The National Football League’s officiating controversies have been the source of heated water-cooler conversations during the past couple weeks, particularly among Packers fans after Green Bay’s controversial loss to Seattle. The frustration is understandable. The rules of the game exist to ensure that both teams compete fairly on a level playing field. When the rules aren’t applied, or are applied incorrectly, one team gains an unfair advantage over the other.
That happened to the Packers, and unfortunately, that is precisely the situation now facing America’s solar manufacturing industry as it competes against China in the global marketplace.
Helios, a Milwaukee-based solar panel maker, joined with other solar manufacturers last year to call China to task for illegally subsidizing and dumping solar products in the U.S. at prices so artificially low that many U.S. manufacturers are unable to compete. This is forcing American manufacturers to close facilities and is causing thousands of workers to lose their jobs.
The evidence is compelling. Prior to 2011, American solar manufacturers were a top competitive player in the global solar marketplace with U.S. solar trade exports amounting to $2 billion worldwide. That changed suddenly last year when China’s exports of solar cells and panels surged 135 percent to $2.8 billion while the U.S. swung to a $1.6 billion global solar trade deficit.
Earlier this year, an investigation by the Commerce Department determined that Chinese manufacturers were not only guilty of illegally dumping solar cells and panels into the U.S. market, but that they also benefit from more than a dozen illegal subsidy programs. A final determination of the extent of China’s illegal trade practices is expected in a few days.
This is a positive step forward for U.S. solar companies and the prospect of a stronger American solar manufacturing industry that can help more Americans back to work. But a small yet significant loophole in the way Commerce has preliminarily defined the scope of its investigation threatens to take America two steps back by undermining trade remedy laws applied in this case.
In its preliminary decision, Commerce excluded from the scope of its investigation those Chinese solar panels that are produced from non-China-manufactured solar cells. This despite the fact that the lavish subsidies China provides its solar manufacturing industry to produce these panels and China’s dumping of these panels in the U.S. market are what have been decimating American solar manufacturers.
This omission is a critical technicality that gives China an opening to flaunt trade remedy laws by exploiting just one step in the solar panel manufacturing process. For example, China could manufacture crystals and use them to produce the wafers needed for solar cells, but then send those wafers to another country to actually manufacture the cells. It could then import those solar cells and use them to produce solar panels. In this situation, about 70 percent of the solar panel is produced by China, but it would nevertheless be exempt from anti-dumping or countervailing duty penalties.
And Chinese solar panel manufacturers know it. During a New York Times interview, the president of a company that imports solar panels stated, “Chinese manufacturers wanted to keep wafer production in China, but were making plans to ship wafers to Taiwan or South Korea for conversion into solar cells as one way to potentially avoid any new tariffs the United States Department of Commerce might decide to impose.”
Commerce cannot allow this to happen by omitting a critical stage in the solar manufacturing process from its investigation. U.S. solar manufacturers such as Helios are playing by the rules of fair trade. We need Commerce to ensure that China and other countries do the same.
President Obama and Governor Romney are right to demand that China play by the rules in the global marketplace. But unless Commerce closes this damaging loophole, China will have a way to circumvent the rules of fair trade, and American solar manufacturers and workers will continue to suffer.
Steve Ostrenga is CEO of Helios Solar Works of Milwaukee, Wisconsin.
[Helios is a member, along with SolarWorld, of CASM, the coalition which launched the antidumping and countervailing duties claims against Chinese-made solar panels. --- Editor]
For many years, solar energy in the U.S. was criticized for being too expensive. Now federal policymakers are on the verge of making solar power more expensive, throwing the industry’s growth into reverse gear, increasing costs for consumers, threatening thousands of jobs and triggering a trade war with China.
On October 10, the U.S. Department of Commerce will announce its final ruling on whether to impose tariffs of up to 250 percent on Chinese-made crystalline silicon photovoltaic cells. In order for any tariffs to go into effect, the U.S. International Trade Commission, in a decision expected in November, must determine that Chinese practices have harmed or threaten to harm the U.S. solar industry. These rulings will come after preliminary decisions by the Commerce Department, released earlier this year, imposing anti-subsidy tariffs and anti-dumping duties on some solar modules imported from China.
In spite of the push for protectionism, free global competition and falling prices have benefited the U.S. solar industry. With more than 5,000 companies and over 100,000 employees, the U.S. solar industry has been expanding its workforce by 6.8 percent a year, adding some 7,000 jobs in 2011, while the entire economy had a job growth rate of only 0.7 percent.
Domestic solar manufacturing is a goal that we all support. However, even Gordon Brinser admitted that his company and others would not be saved through these solar tariffs on Chinese modules. First, the bulk of new demand in the United States since 2009 has come from utility-scale projects -- projects that would not exist but for the low prices on today’s solar modules. In fact, Dick Swanson of Sunpower predicted that solar modules needs to be $1.12/Wdc with utility-scale contracts of $0.12 per kilowatt-hour. Today, utility scale contracts have to be $.09 per kilowatt-hour to compete with natural gas -- only possible with today’s lower module prices. Second, solar is a global industry with manufacturing in countries other than China. We are seeing low prices come from many countries, because it is not just China that is taking advantage of the latest manufacturing equipment and innovations. Third, U.S. policymakers have been more committed to phasing out solar incentives than they are to domestic solar module production. Policymakers have consistently forced the U.S. solar industry to honor the solar compact and reduce solar costs even if that means U.S. solar manufacturers might go out of business. Market innovators like SunPower and First Solar have figured out creative ways to avoid commoditization in the face of these pressures.
The U.S. manufacturing industry has many bright spots, including polysilicon -- the key component in producing solar cells -- as well as the equipment and machines that produce solar cells and modules. Other key manufacturing bright spots include solar structures and inverters.
Punitive tariffs are the wrong policy at the wrong time. Because the costs of solar energy have been falling, communities around the country are selecting solar power. With punitive tariffs, these customers will think twice about paying a premium for solar energy.
The punitive tariffs will hit hardest at the smaller solar companies. More than a few local solar installers have been hit with the Commerce Department’s preliminary decision allowing the tariffs to be applied retroactively to products that entered the U.S. 90 days before the ruling, imposing exorbitant extra charges for imports that they bought before knowing they would be paying these duties.
For example, Marco Mangelsdorf, a solar contractor from Hilo, Hawaii, told a hearing of the U.S. International Trade Commission on October 3 that he had received a notice from U.S. Customs and Border Protection requesting payment of $138,000 in additional duties on $54,000 of imported solar equipment purchased before the preliminary tariffs were imposed. At the very least, the U.S. International Trade Commission should call a halt to these retroactive charges.
And to the extent that companies such as SolarWorld, which is pushing protectionism, are not doing well, it’s because they have failed to keep up with charging market conditions -- they have only recently announced a utility-scale 72-cell offering. Their approach to solar kits has been outmaneuvered by residential financing by SunPower.
Instead of improving their own business model, as Sunpower and First Solar have, they are seeking government intervention in the form of punitive tariffs that are creating unnecessary chaos and have triggered a ruinous trade war with China.
For the U.S. solar industry, the real competitor is not imported photovoltaic cells -- our real competitor is electricity generated from fossil fuels, especially water-intensive natural gas. We need to keep reducing prices, not to increase our costs with punitive tariffs.
Instead of initiating a mutually destructive trade war, the U.S. and China should reach a broad trade agreement, negotiated by the two governments encouraging equitable and fair trade benefiting both country’s solar industries. To generate clean energy and green jobs, we need progress, not protectionism.
Jigar Shah is the president of the Coalition for Affordable Solar Energy (CASE) and the founder of SunEdison, a solar energy services company.
Cisco’s bid for smart grid networking kingpin status will be built as much on its partner and developer networking skills as on its grid routers and switches. After all, a network is only as good as the disparate technologies and platforms it tied together.
That’s the backdrop to Monday’s launch of the official “Connected Grid Cisco Developer Network,” which cements some deep ties between Cisco and a roster of smart grid partners like OSIsoft, Proximetry, Space-Time Insight, Alvarion, Itron, Elster, Alstom and Cooper Power Systems, to name a few.
Essentially, Cisco has extended its existing developer support organization, which has about 700 companies and 1,000 product solutions in its catalog, to its smart grid partners. That includes such heavyweights as Itron and Elster, which are integrating Cisco’s IPv6-capable wireless networking into their smart meters, and Alstom and Cooper (now part of Eaton), which are networking their substation and grid gear over Cisco’s technology.
