Mining The Solar Gold Rush

Burlingame, Calif. -

Earlier this month, Fetzer Winery flipped the switch on a new installation of solar panels that cover 75,000 square feet atop its bottling plant and barrel room in sunny Hopland, Calif.--the largest solar energy project at a U.S. winery. The 430 panels will produce 80% of the electricity needed for its bottling operations on the site.

But Fetzer didn't pay to install the panels, and it isn't responsible for maintaining them. The capital cost and operational details of the solar project are being handled by MMA Renewable Ventures, one of a small crop of firms that has sprung up to provide financing in the super-hot solar and renewable energy markets. Today, MMA Renewable Ventures announced it had syndicated its investment in the Fetzer solar project to a publicly traded insurance company whose name it will not disclose. This is the first investment in renewable energy for the insurance company, which was interested in the tax advantages that came with the deal.

Navigating the twists and turns of financing solar energy is complex. On top of the 30% federal tax credit, there are renewable certificates that solar-power owners can sell on a market that's similar to the carbon-emissions trading market. In California, the renewable certs go for between 2 and 5 cents a kilowatt hour.

In addition to San Francisco-based MMA Renewable Ventures, this new niche of financiers includes Sun Edison of Baltimore and New Energy Capital of Hanover, N.H. Bigger guns like Goldman Sachs (nyse: GS - news - people ) and General Electric's (nyse: GE - news - people ) GE Energy Financial Services have done some renewable energy financing as well, primarily of wind farms. All these firms are aiming to cash in on a rapidly expanding market. Solar installations grew 37% in the U.S. last year and are likely to keep growing at a hefty clip, spurred by a combination of high fossil fuel prices and a 30% federal investment tax credit.

For the Fetzer project, MMA Renewable Ventures paid to install the solar panels, and it will own them and maintain them. It has a long-term contract of up to 20 years to sell the electricity generated by the panels to Fetzer for a rate that is currently at least 10% less than what the local utility, PG&E's (nyse: PCG - news - people ) Pacific Gas and Electric, charges. The contract contains a low single-digit yearly rate increase that is half the rate of PG&E's historical rate hikes.

MMA Renewable Ventures' capital comes from investment banks looking for tax-advantaged investments. On top of the tax benefits, investors can expect a return that ranges in the high single digits, says Matt Cheney, chief executive of MMA Renewable Ventures.

Cheney's outfit makes money by charging a fee of less than 1% of the funds under its management. "Our sights are set on having a lot of volume and handling medium-sized projects," he says. He's got a $500 million pipeline of projects currently under review, and he expects plenty of appetite from investors looking for tax benefits. MMA Renewable Ventures has access to these investors through its parent company, Municipal Mortgage & Equity (nyse: MMA - news - people ), known as MuniMae, which provides financing to the affordable-housing sector, the current top destination for investors looking for a tax break.

Fetzer, a unit of beverage giant Brown-Forman (nyse: BFB - news - people ), likes the environmentally friendly sheen that comes from using solar power. But the decision to add so much solar capacity--901 kilowatts--was primarily a financial one. It should shave, at minimum, tens of thousands of dollars a year off its electric bill, says Susanne Zechiel, manager of facility resources for Brown-Forman's California wineries. "Economics is a huge part of this," she says.

The 30% federal tax credit on solar installations, part of the 2005 Energy Bill, is set to expire in 2007, so there's a sense of urgency among many companies about getting solar projects done now. New legislation may extend the tax credit, though.

"I think this is the beginning" of a wave of financing options, says Joel Makower, co-founder of renewable energy research firm CleanEdge. "There's a lot of interest swirling around in the investor community about how to make a market in renewable energy. This is one way."

(c)Forbes.com

U.S., Spain Named for Next Solar Breakout

Who will take Germany’s place as solar’s next big hit?
November 8, 2006

As a result of strong government support, solar power has swiftly become as German as beer, bratwurst, and Oktoberfest.

