Businesses push for global climate agreement at UN

Tue Sep 22, 2009 6:56pm EDT
By Timothy Gardner

UNITED NATIONS, Sept 22 (Reuters) – A group of 500 businesses and nonprofit executives on Tuesday urged global governments to take action on climate change, saying failure to do so would result in catastrophe for the planet and global markets.

“If there is no global agreement then we will lose valuable time and opportunity to … mitigate the potential disastrous consequences of climate change,” Zhengrong Shi, the chairman and CEO of Suntech Power Holdings Co Ltd (STP), China’s top maker of solar power panels, told reporters.

The U.N. Leadership Forum on Climate Change discussed ways to help deal with the worst consequences of global warming as part of a top-level U.N. meeting on the the issue held on Tuesday.

U.S. power utility Duke Energy (DUK) and oil majors BP (BP) and Royal Dutch Shell Plc were also participants in the group.

World leaders including U.S. President Barack Obama and Chinese President Hu Jintao tried to speed up U.N. climate talks at the one-day summit, but proposals did little to break a deadlock on how to share burdens of action on climate change.

Some 190 countries will try to hammer out a new pact on climate change in Copenhagen in December to replace the Kyoto Protocol.

“Failure to find agreement would result in trade tensions and competitive distortions that not only threaten the foundations of our global economy, but also any future advances in sustainable economic and social development,” the group said in a release.

The business leaders said a governmental framework on climate change would boost investments in projects to cut emissions, such as wind and solar farms, and in ways for countries to adapt to heat waves and rising seas.

Some companies have been criticized for participating in agreements seeking to push governments to take action on climate while taking only small steps of their own.

Barbara Krumsiek, the president and CEO of Calvert Investments, which offers mutual funds that invest in socially responsible companies, defended broad business agreements on climate. She said excluding companies from the debate would remove “a robust business presence” that helps contribute to finding solutions to global warming.

Robert Orr, an aide to U.N. Secretary General Ban Ki-Moon, said businesses are an integral component in the fight against global warming.

“Just like we need all governments to be part of the solution to climate change, we also need the collective private sector around the world,” he said.

Orr said 40 percent of the companies in the leadership forum had logged their climate actions on the Carbon Disclosure Project, which asks the world’s biggest companies to publicly list their risks on climate change.

(Additional reporting by Haitham Haddadin; Editing by Christian Wiessner)

Politics may make future of solar energy “small”

Thu Jul 9, 2009 3:14pm EDT

* Opposition to big projects could spur small rooftop solar

* California mulling focus on profusion of small projects

* Price, other issues remain to be worked out for rooftop

By Peter Henderson

SAN FRANCISCO, July 9 (Reuters) – The future of solar energy may be small — small scale, that is.

The climate change and energy policy bill winding its way through the U.S. Congress shows a new federal eagerness to build a renewable energy future, but what specifically to build where is still up for debate.

Massive solar arrays of mirrors and photovoltaic panels harnessing desert sun on otherwise-worthless land are the cliches of clean energy, but environmentalists and homeowners suing to preserve species and backyard views may be the reality.

Such opposition to big solar “plants” in the desert and power lines that would link them to cities could tip the scales toward a profusion of smaller rooftop solar projects as politics upsets conventional wisdom about how the United States could respond to global warming.

That could be a boon for solar panel makers like First Solar Inc (FSLR), the first installer of a big rooftop project in southern California.

“You’d be amazed at the number of people who come out against solar projects,” said Bob Fishman, the chief executive of solar thermal power company Ausra Inc. ‘Not-in-my-backyard’ rejection of solar projects rivals opposition to fossil fuel plants he built in a previous job, he said.

“Nobody wants to give up electricity, but nobody wants to see it get made,” he said.

Trend-setting California may be the test case for the United States. It has the most aggressive renewable ambitions of any state in terms of raw energy production. A target of 20 percent renewables may be raised to a 2020 goal of 33 percent.

“We really may be in a paradigm shift,” said Judith Ikle, program manager for procurement of renewables and climate mitigation at the state’s Public Utilities Commission, which has just finished an analysis of how to build a state-wide system that gets a third of its power from renewable sources.

Partial Eclipse for Solar Shares?

By MIKE HOGAN
barrons.com

Mostly sunny skies for solar — but tread carefully.

