How do we know when solar becomes a mainstream energy source?

One tipoff: when mainstream energy companies get serious about solar.

For example, take NRG, a Fortune 250 wholesale energy generator with about 26 GW of capacity in its portfolio. Most of that is coal, natural gas, oil and nukes.

That’s the past.

Going forward, as per Platts article:

“About 85% of NRG Energy’s committed investments for the next three years will go to solar projects, mainly for three utility-scale projects that have received federal loan guarantees, the company said Thursday.

The company is also open to buying coal-fired generation, Crane said. “We’re not afraid of owning conventional generation,” he said. “We would like to own more generation in the Northeast.” However, the outlook for coal plants in the Northeast is dim, according to Crane. “The economics of coal plants in the Northeast are phenomenally challenged right now,” he said. “It’s not a pretty picture.”

In the same vein, General Electric CEO Jeff Immelt made clear that he’s seen the future, and the future’s solar-powered. GE is building a 400 MW solar manufacturing facility in Colorado. How do they feel about the prospects of solar in a post-Solyndra world? Pretty good:

“We are all-in. We are going to invest what it takes … Because I know by 2020 this is going to be at least a $1 billion product line. I don’t care about Solyndra or any of that other stuff, we did this with no government funding. We can do this,” Immelt said.

Solar. Its not just for hippies anymore.

Vote Solar is a non-profit grassroots organization working to fight climate change and foster economic opportunity by bringing solar energy into the mainstream.

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Yesterday morning’s keynote address at the Renewable Energy Finance Forum was delivered by Pennsylvania’s ex-governor Ed Rendell, who spoke on the possibilities that renewable energy may gain traction through politics. I suppose anything’s possible, so I tried to track with every word – and I’m glad I did.

Rendell began by pointing to a few points of concern to all of us:

1) The US is clearly and rapidly falling behind in the arena of innovation generally and in energy particularly. In 2009, for the first time ever, the US Patent Office granted a majority of its overall patents to foreign nations/companies. And nowhere is America losing faster and more obviously than energy.

2) Those of us who believe that the world is headed in an unsustainable direction are running out of time. China will import 80% more coal this year than last, and they’re building one new coal plant per week.

3) By far, the most important energy topic discussed in Congress is light bulbs, gaining far more minutes on The Floor than the runner up issues (subsidies for oil, and energy as a national security concern). Apparently, our leaders are deadlocked on the decision to ensure that incandescent bulbs are not removed from US commerce – and neither side is blinking. Rendell paused for a moment, then asked, “Do Republicans have a huge store of old light bulbs that they wish to sell into the market? They threatened to withhold their votes to elect Fred Upton (R- MI) chairman of the energy subcommittee unless he toed the line on this issue – to which he finally acceded. The Republicans appear to be on an all-out crusade here. Regardless, we’re diddling around while the rest of the world is kicking our butts.”

But Rendell is on a crusade of his own – this one to see a renewable portfolio standard (i.e., a mandate to get to a certain minimum mix of clean energy) at the federal level. “Through years of experience at the state level, we’ve proven that clean energy mandates create payoffs in terms of a large number of good, well-paying jobs. We need a stable policy to support this at the national level – and it has to be permanent; it can’t flip-flop every four years.

So why, precisely, is this not happening? According to Rendell: “There are too many special interests arrayed against it. Over 90% of Democrat voters are in favor of Congress passing legislation that prioritizes clean energy. In fact, over 75% of Republican voters are in favor of the exact same thing. Clearly, the will of the American people is being frustrated by special interests.”

He told a story (perhaps self-serving, since he was the hero – but hey, isn’t that what politicians do?), in which he pointed out that when he was governor, Pennsylvania was one of only nine states that had no investment in pre-K education. “Harrisburg was dominated by lobbyists, and the poor kids — who would benefit most from this — had none. So I said: ‘I’m going to take this one on myself.’ Well, we won that fight, and now our young kids rank number one in reading.”

“Together, we can do this,” Rendell fairly bellowed in summary. “But we can’t do it inside the Beltway. The lobbyists are raising campaign money for our senators and representatives in Washington seven days a week. It never stops. It never stops. There are fund-raisers happening literally every night. If change is going to happen, it needs to take place in hometown America. Your leaders have to hear it from you.”

