SolarCity’s New Bond Offering Lets Everyone Invest in Home Solar

solar installersOn top of new storage-plus-solar deals for businesses, lease-to-own models, and business partnerships, SolarCity has just cooked up a new way for everyday Americans to invest in the solar power it provides.

The country’s biggest solar services firm and its leading installer of rooftop solar systems, SolarCity announced on Wednesday that it’s now offering bonds online to everyday investors, the New York Times reported. Bonds are a form of debt: the purchaser pays the bond seller a fixed amount, then the seller pays back the amount over a pre-determined amount of time (maturity) along with interest. It’s a way for a company to build up capital to finance future expansions, particularly in its start-up years. SolarCity’s bonds will be sold in $1,000 increments, and will be available to any U.S. citizen, 18 or older, with a domestic bank account. The bonds will mature in one, two, three, or seven years, and will offer interest rates between two and four percent.

[Editor's note: This article originally appeared on ThinkProgress, and is reprinted with permission.]

The company has already raised $575 million through the traditional bond market, which is generally only available to wealthy and institutional investors, and is run through middlemen in the financial services industry. Mosaic is the only other solar company to use similar “crowdfunding” structures to finance individual projects on the small- and medium-scale. But unlike SolarCity it doesn’t install the arrays itself, and it only just recently began moving into the residential solar market.

“We’re similar to crowdfunding in that we’re doing this directly through our own online platform with no fees to purchase,” said Tim Newell, the vice-president of financial products at SolarCity. “We don’t look to earn revenue from the sales of the bonds.”

SolarCity will handle the bond sales and the paperwork through its own website, and the plan is to offer $200 million worth of bonds initially, but expects to make additional offerings on a fairly regular basis in the future. The company will also pay back the bonds using the monthly electricity payments from its solar customers. “The big innovation in this announcement is not solar-specific; it’s the offering of simple, attractive corporate bonds to the general public,” observed Shayle Kann, the vice-president of Greentech Media, a renewable technology research outfit. “The fact that these are ‘solar bonds,’ meaning bonds backed by SolarCity’s revenue streams, is just icing on the cake.”

“By expanding the pool of people who can participate in financing solar with us, we’re diversifying our sources of capital,” Newell added. “That also makes us more resilient in any economic environment and over time should help us be able to have the lowest cost of capital.”

The new direct-to-consumer bonds are admittedly smaller and come with lower rates than the bonds SolarCity has sold in the traditional market. The latter offered longer maturities and interest rates at 4.03 percent or even 4.59 percent.

But in a national and global financial market that’s still seen as somewhat uncertain when it comes to renewable power, direct-to-consumer models, crowdfunding, and other forms of financial innovation have emerge as useful — even crucial — tools in building up green power capacity, either at the level of utilities or for the individual homeowner. “If you look at the task we have to overcome in transforming the energy infrastructure, it’s a massive task,” SolarCity CEO’s Lyndon Rive also said. “We need to deploy large amounts of money as fast as humanly possible… One of our biggest tasks is raising awareness and helping people understand that solar is not a 10-year investment with minimal payback.”

By giving everyday investors a stake in the energy source, solar bonds can also serve as an implicit marketing program or awareness-raiser for solar power and green policy. “If you have some skin in the game, then you’re going to want [solar] to succeed in the same way as when you invest in a stock, you want that stock to be successful,” Amy Davidsen, the U.S. executive director of The Climate Group, a non-profit organization that seeks to promote clean energy technology, told The Guardian. “[This] will include supporting policies to help support clean energy.”

A similar dynamic has played out in Germany, where citizens locally own about half of the country’s renewable power capacity, meaning they benefit from the returns on the investment. That’s kept support high for Germany’s green energy policies, even as they’ve arguably helped contribute to high residential electricity bills, thanks to some quixotic design choices. SolarCity’s situation is a bit different — its raising capital to install solar systems, as opposed to offering ownership in the systems themselves — but the end effect of giving the bond customer a personal stake in the social and economic fate of renewable power more broadly.

Over the long haul, SolarCity hopes the bonds will become a “significant part of our financing strategy,” according to Newell. But, he added, “this is new –- no one has done this before — and we’re going to have to see how it proceeds.”

SolarCity installers photo CC-licensed by Steve and Michelle Gerdes on Flickr.

In Europe (and Everywhere Else), Solar is Cheaper than Dirty Energy

europe solarHopefully, there’s not much surprise in a recent European Commission report (PDF) explaining that the real “direct total cost” of 20th-century energies like coal and nuclear is actually higher than 21st-century solar. The facts are as bright as day.

