Archive for April 2012

JCM Capital Launches $10,000,000 Solar Development Capital Fund for FIT Projects in Ontario, Canada

TORONTO, Apr 24, 2012 (BUSINESS WIRE) — JCM Capital (JCM) announced today that they have launched a $10 million solar development capital fund that will invest in early-stage photovoltaic (PV) projects installed on large commercial and industrial buildings across Ontario, leveraging the Province’s Feed-in-Tariff (FIT) program. The aim of the fund is to target application-ready projects to be submitted into the upcoming Ontario Power Authority’s (OPA) application window, and as such, assist with early-stage development costs such as FIT application fees, structural engineering assessments, FIT security deposits and grid connection impact assessment (CIA) costs. The fund will also invest in Ontario-based FIT contracted projects that have not yet reached commercial operation.

CEO of JCM, Christian Wray stated that despite the recent changes to the Province’s Green Energy Program, the fund will ensure that necessary capital is available for quality projects that meet the requirements of the revised FIT 2.0 program. “JCM has and will continue to support the small to mid-size solar market in Ontario with the belief that our investment in distributed solar power generation will provide the maximum benefit to all stakeholders. The fund creates a unique solution for local PV development companies that have few options when funding early-stage projects that require significant risk capital.” Wray also noted that JCM has a strong track record in working with solar developers in Ontario and looks forward to partnering with and supporting other experienced developers as the program continues.

To date JCM has successfully deployed over $5 million of development capital, enabling the advancement of an initial 20MW commercial rooftop solar portfolio. When completed, the aggregate construction costs of this initial portfolio will exceed $80 million and will offset approximately 20,000 tons of harmful C02 from being released into the earth’s atmosphere – the equivalent of planting 2 million trees or removing 60,000 cars from the road.

The fund will also help create further jobs in accordance with the Province’s Green Energy Act initiative.

For more information, please visit www.jcmcapital.ca

About JCM Capital (JCM)

JCM Capital is a financial advisory company that focuses primarily on financing and the co-development of solar energy projects in Ontario, Canada. The Company provides commercial solar energy developers early-stage development capital and/or equity financing solutions for ‘construction-ready’ and operational solar projects while offering strategic and project management support. Current portfolios include rooftop and ground-mounted projects spanning from Southwestern to Eastern Ontario. The Company is looking to expand it’s reach through the cultivation of new partnerships and associations.

SOURCE: JCM Capital

Thiele Solar Proposal Included In NY-Sun Initiative Announced By Governor

Sag Harbor – New York State Assemblyman Fred W. Thiele, Jr. (I, D, WF-Sag Harbor) applauded Governor Andrew Cuomo for establishing a solar feed-in tariff plan for the Long Island Power Authority (LIPA), similar to the one he proposed in 2009, as part of his NY-Sun proposal to increase the generation of solar power in New York State.

Thiele stated, “If we are to be truly energy independent and reduce energy costs on Long Island, we must provide incentives to encourage the production of solar and other alternative sources of energy. The establishment of a feed-in tariff program is a market-based strategy to do just that. Rather than provide cash rebates to install solar, here LIPA would pay an incentive for the power produced by solar power to encourage the development of solar infrastructure.”

Thiele’s proposal, first introduced in 2009, would have directed LIPA to establish a feed-in tariff program. Under the Thiele proposal, LIPA would have been authorized to purchase up to 100 megawatts of electricity under the program. Thiele’s bill set an initial tariff of 32 cents per kilowatt hour and a 20 year contract for solar producers. LIPA could adjust the tariff due to market conditions no more than once every two years.

Under the proposal announced by LIPA and the Governor last week, 50 megawatts would be purchased by LIPA and the tariff would be 22 per kilowatt hour.

Thiele stated, “Not only will this program encourage the rapid and sustainable development of electricity from renewable sources, it will create green jobs on Long Island. The German solar energy industry created over 50,000 jobs in less than five years, with the entire renewable energy industry creating as many as 200,000. More than 25,000 solar energy workers are employed in Spain. In Gainesville, Florida, a surge of capital investment in community solar systems has been experienced and local contractors have been hiring to meet demand. A solar feed-in tariff program will provide a simple and transparent means for solar investments to earn reasonable and reliable returns, allowing capital to flow into clean and renewable energy systems. My only reservation is that LIPA may have initially set the tariff too low to encourage investment. Hopefully, they will adjust to market conditions to make the program successful.”