I don’t consider myself a sucker for political rhetoric, but I have to say that there was a level of gusto in my applause as Rendell left the stage.

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One of the most powerful drivers for the growing commercial solar market is the rising cost of electricity.  If you are a small business owner in the Northeast with a painfully high electricity bill that rises year after year, solar power could be a smart way to lower your costs today and lock in low rates for the future. 

The problem is that you have no idea where to start and you don’t have time to spend sorting through the decisions required to purchase a solar power system.  You could look up a series of solar installers, interview them, check their references, get multiple quotes, read through the detailed contracts, and compare financing options, hoping to produce the best return on investment.  But you really hadn’t planned on spending that much of your time on going solar, so you put it off for later. Often later never comes. Working with a solar broker, a new solar business model, may help businesses go solar and start saving money now rather than not at all.

A variety of factors are making solar increasingly cost effective for homeowners, business owners and landlords.  One factor has been the rising price of electricity in many states, often those that have faced deregulation of the electricity market.  Subsidies that many states provide are another important factor like Solar Renewable Energy Credits (SRECs), and the adoption of Renewable Portfolio Standards that create a market for SRECs.  The combination of financial incentives and high energy costs have driven the rapid growth of solar in California for many years, and are driving the current rapid growth of solar power in New Jersey today.  Several additional states in the Northeast appear equally promising as new centers of solar growth in the months and years ahead.

For the business owner thinking of going solar, the questions include:

• With so many manufacturers of PV panels now, how can you decide which PV panels are the most efficient, weather-resistant and the best overall value?
• Is my commercial property well-suited to installation of PV?
• Do I have the time to meet with many solar salesmen and installers to understand the many options and get the best value?
• How long does it take for PV panels to pay for themselves?
• Would purchasing panels or working through a power purchase agreement provide the best returns on a solar investment?

To help business owners answer these questions and make the adoption of solar power easier, an innovative business model has sprung up in the alternative energy field: solar energy brokering. With a solar broker, you have a single contact who guides you through the whole process, saving you time and frustration, and probably saving you money.

Typically people must themselves contact solar installers and interview them to decide which installer seems to provide the best value.  A solar broker makes the whole process easier, operating like independent insurance agents who educate customers about coverages and help them to identify their particular needs. Solar brokers can also assist with obtaining rebates and incentives. The solar broker acting as an independent agent is an alternative to a direct-sell company that markets and sells directly to the end-customer. But, in contrast to salesmen who represent one solar installer, solar brokers may also work with many solar manufacturers and installers to provide the greatest number of options.

Prime Solar Network based in New Jersey is one business developing the solar broker business model to help businesses and homeowners save money.

“Property owners can try to become an expert when they take the time to meet with several solar companies and compare different design and material options, and different prices for installations or options of financing,” said Tim Cassidy, CEO of Prime Solar Network. “Alternatively, they can rely on experts to do the competitive bidding for them and supply an easy to read report with conclusions on the options. We offer the latter, which sure seems to be the logical choice.”

As long as experts predict that the cost of electricity will continue to rise, businesses will continue to need financially sound solutions like solar.  And with time always a precious resource for businesses, talking to a solar broker could be the easiest way for them to make this happen.

Glenn Croston is the author of “75 Green Businesses You Can Start to Make Money and Make a Difference, and the founder of Starting Up Green (www.startingupgreen.com), helping businesses to stat green and grow greener.

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In April, California made another big leap ahead in the clean energy race. At a solar panel factory in Milpitas, with Dept of Energy Secretary Steven Chu joining him on stage, Governor Jerry Brown signed legislation making the 33%-by-2020 Renewable Portfolio Standard(RPS) the law of the land. (Watch a video of the bill signing here.)

Vote Solar’s newest advocate, Susannah Churchill, took this happy opportunity to develop a memo including an update on how far California’s utilities and others have already gone towards 33%, as well as a summary of what the new law says about how much of the standard can be met via out-of-state renewable projects. Some of her key conclusions include:

• Despite aggressive contracting beyond 20%, California’s large IOUs should still have a significant appetite for renewables procurement in coming years.



• Munis, ESPs and CCAs in California are collectively far behind the large IOUs in their required progress toward 33% renewables. The newly RPS-obligated munis, which serve about one quarter of the state’s load, will represent an important source of renewables demand.

