Archive for April 2011

Malaysia Joins Other Asian Countries in Adopting Renewable Energy Feed-in Tariffs

By Paul Gipe

Joining several other Asian countries, Malaysia’s parliament has approved a sophisticated system of feed-in tariffs to develop its renewable energy resources.

By 2020, Malaysia expects to have installed more than 3,000 MW of new renewables of which about one-third (1,250 MW) will be from solar PV, and another one-third from biomass (1,065 MW).

On April 5th, Malaysia adopted a system of Advanced Renewable Tariffs and renewable energy targets differentiated by technology.

Malaysia joins Thailand and Taiwan in implementing such a policy. The Philippines has been delaying launch of a similar program for the past year. Japan has a much more limited program that only applies to solar PV and only pays for excess generation.

Ahmad Hadri Haris, the chief technical advisor to Malaysia’s Minister of Energy, announced that the Dewan Rakyat (Malaysian House of Representatives) passed both the Renewable Energy Bill creating the feed-in tariff policy and the Bill for the Sustainable Energy Development Authority. Haris says the legislation will be officially published in May and will likely go into effect in mid summer.

Like a growing list of countries that implement systems of Advanced Renewable Tariffs, such as Uganda, Malaysia’s policy includes specific targets for each technology by year.

For example, in 2011 Malaysia’s quota for solar PV is 29 MW and in 2012 the target is an additional 46 MW. Approximately, one-third of the solar PV capacity is set aside for projects less than 1 MW in size.

In contrast to the Philippines, where its Renewable Energy Act was passed as early as 2008, Malaysia made steady progress from public consultation through passage of legislation, to expected implementation this summer.

Like sophisticated programs in Ontario, Canada, and Germany, Malaysia’s feed-in tariffs are divided into multiple tranches. As in Ontario, solar PV is divided into six tranches, not including Malaysia’s four separate bonus tranches for locally manufactured components.

CLEAN Coalition launches campaign for feed-in tariff for California

On April 26th, 2011, the Clean Coalition (Palo Alto, California, U.S.) announced the launch of a campaign to implement a European-style feed-in tariff policy in California.

Partners in the CLEAN California Campaign include the Los Angeles Business Council (Los Angeles, California, U.S.), the U.S. Green Building Council California chapters, the Local Clean Energy Alliance, the American Biogas Council (Washington, D.C., U.S.), Global Exchange (San Francisco, California, U.S.) and a number of other organizations and private companies.

“We need broad support to help California maintain its national leadership on climate policy action by driving the transition to a clean energy economy,” said former California Energy Commissioner John Geesman.

“The CLEAN California Campaign will play a critical role in enacting policies that will create jobs, attract businesses and private investment dollars to our state, and set the foundation for our economic growth.”

The Clean Coalition refers to the policy as Clean Local Energy Accessible Now (CLEAN), however the organization, which was previously named the FIT Coalition, acknowledges that this is another term for a feed-in tariff.

FIT policies rare in the United States

Feed-in tariffs are the most widely implemented and successful policy in the world for rapid development of renewable energy industries; however in the United States FIT policies based on best practices from Europe are extremely rare.

Instead, the U.S. states have largely relied on renewable portfolio standard (RPS) policies, which require that utilities generate or purchase an increasing portion of their electricity from renewable energy sources.

The mechanism to achieve this goal is primarily punitive in that utilities are forced to pay non-compliance payments if they do not reach RPS goals.

FIT policies do not contain a goal as RPS policies do; instead they contain a mechanism that pays producers of renewable energy a set amount of money above their cost of production, under a standard, “must-take” contract.

Policy to support 12GW goal for renewables

The Clean Coalition states that this policy will support California Governor Jerry Brown’s goal of installing 12GW of new renewable energy projects by 2020.

Governor Brown promoted a feed-in tariff for California as part of this campaign for Governor, however, the Clean Coalition does not yet have a formal statement of support from the Governor.

