First Solar buys 117 MW project from solar startup

Wed Nov 4, 2009 8:39pm EST

* Solar thermal co Ausra started project in 2007

* Financial terms not disclosed

* First Solar says deal to make way for other project

LOS ANGELES, Nov 4 (Reuters) – Solar industry bellwether First Solar Inc (FSLR) said on Wednesday that it bought a 117 megawatt project in California from Kleiner Perkins-backed solar thermal start-up Ausra Inc, a move that could speed up another 550 MW project in First Solar’s pipeline.

The companies did not disclose the financial terms.

Ausra, which is also backed by Khosla Ventures, said that the sale of the project — called Carrizo Energy Solar Farm — follows its strategy to move away from developing solar projects and focus on supplying large-scale solar steam generators.

“The sale of Carrizo is another step in executing our plan,” said Tom Bartolomei, senior vice president of business development at Ausra, in a statement.

Ausra landed a power purchasing agreement with California utility PG&E (PCG) two years ago for the project, located in San Luis Obispo County. That agreement was withdrawn as part of the sale, the company said.

First Solar can use the newly acquired land to revise the layout of the larger 550 MW Topaz Solar Farm project, which has run into “concerns such as farmland conservation and wildlife needs,” said Kathryn Arbeit, who oversees Topaz.

Both projects include land near each other in San Luis Obispo County.

Shares of First Solar closed down 2 percent at $121.59 on Wednesday on the Nasdaq.

(Reporting by Laura Isensee; Editing by Steve Orlofsky)

US utility wants to deploy largest grid battery ever

Wed Aug 26, 2009 3:11pm EDT

By Poornima Gupta

SAN FRANCISCO, Aug 26 (Reuters) – Southern California Edison said on Wednesday it is seeking a U.S. grant to store wind power in the largest-ever grid storage battery, to be built by A123 Systems.

The utility, a unit of Edison International (EIX), wants $65 million in grants from the U.S. Department of Energy for the pilot storage project and for another project involving integration of home energy management systems into the electric grid.

The utility wants $25 million for the battery project, which would be the largest ever for power grid applications, Paul De Martini, vice president of advanced technologies, said in an interview.

U.S. utilities are racing to increase their production of electricity from renewable energy sources to meet stricter state environmental rules and to gear up for any U.S. move to regulate greenhouse gas emissions from fossil fuels.

But wind and solar are intermittent energy sources, and storing the power — at an economically viable rate — is seen as crucial to making ‘alternative’ energy truly mainstream.

Southern California Edison is seeking the money from a $615 million fund that the DOE has set up for “smart grid”-related pilot projects. Smart grid technology measures and modifies power usage in homes and businesses, improving grid reliability.

The company wants privately-held A123 Systems to assemble a utility-scale battery that would be made up of smaller batteries in an 8,000-square-foot building at an existing substation in the Tehachapi region in California.

The project is important to the California utility as it expects to have about 4,500 megawatts of wind power in the Tehachapi region by around 2015 and needs to find a way to store the power, De Martini said.

“We do recognize that there is a need for energy storage to help with mitigating some of the intermittentcy of wind,” he said.

Southern California Edison is one of the leaders in delivering renewable energy to customers. It transmitted 65 percent of all solar energy produced in the United States last year.

A123 Systems, which makes lithium-ion battery packs for use in plug-in hybrid vehicles, was one of the big winners of the competition for $1.5 billion in federal stimulus funds for companies that make advanced automotive batteries.

The Watertown, Massachusetts-based company, which counts General Electric (GE) among its shareholders, received $249 million to build a battery factory in the United States.

The approval of Southern California Edison’s application would be a big boost for A123 Systems’ push into energy storage batteries for the grid.

The result of the applications is expected in November, De Martini said.

For the second pilot project on smart grid integration, Southern California Edison is seeking $40 million from the DOE and will be working with GE, SunPower Corp (SPWRA, SPWRB) and Boeing Co (BA), he said.

Utility companies around the world are laying the groundwork to upgrade their networks with smart grid technology.

Separately, another California utility, Pacific Gas and Electric Co (PCG), is seeking $25 million from the DOE’s smart grid fund for a compressed air energy storage project, which aims to pump compressed air into an underground reservoir, using mainly wind energy produced during non-peak hours. The air would be released to generate electricity during periods of peak demand.

(Reporting by Poornima Gupta; editing by John Wallace)

Potential of the sun dawns on the US

By Sheila McNulty in Houston
August 18 2009 18:48

Solar panels may not adorn every rooftop but governments globally could finally be giving the industry the fresh impetus needed for it to fulfill its potential.

In spite of record growth, rates over the past five years, high costs (solar energy can be four times as expensive as traditional gas-fired electricity) and the economic downturn mean solar has not become a mainstream energy source.

While many solar companies were profitable before the economic downturn, boosted by government subsidies, the credit squeeze and fall in energy demand has hit them along with the rest of the power sector. This has led some component prices to drop, which has heaped pressure on margins at many manufacturers.

Germany, Japan and Spain lead the market, mainly because their governments took an early lead in pushing the technology’s development and, as a result, the industry is led mostly by European companies.

Germany’s Q-Cells is the world’s largest solar cell manufacturer, while Abengoa Solar, a Spanish company, this year built the world’s largest solar tower, delivering electricity to 10,000 homes.

However, China and the US are making a concerted effort to make up for lost time. China is already the world’s biggest producer of solar panels but exports 90 per cent of the equipment, while many in the industry expect the US to overtake its rivals shortly following increased attention from Washington.

Globally, Jeff Smidt, general manager of Underwriters Laboratories global energy business, says solar submissions for the seal of approval from the safety certification and testing organization is on the rise, particularly from Chinese makers.

“We’re seeing a huge increase in solar panels submitted for our evaluation,” Mr Smidt says.

China is building its first commercial solar power station, which sparked interest from companies globally looking to bid for contracts.

However, the US, following its $787bn economic stimulus package, which includes grants and tax breaks for US clean energy projects over the next 10 years, has attracted the most attention.

PG&E Contracts With Sempra Generation for More Solar Power

Utility Adds 48 Megawatts of Thin-Film Photovoltaic Solar Power to Serve California Customers

Monday July 27, 2009, 1:00 pm EDT

SAN FRANCISCO and SAN DIEGO, July 27 /PRNewswire-FirstCall/ — Pacific Gas and Electric Company (PCG) announced today that it has entered into a contract with El Dorado Energy, LLC, a subsidiary of Sempra Generation, to purchase 48 megawatts (MW) of photovoltaic solar power produced at the Copper Mountain Solar facility. This is the utility’s second contract for renewable energy from Sempra Generation and it is subject to approval by the California Public Utilities Commission.