Germany’s capacity to produce solar power grew 80 percent in 2005, compared with the 42 percent average of 20 participating nations, according to the International Energy Agency’s Photovoltaic Power Systems Programme—and others say Germany’s growth was actually much higher. The country overtook Japan, the former solar king, last year. “Germany is by far the largest market now,” said Xu Bin, an overseas business department employee for Yingli Solar.

But while nobody else may be able to replicate the German cultural phenomena, some in the industry believe that other countries will soon have a chance to overtake Germany as the fastest-growing solar market.

Michael Schmela, editor-in-chief for solar trade magazine Photon International, says demand is already dropping in the German market. The government-guaranteed price for solar electricity drops 5 percent each year, yet solar module prices have stayed high, reducing the return that homeowners and business owners can make. Mr. Bin also thinks Germany might fall from the top spot after two years, although he envisions a slow descent.

Red Herring surveyed companies at a German solar conference to find out which country is the heir apparent, if Germany’s solar reign subsides. Most picked either Spain or the United States to wear the the lederhosen next. Here’s what they said:

Claus Beneking, CEO of Germany-based ErSol:

The U.S. If they make a decision to go this way, they will ramp up very quickly.

Frank Asbeck, CEO of Germany-based SolarWorld:

California, due to the legislation and the feeling that while sometimes America needs a longer time to understand something, once they understand, they perform. They really know how to react. (SolarWorld entered production in the U.S. this summer and is increasing capacity.)

Thorsten Vespermann, head of corporate communications at Germany-based Conergy:

The U.S. will become one of the most important markets worldwide, I’d say in two to four years. We’re preparing our company to be the largest in the U.S. because it’s very important to future growth.

Xu Bin, overseas business department for China-based Yingli Solar:

Maybe Spain, because the government there will commit a lot of dollars to install solar programs. Spain is very strong competition for Germany.

Thomas Limberger, CEO of U.S.-based Oerlikon:

Probably Spain and the South European countries, due to the government funding policies.

Brian Stone, vice president of marketing at U.S.-based PowerLight:

California, and then the rest of the U.S., if it follows California’s lead. We’ve got $3 billion in incentives, and no matter how you analyze the money, that’s billions for residential and commercial solar.

Peter Thiele, general manager of the solar business group for Sharp Electronics in Germany/Austria:

Germany. Italy and Spain have potential, but Germany will continue to develop further. We’re pushing the government to continue the subsidy for at least 15 years.

Contact the Writer: jkho@redherring.com

Silicon Shortage: End In Sight?

A report by the Prometheus Institute predicts it will ease in 2008.
October 26, 2006


The shortage of solar-grade silicon will ease in 2008, according to a report released Thursday by the Prometheus Institute for Sustainable Development.

The free report, titled “Polysilicon: Supply, Demand, and Implications for the PV Industry,” projects that the availability of polysilicon—a grade of silicon used by both solar and semiconductor industries—will grow from 34,710 metric tons in 2006 to 73,900 metric tons in 2008, and to 97,100 metric tons in 2010.

According to research firm Piper Jaffray’s estimates, cited in the report, the total polysilicon available for the solar industry alone will grow from 13,523 metric tons this year to 30,510 metric tons in 2008 and 49,308 metric tons in 2010.

That means there will be enough silicon to allow the solar-electric industry to grow to 8 gigawatts of annual peak capacity by 2010, writes Travis Bradford, president of the institute.

Larger-than-expected expansion plans by major silicon manufacturers such as REC, Wacker Chemie, and Tokuyama, are pushing the positive prognosis (see Three Huge Solar Trends, Solar: 3 Reasons For Optimism).

The institute also expects that thinner wafers, silicon recycling, a growing market share for thin-film technologies that use little or no silicon, and technology advances that enable modules to convert more sunlight into electricity using less silicon will help ease the shortage.

The prediction is good news for the booming solar industry, which has been constrained by the silicon shortage, resulting in high prices, long-term contracts for silicon and modules, and growing investment in technologies that use less silicon (see PowerLight Snaps Up Solar Cells, Nanosolar Gets $100M for PV).