2011-04-29| Courtesy: Clean Coalition | © Heindl Server GmbH

Ottawa energy co-op seeks solar investors

Ottawa’s first energy co-op is looking for investors in solar power projects to be built in the city.

“We’re interested in people who want to invest their money in the long term. It’s a 20-year project, so it’s like a bond or a debenture,” said Dick Bakker of the Ottawa Renewable Energy Co-op.

Ontario’s Feed-In Tariff system allows small-scale generators to sell to the provincial grid at preferred rates. There are small subsidies for wind turbines and larger ones for solar power. Prices vary with the size of project, but go up as high as 80 cents a kilowatt hour.

The Ontario plan also encourages “community-based” projects, where investors pool their money and build a larger installation than they could build working separately. There’s also encouragement for native-owned projects.

Tonight, Bakker will explain his proposal to anyone who is interested. He has rented the Mayfair Theatre. Admission is $10.

The Ottawa Renewable Energy Co-op sells a membership for $100. After that, investors buy shares in multiples of $5,000, with a $100,000 maximum.

“They’re trying to get locallyowned power generation as opposed to the banks from Calgary or Toronto or San Francisco owning these things. Then you fight NIMBY (“not in my back yard”) easier, because the windmill looks better if (local people) own it and it’s making money for us.”

“We want to take investment money from citizens in Ottawa and invest it in the city of Ottawa. Money, jobs and energy stay in Ottawa.

“We want to do some solar projects.” The group may branch out to wind power and “run-of-river” generation later, but this isn’t certain.

The size of the installation would depend on how much money is invested, he said.

Tonight’s presentation features explanations of the FIT system and films on solar power, as well as short speeches by industry representatives and Ottawa Centre MPP Yasir Naqvi, and a question period. It starts at 7 p.m.

Bakker already has a small solar installation at his home in Manotick Station.

“I own my own facility and now I’d like to start a bigger project.”

The group’s website is at .

Kristopher Stevens, president of the Ontario Sustainable Energy Association, said similar community projects are starting around the province.

“There’s a bunch of them going on. One of the first projects was a Unitarian Church here in Toronto that did a 20-kilowatt system,” he said. Others followed in Burlington, Barrie, and through a group of 40 farmers in Norfolk County.

These projects allow people to participate in supplying power “and at the same time not have to put a $20,000 system on their roof.”

© Copyright (c) The Ottawa Citizen

United States Solar Photovoltaic Project Order Backlog Surpasses 12 GW

United States Deal Tracker report. While the PV industry is facing the effects of large cuts in feed-in tariffs across Europe, the order backlog in the US confirms that the country will be one of the most promising growth markets over the next 24 months. The US market doubled in size in 2010 and is forecast to do so again in 2011.

Figure 1: Non-Residential Projects by System Size* (2010-2015)

Quote start“The non-residential segment has traditionally been driven by corporate and government customers,” Craig Stevens, president of Solarbuzz. “As Renewable Portfolio Standards take effect, utilities have become a key driver of medium term market growth.” Quote end

San Francisco, CA (Vocus/PRWEB) April 06, 2011

The solar photovoltaic (PV) project order backlog for the United States market has now soared past 12 gigawatts (GW), according to the latest edition of the Solarbuzz United States Deal Tracker report. While the PV industry is facing the effects of large cuts in feed-in tariffs across Europe, the order backlog in the US confirms that the country will be one of the most promising growth markets over the next 24 months. The US market doubled in size in 2010 and is forecast to do so again in 2011.

The April edition of the United States Deal Tracker logs over 375 non-residential projects in the US project pipeline being planned or going through a Request for Proposal process. It also includes an additional 775 projects that total 0.7 GW of PV systems either installed or being installed since January 1, 2010.

Non-residential PV systems in the US market range from just 50 kilowatts up to hundreds of megawatts. Even with the growing utility presence in the market, the corporate and government sub-segments still have 76% of the completed projects since January 1, 2010.