From the office of Assemblyman Fred Thiele

Israeli Desert Yields a Harvest of Energy

By ISABEL KERSHNER

KETURA, Israel — Arriving at this bone-dry kibbutz in the Arava Desert late one afternoon in August 2006, Yosef Abramowitz, a social activist, Jewish educator and multimedia entrepreneur from Boston, opened the door of his van and was hit by a wall of heat.

 

“The sun was setting, but it was still burning,” he said. “I remember the sensation.”

Later, unable to sleep, he rose about 5 a.m. and stepped outside as the sun was coming up over the mountains of Jordan. “It was so hot already,” he recalled. “I said to myself, ‘This whole place must work on solar power.’ ”

Then he found out that was not true.

So Mr. Abramowitz, who had spent six months at Ketura in the early 1980s as part of a Young Judaea program, quickly abandoned his plans to spend a quiet family sabbatical with his wife and children in southern Israel. Instead, he went into partnership with Ed Hofland, a businessman from the kibbutz, and David Rosenblatt, an investor and strategist from New Jersey, to found the Arava Power Company, now the leading commercial developer of solar power in Israel.

After more than five years of political and regulatory battles with the Israeli authorities, the company has transformed 20 acres of a sand-colored field on the edge of the communal farm. It now glistens with neat rows of photovoltaic panels from China — 18,600 in all — that harness the sun. There is no smoke, only a slight buzz in the spotless rooms where the panels’ current is turned into electricity that can be fed into the electrical grid. Small openings in the perimeter fence allow animals to cross the field.

Depending on the time of year and rate of energy consumption, this field provides power for as many as five communities.

Siemens, the German conglomerate, was brought in as a partner and invested $15 million, and its Israeli branch built the field. The Jewish National Fund, a century-old Zionist group most associated with planting trees in Israel, made an unusual strategic investment of $3 million in a twist on the early national ideal of trying to make the desert bloom.

In forging a path for commercial solar energy, Mr. Abramowitz said he endured regulatory battles involving two dozen agencies as big as the Israeli Agriculture Ministry and as small as the local planning agency on issues like zoning changes and renewable energy quotas.

Along the way, Mr. Abramowitz — who left the kibbutz for Jerusalem in 2009 but still visits often — became known in Ketura as Captain Sunshine. “He got his nickname, first, because of his sunny personality,” said Elaine Solowey, a member of the kibbutz, “and, second, because anyone who beats the government bureaucracy is a superhero.”

Arava Power’s pioneering work has not gone unnoticed. Other communal farms and communities in the arid reaches of southern Israel are rapidly turning to renewable energy: solar energy is a harvest that does not require irrigation.

Last month, Israel’s Public Utility Authority issued licenses for nine larger solar fields, including a 150-acre site at Ketura that will eventually meet one-third of the peak daytime energy needs in the nearby city of Eilat.

Ketura’s new solar field will be built across the road from the kibbutz in a rift valley between two mountain ranges. The near-constant breeze from the north will naturally cool the backs of the panels, which will face south. With up to 14 hours of sunlight in the summer, an average of only 15 cloudy days a year and access to the national electricity grid nearby, the area has conditions that are perfect for producing solar energy, Mr. Abramowitz said.

“God could not have invented a better place to do solar power,” he said during a recent tour.

Arava Power has entered deals to lease land from numerous farms and communities in southern Israel. It has also teamed up with Bedouins in the Negev Desert: the tribes will lease their lands to Arava Power for solar installations, and the company will provide jobs for the clans. In February, the regulatory authorities granted the first license for an installation on Bedouin-owned land belonging to the Tarabin tribe. Financing for the Bedouin fields is coming from the United States government’s Overseas Private Investment Corporation.