• Renewable projects outside the state that are able to interconnect to a California balancing area, or schedule or dynamically transfer energy directly into a California balancing area, will be better situated to meet future California renewables demand than those that cannot.

• Projects outside the state will be better able to compete for California renewables demand if adequate transmission is available to allow renewable energy to be delivered directly into a California balancing area.

Vote Solar is a non-profit grassroots organization working to fight climate change and foster economic opportunity by bringing solar energy into the mainstream.

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Due to its increasing population, the State of Nevada spends approximately $6 billion every year on imported energy. Therefore, numerous lawmakers in the state have turned to an alternative, smarter solution for powering the energy – through the use of renewable energy that is locally produced. Nevada is blessed with over 250 days of pure sunshine annually and is one of the top nations in the state for solar energy production. Nevada is also rich in geothermal and wind resources as well. The state has created its own renewable portfolio standard – their 2005 standard states that a minimum of 20 percent of total power will be created using renewable sources of energy by the year 2015.

1) Renewable Energy Businesses in Nevada. Nevada has the distinction of housing a large number of renewable energy businesses. Premier Power Renewable Energy, Inc. is one of the leading North American and European providers of high quality solar power systems for commercial, industrial, government, agricultural, utility, and residential use. The Alternative Fuel Vehicle Institute is an organization assisting in offering transportation technologies that minimize environmental impacts. The Clean Energy Center designs as well as installs wind turbines, solar electricity, and solar hot water systems in Nevada and California.

2) Nevada Renewable Energy and Energy Efficiency Authority. The Nevada Renewable Energy and Energy Efficiency Authority is a one-stop-shop website for all things renewable energy and energy efficiency in Nevada. The website offers a number of rebates and incentive programs, tax abatement projects, energy grants, and the various laws, regulations, and rules involved in clean energy. It is the best place for businesses and residents to go to and learn about clean technologies.

3) Nevada State Financial Incentives for Renewable Energy and Energy Efficient Goods and Services. In an effort to make renewable energy and energy efficient products and resources more affordable to businesses and residents, Nevada created a number of financial incentives for assistance. This includes portfolio energy credits, property tax abatements for green buildings, renewable energy systems property tax exemptions, and a large number of utility rebate programs.

4) Nevada-Based Nonprofit Organizations Receive Energy Efficiency Grants. In 2010, NV Energy offered almost $210,000 in energy efficiency grants to different nonprofit organizations. These funds were invested in a number of energy efficient improvements including lighting retrofits and insulation, air conditioning, and window upgrades. The projects are predicted to provide more than 450,000 kilowatts of annual electricity, enough for 51 homes in northern Nevada.

5) Nevada Institute for Renewable Energy Commercialization. The Nevada Institute for Renewable Energy Commercialization is a public-private partnership consisting of a number of utilities, research institutes, energy producers, distributors and users, corporations as well as venture capital organizations. The institute looks to speed up the total deployment and comprehensive adoption of different renewable energy solutions throughout the state and create new jobs.

6) Nevada Renewable Energy Consortium. The Nevada Renewable Energy Consortium is a partnership between the Desert Research Institute, the University of Nevada at Reno and the University of Nevada at Las Vegas along with a number of community colleges around the state. The objective of the consortium is to assist the state in achieving its goal of becoming a national leader in the field of renewable energy research, development, and workforce development. They have a number of projects, including thermal treatment of biomass, low cost and high efficient flexible solar cells, and geothermal-life cycle.

7) Nevada Attracts Renewable Energy Industry. Nevada is looking to show its presence and become a major state for renewable energy investment. Nevada wants to become a leader in many areas of renewable energy. Nevada has a large number of solar energy projects, including Nevada Solar Pone, the third largest solar thermal power plant around the world. Nevada also houses the largest photovoltaic generating plant in the United States. As for geothermal, Nevada has the potential to offer more than one-thousand megawatts of energy. The state has the number one spot for per capita use of geothermal energy.

