October 2008

From industry advocacy group, Vote Solar.com, comes this information to review concerning Proposition 7 on the California ballot:

Proposition 7 (pdf) is a California ballot initiative that would dramatically increase the state’s renewable energy requirement, to 50% renewables by 2025. Yet most environmental groups and almost all renewable energy companies and trade associations oppose it. Why?

The problem is not with the goal. We urgently need to increase our usage of renewable energy to 50%–and more. The problem is that the initiative is unlikely to deliver the desired result. Most of the opposition comes from a belief that Proposition 7 is so flawed that it will make the task of growing renewable energy markets harder, not easier.

Different groups have found many elements of the initiative problematic. You can read CalSEIA’s analysis here, Union of Concerned Scientists here, and NRDC’s here. (The Solar Alliance, American Wind Energy Association, and the Large Scale Solar Association all also oppose).
For the balance of the article and analysis, click here.

BusinessWeek weighed in on solar, its effect on the housing industry, new homes, price savings and valuations of solar homes in Adam Aston's article, "Will Demand for Solar Homes Pick Up?

Here are excepts, for the full article, click here.

As global financial markets melted down in October, Congress handed a gift to America's green energy industry: It renewed and broadened a set of tax credits for wind and solar power, geothermal, tidal energy, and more. The move did little to prop up eco-energy stocks, which have followed oil prices down. But the news did send a positive jolt to one of the economy's darkest sectors: homebuilding. Or, more specifically, solar-powered homes. Consumers recognize that green homes "save money month in, month out," says Rick Andreen, president of Shea Homes Active Lifestyles Communities in Scottsdale, Ariz.

Most of the sweeteners Congress conjured up will go to big projects such as wind farms. But aspiring buyers of green homes will benefit, too. The revised 30% one-time investment credit for solar means that a buyer who installs a typical $25,000 solar panel system on his roof will get $7,500 in income tax credits, up from $2,000 under the old standard. How long that investment takes to pay off will depend on local rules and utility rates. In markets with the most costly power, such as California, Connecticut, and New Jersey, the pretax compound rate of return on a typical home solar system will be better than 15% per year, says Andy Black, chief executive of OnGrid Solar, an industry research firm.

The fresh credits may mark a turning point for solar-powered homes. During the housing boom, when mortgages and energy were both cheap, green power was not a hot option; typical home buyers preferred granite countertops to solar panels. But even before the subprime crash, builders began to see rising interest in sun-powered dwellings. Ryness Co., which compiles sales data for homebuilders, found in a recent survey that homes with solar systems were outselling others by as much as 2:1 in 13 California communities.

Escondido, CA Residential System Utilizing Mitsubishi Solar Panels Installed by HelioPower

By Glenna Wiseman

With the extension of the Federal Investment Tax Credits for solar, the mood was jubilant.  Rhone Resch, president of SEIA, relived the exhausting 18 month journey the industry took to get the credits in place.  The legislature turned in a Hollywood style ending in its passage as part of the Emergency Economic Stabilization Act of 2008.   His retelling of the amazing collaborative effort presented a cathartic opportunity for the industry to take a deep breath, fully embody the triumph and now move onto the hard work yet to come.  In fact Resch reiterated a laundry list of objectives SEIA sees as critical to the growth of the solar industry.  Ending his speech, he recalled the recent "Drill Baby Drill" call of the oil industry, urging the industry to replace it with "Go Solar, Baby, Go Solar!"

Talking with veterans of the industry at large, several mentioned the show reminded them of the "dot com" rush.  Lots of investment bankers rooming the aisles looking for the next big idea, etc.  Described as the "solar rush" by some, the industry is indeed poised for heavy growth over the next decade. If this industry matures as most do, you will see consolidation in the ranks and those investing in solar power systems are wise to look to strong entities to supply panels.

Many believe solar to be the "right technology at the right time and place" as our country looks to green up its energy sources and free up the grip of foreign oil on our economy and national security interests. 