But Cisco’s CDN also brings in a host of back-end IT players, many already Cisco developer partners via other industries. Names on that list include BitStew and Infoblox, which assist in Cisco’s smart grid network management platform, and Symmetricom and Meinberg, which make high-speed switch technology used by Cisco.
At the same time, Cisco software partners are working more closely to package their platforms on the networking giant’s gear in ways that help utilities get new technology up and running, said Sanket Amberkar, senior manager of energy and smart grid marketing. For instance, partnerships with the likes of EMC and VMware or NetApp on IT platforms for data center and network management can also serve as the building blocks for a utility smart grid deployment.
Cisco’s work with OSIsoft helps illustrate how it’s applying this IT management expertise on the smart grid front. OSIsoft, a San Leandro, Calif.-based smart grid and industrial controls data management software vendor, has actually been working with Cisco on telecommunications for years now, and had integrated components of its Pi system on Cisco’s Compute Platform, said Stewart Young, OSIsoft’s alliance manager.
That, in turn, allows both parties to know beforehand just how well their technologies run together under test conditions, as well as real-world deployments. “We’re both infrastructures,” is how Young put it. “Cisco offers the potential to consolidate and reduce the number of, say, isolated and dedicated networks, and push more data through one investment in a sort of multi-functional network … and OSIsoft offers that same concept, pulling data from heterogeneous systems and over IP networks” back to its heavy-duty data management platforms.
As with Cisco’s broader developer partnerships, its smart grid program comes with grades of support, said Malay Thacker, the new program’s manager. Those include interoperability and verification testing, which yields “Cisco Compatible” gear from successful partners. On the smart grid front, partner DNV KEMA helps out on the testing, as does LogRhythm, a company that specializes in helping companies comply with federal NERC-CIP rules on “critical infrastructure” communications and controls projects, including cybersecurity, Thacker said.
On the integration front, Cisco and partner products can share data through an application programming interface (API) and software developer kits (SDK), allowing solutions to be built on top of the Cisco network. Eventually, the Cisco grid partnership can lead to Cisco licensing its technology to be embedded in gear from its partners, as Cisco has done with Itron, Elster and Alstom.
The complete list of Cisco’s new smart grid partners includes: Alstom Grid, Alvarion, BitStew, Cooper Power Systems, DNV KEMA, Elster, InfoBlox, Itron, LogRhythm, M2M Telemetria, Meinberg, OSIsoft, Proximetry, QinetiQ, Space-Time Insight, Subnet Solutions, and Symmetricom.
Cisco is far from the only smart grid contender to be beefing up its partnerships, of course. Smart grid IT giants like Infosys, IBM, Microsoft, Oracle and SAP have built utility alliances and partnerships to bring integrated products to market -- as well as to provide their name to convince utilities to try out new technology.
At the same time, startups like Silver Spring Networks are deepening their relationships with partners up and down the technology chain in hopes of building their existing smart meter networks into multi-purpose smart grid platforms -- just like Cisco wants to. Think of it as a three-legged race for smart grid market share, in which each partner’s leg is tied to another’s. Reaching the finish line is a team effort, and nobody's going to get there alone.
As of today, SunPower founder Richard Swanson is officially retired.
Swanson, at age 67, said he's done with "14-hour days" and operations reviews and is ready to adapt to his new role as "elder statesman." Swanson remains with SunPower (SPWR) on its technical advisory board.
The arc of Swanson's career is a classic American success story.
Swanson received his Ph.D. in electrical engineering from Stanford University in 1974 and joined the Stanford faculty, where his group developed the point-contact solar cell. Lab versions set a record 28 percent conversion efficiency in concentrator cells and 23 percent in large-area one-sun cells. In 1991, Dr. Swanson resigned from the faculty to found and work at SunPower. The company had some lean times, raised capital from Silicon Valley entrepreneurs, notably T.J. Rodgers, become a technological powerhouse and moved downstream. SunPower's deal with French oil and gas conglomerate Total, kept the firm afloat and gave it backing.
Swanson went from Ph.D. science project to the world's energy stage.
The solar industry is transitioning, said Swanson. The current phase of "explosive growth" has been driven by investment capital from public markets and incentives from Germany and Italy. But in Swanson's words, "This is rapidly coming to an end." He called the subsidy regimes "fatigued."
The costs of solar are coming down so fast, "we're approaching grid parity." Swanson said that even with the Investment Tax Credit expiring at the end of 2016, the falling cost of solar will more than make up for that 30 percent reward. He declared, "We'll have weaned ourselves off of subsidies. We will have arrived as an industry."
SunPower's CEO Tom Werner compared Swanson to Gordon Moore of Intel and called him the Schottky of solar.
Werner said that "most mortals don't create a new solar design in a sleepless moment" that becomes, "with the help of a lot of engineers," SunPower's 22-percent-efficiency solar cell. Werner also pointed out that Swanson got into and stayed in solar when most of his peers moved to semiconductors.
"We're in a paradoxical time in the solar industry." Despite the "doom and gloom about excess capacity and depressed prices, nowhere else can you find a $100 billion industry growing at 20 percent a year," said Swanson at a recent IEEE event in Palo Alto, Calif.
"We have to figure out how to nurture a large, fast-growing industry," said Swanson.
Over the last year, as "President Emeritus" at SunPower (SPWR), Swanson has been involved with the low-concentration C7 tracker, the high-efficiency Maxeon solar cell, and SunPower's residential efforts in Japan. He has also worked with the DOE's SunShot program, looking to drive the cost of installed solar down below $1.00 per watt.
"From my perspective, the last ten years have been a rocket launch that exceeds any expectation," he said, adding, "There's been an overshoot, but signals do overshoot," according to the self-described "old electrical engineer."
Last week I attended an EDF-sponsored workshop discussing the firm's new Investor Confidence Project (ICP). The ICP is focused on encouraging more lenders to finance the building energy efficiency market.
Just as mortgage-backed lenders need evidence that underlying mortgages are being paid, lenders for comprehensive energy efficiency projects need data to show that these loans will “perform.” So the ICP asks market participants to voluntarily provide their current energy project performance data using their newly developed Energy Efficiency Performance Protocol (EEPP). The EEPP gives everyone a standard way to present their energy savings performance, which allows this anonymous, pooled data to be reported to the investor community.
With a focus on comprehensive building energy savings, the EEPP defines deep retrofits as “projects with sufficient depth necessary for pre- and post-retrofit meter data yields (i.e., savings can be anticipated to be of greater magnitude than noise).”
A few years ago, the term "deep retrofit" came into vogue amongst politicians, energy efficiency vendors and even homeowners. The residential visual was a strong one, with new energy-efficient stuff like windows, insulation, and a shiny boiler in the basement. For the commercial/industrial market, the image was a smart building -- with upgraded HVAC and LED lighting, all managed by an intelligent, weather-sensitive computerized energy management system which made energy efficiency decisions automagically.
But beyond the visual, many building owners have been left asking the question, "What's deep for my building?”
Technicians say "deep" is a retrofit driving a reduction in a building’s energy use by 50 percent to 75 percent.
However, the practical challenge with deep retrofits is that they’re really complex to model -- which makes them harder for customers to believe.
Deep retrofits involve multiple energy conservation measures (ECMs), each of which has a relative impact on the other measures. They involve lots of assumptions about how the building will operate versus how it operates currently. Depending on which engineer develops your building energy model, the same measures can yield very different savings and returns.
In traditional ESCO contracts, the project developers list out all of the individual ECMs, then work with the customer to get approval for as many as possible (which increases the size of the overall ESCO deal). But as these projects are funded by tax-exempt bonds, the main delimiter is only the term of the bond that can be issued. A 20-year bond allows more ECMs with a longer payback -- a “deeper” retrofit. A 15-year bond cuts a bunch of ECMs out of the retrofit, so it is less deep.
In these ESCO projects, the most vague ECM is always the building management system (BMS) from a firm like Johnson Controls/Metasys or Schneider/TAC, which magically add controls with configured software to generate additional energy savings. Needless to say, the whole building energy model which calculates the impact from this optimized BMS makes a lot of assumptions.