Arava Power expects to grow into a $2 billion enterprise. That is quite a change for a small kibbutz that has mainly lived off its date palms, dairy shed and the salaries of members who work outside the farm.

Ketura was founded in 1973 by 25 idealists, graduates of the Young Judaea Zionist movement, and is known for its socialist values and simple, communal lifestyle. Though the kibbutz has a stake in Arava Power, Mr. Hofland, the company chairman, will not make any personal profit.

The kibbutz is also known for environmental innovation. It operates a high-tech algae farm and is home to the Arava Institute, where Israelis, Palestinians, Jordanians, Americans and others study the environment. The kibbutz’s appreciation for education has resulted in what its secretary general, Sara Cohen, calls “knowledge-based ventures.”

In one such effort, Dr. Solowey domesticates rare plants, including species with medicinal properties, and works on finding new crops for arid and saline lands.

As yet, the prospect of solar power riches has not gone to the heads of the practical farmers who live in Ketura.

“It means having our future accounted for, when we cannot work in the date fields anymore,” Ms. Cohen said. “And our children’s education will be secured.”

Still, she added, “We are not eating filet mignon in the kibbutz dining room yet.”

Dark Days For The Solar Industry

By Richard T. Stuebi

With the Solyndra debacle and other bankruptcies (e.g., Evergreen Solar, SpectraWatt), and a 65% decline in the MAC Global Solar Energy Index (SUNIDX), 2011 was a bad year for the solar industry. Now into 2012, the hits just keep on coming.

Last week, the long-time solar energy poster-child First Solar (FSLR) announced it was closing its German factory and laying off 2,000 employees. Earlier in April, Solar Trust and Q-Cells filed for bankruptcy, following on the heels of the bankruptcy filing of Energy Conversion Devices in February. Turning from photovoltaics to solar thermal, BrightSource Energy withdrew at the last-minute its planned initial public offering on April 11, citing “adverse market conditions”.

Adverse market conditions, indeed! Quoting the immortal Vince Lombardi, “What the hell is going on out here?”

There are at least four fundamental forces at play that are battering the solar markets:

First, over the past few years, China has made an astounding push into solar energy. Whereas China was a non-factor in the solar industry not long ago, today China owns about 50% market share of supply. Achieving this massive leap-frog was clearly an act of state-driven industrial policy, as it required enormous sums of capital — far beyond what would be justified solely to supply the Chinese domestic market for solar energy. But, it’s more than merely state-sponsorship: in March, the U.S. Department of Commerce found that Chinese solar manufacturers had been “dumping” their products into U.S. markets at prices below cost, exploiting unfair subsidies available to them from the Chinese government but not available to non-Chinese players. Stay tuned to this brewing trade war.

Second, a ton of capital has been invested over the past several years in next-generation solar technology ventures. While the technologies have differed widely, all have been premised on significantly reducing the costs of solar energy and enabling the market to expand by orders of magnitude. Although some of these ventures have crashed-and-burned (e.g., Solyndra), others are still alive and may end up doing very well. At the very least, these ventures have pushed the boundaries of innovation in the solar industry overall, which in turn has reduced the costs of solar energy in many ways and aspects — which in turn is in fact exponentially expanding the potential market for solar energy.

Third, European demand for new solar installations has fallen off a cliff. Many of the leading European solar markets — Germany, Spain, Portugal and Greece — all had very aggressive “feed-in tariff” policies, promising very high prices for any electricity generated by solar installations. These prices had remained high, in fact escalated, while solar costs declined precipitously, enabling solar investors windfall profits: a classic bubble, which has now largely burst, given the financial straits in which many of the above-noted European countries find themselves. (Dedicated readers of this blog will recall my long-standing lack of enthusiasm about the feed-in tariff subsidy approach. Its flaws are now being starkly revealed.)

Fourth, plummeting natural gas prices — due to the surge in supply, associated with the shale gas boom enabled by the broad deployment of advanced fracking approaches — are causing U.S. electricity prices to fall, and solar companies struggle to compete. A quote from Andrew Beebe of Suntech (leading Chinese manufacturer, widely accused of dumping) in a recent New York Times article called “Clouds on Solar’s Horizon” speaks volumes: “We’re really not competitive” at current natural gas prices.