How bad is it? Michael Rogol, managing director of Photon Consulting, the consulting and research arm of trade magazine Photon International, expects a total of 2.4 gigawatts of solar equipment to be produced this year, but says the industry could sell 5-gigawatts worth if more equipment was available.

Even Sharp, the world’s No. 1 solar manufacturer, could double its sales if it had the silicon, says Ron Kenedi, head of solar operations in North and South America.

And with “no significant new capacity” this year, solar’s growth will stay limited through 2007, according to the Prometheus report. “It is likely than 2006 and 2007 will be difficult for the PV industry,” the report states.

Silicon Prices

The silicon shortage became apparent in 2005. According to Mr. Rogol, prices—which had fallen as low as $9 per kilogram after the dot-com crash—averaged $32 per kilogram by the end of 2004, regardless of whether the silicon was bought directly from silicon manufacturers or second-hand.

Those averages jumped to $45 per kilogram for direct purchases, and $100 per kilogram for purchases on the aftermarket, in 2005. This year, aftermarket prices are more than $150 per kilogram, compared with about $60 per kilogram for direct purchases.

And next year, Mr. Rogol expects the prices to rise to $70 and more than $200, respectively. “The most profitable way to use silicon in the electronics sector is not to make a chip, but instead to resell it to solar,” he says.

Projections about when the shortage will end vary widely. Mr. Rogol says even the higher-then-expected growth in silicon production isn’t enough to match the growth in demand. “Supply this year, at an extreme, is up maybe 50 percent, but demand is definitely growing faster than supply,” he says. “Could that reverse eventually? Sure, it could happen, but not as long as grid prices keep rising and the government keeps putting strong incentives in place.”

Of course, not everyone wants the shortage to end soon. Some thin-film manufacturers have benefited from increased attention and funding, for example, and would welcome a continued shortage (See Blitzstrom Buys More Thin Film, ErSol Buys Into Thin Film, Solar’s Going Thin).

B.J. Stanbery, CEO of thin-film startup HelioVolt, says he doesn’t expect the shortage to abate until 2009, and says it won’t disappear altogether until 2010 or 2012, if at all.

The real trouble with predictions is that demand is theoretical and hard to quantify, depending on factors like government subsidies and pricing.

So opinions vary widely. With all the new silicon, many solar companies—including MMA Renewable Ventures, Trina Solar, Yingli Solar, and Conergy—say they expect the shortage to end in one to three years.

(c) Red Herring
Contact the Writer: jkho@redherring.com

Solar industry chases a cheaper kilowatt

By Martin LaMonica
Staff Writer, CNET News.com
Published: March 9, 2006, 4:00 AM PST


Solar power, long seen as among the most promising of alternative energy sources, may finally get its chance to shine.

Solar equipment manufacturers have been chasing the same goal for decades: producing a cheaper kilowatt of electricity. Now, after years of unfulfilled hopes, experts say that the solar picture is finally improving.

New technology is being developed in solar photovoltaic (PV) systems. And, more important, investors seem to be taking the advice of none other than Thomas Edison, the legendary inventor who famously exclaimed: "I'd put my money on the sun and solar energy."

Many decades later, venture capitalists are heeding that call.

"Conditions have never been better because electricity prices are going up. The basic challenges with solar energy haven't gone away (since the 1970s) but clearly advances in material science, the economic conditions we're facing, and environmental mandates are all making solar much more attractive," said William Lese, managing director of venture capital firm Braemar Energy Ventures.

The surge in venture capital activity dovetails with the growing interest overall in so-called clean technologies. "It's not like the Internet boom of the late 1990s, but there's a clear understanding that this is a market that is about to take off," said Steve Chadima, chief marketing officer at Energy Innovations, a manufacturer of energy systems spun off from incubator Idealab.

Although still a fraction of overall energy industry, use of solar PV goods--products that convert light to electricity--saw rapid growth last year. The total market, which includes components and installation services, grew more than 50 percent in 2005, according to Clean Edge, a clean energy research firm.

Read full article on CNet.com

Solar panel shortage to continue through 2006

When it comes to solar power, the problem today is not demand--it's supply.