Utility-scale projects under development are found in 29 states, but four states account for 80% of this total, measured in terms of MW. This segment is increasingly being serviced by specialist project developers, but also directly by major cell and module manufacturers acting in that role. The top 10 developers account for 57% of the utility pipeline in MW terms. “The non-residential segment has traditionally been driven by corporate and government customers,” Craig Stevens, president of Solarbuzz. “As Renewable Portfolio Standards take effect, utilities have become a key driver of medium term market growth.”

In terms of numbers of non-residential projects, the top 10 states are California, New Jersey, Massachusetts, Pennsylvania, Arizona, Texas, Colorado, North Carolina, Nevada, and Florida.

Over 260 different installation companies are servicing the identified 1150 non-residential projects that buy their modules either directly from manufacturers or through distributors. First Solar, Suntech Power, Sharp, Yingli Green Energy, and SolarWorld are the most represented module manufacturers in this segment.

The installed system pricing data shows that the largest US projects are now being completed in the range of $3-4 per watt DC. The reduction in non-residential PV system prices is key to stimulating US market growth.

The Solarbuzz United States Deal Tracker report tracks installed system prices by project across the country, including the fast growing utility segment—providing unrivalled price transparency to aid bid responses by the solar industry and for the purchasers of systems. The parameters in the database for each installation include owner or host name, project developer, installer, system size, system type (ground mount, roof mount, BIPV, tracking and carports), Power Purchase Agreement provider, city and state, timing of installation and installed pricing data. For more information or to order Solarbuzz regional reports, contact us at one of our seven global locations, email us at contact(at)solarbuzz(dot)com, or call 1.516.625.2452.

About Solarbuzz
Solarbuzz, part of The NPD Group, is a globally recognized market research business focused on solar energy and photovoltaic industries. Since 2001, Solarbuzz has grown its client-base to include many of the largest global PV manufacturers, major investment banks, equipment manufacturers, materials suppliers, hedge fund companies, and a vast range of other multi-nationals. Solarbuzz offers a wide array of reports, including Marketbuzz®, an annual global PV industry report, and Solarbuzz® Quarterly, which details both historical and forecast data on the global PV supply chain. The company’s research also provides annual downstream PV market reports by region for Europe, Asia Pacific and US markets. In addition, is a recognized and respected online resource within the solar industry. For more information, visit or follow us on Twitter at @Solarbuzz.

About The NPD Group, Inc.
The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,800 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, contact us or visit and Follow us on Twitter at @npdtech and @npdgroup.
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SAVVY Public Relations
Phone: 925-336-9592
E-mail: stacey (at) savvypublicrelations (dot) net

Study by Lawrence Berkeley National Lab Finds that Solar Photovoltaic Systems Boost the Sales Price of California Homes

Last week, LBNL announced completion of a new report entitled, “An Analysis of the Effects of Residential Photovoltaic Energy Systems on Home Sales Prices in California.”

An increasing number of homes with photovoltaic (PV) energy systems have sold in the U.S., yet relatively little research exists that estimates the impacts of those PV systems on home sales prices.  A clearer understanding of these effects might influence the decisions of homeowners considering installing PV on their home or selling their home with PV already installed, of home buyers considering purchasing a home with PV already installed, and of new home builders considering installing PV on their production homes.

This research analyzes nearly 2,000 California homes that have sold with PV installed.  Across a large number of model specifications and robustness tests, the analysis finds strong evidence that California homes with PV systems have sold for a premium over comparable homes without PV systems.