The first two forces have dramatically increased supply and reduced costs of solar energy, whereas the second two forces have substantially depressed demand for solar energy. When combined, the conclusion is simple: the solar market is experiencing a massive glut. Solar customers clearly benefit, but solar companies feel the pain acutely.

So, these are dark days for the solar industry. According to this article in the Washington Post, even the Chinese companies that have come to dominate are hurting.

But, as they say, it’s always “Darkest Before Dawn”…which in fact is the title of a new white paper by McKinsey & Company that presents the flip-side of this story. The authors — Krister Aanesen, Stefan Heck and Dickon Pinner — argue that the impending shakeout and consolidation is quite typical of industry at solar’s stage of maturity, and that there will be a bright future for solar energy not that long from now. That may be more true for customers and the planet, as low-cost and non-emitting solar energy becomes much more widespread, than for industry participants, who will face increasingly intense and relentless competitive pressures to constantly innovate and improve their technologies and business processes.

From an investment perspective, perhaps the bottom is approaching or is being hit right now for the solar industry. Earlier this year, Gordon Johnson, solar industry analyst from Axiom Capital Management, reversed his 14-month bearish position on the industry. However, as of this writing, SUNIDX is still trending downwards — though the decline is shallowing.

For those in the solar sector, the road is bumpy and will be for at least a while. Seat belts fastened, please.

LA launches feed-in tariff pilot

LA launches feed-in tariff pilot

Apr 23, 2012

Los Angeles is becoming the latest city in the U.S. to adopt a feed-in tariff (FiT) to spread the adoption of solar. It’s also likely the largest. Last week the city’sLos Angeles Department of Water and Power (LADWP) Board of Water and Power Commissioners at its municipal utility, the Los Angeles Department of Water and Power (LADWP) approved the city’s 10 megawatt FiT pilot program.

Under the FiT building or PV array owners are paid for the power their system produces at a premium to what they system owner normally pays for electricity. “The rate for energy will be based on the bid price of energy multiplied by the time-of-delivery factors as described in the FiT guidelines,” said a LADWP spokesperson who preferred not to be named.

Projects will be accepted based on a competitive bidding process. Preference will be given to projects with lower costs of energy, according to LADWP.

The FiT is open to residents, businesses and nonprofits, according to the spokesperson. “LADWP will make available a total of 10 megawatts for the entire demonstration program. Individual projects can be between 30kW to 999kW (AC) in size,” the spokesperson said. “The only criteria is that the project must be located in the LADWP service area.”

Systems could also be owned by third parties like solar leasing companies. “LADWP is leaving it up to the program participants to set up the ownership structure.”

The demonstration program is a precursor to larger FiT program that LADWP plans to issue as it adds more solar energy into its renewable portfolio to meet California’s renewable energy portfolio standards. The utility is required to source 33 percent of its energy from renewable resources by 2020.

The latter FiT program could range from 75 megawatts to 150 megawatts and should launch relatively quickly, according to the spokesperson. “LADWP would like to roll out the final  FiT program in phases starting in January 2013 which is contingent on positive outcome of rate proposal.” The size of the larger program will be based at least partly on the success of the demonstration project.

Defense Department releases energy conservation roadmap

By Lisa Daniel
American Forces Press Service

 

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Department of Defense Seal.
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WASHINGTON (3/12/12) – The Defense Department Friday released an implementation plan for cutting energy consumption in military operations

Officials released a strategy in June outlining the need for energy conservation in military operations. In the plan released, Defense Secretary Leon E. Panetta reiterates that the department must do its part to reduce U.S. fuel consumption not only to save money, but also to have less reliance on foreign oil and to improve security for U.S. forces who transport fuel into battle spaces.

“Energy security means a reliable, secure and affordable supply of energy for military missions, today and in the future,” the secretary said.

The implementation plan outlines a three-part strategy of reducing the demand for energy, securing diverse options beyond fossil fuels, and building energy security considerations into all military planning.