8 ) Nevada Shows Renewable Potential. Nevada is a large renewable energy base, home to three key sources of renewable energy power – hot springs, wind, and sunlight. In one study done by the Energy Information Administration, roughly half of the state has enough sunlight for the generation of a minimum of six kilowatt hours of solar power for every square meter on a daily basis. Approximately half of the state has ample underground hot springs able to produce a minimum of 80 milliwatts of geothermal power for every square meter. Finally, 25 percent of the state receives ample wind to host a number of utility-scale wind farms. According to John White, executive director at the Center for Energy Efficiency and Renewable Energy, “Nevada is abundantly blessed with renewable energy resources. There’s no question Nevada has the potential to be completely reliant on renewable energy for its power needs, and to be a net exporter.”

9) Nevada-Based Renewable Energy Company Partners with Hyundai and LG. In mid-2010, Matinee Energy, Inc, a Nevada based company reached an agreement with LG Electronics, Inc, and Hyundai Heavy Industries, two of Korea’s manufacturing giants. In the plan the three companies will pledge more than $1 billion to pursue a couple hundred megawatts of energy via utility-scale solar projects throughout the United States. The initial goal is set for 240 megawatts but the total should be higher when the project is over. The first development is the Paragon Ranch Solar Project in New Mexico which is a 200 megawatt solar plant. The joint effort Matinee has with these two companies will assist in their plans to reach a larger client base in both wind and solar energy industries.

10) University of Nevada Renewable Energy Center. The Renewable Energy Center at the University of Nevada in Reno is a fairly new collaborative that focuses on creating programs designed for competitive research to create comprehensive plans to boost the standing of Nevada in the field of renewable energy. The collaboration focuses on four colleges, Agriculture, Biotechnology and Natural Resources; Engineering; Business; and Science. There are current research groups for hydrogen energy and storage, biomass, geothermal, solar energy, and power grid. The facility is one of the most unique in the country allowing for cutting edge research, development, and interaction.

Article by Shawn Lesser, Co-founder & Managing Partner of Atlanta-based Watershed Capital Group – an investment bank assisting sustainable fund and companies raise capital, perform acquisitions, and in other strategic financial decisions. He is also a Co-founder of the GCCA Global Cleantech Cluster Association ”The Global Voice of Cleantech”. He writes for various cleantech publications and is known as the David Letterman of Cleantech for his “Top 10″ series. He can be reached at shawn@watershedcapital.com

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There’s solar trouble in Ohio. For the second year of a two-year-old Renewable Portfolio Standard, Ohio utilities are requesting waivers from their solar electricity requirement. First Energy Corp – which is parent company to Toledo Edison, Ohio Edison and Cleveland Electric Illuminating – reports that they were unable to find enough solar renewable energy credits in Ohio needed to satisfy their 2010 benchmark for solar energy. First Energy has filed for force majeure for the second year in a row claiming that it was a circumstance beyond their control, a legal ‘act of God’, that prevented the company from buying the needed SRECs.

We didn’t believe it was an Act of God last year when First Energy filed for force majeure. Not when the company sought only current year vintage SRECs, knowing well from their experience as a corporation in Pennsylvania that solar projects require the securitization of a long term contract (>10 years) to develop new projects. We filed comments last year explaining that solar projects need the secure revenue stream of long-term contracts in order to make developer investment worthwhile. So when First Energy filed the same sorry excuses again, we could only think it’s awfully suspect that an Act of God would occur twice in a row.

In addition to the long-term contract issue on the wholesale side, First Energy has made a couple other moves that don’t exactly indicate a good faith effort to achieving its solar requirement. For example, the utility was required to start a customer SREC purchase program under the RPS this year. The program they made available to their customers offered a 15 year contract but with a floating price to be re-determined each and every year. Who would enter into a contract to sell a product at an unknown price for this year and the next 14? Only eight solar system owners that’s who.

And finally, First Energy could have followed the example of AEP Ohio, a neighboring utility that has successfully entered into a long term PPA with a 10 MW solar farm and is in development for another 49 MW solar facility as we write. If AEP can do it, so can First Energy.

So in our book, force majeure simply doesn’t fly. It’s more likely that First Energy is unwilling to meet its solar set aside and is not taking the state’s renewable energy standard seriously.

Last year the Public Utilties Commission of Ohio granted solar waivers and let the utilities off the hook. This year, we hope that the PUCO will either order First Energy to issue RFPs for long term contracts or pay the solar penalty ($400/MWh) for failing to meet their benchmark.

Vote Solar is a non-profit grassroots organization working to fight climate change and foster economic opportunity by bringing solar energy into the mainstream.