Even with less deep retrofits, the energy modeling involves a lot of subjective decisions.
Recently we installed new internet-based thermostats, rooftop unit (RTU) optimizers, demand control ventilation (DCV), and dual enthalpy economizers at a customer’s retail facility. The overall financial return was fast, but each ECM looked even better on a standalone basis than when we modeled them all together.
If smart thermostats prevent the HVAC from unnecessarily running on the weekend, the other ECMs save energy for just five, not seven days per week. Likewise, if we model the RTU optimizer’s impact first and then added thermostats, the thermostats impact only the now-reduced load of an optimized RTU. Keep adding DCV and economizers and each successive ECM has a lower impact depending on what you modeled before it.
Do this for all sixteen combinations of the ECMs and each blended return will be different. Oh, and don’t forget that some utilities pay higher rebates for low payback measures, or issue custom rebates for packages of ECMs.
So when going “deep,” building owners need to be knowledgeable enough to understand the basic interdependencies involved in the building energy modeling process -- or run the risk that, in the end, they have to sign up for “just trust me” from their energy efficiency salesman.
With its platform now channeling $2 million per day to credit applications for U.S. PV solar systems, Clean Power Finance (CPF) is working to better the proposition for installers by bringing down their single biggest as yet uncontrolled cost: non-hardware soft costs.
CPF was founded in 2007 as an online tool to connect solar buyers and sellers and to help them design solar systems. In 2011, CPF stepped up its backing of solar by channeling third-party funding from institutional investors to installers of residential PV. It is now the fourth biggest player in the third-party ownership (TPO) space.
The last two years’ unprecedented expansion in PV solar has been driven by the growing availability of third-party capital just as panel prices plunged.
Through TPO, institutional money purchases solar systems, which users lease. The users get a 10 percent to 20 percent utility bill discount with low or no upfront cost and no ownership responsibility. The funder gets the 30 percent federal investment tax credit, the depreciation deduction, and part, or all, of the lease payment revenue stream. The installer gets the work.
Sunrun, SolarCity, SunPower (NASDAQ: SPWR), and CPF are the biggest TPO facilitators. They may get a piece of the revenue stream or a fee. And, though no TPO player has yet done so, they may soon begin earning a new revenue stream by securitizing the lease payment cash flow.
The significant potential threat to the TPO-driven solar expansion is if panel and other hardware prices go up and installer costs don’t come down.
Solar manufacturers are working to keep panel costs down, despite the tariff recently imposed by the U.S. on Chinese imports. TPO facilitators are aiming at balance-of-system (BOS) and soft costs.
Despite the cost of capital it adds, TPO is also a major benefit to installers, according to CPF Director of Government Programs Management James Tong.
“Third-party financing does add a cost because it's an additional service,” Tong said. “We estimate it’s 40 cents to 50 cents per watt, depending on system size and finance terms.”
But, he explained, “if you do an analysis of third-party-owned systems versus cash systems, with CSI data, you will find the cost of a TPO system is lower.”
Getting utility bill savings with no upfront costs or ownership responsibilities, Tong said, “makes the value proposition to the consumer much more appealing.” Selling that proposition, Tong said, “generates more sales. Companies that don't have financing spend more on those acquisition costs, one of the biggest of soft costs.” With financing available, Tong said, installers convert leads to sales faster, make more sales, and generate more and better referrals. That lowers both marketing and sales force costs.
Increasing the volume and flow of sales reduces inventory holding costs such as equipment depreciation, warehousing, and the opportunities lost because money is being spent on those things instead of being invested in growing solar.
Labor is another high cost for installers that financing helps with, Tong said. “Solar is very seasonal. At peak times, employees are working overtime. At dead times, employees do nothing. With consistent volume, cost can be significantly lower.”
“Third-party financing opens the door to thousands of customers that otherwise would not consider solar due to their fear of writing a large check,” said Senior Vice President Todd Lindstrom of Paramount Solar.
But not all installers have adjusted to TPO. California Sun Systems President Tad Rose called it “a mixed bag.”
LA Solar Systems owner Shawn Alvandi, who has been installing solar since 2004, complained that it makes his work more complicated and that dealing with leasing companies puts greater restrictions on him. He has found it easier to sell a buyer on spending “$3,000 to $4,000 more if they have no monthly payments,” he said.
Total average soft costs for installers leave them “a little less than a 10 percent margin, if they are profitable at all.” Their acquisition costs “may be 60 cents to 70 cents per watt or more,” Tong said. “But big companies with financing can keep those costs as low as 25 cents to 35 cents per watt.” According to the most recent CSI data, Tong said, “TPO-financed deals have a lower cost per watt. I'm almost sure that is coming out of acquisition costs.”
The best way to increase the use of solar, Tong said, is to drive down cost. The Clean Power Finance model, he said, is “trading off on margin, but we'll help you get more sales. If we get enough volume, we grow.”
But not all installers see the benefits yet.
Alvandi said he is facing lower margins but no greater volume. “It is still tough to find clients,” he said.
“The third-party offering is crucial,” Paramount Solar’s Lindstrom said. “Otherwise, the pool of potential clients is limited to those that have a tax appetite, the ability to comprehend how that works, and access to cash. With third-party financing, access to cash is simple, straightforward and immediate.”
Rose said he has only seen the TPO option close a reluctant customer “in a couple of instances.”
Paramount Solar started as “a small group of five or six folks three years ago,” Lindstrom remembered. Now it is rapidly approaching 100 employees. Without third-party financing, “we would be a mom-and-pop solar company with twenty employees, tops.”
China is planning to spend between $2.5 billion and $3 billion per year to deploy hundreds of millions of advanced electricity meters between now and 2020 -- all part of its push to become the single biggest smart grid market in the world. But China’s smart meter rollout is going to look a lot different than those we’ve seen so far in the U.S. and Europe.
First of all, China’s smart meters are going to be quite a bit less expensive than their Western counterparts. Key government-controlled utility State Grid Corp. of China are targeting meters that cost about $50 apiece or less, compared to the $150-and-up ranges seen in North America and the $100-and-up for European smart meter projects.
Another important difference is that China is expected to reserve large chunks of its smart meter market to domestic metering companies like Ningbo Sanxing Electric, Wasion, Hi Sun Technology, Linyang Electronics and Holley Metering. But while the meters may bear Chinese names, the technology inside them may well come from abroad.
Take the joint venture between China’s Holley and Echelon Corp. (ELON), the San Jose, Calif.-based smart grid vendor. On Monday, the partners announced some new milestones and pilot projects for its jointly developed technology that help lay out just how China’s smart meter landscape is going to differ from what we’ve seen deployed so far in the West.
The JV, officially named Zhejiang Echelon-Holley Technology Co., launched in March with the goal of adapting Echelon’s powerline communications (PLS) networking and control software technologies for China’s market. Monday’s news included two new pilots of the technology, the first a 30,000-meter deployment in Inner Mongolia, and the second a 20,000-meter pilot in Shanxi province.
This isn’t the only joint venture between a Chinese metering vendor and a foreign company. Last month, Siemens and Wasion Group announced a JV aimed at delivering Siemens’ smart grid technology to the market, including a meter data management and analysis platform from eMeter, bought by Siemens for an undisclosed sum late last year.
Likewise, smart metering giant Landis+Gyr, which was bought by Toshiba for $2.3 billion in 2011, announced in March that it was partnering with Chinese telecommunications giant Huawei to jointly develop a communications hub for connecting smart meters and home energy devices -- though the two named the U.K., rather than China, for its initial target.
Of course, given its massive future market potential, China is doubtless going to be the target of more such partnerships. China deployed roughly 12 million meters in the fourth quarter of 2011, and is expected to need up to 300 million smart meters by 2016 or so. Overall, China will invest nearly $250 billion into its grid in the next five years, according to GTM Research’s report, The Smart Grid in Asia, 2012-2016, Markets, Technologies and Strategies.
But there’s an important caveat to keep in mind when talking about China’s current smart meter deployment figures, Varun Nagaraj, Echelon’s senior vice president of product management and marketing, said in an interview. Simply put, a lot of the meters deployed so far haven’t actually been made “smart” yet.