“This is a question of making sure the whole department is executing this strategy and using energy to support military operations better and interoperable and in a way that supports the whole department better,” said Sharon E. Burke, assistant secretary of defense for operational energy plans and programs.

The plan creates a Defense Operational Energy Board to oversee the department’s progress. Military services and DOD agencies are to report to the board on their energy consumption last year and projected consumption for the next five years, the plan says. The board will work with the services and agencies on actions needed to improve their consumption baselines.

The services have reported goals for:

  • The Army to have 16 “Net Zero” installations by 2020 and 25 by 2030 — installations that do not use more energy or water than they produce and reduce waste by recycling;
  • The Navy to reduce fuel consumption afloat by 15 percent by 2020;
  • The Air Force to increase aviation energy efficiency by 10 percent by 2020; and
  • The Marine Corps to increase energy efficiency on the battlefield by 50 percent by 2025, and, as a result, reduce daily fuel consumption per Marine by 50 percent in the same time.

The combatant commands will then report to the board on how they guide their forces to improve energy performance and efficiency, such as the ability to field fuel quickly and the use of alternative energy technologies.

The board is to develop department-wide energy performance metrics in consultation with the DOD components and based on consumption baselines.

The assistant secretary of defense for research and engineering is to assess the department’s gaps in energy science and technology and report recommendations to the board.

The plan also calls for:

  • Improving operational energy security at fixed installations;
  • Promoting the development of alternative fuels;
  • Incorporating energy security considerations into requirements and acquisitions; and
  • Adapting policy, doctrine, military education and combatant command activities to support reduced demand of energy.

“Even though the strategy and implementation plan is new,” Burke said, “the department has been making progress for some time in using less energy – more fight for less fuel. We haven’t been standing still on this.”

Soldiers and Marines have reduced their energy consumption in Afghanistan by using solar rechargeable batteries, solar microgrids, more efficient tents and better fixed shelters, Burke said.

Also, the Army is using generators at its forward operating bases that are 20 percent more efficient, and become even more efficient by being wired together. The Navy, too, has made good progress by incorporating energy considerations into its acquisitions process, she said.

Less demand for energy and more conservation lessen the risk to troops to transport fuel through battle zones, she said.

“When you’re focused on the fight, the most important thing is that the energy be there — and that’s how it should be,” Burke said. “But people also are beginning to understand there is a cost to using and moving that much fuel.”

Stateside, Fort Bliss, Texas, and Fort Carson, Colo., as well as the Oregon National Guard, are showing progress toward the Army’s Net Zero goal, the plan released today says.

“There’s a lot of good things going on, and a lot more needs to happen,” Burke said. The department’s energy conservation effort, she added, is both a challenge and an opportunity.

“Energy … shapes our missions, and we can shape it,” she said.
As part of the implementation plan, Panetta wrote that the rising global demand for energy, changing geopolitics and new threats will make the cost and availability of energy even less certain in the future.

“Energy security is an imperative – our economic well-being and international interests depend on it,” he said.

US military sets its sights on solar to sideline fossil fuels

By:  Cheryl Kaften

The U.S. Department of Defense (DOD) moved ahead this week with its plans to mete out “more fight for less fuel”. With support from the White House, the Pentagon intends to reduce reliance on fossil fuels by building next-generation combat vehicles, making energy storage safer and more effective, and increasing the deployment of renewable energy across America’s Armed Forces to three gigawatts (GW) by 2025.

US flag

The DOD is said to be making one of the largest commitments to clean energy in history.

Flickr/Jeff Kubina

“We haven’t been standing still on this,” commented Sharon E. Burke, assistant secretary of defense for Operational Energy Plans and Programs. Already, Burke said, the Army’s ground troops and the Marines have reduced their energy consumption at the tactical edge in Afghanistan by using solar rechargeable batteries, solar microgrids, more efficient tents, and better fixed shelters. The Navy also is incorporating energy considerations into its acquisitions process, she said.

Less demand for energy and more conservation reduce the risk to troops who transport fuel through battle zones, explained Burke. “When you’re focused on the fight, the most important thing is that the energy be there … But people also are beginning to understand there is a cost to using and moving that much fuel.”