But the numbers don’t lie, which means the truth is that the EU’s energy competition is clearly tilted toward photovoltaics. Solar world leader Germany has been installing panels like an infrastructure that wants to be taken seriously, and as a result German distributed solar has chopped the value of some of its utilities value in half. So the overall political and economic lesson to be learned from the European Commission’s report is that any utility that wants to have a future should to divest from last century’s globally warmed power plays and turn up the sunshine. The data, and its dollars, more or less demands it.

“With its increasing cost-effectiveness, solar is set to overtake conventional technologies in the short term,” explained European Photovoltaic Industry Association policy director Frauke Thies in a press release. “Despite decades of heavy subsidies, mature coal and nuclear energy technologies still rely on similar levels of public support as innovative solar energy is getting today. However, support to solar electricity is already coming down, in line with the rapid technology cost reduction, as opposed to coal and nuclear energy which remain locked into subsidies as they have been for the last 40 years.”

Of course, it’s just a matter of time before the subsidy crutches are kicked out from oil, natural gas and nuclear, sending them further crashing. Universities, companies and consumers are fleeing them with every new report on global warming’s exponential emissions and disasters. Companies like SolarCity are rolling out solar bonds directly to the people, instead of just powerful financial institutions like Goldman Sachs, who in turn are fielding concerns from their investors about the cratering oil sector.

Everything points toward solar as the prime mover for the energy markets going forward, from the EU outward. Buy in.

German solar home photo CC-licensed by johnathaneric on Flickr.

A Look at the Energy Efficiency Trends that Save Everyone Money

energy efficiency trendsIf you’ve been listening to the candidates in this election season, you’re likely to be pretty depressed about the nation’s energy future (and present). The typical attack ad these days is a litany of complaints about energy prices, security and reliability. But despite all these gloom and doom claims, it just ain’t so, as a new NRDC report released today shows in analyzing the latest available data from government and other sources.

Here are some of the highlights from NRDC’s 2nd Annual Energy Report, “Positive Energy Trends Bode Well for U.S. Security and the Economy,” which underscores that the economic and environmental performance of America’s energy systems has never been better:

  • Forty years of sustained improvements in the productivity of energy use have made energy efficiency not just America’s largest single-energy resource, but a resource whose cumulative contributions to the nation’s energy needs now exceed those of all competitors, from oil and coal to natural gas and nuclear power. This means that when we use energy smarter, we don’t need to generate as much of it or purchase dirty resources like coal and oil.
  • Total U.S. energy use peaked in 2007 and has trended downward since. Despite a small 2.8 percent uptick in 2013, the total still was below the level recorded a full decade earlier. Any lockstep linkage between economic growth and total energy use ended almost 40 years ago.
  • Americans rely increasingly on electricity to power their homes, offices and factories. Yet since 2000, for the first time in modern history, the national growth rate for electricity consumption has dropped below that of the population for an extended period, thanks in large part to our increased energy efficiency (see chart). From 2000 to 2013, electricity consumption rose by a total of less than 7 percent, with a miniscule average annual growth rate of about 0.5 percent, even as the population grew by about twice that rate during the same period. NRDC is working with the nation’s utilities on new business models so they won’t need growth in electricity use in order to prosper.

Thumbnail image for TrendsInUSElectricityUse_F2_lrg.jpg

  • In June 2013, President Obama set a goal of cutting 3 billion tons of carbon pollution by 2030 through his administration’s efficiency standards for appliances and federal buildings. We’re already two-thirds of the way there, and the resulting reductions in our energy bills will exceed $4 billion.
  • The amount of oil used in U.S. vehicles, homes, and businesses rose slightly in 2013 (about 1.5 percent), but is still down almost 12 percent from its 2005 peak. Surprisingly, 2012 oil use was lower than in 1973 (when the nation’s economy was only about one-third its current size), as we reported last year in “America’s (Amazingly) Good Energy News.” Lowering our reliance on oil reduces our need to import it from unstable overseas locations, too.
  • Wind power has dominated the nation’s renewable energy growth since 2000, with a 30-fold increase in its share of generating America’s electricity. By 2013, wind was providing more than 4 percent of U.S. electric generation, and the absolute increase in wind generation from 2000 to 2013 was almost five times greater than the increase in nuclear generation over the same period.
  • Solar is surging too, and in June 2014, for the first time in U.S. history, the U.S. Department of Energy also recently reported that hydropower generation over a full year was less than the combined contribution of other renewable electricity sources (including wind, solar and geothermal).

Looking ahead

But the best is yet to come, in terms of mobilizing clean energy resources to reduce carbon pollution. The U.S. Environmental Protection Agency proposed power plant standards in June 2014 that will keep more than 5.3 billion tons of carbon dioxide (CO2) out of the atmosphere by 2030. Put differently, in just 16 years, the standards will reduce harmful emissions from America’s power plants by 30 percent compared to 2005 levels. And because the EPA proposal calls for states to be credited for energy efficiency improvements in all sectors of the economy, EPA expects that electricity bills would drop as a result (by about 8 percent). For the average customer, that represents an annual savings of about $100.