That’s because China has decided to split up its smart meter deployments into separate metering and communications components, Nagaraj said. It’s possible that millions of smart meters deployed in China to date may not yet have the communications modules that allow them to connect to the smart grid at large. That’s very different than in the United States and Europe, where smart meters tend to have metrology and communications combined “under glass” in a single unit, he said.
Even so, while China may not have mandated that every new meter come with communications enabled, it has mandated that all meters and all comms modules can interoperate, Nagaraj added. That’s been done through a common State Grid certification process to prove that meters and communications modules can talk to one another via a common format.
That means that the Echelon-Holley JV’s communications modules, while currently being installed by Holley, should be able to plug in to any other meters being built to China’s interoperability standards, he said.
Zhejiang Echelon-Holley isn’t the only vendor targeting China’s template for a smart meter architecture that can be deployed in a modular fashion. Shanghai-based Miartech, which raised $6 million from DFJ DragonFund in 2006 (PDF), and an investment from Intel in 2010, has been named one of three technologies to guide PLC standards for the country by State Grid Corp. of China, the country’s massive national utility.
Likewise, Swiss chipmaker STMicroelectronics is staking a claim in smart metering in China; Norwood, Mass.-based Analog Devices is working with China’s Nanjing NARI; Milan, Italy-based Accent is working with Chinese PLC comms maker Topscomm; and Singapore-based Semitech is putting its PLC chips in meters built by LangFang Gao Shan, to name a few more examples.
At the same time, partnerships with better smart meter-communications technology combinations can expect to win out over less-capable competitors. For example, the Inner Mongolia pilot project that the Echelon-Holley JV is supporting has also been testing other varieties of PLC technologies for the past three years, though Nagaraj wouldn’t say if Echelon is replacing or merely augmenting those technologies.
PLC isn’t the only communications technology being used in China, either. Backhaul networks that connect local smart meter networks including Echelon’s to utility offices can be cellular, fiber or a variety of technologies. Glen Canyon, a Santa Cruz, Calif.-based startup that’s promising to sell millions of meters for $25 and under to China, is including 6LoWPAN wireless radios for connecting its meters in local mesh networks.
Eventually, of course, participants in China’s many smart meter pilot projects will want to land bigger pieces of the rollouts to come. Inner Mongolia is expected to add 10 million new smart meters over the next five years and the Shanxi province is targeting 10 million new smart meters over the next three years, according to Echelon. We’re bound to see multiple combinations of technologies play a role in these broader-scale deployments to come.
Governor Romney had some choice words for President Obama and his renewable energy efforts in last week's debate. Here's a transcript of Romney's remarks:
And -- and in one year, you provided $90 billion in breaks to the green energy world. Now, I like green energy as well, but that's about 50 years' worth of what oil and gas receives, and you say Exxon and Mobil -- actually, this $2.8 billion goes largely to small companies, to drilling operators and so forth.
But you know, if we get that tax rate from 35 percent down to 25 percent, why, that $2.8 billion is on the table. Of course it's on the table. That's probably not going to survive, you get that rate down to 25 percent.
But -- but don't forget, you put $90 billion -- like 50 years' worth of breaks -- into solar and wind, to -- to Solyndra and Fisker and Tesla and Ener1. I mean, I -- I had a friend who said, you don't just pick the winners and losers; you pick the losers. All right? So -- so this is not -- this is not the kind of policy you want to have if you want to get America energy-secure.
Each company have [sic] produced great products, 2,000 jobs and are the first new automotive companies in 50 years. While the rest of the world admires this achievement, only an American businessman turned politician could attack this success. Write about the hard-working entrepreneurs, not the politicians. Let's celebrate Henrik Fisker and Elon Musk, not criticize them.”
Lane also said that Romney “inflated $500 million lost by Solyndra (one company) to $90 billion of TARP money, a massive leap of logic and corruption of facts.”
Greentech Media has done its own fact-checking of Governor Romney's debate claims here.
Besides being the world’s single largest deployment of EV charging infrastructure in the world, the Department of Energy’s $230 million EV Project is also a huge data collection engine. Indeed, one of the key goals of the government-industry partnership is to learn everything there is to know about how plug-in vehicles interact with the grid -- and how plug-in owners deal with using the grid as a gas station.
ECOtality, as contractor for the EV Project's 5,000 residential chargers and 2,000 commercial chargers, just hit another milestone, announcing this week that it has passed 1 million “charge events” -- single instances of a Chevy Volt or Nissan Leaf being plugged into the power grid.
ECOtality has been tallying up driver miles for years now, recently reaching the 40-million-mile mark, as drivers in cities across the country keep plugging in and giving the project their data.
So what can 1 million charge events tell us? Steve Schey, director of stakeholder services for ECOtality, took time to answer some questions via email, and explains what insights are to be gleaned from this milestone.
GTM: What are the most notable things you've discovered in the course of racking up 1 million charge events?
Schey: Since the beginning of the project, we’ve consistently seen that most EV charging happens at home. While we still expect the majority of charging to take place at home, we’re excited to see that in the past three months, public charging has increased by 25 percent. This shows that drivers are becoming more and more comfortable with stretching the range of their vehicles and utilizing the public infrastructure available. The cities with the greatest increases in charging away from home were Los Angeles, Tucson and Memphis, with San Diego, Oregon and Houston also showing significant increases. Overall, cities where drivers are going the farthest distances between charges are San Francisco, Knoxville and Chattanooga.
We’ve also seen differences between average number of charge events per day between the Volt and Leaf. Nissan Leaf drivers charge 1.1 times per day, while Volt drivers charge 1.5 times, indicating the Volt drivers are interested in keeping their vehicles out of the traditional gas combustion engine mode.
GTM: What behavioral data have you discovered?
Schey: EV drivers still primarily charge their vehicles at home, but as public infrastructure options expand they are charging their vehicles away from home more often. Recharge times are short, but we are experiencing increases. Average home recharge time has increased from 1 hour to 30 minutes per day to 1 hour and 48 minutes per day. With greater driving distances come longer recharge times.
GTM: What have you learned about what people are willing to pay for different charging experiences?
Schey: We are just starting to roll out our pricing fees and therefore do not yet have adequate data to draw conclusions about what drivers are willing to pay. However, we can say from the time-of-use rates available in select cities that price signals do work. Drivers in these regions charge more often during the low peak periods than other times during the day to minimize their electricity bill.
From a host-site perspective, we know that retailers in particular benefit from offering EV charging services. Data show that EV drivers are three times as more likely to return to a store with an EV charging station than one without. In addition to retailers, hotels have emerged as an ideal charge location, and we have a number of deals with hotels in the works.
Familiar arguments, with just a few new twists, were replayed on Wednesday in Washington, D.C., as U.S. solar manufacturers and their opponents clashed before a commission charged with making the final decision on tariffs on Chinese solar PV imports.
The combatants were testifying before the U.S. International Trade Commission in a hearing [PDF] to determine if alleged unfair practices by the Chinese solar industry -- illegal subsidies from the government and dumping of products at below cost -- are injuring the U.S. industry.
In a preliminary ruling in December 2011, less than two months after SolarWorld and a handful of other U.S. manufacturers petitioned regulators to intervene against the Chinese, the ITC voted 6-0 that there was enough evidence to send the case forward. Since then, preliminary anti-subsidy and anti-dumping tariffs -- totaling around 35 percent on key manufacturers -- have been imposed on Chinese PV imports by the U.S. Commerce Department.
Next week, the Commerce Department will issue its final verdict on the size of the tariffs, and then in early November the ITC is expected to announce its final decision on whether to lock the tariffs into place.
Beleaguered manufacturers told Wednesday’s hearing that things only got worse in the months after the Coalition for American Solar Manufacturing brought the case. The gist of their case: A flood of subsidized, underpriced Chinese imports are bringing American solar manufacturers to their knees.
“Since I testified here last October, Chinese imports have surged into the United States in even greater quantities, far surpassing demand in the market,” Kevin Kilkelly, president of sales for SolarWorld Americas, said in prepared testimony posted on the CASM website. “Based on my knowledge of the market, this rush of imports caused inventories to build rapidly and prices to crash, further injuring the U.S. industry. Unfortunately, the market won’t recover until these substantial inventories are worked off, at fair prices.”
But the dispute over penalties on Chinese imports has split the broader U.S. solar industry, and the Coalition for Affordable Solar Energy, made up mostly of solar power installers and developers, has fought CASM every step of the way in the trade dispute. CASE fears that tariffs on Chinese solar panels will put a dent in solar’s push toward grid parity and slow growth in the United States.