Last June, DOD officials released a strategy outlining the need for energy conservation in military operations. The plan calls for a Defense Operational Energy Board to oversee the department’s progress. Military services and DOD agencies are to report to the board on their energy consumption during 2011 and on their projected consumption for the next five years, the plan says. The board will work with the services and agencies on actions needed to improve their consumption baselines.

Fast-forward to renewable energy

According to a statement from the White House on April 11, the DOD is making one of the largest commitments to clean energy in history, by developing a goal to deploy three GW of renewable energy, including solar, wind, biomass, and geothermal, on Army, Navy, and Air Force installations by 2025. That would be enough power to meet the needs of 750,000 homes.

According to White House Press Secretary Jay Carney, “This effort furthers the commitment President Obama made during the State of the Union (Address) to develop one gigawatt of renewable energy on Navy installations by 2020. The Air Force goal of obtaining 1 gigawatt by 2016 and the Army goal of obtaining 1 gigawatt by 2025 support the broader DOD goal to meet 25 percent of its energy needs with renewable energy by 2025.”

Together with emerging microgrid and storage technologies, reliable, local sources of renewable power will be used increase the energy security of U.S. military installations. To meet these goals at no additional cost to the taxpayer, DOD will leverage private sector financing through authorities such as power purchase agreements, enhanced use leasing, utility energy savings contracts, and energy savings performance contracts.

Testing new technologies

In brief, among the other energy conservation initiatives launched by the DOD and the White House this week are the following:

  • New lab for next-generation vehicles: On April 11, the Army opened a 30,000-square-foot research facility, called the Ground Systems Power and Energy Lab (GSPEL), at Detroit Arsenal that will develop cutting-edge energy technologies for the next generation of combat vehicles.
  • Green Warrior Convoy: As part of required road tests of technologies developed at the GSPEL, the Army will launch a Green Warrior Convoy of vehicles in 2013. The convoy—which will make stops at schools, community facilities, and military bases— will test and demonstrate the Army’s advanced vehicle power and technology including fuel cells, hybrid systems, battery technologies and alternative fuels.
  • Energy storage competition: Through its Advanced Research Projects Agency– Energy (ARPA-E), the Department of Energy will fund a $30 million research competition that will engage America’s brightest scientists, engineers, and entrepreneurs in improving the capability of energy storage devices, including batteries. ARPA-E’s new “Advanced Management and Protection of Energy-storage Devices” (AMPED) program will promote the development of next-generation energy storage sensing and control technologies, including enhancing the performance of hybrid energy storage modules being developed by the DOD for war-fighting equipment.
  • Biuofuel development: As part of his Blueprint for a Secure Energy Future, President Obama has challenged the Departments of Navy, Energy, and Agriculture to partner with private industry to accelerate the commercialization of drop-in biofuels for military and commercial use. The three departments have developed a plan to spur private industry and financiers to construct or retrofit multiple integrated biorefineries—capable of producing millions of gallons of fuel annually from domestic feedstocks at a competitive price.

Carney emphasized that the plans outlined this week in support of fossil fuel independence are part of the administration’s broader goals for the nation. “These new steps build on President Obama’s unwavering commitment to energy security for America’s warfighters, and to a sustained, comprehensive strategy to ensure a secure energy future for all Americans.”

Hanwha Solar opens North American R&D center

By:  Becky Stuart

Korea-based Hanwha Solar has opened a new R&D center in Santa Clara, California. The goal is to develop next generation photovoltaic concepts, with a focus on efficiency and low cost.

Hanwha Solar ribbon cutting Santa clara R&D Facility

The new facility will first focus on thin silicon substrates, in particular, increasing efficiencies.

Hanwha Solar

The company has invested $14 million in the new, 30,000 square foot facility, 60 percent of which has been devoted to lab space.

The facility has been “built with room for expansion in mind,” said Hanwha in a statement released. It added that Silicon Valley was chosen, due to its being an “epicenter” of clean R&D technology. A total of 30 people will be employed there, thus bringing its U.S. workforce to 77.