EPA’s findings are one more reminder that progress toward a clean energy economy goes hand-in-hand with economic health more broadly, and America’s success in linking them will help inspire worldwide progress toward stabilizing atmospheric concentrations of greenhouse gases.

And, as NRDC’s new report shows, fortunately we’re already leading the way down the path to more stability in America’s economy and security – despite the fear-mongering that all those candidates want you to believe.  

This article originally appeared on NRDC’s Switchboard blog, and is reprinted with permission. Visit NRDCs Switchboard Blog

California Backs Some West-Facing Solar Panels to Meet Peak Demand

Last month, the California Energy Commission (CEC) revised the guidelines for its New Solar Home Partnership – a 360-megawatt program within the 3,000-MW California Solar Initiative (CSI) – to provide an incentive for builders to include west-facing photovoltaic systems in newly constructed solar homes instead of more typical south-facing systems.

As detailed in the eighth edition of the official program guidebook, solar installations on new homes oriented with an azimuth between 259 degrees and 281 degrees – that is, 11 degrees plus or minus of due west – will receive 15 percent on top of standard incentives. These currently range between 75 cents and $1.50 per Watt, or an expected performance-based derivative thereof.

Regardless of incentive level or type, the maximum additional amount is capped at $500 per system. Thus, a new subdivision with 100 solar homes all equipped with west-facing PV systems, for instance, theoretically could be worth up to $50,000 in additional incentives.

But why entice builders to point PV systems west in the first place, when on an annual basis south-facing systems clearly have superior output?

“We are hoping to squeeze more energy out of the afternoon daylight hours when electricity demand is highest,” explained David Hochschild, the CEC’s lead commissioner for renewable energy, in a statement. “By encouraging west-facing solar systems, we can better match our renewable supply with energy demand.”

Most residential systems in California today are aligned with a strategy of maximizing annual output for the individual owner rather than with such a holistic renewable energy strategy for the grid.

South-Facing Panels Are Superior on Annual Basis

It’s easy to understand why. As in the rest of the Northern Hemisphere, south-facing solar electric systems in California will generate in the range of approximately 15 to 20 percent more electricity than west-facing systems over the course of a year – even though west-facing installations will generate more output than south-facing systems during the two- to three-sunniest months.

The exact annual output advantage of south-facing PV systems compared to other orientations depends on many variables, including the precise location of the system and its azimuth, tilt, shading, modules, inverter and other factors. But generally, over the course of the year, a system oriented due south at 180 degrees will generate considerably more electricity than that same system facing west at 270 degrees.

Tracking the sun from east to west throughout the day, as many ground-mounted systems do, can boost system yield even further, by another approximately 15 to 30 percent, depending on whether the system uses single- or dual-axis tracking. Because they’re usually attached to or integrated with rooftops, residential systems generally do not use tracking.

Several convenient online or downloadable system output calculators exist for homeowners, builders and laypersons to explore the production differences of fixed residential systems under various orientation scenarios, such as the National Renewable Energy Laboratory’s PV Watts and the CEC’s PV calculator.

For example, PV Watts shows that south-facing 6-kW systems installed at a fixed tilt equal to latitude in Sacramento, Phoenix, Denver and Tampa would produce 16- to 29-percent more electricity annually than the same systems oriented at due west.

Another example, performed using the CEC’s PV calculator, shows that a south-facing 2.18 kW system in San Jose, installed at a 30-degree tilt, would generate 3,920 kWh per year, and qualify for $1,640 in New Solar Home Partnership incentives. That same system, aimed west, would generate just 3,284 kWh per year and qualify for $1,543 in incentives.

This is why it takes an added incentive to encourage west-facing systems. In this scenario, adding 15 percent to the incentive of the west-facing system would boost the total CEC incentive amount to about $1,774 – higher than the incentive for the south-facing system.

Addressing the ‘Solar Duck’ Problem

The problem that the CEC’s new incentive seeks to address – which the California Independent System Operator has depicted in its now-famous “solar duck chart” – is that increasing volumes of south-facing fixed-tilt solar systems contribute to the risk of over-generation on the grid during the midday hours and require ever more flexible operations from conventional power plants, which are required to ramp up at increasingly steep rates in the late afternoon when south-facing solar ramps down.

A paper published earlier this year by the Regulatory Assistance Project identified orienting fixed PV systems to face west instead of south as one of several strategies to help “teach the duck to fly” – to level out load – and to help grid operators “manage the renewable energy transition without fear or resource inadequacy, prices spikes, curtailment of renewable energy or other duck-related symptoms.”

