakravarty said that Bidgely sees some of its greater opportunities coming from partnerships with utilities, or home energy service providers, appliance makers and anyone else looking for accurate data household energy use at the appliance level, all from the utility side of the meter.

Utilities, for example, could find Bidgely’s home-by-home insights quite useful for directing the billions of dollars of energy efficiency funding they’re mandated to spend, he said. The same could go for home automation or security vendors, telecommunications providers trying to sell home energy controls as the “fourth play” of their triple-play broadband, phone and cable services, or retail utilities in deregulated markets like Texas or the U.K. that compete for customers, he said. 

Appliance makers, for their part, could start using Bidgely’s platform to detect changes in power use that indicate aging or malfunctioning equipment, or even to compare and contrast their own appliances’ efficiency against those of its rivals, he said.

It will be interesting to see how Bidgely’s method of disaggregating loads at the meter itself compares with other methods aiming at the same information. Stanford has been doing a lot of research into these different energy disaggregation technologies (PDF), but much work remains to be done -- Intel, for one, has been testing its own in-home plug-level disaggregation technology for years now.

At the same time, there are other ways to combine masses of data and advanced analytics to yield house-by-house energy insights. Startups like Nest Labs and EcoFactor are combining smart thermostats and cloud-based analytics to diagnose home heating and cooling inefficiencies and tune thermostat settings to deliver energy savings.

All of these new technologies are competing for a market that doesn't really exist yet, of course. Home energy management technology is still limited primarily to utility pilot projects and those rare homeowners who have both the money and the interest to install their own power monitoring and control gear.

Taking the cost of sensors out of the home energy equation could be one way that energy disaggregators like Bidgely help expand the market beyond those experiments and early adopters. But their real test will be simple: are they accurate?

SolarCity Goes Big With Utility-Scale PV in Kauai

Fri, 10/19/2012 - 14:30

Solar installer and financier SolarCity has historically addressed the residential and small commercial market.

But SolarCity was just chosen by the Kauai Island Utility Cooperative (KIUC) to construct  a 14-megawatt (DC) solar photovoltaic power plant on land owned by Grove Farm. It's a $40 million project that will use more than 50,000 panels on 67 acres of the tropical island. The project is still in the planning stages and won't commence construction until mid-2013, pending regulatory approvals, so vendors and technologies have not yet been selected. It's the first utility-scale deal won by SolarCity.

GTM Research Solar Analyst Andrew Krulewitz comments, "Continuing a trend that we've seen in SolarCity's non-residential business, where systems have grown from ~50 kilowatts on average two years ago to the company now regularly connecting projects of one megawatt or more, it was only a matter of time before SolarCity tossed its hat in the utility-scale ring." Krulewitz notes that 14 megawatts for $40 million works out to an installed cost of $2.85 per watt, which "isn't bad, but it's not industry-leading either."

SolarCity is in its pre-IPO quiet period and is even less communicative than usual. Rob Day took a deep look at the solar installer and financier's SEC paperwork here.

The location of the project, Grove Farm, is a community development and property management company near the town of Koloa. The Grove Farm project is one of three planned by the KIUC, which will result in a total of 30 megawatts of generation capacity being in place by 2023 -- about half the daytime energy demand of Kauai. SolarCity has already done some work on Kauai -- at the Lihue airport, at military homes, and at the University of Hawaii.

In conversations with installers on the ground in Hawaii, we've learned that salt air and moisture places more demands on electronics and materials in a solar installation -- so much so that warranty times for systems hardware are shorter than on the mainland. This applies to panels as well as inverters.

KIUC is a member-owned cooperative with 33,000 customers. We spoke with Jim Kelly, Communications Manager at KIUC. The island has an average peak load of 65 megawatts and more than 100 megawatts of capacity. 

Approximately 89 percent of that power is now furnished by oil-fired generation. Kelly said the average customer cost for electricity is $0.43 per kilowatt-hour, with an average bill of $200 per month for roughly 480 kilowatt-hours, which is "attributable to the cost of oil," in Kelly's words. Kauai has a goal of generating 50 percent of its energy from renewable sources by 2023. 

Kelly acknowledged that island grids tend to be fragile and that the co-op's engineers are working "12 hours a day" to be able to handle the realities of distributed generation. That includes battery storage, which is currently under consideration, according to Kelly.

He said that there was "a new sense of urgency to get these renewables built and on-line. It's been difficult in the last decade to get from the talking-stage to the building-stage. Finance has been especially challenging. It's great that we're starting to turn dirt and get these projects on-line."

Kelly said that on an island like Kauai, "Even small projects make an impact," adding, "It means there's a lot of oil we're not going to buy."

Carolyn Campbell, Solar Analyst at GTM Research, recently published some preliminary work on solar in the U.S. after the Investment Tax Credit recedes. States with high electricity costs and lots of sun, like Hawaii, are better positioned to continue growth in the solar sector.


 

Wanxiang to Bid on Bankrupt A123

Fri, 10/19/2012 - 12:28

A123 may have declared in its bankruptcy filing this week that it has chosen U.S.–based Johnson Controls, rather than Chinese rescuer Wanxiang, as the preferred bidder for its automotive battery business. But that doesn’t mean that Wanxiang is letting go of its $465 million bid to buy A123 outright.

That’s the upshot of a Thursday appearance by Wanxiang North American operations head Pin Ni in the federal bankruptcy court in Delaware that’s going to arrange the future of A123’s assets and business lines. The Waltham, Mass.-based advanced lithium ion battery maker filed for bankruptcy protection on Tuesday, and also announced that it had reached a deal with Johnson Controls to buy its automotive battery business, including its federal grant-backed factories in Michigan, for $125 million.

But Ni told the court that “our interest and goal remain the same,” in terms of Wanxiang’s plan to take an 80-percent ownership stake in A123. That deal was reached in August, when A123 was struggling under consistent losses since its 2010 IPO, as well as a massive battery recall involving key customer Fisker Automotive. Indeed, Ni was quoted in news reports saying that A123's bankruptcy only makes it a more attractive target.

The idea of a Chinese company taking over taxpayer-backed U.S. technology led to immediate criticisms on Capitol Hill, and Wanxiang’s structured deal with A123 did involve it retaining access to the $249 million Department of Energy stimulus loan that’s helped build A123’s factory in Livonia, MIch., as well as ownership of A123’s intellectual property.

A123 CEO David Vieau said in a Tuesday statement on the company’s website that “We determined not to move forward with the previously announced Wanxiang agreement as a result of unanticipated and significant challenges to its completion,” though his statement didn’t specify the challenges involved.

Here’s our previous coverage of the A123 bankruptcy, starting with the political fallout:

We’ve already seen the inevitable comparison to bankrupt solar company Solyndra, which took a $535 million loan guarantee from the Department of Energy only to go under last year. DOE-backed flywheel energy storage maker Beacon Power and thin-film solar startup Abound Solar have since declared bankruptcy as well, making A123 the fourth to get DOE cash, then go under.

A123’s fate is likely to be much different than Solyndra’s, which has seen its plant dismantled and its technology stranded. Obviously it has many suitors for its technology. Still, that won’t extinguish the political firestorm to come on A123’s crash and burn, of course. Congressional inquiries into A123’s remaining share of its DOE loan, as well as its relationship to struggling plug-in hybrid automaker (and key A123 customer) Fisker Automotive, have been underway for months.

Let’s start with the main stage. Mitt Romney’s campaign issued a statement on Tuesday calling the bankruptcy “yet another failure for the president's disastrous strategy of gambling away billions of taxpayer dollars on a strategy of government-led growth that simply does not work.” President Obama’s campaign fired back that Romney, as Massachusetts governor, had presided over state loans to companies that later defaulted on their debts.

On a less personal, but still political, note, a Department of Energy spokesman wrote in a blog post that Republican members of Congress had signed on as A123 supporters -- not surprisingly, both from Michigan, where A123’s plant was built with federal and state support.

DOE’s blog also stated that 100-mile-range batteries have dropped in price from about $33,000 before it started investing billions of stimulus dollars into the sector, to about $17,000 today. That’s on track to drop to $10,000 by 2015, DOE predicts. Of course, that’s based on a rosy projection for the advanced battery market, which DOE says is set to grow from $5 billion in 2010 to nearly $50 billion in 2020.

In large part, that’s tied to equally optimistic, official Obama administration goals to put 1 million plug-in vehicles on U.S. roads by 2015 -- a growth rate that is hard to imagine, given the fact that only 50,000 EVs have been sold so far this year.

Cost, Quality Struggles: Will GM Stick With A123?

Beyond the core problem of a slow-to-develop market, A123 may have faced struggles to compete on cost against its rivals, according to an analyst who spoke to Wired. Asian companies dominate the advanced battery market today -- South Korea’s LG Chem makes the batteries for GM’s Chevy Volt, Japan’s Panasonic makes Tesla Motors’ batteries, and the Nissan Leaf’s batteries come from a Nissan-NEC joint venture.

To be sure, A123 has a long list of EV customers, including General Motors, BMW, SAIC Motor Corp., Tata Motors and Smith Electric Vehicles. But Fisker was its main customer, with about 26 percent of A123’s revenue, according to bankruptcy filings -- and Fisker has been having its own problems as it strives to meet terms of its own $529 million DOE loan. Fisker was also the company that received A123 batteries that were subject to a mass recall this spring, a disaster that triggered A123’s spiral into bankruptcy.

It’s hard to predict how the proposed acquisition by Johnson Controls will affect those ongoing relationships. GM, which has tapped A123 to build batteries for its Spark EV, issued an official "no comment" on its Chevy Volt website on Tuesday as to whether it would continue using the bankrupt company’s batteries if the Johnson Controls deal goes through.