The first project will focus on thin silicon substrates, in particular, increasing efficiencies. Chris Eberspacher, chief technology officer, Hanwha Solar, will oversee the work. “The lab is engineering methods of applying a thinner layer of silicon, which will make the panel less expensive while not compromising effectiveness and energy efficiency,” explained the company.

Hee Cheul Kim, president of Hanwha Solar, commented, “It is critical for a global company like Hanwha Solar to have a strong presence in California, because it is the epicenter of clean technology R&D. The investment being made in solar is a reflection of the confidence the Hanwha Group has in clean energy as a long term growth engine.”

Overall, the company says it has invested $50 million in the U.S. over the past two years, through partnerships with businesses like OneRoof Energy, Crystal Solar, Solar Monkey and 1366 Technologies. “Hanwha Solar will continue to increase the company’s footprint in the region over the coming years, making additional investments and increasing employment,” continued the statement.

Developing technology

In related news, Hanwha, well-known for its solar and chemical operations, exhibited its solar technology for the first time at the International Green Energy Exhibition in Daegu, South Korea, this March. Hanwha TechM used the event to showcase its newly developed equipment, which includes wire saws and a module production line. Next year, the company will head to the U.S. and Europe to tout its products at such shows as the SPI and Intersolar.

Jun-Suk Byun, manager of the sales team for the machine tool division told pv magazine that the company is beginning to focus its efforts on the upstream business. While the equipment is still in the early phase of development – “a baby” – he is confident that mass production on the module line, of which there is currently one in operation, will be reached in the next two years. Furthermore, he states that the equipment is cheaper than the competitors’, like Centrotherm.

With regard to its wire saws, which use diamond wire technology, they are said to be helping to both lower costs, by around 15 percent, and increase quality. Jun-Suk Byun adds that diamond wire technology is better than slurry, for instance, as there are fewer associated environmental problems.

Although Hanwha TechM is currently working on the production technology in Korea, it does intend to establish a manufacturing base in China in the future.
He says that the company is also looking to develop its own string technology. In terms of its key sales markets, China is sitting at number one, followed by Taiwan.

Can Ontario require ‘domestic content’ for FIT eligibility?

By:  Cheryl Kaften

Just how important is “home advantage” to players in the renewable energy sector? It could be a game changer, according to Japan and the European Union, both of which have brought complaints against Canada for violating the rules of fair competition.

80MW Sarnia Solar photovoltaic thin film Ontario project

Nothing in the renewable energy industry has challenged the scale of the iPhone to date. However, Corning Glass represents proof positive that, yes, it matters where the components are manufactured.

First Solar

Specifically, Japan and the EU have protested to the World Trade Organization (WTO) in Geneva that the Canadian Province of Ontario is breaching international convention by stipulating that new solar and wind facilities must be built with a certain amount of domestically manufactured components. For example, solar arrays must be 60 percent “Made in Ontario” in order to participate in the province’s feed-in-tariff (FIT) scheme.

Both nations claim Ontario is discriminating against its global trade partners and giving preferential treatment to local providers. The two cases in all likelihood will lead to a landmark ruling on the legitimacy of “domestic content requirements” in international commerce.

To grasp the implications of insisting on largely domestic-made products, consider how much U.S. manufacturers would gain by the passage of a 60 percent domestic content regulation applying to the components of the Apple iPhone alone, which today is manufactured chiefly in China.

Since the launch of the iPhone in 2007, Corning Glass has manufactured the scratchproof face of the phone out of a factory in Kentucky. Not only has Corning created jobs and profits by becoming a domestic supplier to California-based Apple, but, after the iPhone became a success, Corning received a flood of orders from other companies hoping to imitate Apple’s designs. Its glass sales have grown to more than US$700 million annually, and it has employed about 1,000 Americans to support the emerging market.

Nothing in the renewable energy industry has challenged the scale of the iPhone to date. However, Corning Glass represents proof positive that, yes, it matters where the components are manufactured.

Imports on the outs?