Sempra Generation’s new Copper Mountain Solar facility will produce an average of 100 gigawatt-hours of electricity each year, equal to the annual consumption of more than 14,000 average homes. Construction of the new solar project is slated to begin later this year and will be completed in 2011.

“PG&E is pleased to collaborate again with Sempra Generation as we work to meet our customers’ long-term energy needs with environmentally friendly power,” said Fong Wan, senior vice president of energy procurement for PG&E. “Solar projects, like the Copper Mountain Solar facility, are ideally suited to help meet our customers’ peak energy loads.”

Today’s agreement, combined with a contract PG&E signed in late 2008 to purchase the entire 10 MW output of Sempra Generation’s existing El Dorado Energy Solar power plant, provides PG&E with all 58 MW generated by the Boulder City, Nev., solar projects. Boulder City is located about 40 miles southeast of Las Vegas.

“This agreement represents a major step forward for Sempra Generation in the development of the largest operational photovoltaic solar power installation in North America,” said Michael W. Allman, president and chief executive officer of Sempra Generation. “It also demonstrates how we leverage our existing investments in land and electric infrastructure to deliver low-cost, large-scale solar power projects. The nearly one million solar panels installed at our two Nevada solar facilities will bring a new source of clean energy to the West and help reduce carbon emissions in the region,” Allman added.

Copper Mountain Solar will create about 200 local construction jobs.

Since 2002, PG&E has entered into contracts for more than 20 percent of its future electric power deliveries from renewable sources. On average, half of the electricity PG&E delivers to its customers comes from carbon-free generating sources, making the company’s energy some of the cleanest consumed by any electric utility customers in the nation.

About Sempra Generation

Sempra Generation, a subsidiary of Sempra Energy (SRE), operates and maintains a fleet of natural gas fueled and solar power plants serving the U.S. market and is in the process of developing renewable power projects in the Pacific Southwest. Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2008 revenues of nearly $11 billion. The Sempra Energy companies’ 13,600 employees serve more than 29 million consumers worldwide.

Solar panel cap looms

7/9/2009 12:45:11 PM

ESCONDIDO, CALIF.: The climate for switching to solar energy in California is sunny, with federal and state tax breaks covering half the installation cost and owners of rooftop panels earning credits against electric bills for the power they generate.

But those credits are forecast to run out in the next couple years.

And a San Francisco Bay Area lawmaker is sponsoring legislation to keep the credits going.

The legislation by Assemblywoman Nancy Skinner, D-Berkeley, took an important step forward Tuesday as her Assembly Bill 560 passed out of the Senate Energy, Utility and Communications Committee, 9-1. The bill next goes to the Senate Appropriations Committee, as early as next week. It passed the Assembly earlier.

The situation is this: When California established a policy allowing homeowners and business owners to receive credits for the power they produce on their roofs, the state set an upper limit for that incentive. Once rooftop power represents 2.5 percent of the electricity supply in particular utility service area, no more credits can be claimed for new installations.

Skinner has been trying to raise that cap to four times the amount, or to 10 percent. The proposal ran into some opposition in Tuesday’s committee hearing on the bill, and the panel changed the number to 5 percent.

That still is enough to keep credits going — and solar panels being installed — for the foreseeable future, she said.

A local homeowner who installed solar panels on his roof a couple years ago has been watching the bill. He says it has huge implications for the future of California’s electrical supply.

“Solar energy, in my opinion, is just going to absolutely explode,” said Peder Norby of Carlsbad, in a telephone interview Tuesday.

But while Norby figures sun power is destined to become bigger, it is unclear how much green energy will come from giant, remote desert solar farms as opposed to roofs of local homes, businesses and public office buildings.

If credits run out for rooftop panels, he said, that will stunt the growth of home-grown power.

“Once you reach the cap, the small guy’s out of the picture,” Norby said.

Similarly, if credits are discontinued, Riverside County’s Elsinore Valley Municipal Water District might reconsider a plan to add solar panels, said district spokesman Greg Morrison.

The existing panels on three buildings and the credits associated with those are helping the agency save 15 percent on annual electricity costs, Morrison said. And the district would like to put up more.

“It seems counterintuitive to not raise it (the cap).” he said. “If you want to reduce energy demand, and certainly peak energy demand, you would want to continue to encourage alternative energy sources like solar.”

The issue has come up because Pacific Gas & Electric Co. (PCG), the giant utility that serves much of northern and central California, is expected to reach the cap in its service territory sometime next year.

San Diego Gas & Electric Co., which serves 3.4 million people in San Diego County and southern Orange County, is a little farther behind, with rooftop solar accounting for 50 megawatts, or a little more than 1 percent of its power supply. In Southern California Edison’s (EIX) territory, which includes Riverside County, rooftop solar panels account for 0.5 percent of the total generating capacity.

A megawatt is the industry yardstick for measuring large amounts of electricity and is generally what is required to keep the lights on in 650 homes.

SDG&E opposes the bill.

“Obviously, we support allowing our solar customers to be able to fully offset their electric consumption,” said Jennifer Briscoe, a spokeswoman for SDG&E. “But we want to make sure that there is not an unfair level of cost sharing.”

The San Diego utility and other power providers argue that, because homeowners get a full retail-price credit for the energy they generate, they are relieved of the responsibility to pay costs associated with financing transmission lines and power plants.

And advocates for the poor contend that unfairly saddles other customers not wealthy enough to install panels with the burden of paying for plants and wires.

“That cost is just shifted to the other customers in the system.” said Sen. Roderick Wright, D-Inglewood, during Tuesday’s hearing.

And, he added, “There ain’t no rooftop solar panels in Watts.”

To a degree, critics have a point when it comes to residential customers, Skinner said. They tend to ramp up their electrical use after they return home from work, when the temperature outside is cooling down. But that’s not the case with the other customers that possess a large majority of panels, she said.

“We have lots of businesses now and public sector entities, whether they be schools, community colleges or city halls, that are making long-term investments in solar,” Skinner said by telephone, following the hearing.

And they use power during the heat of the day, during the very hours when peak demand occurs, she said. That means the power their panels generate is canceling out the need to build new power plants and transmission lines to handle growing peaks.

Forty-four states let customers claim credits for power they produce, and 18 have no limit on how many may take advantage of that arrangement. A limit is likely to survive for some time in California, Skinner said, but it is time to raise it.

“Why would you generate your own electricity if you couldn’t get any credit for that?” she asked.

Solar: Should Utility Customers Subsidize Solar Homes?

Posted by Eric Savitz
barrons.com

Here’s a tricky question: should the average electric utility customer pay higher rates so that people who install solar systems can sell power back to the grid?

That question is at the heart of a story today in the L.A. Times about whether to expand a program under which California utilities buy back power from customers with solar panels. Current state law allows utilities to cap solar power purchases at 2.5% of their generating capacity; a provision now being debated in Sacramento would quadruple the cap to 10%. The piece notes that Pacific Gas & Electric (PCG) could hit the 2.5% cap by the end of the year, while Southern California Edison (EIX) and San Diego Gas & Electric (SRE) are moving more slowly.