According to the paper, “With time-varying rates, consumers will realize greater value from their PV investment by installing racking to orient the panels toward the west. Properly designed, this should compensate customers for any slight reduction of total PV output that results from this strategy – a significantly higher price per kWh for the same or slightly lower output.”

The CEC’s new west-facing solar incentive is just a start. Taken alone, its impact is likely to be small because the program represents just a fraction of the state’s solar market as a whole.

According to program statistics, more than 29,000 systems, totaling about 87.8 MW, have leveraged the CEC’s New Solar Homes Partnership incentives to date, with just under half of that already installed and the rest reserved.

This compares to 133,233 systems installed on existing homes, or about 1,548 MW, supported by the California Solar Initiative. Including commercial systems, more than 2,200 MW of distributed PV has been installed under CSI. In addition, the California Independent System Operator registered more than 4,200 MW of large-scale PV and around 700 MW of solar thermal electric capacity on the state’s wholesale power grid at the end of September.

But combined with other load-leveling strategies outlined in the Regulatory Assistance Project paper, west-facing incentives like the CEC is offering could help address challenges associated with adding more intermittent solar to the grid.

Other strategies identified in the paper include targeting energy efficiency to the hours when load ramps up sharply; deploying energy storage in targeted areas; substituting some large-scale PV with solar thermal using a few hours of storage; concentrating utility demand charges into the “ramping hours;” and implementing aggressive demand-response programs.

South-facing solar panels photo CC-licensed by Bernd Sieker on Flickr.

How Carla Peterman and the CPUC will Make Calif. an Energy Storage Leader

Energy storage has been hailed as a “holy grail” for clean energy. Through energy storage, renewable power can be tapped whenever it’s needed, not just when nature cooperates.

This means that utilities can overcome the intermittent production of renewable energy while controlling power supply and demand. And residential homeowners capturing unused electricity from rooftop solar systems for later use can enter into a new level of freedom from utility rate volatility.

Despite the promises of energy storage, adoption has been historically slow. It’s been hard for businesses and consumers to justify the premium price tag that comes with this emerging technology.

But many industry watchers say we are at a tipping point. And now is the time to integrate storage in a meaningful way into the energy mix so we can take full advantage of the increasing amount of renewable power being generated.

Helping to drive energy storage adoption on a large scale is Carla Peterman. She is one of five commissioners serving on the California Public Utilities Commission (CPUC).

Peterman was appointed by California’s governor in December 2012 to the commission, which in part regulates privately owned electric companies. In addition to her work at the CPUC, Peterman is pursuing a doctorate in energy and resources at the University of California Berkeley.

Peterman’s previous experience includes a post at the California Energy Commission where she was lead commissioner for renewables, transportation and natural gas. She has also been a Rhodes Scholarship recipient.

Since taking a seat at CPUC’s head table she has been charged with implementing the nation’s first energy storage targets. An assembly bill, formally called AB 2514, gave the CPUC the authority to set energy storage targets for investor-owned utilities.

In October of last year, the CPUC approved a mandate requiring the state’s big three investor-owned utilities — Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric — to procure a total of 1.325 gigawatts of energy storage by 2020. Of that, 200 megawatts will be carved out for customer-side storage.

At the time, the CPUC said the target was a six-fold improvement from California’s then 35 megawatts of energy storage. The commission also said it was the largest energy storage target of its kind in the world.

Carla PetermanAccording to the mandate, utilities will procure energy storage through four solicitations. The first request for proposals will be issued at the end of the year.

It’s a big job to make sure all stakeholders come through with hitting the 1.325-gigawatt storage target. SolarEnergy.net spoke with Peterman about the task at hand and the challenges she foresees.

SolarEnergy: Will utilities be including new residential consumer storage in their first round of energy storage solicitations slated to take place at the end of the year?

Carla Peterman: The utilities didn’t propose new programs at this time for customer side storage. They are relying on the existing Self-Generation Incentive Program, which supports storage as well as permanent load shifting programs in order for them to meet they’re customer side target this side around. Those are existing programs that provide incentives for installing storage that customers can take advantage of already.

SE: What needs to happen at a policy level to increase energy storage for residential consumers?

CP: We need to be thinking about how to align our policies that promote distributed generation with our policies to promote storage. For example, the commission this past year adopted some changes to the net metering program to allow for rooftop PV that is paired with storage to be able to qualify for net metering.

We also need to get more systems out there and learn from them. Learn what are the grid impacts, understand how customer side storage can help reduce peak demand, and how it can help with reliability. Because energy storage is in its infancy, we’re going to need to gain some operational experience with it.

SE: What will guide you as you work to assess the value of customer-side storage?