INVESTORS IN SOLAR STOCKS TEND TO LOOK on the bright side of things. The result: some industry shares have risen to dizzying heights.

Share prices of Trina Solar (TSL), Canadian Solar (CSIQ), Yingli Green Energy (YGE), Suntech Power (STP), Solarfun (SOLF), JA Solar (JASO) and China Sunergy (CSUN) have logged triple-digit percentage gains over the past quarter, according to Barclays Capital (www.barclayscapital.com). LDK Solar (LDK), First Solar (FSLR) and Evergreen Solar (ESLR) have posted high-double-digit returns.

We will get to what we would do with the shares in a minute, but first let’s see how this relatively small industry came back after crashing harder than most when the bottom fell out of the stock market. One propellant has been resurgent oil prices, which tend to reinforce the need for alternatives. Of course, the overall market’s revival has helped a lot, too.

Also important, solar stocks have a halo of political favor that helped them avoid a capital-deprivation-induced coma a few months ago. Instead, they will spend the next eight years protected by the government with a generous allowance of federal, state and local tax incentives, reports the Solar Energy Industries Association (www.seia.org/cs/solar_tax_policy). This protection comes courtesy of the American Recovery and Reinvestment Act of 2009.

SUBSIDIES ARE REQUIRED — for the time being, at least — because even with a free supply of sunshine, solar is the costliest way to generate electricity by a sizable margin, notes global energy researcher New Energy Finance (www.weforum.org/pdf/climate/Green.pdf). It faces significant technology hurdles before it can take its place alongside baseload energy sources on the national power grid. On the other hand, solar is uniquely equipped to be a low-cost answer to the peak-demand problems that bedevil utilities.

“We feel that, within three years, solar will achieve price parity with natural gas and other sources during afternoon and summer peak-load hours,” says Barclays Capital Analyst Vishal Shah.

Delivering a fraction of 1% of America’s electricity at present, solar won’t command much more than a couple of percentage points 20 years from now, says the U.S. Energy Information Administration (www.eia.doe.gov/cneaf/alternate/page/renew_energy_consump/rea_prereport.html).

But of more relevance to investors is that this narrow slice of a very large energy pie is growing at an astounding rate, says Merrill Lynch researcher Steven Milunovich. Pre-eminent energy auditor British Petroleum (www.bp.com) reported a 69% increase in solar installations in 2008, of which the U.S. has about one gigawatt of the world’s 14 gigawatt capacity (www.bp.com/sectiongenericarticle.do?categoryId=9023789&contentId=7044135). A megawatt (MW) is one million watts and a gigawatt (GW) is 1,000 megawatts.

By Shah’s count, projects already in the pipeline should add more than three GW of new generating capacity by 2012 to each of two relatively untapped markets — utilities and large-scale commercial businesses. The recovery and reinvestment legislation lets businesses get cash back from the U.S. Treasury Department for 30% of the cost of a solar project (www.treas.gov/recovery/programs.shtml). That and low-interest loan guarantees, notes Shah, are adding jumbo solar arrays to the roofs of big-box stores like Wal-mart (WMT) (http://walmartstores.com/FactsNews/NewsRoom/ 9100.aspx) and multi-megawatt solar farms to the portfolios of utilities that need to offset carbon emissions.

Major coal user Duke Energy (DUK) will buy all 16 MW of capacity from a new SunEdison (www.sundedison.com) facility, and build 10 MW of its own capacity (www.duke-energy.com). Florida Power & Light (FPL), the nation’s largest solar operator, plans another 110 MW, including a 10 MW solar array at NASA’s Kennedy Space Center (www.fpl.com/news/ 2009/52709.shtml). Even nuclear powerhouse Exelon (EXC) is developing a new 10 MW facility with SunPower (www.sunpowercorp.com) in downtown Chicago (www.exeloncorp.com/aboutus/news/pressrelease/corporate/ 04232009_1Q+Earnings.htm).

The new tax regime helps defray what can be $30,000 in up-front costs for residential solar systems that now account for most American capacity (www.nrel.gov/docs/fy09osti/44853.pdf). EIA anticipates another 1.6 million installations by 2016 (www.eia.doe.gov/oiaf/aeo/demand.html) from consumers who can find which local, state and federal programs apply to their locales in the National Renewable Energy Laboratory (www.nrel.gov) database at DSIRE (www.dsireusa.org).