CASE, in a conference call with media on Thursday morning, said it argued to the ITC that SolarWorld is trying to shift the cost of its own strategic mistakes onto the rest of the industry. It said the industry -- “the other 98 percent of U.S. solar jobs” beyond SolarWorld and its CASM cohorts -- has not been suffering as the cost of solar has plunged.
“The U.S. solar industry is doing well,” said Kevin Lapidus of SunEdison, CASM’s legal point man on the trade case. He cited a growing U.S. solar workforce of more than 100,000, and forecasts that 3.2 gigawatts of solar will be installed this year, up from 1.8 GW last year.
Lapidus said the driver in the decline in solar prices hasn’t been China, but rather has been “demand-side forces,” including a decrease in incentives for solar and falling prices for natural gas. Dynamic, innovative companies have responded to these pressures by driving down their costs, while SolarWorld has stumbled, Lapidus argued. He cited companies such as SunPower and First Solar, who he said were among the relatively healthy companies helping push solar toward grid parity, a necessary process that would be derailed by the final imposition of tariffs.
That said, CASE in truth sounded a bit pessimistic that the ITC would make a complete turnaround on tariffs this late in the game, conceding that SolarWorld had a “low bar” to show harm. The group seemed to be pinning its hopes on a ruling that would waive imposition of retroactive tariffs.
In its preliminary rulings, the Commerce Department had said that a surge in Chinese imports after SolarWorld filed its case constituted “critical circumstances.” That meant that importers would have to start putting up tariff deposits for any goods brought in during the 90 days retroactive to the March anti-subsidy ruling and the May anti-dumping ruling. One importer snared by the critical circumstances ruling was Marco Mangelsdorf, owner of a solar equipment store in Hawaii, who told the commission his story of getting a bill for $140,000 from U.S. Customs and Border Protection on an order of solar panels from China that he placed before any preliminary tariffs were in place.
What’s the price of charging that Chevy Volt on your household electricity bill? And how big a share of your total power use is that plug-in sucking up, anyway?
Volt owners in Austin, Texas’s Mueller neighborhood can now answer questions like these. General Motors announced Friday at the SXSW Eco conference that it’s rolling out its new EcoHub app as part of its participation in Austin’s Pecan Street Project smart grid project, meant to tie together plug-in vehicles, rooftop solar panels and energy-smart home systems.
It's the first app developed using the proprietary smart grid APIs that GM released for its OnStar car navigation system back in February, and for now, it’s only available to Pecan Street customers, who have bought 55 Volts and counting under a special rebate program meant to saturate the neighborhood with electricity-thirsty plug-in cars.
Like every other plug-in electric and hybrid car maker, GM wants to network its cars so that both customers and utilities can track and control their charging patterns. Adding hundreds of plug-ins to a neighborhood could overwhelm the grid, if they’re all plugged in at once. But managing their charging could allow plug-ins to serve grid balancing and support services that could make them assets, not liabilities, to the power system.
In the case of GM’s new app, it’s combining the on-board Volt system for tracking and managing battery charging with the smart meter data coming from utility Austin Energy, which includes pricing. That combines the three variables of time, power and price to deliver costs of charging the Volt, compared to overall household power usage, in a way that can be hard to do for plug-in owners who use household power to charge their cars at night.
To be sure, EV charging stations, whether they’re slow-chargers in the garage or fast-chargers on the highway, already come with their own technology for tracking power and pricing. That allows EV charger networking companies like ECOtality or ChargePoint (also known as Coulomb Technologies), or private charging networks like NRG Energy’s eVgo network, to set prices, track and bill their own customers on their own terms.
Likewise, plug-in cars from Nissan, Mitsubishi, BMW, Ford, etc. already have onboard battery management systems that control when and how fast they charge, and most come with telematics that allow them to communicate that data to platforms like GM’s OnStar system.
But combining power and price can be tricky, particularly for utility customers trying to choose between a growing variety of utility pricing programs for EV owners. The Union of Concerned Scientists reported last month that California plug-in owners could see differences of as much as $400 per year on their power bills for charging, depending on which rate programs they signed up for, to take one example.
Tools like EcoHub could be useful in solving this problem. This first version will only be available for testing in the Pecan Street Project, but GM hopes to offer them to the general public in the future. It can integrate on a utility-by-utility basis, though it’s hoping that common data formats like those being developed under the White House’s Green Button initiative could make getting data to customers much faster and easier, a GM spokesman said.
Eventually, of course, utilities want to go beyond just knowing what their customers’ plug-in cars are doing, and start doing something about it. Utilities and governments around the world are building out networked charging infrastructure, first to collect data, but later to actively control plug-ins via schedules or push commands that can help avoid grid overloads and imbalances.
GM’s EcoHub app isn’t built to do that kind of stuff, but of course the Chevy Volt is one of many plug-in cars being tested for these more advanced vehicle-to-grid (V2G) applications. But first, let’s get the data in the hands of the customer.
In this week's podcast, Greentech Media CEO Scott Clavenna talks with Senior Analyst Shyam Mehta of GTM Research about his analysis of the solar supplier community, a community under significant stress caused by the huge imbalance between supply and demand in the global solar market, as well as the "China Factor."
Our weekly podcasts let you hear from GTM research analysts, editors, reporters and the occasional special guest. Stay tuned and thanks for listening.
Subscribe to the podcast series through iTunes. Click here to visit the iTunes store.
For more information on GTM Research coverage of PV suppliers, visit www.greentechmedia.com/research or schedule a demo of the GTM Research Competitive Intelligence Tracker. Shyam Mehta is the author of a forthcoming report on the PV module manufacturing landscape.
Behind schedule because of their standoff with Los Angeles County, First Solar (NASDAQ: FSLR) is powering ahead to get phase one of its 230-megawatt Antelope Valley Solar Ranch One (AVSR1) on-line by the end of 2012.
AVSR1 Community Liaison Adam Eventov just announced to the surrounding communities that the site’s 6:00 a.m. to 4:30 p.m., Monday through Saturday hours will be extended to 10 p.m. on weekdays and Saturdays; a Sunday 7:00 a.m. to 7:00 p.m shift will also be added.
Eventov pledged that the evening and Sunday activity construction noise would be “within the limits of Los Angeles County ordinances” and that lighting would be controlled.
First Solar's relationship with local communities has been strained since First Solar bought the AVSR1 project from NextLight in the spring of 2011. First Solar’s $140,000 peace offering, made in January, still has not been accepted.
Though it is doing engineering, procurement, and construction (EPC) for Exelon Corporation (NYSE: EXC), to which it sold the project earlier this year, some community resentment persists toward First Solar.
“It's nice to tell us that the die is already cast and we are not counted,” read an email to the Los Angeles County Deputy Supervisor from Fairmont Town Council, the community nearest to the project. “If these people are going to run roughshod over us then they better come up with some ‘sugar instead of vinegar.’ Of First Solar’s promise that the AVSR1 project would be a good neighbor, the email continued, “I haven't seen any good yet, only ‘screw them, get the project done.’ We as a Town Council object to night work.”
An email from an Oso Town Council representative, the next closest community, charged First Solar with “blatant lies and misinformation” and “decisions that are brokered before any attempt to get community input.”
As far as Oso is concerned, the email went on, “We do not want you to create an even bigger problem with bigger and longer shifts. Only when you come to our community with real interest and you start doing those things the community has asked for so many times, can you then ask for us to support you.”
The AVSR1 site “is a terrible eyesore,” the email concluded, asking yet again, as locals have many times before, that the landscaping be modified. “Come back after that and we can discuss things further.”
Local leaders have suggested publicly and privately that such feelings may have been at the root of vandalism committed the night of July 9-10, when an unidentified vandal caused an estimated $100,000 in damages to AVSR1 by cutting both a transmission line and a water pipe.
A report was filed with the Sheriff’s Department and First Solar offered a $25,000 reward for information leading to the vandal’s apprehension, but there was no response. The vandalism disrupted a peace in Antelope Valley that followed the settlement of differences between First Solar and Los Angeles County that set the construction schedule back two months and caused hundreds of local residents to be furloughed.