All three utilities oppose the higher cap. The Times notes that while the power companies support solar power, they want more information on whether it is fair to increase financial incentives for solar-panel ownership at the expense of the rest of their customers. The piece points out that the so-called “net metering” program which allows people to sell power to the grid is in addition to a 20% state subsidy and a 30% federal income tax credit.

The piece noted that a staff report by the state Senate’s Energy, Utilities and Communications Committee asserted that the utilities are over-paying for power produced by solar customers. Under the legislation, the solar companies pay a full retail rate, “well above the value of the generated power.”

Handful of players seen ruling the solar roost

Wed Jul 1, 2009 12:35pm EDT

By Nichola Groom

LOS ANGELES (Reuters) – Solar panel makers from California to China are gearing up to capture a slice of the growing U.S. market for utility-scale solar power plants, but just a handful of players are expected to snap up most of the business in the coming years.

U.S. players First Solar Inc (FSLR) and SunPower Corp (SPWRA, SPWRB) and China’s Suntech Power Holdings (STP) are widely expected to be the primary winners of large photovoltaic solar projects in the United States in the next few years, with the first two already firmly entrenched in the market.

“I don’t think the utility landscape is going to become as competitive as the commercial market, because the barriers to entry are much higher,” said Barclays Capital analyst Vishal Shah. “It takes a long time to prove your technology to the utility so they can be comfortable. So from that standpoint it limits the competition only to a handful of players.”

For much of the last two years, investors have been banking on an eventual boom in solar power plants in the United States due to increased concerns about climate change that have ushered in generous government incentives for clean energy. That optimism has only intensified in recent months despite a weak global economy and tight credit markets that have hampered development of green power projects this year.

Efforts by the Obama administration to speed development of renewable energy, state mandates for renewable power and a dramatic drop in the cost of solar panels mean “the U.S. market could potentially (and finally) become ‘the promised land’ that investors have been waiting for since late 2007,” FBR Capital Markets analyst Mehdi Hosseini said in a June research note.

PG&E Teams With NRG Energy and eSolar for 92 Megawatts of Solar Thermal Power

Thursday June 25, 2009, 1:00 pm EDT

Project Features Unique Modular Technology to Speed Delivery of Clean Energy to Utility Customers

SAN FRANCISCO, June 25 /PRNewswire-FirstCall/ — Pacific Gas and Electric Company (PG&E) announced today that it has entered into an agreement with Alpine SunTower, LLC, a subsidiary of NRG Energy Inc. (NRG), for 92 megawatts (MW) of renewable, solar thermal power.

The Alpine SunTower project features eSolar’s modular, scalable solar thermal technology and is scheduled for completion in 2012. The project will be located near Lancaster, Calif. and will produce approximately 192 gigawatt-hours of electricity each year. This is equal to the annual consumption of nearly 30,000 average homes.

“PG&E is collaborating with NRG and eSolar to serve our customers’ future energy needs and respond to their demand for renewable resources,” said Fong Wan, senior vice president of energy procurement for PG&E. “The combination of NRG’s proven development skills and eSolar’s innovative technology can provide our customers with clean, affordable energy.”

The project announced today is part of eSolar and NRG’s recently announced plans to develop up to 500 MW of solar thermal power in California and across the Southwestern United States.

“NRG is very pleased to be working hand-in-hand with PG&E, a utility at the forefront of bringing green solutions to the electricity sector, to deploy at scale eSolar’s exciting new solar technology,” said David Crane, NRG’s president and chief executive officer. “As we enter the hot summer months, we are reminded that solar power has a key role to play in helping meet peak demands in California.”

Solar thermal power generates electricity by converting solar energy to heat, which boils water to create steam that turns a turbine. The spinning turbine then generates electricity like a traditional steam plant but without burning fuel or causing emissions, such as greenhouse gases. eSolar’s concentrating solar power projects feature a proprietary combination of optics and software in a pre-fabricated form factor for cost-effective scalability. Its scalable plants will be built in 46 MW unit solutions, each of which requires one quarter square mile of land.

“With the only operating solar power tower technology in the U.S., this new agreement with world-class utility PG&E points to the success of NRG and eSolar to develop solar thermal generation,” said Bill Gross, CEO of eSolar. “eSolar’s power towers can be designed in variable configurations and are easily scalable to meet the growing and evolving needs of forward-looking power providers like PG&E.”

Since 2002, PG&E has entered into contracts for more than 20 percent of its future electric power deliveries from renewable sources. On average, half of the electricity PG&E delivers to its customers comes from carbon-free generating sources, making the company’s energy some of the cleanest consumed by any electric utility customers in the nation.

About Pacific Gas and Electric Company

Pacific Gas and Electric Company, a subsidiary of PG&E Corporation (PCG), is one of the largest combined natural gas and electric utilities in the United States. Based in San Francisco, with 20,000 employees, the company delivers some of the nation’s cleanest energy to 15 million people in northern and central California. For more information, visit www.pge.com/about/.

About eSolar

eSolar is an Idealab company founded in 2007 to develop, construct and deploy modular, scalable solar thermal power plants. eSolar’s approach marries a low-impact, pre-fabricated form factor with advanced optics and computer software engineering to meet the demands of utilities of any size for clean, renewable and cost-competitive solar energy. By focusing on the key business obstacles that have characterized large solar installations – price, scalability, speed of deployment and grid impact – eSolar has developed a proprietary solution to make a dramatic reduction in the cost of solar thermal technology. eSolar is based in Pasadena, California. For more information please visit http://www.esolar.com/.

About NRG

NRG Energy, Inc., a Fortune 500 company, owns and operates one of the country’s largest and most diverse power generation portfolios. Headquartered in Princeton, NJ, the Company’s power plants provide more than 24,000 megawatts of generation capacity, enough to supply more than 20 million homes. NRG’s retail business, Reliant Energy, serves more than 1.7 million residential, business, commercial and industrial customers in Texas. A past recipient of the energy industry’s highest honors–Platts Industry Leadership and Energy Company of the Year awards, NRG is a member of the U.S. Climate Action Partnership (USCAP), a group of business and environmental organizations calling for mandatory legislation to reduce greenhouse gas emissions. More information is available at www.nrgenergy.com.

Cal PUC approves SCE 500-MW rooftop solar program

Thu Jun 18, 2009 3:12pm EDT

By Bernie Woodall

LOS ANGELES, June 18 (Reuters) – A program to place 500 megawatts of solar photovoltaic panels on commercial rooftops in the Southern California Edison territory was approved unanimously by the California Public Utilities Commission on Thursday.