A shortage of polysilicon solar panels, those mirror-like panels seen most often on the top of buildings, will continue to crimp the potential for solar energy for a second straight year, according to a report from investment bank Piper Jaffray.

Alternative solar technologies, such as thin-film solar panels, however, will begin to pick up the slack in 2007 and allow the industry to accelerate again.

The production of technology for harvesting solar energy will grow by only 9 percent this year, rising from 1,709 megawatts in 2005 to 1,868 megawatts. (The numbers reflect how much energy the entire output of solar technology could harvest at any given moment.)

Shipments would likely be higher, but factories can't produce enough silicon solar panels, according to the study and several different executives. Output of solar technology rose by 67 percent in 2004 and by 35 percent in 2005. The shortage, which began in 2005, retarded grow that year, too.

In 2004, more processed silicon got consumed in making solar panels than in making semiconductors, according to Nick Parker, chairman of Cleantech Venture Network.

...

Read full article on CNet

Supply problems await areas other than silicon

July, 2006: If PV wants to make a significant contribution to the world's electricity supply by around 2030, it must continue to grow as strongly as it has hitherto. But currently, silicon is scarce. That's drawing attention to alternative technologies, and an increasing number of companies are constructing production facilities employing these innovations. Have they solved the raw materials problem – or merely postponed the day of reckoning?


Few people have had as much success in the area of solar silicon cells as Martin Green, so it‘s no wonder that the physicist and leading thinker at the Centre for Photovoltaic Engineering (CPVE) at Australia‘s University of New South Wales has a clear opinion when it comes to the industry‘s currently most heavily discussed topic: what will be the semiconductor of the future?

Green has formulated three simple – or better, simple sounding, but in reality rather complex – criteria for PV: if PV is to play a decisive role in the world‘s future energy supply, then the raw materials required for solar cells need to be »inexpensive, nontoxic, and readily available.« And until now, the only available semiconductors that meet these criteria are made of silicon.

Read full article in Photon-International

Cypress CEO: Time to take a different tack on energy

One of the refreshing things about interviewing T.J. Rodgers, CEO of Cypress Semiconductor, is that he's willing to speak his mind.

Net neutrality? It's un-American. Government-funded research projects? Mostly, they are flops. The clean tech energy boom? It's overblown. A libertarian, he has promoted a market-driven approach to expanding Silicon Valley for years.

He's in a slightly odd spot now. SunPower, a fast-growing manufacturer of solar panels, is a subsidiary of Cypress, and solar power is heavily subsidized. Rodgers admits it's a contradiction, but says the subsidies will decline as the cost of generating electricity the traditional way skyrockets.

Read full article on CNet.com

Silicon vs. CIGS: With solar energy, the issue is material

An informative article about different solar cells technologies on CNet

Silicon or CIGS. In the solar world, them’s fightin' words.

The booming solar industry is in the midst of an argument over which material will become dominant in the future for harvesting sunlight and turning it into electricity. Solar panels made from crystalline silicon currently account for more than 90 percent of the solar infrastructure today.

Unfortunately, silicon panels remain relatively expensive to make. Without subsidies, it's still cheaper to get electricity from the grid. A two-year shortage of polysilicon, which may not ease until 2008, has severely limited growth and sales.

Panels that harvest energy with CIGS (copper indium gallium selenide) cost far less to make and install, say backers. The material can be sprayed onto foil, plastic or glass or incorporated into cement and other building materials. Conceivably, the entire exterior of a house or building could become a solar generator.

CIGS also doesn't degrade in sunlight like other thin-film technologies.

"The smartest investors are going short on silicon and long on thin film, especially CIGS," said Martin Roscheisen, CEO of Nanosolar, a start-up that has received $100 million in venture funds to build a plant capable of producing 430 megawatts-worth of CIGS panels.

Read full article on Cnet

Climate: A Crisis Averted

A great perspective! :)



"Climate: A Crisis Averted" looks back from 2056 and recounts how ordinary citizens in 2006 -- realizing that global warming was a scientific fact and not a climatic theory -- take action to demand clean energy and other planet-friendly options. The movie describes how a movement called RenewUS effected real change with an action plan, or 'call-to-arms' on global warming.