Specifically, some of the key findings from the analysis include:

  • The average home sales price increases from PV across the full sample of homes in the dataset ranges from approximately $3.9 to $6.4 per installed watt (DC) of PV.
  • Most models coalesce near an average effect of $5.5/watt, which corresponds to a home sales price premium of approximately $17,000 for a relatively new 3,100 watt PV system (the average size of PV systems in the study).
  • These average sales price premiums appear to be comparable to the investment that homeowners have made to install PV systems in California, and homeowners with PV also benefit from electricity cost savings after PV system installation and prior to home sale.
  • When expressed as a ratio of the sales price premium to estimated annual electricity cost savings associated with PV, an average ratio of 14:1 to 22:1 can be calculated; these results are consistent with those of the more-extensive existing literature on the impact of energy efficiency on home sales prices.
  • The analysis finds that sales price premiums decline as PV systems age.
  • When the data are split between new and existing homes, a large disparity in premiums is discovered: the research finds that new homes with PV in California have demonstrated average premiums of $2.3-2.6/watt, while the average premium for existing homes with PV has been more than $6/watt.
  • The research suggests several possible reasons for the lower premium for new homes, including that new home builders may also gain value from PV as a market differentiator, and may therefore have been willing to accept a lower premium in return for faster sales velocity.

The full report can be downloaded from:

A 2-page summary of the report’s key findings can be found at:

Funding and support for this study came from the U.S. Department of Energy’s Solar Energy Technologies Program, the National Renewable Energy Laboratory, and the Clean Energy States Alliance.

Below is a press announcement distributed with the study.

Media contact: Allan Chen (510) 486-4210,

Technical contacts:  Ryan Wiser, (510) 486-5474,,  and Ben Hoen, (845) 758-1896,

New Berkeley Lab Study Finds that Residential Solar Photovoltaic Systems Boost the Sales Price of California Homes

Berkeley, CA– New research by the U.S. Department of Energy’s (DOE) Lawrence Berkeley National Laboratory finds strong evidence that homes with solar photovoltaic (PV) systems sell for a premium over homes without solar systems.

“We find compelling evidence that solar PV systems in California have boosted home sales prices,” says Ben Hoen, the lead researcher on the study and a Principal Research Associate at Berkeley Lab. “These average sales price premiums appear to be comparable with the average investment that homeowners have made to install PV systems in California, and of course homeowners also benefit from energy bill savings after PV system installation and prior to home sale.”

The research finds that homes with PV in California have sold for a premium, expressed in dollars per watt of installed PV, of approximately $3.9 to $6.4/watt.  This corresponds to an average home sales price premium of approximately $17,000 for a relatively new 3,100 watt PV system (the average size of PV systems in the Berkeley Lab dataset), and compares to an average investment that homeowners have made to install PV systems in California of approximately $5/W over the 2001-2009 period.

“This is a sizable effect,” says co-author and Staff Scientist Ryan Wiser of Berkeley Lab.  “This research might influence the decisions of homeowners considering installing a PV system and of home buyers considering buying a home with PV already installed. Even new home builders that are contemplating PV as a component of their homes can benefit from this research.”

Approximately 2,100 megawatts (MW) of grid-connected solar PV have been installed in the U.S.  California has been and continues to be the country’s largest market for PV, with nearly 1,000 MW of installed capacity.  California is also approaching 100,000 individual PV systems installed, more than 90% of which are residential.  Though an increasing number of homes with PV systems have sold, relatively little research has been performed to estimate the impacts of those PV systems on home sales prices.

The Berkeley Lab research is the first to empirically explore the existence and magnitude of residential PV sales price impacts across a large number of homes and over a wide geographic area.  The research analyzed a dataset of more than 72,000 California homes that sold from 2000 through mid-2009, approximately 2,000 of which had a PV system at the time of sale.  “This is the most comprehensive and data-rich analysis to date of the potential influence of PV systems on home sales prices,” says co-author and San Diego State University Economics Department Chair Mark Thayer.

The research controlled for a large number of factors that might influence results, such as housing market fluctuations, neighborhood effects, the age of the home, and the size of the home and the parcel on which it was located.  The resulting premiums associated with PV systems were consistent across a large number of model specifications and robustness tests.

The research also shows that, as PV systems age, the premium enjoyed at the time of home sale decreases.  Additionally, existing homes with PV systems are found to have commanded a larger sales price premium than new homes with similarly sized PV systems.