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Ohio, in 2008, created their own renewable portfolio standard that necessitated 25 percent of the overall energy in Ohio is created out of advanced energy sources by the year 2025. According to the portfolio, more than half of the energy created, must come from in-state sources. The impact of this standard and the venture into clean technologies is very evident across the Buckeye State. Small companies, homeowners, and farmers are investing in wind turbines and solar panels, large scale renewable projects are being introduced and numerous companies are involved in the supply chain manufacturing for renewable energy.

1) Incentives for Renewable Energy and Energy Efficiency. To increase the importance of the use in renewable energies, Ohio offers a number of financial incentives to businesses and residents. Incentives include the Energy Conversion Facilities Corporate Tax Exemption, Home Improvement Program, Energy Smart Home Program, GEO Solar Thermal Rebate Program, Tax Incentives for Improving Air Quality in Ohio, Residential Property Tax Abatement for Green Buildings, Energy Conversion Facilities Sales Tax Exemption, Residential Energy Efficiency Rebate Program, Commercial Energy Efficiency Rebate Program, and a slew of other Utility loan and rebate programs, state loan and rebate programs, sales and property tax incentives, non-profit rebate programs, local loan programs, and corporate exemptions.

2) Tax Elimination on all Renewable Energy Projects to Increase Investment and Jobs. To create more investment into renewable energy products, in late 2010, the governor signed legislation removing all personal and real property taxes for facilities housing renewable energy project t was the belief of the governor that after the recession, it is the duty of Ohio to assist in increasing investment into Ohio. According to the governor, “I signed this order to implement these rules and help spur business investment immediately. This tax reform is part of our economic development strategy to strengthen Ohio’s business climate and help create jobs for Ohioans in our growing industries, like advanced energy.” This tax elimination will lower the tax burden on companies wanting to locate and grow and create new jobs.

3) University Involvement. Because of the increased focus into renewable energy and energy efficiency, many universities are now offering programs and degrees in various renewable energy topics. Wright State University in Dayton, Ohio offers an MSE in Renewable and Clean Energy, the University of Dayton offers an MS in Renewable and Clean Energy, and both University of Northwestern Ohio and Hocking College offer an AAS in Alternative Energy.

4) Ohio Third Frontier. Ohio has allotted more than $20 million in grants for clean technology energy products, such as fuel cell technologies, energy storage, biofuel, wind, and solar. With only the investment into biofuel, more than 20,000 jobs are said to be created and would increase opportunities for not only the development, but the deployment as well of fuel cell technology. Many companies and universities were awarded grants for research and development of renewable energy technologies.

5) Foreign Investment. Because of the growth of the cleantech sector in Ohio, the state has been eyed by some major international cleantech players, one of the biggest being Israel. In mid 2010, major Israeli cleantech company LN Greentech, started a number of meetings with Ohio that resulted in signing with Ohio Clean Technologies Group. This not only created more than 2,000 sustainable jobs, but it also created a direct route to bring clean technologies in clean and alternative energy sources to the Ohio market.

6) Green Energy Ohio. One impact is the further promotion of economically and environmentally sustainable energy policies throughout the state through Green Energy Ohio, a not-for-profit organization dedicated to promoting environmentally and economically sustainable energy policies and practices in Ohio. Green Energy Ohio offers a number of events, job and internship placement, networking, programs and resources into renewable energy. This non-profit organization provides information on all different forms of renewable energy; including biomass, hydro, solar, and energy, in an effort to have more utilize it.

7) Increasing Resources and Increasing Jobs. The growth of renewable resources will transform Ohio’s energy supply as well as provide fuel for the economy. Renewable energy sources will lower Ohio’s 77 percent reliance on coal and its 60 percent reliance on imported power-plant fuel. Ohio, is twenty-seventh in the country currently with wind-power production and is poised to rise up. A study concluded that if Ohio would generate 20 percent of energy from wind production by the year 2020, it would generate more than 3,000 permanent jobs. Ohio also has strong potential in the biomass industry, it is seventh in the nation for the production and could generate 7.5 percent of all electricity needs by 2020 and create hundreds of new jobs in the process. Lastly, Ohio is using solar photovoltaic manufacturing companies to increase its economy and create more than 5,000 jobs.