The Edison International (EIX) subsidiary SCE will own half of the 500 MW of solar PV to be installed, and half will be developed under purchased power agreements.

The SCE-owned portion of the program is to be completed in five years and will cost an estimated $875 million. SCE says that each year it will install 50 MW.

SCE and Edison International are based in Los Angeles suburb Rosemead.

The purchased-power portion in which independent solar developers install the PV panels and enter long-term contracts to sell power to SCE, is already under way. While it is not expected that all 250 MW of this portion to be installed within five years, contracts for the installations are likely to be signed by then, an SCE official said. Long-term contracts for solar are usually 20 years.

SCE said the cost for the PV panels it owns is estimated to be $3.50 per installed watt, which is about half the cost to install PV panels on homeowners roofs in the California solar incentives program. That’s because of economies of scale.

PUC Commissioners Rachelle Chong and John Bohn said splitting the program to allow utility-owned and independent producer-owned panels allows comparison of costs and other issues.

The credit crisis has dried up finding for renewable energy projects. Utilities, however, have been a bright spot for solar installations because, effective late last year, they can claim a 30-percent federal tax credit.

Earlier this year, Pacific Gas & Electric Co based in San Francisco said it would pay $1.4 billion to own up to 250 MW of solar generation, its first direct investment in renewable generation in more than a decade. PG&E Co is a unit of PG&E Corp (PCG).

First Solar (FSLR) won the first two competitive bid contracts in the program of panels to be owned by SCE. First Solar has already installed 2 MW on commercial roofs in Fontana, California and is installing 1 MW of panels on roofs in Chino, California.

Eventually, SCE will own 250 MW of PV panels atop 150 commercial roofs that together will cover two square miles (5.2 square kilometers) under lease arrangement with building owners. The Fontana project has 33,700 PV panels and is the largest PV installation in the state.

PUC President Michael Peevey said an advantage of putting PV panels on large commercial buildings are that they are normally near or in cities where the electricity demand is.

(Editing by Christian Wiessner)

SunPower Falls as Analyst Sees Co. Losing PG&E Deal

Posted by Tiernan Ray
barrons.com

Solar panel maker SunPower (SPWRA, SPWRB) was the subject of both a news item and rumor today, and the rumor seems to have had the bigger impact on the stock, pushing it down 5%.

Hapoalim Securities analyst Gordon Johnson said in a note to clients that he thinks SunPower has lost its bid to provide 230 megawatts of solar panels to NextLight Renewable Energy LLC, a company formed by private equity firm Energy Capital Partners to provide alternative energy to utilities such as Pacific Gas & Electric (PCG). NextLight on Friday said it was selected by PG&E to provide solar power-based energy to Northern and Central California customers.

Writes Johnson, “We believe the key reasoning behind SPWRA’s out performance of the market in Friday’s trading session was speculation by the Street that the company signed a 230MW solar PV contract with NextLight. However, based on our sources, while SPWR did indeed bid for this contract, the company was not selected as the panel supplier for this project.” SunPower shares rose 5% on Friday.

Johnson goes on to cite his checks indicating that “a number of medium-sized customers” of SunPower “have indicated that the company has sold them faulty photovoltaic modules.” Johnson says quality issues probably are known in the industry quickly, and so the matter, if true, could cost SunPower some deals. He recommends initiating a short position in the stock and reiterates a “Sell” rating on the shares.

Meantime, SunPower today said it will outsource assembly of solar panels to contract electronic manufacturer Jabil Circuit (JBL) at factories in Mexico, for all panels target at North America. The company said it is the first step in its plan to “regionalize” assembly of solar panels. Jabil has been seeking ways to reduce costs over several years to contend with falling solar panel prices and to maintain operating margin at about 15% of sales, a goal it reiterated when it gave its Q1 conference call back on April 23.

SunPower shares today clearly reflected more of the bad rumor than the good news, with the stock falling $1.68, or 5%, to $29.89.

PG&E Purchases More Solar Power to Serve California Customers

Friday June 5, 2009, 12:15 pm EDT

Utility Contracts With NextLight for 230 Megawatts of Renewable Power for Energy Customers in Northern and Central California

SAN FRANCISCO, June 5 /PRNewswire-FirstCall/ — Pacific Gas and Electric Company (PG&E), a subsidiary of PG&E Corporation (PCG), announced today that it has entered into a contract with AV Solar Ranch 1, LLC, a subsidiary of NextLight Renewable Power, LLC, for 230 megawatts (MW) of solar photovoltaic power. On average, the project is expected to produce 592 gigawatt-hours of renewable electricity each year for PG&E customers throughout northern and central California. This is equal to the annual consumption of nearly 90,000 average homes.

Utility-scale photovoltaic projects feature solar modules that convert sunlight directly into electricity and produce the greatest amounts of power during the afternoon, when electricity demand is high. NextLight’s project will feature state-of-the-art, commercially proven photovoltaic technology. The project will be located in Antelope Valley, Calif. It is expected to begin deliveries in 2011 and be fully operational by late 2013.

“This agreement will help increase the amount of clean energy we provide to our customers and reduce greenhouse gas emissions,” said John Conway, senior vice president of energy supply for PG&E. “Contracting with companies like NextLight is just one of the many ways in which PG&E is harnessing the power of the sun to meet our customers’ energy needs.”

“NextLight is pleased to contract with PG&E for the output of the AV Solar Ranch 1 project,” said Frank DeRosa, chief executive officer of NextLight. “The project will provide cost-effective electricity to PG&E’s customers, create jobs and local economic benefits for the Antelope Valley, and contribute to California’s renewable energy goals.”

This is the third major solar contract PG&E has signed this year. Since 2002, PG&E has entered into contracts for more than 20 percent of its future electric power deliveries from renewable sources. On average, half of the electricity PG&E delivers to its customers comes from carbon-free generating sources, making the company’s energy some of the cleanest in the nation.

About NextLight Renewable Power, LLC

NextLight Renewable Power, LLC is a renewable energy development company focused primarily on utility-scale solar development in the western U.S. NextLight’s experienced development and commercial team does not promote a particular renewable technology; rather, the company possesses the power industry expertise to site, permit, build and finance projects using the best renewable technology for the application. NextLight was formed by the inaugural fund of Energy Capital Partners, a private equity firm, to respond to the growing demand for clean, carbon-free, utility-scale renewable energy. Together, NextLight and Energy Capital Partners combine expertise in project development and financial resources to build, own and operate successful, utility-scale solar generating facilities. For more information, visit NextLight at www.nextlight.com and Energy Capital Partners at www.ecpartners.com.

New Energy Bill Could Light Up Domestic Solar Power Industry

By Miho Nagano
Thursday June 4, 2009, 6:03 pm EDT

The federal comprehensive energy bill could change the whole game for the solar industry.