“One reason for the disparity between existing and new homes with PV might be that new homebuilders also gain value from PV as a market differentiator that speeds the home sales process, a factor not analyzed in the Berkeley Lab study,” says co-author and Berkeley Lab Principle Scientific Engineering Associate Peter Cappers. “More research is warranted to better understand these and related impacts.”


This work was supported by the Office of Energy Efficiency and Renewable Energy (Solar Energy Technologies Program) of the U.S. Department of Energy, by the National Renewable Energy Laboratory, and by the Clean Energy States Alliance.

Lawrence Berkeley National Laboratory addresses the world’s most urgent scientific challenges by advancing sustainable energy, protecting human health, creating new materials, and revealing the origin and fate of the universe. Founded in 1931, Berkeley Lab’s scientific expertise has been recognized with 12 Nobel prizes. The University of California manages Berkeley Lab for the U.S. Department of Energy’s Office of Science. For more, visit

For more information about DOE’s Solar Energy Technologies Program, see

For more information about the National Renewable Energy Laboratory, see

For more information about the Clean Energy States Alliance, see

For more information on the report, contact Ben Hoen (, 845-758-1896) or Ryan Wiser (, 510-486-5474).

Feed-In Tariffs for Apartment Solar Rooftops Light Up LA’s Energy Plan

At a Sustainability Summit in LA last week, a group of academic, business and political leaders gathered to unveil plans for “Integrating our Energy Housing and Community Needs.” Henry Cisneros, the former head of the Housing and Urban Development for the Clinton Administration spoke on a panel along with Mercedes Marquez from the current department to discuss plans for green HUD projects and a proposal for rooftop solar on low-income housing in Los Angeles. The Mayor stopped by and everyone praised his support of the Solar Feed-in Tariff program which the City Council is expected to vote “yes” on. Will it work?

University of Southern California’s Dr. Manuel Pastor and J.R. DeShazo of the Luskin Center for Innovation presented compelling details of their collaboration with HUD and the LA Business Council to determine the advantages of a solar energy program to economically disadvantaged neighborhoods of the city. Among many issues the USC/UCLA study points out, including the production of jobs, is the case for renewable energy from apartment building roofs (as opposed to industry or deserts), as a equitable solution that benefits residents.

Feed-In Tariffs Incentivize Solar Installation
LA’s City Council President Jan Perry, chair of the Energy and Environment Committee, announced she’d bring a motion to implement a pilot program of 75 megawatts for a Solar Feed-In-Tariff project. “This will provide benefits to the environment, to low income residents and to non-profits that can apply energy savings to social service programs.”

The LA proposal, the largest solar feed-in tariff program in the US, would develop 500 megawatts of solar-generated electricity over the next decade — about three percent of the city’s power needs – and hopes to directly reduce energy costs for consumers. With 100,000 multifamily rental apartment buildings in the city accounting for about one-half of the residents, there’s a tremendous untapped resource for capturing the sun.

sustainability summit image
Cisneros and Marquez of past and current HUD department weigh in on sustainable housing.

“The program will create jobs and enable low-income residents in participating buildings to benefit from rebates or reduced utility costs,” said Kelly Boyer with HUD. “And that’s before you talk about clean air benefits.” Besides the department’s green took kit, HUD is greening 157,000 units nationwide and 2,500 in LA.

The successful feed-in tariff solar project in Gainsville, Florida met its goal for first-year participation within a week. Many are anxious to access the Federal tax credits available through 2016, providing up to $300 million to Los Angeles property owners to install solar power. A rate agreement offered by the Department of Water and Power is another incentive for investors.

The savings in utilities also greatly benefits seniors. David Grunwald of Affordable Living for the Aging admitted he wasn’t a believer a few years ago, fearing it was too expensive. But after saving up to $14,000 in utilities annually, he said, “I’m a poster child for sustainability. It’s an ideal blending of social, economic and environmental goals.” Mary Silverstein Director of the LA Housing Partnership’s 7 Maple Senior Housing Development said, “This allows us to funnel those savings into our resident programs.”