Price vs. Value for Domestic Green Technology Support

In the meantime, the company as a whole has lost a collective $1 billion over the course of its publicly-traded life, retaining $459.8 million in assets and $376 million in debt as of Aug. 31, according to bankruptcy filings. The company has seen its market value fall from a high of $2.3 billion shortly after its 2010 IPO to an estimated $8.2 million as of Wednesday afternoon, representing the destruction of a whole lot of capital.   

At the same time, EV supporters were quick to point out that A123’s assets and intellectual property represent ongoing value for whichever company picks them up. “Government can help facilitate innovation, but the natural business cycle remains -- some failures in any emerging industry are inevitable," Jay Friedland, legislative director for nonprofit advocacy group Plug-In America, said in a Tuesday statement.

In that sense, A123’s bankruptcy is simply a fire-sale opportunity for consolidation into a growing industry, whether under domestic or foreign ownership. Johnson Controls got its own $299 million DOE advanced manufacturing grant in 2009 to build domestic manufacturing capacity for hybrid and electric vehicle batteries, and will be keeping jobs and intellectual property in the country if it takes over A123’s automotive business.

That means that federal investment into A123 -- and Johnson Controls, for that matter -- will be achieving its goals of creating jobs and fostering domestic technology innovation, the Information Technology and Innovation Foundation, a nonprofit founded and chaired by former Republican lawmakers, noted in a Tuesday statement.

“Through critical public investments in battery innovation by ARPA-E and DOE investments in next-generation battery manufacturing, the U.S. battery industry has made significant technological progress in a few short years,” the group noted. “And as shown by Johnson Controls purchase of A123’s manufacturing plants and technologies, it’s helped spur very promising technologies that U.S. industries will continue to use and build on.”

Whether or not U.S. manufacturing plants can compete on costs with Asian rivals is another question. Both A123 and rival lithium-ion battery maker Boston-Power have turned to building batteries in China with partners, both for low production costs and to serve China’s future market for electric vehicles.

Meanwhile, the fate of A123’s significant grid-scale battery business -- some 24 percent of its revenues came from grid storage partner AES, according to bankruptcy filings -- and other parts of the company remains unclear. Indeed, other bidders may emerge to challenge Johnson Controls for A123’s automotive battery business, which includes plants in Livonia and Romulus, Mich., a factory in China and its stake in a joint venture with Shanghai Automotive.

What Happens When the ITC Expires?

Fri, 10/19/2012 - 12:00

Since its implementation in 2006, the 30 percent solar Investment Tax Credit (ITC) has been the main federal policy mechanism to support deployment of solar installations in the U.S. With the ITC set to be stepped down to 10 percent after 2016, GTM Research is undertaking preliminary analysis of what the U.S. solar market looks like in a post-ITC world.

In comparing the U.S. market by state and market segment, the most appropriate metric is the levelized cost of energy (LCOE), which measures the total generation cost in dollars per kilowatt-hour over the lifetime of a PV system. Looking at energy cost, as opposed to capital cost, allows us to assess the competitiveness of solar versus traditional generation.

We modeled both residential and commercial LCOE for twenty state markets, including Arizona, Colorado, California, Connecticut, Delaware, Florida, Hawaii, Illinois, Massachusetts, Maryland, New Jersey, New Mexico, Nevada, New York, North Carolina, Ohio, Oregon, Pennsylvania, and Texas.

Our LCOE analysis includes the following assumptions for residential and commercial systems in 2017:

Source: GTM Research

Insolation, retail electricity prices, and sales tax rates were varied by state. For the purpose of simplicity, annual installed cost estimates were held constant across geographical markets, though, as evidenced in GTM Research’s Quarterly U.S. Solar Market Insight Reports, there is some variability in prices across states. For 2017, we applied a 10 percent ITC with no additional state incentives. While it is possible that some state-level incentives will still be available in out years, we are intentionally conservative in regards to solar policy in order to paint a “worst-case” scenario.

To assess the viability of distributed generation across state markets from 2017 onward, we compared the LCOE to average retail electricity prices with an assumed annual increase of 1.5 percent.

Prior to the expiration of the 30 percent ITC in 2016, our model shows price convergence for nearly half of the twenty states evaluated in the residential market.

Source: GTM Research

In 2017, post-ITC, we expect only three residential state markets to have solar generation costs below grid prices: Hawaii, New York, and Arizona. However, fourteen state markets will have generation prices approximating grid prices, with a delta between LCOE and retail electricity rates of less than $0.05 per kilowatt-hour.

Source: GTM Research

Looking to the commercial market, we see substantially higher penetration of solar at, or below, grid prices. With the 30 percent ITC in 2016, solar generation costs in eighteen of the twenty state markets analyzed will be below grid prices, while all states will be less than $0.01 per kilo-watt hour away from grid parity.

Source: GTM Research

After the ITC is stepped down to 10 percent in 2017, 70 percent of the states analyzed have a project LCOE below retail electricity prices. Additionally, all twenty states evaluated still see solar price convergence toward traditional energy, with a delta between LCOE and grid price below $0.05 per kilowatt-hour. Based on these estimates, GTM Research expects PV to be an economically viable option for commercial customers in 2017, despite the step-down of the ITC from 30 percent to 10 percent.

Source: GTM Research

Please note that these estimates represent our first preliminary analysis of the U.S. distributed generation market following the expiration of the 30 percent ITC. Going forward, we’ll look to evaluate the impact several factors can have on this model, including variations in system prices, electricity rates, and financing costs.

We realize that the 2016 ITC expiration may not take place as currently planned. In a more preferable scenario, the ITC would step down over time, allowing for a gradual, rather than sudden, shift in these numbers and an even more promising outlook for solar as an economic generation option in certain residential and commercial markets from 2017 onwards.

For more information on GTM Research’s U.S. solar market analysis, contact sales@gtmresearch.com.

***

Meet the author of this piece, Analyst Carolyn Campbell, and the rest of the GTM Research team at this year's U.S. Solar Marketing Insight in San Francisco on Oct 29-30. Go here for more details

Arizona’s Solar Future Decided Next Month

Fri, 10/19/2012 - 11:00

Arizona’s solar growth skyrocketed following passage of an aggressive Renewable Energy Standard (RES) in 2006 with a carve-out specifying that 30 percent of the renewables be solar.

But Arizona’s solar resource is so enormous the standard is being rapidly met, and it appears that only those who don’t understand or don’t want to see the state’s solar sector keep growing oppose upping the 15 percent by 2025 requirement.

The decision to expand it must be made by the Arizona Corporate Commission (ACC), an independently elected body constitutionally empowered to regulate public utilities and facilitate business.

Democrats Paul Newman, Sandra Kennedy and Marcia Busching have for months called themselves the Solar Team because they back expansion of the state’s mandate for solar and other renewables. Newman and Kennedy are up for re-election and Busching is challenging a Republican incumbent.

They call Republicans Bob Stump, Robert Burns and Susan Bitter Smith the Trash Burner Team because of their support for a controversial measure recently passed that undermined the state’s solar mandate. Stump is being challenged by Busching, and Burns and Bitter Smith are challenging the Democratic incumbents.

The Trash Burner decision by the current, Republican-dominated Commission allowed Mohave Electric to substitute an 11-megawatt trash-to-gas power plant for part of its RES obligation. This was granted despite the fact that the original RES specifically ruled trash-to-gas as too polluting an electricity source to be substituted for renewables.

Mohave Electric CEO Tyler Carlson argued the trash-to-gas power plant could reduce costs to ratepayers by saving some of what the utility spends on solar. But “the trash-burner costs almost twice as much to build” and “twenty times more to run,” Democratic Commissioner Paul Newman told GTM. “What are they thinking, and whose interests are they serving?"

The election has been brutal. The Trash Burner Team was forced into a $29,000 settlement to avoid a misuse of public funds charge arising from money restricted to the ACC election that was spent on mailings tying the Solar Team to President Obama.

In a more recent mailing, the Republicans attempted to steal the Democrats’ edge by calling themselves a solar team.

The 15 percent RES came out of the ACC’s decision that growing solar would benefit the state’s economy, ratepayers and taxpayers. Arizona’s citizens and solar builders responded to it enthusiastically and the ACC made sure APS and TEP, the major utilities it oversees and two of the state’s three biggest, provided rebates commensurate with the mandate’s intent. Rooftop solar exploded.

The RES solar requirement will, by the end of 2012, have nominally been met, though it won’t be operationally met until the 280-megawatt Solana solar power tower project goes into service in 2013-14.

With Solana under development and its PPA secured, and without a bigger mandate, the appeal of rooftop solar will remain, but most industry watchers expect demand to slow as the state’s utilities pull back rebate programs instituted to achieve the required amount of solar.

Indicative of the commissioners’ differences was a recent vote on a $19 million balance sheet factor that became available in the 2012 APS budget. Newman proposed adding it to the solar rebate program. Stump proposed refunding it to ratepayers. The Republican majority kept the money from going to solar.

Without RES-driven demand, Arizona utilities have been able to convince the ACC’s Republican majority to lower rebates from $3.00 per watt to $0.20 per watt.

Without a bigger RES solar requirement, said Arizona Sierra Club Director Sandy Bahr, “we are likely to lag.” APS, she added, “is looking at meeting its RES requirement long before 2025. It is likely to be ten years early.”

In a recent campaign debate, the candidates were each asked about expanding the RES.

Stump said the mandate is “just right” and, if expanded, “the cost to consumers would just be too high.”

“I find myself trying to defend the standard,” Kennedy said, from people who “would take away funding.” But, she said, she would like to stop just defending it and “increase the standard.”

Burns said he thought the standard should be left in place to “find out what’s best” for solar in the state.

“It was a good starting point,” Newman said, “but 15 percent is not enough to keep us strong. Promoting solar energy in Arizona is a no-brainer. Other states in the Southwest have higher solar requirements.”

Bitter Smith echoed Stump, agreeing the current RES “is just right.”

“I think it’s too low,” Busching said.  “Ariziona was second in the U.S. in solar installations in 2011 but was it was twenty-fourth in renewable energy. Being the sunniest state, Arizona has an opportunity to be a leader.”