Clinton Global Initiative

Four subjects that will shape 21st century

1. Energy and Climate Change

2. Global Health

3. Poverty Alleviation

4. Mitigating Religious and Ethnic Conflict



http://www.clintonglobalinitiative.org

The Return of the Sun

The energy we need is all around us.

Three Huge Solar Trends

As solar industry prepares for its largest U.S. conference, three big trends are already clear.
October 13, 2006

Solar news announcements are already flowing in advance of the largest solar conference in the United States, which kicks off Sunday.

More than 3,500 attendees have already registered for Solar Power 2006 in San Jose, and the Solar Energy Industries Association is expecting on-site registrations to bring that number to at least 5,000, said Noah Kaye, the association’s director of public affairs, Friday.

That compares with 1,100 attendees last year, he said. “It certainly reflects the growth in the industry and the fact that this industry is attracting more interest from more different commercial industries than every before,” he said.

Market policies have raised to California’s allure for the solar industry. The U.S. federal government created tax credits to support renewable energy, and California created the largest solar program in the country (See Schwarzenegger Signs Solar Law, California Solar Gets $2.9B).

Because of that, the conference is getting strong interest from the rest of the world, especially from Germany Taiwan, and China, Mr. Kaye said. About 30 percent of the registered attendees are coming from outside the United States, he said. “I think this reflects the growing belief that the United States is going to be playing an increasingly larger role in the global solar industry going forward,” he said

The expected attendance still places the conference below the 21^st European Photovoltaic Solar Energy Conference and Exhibition in Dresden, Germany, which counted more than 6,500 attendees this year (see Solar Supernova, Solar: ErSol Buys Into Thin Film, Blitzstrom Buys More Thin Film , Sun Cools New Refrigerator, Solar Energy For The Poor, Clean Energy Goes To The Movies, Entering A SolarWorld, Fat Deal For Thin-Film Solar, Solar Comes Out At Night).

But Julie Blunden, vice president of external affairs at solar manufacturer SunPower, said the company sees the conference as “the unveiling of the U.S. solar industry in a new and improved form, now that we’ve got a real market.”

So it’s no wonder the announcements are streaming in. Early announcements point to three trends that conference goers can expect to see next week.

Read full article on RED Herring

Solar Energy’s Bright Future

The sun keeps shining on the solar industry because it passed the crucial test—it makes money.
March 20, 2006 Print Issue

During the last year, solar power got more buzz with each oil and natural gas spike. Venture investment tripled, according to the Solar Energy Industries Association (SEIA)—encouraged no doubt by last year’s top three tech IPOs, all solar companies.

Some solar stocks doubled in just the last three months, including companies like Suntech Power, which went from an offering price of $15 on December 14 to $37.83 on March 1, and SolarWorld, which went from €116.69 (about $140) on December 1 to €233.39 on March 1.

The worldwide solar market grew from $8.3 billion in 2004 to more than $12 billion in 2005, according to CLSA Asia-Pacific analyst Michael Rogol. Mr. Rogol expects the market to top $16 billion this year and $40 billion in 2010. Oakland, California-based research firm Clean Edge sees solar taking a more gradual curve, but still getting huge.

That still leaves a peanut-sized industry compared to fossil fuel—a trillion-dollar-plus market starring Exxon Mobil (2005 sales: $358.95 billion). But solar has been growing at a compound annual growth rate of 36 percent for six years, according to SEIA President Rhone Resch, who sees growth speeding up, if anything. “It’s not a matter of if solar will play a big part in electricity generation, but when.”

Read full article on Red Herring

StartTalking: Alternative Energy

TV-Series on alternative energy sources.

Carbon Addiction

Solar

The Alternative Energy Age

and some more

USA: Energy Secretary Announces $13 Million to Expand Solar Energy Technologies

U.S. Department of Energy (DOE) Secretary Samuel W. Bodman today announced more than $13 million to fund new research in solar technologies. This funding, part of President Bush's $148 million Solar America Initiative, will support the development of more efficient solar panels, known as photovoltaic devices.