If the bill passes Congress and becomes law, it would require U.S. utility companies to supply around 15% of their electricity from renewable sources like solar and wind power by 2020.

This means utilities would need large-scale solar systems to generate enough electricity to meet the federal mandate.

Up to now, Germany has been by far the biggest solar energy market — close to a 35% share — because of its heavily government-subsidized solar facilities. The U.S. accounts for only 5% of the global market, according to analysts.

But that could quickly change. The U.S. will be the strongest market in the next two or three years, and could grab a 25% to 30% market share in the long run, says analyst Stephen Chin of UBS.

Price Matters

When utility companies shop for solar panels, price matters. They may go for the providers with the lowest prices. Utilities, which largely depend on public money, are “very price-sensitive,” Chin said.

The industry’s cost-cutting leader, First Solar (FSLR) of Tempe, Ariz., has a big advantage when it comes to pricing. The maker of solar panels can now manufacture solar modules for 93 cents per watt, down 5% from 98 cents in its fourth quarter. Still, it managed a hefty 56% gross margin in the first quarter.

First Solar’s costs per watt of electricity beat Chinese competitors. Yingli (YGE), a Chinese low-cost leader, couldn’t break $1 per watt in the first quarter even with falling silicon costs, says analyst Kelly Dougherty of Macquarie Research.

UBS analyst Chin estimates that First Solar charges $1.80 per watt to utility clients for panels while competitors charge around $2.50 per watt, a difference of 25% to 30%.

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.”

Solar sector rises on utility demand

Solar stocks rise on expectations for rising utility demand, PG&E contract, energy bill

Monday May 18, 2009, 3:46 pm EDT

NEW YORK (AP) — The solar sector soared in Monday trading as last week’s record-setting solar thermal contract from Pacific Gas & Electric (PCG) signaled continued demand from utilities.

Shares also rose ahead of the much-anticipated energy bill, which investors expect will deliver generous provisions for solar energy once passed.

Last week, California utility Pacific Gas & Electric Co. signed new solar contracts with Oakland-based BrightSource Energy for a total of 1,310 megawatts of solar thermal power, the nation’s largest solar deal.

Raymond James analyst Pavel Molchanov said the deal signals solar power’s growing mainstream acceptance by utilities. Solar thermal power is economically viable only in areas of high-sunlight and is a utility-scale technology because it is used to power large, conventional turbines, Molchanov noted.

PG&E’s “mega-deal” for solar thermal power boosts demand from utilities for photovoltaic products as well. As this trend builds momentum, utilities could offer the industry the most durable source of photovoltaic demand.

Molchanov rated GT Solar International Inc. (SOLR), JA Solar Holdings Co. (JASO) and Real Goods Solar Inc. (RSOL) “Outperform.” He also recommended buying shares of First Solar Inc. (FSLR), which he rated “Strong Buy.”

Shares of GT Solar jumped 18 cents, or 3.4 percent, to $5.55 in afternoon trading. JA Solar shares rose 5 cents to $3.16. Real Goods Solar share rose 4 cents to $2.12. Shares of First Solar climbed $7.28, or 4.1 percent, to $184.71.

Elsewhere in the industry SunPower Corp. shares increased $1.35, or 5.4 percent, to $26.40. Trina Solar shares rose 62 cents, or 3.7 percent, to $17.53. Molchanov rated both these companies “Market Perform.”

PG&E and BrightSource Sign Record Solar Power Deal

Wednesday May 13, 2009, 1:35 pm EDT

Power Output of Solar Projects is Expected to Equal the Consumption of 530,000 Average Homes

SAN FRANCISCO, May 13 /PRNewswire-FirstCall/ — Pacific Gas and Electric Company (PG&E) announced today that it has entered into a series of contracts with BrightSource Energy, Inc. for a record total of 1,310 megawatts (MW) of solar thermal power. These power purchase agreements, covering seven projects, supersede the agreements PG&E executed with BrightSource in April 2008 for up to 900 MW of solar thermal power.

The first of these solar power plants, sized at 110 MW and located in Ivanpah, Calif., is contracted to begin operation in 2012. BrightSource will build and place in commercial operation each of its plants as quickly as permitting and infrastructure allow. All seven projects are expected to produce 3,666 gigawatt-hours of power each year, equal to the annual consumption of about 530,000 average homes.

“The solar thermal projects announced today exemplify PG&E’s commitment to increasing the amount of renewable energy we provide to our customers throughout northern and central California,” said John Conway, senior vice president of energy supply for PG&E. “Through these agreements with BrightSource, we can harness the sun’s energy to meet our customers’ power requirements when they need it most – during hot summer days.”

“Today’s agreements reflect the technological milestones that the BrightSource Energy team has achieved over the past year,” said John Woolard, CEO of BrightSource Energy. “Our technology is setting the bar for efficient production of solar energy. We’re thrilled by the opportunity to help PG&E and other leaders bring energy customers more clean and reliable solar energy.”

Since 2002, PG&E has entered into contracts for more than 20 percent of its future electric power deliveries from renewable sources. On average, half of the electricity PG&E delivers to its customers comes from carbon-free generating sources, making the company’s energy some of the cleanest in the nation.

About BrightSource Energy

BrightSource Energy, Inc. provides clean, reliable and low cost solar energy for utility and industrial companies worldwide. The BrightSource Energy team combines nearly three decades of experience designing, building and operating the world’s largest solar energy plants with world-class project development capabilities. The company now has contracted to sell more than 2,600 megawatts of power to be generated using its proprietary solar thermal technology. BrightSource Energy’s solar plants are designed to minimize their impact on the environment and help customers reduce their dependence on fossil fuels. Headquartered in Oakland, Calif., BrightSource Energy is a privately held company with operations in the United States and Israel. To learn more about BrightSource Energy and solar thermal energy, visit www.brightsourceenergy.com.

About Pacific Gas and Electric Company

Pacific Gas and Electric Company, a subsidiary of PG&E Corporation (PCG), is one of the largest combined natural gas and electric utilities in the United States. Based in San Francisco, with 20,000 employees, the company delivers some of the nation’s cleanest energy to 15 million people in northern and central California. For more information, visit www.pge.com.

SunPower Reports First-Quarter 2009 Results

Thursday April 23, 2009, 4:05 pm EDT

- Signed 3-year, 300 to 600 MW supply agreement with FPL Group in April 2009

- Awarded 17 MW power plant agreement with Xcel Energy in April 2009

- Announced 8 MW power plant development agreement with Exelon in April 2009

- Received regulatory approval of 210 MW power purchase agreement with Pacific Gas and Electric

- Booked more than $60 million in North American commercial systems projects

- Began construction of SunPower’s first Italian power plant with Api Nova

SAN JOSE, Calif., April 23 /PRNewswire-FirstCall/ — SunPower Corporation (SPWRA, SPWRB) today announced financial results for its 2009 first quarter which ended March 29, 2009. Revenue for the 2009 first quarter was $214 million and compares to revenues of $401 million in the fourth quarter of 2008 and $274 million in the first quarter of last year. The Components and Systems segments each accounted for 50% of first-quarter 2009 revenue.