At another panel moderated by Mary Nichols of the California Air Resources Board, representatives from local utilities addressed the changes to California’s now renewable energy mandate and listed the retrofitting goals they’ve already accomplished. Some admitted rebates are slow in coming, which was confirmed by a disgruntled owner of a solar installation firm I spoke with at the break, who said his contractor has been waiting for hundreds of thousands of dollars in rebates for months. “The suits can all pat themselves on the back, but ironically, this makes my business unsustainable.”

The path for bikes and feed-in tariffs
Finally, LA’s Mayor Antonio Villaraigosa spoke of the city’s many initiatives, how parts of the LA River are now navigable and graduates of the Green Retrofit Training Program are upgrading city buildings,diesel trucks are being reduced at the ports, and more mass transit is in the works. He’s also a proponent of extensive bike paths throughout LA and broke his elbow when a taxi hit him on the campaign trail.

There’s scarce money for the approved bike paths so let’s see how his solar feed-in tariffs fare, and if others will follow.

World Bank approves US$50M for rural electrification in Peru

  • Rural electrification. Photo: ANDINA/MEM
    Rural electrification. Photo: ANDINA/MEM
  • Lima, Apr. 24 (ANDINA). The World Bank Board of Directors approved this week a US$50 million loan to continue the implementation of rural electrification in Peru.

    This new financing for the second “Rural Electrification Improvement Project through the implementation of Competitive Funding of Subprojects” will provide electricity to 140,000 people in approximately 34,000 households.

    Among other benefits, access to electricity will avoid the use of kerosene lamps inside homes, which causes respiratory illnesses that primarily affect women and children. Rural electrification will allow rural health centers to provide adequate refrigeration to medicines and vaccines, sterilize medical equipment and use ventilators.

    At the same time, electricity increases the time women have to complete home chores, expanding their educational opportunities, their chance to perform economic activities, as well as their ability to participate in community affairs. Additionally, street lighting contributes to public safety.

    In that regard, Energy and Mining Minister Pedro Sánchez Gamarra said: “we’re making great efforts toward expanding electrification and reducing the gap between urban and rural areas. We’ve significantly increased public investment in electrification.”

    The senior official added that “with this second Project, we continue to seek alternative methods to improve rural electrification, such as the involvement of distribution companies, as well as the use of renewable energy to serve remote locations and the promotion of electricity usage to improve the productivity of micro and small rural enterprises.”

    When the first Project began in mid-2006, with World Bank support, more than six million people in mostly-poor rural areas lacked electricity. Rural electrification coverage in Peru was one of the lowest in Latin America. Combined with a lack of other infrastructure, health care and education projects, such shortages limited opportunities for economic development.

    That trend has been reversed, however. As a result of a joint effort by the Energy and Mining Ministry (MEM), electricity distribution companies and regional and local governments, it is estimated that the electricity coverage in rural areas increased from 30 percent in 2007 to 55 percent by late 2010.

    Through the promotion of productive usages of electricity during the first Project, 40 percent of those in Cuzco who acquired electric equipment to improve their productivity were women. They used electricity to generate income by producing crafts, baked goods and dairy products.

    Laura Frigenti, WB Manager for Operations and Strategy for Latin America, said that “the new project represents a great challenge given that it builds upon the achievements of the first Rural Electrification Project, but will be operating under more difficult conditions.”

    “It will provide electricity to smaller localities, farther from the grid and with sparser population. This increases the costs of extending the network and will demand a higher use of alternative energy sources such as photovoltaic solar energy systems.”

    This new initiative encourages existing electricity distribution companies to provide their services through individual domestic photovoltaic solar energy systems. This supports the goal of supplying electricity to those living in isolated areas.

    The new project intends to increase rural electricity coverage by 3 percent, in order to reach a combined total from both projects of a 9 percent increase in coverage.