"This investment is a major step in our mission to bring clean, renewable solar power to the nation," Secretary Bodman said. "If we are able to harness more of the sun's power and use it to provide energy to homes and businesses, we can increase our energy diversity and strengthen our nation's energy security."

Full article on SolarBuzz

Spotlight on Solar Power 2006

San Jose, California [RenewableEnergyAccess.com] The largest business-to-business solar energy event in the history of the United States officially kicks off today, and attendance at the week-long Solar Power 2006 in San Jose, California, is expected to more than triple -- up from 1,300 last year -- to nearly 5,000 attendees. The historic turnout includes some of the biggest names in Silicon Valley such as keynote speaker Vinod Khosla, founder of Sun Microsystems and president of Khosla Ventures.

Full article on RenewableEnergyAccess

Climate change inaction will cost trillions: study

By Jeremy Lovell

Reuters

LONDON (Reuters) - Failing to fight global warming now will cost trillions of dollars by the end of the century even without counting biodiversity loss or unpredictable events like the Gulf Stream shutting down, a study said on Friday.

But acting now will avoid some of the massive damage and cost relatively little, said the study commissioned by Friends of the Earth from the Global Development and Environment Institute of Tufts University in the United States.

Special Report Read complete Post coverage on the science and politics surrounding the threat of human-induced climate change. » FULL COVERAGE

The climate system has enormous momentum, as does the economic system," said co-author Frank Ackerman. "We have to start turning off greenhouse gas emissions now in order to avoid catastrophe in decades to come."

The study said the cost of inaction by governments and individuals could hit 11 trillion pounds a year by 2100, or six to eight percent of global economic output then.

Most scientists now agree average temperatures will rise by between two and six degrees Celsius by the end of the century, driven by so-called greenhouse gases like carbon dioxide from burning fossil fuels for power and transport.

Read full article on Washington Post

Want a cut of the $14 billion in energy law?

Up to $3,400 in tax credit for hybrids; solar incentives as well


Is this lifestyle in the cards for you? A hybrid Prius sits in front of a Raleigh, N.C., home powered by the sun and built by Enertia Building Systems, which has built similar homes in 30 states.

By Miguel Llanos
Reporter
MSNBC

You, too, can get some of the $14 billion in tax breaks in the energy bill that President Bush signed into law in August. No, you won't qualify for billions or even millions — that’s for the energy industry. But consumers concerned about energy costs and striving for efficiency could write several thousand dollars off their federal income tax.

Here's how the credits work: Buy or lease a hybrid gas-electric vehicle and qualify for a tax credit of up to $3,400. Install solar power in your home and get up to a $4,000 tax credit. Make your home more energy efficient and get credits ranging from $50 to $500.

Read full article on MSNBC

Scientists Issue Global Warming Report

Global Warming Study Predicts Strain on Northeast Power Grid, Farms, Forests by Next Century

By LINDA A. JOHNSON
The Associated Press

TRENTON, N.J. -- Global warming could strain the Northeast's power grid, farms, forests and marine fisheries by the next century unless carbon dioxide emissions are reduced by 3 percent each year, according to a report released Wednesday.

The climate in the nine states _ from New Jersey and Pennsylvania up to Maine _ could become like that of the South with longer, much hotter summers and warmer winters with less snow, the report by the Union of Concerned Scientists said.

Smog drifts over the famed Hollywood sign in this August file photo. (AP Photo/Nick Ut, FILE) (Nick Ut - AP)

Read full aricle in Washington Post

John Doerr Touts ‘Greentech’

Famed Kleiner Perkins partner thinks global warming is a great way to make some good, clean money.
October 2, 2006

John Doerr, famed partner at venture capital firm Kleiner Perkins Caufield & Byers asked his family how they felt about the problem of global warming as they sat around the dinner table one night. It was his 16-year-old daughter’s response that hit him in the gut.

“‘Dad, I’m scared and I’m angry. Your generation created this problem and you better fix it,’” she said.

Read full article on RED Herring