CP: In terms of AB 2514, the legislation sets out objectives for us to think about as we’re procuring storage. One is greenhouse gas reduction, another is helping to integrate renewables, and another is avoiding upgrades to the distribution system. To the extent that customer-side storage can help with those, particularly upgrades to the distribution system, there will be some value.

SE: How will the CPUC help evaluate the technology being used for energy storage?

CP: One of the things that we are collectively working on is better identifying when and how storage is needed on the system. This will help customers and suppliers of customer side storage figure out what the best products are to provide.

SE: How do you think California’s mandate will impact storage adoption across the country?

CP: I think it’s been a signal to the market that this is a product that has value. I hope that we’ll spur providers of this technology, and more choice for customers. This is all about giving customers some choices in terms of their energy procurement and management.

SE: What measures are in place to make sure California stays on track with hitting its energy storage target?

CP: We are going to do a big assessment of the program in 2016. We’ll have a chance to evaluate what we’ve been doing and whether new measures are needed. We are also coordinating with the Independent System Operator on a storage roadmap so we can identify what are the regulatory barriers to developing more storage.

SE: How do you create policy that fairly pushes the adoption of an emerging technology among diverse, at times adversarial, stakeholders?

CP: No one gets everything that they want, but ultimately I hope that we are able to address the largest concerns and the largest barriers.

My general approach is that we need to be moving forward. We need to be sending the right signals for the type of energy system we want. But we have to have enough sensibility in our approach to adapt to uncertainty, and I think that’s the challenge.

Photos courtesy of Carla Peterman.

Behind the Push to Bring More Women Into the Solar Industry

Kristen Nicole, Women in Solar Energy Executive Director.

The biggest trade association for solar energy in the U.S. has put the need to increase the number of women in the industry front and center this week.

On Tuesday, the Solar Energy Industries Association (SEIA) hosted a webinar showcasing the organization it has invested in to help equalize the gender diversity of solar’s predominately male workforce.

In May, SEIA cut a $10,000 check and signed on as a founding corporate member of Women in Solar Energy, an organization dedicated to increasing the number of women across the solar industry and in leadership positions.

Women comprise 18.7 percent of the U.S. solar workers according to the latest research by solar job tracker The Solar Foundation. The industry employed 142,698 people in total as of November 2013.

Women in Solar Energy had been functioning as an informal organization until January when it obtained nonprofit status.

Since establishing nonprofit status, Boston-based founder and executive director Kristen Nicole, pictured above, has been angling to establish Women in Solar Energy as an essential organization for women in the industry.

Nicole, who is also a consultant on grid and solar integration, has already helped Women in Solar Energy usher in a variety of programs, such as SheSpeaks, where member bios are submitted to industry conferences in a bid to increase representation of women on technical panels.

Women in Solar Energy’s work also includes such efforts as matchmaking women mentors with mentees, and shaping curriculum for school-age children to cultivate an early interest in solar.

During the SEIA-hosted webinar Nicole also spoke of Women in Solar Energy’s burgeoning efforts to get a women’s annual leadership conference started next year.

Beyond an overview of the organization, the webinar worked to bring more members and volunteers to Women in Solar Energy.

Sara Rafalson, vice president of membership and communications for Women in Solar Energy.

“We are really getting off the ground,” said Sara Rafalson, vice president of membership and communications for Women in Solar Energy. Sara is also a senior associate at the solar energy finance and investment firm Sol Systems.

Women in Solar Energy has under 100 members. Membership is not free and will run an industry professional $150 annually to be an official part of the organization.

Rafalson, pictured at right, explained that now is a prime time for interested parties to support the organization and get involved if they want to help shape the organization.

For any organization of this stature to make a meaningful impact some serious money is needed. Women in Solar Energy has set a $100,000 fundraising goal for the year. In addition to SEIA, three corporate sponsors, which include industry leaders Clean Power Finance and SunPower, have signed on.

Although Nicole and Rafalson didn’t discuss specific donation amounts from Women in Solar Energy’s latest corporate sponsors, it was made clear that SEIA remains the biggest financial supporter.

Women in Solar Energy isn’t the only organization working to bring more women into the industry. Multiple efforts have taken root this year to improve the gender balance in the industry as written about previously on SolarEnergy.net.

As the call to bring more women into the solar industry gains momentum, another group based out of San Francisco is looking to improve gender representation by supporting the needs of women across the cleantech and sustainability space.

Currently waiting for official decree of its nonprofit status, Women In Cleantech & Sustainability has been ramping up its efforts.

The organization was founded in 2011, and filed for nonprofit status in February in part to pave an easier road for going after sponsorships and grants.

Lisa Ann Pinkerton, founder of Women In Cleantech & Sustainability.

There is no fee to join Women In Cleantech & Sustainability. To date, the organization has more than 600 members, most hailing from the San Francisco Bay Area, according to Lisa Ann Pinkerton, founder of Women In Cleantech & Sustainability. Pinkerton, pictured at left, is also founder and president of public relations and marketing firm Technica Communications.