8 ) Cleveland is well positioned for cleantech. Cleveland’s manufacturing expertise offers strong base for companies in the Cleantech supply chain. The industries that are part of the Cleantech supply chain collectively represent $12.5 billion, or 7.5 percent of Northeast Ohio’s economy today, and is projected to grow more than 20 percent between 2010 and 2015

9) Incentives for Cleaning up Contaminated Lands. To further reduce carbon footprints, it has been a necessity to clean up contaminated lands in Ohio. Funds that assist with this are the Clean Ohio Assistance Fund, the Clean Ohio Revitalization Fund, Urban Redevelopment Loan Program, and the Water Pollution Control Loan Fund.

10) Rules and Regulations for Electric Utilities. A series of rules were created by the Public Utilities Commission of Ohio regarding energy efficiency and renewable energy for electric utilities in the state. The rules require Ohio utility companies to elevate the amount of power generated by renewable technologies, from .25 percent in 2009 to 25 percent by 2025. Furthermore, solar power must reach .5 percent of all power in Ohio by 2024. The last rule mandates each utility report its greenhouse gas emissions with the international climate registry and to file an annual carbon dioxide control plan with the Ohio EPA.

Article by Shawn Lesser, president and founder of Atlanta-based Sustainable World Capital, which is focused on fund-raising for private equity cleantech/sustainable funds, as well as private cleantech companies and M&A. He is also a co- founder of the GCCA Global Cleantech Cluster Association, and can be reached at shawn.lesser@sworldcap.com

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The future of energy is all about abundant, cheap, and clean power. Over the last few months of 2010 the U.S. Department of Interior’s Bureau of Land Management (BLM) and the California Energy Commission (CEC) approved 10 large-scale Concentrating Solar Power (CSP) projects totaling about 4,190 MW. (1) They include the largest single solar power tower (370 MW) and parabolic trough (1,000 MW) projects in history.

In terms of their collective impact on the future of energy, these Desert Power projects may well be the most important energy projects in the world today.

California Solar Valley – Back to the Future

Back in the 1980s Califonia had a solar boomlet led by a company called Luz. Nine CSP power plants collectively known as SEGS (Solar Energy Generating Systems) went up in the Mojave desert using parabolic trough concentrator technology. The SEGS power plants have a total of 354 MW and have generated about 0.7 TWh of electricity yearly over the last two decades. SEGS would fulfill San Francisco residential power needs for about 7 months of each year.

By 1990 SEGS generated about 90% of all the solar power in the whole world which made California the world’s largest solar market and technology developer. But development of new CSP plants came to a grinding halt. America didn’t build another large solar power plant until Nevada Solar One was built near Las Vegas in 2007, adding another 70 MW of solar power to the grid.

The newly approved 4.2 GW of Desert Power CSP will increase America’s solar CSP infrastructure by an order of magnitude. Solar power will significantly contribute to California’s Renewable Portfolio Standard (RPS) goal of 33% clean energy by 2020 and would make the United States the global market leader in Utility Scale solar CSP generation again.

4.2 GW is still tiny compared with the 13 TW (terawatts) of energy consumed around the world each year. Why do I think these desert power projects are so important?

Learning to Cut Costs by Half

Luz didn’t just build solar power plants in the eighties. As it built them its engineers learned to cut costs. Over five years in the 1980s, while building the SEGS plants, Luz cut the cost of solar electricity by 50% – from 28 c/kWh to 14 c/kWh, according to Joshua Bar-Lev, who was on the Luz team in the 1980s and is now is at BrightSource, Inc (Oakland, CA). SEGS plants now generate power at 9 to 12 cents per kWh. (America’s average power price is around 10 c/kWh.) (2)

Solar CSP is not the only set of solar technologies that is pushing costs down. Solar photovoltaic technologies have had exponential drops in costs since the 1970s. Solar PV prices have dropped as much as two-thirds over the last three years alone. (3)

As a result, photovoltaic power plants have already started to puncture grid parity in areas with high solar radiation. A 1MW Concentrating Photovoltaic (CPV) plant at Victor College in Southern California has generated solar power since the summer of 2010 at 8.5 cents per kWh – without subsidies, according to Nancy Hartosch of SolFocus (Mountain View, CA). This is less than the 10 c/Kwh that Americans pay on average (grid-parity). It’s also much less that the prices of more than 40 c/kWh that many pay during the peak summer heat.