    The project is based upon two main components: Investment in rural electrification projects by electricity distribution companies to provide new grid connections using both conventional electricity network connections and photovoltaic solar systems and technical assistance to promote the productive use of electricity and renewable energy, in order to strengthen stakeholder capacity, especially electricity consumers, as well as improving the regulatory framework for rural electrification.

    This US$50 million variable spread loan includes an 18-year maturity period and a 17.5-year grace period.

    (END) EEP

Developer plans $21.9M solar project in Kings Mountain

By John Downey

Strata Solar of Chapel Hill plans to build a 4.5-megawatt solar project in Kings Mountain that will begin operating by the end of the year.

The company plans to sell the power to Duke Energy Carolinas. Michael Cohen of Strata says no power-purchase agreement has been signed as yet. Strata is negotiating for a 10- to 15-year contract to sell the power to Duke.

The project is expected to cost $21.9 million to build. It consist of 21,672 solar panels, ground-mounted, on 28 acres off Dixon Dairy Road.

It will be the second-largest solar project so far in the state. The largest is the 17.2-megawatt solar farm developed in Davidson County by SunEdison. Duke Energy is buying the power produced by that project. In North Carolina, commercial power producers must sell electricity from their plants to a utility for distribution.

Strata has created a separate subsidiary, Dixon Dairy Road LLC, to own the project. Strata registered the project Wednesday with the N.C. Utilities Commission.

Feed-in tariff fight intensifies as developers predict halt to solar projects

The chilling effect of the coalition’s proposed cuts to feed-in tariff incentives on planned solar projects with 50kW capacity was hammered home last week with the release of new data suggesting that virtually no mid-sized installations will go ahead if the incentives are slashed as planned.

Officials from the Department of Energy and Climate Change (DECC) last week hosted a workshop alongside the Micropower Council and the British Photovoltaic Association where they were presented with detailed evidence on how the proposed feed-in tariff cuts of between 40 and 70 per cent are expected to result in a freeze on all projects with over 50kW capacity, including community-owned and public sector projects.

“We’ve all had our rant about the cuts, now we need to help ministers with the evidence they need to make decisions,” Dave Sowden, chief executive of the Micropower Council, told BusinessGreen. “It is still a bun-fight, but it is turning into an evidence-based bun-fight.”

Officials saw presentations from three solar developers – building giant Kingspan, solar specialist Suntech and insulation and solar technology installer Mark Group – all of which demonstrated that the scale of the feed-in tariff cuts proposed in the government’s ongoing review will make the full range of 50kw plus projects unviable.

Most notably, Kingspan used three real life projects with capacities of 100kW, 250kW and 500kW to undertake a detailed analysis of the rates of return available to firms at different locations and under the current and proposed tariff regimes.

The analysis found that, with the current tariffs, firms deploying the projects could expect to receive rates of return before tax ranging from 7.1 per cent for a 100kW installation in Edinburgh to 11 per cent for a 500kW array in Plymouth.

In contrast, once the tariff proposed in the government’s consultation is applied, none of the projects attains the five per cent rate of return DECC has said in its impact assessment that it wants to achieve. The best rate of return is 4.7 per cent for a 100kW array in Plymouth, while all other projects would deliver returns of between 3.8 and -1.2 per cent.

Significantly, Kingspan’s analysis is based on real life projects and the company has offered to make all of its calculations, invoices and contracts available to DECC officials.

t also contains calculations revealing the level of tariffs required to deliver the five to eight per cent rate of returns that the government initially said should be available through feed-in tariffs.

Similarly, Suntech carried out a detailed comparison of the UK’s proposed changes to the feed-in tariff and Germany’s flagship scheme, providing evidence that, despite government claims to the contrary, the UK will be offering incentives that are significantly less attractive to investors than those still available in Germany.

Finally, Mark Group analysed a series of planned solar projects for schools and found that the proposed changes to incentives would make all 50kW plus installations financially unviable.