The stoppage began in early April after an LA County safety inspector disallowed the International Electrotechnical Commission (IEC) certification of First Solar’s cadmium telluride (CdTe) thin-film photovoltaic PV panels and demanded the County-required Underwriters Laboratory (UL) certification.
The impasse was resolved when County Supervisor Michael Antonovich, in response to community representatives’ call for him to get their residents back to work, reportedly pushed the County’s Building and Safety Department to accept First Solar’s certification.
The vandalism was announced at a subsequent meeting between First Solar and local leaders. “When you have dissatisfied people in the community, this sort of thing happens,” an Oso Town Council officer observed.
“At least one dissatisfied person,” several First Solar officials snapped back.
Hostility was expressed at the meeting on both the company and community side. Locals who described themselves as representatives of “disgruntled neighbors” complained again about the AVSR1 landscaping.
“Morally, how can you do that, destroy peoples’ homes?” one resident demanded, calling the site “out-and-out ugly.”
Acts of vandalism against unwanted renewable energy development is not unknown in Antelope Valley. Eight acts amounting to more than a half million dollars in damages were committed against wind projects there during the summer of 2011. Shortly after, proposed NextEra Energy (NYSE: NEE) and Element Power wind projects were postponed.
Tensions between LA County and First Solar also remain high. GTM has seen confidential County reports documenting issues with First Solar workmanship, as well as County inspector harassment. The reports are from both the AVSR1 site and from the nearby Alpine Solar site, at which First Solar is doing EPC for NRG Solar (NYSE: NRG).
Another nuisance ahead for the still financially burdened First Solar is a class action lawsuit brought by former AVSR1 employees who allege (1) failure to pay minimum wage or overtime, (2) failure to provide accurate itemized wage statistics, (3) failure to maintain accurate payroll records, (4) failure to provide proper rest breaks, (5) failure to provide proper meal breaks, (6) failure to provide customary wages, and (7) failure to reimburse expenses. There are at least a dozen former workers involved and more are expected to join.
GTM was unable to reach First Solar for comment.
Among the many numbers from the first Romney-Obama presidential debate was one in a remark Governor Romney addressed to the President. “In one year, you provided $90 billion in breaks to the green energy world.”
Later, Governor Romney -- who the pundit class declared the debate's winner -- addressed the Department of Energy loan guarantee program. “These businesses, many of them have gone out of business, I think about half of them, of the ones that have been invested in have gone out of business.”
The governor then used one of the zingers his campaign staff had told the press to watch for. “A number of them happened to be owned by people who were contributors to your campaigns. I had a friend who said you don't just pick the winners and losers, you pick the losers.”
The Romney campaign subsequently said the governor was referring only to 2009 and 2010 loans because "it takes time for a company to go bankrupt."
“The DOE Loan program has three parts, two of which were established in the George W. Bush administration and one of which was established in the Obama administration," Former DOE Director of Financing for Energy Efficiency and Renewable Energy and Capital E President Gregory Kats testified to Congress earlier this year.
The first part was a 2005, $10.3 billion Bush program “with two nuclear commitments.” The second was a 2007, five-loan, $8.4 billion program for “advanced technology vehicles manufacturing.” The third was part of the 2009 American Reinvestment and Recovery Act.
“Like other loan guarantee programs, Kits told Congress, the grants were provided “with the expectation that most funded projects would succeed commercially but that some would not.”
As of early 2012, Kits said, the program “approved 28 loans worth $16.1 billion dollars, and has so far experienced two highly publicized defaults (both in the fall of 2011): Solyndra and Beacon. These loans were for $535 million and $43 million, respectively.” The total defaults, he said, “are likely to net out to $300 million to $400 million. This is roughly 2 percent of the amount guaranteed.”
The later Abound Solar failure cost DOE $70 million, which would not increase Kits’ 2 percent conclusion.
Or, as GTM Research VP Shayle Kann expressed it on National Public Radio’s Marketplace after the debate, “The truly misleading and irresponsible claim is that anywhere near half of the companies taking advantage of these programs have gone bankrupt. Thousands of companies have benefited from these programs, and in spite of a very small number of very public failures, the vast majority of these companies remain operating -- and in many cases, thriving -- enterprises.”
By Governor Romney’s own report, Bain Capital’s success rate was 80 percent. This makes him statistically better at "picking losers" than the Department of Energy.
A little-remarked-on point noted to GTM by SolarReserve CEO Kevin Smith recently is that the loan programs’ interest payments will likely net federal taxpayers some $8 billion in revenues. That, of course, is in addition to the benefits of putting some 60,000 people to work doing good things for the nation’s future.
Governor Romney’s cronyism accusation was answered by the Washington Post: “Romney said that Obama sent money to firms whose executives had donated to his campaign. That is true in the case of Solyndra, but while House Republicans have harshly criticized the administration for that, investigations have not revealed any direct link between the loans for Solyndra and campaign support for the president.”
DOE loan recipients John Woolard, CEO of BrightSource Energy, and SolarReserve’s Smith both denied to GTM any personal relationship with the White House that might have been associated with their funding.
GTM Research’s Kann also told National Public Radio’s Marketplace that the $90 billion “includes a wide variety of programs ranging from renewables to energy efficiency to high-speed rail.” The programs, Kann added, “take a number of forms, from tax credits to R&D grants and everything in between.” They were “not all introduced by the Obama administration,” Kann said, and “were not all offered in just one year.”
The White House website broke down the investments in more detail:
-- $29 billion for energy efficiency, including $5 billion for improvements in the homes and apartments of low-income households
--$21 billion for renewable electricity generation, including wind turbines and solar panels
-- $10 billion for grid modernization, including millions of “smart meters” that read themselves, eliminating the need for meter readers
-- $6 billion to help establish factories to make batteries for electric cars and other components of advanced vehicles
-- $18 billion for fast trains
-- $3 billion for research and development into capturing and sequestering carbon dioxide
-- $3 billion for job training and scientific advances in green energy
-- About $2 billion to help build wind turbines, solar panels and similar “green” products
Update: Nest has added new investor Venrock to the existing group of investors of Kleiner Perkins, Google Ventures, Shasta Ventures, Al Gore's Generation Investment Management, Lightspeed Venture Partners, and Intertrust. Nest has not disclosed the amount of this funding round although the initial rounds, prior to this Round C with Venrock, were reputed to be in the $50 million to $80 million range, according to VC sources who passed on the deal.
Venrock's Matthew Nordan writes about his Matt Trevithick-inspired Nest installation here.
Nest just announced a second-generation version of its slick, smart and Apple-esque thermostat. (Nest is founded by Apple alum and iPhone designer Tony Fadell.)
Lowering the costs of home heating and AC usage is what programmable thermostats can do if they are used correctly. Heating and cooling is the low-hanging energy fruit in a home.
The Palo Alto, Calif.-based Nest thermostat detects outside and inside temperatures and occupancy patterns and can potentially save an average of $173 on an annual electric bill for roughly a two-year payback. Homes would save that same 20 percent if they used a conventional programmable thermostat -- but according to Nest, only 11 percent of owners use their thermostat correctly. Nest automates the process with some wireless data crunching and sensors.
One modification on the thermostat is cosmetic: the round is thinner. Changes in the backplate have improved compatibility. And functional changes allow the thermostat to distinguish between radiant heat systems, heat pumps, and forced air, with a thermostat profile optimized for each system type. Multiple-stage heating and cooling was addressed. Sensors were improved.
The new unit is priced at $249, while the older inventory has been priced to move at $229.
The New York Times quoted a spokesperson for the 136-employee Nest as having sold “in the mid-hundreds of thousands” of units.
In a briefing last week, Nest spokespeople would not provide details on unit sales or on the startup's Series C funding round.
The firm is currently in the "top ten in Amazon home improvement" and a "bestseller" at Lowe's. Others in the advanced thermostat business include Honeywell, Cooper Industries, and Radio Thermostat.
We reported on deregulated Texas utility AC Reliant giving away free Nest thermostats. The company claimed that with Texas AC on full blast, the Nest paid for itself over one season.
Squeezing insight out of building energy data isn’t as easy as it sounds. Sure, building energy dashboards can show how much energy the building is using and how much it’s costing at any point in time. Likewise, past data can be put into graphs and charts to catch trends that indicate a failure to run an existing building’s systems most efficiently, or opportunities to invest in new efficiency measures.