The Burns and Bitter Smith contention that too much solar will negatively impact the state’s economy also shows the so-called Trash Burner Team's misunderstanding of solar, noted Commissioner Newman’s campaign. It pointed out that Phoenix construction jobs dropped 14.4 percent in 2010 while Arizona moved from eighth to third place nationally in providing solar employment the very next year, going from approximately 3,800 to 4,786 jobs.

Another example of where the sides stand was a recent incident at the Commission. Newman’s staff wanted to use the Commission’s in-house video system and online broadcast capability to do public outreach educational seminars on the energy issues facing the commission. Republicans blocked the plan.

Each of the candidates was contacted for a statement about the AZ RES. None responded.

 

GSA, IBM, Partners Take on Big Building Energy Analytics

Fri, 10/19/2012 - 06:00

The U.S. has vast room for improvement when it comes to capturing energy efficiency in buildings, and the federal government knows it. We’ve seen billions of dollars in federal funds directed at efficiency projects across the nation, from smart grid and state efficiency stimulus grants to public-private partnerships like the $4 billion Better Buildings Challenge.

And then there’s efficiency that’s directly under government control. Federal agencies are mandated to reduce energy consumption in buildings by 30 percent by 2015, and to get there, the U.S. General Services Administration is key. GSA is essentially the federal government’s landlord, with 360 million square feet of buildings under management, and a commensurately large energy bill. That’s made it a key partner for building energy efficiency technology vendors across the nation.  

One of GSA’s more ambitious projects, launched this summer, plans to link 50 of the government’s highest energy-consuming buildings, comprising 31 million square feet, into an intelligent energy management network, from building sensors to enterprise-level management. IBM is the lead on the project, but it is working with various other consulting and technology providers, including SkyFoundry, Environmental Systems Inc. (ESI), Honeywell’s Tridium building controls platform and consultancy Intelligent Buildings.

It’s a noteworthy project on many levels, not the least in the scope of integration being undertaken. As lead contractor, IBM is pulling in its experience in sensors and data collection, as well as the building management software platform from its 2010 acquisition of startup Tririga, which already managed property energy and sustainability for big retailers and other property owners around the country.

Milwaukee-based ESI, which designs and manages building control and efficiency projects for retail chains, supermarkets and other big clients, is integrating SkyFoundry’s building software analytics and Tridium’s Niagara framework for building control networking inside the buildings themselves, Paul Oswald, ESI President, said in an interview this summer.

As for SkyFoundry, its building analytics software is now being used by partners to manage efficiency in more than 1,200 buildings, or about 15 million square feet, in the U.S. SkyFoundry partner and COO John Petze, who previously helped lead Tridium to its acquisition by Honeywell in 2005, told us earlier this month that the GSA project is “moving fast,” and has already yielded some preliminary results.  

There’s value to be collected from the data, beyond the $15 million in savings that GSA wants to achieve after the first year. First, the system will monitor energy use in each building to yield specific insights into efficiency potential. Next, it will stream the data from all locations to a central facility, where it can be used for various portfolio management functions, like assessing which structures could benefit the most from retrofits.

“We are at a tipping point in terms of advancing the greening of our buildings and making them smarter,” Bartlett, vice president of industry solutions at IBM, said in a statement.  “When you look at buildings holistically, with end-to-end visibility across all systems,  you can more clearly see the connections, the interactions, and opportunities for efficiency among the various systems. Using analytics, we can make better decisions about how to best visualize and optimize these systems.  The data exists -- it's a matter of understanding and responding to what the data is telling us, and that's what we're helping GSA to do.”

If the building analytics are successful in reducing energy use, the GSA would install the software in another 50 buildings, and the platform could eventually be extended to its entire building portfolio, according to reports. The platform could also be used to model best practices in building energy efficiency IT deployments -- the GSA is a proving ground of sorts for all kinds of different technologies, from LEDs to CHP.

Of course, tying the insight from smart building technology into real-world action requires putting a dollar value on the investment and return associated with the long list of spending options they can deliver. Simple lighting and insulation replacements only go so far, and as SkyFoundry’s Petze noted to us, “you can’t replace half a chiller,” meaning that worthwhile HVAC improvements often go addressed for lack of a business case to spend so much money upfront.

The government can access cheap, long-term loans to pay for efficiency upgrades with a longer-term payback than private building owners can. The GSA is also pretty sure it’s going to be owning the same buildings it’s investing in a decade or two from now -- something that’s not true in the commercial real estate world. Most efficiency experts say that commercial building owners and managers are demanding a 1- to 2-year payback on their investments, which has limited the market somewhat.

Even buildings that already have building management systems, or facilities that are always in use, have anomalies that can be corrected, Petze noted. Parking lot lights left on at night, HVAC units that heat and cool a building in turns, improper trigger settings that force equipment to turn on and off all the time, leading to early breakdowns -- all of these kinds of factors are awaiting in the data that projects like the GSA’s could yield.

Even if this is a one-off partnership with IBM, the scale of GSA could help open more of the private sector. “If the GSA can lead the way to make their buildings the most efficient,” Petze said, “it will help the many commercial buildings that have been more reticent.”

PV Module Consolidation in 2013-2014: What to Expect

Thu, 10/18/2012 - 15:00

Report author Shyam Mehta talks about solar module winners, losers, who gets acquired, and what the market looks like in 2014 in this podcast.

This is the first in a series of articles from GTM Research's just-published report assessing the global module supplier landscape, Global PV Module Manufacturing 2013: Competitive Positioning, Consolidation and the China Factor. For more information on the report, click here.

After several years of sustained profits and strong (if not always stable) growth, the PV manufacturing sector has found itself in the midst of a protracted downturn. A combination of overly aggressive capacity build-up in 2010 and 2011, along with severely curtailed subsidies in major feed-in tariff markets resulted in a massive supply-demand imbalance that manifested itself in early 2011, and is not expected to abate until at least 2014. 

Consequently, inventories have remained high and gross profit margins for PV module suppliers have nose-dived, from peaks of more than 30 percent in late 2010, when supply outpaced demand, to low single digits as of mid-2012 for even the lowest-cost producers. The growing commoditization of modules -- that is, the perception in the minds of buyers that quality and reliability do not differ significantly from one producer to another -- has not helped matters, either. 

Rampant overcapacity and commoditization have led to a spate of plant closures, market exits and insolvencies in the past year and a half, shown in chronological order below. However, the victims so far have mostly been smaller producers in high-cost regions, and this has done very little to alleviate the industry’s troubles.

With overcapacity likely to persist through much of 2013 and the balance sheets of most producers under severe stress, there is very little doubt in our minds that much more consolidation is on the way, and that the global PV module landscape is headed for a significant transformation. Below, we list eight trends we expect to play out over the course of the next two years.

1. Most Firms in High-Cost Locations to Exit Market by YE 2013

Most instances of consolidation activity (market exit or plant closure) thus far have been firms with facilities in high-cost locations (primarily Western Europe and the U.S.). We expect this to continue at a rapid pace given the persistence of global oversupply in 2013. By 2015, we expect module facilities in high-cost locations to make up just 9 percent of global capacity, compared to 32 percent in 2009. The few plants we expect to still be operating in these regions will mostly be regional module assembly hubs owned by companies whose major production bases are offshore, for example, Kyocera, Panasonic, Suntech Power, and AUO. The risk factor to our view here, of course, is the imposition of anti-dumping tariffs against Chinese module manufacturers in Europe.

2. Thin Film Space to Contract to Less Than 10 Active Manufacturers by 2015

Thin film plant closures in 2011-2012 have had a disproportionately high rate of occurrence (more than 50 percent of the total) compared to their share of overall production (just 16 percent in 2011). This is strongly linked to the inferior competitive positioning of most thin film firms compared to their crystalline silicon peers, specifically with regard to plant scale, manufacturing costs, efficiency, time-in-market, and bankability. With c-Si costs expected to continue to fall to levels below $0.50 per watt by 2014 (with a few exceptions), the window of competitiveness for most existing thin film firms has closed -- irreversibly. Consequently, we believe that 2013 and 2014 will continue to see a significant number of plant closures and market exits from thin film firms. By 2014, we expect thin film to make up less than 5 percent of global module capacity, compared to 19 percent in 2009, and three suppliers -- Hanergy, Solar Frontier, and First Solar -- will make up 92 percent of the installed thin film base.

3. Aggressive Downstream Build-Out in China Will Prop Up Select Domestic Suppliers

China’s aggressive downstream deployment of late is a move to support its struggling manufacturers in the oversupplied global environment. Given that oversupply is likely to persist in 2013, we expect this to continue. Along the lines of Alex Solar, LDK, and Astronergy, select domestic firms will be awarded module supply and/or EPC contracts for several large, multi-hundred-megawatt projects by local and provincial governments, as well as state-owned developers. We believe that the large pure-play firms and diversified firms are likely to be preferred for such contracts on account of their workforce and government connections.

4. Select Struggling Pure-Play Chinese Firms Will Receive Additional Debt From Domestic Lenders

We believe that at least a few China-based firms that currently face severe near-term liquidity challenges are likely to receive additional financial support from domestic lenders. This will allow them to service their near-term debt obligations, stay solvent, and maintain employment. An early indicator for this sort of outcome was in July 2012, when it was announced that the city of Xinyu had essentially created a bailout program for the troubled LDK Solar. We do not believe that LDK will be an isolated example; on the contrary, we think that many other large, struggling Chinese module suppliers are also likely to receive similar forms of assistance from their local and provincial governments. Preference is likely to be accorded to larger, more established firms with large workforces (in the 10,000 range and above), significant and unserviceable near-term debt, and strong ties to local, provincial and central governments*.