California Gov. Arnold Schwarzenegger walked the show prior to its official opening.  "Of course we are now facing tough economic times, but that's why we need to focus on solar and the environment," he said as reported by TheStreet.com.

The environment and the economy are cental themes in Thomas Friedman’s new book, "Hot, Flat and Crowded."  World-renowned author, journalist and three-time Pulitzer Prize winner, Friedman focuses on the role of environmental efforts in his new book, seeing this strategy as central to our financial well-being, among critical benefits.  You can join his online group discussion at http://www.thomaslfriedman.com/.

Solar Energy Companies Unite Behind Historic Federal Legislation; U.S. Now Poised to Lead Global Solar Energy Marketplace; Sprawling Solar Energy Expo Opens Its Doors to Sunbelt Citizens

All roads lead to Southern California this week, as thousands of people from around the world attend Solar Power International, the largest solar energy industry event in the Americas. Presented by Solar Electric Power Association (SEPA) and Solar Energy Industries Association (SEIA), Solar Power International '08 begins just days after the U.S. Congress passed the most significant federal policy ever enacted to support the solar energy industry — an eight-year extension of the federal investment tax credit for solar energy, and the elimination of both the residential cap for residential systems and the utility exemption. This sweeping legislation marks a turning point for the solar energy market in the U.S., which has already grown steadily at 40 percent per year throughout the decade and stands poised for a new era of expansion. Now in its fifth year, Solar Power International takes place October 13 — 16, 2008, at the San Diego Convention Center. This year the conference and expo coincides with Solar Energy Week in San Diego, organized by the California Center for Sustainable Energy (CCSE), drawing curious citizens from across the region to learn about solar power. With a total attendance expected to approach 20,000 people, Solar Power International '08 is the largest solar energy event in U.S. history.

Residential Ground Mounted Solar Power system in Temecula, CA by HelioPower

In concert with the solar industry’s biggest U.S. event, Solar Power International 08, HelioEMS, Energy Management Solutions, and HelioPower have announced a joint promotion to assist California customers.  The promotion, which runs through the end of the year, involves both energy savings technologies and a $500 discount on any residential or commercial solar panel system installation.  Solar Power International 08 takes place in San Diego, October 13-17, 2008.

Energy evaluation and reduction is the initial step any company should take to improve energy efficiency.  All commercial clients who sign up for a solar power system during this promotion and/or at the show will receive a complimentary energy on site walk through of their facility with a HelioEMS team member. 

From HelioPower, residential and commercial clients who contract for a solar power system will receive a $500 discount off their system price and a check for $500 on any referrals they send that result in a new solar panel system being installed.

“This promotion could not have come at a better time,” said Steve LoRusso, Vice President of Sales at HelioPower.  “With the extension of the 30% Federal Income Tax Credit now in place and with the removal of the $2,000 cap from residential tax credits, that easily makes what was a good investment in solar an absolutely great investment!  With utility rates going up like a rocket, we just can’t wait to show our new customers why they need to take a look at what could be their best investment in a decade.  Even if you looked at solar previously, you need to re-visit this investment, as solar is now 30% more lucrative!”

The solar investment tax credit provisions in H.R. 1424, the Emergency Economic Stabilization Act of 2008, passed last week include:

• Extension for 8 years of the 30-percent tax credit for both residential and commercial solar installations
• Elimination of the $2,000 monetary cap for residential solar electric installations, creating a true 30-percent tax credit (effective for property placed in service after December 31, 2008)
• Allowance for Alternative Minimum Tax (AMT) filers, both businesses and individuals, to take the credit

These credits are in addition to local state, city and utility based rebates that vary according to each region. 

“We’re delighted to partner with HelioPower to insure commercial clients are utilizing energy efficiently, prior to investing in a solar photovoltaic (PV) system,” said TR Bietsch, Managing Director of HelioEMS, Energy Management Solutions. “An energy walk-through of their facility enables us to assist customers right away with ideas and suggestions to save money on their electric bill.” 