But once you start adding in weather data, occupancy and use data, and other factors that influence energy use, those graphs and charts start to get complicated and hard to read. What’s the best way to compile all that information into a graphical interface that actual human beings can use to catch the efficiencies that are being missed amidst all the noise?
Agilis believes it has an answer. The self-funded, mother-son energy consulting firm from McLean, Va. has developed a software platform that crunches tens of thousands of variables like the ones listed above, based on the reams of data the company collects from public sources and its own business, and presents it in a three-dimensional graphic that helps clients recognize hidden opportunities in greening their building portfolio.
Since launching its platform in 2009, Agilis has lined up a pretty impressive list of customers for its software-as-a-service technology, including Constellation Energy, which has used it to help its commercial real estate customers reduce waste and make efficiency investments that have been paying themselves off in six months to a year or so -- an enviably fast ROI for the building energy efficiency world.
Other customers include real estate companies like Boston Properties, Federal Capital Partners and KBS Realty Advisors, which have piloted the Agilis systems in Washington, D.C.-area buildings and found ways to shave power costs by an average of 10 percent to 15 percent with little or no upfront investment.
That’s a pretty standard range for the savings that the Agilis platform can deliver, founder and CEO Joe Hirl said in an interview -- but sometimes the savings can add up to as much as 50 percent.
It all depends on how well the building is running today, compared to how well it could be running. See some red “peaks” in your building’s energy use on certain days over the course of a month? That’s excess energy use, possibly to respond to hotter-than-usual days -- or possibly because you’re not cooling the building early enough to avoid kicking AC units into overdrive during hot afternoons.
What about those blue-colored peaks showing up during the nighttime or on weekends? That’s a sure sign that someone has mis-programmed the building’s system for shutting down during non-work hours -- “That’s some of the easiest stuff to fix,” Hirl noted.
Agilis isn’t alone in bringing technology to bear to improve building efficiency visibility and energy performance, of course. Smart building analytics is an increasing focus of energy services giants like Constellation (now owned by Exelon), Honeywell, Johnson Controls, Siemens, Schneider Electric and a host of others, as well as startups and new entrants such as EnerNOC, SCIenergy, Viridity Energy, BuildingIQ, FirstFuel, Retroficiency and SkyFoundry, to name a few.
But the Agilis platform also goes deeper into some of the tricky issues that arise for buildings and their energy bills. Hirl, a former U.S. Navy nuclear power officer, has experience in that building-energy nexus -- prior to founding Agilis in 2003, he spent more than a decade managing energy trading businesses for both Progress Energy in the United States and Enron in Scandinavia, Australia and Japan.
Take demand charges -- penalties that commercial customers have to pay when they exceed a set limit for power use at any single time, imposed by utilities to keep total power draw on the grid in control. Agilis can graph a building’s power usage against other buildings of its class and tell the building owner if their building is using too much power overall. But it can also tell the owner if they’re power use is fluctuating too much, and thus leading to its demand charges being imposed too often.
Likewise, buildings can sometimes be too aggressive about turning down their building power use during non-work hours, he said. That can become a problem if the building’s HVAC system has to ramp up too hard in the morning to bring the building back up to the proper temperature, since that can actually use more energy than was saved by turning off the gear in the first place. The Agilis system can catch such overly aggressive power management strategies, and help the building owner revise its policies to reach a more even-keeled approach to shaving off-work power bills.
For less sophisticated customers, Agilis provides its software as a service, helping them understand what it’s telling them and how to adopt new procedures to take advantage of the information. It also works with customers to gather the critical fifteen-minute interval power meter data that shows the building’s energy use profile, whether via submeters in the buildings or through utility data.
For more sophisticated customers like Constellation, Agilis can provide the platform as a “modified SaaS” product that they can run on their own, Hirl said. In this case, Agilis still collects the data from those projects -- an important fact, given that data is the lifeblood for the company’s analytics engine -- but the customer does most of the analysis and makes their own decisions, he said.
Agilis is working with a number of partners in this category, Hirl said. One partner is Trane, the big HVAC company owned by Ingersoll Rand, which is using Agilis for building energy diagnostics, he said, though he wouldn’t provide more details. Agilis is also deploying in Southern California Edison territory in partnership with a big energy services company, he said, but he wouldn’t name the partner.
Former U.S. Vice President, Al Gore is a founder, along with David Blood, of investment firm Generation Investment Management (GIM). Gore is also an investment partner at KPCB, a storied VC firm with a wide greentech portfolio.
An SEC Form 13F from GIM reveals that of the 30 stocks in the $3.2 billion GIM Global Equities Fund, not one firm builds a PV panel, a biofuel, an EV, or a wind turbine.
According to Richard Campbell, speaking for GIM, the form "is from Generation's Global Equities Fund, which is not a greentech fund, hence the lack of greentech stocks in it -- it is a fund that invests in a broad range of global equities." Campbell added, "Generation does have a greentech fund -- its Climate Solutions Fund -- but this invests in mostly private companies, hence there are no 13F filings."
Generation Investment Management advocates for "Sustainable Capitalism." The firm's website claims that its approach is "based on the idea that sustainability factors -- economic, environmental, social and governance criteria -- will drive a company's returns over the long term."
The GIM fund's website quotes Gore as saying, "Integrating issues such as climate change into investment analysis is simply common sense."
But how does Paychex payroll services fit into a climate change thesis?
The $683 million "Climate Solutions Fund" piece of GIM has made direct, minority investments in a number of cleantech firms including SolarCity, Tigo, Ausra, and SMA. Here's a portion of a GIM PowerPoint that shows some of its solar and bio-energy deal funnel.
A solar installer in one Southern California city can take a set of plans to the proper authority and get a permit to build within 48 hours, a twelve-year solar industry veteran recently said. But in a virtually indistinguishable city of the same size that is immediately adjacent, Paramount Solar VP Todd Lindstrom said, “If I get it done in under three weeks, it’s a miracle.”
And, Lindstrom added, “I will be subjected to anything from silliness to lack of comprehension. That costs lots of money, to the point where you seriously consider charging extra.”
“Getting a permit is the choke-point in the process,” Clean Power Finance (CPF) CEO Nat Kreamer said, "[and it is] driving solar companies crazy today. It’s time-consuming, it’s costly and it makes for a bad end-consumer experience.”
Consumers want solar to be easy and quick, Kreamer explained. To do that, “we’re going to have to get the permitting barrier broken down. But we’re not going to get municipalities to change the rules. That’s where hope runs into reality.” The solution, he said, “is software.”
In its winning bid for a $3 million U.S. DOE grant to create an online database of local permitting standards, CPF estimated it could cut the balance-of-system (BOS) non-hardware (i.e., "soft") costs of installing a five-kilowatt (DC) residential rooftop solar system by more than $0.22 per watt. And there would also be other, less quantifiable, impacts, Kreamer said.
The U.S. Department of Energy's SunShot program opened a new $10 million competition last month in search of “innovative, sustainable, and verifiable business practices that reduce these soft costs to $1 per watt.”
“We have to solve this problem,” said Solar Freedom Now (SFN) Co-Founder Barry Cinnamon, a 30-plus-year solar veteran who has done everything from rooftop installs to running Westinghouse Solar (PINK: WEST). “The way we are going to solve it is on the national level because 18,000 cities, 3,000 utilities, 50 states, you’re never going to fix it everywhere."
The difference in permitting is 21 cents per watt, he said. “But the difference in overhead is 95 cents per watt. There is a huge amount of other paperwork and requirements that aren’t permitting-related. A lot of those have to do with interconnection agreements, inspections required by the utility, incentive paperwork, fire codes, things that really aren’t specifically permitting.”
Rather than aggregating requirements, SFN proposes that “there are no requirements,” Cinnamon said. “If the system fits into a certain box, has certain characteristics, it requires no permitting. That’s what Germany did and it is working well.”
SFN is “working with stakeholders now to define those characteristics,” Cinnamon said, but “in broad-brush ideas, if the system was under five kilowatts, using solely UL-approved components, and installed by a licensed installer, you shouldn’t need any other requirements.”
The state of Vermont, Cinnamon noted, requires utilities to automatically interconnect standard rooftop solar systems within ten days after they are registered unless there is a major problem.