Learning curves and cost-cutting are of course not unique to solar. There are several reasons why solar and many other industries have been able to continue to push cost curves down. Several of them actually reinforce one another:

1. Learning Curves. The more we do something the more efficient we become at doing it. According to NASA industries like shipbuilding, aerospace, or repetitive electronic manufacturing have learning curves of 80%-95%.
2. Innovation.  As the market grows in importance it attracts more talent and attention in Universities, Research Labs, and Corporations.  Increased research and development create new technologies and processes or improve existing products to grab a larger share of that growing market.  In my book “Solar Trillions” I wrote a case study on a startup company that developed a simple but ingenious component that promises to to cut solar power costs by 10% or 20%. (2) Even Google has announced it’s working on an innovative mirror for CSP plants. (3)
3. Investments. The more the market grows the more suppliers across the whole solar value chain (from suppliers to customers to competitors) invest in new capacity and new products and services to meet the new demand.  They work with innovators and invest in in-house R&D and product development capabilities. Venture Capital flows into startup companies that create new technologies that cut costs even further.
4. Scale.  Building a large-scale CSP solar plant is a construction project which consumes commodities like concrete, steel, and aluminum. The larger the purchase order of alumimum that a company makes the lower the unit cost that a company is going to get.
5. Bankability. As more solar power plants come online, many bankers lose their fear of financing new plants.  The cost of capital for new solar power plants decreases – which further lowers the levelized cost of solar electricity.

The history of SEGS suggests that the builders of  4.2 GW of new CSP desert power plants in will cut the levelized cost of electricity (LCOE) of utility scale desert solar power by 50% over the next 5 years.

The Future of Energy – Making Legacy Energy Obsolete

This 50% cost shave means that by 2015 we will be talking about desert solar power costs on the order of 7 c/kWh. (Assuming that CSP cost of electricity in the Mojave desert are around 14 c/kWh, which is where Luz left off in 1990.)  This will undoubtedly be cheaper than two major forms of subsidized legacy power: new nuclear and natural gas. The few nuclear plants breaking ground today will already be obsolete by 2015 – years before they even start generating power.  Desert Power CSP will also be within striking distance of coal.

Cost-cutting would create a virtuous cycle of demand and investments in more solar power plants which would lower costs even more which would spur more demand and investments and so on.

How long can the solar industry keep up the desert power cost-cutting?  Can the solar industry cut costs another 50% between 2016 and 2020?  The Bureau of Land Management (BLM) has received requests to develop solar CSP plants totaling of 24,000 MW (24 GW) in California’s deserts. (2)  This does not include desert land to be developed elsewhere in the US Southwest, India, China, Spain, the Middle East and North Africa.  If this wattage is developed over the next decade and the cost curve follows solar history or matches industries such as shipbuilding, aerospace, or repetitive electronic manufacturing then we will be looking at another 50% cut in the solar LCOE. The cost of solar would then be on the order of 3.5 cents/kWh.

This would mean that by 2020 desert solar power will be cheaper than coal.

Put another way, by 2020 solar will be cheaper than the three major forms of subsidized dirty legacy power: coal, natural gas, and nuclear.  Solar, which is by far the most abundant source of energy on earth, will also the cheapest, thus helping to bring about a multi-terawatt clean and sustainable energy infrastructure. This is why the 4.2 GW of California desert power projects are key to the future of energy and the most important energy projects in the world today.

Endnotes:

(1) The California Energy Commission, Large Scale Solar Energy Projects,   http://www.energy.ca.gov/siting/solar/index.html

(2) “Solar Trillions – 7 Market and Investment Opportunities in the Emerging Clean-Energy Economy”, Tony Seba, 2010, http://tonyseba.com/books/solar-trillions/

(3) The New York Times, http://www.nytimes.com/2011/01/15/business/energy-environment/15solar.html

(4) NASA Learning Curve Calculator: http://cost.jsc.nasa.gov/learn.html

(5) CNET, “Google develops prototype mirror for solar energy”,  http://news.cnet.com/8301-11128_3-10460913-54.html

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At the North American International Auto Show yesterday, Ford sponsored a discussion with Stewart Brand, author of the Whole Earth Catalog. In his discussion, he highlighted the dramatic shift in population from rural areas to urban areas in developed nations thus increasing overall energy usage.