“The first quarter of 2009 was the most challenging quarter we’ve seen since SunPower went public in 2005,” said Tom Werner, SunPower’s CEO. “Our quarterly performance was impacted by seasonality, the continuing effects of the credit crisis and difficult economic conditions. Despite these headwinds we were able to deliver strong gross margins in our Components business and positive non-GAAP net income. We have responded to current market conditions by moving to a demand-driven manufacturing model and reducing our planned operating expenses to align with our adjusted revenue outlook. Our recent announcements with FPL Group (FPL), Exelon (EXC) and Xcel (XEL) are representative of the range of opportunities in our utility and power plant business pipeline. Looking forward, we see positive trends emerging in a number of market segments, including the rooftop, distributed power plant and utility markets that give us confidence that we are well positioned for growth in the second half of 2009, 2010 and beyond.

“We were also pleased to announce today our expanded partnership with FPL Group through a significant supply agreement for future solar projects. This builds on our successful commencement of construction of the 25 megawatt DeSoto Next Generation Solar Energy Center in the first quarter of 2009. We look forward to working with FPL Group on future solar power plants around the country,” Werner concluded.

First Solar, Sempra in new solar plant deal

Wed Apr 15, 2009 2:30pm EDT

*First Solar to build 48 MW plant for Sempra in Nevada

*Deal expands existing 10 MW plant in same location

LOS ANGELES, April 15 (Reuters) – First Solar Inc (FSLR) said on Wednesday it would build a solar power plant for Sempra Energy (SRE) in Nevada that, when completed, will be the largest photovoltaic power plant in North America.

The 48-megawatt plant near Boulder City, Nevada, expands a 10 MW plant First Solar built for Sempra’s generation unit last year. It is expected to be completed in 2010.

California utilities have been a bright spot in an otherwise gloomy solar market because they must comply with a state mandate to produce 20 percent of their power from renewable sources by 2010 and then 33 percent by 2020.

First Solar, whose cadmium telluride solar panels cost less than traditional polysilicon-based panels, has benefited from cost-conscious utilities’ efforts to buy more clean, renewable power through deals with Sempra and Edison International’s (EIX) Southern California Edison.

The company also expanded its presence in the U.S. utility market this month with the acquisition of rival OptiSolar’s project pipeline.

“Utilities offer the most durable source of solar demand in a weak economy, because many are under mandate to invest in new renewable generation; and they have some of the best access to financing even in otherwise frozen capital markets,” Raymond James analyst Pavel Molchanov said in a client note.

The latest deal is subject to Sempra executing a power purchase agreement with a utility customer for the electricity the plant will generate.

The existing 10-MW plant supplies power to California utility PG&E (PCG)

Larger solar power plants are in the works in North America, but will be completed after the latest First Solar and Sempra project.

First Solar shares were down 50 cents, or 0.3 percent, at $147.60 in afternoon trade on the Nasdaq. Sempra shares were up 44 cents, or 1 percent, at $45.35 on the New York Stock Exchange.

(Reporting by Nichola Groom)

PG&E looks to the sky for solar power from satellites

4/15/2009 4:19:18 AM

By Steve Johnson, San Jose Mercury News

SAN FRANCISCO, CALIF.: In what is believed to be a world’s first, PG&E (PCG) is asking state regulators to let it hire a southern California company to generate electricity from solar-powered satellites in space.

“Emerging technologies like space solar face considerable hurdles,” the utility acknowledged in a filing with the California Public Utilities Commission on Friday. However, it added, “PG&E believes that potential, significant benefits to its customers from a successful space solar installation outweigh the challenges associated with a new and unproven technology.”

“We believe this is the first of its kind,” said PG&E spokesman Jonathan Marshall.

Under the plan, which PG&E hopes to have approved by the end of October, the utility would hire Solaren of Manhattan Beach to oversee the project, which is expected to deliver 200 megawatts of power to California by as early as 2016. One megawatt of electricity generally is enough to power 750 to 1,000 homes.

The idea would be to have satellites in stationary or so-called geosynchronous orbits over the earth use solar cells to convert the sun’s energy to electricity. The satellite then would transmit that power as radio frequency energy to antennas in Fresno County, which would convert the energy to electricity for the state’s power grid.

In its request to the PUC, the utility noted that satellites routinely convert solar power to radio frequency energy and send it earthbound in the form of communications.

The filing did not disclose the overall cost of PG&E’s proposed contract with Solaren.

Xcel Energy and SunPower Sign Contract to Build 17-Megawatt Solar Photovoltaic Power Plant in Colorado

Tuesday April 7, 2009, 8:00 am EDT

DENVER, April 7 /PRNewswire-FirstCall/ — Xcel Energy (XEL) and SunPower Corp. (SPWRA, SPWRB), a manufacturer of high-efficiency solar cells, solar panels, and solar systems, today announced an agreement to build a 17-megawatt AC photovoltaic (PV) solar power plant in Colorado’s Alamosa County. When completed at the end of 2010, the power plant will be the second-largest high-efficiency solar PV power plant in North America. It is expected to create approximately 200 jobs during construction.

“We believe that solar power generation will play an increasingly vital role in our efforts to meet the wishes of our Colorado customers for more renewable, clean energy sources,” said Tim Taylor, president and CEO for Public Service Co. of Colorado, an Xcel Energy company. “SunPower’s experienced approach to solar power plant design and construction will allow us to quickly complete this important project.”

The plant will use SunPower® Tracker systems, which generate up to 30 percent more energy per land area than conventional systems and reduce land-use requirements. SunPower Trackers tilt toward the sun as it moves across the sky, increasing energy capture and providing more power on hot summer days when utilities need it most.

“Today, high-efficiency solar PV technology is competitively-priced for power plant applications. It’s fast to install, and reliably delivers clean power, particularly during peak demand hours,” said SunPower CEO Tom Werner. “We congratulate Xcel Energy for providing leadership in the promotion of solar power development, and for demonstrating how renewable technologies are part of the solution to ensure the health of our economy and our environment.”

Xcel Energy is ranked as the fifth-largest utility provider of solar power in the nation. In Colorado, the company has acquired more than 25 megawatts of on-site solar generation from homes and businesses participating in Xcel’s Solar*Rewards rebate program. In addition, the company buys power from an 8.2-megawatt solar farm adjacent to where the new facility will be built. The company also is the nation’s number one utility provider for wind power, and is working to meet various renewable energy standards in many of the eight states in which it serves.