A national permitting database “can end up very complicated,” Cinnamon said, “and may not get us to where Germany is.” SFN “supports all efforts, including CPF’s,” he added. “They may learn what the common denominators for that five-kilowatt system are and that may be the template for a national policy.”
Cinnamon offered two examples. “Your standard gas hot water heater is dangerous,” he said. “But you can go buy one at Home Depot (NYSE: HD) and install it in a day.”
The other, he said, is a car. “You can go to a car lot and buy any car, even a 30-year-old rust bucket with flat tires that’s not safe at all.”
There is, Cinnamon said, “a quicksand of stupid regulations and requirements and we need a policy standard to bring to lawmakers in Washington, D.C., that has two million people who want it.”
“The real benefit from the National Permitting Database,” observed installer Next Step Living’s Brian Greenfield, “will come when the information gathered is used to encourage municipalities to streamline their permitting requirements.” Although unlikely, he noted, “one statewide or national set of requirements would be a giant step forward.”
Smart thermostats seem to be getting smarter these days.
Up until a few years ago, programmable thermostats were as smart as their technology. The problem, of course, was that they weren’t that smart as they needed to be in the hands of the average person. Even though the thermostats had the potential to save energy through personalized settings, homeowners had to actually set them to realize the savings.
Now, all of the major HVAC and thermostat companies makes smarter solutions -- wireless, connected thermostats that can often be set up online. The most celebrated example is the Nest thermostat, which recently released its second version.
Some of the incumbents are finding startup partners to bring the smarts to their thermostats. The most recent is Carrier, which just announced EnergyHub as its partner for its ComfortChoice Touch thermostat.
“Carrier is pleased to team with EnergyHub to offer customers the ComfortChoice Touch thermostat with the Mercury smart thermostat platform,” said Ray Archacki, senior product manager at Carrier. “With more than twelve years of two-way demand response field experience, Carrier recognizes that modern software platforms, such as Mercury, are the key to introducing homeowners to the benefits of advanced communicating thermostats.”
EnergyHub is already working with Radio Thermostat of America, offering its software-as-a-service for the 3M thermostat. The Brooklyn-based startup has used its market penetration through the Radio Thermostat of America partnership to build demand response offerings for utilities -- something that Carrier is also interested in. There are already 20,000 of Carrier's ComfortChoice Touch thermostats in homes, and EnergyHub's platform will be offered for thermostats being sold moving forward.
Carrier is hardly new to the demand response game. Old-school demand response programs mostly revolved around switching off AC units or water heaters during peak demand. Even though Carrier has been doing two-way demand response for more than a decade, increasingly sophisticated software platforms make the proposition of demand response more attractive to the homeowner. Software can pre-cool homes before a peak event, for instance, or respond to price signals to adjust a thermostat.
There are already a handful of programs taking advantage of smart thermostat penetration within utilities’ territories. SDG&E is working with EnergyHub and AlertMe to offer the customers with smart thermostats a more aggressive pricing option as part of the peak rebate program. CenterPoint teamed up with WeatherBug to offer its home energy management app to customers that take part in their residential demand response program. EnergyHub said it is also working with a few other utilities implementing similar programs. Carrier and EnergyHub will look to add on even more programs, according to Seth Frader-Thompson, CEO of EnergyHub.
Carrier, which is owned by United Technologies Electronic Controls (NYSE: UTX), has been retooling its demand response offerings through different partnerships. In 2011, Carrier struck a deal with Comverge for its thermostats to be integrated into the demand response provider’s platform. Comverge has been growing its C&I business substantially in recent years, but it still has a larger portion of its business coming from residential compared to other major demand response players. In April, Comverge announced that it would be delivering “thousands” of new “Brighten” iThermostats for TXU, featuring Carrier-branded thermostats.
The question for energy management companies, HVAC suppliers and utilities is how to maximize the opportunity for everyone -- and that includes the customer. EnergyHub can provide performance tracking for HVAC along with optimizing and reducing energy use.
For utilities, the appeal of tapping into thermostats already in their territory is huge -- but the opportunity is still fairly small. In the case of SDG&E and Alarm.com, the home security company has around 1,000 customers with its thermostat offering in the utility’s territory that serves more than three million people. So while partnering with residential energy management companies is relatively easy, the penetration is not substantial.
Of course, the solution there is to offer rebates -- or give away -- the increasingly sophisticated thermostats. Reliant was offering up the thermostat from Nest Labs for customers that signed a two-year agreement for a fixed rate. For many utilities, the appeal of offering rebates or demand response incentives for energy-saving technology is a safer route than deploying hundreds of thousands of thermostats and then hoping to see the energy reduction during peak days.
Frader-Thompson has proclaimed that aggregating residential customers is officially a trend. “Which makes sense, of course, given the rapid growth of non-utility distribution channels for connected thermostats,” he added. The next question is how this trend will scale across slow-moving utilities.
Integration and interoperability is the name of the game in smart grid. The past week has seen a host of announcements making this clearer than ever.
First off, let’s take the partnership between smart metering communications vendor Aclara and smart grid enterprise integration partner Calico Energy. In January these two companies joined forces to build a demand response management system (DMRS) that can scale from individual homes all the way to regional grid operators.
Last week, the two partners announced their first utility project featuring their tech mashup with Fort Collins, Colorado’s municipal utility. The $46 million project will link the 65,000 electric smart meters and 34,000 water smart meters that Fort Collins is deploying to its customers through mid-2013 in an “integrated consumer engagement and demand response solution,” the companies said.
Aclara, owned by Esco Technologies (ESE), will provide the consumer engagement platform -- a task it’s done for some of the biggest utilities in the country, including recent new customer Sacramento Municipal Utility District -- as well as the demand response capabilities of the new system, which will run over the Elster smart meters Fort Collins is using.
Calico, for its part, will integrate Aclara’s software into its enterprise services bus (ESB) architecture for linking lots of different smart grid systems -- AMI, load control switches, grid sensors, etc. -- into a single enterprise platform. Utilities today tend to integrate different software platforms via vendor-supplied APIs, provided en masse by the tangled web of partnerships common to the smart grid industry (see Cisco, IBM and Silver Spring Networks for some examples).
An ESB, or a service-oriented architecture (SOA) approach, on the other hand, requires more forethought and design upfront, with the expectation that it will run more smoothly as an integrated whole at the end of the day. In terms of the game of “Telephone,” it might be described as the difference between having a roomful of people who all speak the same language and can hear each other clearly, versus a roomful of people who only speak one or two languages, and are depending on a handful of translators to get their message across.
Utilities have a lot of disparate systems to connect, which could make SOA approaches more popular in the future. Fort Collins is already working with eMeter, giving Calico and Aclara another platform to integrate to.
Speaking of eMeter, the meter data management company bought by Siemens last year has been announcing deeper integration with various smart grid partners, most recently with U.S. startup Silver Spring Networks and Chinese meter maker Wasion.
This week, it launched its latest integration news with smart meter vendor Echelon. EMeter will integrate ITS EnergyIP Platform with Echelon's Control Operating System (COS) software, which comes with a number of applications built in to use Echelon’s meters for various utility tasks like power quality sensing and theft detection.
While the two didn’t name any joint projects, both companies are working with Danish utility NRGi, and both have broader smart grid deployments in Europe that could see potential for future integration.
In the meantime, large-scale smart grid contracts are highlighting the level of integration going on in the industry. Take Wednesday’s news from smart meter vendor Itron (ITRI) that it had won a deal with Southern California Gas to deploy nearly 1.5 million gas meters and more than 600,000 gas regulators, starting later this year.
It’s the first meter award from SoCal Gas, which is owned by Sempra, the same company that owns San Diego Gas & Electric, another Itron customer. But these new Itron smart gas meters will be communicating with the utility not on Itron’s technology, but on Aclara’s, which won the contract last year to supply integrated hardware, software and network architecture solution to approximately six million residential and most commercial customers at SoCal Gas. They'll also be integrated to the utility's back-end IT and safety systems via a partnership with Capgemini, the French systems integration company.
Sean Hannan, analyst at Needham & Co., noted that SoCal Gas has yet more smart gas meters to buy to reach all its customers, and said he expected another meter vendor to announce a contract with the utility in the coming weeks or months. It’s an important reminder that big contract announcements don’t necessarily indicate exclusive arrangements between specific vendors and their utility customers.