A DECC spokeswoman said that the workshop was part of the government’s efforts to support its ongoing consultation exercise, adding that the department was in “listening mode” and committed to ensuring that “everyone gets the chance to put their view across”.

Speaking to BusinessGreen following the launch last month of the fast track consultation on solar feed-in tariffs, Climate Minister Greg Barker insisted that it was not the government’s intention to block all solar projects over 50kW capacity, predicting that some projects could still go ahead.

However, he insisted that deep cuts to incentives were necessary to avoid larger solar farms eating up the capped feed-in tariff budget in a way that would limit the availability of incentives for domestic rooftop installations.

Sowden at the Micropower Council said that solar developers were continuing to amass further evidence on how the proposed cuts will affect the industry, while also undertaking work to model the scale of feed-in tariff take up under different incentive levels.

Source: Business Green

How Are State SREC Markets Performing?

Philadelphia — Americans like free-market based solutions, even if a market is based on the illusion that it’s free. (Like the entire energy system, where there’s not one unsubsidized electron or drop of fuel.)

Perhaps that’s why renewable energy credit trading schemes have dominated in the U.S. Although these markets are dependent on government mandate and fiat currency, they create a trading platform that makes Americans more comfortable than, say, a Feed-in Tariff, which is sometimes seen through the U.S. lense as a heavy-handed tool to re-distribute wealth.

Never mind that these mechanisms are funded in the same way – and in some cases depending on how contracts are structured, can look very similar in design. The word “market” makes politicians salivate; the world “tariff” makes them cringe.

This way of thinking has driven states to develop solar incentive schemes based on Solar Renewable Energy Credits, or SRECs.

SRECs are tradable credits that represent one megawatt-hour of solar electricity. In states with specific solar targets under a Renewable Portfolio Standard, energy suppliers must accrue a certain number of SRECs to meet yearly goals. These power providers can either generate the SRECs themselves by investing directly in projects, or purchase the credits from project owners, brokers and aggregators.

The value of credits is based upon supply and demand: If there’s a shortage of solar electricity in a given state, SREC prices will be high, thus stimulating more development. If there’s an oversupply of solar, SREC prices will drop. Prices are capped by a penalty that power providers pay if they can’t meet their targets.

Theoretically, an SREC market should provide a more dynamic way of determining the value of solar electricity in a particular state.

So is the policy working?

That was one of the key questions addressed at PV America, a conference focused on the Northeast and Mid-Atlantic states where SRECs dominate.

It’s too early to determine the long-term effectiveness of SRECs, as they’re still a fairly new mechanism. But with seven states and the District of Columbia now with credit-based markets in place, the cumulative experience is growing fast.

Below, Yuri Horwitz of the SREC financing company SolSystems talks about the successes and uncertainties in some of the leading East Coast markets.

Yuri Horowitz

We also caught up with Natalie Andrews of the Massachusetts Department of Energy Resources to talk about that state’s emerging SREC market and how it differs from others in the region.

Massachusetts had troubles early on when one of the largest energy suppliers sued the government for requiring in-state SRECs – saying it was violating national commerce laws. The suit was settled, but it has other states with similar incentive schemes thinking about the potential consequences.

Jeff Wolfe, CEO of the installer/distributor groSolar, works on projects around the Northeast and Mid-Atlantic region. Below, he shares his thoughts on the ups and downs of SREC and rebate programs in the states he’s working in. (Wolfe hesitates to call them “markets,” still believing their long-term viability hasn’t been proven.)

And finally, we spoke with Carrie Cullen Hitt, president of the SolarAlliance, to chat about how to create successful, stable solar policy. With so many states facing severe budget constraints, there’s been a backlash against incentives for clean energy – both taxpayer funded (rebates) and ratepayer funded (SRECs and Feed-in Tariffs).

While the backlash concerns Hitt, she also believes that if states have a solid market structure in place (i.e. good interconnection standards, streamlined permitting and net-metering), businesses will make it through the turbulence.