The real catalysts for share appreciation, though, will be the megawatt-sized utility and commercial installations, says Shah. Government pump priming has restarted the flow of private capital, adds New Energy Finance (www.newenergyfinance.com): “Already in the second quarter, investment in clean energy companies via the public markets has rallied sharply with well over $2 billion of completed secondary issues.”

SO WHAT SHOULD INVESTORS DO? Chinese solar companies sell at a median multiple of 55 times 2009 earnings, a heady bounce from their median nine times just before China announced its stimulus plans in March. Meanwhile, their American cousins have climbed to a median multiple of 27 times — led by a 74% run-up in U.S. technology leader First Solar.

Depending on the price you paid, Shah suggests you might want to lighten up on Canadian Solar and Solarfun based on valuation. But don’t abandon the sector altogether. As high as they are, valuations aren’t that rich in terms of projected 2010 earnings, says Shah. He and Milunovich agree this could be a breakout year, in which select companies — leading Chinese crystalline-silicon panel makers like Yingli, JA and Suntech, and U.S. thin-film innovators like First Solar, SunPower (SPWRA, SPWRB) and Energy Conversion Devices (ENER) — will be able to support a 20-plus multiple.

While small solar companies have more headroom for share-price gains than do larger energy companies, their shares come with more risk and volatility. Don’t be blind to the downside.

Duke Energy starts ’smart’ solar initiative

6/17/2009 1:16:51 PM

CHARLOTTE, N.C.: Duke Energy (DUK) unveiled its first glimpse of “smart grid” technology in the Charlotte area on Tuesday with an array of 213 solar panels in south Charlotte’s McAlpine neighborhood.

The panels, mounted at a substation on Pineville-Matthews Road, will produce 50 kilowatts of electricity, enough to power five homes. The electricity can be sent directly to area distribution lines or charge a massive, 500-kilowatt storage battery that will help stabilize power availability at times of high demand.

Over the past year, Duke has installed 8,100 “smart meters” in area homes, giving customers new details on their home power usage. Digital communications equipment mounted on utility poles and power lines will feed new data about power outages and other problems.

Duke also has enlisted about 100 McAlpine households to test Web-based energy management systems that allow them to fine-tune their electricity use.

David Mohler, Duke’s chief technology officer, called McAlpine a “smart-grid laboratory” for technology that is expected to see wider use during coming years. “It allows us to figure out, how do you use these assets in tandem?”

Duke expects to invest $1billion in smart grid over the next five years.

Smart grid envisions increased interaction with customers, quicker response to outages and power demand, and use of renewable energy such as solar and wind power. It has the potential to save customers money by using less electricity and, possibly, save enough power to delay the need for new power plants.

Already, Mohler said, the McAlpine technology has detected outages at five homes — all before anyone reported the problem.

The banks of solar panels at the substation themselves hint at emerging technology. The panels use less silicon than conventional models, making them cheaper, have reflective backings to increase performance and use plastic rather than metal housings. Three panels, mounted on pedestals, can be turned to catch light at different times of day.

Sunstore Solar of Greer, S.C., did the installation.

The zinc-bromine flow battery, the size of a freight trailer, was chosen because it will leave little hazardous waste at the end of its operating life. It will be the largest of its type to be installed in the United States, Duke says.

—–

To see more of The Charlotte Observer, or to subscribe to the newspaper, go to http://www.charlotteobserver.com.

Copyright (c) 2009, The Charlotte Observer, N.C.

Electric Utilities Rise to Meet Solar Call-to-Action

“2008 Top Ten Utility Solar Integration Rankings” Reports on Power Industry Adoption of Solar Electricity

WASHINGTON–(BUSINESS WIRE)–As financial markets deteriorated in October 2008, Solar Electric Power Association Executive Director Julia Hamm challenged the solar and utility industries to deploy solar power on a massive scale despite new economic barriers. She issued the challenge in a speech at Solar Power International, the nation’s largest solar conference and trade show. Today, the Solar Electric Power Association (SEPA) issued a report demonstrating that the industry has responded even amidst a tough economic climate.