By the end of 2010, the largest high-efficiency solar PV plant in North America will be the 25-megawatt (AC) Florida Power & Light (FPL) plant that SunPower is currently building and expects to complete by the end of this year; Alamosa will be the second-largest facility. The FPL plant is almost twice the size of North America’s largest operating solar PV plant, the 12-megawatt (AC) (14-megawatt (DC)) array at Nellis Air Force base in Nevada, also built by SunPower. SunPower has a contract to build a 210-megawatt (AC) (250-megawatt (DC)) solar power plant for Pacific Gas & Electric Company (PCG) in California, which is expected to be complete in 2012.

Construction of the new Alamosa project is contingent on factors including approval by the Colorado Public Utility Commission and project financing.

About Xcel Energy

Xcel Energy is a major U.S. electricity and natural gas company that provides a comprehensive portfolio of energy-related products and services to 3.4 million electricity customers and 1.9 million natural gas customers through its regulated operating companies in eight Western and Midwestern states. Company headquarters are located in Minneapolis. More information is available at www.xcelenergy.com.

BP Solar Targeting Utility-Scale US Solar Projects

April 06, 2009: 01:34 PM ET
Dow Jones

NEW YORK -(Dow Jones)- BP Solar International Inc. is hoping to install 100 megawatts of large solar projects in the U.S. in 2009 as it focuses attention on the utility sector, the company’s chief executive, Reyad Fezzani, told Clean Technology Insight.

The solar unit of London-based BP PLC (BP) is bidding for numerous utility solar projects amid growing competition from such combinations of developers and panel providers as First Solar Inc. (FSLR), SunPower Corp. (SPWRA, SPWRB) and Gemini Solar, a joint venture between MMA Renewable Ventures and Suntech Power Holdings Co. (STP).

“The downstream market in the U.S. is becoming increasingly utility-focused. This means larger projects, longer lead times and increased complexity,” said John Hardy, senior research analyst and vice president at Broadpoint AmTech, a division of Broadpoint Securities Group Inc. “In three years, I would not be surprised if the U.S. market reached 3 to 4 gigawatts in annual installations.”

Driven by state mandates, utilities are seeking large solar installations. A year ago, Fezzani said, a 10-MW power-purchase agreement was considered large. ” Now the average size is 25 to 50 MW. We are bidding for tenders that are orders of magnitude larger, 100 to 150 MW and even one that’s 500 MW,” he said.

BP Solar can manufacture and sell up to 320 MW of solar panels this year, compared with 162 MW in sales in 2008 and 115 MW in 2007. Of the total 2009 sales, about 40% will be distributed to residential customers and 60%, or 192 MW, will serve large commercial and utility scale-projects, with commercial representing less than half of that. The U.S. will probably take up half of the 192 MW, Fezzani said.

Hardy places his bets on SunPower and First Solar as the best-positioned companies to win utility contracts: First Solar because of its proprietary low- cost and reliable thin-film manufacturing process, and SunPower due to a combination of its high-efficiency cells and systems-level tracker technology. But BP’s Fezzani disagrees.

Despite the fact that BP’s solar panels aren’t the cheapest on the market, ” our reserach indicates that on a cents-per-kilowatt-hour basis, over the lifetime of our offer, we are the lowest cost,” Fezzani said. That calculation stems from the long-term performance of BP’s panels that see very little degradation according to recent tests done by the company.

Google to map green energy zones

by Todd Woody
GreenWombat

Can Google help defuse a simmering green civil war between renewable energy advocates and wildlife conservationists in the American West?

That’s the idea behind a new Google Earth mapping project launched Wednesday by the Natural Resources Defense Council and the National Audubon Society. Path to Green Energy will identify areas in 13 western states potentially suitable for massive megawatt solar power plants, wind farms, transmission lines and other green energy projects. The app will also pinpoint critical habitat for protected wildlife such as the desert tortoise in California and Wyoming’s sage grouse as well as other environmentally sensitive lands.

“This was information that was unavailable or very scattered,” said Google.org program director David Bercovich at a press conference. “The potential cost savings from this will be enormous. If we can get people to the right areas and streamline the process that will have enormous benefits in getting clean energy online faster.”

NRDC senior attorney Johanna Wald said her group already is using Path to Green Energy in New Mexico to help plan a new transmission project. “Careful siting is the key to renewable energy development,” she said, noting that NRDC has mapped 860 million acres. “We’re not greenlighting development on places that are on our map but we’re providing a framework for discussion.”

The unveiling of Path to Green Energy comes two weeks after California Senator Dianne Feinstein announced she would introduce legislation to put as many as 600,000 acres of the Mojave Desert off limits to renewable energy development to protect endangered wildlife and their habitats. Solar developers have filed lease claims on a million acres of federal land in the California Mojave and there are state and federal efforts already under way to identify green energy zones across the West.

Path to Green Energy is designed to give regulators and developers a tool to choose the best potential sites for solar and wind farms so they don’t get bogged down in years-long and multimillion-dollar fights over wildlife. Ausra, BrightSource Energy and other developers of the first half-dozen solar power plant projects moving through the licensing process in California have spent big sums on hiring wildlife consultants who spend thousands of hours surveying sites for desert tortoises, blunt-nosed leopard lizards and other protected species.

The Google Earth app won’t do away with the need to do such detailed environmental review but puts in one package a variety of information that developers must now cobble together themselves — if they can find it. Path to Green Energy could also prove valuable to utilities like PG&E (PCG) and Southern California Edison (EIX) as more and more projects are proposed and regulators scrutinize the cumulative impact of Big Solar power plants across regions.

For instance, in California’s San Luis Obispo County, three large-scale solar farms are being planned within a few miles of each other by Ausra, SunPower (SPWRA, SPWRB) and First Solar (FSLR). That has resulted in delays as wildlife officials initiate studies looking at how all those projects affect the movement of wildlife throughout the area. Going forward, Path to Green Energy will give developers a snapshot of where the wild things are, as well as wildlife corridors to help them avoid siting one plant too close to another in a way that may impede animals’ migration. That could save millions of dollars in mitigation costs – money builders must spend to acquire land to replace wildlife habitat taken for a power plant project as well as avoid fights with environmental groups that have become increasingly uneasy about Big Solar projects.

If the desert tortoise is the critter to avoid when building solar power plants in the Mojave, the sage grouse poses problems for Wyoming wind farms. Brian Rutledge, executive director of Audubon Wyoming, said Path to Green Energy shows the densities of sage grouse across the state, allowing developers to stay clear of those areas.

“We get a solid indication of where energy development shouldn’t go,” he said. “Just as important, we get a better sense of the places that should be evaluated for wind turbine farms and transmission lines. The maps make clear that there is plenty of room for green energy.”