Women In Cleantech & Sustainability activities include networking events, talks and trainings.

In September, the organization started its first annual TED Talks-style event, which included speakers such as Kirstin Hoefer, senior vice president of customer solutions for Clean Power Finance; and Carol Neslund, vice president of sales for Enphase Energy.

In late October, Women In Cleantech & Sustainability will offer a training focused on helping women who are working in the likes of the traditional tech industry transition to career in cleantech or sustainability.

Among the programs Pinkerton has on the organization’s agenda to start next year is a virtual, global leadership summit. There are more than 40 different women’s cleantech or sustainability organizations around the world, according to Pinkerton,

“We aren’t talking to each other,” she said about the lack of communications between the organizations.

Pinkerton believes that women’s advancement in the cleantech and sustainability space can be accelerated if these more than 40 women’s organizations open a dialogue, share best practices and support one another.

She also wants an initiative advancing women in cleantech and sustainability to be developed by participants during the summit that all the organizations can back.

“We don’t have the luxury of waiting around for the cleantech and sustainability market to really mature naturally,” she said in regards to ensuring equal gender representation. “We need to put as much effort in them as we can.”

Just Like Homeowners, Airports Are Going Solar to Save Money

solar airportThe biggest solar power project in the entire state of Minnesota is going to be at an airport.

On Thursday, Gov. Mark Dayton joined officials from the Minneapolis St. Paul International Airport to announce the construction of a $25 million solar project there, which will be built on top of two parking ramps at the airport’s main terminal. The solar panels are expected to produce 3 megawatts (MW) of power, and generate close to 20 percent of the airport’s total electricity.

[Editor's note: This article originally appeared on ThinkProgress, and is reprinted with permission.]

Beyond the airport, the project means that Minnesota itself will have 20 percent more solar capacity than it did before.

“Minnesota’s nation-leading clean energy policies, and projects like this one, have significantly reduced carbon emissions in our state while helping create thousands of new jobs,” Dayton said.

Dayton’s not wrong — airport solar projects like the one in Minnesota have been on the rise, creating construction jobs and helping reduce air pollution at airports across the country.

The increase can be attributed both to a Federal Aviation Administration (FAA) program aimed at reducing airport emissions, but also the simple fact that solar can provide significant savings for an industry with high monetary and environmental costs.

“Airport interest in solar energy is growing rapidly as a way to reduce airport operating costs and to demonstrate commitment to sustainable airport development,” says the website of Harris Miller Miller & Hanson Inc., a consulting firm that helped write the FAA’s regulatory guidance for solar power at airports.

SolarAirports

CREDIT: Harris Miller Miller & Hanson, Inc.

Right now, airport operating costs are high, so high that the majority of airports lose money every year. A substantial portion of those costs come from energy use. In fact, the Airport Cooperative Research Program says airports are one of the largest public users of energy in the country. In terms of expenses, energy is often the second largest operating expense, exceeded only by personnel, according to the ACRP.

One way to reduce energy costs is simply to reduce electricity use, which is why many airports have taken to installing solar projects. That’s because when the initial cost of the installing the project is paid off, the airport essentially provides free electricity to itself, disregarding the cost of maintenance.

That scenario, however, is only possible if the airport decides that it would like to privately own the solar operation — something that does not happen widely in the United States due to the substantial cost involved. What happens far more often is that airport solar projects are owned by private companies, which unlike airports, are eligible for tax credits. The airport, in most cases, acts solely as the property owner.

The model is pretty simple. An airport leases its property to a private solar developer, usually for long-term — about 10-30 years — the FAA says. The private business owns all of the electricity produced from the solar panels, and the airport buys that electricity. So while the developer is paying the airport for the land, the airport is also paying the developer for energy. The advantages to this model, according to the FAA, is that it allows the airport to avoid making a huge investment, and lets them have a solar project without having to hire a bunch of solar experts.

In some cases, public electric utilities lease airport land for solar projects and sell electricity back to the airport, much like the private company model. In Florida, for example, Tampa Electric Co. is currently installing 280,000 square feet of solar panels on top of a parking garage at the Tampa International Airport. Construction is estimated to be finished by 2015.

The disadvantage with those models, though, is that the airports still pay for electricity, albeit at less than market rate.

It’s not just money, however, that drives airports to install solar panels at their facilities. The environmental benefits can also be attractive, according to the aviation manager at Denver International Airport, which currently has one of the largest airport solar projects in America.

“We support alternative energy applications at DIA because these projects are good for the environment while positively impacting our bottom line; they are financially sustainable,” DIA aviation manager Kim Day said in a statement. “This airport was built with a goal of being green.”