Japan and the EU claim that Canada is in violation of three international trade agreements, because:

  • Ontario’s domestic content regulations accord “less favorable treatment to imported equipment” and are “being applied so as to afford protection to Ontario production of such equipment” (General Agreement on Tariffs and Trade [GATT]: Art. III:4, III:5, XXIII:1);
  • Ontario’s domestic content stipulations appear to be trade-related investment measures that are inconsistent with the provisions of Article III of the GATT 1994 (Trade-Related Investment Measures [TRIMs]: Art. 2.1); and
  • A subsidy had been granted … that would confer a benefit, “contingent [on] the use of domestic over imported goods” (Subsidies and Countervailing Measures: Art. 3.1(b), 3.2, 1.1).

Tensions – and world interest – ran high when the two nations faced off with Canada for oral arguments on March 27 and 28 in Geneva. The key issues to be considered: Was Canada liable to the world court for the independent actions of its province, Ontario?; Were the content requirements of the FIT Program a barrier to fair trade?; and Did Ontario discriminate in favor of domestic goods with subsidies designed to promote production in the province, rather than designed to advance the renewable energy industry?

Canada responded with a rationale that was geared to render all three questions moot. It characterized the FIT scheme as a form of “government procurement, designed to ensure the affordable generation of clean energy in Ontario” – and, by doing so, attempted to shield the FIT and its domestic content mandate from both the GATT and TRIMs provisions. (Government procurement is also exempt from the WTO Subsidies and Countervailing Measures agreement, provided that it does not confer a benefit.)

And although governmental purchases are covered under another WTO pact – the plurilateral Government Procurement Agreement – Canada argued that the GPA represents a purely national commitment. Therefore, Ontario was under no obligation to grant access to its energy procurement market.

However, Tokyo and Brussels insisted that the program provides a subsidy. “The defining aspect of FIT contracts is that they ensure renewable energy generators payments in excess of those that they would [otherwise] receive,” argued the Japanese Member, adding, “That excess is best confirmed by examining the difference between the FIT rates and HOEP [Hourly Ontario Energy Price], as HOEP represents the entire rate” on the open market.

Ottawa was quick to eliminate any associated wiggle room. The Canadian Member characterized the HOEP as “an inappropriate benchmark” and opined that “the focus of any benefit analysis must be on the recipients of the benefit – wind and solar energy producers – not consumers.”

Court of public opinion

Industry reaction to the WTO hearing has been mixed. David Robinson, president of Senergy Solar Corp., LLC, based in Haverton, Pennsylvania, supported Canada’s mandate for domestic content. He told pv magazine, “I wish that the U.S. government would impose the same sort of content requirements here. Then, we would have solar companies moving here, instead of up north to Canada.”

Stephen Morgan, CEO of American Clean Energy, a Saddle Brook, New Jersey-based firm that designs and builds photovolatic arrays, came out against the content requirements. He commented to pv magazine, “The use of content restrictions has nothing to do with promotion of environmentally sustainable energy; rather it is about … subsidizing job creation in a non-transparent manner through otherwise higher-than-necessary alternative energy costs.”

By contrast, Matthew Ayres, managing director of Sydney, Australia-based Growth and Innovation Asia-Pacific, advised a more measured approach, telling pv magazine, “A strong bias toward import may reduce the domestic capability base. A strong domestic focus may limit the use of new (international) technology and skills. So, we are left with a prudent balance that respects the domestic economy, the ability to build a sustainable domestic capability in renewable energy; then bringing the best skills and technology to the table in a way that expands the market in a structured and staged manner.”

Getting the proper FIT

There are now more than 35 FIT programs worldwide. Will this case have repercussions for any other feed-in tariffs currently in place?  That’s unlikely, unless they invoke a domestic content clause. Canada’s Province of Nova Scotia, for example, has its own FIT scheme, but has not been named in any complaint.

How the case plays out remains to be seen. By the end of April, the parties must submit written rebuttals to the panel, which will then schedule a second oral hearing. A ruling on the case is not expected until late October 2012.

Watch out for the May edition of pv magazine, which will discuss the issue in more detail.