SEPA’s “2008 Top Ten Utility Solar Integration Rankings” report identifies the utilities in the U.S. that have the most significant amounts of solar electricity integrated into their portfolio, and records the increased collaboration of the U.S. electric utility and solar energy industries. The report demonstrates that the utility segment is making a major investment to increase the amount of solar energy in power portfolios, with many utilities doubling the amount of solar power in their portfolio in just one year. The overall installed solar capacity of the top ten ranked utilities rose from 711 megawatts to 882 megawatts, reflecting 25 percent growth. Ninety-two utilities participated in this year’s survey, an increase of more than 80 percent over last year, showing that the utility industry’s interest in solar power is stronger than ever.

“This year’s report demonstrates that solar electricity is finally on the radar screen of utilities across the country,” said Julia Hamm, executive director of the Solar Electric Power Association. “Solar plants large and small are ready for significant build-out, and the utility industry is moving quickly toward mass adoption to meet a variety of business needs.” Renewable portfolio standards, impending carbon policy, and fluctuating costs of power generation and fuel resources top the list of drivers towards improved utility perception of solar electric options.

The report also documents a wave of utility-driven installations, pointing to the growing importance of utilities in the solar power market, and the growing importance of solar power to the business of utilities. Historically, the solar power market has been dominated by customer-driven installations.

“Residential and commercial photovoltaic projects will continue to be important stimulants for job creation and small business growth, but they will be complemented by large-scale photovoltaic and concentrating solar power projects,” said Mike Taylor, director of research and education at SEPA. “The variety of ways solar power is being implemented signals an increased maturity in the market.”

Duke Energy to Build up to 400 ‘Mini’ Solar Power Plants in North Carolina

CHARLOTTE, N.C., May 7 /PRNewswire-FirstCall/ — Duke Energy (DUK) will build between 100 and 400 electricity-generating mini solar power plants throughout North Carolina over the next two years in one of the first large-scale initiatives of its kind in the U.S., CEO Jim Rogers said today.

“Solar and wind are both going to be key parts of our strategy going forward,” Rogers told reporters following the company’s annual meeting.

The North Carolina Utilities Commission on Wednesday issued a decision allowing Duke Energy to proceed with its $50-million proposal to install solar panels on the roofs and grounds of homes, schools, office buildings, shopping malls, warehouses and industrial plants, starting later this year.

Collectively, the solar sites will generate enough electricity to power 1,300 homes.

The electricity will flow directly from the solar sites to the electrical grid that serves all customers.

Duke Energy’s solar initiative will be among the nation’s first and largest demonstrations of distributed generation, in which electricity is produced at numerous micro generating sites rather than at a large, centralized, traditional power plant.

“We are redefining our boundaries. We’re looking ahead and we’re looking around the corner,” Rogers told shareholders attending the meeting. “We believe the future is a low-carbon world. The 21st century mission of our company is to decarbonize our energy supply and provide universal access to energy efficiency.”

Duke Energy will own and maintain the solar panels during their expected 25-year lifespan. The company also will own the electricity generated.

It will pay a rental fee to property owners who host the panels for use of their roofs or land, based on the size of the installation and amount of electricity generated at any given site.

The solar plan is one of several renewable and clean-energy initiatives announced by Duke Energy in the past 12 months, including:

Solar

* The purchase of the entire electricity output (16 megawatts) from what will be one of the nation’s largest photovoltaic solar farms, to be built in 2009-2010 in Davidson County, N.C.

Wind

* The opening of three new electricity-generating wind farms in Texas and Wyoming.

* A plan to build two more wind farms in Wyoming in 2009.

* The potential development of 5,000 additional megawatts of wind energy in 14 states over the next several years.

* An agreement with Wal-Mart to supply wind-generated electricity to up to 15 percent of the retail chain’s 360 stores and other buildings in Texas.

Storm Clouds

Jonathan Fahey, 02.26.09, 05:00 PM EST
Forbes Magazine dated March 16, 2009

First Solar, the darling of the photovoltaic industry, confronts new competition and a bum economy.
image

In warehouses around the world there is a gigawatt of solar panels just sitting in the dark. That represents 20% of all the solar panels produced worldwide in 2008. Prices, predictably, are falling fast. The solar industry is in a period of upheaval, battered by the credit crunch, slowing government subsidies and falling natural gas prices. The company with the most to lose is the industry’s darling–First Solar (FSLR) of Phoenix.