Given the significant near-term debt owed by these companies, the “bailout” packages extended to these firms may end up being in multiple phases. For example, LDK has current (due in twelve months) liabilities of almost $4.5 billion, so the $79 million package provided by Xinyu is a drop in the bucket of required assistance.  In terms of how exactly the assistance is provided, it could take on many possible forms, such as:

  • Extension of the terms of existing obligations
  • Rolling short-term loans (such as that provided by Xinyu to LDK)
  • Additional long-term loans
  • Debt/equity swaps via purchase of convertible bonds
  • Forgiveness of existing debt

 

5. Large Chinese Firms Will Continue to Acquire European Module Companies

We noted previously how lower-tier Asian firms have acquired established but embattled European module suppliers such as Sunways, Scheuten, Q-Cells and Solon in recent months. By doing so, Asian firms such as Microsol, Hanwha and Aiko Solar hope to access the strong brand and channel penetration of their acquisitions to gain an edge in European markets. We expect this trend to continue, given that Europe will still be a 12+ gigawatt market in 2013, as well as the looming possibility of anti-dumping tariffs being imposed on Chinese components. We believe the larger European developers and integrators -- juwi, Phoenix, and Solarstrom -- could also be targets.

6. Select Pure-Play Chinese Firms Could Be Acquired by Diversified or State-Owned Chinese Firms

On the whole, the pure-play Chinese firms (even Tier 2/3 firms) are better positioned than their diversified counterparts on most key metrics, including manufacturing costs, brand, and channel penetration. At the same time, most of them are in dire need of recapitalization, and not all such firms are likely to be the beneficiaries of continuing largesse from government-owned lenders. There are thus natural synergies to be gained from the acquisition of certain pure-play Chinese solar firms by larger diversified Chinese firms – either those that are already involved in module manufacturing or new entrants, such as the state-owned enterprises.

Once again, LDK Solar could serve as a bellwether for future cases. Our sources in China report that a number of state-owned enterprises (e.g., Sinoma, CECEP, CNBM, Guodian, Shenma) have met with LDK regarding possible acquisition deals. The Chinese press also reported that Jiangxi Copper Corporation, a Jiangxi-based SOE (in LDK’s home province), has sold RMB 300 million ($47 million) worth of shares to fund the purchase of LDK shares, which could make LDK one of the first (at least partially) nationalized PV manufacturing giants. 

7. Will Smaller Chinese Firms Be Allowed to Exit?

We have heard plenty of anecdotal evidence in solar as well as other manufacturing sectors about the proliferation of “zombie companies” in China. These are firms that, despite having no commercial viability, have been kept on life support by China’s banking system at the behest of provincial and central governments to maintain employment. Rather than allowing firms that have not been able to repay their debt to go insolvent, banks are forced to continue lending money to failed businesses far past the point where they demonstrate any ability to repay the debts. Admittedly, this behavior does not make any sense from a capital-efficiency perspective, and it cannot continue forever. It would require a massive expansion in Chinese installations (to the tune of 15 gigawatts in 2013), considerably beyond what we expect to occur, to keep the entirety of existing Chinese capacity in business. On top of this, module, system, and solar PPA prices in China are substantially lower than in the rest of the world, and are barely sufficient to generate a positive gross margin even for the larger firms. Still, we have yet to see any form of capacity rationalization out of China so far, even amongst smaller players.

Despite the prevailing uncertainty, we take the view that some form of consolidation amongst the smaller Chinese module firms will take place in 2013-2014. One reason is that China’s support of even uncompetitive companies is badly damaging producers that would otherwise be well positioned for success, such as Trina and Yingli. Secondly, the cost gap between the smaller and larger companies is growing, not shrinking, making it increasingly difficult to continue supporting them. And finally, we believe that the general state of China’s economy will result in a more stringent top-down fiscal policy. Chinese provinces and cities are mired in debt crises of their own, and the Chinese economy is currently besieged by an unprecedented inventory overhang that is partly caused by such lending practices.

8. Even Larger Diversified Firms Will Be Forced to Exit the Market Without Aggressive Product or Business Model Differentiation

The current module landscape is populated with a number of large, diversified, and well-capitalized conglomerates; examples are LG, Samsung, AU Optronics, Sharp, Panasonic, Bosch, and Saint-Gobain. Most of these firms entered the module market in 2009-2010, when industry dynamics were vastly different compared to the present: supply-demand balance was relatively tight, brand and bankability had a larger influence, module margins were north of 20 percent, and the global PV market was dominated by feed-in tariff markets with well-established financing and distribution infrastructures.

Today, these firms find themselves at a crossroads: they can conclude that they have no lasting competitive edge in module manufacturing and sales and exit the market, thus cutting their losses (this was the path that Schott opted to follow), or alternatively, they can compete by differentiating substantially and aggressively in terms of their product or business model. What will not work (except in a market where tariffs have been imposed on Chinese cells and modules) is trying to beat the Chinese firms at their own game -- that is, the production of plain-vanilla modules for sale to distributors and integrators. We see most such firms giving up the solar ship in 2013-2014 in the face of persistent unprofitability -- although the sunk costs of earlier investment may keep them in the game for longer than is rational.

* Since the writing of this report, the official China Securities Journal reported that China Development Bank (a state-owned lender and a large creditor to the publicly traded Chinese suppliers) is preparing to recommend stronger financial support for Suntech Power, Trina Solar, and Yingli Green Energy. It also named Hareon Solar, Shanghai Chaori Solar Energy Science & Technology and Sungrow Power Supply Co, without disclosing the other six companies in line for priority funding.

Report author Shyam Mehta talks about solar module winners, losers, who gets acquired, and what the market looks like in 2014 in this podcast

 

GSA, Largest Tenant in US, Focuses on LED Lighting

Thu, 10/18/2012 - 14:00

The U.S. General Services Administration has the benefit of a lot of space to play around with. On the downside, all that space means significant utility bills.  

For the GSA, energy efficiency is becoming a way of life, not only to cut costs at more than 9,600 assets that it owns or rents, but also to meet the 2007 federal mandate that government buildings slash energy consumption 30 percent by 2015. 

To meet those goals, and to push the whole market forward, the country’s largest tenant launched the Green Proving Ground program to evaluate sustainable building technologies. Based on performance, the GSA can then recommend technologies to its portfolio.

The GSA has already published findings on occupant-responsive fluorescent lighting, but now it has turned its attention to LEDs and controls. “Lighting is a significant portion of a building’s energy load,” said Kevin Powell, program manager for Green Proving Ground. “This is a great place to target if you want the reductions we’re mandated to achieve.”

As part of the Recovery Act, the GSA had more than 200 projects of lighting retrofits, but few were LEDs. “The Green Proving Ground GPG program is looking at the next generation of products that are targeting general office lighting, which is the great frontier,” said Powell. The frontier has certainly moved to LEDs, which have come down significantly in price. For most office applications, a report from Groom Energy and GTM Research estimates that large market adoption for LEDs (with a less than five-year payback) is approaching and will probably come in another year. 

As part of this year’s Green Proving Ground pilots, the GSA is testing LED Troffers from Cree and wireless controls from Daintree Networks. The technologies will be tested separately and together, with results expected in early 2014.

The GSA likes to test technologies in various settings to get an idea of what applications are right for what space -- whether it’s a 9-5 office or a 24-hour call center. The bulk of GSA’s footprint is office space.

Daintree’s ControlScope solution will be used to control existing fluorescent lights in one building and to control Cree’s lights in another building. Powell notes that one of the advantages of LEDs is their inherent controllability, but the agency still doesn’t know if the cost-benefit is right.

“The point is to see whether or not we can cost-effectively install that at market prices today,” said Powell. But cost isn’t the only factor; occupant satisfaction and maintainability also play a part in evaluating technology.

In the case of occupant responsive lighting, the technology saved 27 percent over baseline conditions for spaces illuminated 12 hours a day, five days a week -- and occupants embraced the upgrades. For LEDs, the savings will have to significantly beat what’s achievable with controllable fluorescents to make inroads with GSA. 

Daintree Networks and Cree are already working together with the Sacramento Municipal Utility District, delivering the joint solution at a wholesale distributor. The retrofit to the office and breakroom resulted in more than 91 percent savings.

Once the GSA has completed findings, then it can recommend technologies to some or all of its portfolio. With more than 370 million square feet of building stock, if the GSA widely implements a technology, it can easily push the entire market forward.

For the federal agency, 2015 isn’t the endgame when it comes to meeting energy efficiency goals. Even once that mandate is met, the GSA then needs to turn its focus to net-zero energy designs by 2020, said Powell, who noted that taking the heat out of lighting by using LEDs will likely be a component of those designs. We have a great deal of incentive to roll out technologies that prove out as quickly as possible,” he said. 

Electric Cars: The Tipping Point for the Smart Grid

Thu, 10/18/2012 - 13:00

We worry about electric cars the way Woody Allen worries about death. Nearly everything seems like a threat: their expensive batteries, excessive weight, and, scariest of all, their potential to leave us stranded somewhere we don’t want to be.

But let’s not leave all the anxiety to electric car owners. The rest of us need to start worrying about what will happen if enough people buy these things and try to charge them at the same time: The blackouts will start rolling faster than a Tesla at the race track.

While no one can argue that electric cars have the potential to do a lot of good for the air and the planet, they also push utilities toward a reckoning with the so-called smart grid. Electric grids as we know them today -- many of which are already stretched to the limit -- simply are not designed to handle the load.

As more governments encourage the use of electric cars through mandates, tax breaks, and other mechanisms, utilities will need to figure out how to deliver power to those cars reliably and efficiently -- without cutting further into already razor-thin profit margins. Not an easy task when you consider that the utilities will need to do more than put power through a wire; they must also service (and perhaps create) an electric version of the gas station network that has been in place for 100 years.