Stewart noted that in addition to the intermittency problem associated with wind and solar, each of these forms of renewable energy takes a significant amount of land. To get one gigawatt of power from wind, it takes approximately 250 square miles of landscape. To get one gigawatt of power from solar, it takes 50 square miles of landscape. Don’t forget the fact that you need to build power lines to connect all that power to the grid (see Sunrise Power Link)

Stewart, as of late, has become a believer in either developing clean coal technology or taxing the hell out of it in order to make it a less attractive form of energy. However, it was the discussion on nuclear that raised eyebrows. Stewart stressed that increasing nuclear energy development should be at the top of our list in weaning ourselves off of fossil fuels. He recognized that environmentalists have, over the last thirty years, helped increase regulation on nuclear power plants. However, as Stewart noted, all these regulations will hamper growth in nuclear power in the US while other nations, including China, forge ahead in implementing advanced nuclear technology.

Now the question becomes, if large solar and wind projects are unattractive for any number of reasons, can the Federal government enact new policies to fast track approval of nuclear plants? While there are a number of nuclear power plants being proposed, they will likely come online by 2018 at the earliest.

The other question that is raised by Stewart’s support of nuclear power is whether it should qualify as a renewable energy source for purposes of a renewable portfolio standard/renewable energy standard?

Ford Motor Company paid for my travel and accommodations at the 2-day Driving Green Technology event, I was not compensated in any other manner for my time. My opinions here are my own.

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Just across the bay from Vote Solar HQ, the team of researchers at Lawrence Berkeley National Lab has been busy as ever cranking out detailed reports of valuable information on clean energy markets, policies, costs and benefits. We found two recent reports particularly illuminating:

State RPS Policies are Key to U.S. Solar Market Growth
The dynamic Wiser/Barbose duo issued a report on the various approaches to renewable portfolio standards (RPS) taken across the country – and their effectiveness in deploying solar.

The results are in: RPS’s with solar carve-outs (currently in place in 16 states + DC) have been an important factor in the solar market growth the U.S. has experienced of late. And with new programs gearing up in states nationwide and solar prices becoming competitive with the lower cost renewable resources, this policy mechanism is set to seriously kick up the solar wattage in the coming couple years. BUT not all RPS policies are created equal when it comes to deploying solar. The RPS is just the target – the solar market needs the right policy road to get there, and states have had varying success in providing a smooth path to growth. Resource constraints, restrictive cost caps, inadequate contract terms and a general lack of transparency and predictability can undermine solar deployment under a state’s RPS.

These are issues we discuss with policymakers in forums from Arizona to Pennsylvania. No longer a theoretical exercise, state leaders can now draw on real world experience and proven best practices to design effective programs. This report from LBNL provides a roadmap for navigating those RPS lessons learned.

Geographic Diversity Smooths Solar Output
For folks in the business of keeping the lights on, there’s much debate around how much variable renewable power the grid can support before it becomes a problem . . . the wind doesn’t always blow, clouds happen, how are utilities supposed to deliver the reliable power their consumers demand? Does adding significantly more renewables require more dirty generation to balance it? Or can we really depend on wind, solar and other clean energy sources to meet our nation’s electricity needs? Lots of questions, and there are just not many answers founded in real world data out there.

That’s why we were so excited to see an LBNL’s report on the topic: ”Implications of Wide-Area Geographic Diversity for Short-Term Variability of Solar Power.” Full PDF here and slightly more digestible PPT presentation here.

Conventional power quality analysis has typically looked at output from a single PV system – as you can imagine, a passing cloud can have a real impact on the hour-by-hour performance of that solar system. But LBNL questioned whether that would ring true for the aggregate output from distributed systems across multiple sites. So they tracked solar data from 23 sites throughout Kansas and Oklahoma taken at one-minute intervals for a year to find out.

Conclusion: geographic diversity can significantly reduce extreme changes in aggregated PV output, the resources required to accommodate that variability, and the associated costs of managing variability. These smoothing benefits correlate closely with distributed wind energy production as well.

Low carbon grid, here we come.

Vote Solar is a non-profit grassroots organization working to fight climate change and foster economic opportunity by bringing solar energy into the mainstream.

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