“From a technology perspective, solar is not hard to do,” says Gordon Johnson, an analyst at Hapoalim Securities. “Longer term, this is a commodity business.” Adds a hedge fund investor who speaks anonymously, for fear of offending First Solar: “In the end it will be like selling a toaster–superlow margins and no brand loyalty.”

In an industry marked by broken promises, First Solar has been a success story. It delivered growth and big, uninterrupted profits. Over the past four quarters the company earned $277 million on $1 billion in sales. That’s nearly triple the $103 million profit and $356 million in sales recorded in the year before. Though the company’s stock, at a recent $130, is far from its $300 high of last May, it is comfortably above where it went public in late 2006, $24.50.

First Solar’s success is attributed to Michael Ahearn, the company’s reticent chief executive. (The company declined interview requests.) Ahearn was an adviser to the late John T. Walton, helping the Wal-Mart (WMT) scion find and fund the next great company, when he came across an Ohio outfit called Solar Cells. Ahearn reportedly convinced Walton to invest $45 million in 1999. Ahearn got involved in the business and eventually installed himself as chief executive. By 2002 the company was out of money, but Ahearn convinced Walton to invest another $100 million in what would become First Solar.

Ahearn’s Waltonesque strategy was to drive down cost. There are two basic types of solar cells–traditional crystalline silicon cells made out of the same stuff that powers computers, and thin films made from any of a number of chemical formulations. Thin-film cells are much less efficient at turning sunlight into electricity, but they are cheaper to make. For the buyer, there’s a clear tradeoff. The objective is to get the lowest cost per kilowatt-hour generated. Depending on where it’s installed, a panel will produce something like 1.6 kwh of electricity annually for every watt of peak power.

Utility Solar Assessment (USA) Study

The following is an excerpt from Utility Solar Assessment (USA) Study. To read the full report, please download the PDF file by clicking on the link at the bottom.

The Utility Solar Assessment (USA) Study, produced by clean-tech research and publishing firm Clean Edge and green-economy nonprofit Co-op America, provides a comprehensive roadmap for utilities, solar companies, and regulators to reach 10% solar in the U.S. by 2025.

The study finds that significantly scaling solar power in the U.S. will require the active involvement of utilities. The study delivers a to-do list for the three key stakeholders in the nation’s solar industry. Among others, the action items include:

* For utilities: Take advantage of the unique value of solar for peak generation and alleviating grid congestion; implement solar as part of the build-out of the smart grid; and adapt to new market realities with new business models.

* For solar companies: Bring installed solar systems costs to $3 per peak watt or less by 2018; streamline installations; and make solar a truly plug-and-play technology.

* For regulators and policy makers: Pass a long-term extension of investment and production tax credits for solar and other renewables; establish open standards for solar interconnection; and give utilities the ability to “rate-base” solar.

The USA Study also reports that:

* For the first time solar power is beginning to reach cost parity with conventional energy sources. As solar prices decline and the capital and fuel costs for coal, natural gas, and nuclear plants rise, the U.S. will reach a crossover point by around 2015.

* Installed solar PV prices are projected to decline from an average $5.50-$7.00 peak watt (15-32 cents kWh) today to $3.02-$3.82 peak watt (8-18 cents kWh) in 2015 to $1.43-$1.82 peak watt (4-8 cents kWh) by 2025

Duke Energy to Invest US$100 Million in Solar Power

June 10, 2008

LOS ANGELES – Duke Energy Corp (DUK) said Monday it plans to spend US$100 million to install solar panels at up to 850 homes, schools, stores and factories in North Carolina.

The plan, which requires approval from the North Carolina Utilities Commission, will help Duke meet the state’s requirement that 12.5 percent of its power come from renewables or energy efficiency projects by 2021. By 2010, 0.02 percent of Duke’s energy sold to customers must come from solar.

If approved, Duke would spend two years installing 20 megawatts (MW) of solar panels. The project would help power more than 2,600 homes, the company said in a statement.

Duke’s Carolinas utility would own and operate the solar equipment. The company plans to recover its US$100 million investment through North Carolina’s cost recovery program for renewable energy projects.