Clearly, the grid will need to get smarter. And not just because of electric cars. For example, in Germany the government has set a 2022 deadline for shutting down a nuclear power sector that, until recently, provided nearly a quarter of the country’s power generating needs. Similarly, in Japan, lingering concerns about the safety of nuclear power following the tsunami-related meltdown at the Fukushima Daiichi facility have resulted in the ongoing shutdown of almost all the country’s nuclear power sector.

The likely replacements for nuclear (and coal, oil, and natural gas) -- namely, sun and wind -- are as anxiety-inducing to the current electric grid as electric vehicles. Neither provides what the grid is designed for: predictable flow. With wind power generation, for instance, utilities may have only a day or even just a couple of hours’ notice to confirm whether generating capacity will meet or exceed power needs. Some of the time, the wind may blow when it is not needed, so utilities will need storage solutions for excess energy that they can feed back into the grid when the wind dies down and power demand picks up.

Sounds like a disaster in the making. However, renewables and electric vehicles also represent opportunities for new revenue and even for new business models for an industry that today is languishing in low-margin commodity land.

It’s unlikely EVs will take over the world, and we do not expect that e-mobility will completely replace cars powered by fossil fuels, but we do believe that EVs will eventually account for 10 percent to 15 percent of vehicle sales volume (governments in both Germany and Ireland have already set these percentages as goals). For utilities, these sales represent an opportunity to open a new market.

The most obvious potential new business opportunity may come from installing, servicing, and operating the charge points that EV owners will need to use to recharge their batteries. But the charge points aren’t exactly a free lunch. In Switzerland, for instance, it can cost €12,000 (roughly $15,500) just to install a single public charging station. And then there are the costs of maintaining and operating the charge points.

Energy companies are looking at a variety of strategies for defraying charge point installation costs or adding revenue streams. Here are four examples:

  • Collaborate with businesses where drivers don’t mind waiting. Restaurants and retailers are two prime possibilities. For example, North Carolina utility Duke Energy has partnered with Kohl’s department store chain to put charging stations in 52 store parking lots across 14 states. The business helps pay for the charge point, then benefits from EV owners who hang out while they top up their vehicle’s batteries.
  • Manage electric car fleets/provide car-sharing. Utilities could take on the management of corporate electric car fleets, just as some of them today provide a more holistic solution for power management. Utilities could also partner with car rental companies or develop their own fleets of rentals to compete in areas with sufficient charging infrastructure.
  • Partner with technology companies. Singapore Power has partnered with Bosch to install a network of charging stations. Bosch takes responsibility for installing and maintaining the charging stations, which reduces both cost and risk for Singapore Power, but the utility must accept a lesser role as a pure supplier of energy to the charging stations rather than an operator of the stations, thus reducing the potential upside as well.
  • Use charging stations to generate additional revenue. Charging station manufacturers are putting LCD displays on charging stations and selling advertising space on them. Utilities could get into the game, too.

 

Yet regardless of which business models emerge for utilities, an integral piece of the big picture will be the development of the smart grid. To cope with the demands of millions of consumers plugging their cars into the grid, either in their homes or at public charging points, utilities will need to manage demand with smart grid systems that can intelligently allow EVs to draw from the grid during periods of low energy demand, such as during the overnight hours. Or perhaps the utilities will allow users to recharge their EVs at any time, but provide financial incentives so that it is less expensive to recharge a car (or run any major electric appliance) during low-demand periods.

Answers to these and other questions surrounding EVs are still being discovered. But as battery technology improves to the point where EVs offer greater range at more affordable prices, and as governments boost incentives and mandates for EV/PHEV adoption, more and more utilities are pushing forward with pilot projects to test the logistics and economics of EV usage. This is a time for bold experimentation, as EVs, smart grids, renewable energy evolve together into a new and exciting utility-transportation ecosystem.

***

Maurizio Cattaneo is Global Lead and Joerg Ferchow is a solution manager in SAP’s Energy and Natural Resources Global Hub. Andreas Schulze is a solution manager in SAP's Automotive Industry Business Unit.
 

First Solar in India: Exploiting RAMs and FITs

Thu, 10/18/2012 - 12:00

First Solar (NASDAQ: FSLR) just announced deals for the sale of 50 megawatts of its cadmium telluride (CdTe) thin-film modules to Indian developers Kiran Energy Solar Power Pvt. Ltd. and Mahindra Solar One Pvt. Ltd. for side-by-side 20-megawatt and 30-megawatt projects in the state of Rajasthan.

First Solar’s India strategy “includes establishing a deep local presence,” CEO James Hughes recently said. India is “a very real opportunity.” The company’s impressive average module manufacturing cost of $0.70 to $0.72 per watt, its 12.7 percent efficient modules, and its proven bankability, Hughes believes, are competitive advantages in India.

India’s Jawaharlal Nehru National Solar Mission (JNNSM), aimed at the addition of 20,000 megawatts of solar capacity by 2022 through a renewable auction mechanism, closed this year. In addition, several Indian states, notably Gujurat, have solar feed-in tariff programs.

With an energy deficit and infrastructure that led to the world’s worst blackout, India’s turn to solar caused a stampede of capacity building by Indian module manufacturers and a stampede to India by international solar manufacturers, builders and financiers seeking a piece of the action.

“There is roughly 1050 megawatts of cumulative capacity now installed in India,” explained GTM Solar Market Analyst Scott Burger. “Of that, roughly 670 megawatts came from the Gujarat policy and the remaining portion from the National Solar Mission and then a mix of other, smaller policies.”

Burger identified First Solar activity in India that included JNNSM deals with Fonroche Energie Group (twenty megawatts), NVR Infrastructure (two megawatts), Azure Power (35 megawatts), and Green Infra (25 megawatts). The two newest projects fall under the JNNSM. 2011 deals with Reliance Power (NSE:RPOWER) (100 megawatts) and ACME Tele Power Ltd (fifteen megawatts) fall under Gujarat’s feed-in tariff policy.

India solar experts point out a market distortion that favors First Solar.

When the JNNSM law was written in 2009, there was a strong domestic content requirement (DCR) for silicon panel-based solar projects but thin-film solar was not on the India policymakers’ radar.

As a result, Burger noted, First Solar is probably the largest module supplier to the Indian market. “We expect to win 20 percent of the market this year and on a go-forward basis,” Hughes has said.

But, Burger said, "there has been uncertainty as of late.” Both Rajasthan state and the JNNSM delayed new offerings. “While I am sure India is committed, the financials of solar are tough to navigate right now,” Burger said. And “the question of a local content law rule for thin film certainly has something to do with the uncertainty.”

The absence of a thin film DCR was partially responsible for the failure of many Indian entrepreneurs who stampeded to build silicon-based panel manufacturing capability. The other part of their failure was in their price structure.

Competing with low-cost Chinese panel makers supported by the Chinese government has been as challenging for India’s manufacturers as it has been for the U.S. and EU manufacturers who have clamored for tariffs.

First Solar’s advantage in India was a U.S. Export-Import Bank low-cost loan program for international businesses that buy U.S. products. At least $305 million in U.S. Ex-Im Bank loans went to Indian solar projects since 2010 that used First Solar’s thin film.

First Solar is “a visible, bankable brand,” Burger said, but “they are also benefiting from U.S. Export-Import Bank financing.”  While India’s solar industry faces 15 percent interest rates from its domestic banks, Ex-Im Bank interest rates for developers who use First Solar’s thin film panels is as low as 3 percent to 4 percent.

Burger and most India solar watchers expect the government to announce some form of a thin film DCR along with the next, 3-gigawatt JNNSM phase. Neither Hughes nor Burger expects this to spell the end of First Solar’s India success.

“We continue to maintain a close working relationship with Ex-Im,” Hughes said, “which plays an important role by providing financing in challenging markets like India.”

That financing will drive module sales, Hughes believes. It might be risky for the company to pursue a market with a new rule directed specifically at excluding them, Hughes acknowledged.

But “a domestic content requirement would likely manifest itself in the public sector programs,” Hughes explained. “We actually believe the private self-generation market is the source of a great deal of the opportunity.” Further, he added, “if the kind of visible demand that we expect develops in that market, that is likely a market where we would look to put manufacturing in place. And so obviously, at that point any such policies would actually be an advantage.”

According to knowledgeable sources in India, Burger said, the country could “move from to a market driven by the National Solar Mission and the Gujurat feed-in tariff to a market driven by renewable portfolio obligations. But I think it will be well beyond 2013 when solar is cost competitive on an unsubsidized basis.”

On the other hand, he said, other factors, like energy security, could drive demand. “First Solar is “looking at India in the longer term. The population is set to explode and they are starting to need a lot of power.” And, Burger added, “there are policies outside the National Solar Mission that may not have domestic content requirements that First Solar could do very well in.”

Flexitricity Pushes the Envelope in Growing UK Demand Response Market

Thu, 10/18/2012 - 11:00

Demand response is expanding its wings in many ways. About a year ago, two companies used demand response for frequency regulation in the PJM market, the grid operator that covers the Mid-Atlantic.

A similar project just played out in the United Kingdom, where Scottish demand response company Flexitricity recently dispatched sub-second demand response from a manufacturing plant for frequency services for National Grid.

The two pilots would make it seem as though the demand response markets are moving along in tandem from both sides of the pond. Nothing could be further from the truth.

Demand response is a far more mature market in the U.S., where a few large companies and endless startups bid megawatts into ever-changing markets. The bulk of the megawatts have traditionally gone to capacity resources, but increasingly, demand response is playing in additional markets, including frequency regulation and spinning reserves. Residential demand response is also increasingly becoming a reality in small doses.

In the U.K., however, there has traditionally been more generation than was needed, leaving little need for load shedding from the commercial and industrial sector. That is changing. “Everyone has known available generation is on its way down, but it’s not down yet,” said Alastair Martin, founder and chief strategy officer at Flexitricity.

The U.K. government estimates that the electricity reserve margins will be down to about 4 percent by 2015/2016, down from about 14 percent this year. The drop in reserve margins is due to retiring coal plants because of tightening environmental regulations and not enough new generation coming on-line fast enough. The reserve margins are similar to the shortfalls that Texas could be facing in coming years. 