In fact, the goal of being green can help with the funding of airport solar projects, as well. One of the only airports in the United States that owns its own solar facility is the Albuquerque International Sunport in New Mexico. But it didn’t pay for the panels alone; the FAA granted the airport a combined $3.2 million since 2010 under the agency’s Voluntary Airport Low Emissions (VALE) program, which helps airports maintain air quality standards required under the Clean Air Act.

Through VALE, the FAA estimates that airports are currently reducing ozone emissions by 370 tons per year, the equivalent to removing 20,604 cars and trucks off the road annually. While voluntary, cutting airport emissions through program’s like VALE are critical for reducing the health impacts of pollution. The EPA says ozone emissions can harm human health by triggering chest pain and coughing, and worsening bronchitis, emphysema, and asthma.

Solar airport photo courtesy of the City of San Jose.

SolarCity Brings Its Muscle to Solar Ownership with New Lending Plan

solarcity installersSolar’s failure to spread across the United States, according to renewable energy advocates, lies not with flaws in technology or lack of sun, but in the scarcity of financing.

On Wednesday, the nation’s largest provider of rooftop solar systems, SolarCity, tackled that problem head-on, announcing it will now act as direct lender to customers and offer low-interest loans to finance solar energy installations.

The company’s new financing option, MyPower, lets homeowners own the solar panels without the upfront costs that can top $30,000 for a mid-sized home system. SolarCity puts its financing plan on par with solar leasing, an innovation it helped to pioneer and that has driven the majority of rooftop installations in the past few years.

Dominating the market

Especially important: The funding scheme comes from SolarCity, the company that dominates the U.S. market. Started by Elon Musk, the PayPal billionaire who also is behind the Tesla electric vehicle, SolarCity has more than 80,000 customers and has found extraordinary success through arrangements in which it retains ownership of solar panels while customers lease them.

SolarCity boasts that it signs up a new customer every minute of the workday; it installed more residential solar in the second quarter of 2014 than its next 50 competitors combined.

MyPower is meant to appeal to customers who prefer to own their solar panels yet are looking to reduce the upfront costs of a switch to renewable energy.

Important for growth

“There have been [loan] products out there already, but because SolarCity is the largest residential installer in the U.S., this is further indication that it’s more the mainstream,” said David Feldman, senior financial analyst for the U.S. Department of Energy’s National Renewable Energy Laboratory.  “It’s further validation of what SolarCity has said historically: They’re not in the business of owning solar; they’re in the business of selling systems. And if they need to be the financier to do that, they’ll do it.”

MyPower customers will be able to obtain loans with a fixed annual percentage rate as low as 4.5 percent for 30 years, the company said. Some banks offer loans of up to $40,000 for solar installations, with financing rates starting at 4.99 percent.

It’s hard to overstate how important leasing has been to the growth of the solar industry in the United States in the past two years: More than 90 percent of the residential solar market in New Jersey, the No. 2 U.S. solar state, has consisted of leased systems since the middle of 2013. And in the No. 1 solar state, California, more than two-thirds of installed systems were leased.

Drawbacks to leasing

But leases have drawbacks. Homeowners give up a variety of benefits, such as a federal tax credit of 30 percent of the cost of a system. Ownership locks in lower-cost electricity for 20 or 30 years while utility electricity rates go up. In contrast, homeowners leasing panels typically agree to an escalator clause of a 1 percent or 2 percent rate increase per year – meaning that leasing could be a higher-cost option in the long run.

“The ownership model provides a hedge against rising energy costs because you’re locking in your electricity rates for the next 20 to 30 years, and any energy analyst can guarantee you that electricity rates will be going up,” said Rhone Resch, president of the Solar Energy Industries Association, an industry trade group.

SolarCity’s financing option may also help to make solar affordable in certain states – ironically, many of them in the sunny U.S. southern states like Florida – where laws have made it difficult for rooftop solar to gain a foothold. Longstanding rules meant to protect monopoly utility companies restrict or limit certain types of third-party arrangements in those states.

But to start with, SolarCity will offer MyPower only to customers in Arizona, California, Colorado, Connecticut, Hawaii, Massachusetts, New York and New Jersey.

Marianne Lavelle is a staff writer for The Daily Climate, an independent news service covering energy, the environment and climate change. Follow her on Twitter @mlavelles.

This article originally appeared on The Daily Climate, and is CC-licensed for reprinting. The Daily Climate is an independent, foundation-funded news service covering energy, the environment and climate change. Find us on Twitter @TheDailyClimate.

Photo courtesy of SolarCity.

How Does Solar Stack Up Among the World’s Top Cleantech Companies?

cleantech 100For the sixth year in a row, the Cleantech Group has just published its list of the Global Cleantech 100, recongizing the most innovative for-profit firms working toward a low-carbon future.