The payback from using Web 2.0 software could indeed be tremendous, given that Google (GOOG) spent a scant $50,000 in donations to NRDC and Audubon to create the maps.

Surviving The Solar Shakeout With Innovation

Josh Suskewicz, 03.23.09, 06:00 AM EDT

A First Solar-OptiSolar merger would combine a disruptive technology with a powerful, differentiated business model.

Earlier this month, First Solar (FSLR), one of the world’s leading solar power companies, announced that it was buying start-up OptiSolar’s portfolio of impending projects for $400 million.

OptiSolar had appeared out of nowhere last year to ink massive contracts with utilities, including a record $550 million deal with Pacific Gas and Electric Co., now PG&E (PCG), and seemed poised to become a major player in the industry. I was not the only one who wrote admiringly about its differentiated, fully integrated business model–whereas most solar power companies simply make solar modules that they sell to contractors and developers, OptiSolar planned to control its full value chain–it would actually build and operate power plants using its panels.

Then came the credit crunch, and funding for OptiSolar’s ambitious plans disappeared. First Solar, which has minted cash over the last few years as its highly disruptive thin-film solar panel approach matured, is using its war chest to step into the void. Some observers are voicing concerns about the price and timing of the deal. Why not be conservative with cash while economic storms are still raging? Other analysts would rather see First Solar spend its money on diversifying its technology mix by picking up early-stage competitors with distinct and promising technologies, such as CIGS cells.

These are legitimate warnings–it’s certainly hard to fault analysts for urging caution and diversified portfolios in times like these. But I really like the deal, because it sets the stage for First Solar to marry its disruptive technology with a powerful, differentiated business model.

Taking on OptiSolar’s power plant projects–and, significantly, its plant development team–sets First Solar up to move to an integrated model that will allow it to extend its already industry leading price advantage. Solar as an industry is still immature; system prices are too high and the value chain has not fully cohered. As a result, project costs are pretty variable, and the modules themselves can be just a fraction of the total price tag.

OptiSolar shuts down manufacturing

San Francisco Business Times – by Celia Lamb

OptiSolar Inc., which assembled thin-film photovoltaic panels, is laying off the majority of its employees.

The Hayward company has to suspend its manufacturing and assembly businesses because it could not obtain funding to keep the operations going, company spokesman Alan Bernheimer said.

The company will cut 142 jobs at the Hayward headquarters and 58 from McClellan Park in the Sacramento area, Bernheimer said. The employees will receive 60 days of severance pay and benefits. Only a small “transition team” will remain at both locations, Bernheimer said.

“We continue to search for a buyer for the manufacturing business,” Bernheimer said. “The saddest thing is the break-up of the team, which has done so much to advance large-scale solar. We hope it continues, even if it’s not under the OptiSolar name.”

OptiSolar had planned to build a $1 billion, 550-megawatt photovoltaic farm in San Luis Obispo County. Last year, the company lined up a contract to sell power from that project, which would have been the largest solar farm in the world, to Pacific Gas and Electric Co (PCG).

This month, First Solar Inc. (FSLR) of Tempe, Ariz., announced a deal to buy OptiSolar’s project development portfolio for about $400 million in stock.

OptiSolar stopped construction of a McClellan Park plant, where it would have built solar modules, due to a cash shortage. It laid off about 300 people in January.

Sempra selects First Solar for 50MW addition to El Dorado plant, says analyst

13 March 2009 | By Mark Osborne

After a recent tour of Sempra Energy’s (SRE) 10MW solar energy plant in El Dorado, near Boulder City, Nevada, Pacific Crest financial analyst, Mark Bachman said in an investor note that Sempra was planning a 50MW addition to the site and that First Solar (FSLR) had again been selected for module supply. The deal was expected to be announced in a few weeks, Bachman said in the note.

First Solar had supplied the original modules for the new 10MW plant that was completed in December, 2008. The thin film manufacturer had also handled engineering, procurement and construction as well as monitoring and plant maintenance.

Bachman noted that; ‘there was an abundance of 72.5W panels in the field, which suggests our cost/watt is probably closer to $3.30/W than the $3.17 we reported on Dec. 16, when we also suggested an installed cost/watt of $0.075/kWh. A more refined LCOE estimate would be closer to $0.12/kWh, while we believe the output was sold to PG&E (PCG) under a PPA at roughly $0.14/kWh.’

The Pacific Crest financial analyst had recently claimed that First Solar had been the first PV producer to reach grid parity within certain regions. The latest potential supply deal for First Solar was not in Bachman’s expected order stream, indicating further market share gains for the CdTe thin film module manufacturer.

First Solar buys rival’s utility project pipeline

Mon Mar 2, 2009 6:18pm EST

* First Solar buys OptiSolar pipeline for $400 mln in stock

* Deal includes 550-MW project for PG&E

* Deal includes 1.3 GW of other projects under negotiation

* First Solar will also get 136,000 acres of land rights

By Nichola Groom

LOS ANGELES, March 2 (Reuters) – First Solar Inc (FSLR) said on Monday it would pay rival OptiSolar $400 million in stock for its pipeline of solar projects, including a major installation for California utility PG&E Corp (PCG) and other nascent deals that will rapidly expand the company’s presence in the U.S. utility market.

The deal, which First Solar Chief Executive Mike Ahearn called a “watershed acquisition” for the company, includes 1.3 gigawatts (GW) of solar development projects currently being negotiated with utilities in the U.S. West and 136,000 acres of strategic land rights that have the potential to deploy up to 19 GW of additional solar projects.

The addition of projects that are already at various stages of development to First Solar’s existing pipeline will “catapult us into a whole new league,” Ahearn said on a conference call to discuss the deal.

“This package, in total, we think would be very hard to replicate at all and certainly not without many years of work,” Ahearn added.

Going forward, the projects will incorporate First Solar’s cadmium telluride solar panels rather than Hayward, California-based OptiSolar’s amorphous silicon panels.

Both solar technologies are considered “thin film,” meaning they are cheaper to produce than traditional crystalline silicon panels.

Last year, OptiSolar made headlines when it secured a deal to build a 550-megawatt solar power plant in Central California for PG&E’s Pacific Gas & Electric.

Then earlier this year, the privately-held company cut 300 jobs, or half its workforce, and halted the construction of a manufacturing plant because it could not secure the funding it needed to expand. That lead the company to “entertain a partner,” Ahearn said.

Also on the call, First Solar executives said the deal would add about $70 million to 2009 revenue, but would decrease earnings per share for the year by 35 cents to 40 cents a share.

The deal is expected to add to earnings “modestly” in 2010.

First Solar shares rose about 2.9 percent to $107 in extended trading following the announcement. The stock closed at $103.97 on the Nasdaq after falling $1.77, or 1.7 percent, in regular trading.

(Reporting by Nichola Groom; Editing by Andre Grenon)