Currently, most of the peaks in the U.K. come in winter, although there are increasing summer peaks, especially in financial centers like London. UK Power Networks, a distribution network operator, recently started a demand response pilot with Flexitricity and ExCel, an exhibition and conference center in London. Like many demand response pilots in the U.K., load is shed but facilities might switch to backup generation, rather than just reducing load completely.

In coming years, the U.K. will likely need traditional demand response load shedding during capacity shortfalls, but it will also need frequency services from new sources. The bulk of frequency services have come from power generators and also from large industrial customers, like aluminum smelters. But large industries are closing and power generators might not be able to meet all of the need. “For this form of frequency response,” said Martin, “we’re the rebirth.”

Most of the frequency response would be provided when generators trip offline unexpectedly, said Martin, although that is just the tip of the market. The U.K. has large wind power penetration and is working on solutions to harness tidal and wave power. He said his company has the types of resources -- from C&I facilities to small power producers -- that can supply the balancing reserves for increasing amounts of renewables in the future.

Flexitricity, which launched its service in 2008, said it was the demand response provider that operated a 24-hour control room in the U.K. While Martin would not give an exact figure of megawatts under contract, he suggested it was comparable to a large coal-fired power plant.

For Flexitricity, automation is key to its offerings. The company is keeping an eye on the OpenADR standard being developed in the U.S., but “we’re starting from further back,” said Martin. He noted that non-automated demand response trials in the U.K. were very challenging. For building managers, “demand response is never their day job,” said Martin. “No matter how skilled or intelligent the individual, we will never be their day job.”

Martin said that while other demand response providers might have moved into DR from other energy services, Flexitricity was squarely focused on demand response, especially because it’s a young market. For other competitors that try to be one-stop shopping, “I think it’s distracting,” said Martin. “It’s hard to do demand response well.”

One competitor that has crossed the pond from the more sophisticated U.S. market is EnerNOC. Interestingly, EnerNOC’s first foray in to the U.K. market was in energy services, and not just demand response. For the many homegrown companies, Flexitricity said that there was more value-add by working with building controls company, ESCOs and energy efficiency companies rather than competing with them. “They help us because we do the bit they don’t do,” said Martin, adding that providing the right type of load shed and the right customer experience is key to growing the market in the U.K.

“It’s easy to sign up to a demand response program,” he said, “but it takes far more work to implement it. “If it doesn’t go well for [the customer], it’s really easy to turn it off.”

North American AMI/AMR Markets Projected to Shrink Into 2013

Wed, 10/17/2012 - 19:30

Based on the latest data from the first half of 2012, as well as discussions with vendors, 2012 is on track to have fewer advanced metering infrastructure (AMI) and automated meter reading (AMR) shipments than 2011, according to the latest North American AMI Deployments & Market Share report. Deployments were down across the electric and gas sectors, and many vendors project that figures for the remainder of 2012 will drop even more sharply than the existing data indicates.

On the other hand, shipments to the water sector have increased by nearly 11 percent this quarter, or roughly 150,000 units. This upward water trend is expected to continue through 2012. However, the water marketplace is only 25 percent the size of electric plus gas, and the modest water growth will not compensate for the other losses.

FIGURE: Annual Shipments of AMI and AMR by Sector

Source: North American AMI Deployments & Market Share: Q2 2012

“This is a very lumpy industry, meaning that there are a few huge projects that dominate the numbers, and the many small projects can never overwhelm the large ones," says Howard A. Scott, author of the report. "When these large projects come to an end, suddenly that data isn’t there anymore. There are some big new upcoming projects that haven’t yet hit the major rollout stage, which should mostly compensate for projects that are currently coming to an end.”

Today, GTM Research and Howard A. Scott of Cognyst Advisors publish the North American AMI Deployments and Market Share: Q2 2012 report. This 29-page quarterly report is part of the GTM Scott AMI Market Tracker and provides the latest information on the AMI deployment and implementation trends of electric, gas and water utilities in North America.

Primary data on shipments in the report is collected directly from over 50 major vendors and analyzed by our team of experts to provide the most timely and strategic outlook available on the industry. The report features analyses of:

  • North American AMI shipments
  • North American AMI market share by vendor
  • North American AMI market share by communications architecture
  • AMI deployments for electric, gas and water utilities
  • Total North American market size and remaining addressable market

 

“As large IOU deployments near completion, it will be critical for AMI and AMR vendors to provide solutions tailored to the specific needs of the municipal and cooperative utility markets,” said Zach Pollock, the Smart Grid Analyst for the report at GTM Research. “Furthermore, with GTM Research and Howard Scott forecasting flat growth for the market through 2013, we're unlikely to see the accelerated AMI and AMR deployment schedules we witnessed during the ARRA boom in 2009 and 2010.”

FIGURE: Quarterly and Annual Electric AMI Market Share by Vendor

Source: North American AMI Deployments & Market Share: Q2 2012

This report includes exclusive data and analysis on Aclara, Elster, Itron, Landis+Gyr, Sensus, Silver Spring Networks, and many other vendors.

The GTM Scott AMI Market Tracker is the smart grid industry’s most comprehensive subscription service, providing energy professionals with strategic data on North American utility AMI and AMR markets. To learn more about this quarter’s report, as well as the Tracker subscription, please visit http://www.greentechmedia.com/research/gtm-scott-ami/.

A123’s Bankruptcy: Facts, Reax and Predictions

Wed, 10/17/2012 - 16:00

Waltham, Mass.-based advanced lithium-ion battery company A123 filed for bankruptcy on Tuesday, becoming the fourth Obama administration-backed green technology company to declare insolvency after receiving tens or hundreds of millions of dollars in federal grants and loans.

That makes it a big political story, with partisans on both sides denouncing and defending the Department of Energy’s $249.1 million grant to A123 (about $132 million spent so far, mainly to build its flagship factory in Livonia, Mich.). We’ve already seen the inevitable comparison to bankrupt solar company Solyndra, which took a $535 million loan guarantee from the Department of Energy only to go under last year. DOE-backed flywheel energy storage maker Beacon Power and thin-film solar startup Abound Solar have since declared bankruptcy as well.

But A123’s fate is likely to be much different than Solyndra’s, which has seen its plant dismantled and its technology stranded. Johnson Controls, the Milwaukee, Wisc.-based industrial giant with an advanced battery portfolio of its own, plans to buy A123’s automotive battery business for $125 million and has pledged $72.5 million in debtor-in-possession financing to keep operations going during bankruptcy proceedings.

Tuesday’s Chapter 11 bankruptcy protection filing in U.S. federal court in Delaware also puts an end to a $465 million bid by China’s Wanxiang to take majority control of A123 in exchange from saving it from insolvency. That deal has been canceled, A123 CEO David Vieau said in a Tuesday statement on the company’s website.

But that won’t extinguish the political firestorm to come on A123’s crash and burn -- even if parts of the company can be saved, as Johnson Controls seems intent to do with the automotive battery line. Congressional inquiries into A123’s remaining share of its DOE loan, as well as its relationship to struggling plug-in hybrid automaker (and key A123 customer) Fisker Automotive, have been underway for months.

Political Fallout and Presidential Policy

Let’s start with the main stage. Mitt Romney’s campaign issued a statement on Tuesday calling the bankruptcy “yet another failure for the president's disastrous strategy of gambling away billions of taxpayer dollars on a strategy of government-led growth that simply does not work.” President Obama’s campaign fired back that Romney, as Massachusetts governor, had presided over state loans to companies that later defaulted on their debts.

On a less personal, but still political, note, a Department of Energy spokesman wrote in a blog post that Republican members of Congress had signed on as A123 supporters -- not surprisingly, both from Michigan, where A123’s plant was built with federal and state support.

DOE’s blog also stated that 100-mile-range batteries have dropped in price from about $33,000 before it started investing billions of stimulus dollars into the sector, to about $17,000 today. That’s on track to drop to $10,000 by 2015, DOE predicts. Of course, that’s based on a rosy projection for the advanced battery market, which DOE says is set to grow from $5 billion in 2010 to nearly $50 billion in 2020.

In large part, that’s tied to equally optimistic, official Obama administration goals to put 1 million plug-in vehicles on U.S. roads by 2015 -- a growth rate that is hard to imagine, given the fact that only 50,000 EVs have been sold so far this year.

Cost, Quality Struggles: Will GM Stick With A123?

Beyond the core problem of a slow-to-develop market, A123 may have faced struggles to compete on cost against its rivals, according to an analyst who spoke to Wired. Asian companies dominate the advanced battery market today -- South Korea’s LG Chem makes the batteries for GM’s Chevy Volt, Japan’s Panasonic makes Tesla Motors’ batteries, and the Nissan Leaf’s batteries come from a Nissan-NEC joint venture.

To be sure, A123 has a long list of EV customers, including General Motors, BMW, SAIC Motor Corp., Tata Motors and Smith Electric Vehicles. But Fisker was its main customer, with about 26 percent of A123’s revenue, according to bankruptcy filings -- and Fisker has been having its own problems as it strives to meet terms of its own $529 million DOE loan. Fisker was also the company that received A123 batteries that were subject to a mass recall this spring, a disaster that triggered A123’s spiral into bankruptcy.

It’s hard to predict how the proposed acquisition by Johnson Controls will affect those ongoing relationships. GM, which has tapped A123 to build batteries for its Spark EV, issued an official "no comment" on its Chevy Volt website on Tuesday as to whether it would continue using the bankrupt company’s batteries if the Johnson Controls deal goes through.

Price vs. Value for Domestic Green Technology Support

In the meantime, the company as a whole has lost a collective $1 billion over the course of its publicly-traded life, retaining $459.8 million in assets and $376 million in debt as of Aug. 31, according to bankruptcy filings. The company has seen its market value fall from a high of $2.3 billion shortly after its 2010 IPO to an estimated $8.2 million as of Wednesday afternoon, representing the destruction of a whole lot of capital.   