The final list of the world’s top cleantech companies drew from a staggering number of entrants: For the 2014 list, almost 6,000 companies were nominated, and the resulting 100 winners come from 17 countries and cover 17 different aspects of clean technologies.

While solar technologies were not the most-represented category — there were nine solar firms among this year’s 100 — solar made a stronger showing than in years past. The companies that made the cut were by and large consumer-facing firms, or “downstream solar” firms, that have helped spur the dramatic rise in home solar installations across the U.S. and around the world.

“This year, with nine companies in the solar category, we are seeing a resurgence of positive sentiment towards solar,” the report notes, “and in particular towards new business models and opportunity sets to increase solar deployment levels around the world.”

Six of firms on the Cleantech 100 fit into the downstream solar category, and most of those are financing-related. Clean Power Finance, Mosaic, Renewable Funding, Sungevity and Sunrun are all focused on overcoming the cost of solar obstacles that keep homeowners from going solar, and Kenya’s M-Kopa is Africa’s first Cleantech 100 winner, offering affordable solar charging to consumers.

The remaining four solar-focused firms (Renewable Funding actually falls under energy efficiency in the cleantech list) span the hardware side of solar. Applied Solar Technologies India makes off-grid solar PV products for telecom companies, QBotix has created robots to help operate and manage solar farms, SolarEdge makes distributed DC systems to increase power generation from solar panels, and SunPartner Technologies is a thin-film PV manufacturer.

With nine companies on the list (10 if you count Renewable Funding), solar is the fourth-largest sector among the 17 represented this year. Energy efficiency is far and away the biggest player in the group: Twenty-four companies on this year’s Cleantech 100 are working in the energy-efficiency space. And two other up-and-coming cleantech sectors also directly affect solar: smart grid companies and energy storage companies bring a combined 14 companies into the Cleantech 100.

Taken together, the Cleantech 100 offers a look at the companies helping to shape a low-carbon future — and highlights the quickly evolving promise that the clean economy offers. The Cleantech Group points out six “megatrends” from the research that led to the creation of this year’s report:

1: The Consumer-Centric Business Models
2: Emerging Market Demand and the Next Go-To Markets
3: Cleantech Goes Inside the Oil & Gas Industry
4: Towards Downstream Solar and Decentralized Energy Services
5: ‘From Waste to Wealth’: Recovery of a Trillion Dollar Market
6: The Big Data Solutions Providers for Utilities

The full report is available for free download from Cleantech.com.

Why LED Lights are Worthy of the Nobel Prize

led lightToday is a great day for the inventors of the blue light-emitting diode (LED), who were just named winners of the prestigious Nobel Prize for Physics. Their invention made it possible to create bright white light in a much more energy efficient way, leading to long-lasting, energy-sipping LEDs in all kinds of products, including the everyday light bulb, the street lights illuminating America’s neighborhoods and highways, and the backlights in flat panel TVs and laptop computers.

[Editor's note: This post, by Noah Horowitz, originally appeared on the NRDC Switchboard blog, and is reprinted with permission.]

The switch from inefficient incandescent light bulbs to LEDs has just begun in the United States and is on track to cut our nation’s electricity bill by more than $13 billion annually and save enough electricity each year to power all the homes in Texas. Those of us working to convert our economy to a clean energy future and reduce emissions of climate-changing pollution are deeply indebted and proud of these three brilliant scientists who won this award: Professor Shuji Nakamura at the University of California Santa Barbara (UCSB) and his two colleagues from Japan.

How blue helps makes white

The secret sauce behind making white light in an efficient way involves mixing red, blue and green light together. While red and green LED lights have existed for a long time, the Nobel Prize-winning physicists reached a breakthrough in semiconductor science about 20 years ago that resulted in the blue LED and eventual mass production of energy-saving LED lighting products that give off white light.

Many of these products use 80 percent less power and last 25 times longer than the products they are replacing, such as the 125-year-old incandescent light bulb that hadn’t changed since the days of Thomas Edison.

LEDs can help those without electricity

Since LEDs are so efficient and only require small amounts of power to produce useful light, new solar-based LED lighting products are now being introduced to developing countries. This is a really big deal, as more than 1.5 billion people around the world do not have access to electricity, and will soon have clean sources of light to replace their kerosene lamps allowing families to cook and read with lighting that does not cause them to breathe harmful particulates into their lungs.

To today’s Nobel Prize-winning scientists who invented the blue LED that jumpstarted the  transformation to more environmentally and economically sustainable lighting, a big thank you on behalf of our planet and its citizens.

This article originally appeared on NRDC’s Switchboard blog, and is reprinted with permission. Visit NRDCs Switchboard Blog

LED lightbulb photo CC-licensed by PiccoloNamek on Wikimedia.