Saint Cyril Church in Encino, CA where 150 Mitsubishi 185 modules were installed by HelioPower.

SEPA Statement on Historic 8-Year Solar Tax Credit Extension

Removal of Utility Prohibition to Have Major Impact on Solar Market Development

WASHINGTON, D.C. – The passage of H.R. 1424, the Emergency Economic Stabilization Act of 2008, provides critical news for the solar industry at large, but also for regulated electric utilities looking to diversify their energy mix with solar electric generation. In addition to extending the federal solar investment tax credit (ITC) for 8 years, the legislation includes the removal of a prohibition that previously prevented electric utilities from taking advantage of the credit.

Based on announcements and discussions with utility executives this year, the Solar Electric Power Association (SEPA) predicts that utilities will quickly become the largest and one of the most important customers for the solar industry, expanding solar markets beyond analysts’ expectations.  Access to the federal tax credit will expedite the timeframe and scale to which this happens.

“U.S. electric utilities’ engagement with grid-connected solar electricity has increased significantly in 2008, with major photovoltaic and concentrating solar thermal project announcements totaling more than 5,000 megawatts,” said Julia Hamm, SEPA executive director.  “Without the ability to take direct advantage of the ITC, the only viable financial option was to have these plants be owned and operated by independent power producers who then in turn sell the electricity to the utility.  The change to the tax credit facilitates utility ownership as another option, which will result in additional projects and innovations.”

With the policy change, utilities that have a tax appetite and an interest in owning solar generation projects now have an added incentive to diversify and clean their energy supply with the addition of solar power. 

“This is a very positive development for the utility industry as it will go a long way to putting solar power within reach of many more Americans,” said Jim Rogers, chairman, president and CEO of Duke Energy, a SEPA member.  “It is exactly what we need as we explore investing $100 million to install, operate, maintain and dispatch solar panels on our customers' rooftops in North Carolina as a viable option to build a bridge to a low-carbon future.”

“The extension of the tax credit also significantly increases the likelihood that recently announced solar projects will come to fruition,” says Hamm.  For example, the largest planned photovoltaic projects in history – one for 550 MW and the other for 250 MW – announced as long term contracts with private solar companies in August by Pacific Gas and Electric Company, were both contingent upon the extension of the federal investment tax credit.

The full list of the solar investment tax credit provisions in H.R. 1424 include:

·         Extension for 8 years of the 30-percent tax credit for both residential and commercial solar installations

·         Elimination of the $2,000 monetary cap for residential solar electric installations, creating a true 30-percent tax credit (effective for property placed in service after December 31, 2008)

·         Elimination of the prohibition on utilities from benefiting from the credit

·         Allowance for Alternative Minimum Tax (AMT) filers, both businesses and individuals, to take the credit

·         Authorization of $800 million for clean energy bonds for renewable energy generating facilities, including solar

Resources:

SEPA Top Ten Utility Solar Integration Rankings:

http://www.solarelectricpower.org/docs/Aug%204%20Top%20Ten%20Final%20revised.pdf

H.R. 1424 Bill Summary:
http://seia.org/galleries/pdf/HR_1424_Solar_Memo.pdf  

H.R. 1424 Full Bill Text:
http://www.solarelectricpower.org/docs/Fin_Stab_Bill_Text.pdf

As part of the Economic Recovery Bill, the Federal Incentive Tax Credits supporting the expansion of solar, wind and other sustainable energy technologies in the United States was passed today on the Hill. 

Breaking news from the Wall Street Journal…"House Passes Bailout Bill on Second Try:"

U.S. House of Representatives lawmakers wary of growing signs of the nation's economic distress voted in favor of a $700 billion Wall Street rescue package on Friday, sending the biggest government intervention in the financial markets since the Great Depression to President George W. Bush for his signature.

From RenewableEnergyWorld.com…"Tax Credits Pass: Renewable Energy Industry Breathes Sigh of Relief:"

After a disastrous few weeks on Wall Street, the renewable energy industry has come out a winner. It seems there's always a silver lining in even the worst developments.