At the same time, EV supporters were quick to point out that A123’s assets and intellectual property represent ongoing value for whichever company picks them up. “Government can help facilitate innovation, but the natural business cycle remains -- some failures in any emerging industry are inevitable," Jay Friedland, legislative director for nonprofit advocacy group Plug-In America, said in a Tuesday statement.

In that sense, A123’s bankruptcy is simply a fire-sale opportunity for consolidation into a growing industry, whether under domestic or foreign ownership. Johnson Controls got its own $299 million DOE advanced manufacturing grant in 2009 to build domestic manufacturing capacity for hybrid and electric vehicle batteries, and will be keeping jobs and intellectual property in the country if it takes over A123’s automotive business.

That means that federal investment into A123 -- and Johnson Controls, for that matter -- will be achieving its goals of creating jobs and fostering domestic technology innovation, the Information Technology and Innovation Foundation, a nonprofit founded and chaired by former Republican lawmakers, noted in a Tuesday statement.

“Through critical public investments in battery innovation by ARPA-E and DOE investments in next-generation battery manufacturing, the U.S. battery industry has made significant technological progress in a few short years,” the group noted. “And as shown by Johnson Controls purchase of A123’s manufacturing plants and technologies, it’s helped spur very promising technologies that U.S. industries will continue to use and build on.”

Whether or not U.S. manufacturing plants can compete on costs with Asian rivals is another question. Both A123 and rival lithium-ion battery maker Boston-Power have turned to building batteries in China with partners, both for low production costs and to serve China’s future market for electric vehicles.

Meanwhile, the fate of A123’s significant grid-scale battery business -- some 24 percent of its revenues came from grid storage partner AES, according to bankruptcy filings -- and other parts of the company remains unclear. Indeed, other bidders may emerge to challenge Johnson Controls for A123’s automotive battery business, which includes plants in Livonia and Romulus, Mich., a factory in China and its stake in a joint venture with Shanghai Automotive.

Quote of the Day: VC Vinod Khosla on Li-Ion Battery Firm A123

Wed, 10/17/2012 - 15:30

Last year, venture capitalist and provocateur Vinod Khosla spoke to about 300 energy storage experts at the annual Energy Storage Association (ESA) meeting. He acknowledged the critical importance of energy storage, showed his knowledge of the sector, and had the crowd eating out of his hand. He then proceeded to dismiss many of the technologies that those at the industry gathering were working on as "toys" because of their inability to scale to truly solve grid-level problems. He also predicted that A123, the lithium-ion battery manufacturer, would not be around in ten years.

That was less satisfying for the audience (which included A123). The incoming and outgoing chairmen of the ESA were somewhat aghast at the comments, although I'm sure Khosla would say them again. Especially since he was absolutely correct about A123.

Yesterday, A123 filed for bankruptcy protection, putting the status of its proposed $465 million bailout by China's Wanxiang -- as well as its $249 million in federal loans -- in question. As Jeff St. John reported, the Waltham, Mass.-based company also said it planned to sell its automotive battery business to Johnson Controls for $125 million, though the deal could be subject to competing bids in the bankruptcy process.

That move, announced on A123’s website, would appear to put an end to a proposal from Chinese auto parts giant Wanxiang Group Corp. to invest $465 million in A123, which would have given it an 80-percent stake in the company.

Khosla described lithium-ion batteries as "toys that can't be deployed at scale." He said that lithium-ion was "too volatile" and "too expensive."  To be economical, energy storage has to be fundamentally safe -- without the necessity to wrap tons of management and safety equipment around it to keep it from exploding or catching fire.

Khosla went on to say that storage is the key to better power utilization, a more reliable grid, and not having to hassle consumers with programming their dishwasher. More local storage means fewer security requirements and fewer potential cyber-wars.


The Khosla Ventures energy storage portfolio includes:

  • LightSail - (which looks like containerized mobile CAES)
  • Sakti3 - Solid-state lithium-ion battery for automotive applications
  • Seeo - Solid-state lithium-ion on a polymer electrolyte
  • Pellion - Rechargeable magnesium-ion battery that is "inherently safe with no liquid electrolytes"
  • Quantumscape - The ARPA-E site calls it a “completely new class of electrical energy storage devices for electric vehicles that has the potential to provide ultra-high energy and power densities, while enabling extremely high cycle life.”
  • Ambri (formerly Liquid Metal Battery Corp.) builds a battery using molten antimony and molten magnesium separated by an electrolyte for utility-scale markets.

Carbon Capture Outlook Grows Bleaker by the Day

Wed, 10/17/2012 - 15:00

Is it time to stick a fork in carbon capture and sequestration?

The case for CCS -- the process of grabbing the carbon produced from generating electricity from fossil fuels, and from a range of industrial processes -- has always been a little odd, predicated on the idea that it was unrealistic to expect immature and expensive clean energy technologies like solar and wind to shoulder the entire burden of reining in carbon emissions, particularly in developing countries.

Yet CCS is actually way behind wind and solar and renewables as a viable option -- and it’s falling further behind the timetable advocates had set for it to be a real factor in the climate-change fight, according to a new report.

The International Energy Agency has been counting on CCS to contribute 7 gigatons out of 42 gigatons in CO2 reductions under “2DS,” a least-cost scenario for keeping the global average temperature from rising more than that magic 2°C that climate people are always talking about. But with the passing of every new day, that scenario seems to get a little more shaky.

“To maintain the path to the 2°C target, the number of operational projects” -- eight are now operating and eight are under construction -- “must increase to around 130 by 2020, from the 16 currently in operation or under construction,” the Global CCS Institute said in its 2012 update of the technology’s progress. “Such an outcome looks very unlikely as only 51 of the 59 remaining projects captured in the Global CCS Institute’s annual project survey plan to be operational by 2020, and inevitably some of these will not proceed.”

So instead of 130 by 2020, we’re looking at maybe 51.

That’s why the institute concluded, “It is clear a very substantial increase in new projects needs to occur if the IEA scenario for CCS is to be met.”

Now, to be sure, the IEA is a big advocate for deployment of more renewables. But it’s hard not to wonder if its continued advocacy of CCS makes sense, given how scarce investment dollars are likely to be in the years ahead. It’s really expensive to get the carbon out of a coal plant flue, compress it to a supercritical state and send it underground to a spot that has been adequately studied to determine it can hold the stuff.

It’s enough to make you think the Congressional Budget Office might have been right earlier this year when it concluded that the big investment the U.S. is making in CCS -- $6.9 billion since 2005 -- probably won’t bear much fruit. That is, unless Washington suddenly develops a spine and “impose[s] costs -- for example, through a tax on carbon -- on users of electricity whose generation releases greenhouse gases (thereby making CCS more competitive), or experiment[s] with different types of electricity production subsidies that would provide more incentive for private-sector investments in CCS.”

We’ll let you be the judge of how likely that is.

***

Editor's note: This article is reposted in its original form from EarthTechling. Author credit goes to Pete Danko.

Satcon, Leading US Solar Inverter Brand, Files for Bankruptcy

Wed, 10/17/2012 - 13:00

Satcon (NASDAQ CM:SATC) has filed for protection under Chapter 11 of the U.S. Bankruptcy Code.

Satcon was one of the leaders in the U.S. inverter markets -- the firm claimed it was the number-one utility-scale inverter supplier in the U.S., as well as the number-one large-scale commercial supplier. Clearly, troubles in solar are not limited to module suppliers or thin-film CIGS startups.

In January of this year Satcon laid off about 140 employees, primarily within its Ontario operations.

In July of this year, we were hearing rumors of Satcon exiting the solar business. We received staunch denials from Satcon VP Michael Levi even as the firm flirted with a Nasdaq delisting. Levi said, "We are quite focused and dedicated to continuing to build upon the commercial leadership position that we have achieved in North American over the past few years, and toward the continued strengthening of our worldwide position in the 3 Phase inverter market, as is reflected in our significant and consistent gains since 2009."

Today, Steve Rhoades, the CEO of Satcon, wrote in a statement, “This has been a difficult time for Satcon. After careful consideration of available alternatives, the Company’s Board of Directors determined that the Chapter 11 filings were a necessary and prudent step, allowing the Company to continue to operate while giving us the opportunity to reorganize with a stronger balance sheet and capital structure. Our goal is for Satcon to emerge from bankruptcy reorganization and continue to provide our customers with the quality products that they need.”

So, what's to blame for this solar casualty? Price pressure is present in every facet of the solar space. There's weaker demand and incentives are diminished. But It's difficult to fault China, as the "market share of Chinese inverter companies in the U.S. is virtually zero," according to GTM Research solar analyst MJ Shiao. (That excludes made-in-China inverters by Advanced Energy, Satcon, et al.) The $7 billion inverter market is dominated by Germany's SMA and other European and American vendors such as Fronius, Advanced Energy, Kaco, and, up until now, Satcon.

Revenue at Satcon in the most recent quarter was $23.7 million.

Satcon stock is trading at $0.09 per share and the firm has a market cap of $1.65 million. According to recently filed court documents, Satcon has $93 million in assets and $121 million in debts. Venture capital firm Rockport Capital owns 18.1 percent of Satcon.

 

 

 

Third-Party Solar Ownership, Monitoring Residential Rooftops, and Herding Cats

Wed, 10/17/2012 - 11:00

Big players in the third-party ownership (TPO) space have the responsibility for a lot of residential rooftop and small commercial solar photovoltaic (PV) systems, and there is money at stake on those systems’ performance.

A homeowner or small business owner who installs a solar PV system can check a computer display, typically provided at installation, and know if it is time to dust the panels or trim an overhanging branch, or whether there is something wrong with the system. TPO players like Sunrun, Clean Power Finance, SolarCity and SunPower (NASDAQ:SPWR) typically guarantee system performance and, with that sector of solar investment soaring, there is a lot of dusting and tree-trimming to be done.

Though tracking and maintaining many small solar systems is a lot like herding cats, such system management is necessary, even vital, for maximizing the return on investment. (See GTM Research's report on Global PV Monitoring here.)

What is unnecessary, according to Mark Liffmann of Clean Power Research (CPR), are excessive, costly maintenance calls and/or the installation of hardware, such as pyranometers, to provide location-specific, time-specific output benchmarks so that the system's software can know if there is shading, soiling or a malfunction.

Clean Power Research (CPR) has a better idea. Its just-released services product capitalizes on proprietary algorithms developed by Dr. Richard Perez of the State University of New York at Albany to interpret National Oceanic and Atmospheric Administration (NOAA) satellite weather data and provide system owners a location-precise, time-specific accounting of benchmark performance without the expense of onsite hardware.

Perez’s algorithms, incorporated into CPR’s SolarAnywhere product, typically provide half-hourly or hourly irradiance information for between one and ten square kilometer areas at ZIP-code-specific locations. SolarAnywhere is part of ongoing efforts to precisely characterize the variability of distributed solar PV systems by the California Independent System Operator, Pacific Gas and Electric (NYSE:PCG), the Sacramento Municipal Utility District, the Electric Power Research Institute, and other institutions.

The data appears comparable to resource assessment information provided to utility-scale solar and wind installations by renewables industry associates like 3Tier, GreenPowerLabs and MeteoTest. The news here is that CPR is making possible the use of SolarAnywhere data at a much smaller scale.

Shading and soiling have specific performance signatures, according to Liffmann. As a small solar system’s software reads its output, it can recognize the compromised performance signatures if it has a real-time optimal output -- in other words, a benchmark -- with which to compare it. But, Liffmann said, optimal output, like the weather, is always changing.

CPR’s SystemCheck generates that real-time optimal performance benchmark for present conditions from NOAA satellite image irradiance data and the PV system’s specifications for the PV system. The solar system’s control software can then compare the system’s expected optimal performance with its measured performance and determine if there is a soiling signature, a shading signature or compromised function, according to  DECK Monitoring’s Peter Denato. DECK is the CPR software’s first announced purchaser.

The ability to monitor system performance without installing onsite hardware saves hardware costs and hardware maintenance costs without significantly compromising the ability to optimally maintain the system, Liffmann said. The other alternative -- regular maintenance calls -- would be even more cost-inefficient.  

Denato said the cost for five years of CPR services is about half the cost of installing a pyranometer to provide precise location irradiance as a benchmark. He acknowledged the CPR services might only cut total system cost by a small percent, but both he and Liffmann pointed to improved system performance without increased maintenance costs and the ability to make more and better data available to TPO investors as added value.

Smart Grid Saves EPB Chattanooga $1.4M in One Storm

Wed, 10/17/2012 - 06:00

In July, we reported on the first real test of EPB Chattanooga’s smart grid investment that occurred when a powerful windstorm roared through the city in Tennessee.

The utility, which serves 170,000 customers, found that it cut its power outages by at least half, according to Jim Glass, manager of smart grid development at EPB Chattanooga.

At the time, Glass said it was difficult to put a monetary figure on the savings. But new data has done just that. The utility has been installing 1,200 S&C IntelliRupter automated switches on the distribution grid since early 2011. The utility also boasts one of the fastest internet pipelines in the world and a full rollout of smart meters.

It is the switches that paid off in the summer storm. The utility had a 55 percent reduction in duration of outages, and the expedited restoration saved EPB Chattanooga $1.4 million.

"This marks a major step in understanding the value proposition for self-healing feeders. To be able to point to $1.4 million dollars in operational savings without the inclusion of social costs will drastically help utilities build business cases for their public utility commissions," said Ben Kellison, smart grid analyst for GTM Research. "However, continued difficulties with ROI calculation will persist for self-healing feeders as utilities often adopt vegetation management in concert with feeder upgrades as part of a reliability program. This leaves it to the statisticians to determine the benefits of chainsaws versus vacuum chambers."

There were 58 million avoided minutes of customer interruption -- and most customers were restored about 1.5 days earlier than would have been possible before the smart grid upgrades.

The map below shows customers who experienced an outage as part of the storm on July 5 as red dots. Blue dots are customers that would have been impacted before the distribution automation upgrade, but were not affected during the actual storm.

There is still a lot of red on the map, but there were thousands of customers who had their outages restored remotely, vastly cutting down the duration of the outage. “If we can make a significant impact on outages in our community, we’re improving the bottom line for businesses."

EPB Chattanooga is not the only utility installing smart switches, but it is far and away the leader in automated feeder switches right now, given its 600-square-mile territory. The stimulus funds have helped to install more than 5,700 automated feeder switches nationwide, with more than 1,500 deployed at Southern Company (but over a much larger territory than Chattanooga). Many other utilities, including Consolidated Edison, Duke Energy Carolinas, Avista, NSTAR, CenterPoint and others also have hundreds of automated switches, according to smartgrid.gov. Other utilities, such as Vermont Electric Cooperative, are also reaping the benefits of its smart grid during storms. 

The calculation of savings from smart grid investments is an important step forward for any utility that has invested in technology. For those that are considering the investment, data from utilities that are leading in smart grid is increasingly necessary.

Earlier this month, Maryland’s governor proposed to force his state’s utilities to harden their systems against outages, according to the Baltimore Sun. The move comes after sudden thunderstorms storms known as 'derechos' ripped across the mid-Atlantic region in late June, leaving millions without power from Ohio to Virginia.

But hardening the system is often less about cutting-edge technology and more about increased tree-trimming or burying power lines. However, as more data emerges from progressive utilities on outage avoidance and cost savings, the case for distribution automation will likely only grow stronger.

 

 

 

 

 

 

 

 

Itron Tests Smart-Grid-to-Home Waters With C3, GreenCom

Tue, 10/16/2012 - 16:21

Itron has been quiet about what, if anything, it plans to do to connect its smart grid networks to the home energy management platforms and home area networks (HAN) devices of the future. Given the frothy and still-nascent state of the home energy technology market, that’s probably a good thing.

That doesn’t mean the Liberty Lake, Wash.-based smart meter giant hasn’t been experimenting on home energy management with various partners, of course. It and smart meter competitors like Sensus, Elster, General Electric and Toshiba’s Landis+Gyr are piloting various meter-to-home energy monitoring and control systems. Itron’s consumer engagement partner list includes Comverge, Digi International, EnergyHub, SentinelWorks and Tendril, to name a few well-known companies in the field.

Now you can add two more to the list. One is C3, the high-profile energy management software startup founded by Siebel Systems billionaire Tom Siebel. C3 and Itron announced this week that they’re jointly marketing a utility IT package that includes Itron’s advanced metering infrastructure (AMI) and meter data management (MDM) platforms and C3’s cloud-based energy efficiency and customer engagement software platforms.

Itron and C3 have already been working together for some time at utilities including Detroit Edison, Southern California Edison, Commonwealth Edison and Entergy, Sharelynn Moore, Itron’s vice president of corporate communications, said in a Tuesday interview. It’s an interesting set of additions to C3’s utility customer list -- the Redwood City, Calif.-based startup, for its part, has stayed relatively quiet about its work with utilities, beyond announcing a project with Pacific Gas & Electric last year. Other customers include GE Energy, SAIC, Hewlett Packard, Constellation New Energy and Masdar City.  

On the home front, C3 bought Efficiency 2.0, a startup that offers utility customers free coupons and other gifts in exchange for participating in efficiency programs and reducing energy use, in May. Since then, C3 has built the startup’s technology into a residential energy management and customer engagement product, which integrates with C3’s SaaS-based platform for commercial and industrial energy management as well, CTO Ed Abbo said at Greentech Media’s Soft Grid conference in August.

Itron, in turn, can offer C3 access to raw meter data, as well as Itron’s data management and analytics capabilities, Moore said. That can include projects where utilities are using Itron meters, as in Southern California Edison, or where Itron’s MDMS is connecting to other vendors’ meters, as in ComEd’s Chicago territory, she said.

The two haven’t announced any specific projects yet, but Moore noted that the C3-Itron platform is suited for small and medium-size business customers, as well as residential customers. California’s big three utilities face a mandate to start offering their business customers time-of-use rates and other smart meter-enabled features in the coming years.

Meanwhile, over in Europe, Itron just launched a set of smart grid “ecosystems,” or ready-to-deploy technology integration packages under the name Nexergy, that include a German home energy startup as a partner.

GreenCom Networks is its name, and according to Jean-Paul Piques, senior marketing director for Itron in Europe, the Middle East and Africa (EMEA), it’s working with Itron on a number of small-scale consumer pilots in Europe. Itron is also an investor in the startup, he said, though he declined to provide more details.

GreenCom’s technology is underlying Itron’s “Nexergy P2H” consumer engagement ecosystem, which Piques described as a more high-end home energy engagement and control platform. The startup won an “excellence award” at the CleanEquity Monaco 2012 conference this year, and lists Deutsche Telekom, “smart grid-ready” heat pump maker Innasol and grid SCADA/EMS vendor PSI AG as customers as well.

Itron’s other Nexergy product lines include the SPS platform for managing utility billing programs such as pre-pay, as well as three flavors of communications technology -- point to point, point to multipoint and powerline carrier -- aimed at satisfying Europe’s complex and still-evolving national smart metering plans.

Interestingly enough, Itron’s powerline carrier (PLC) plans in Europe also include long-time partner Cisco, Piques said. Cisco is working on a PLC technology known as G3-PLC, along with such industry players as Itron, Landis+Gyr, and a host of semiconductor companies, and Itron hopes to use it in European markets, he said. PLC hasn’t taken off in North America, but it’s far more common in Europe and is expected to play a role in such emerging markets as China as well.