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Spain suspends FITs

28. January 2012 | Top News, Applications & Installations, Industry & Suppliers, Global PV markets, Markets & Trends | By:  Oliver Ristau

In a surprise move, the Spanish Council of ministers has implemented a temporary suspension of the renewable energy feed-in-tariffs (FIT) for new installations in Spain.

Spanish flag

No further renewable energy projects, which includes photovoltaics, will receive FITs.

Solarpack

As a reaction to the financial crisis in the Mediterranean country, the new Spanish government, under Prime Minister Mariano Rajoy, has approved a new law, by which the current system of remuneration for renewable energies will be discontinued.

As the Council of Ministers announced on Friday, the government won’t give any economic incentive to fund new renewable installations, and the relevant administrative and funding systems will be suspended.

While it was said that the suspension will be temporary, the government did not disclose any timeframe for when the FITs may be resumed.

In a statement released, it argued that “to maintain the current system of remuneration is incompatible to the current economic crisis.” It did stress, however, that the new measures will not be retroactive. They won’t effect “either the installations in operation, or those that are already registered.”

What’s New on Feed-in Tariffs

By Paul Gipe

 

  • Pakistan Regulator Seeks Approval of Feed-in Tariffs for Wind–Feed-in tariffs for wind energy have been submitted to the Water and Power Ministry from Pakistan’s National Electric Power Regulatory Authority (NEPRA). NEPRA has proposed a novel two-tier system of tariffs depending upon ownership. Pakistan will pay foreign wind developers less than domestically-owned companies. . .
  • Maldives May Launch Solar Feed in Tariff–The Maldives, an Indian Ocean archipelago of 300,000 inhabitants, may be moving towards a system of feed-tariffs for solar photovoltaics (solar PV). . .
  • Updated Tables of Feed-In Tariffs Worldwide–Updated tables include Pakistan, Sri Lanka, and suggested tariff in the Maldives. . .
  • Palo Alto Proposes Limited Solar Feed-in Tariff–Palo Alto’s municipal utility has proposed a limited feed-in tariff program for solar photovoltaics (solar PV) only. . .
  • Reuters: Green energy sector cheers Ontario election result–Ontario’s renewable energy industry breathed a sigh of relief on Friday and manufacturers looked forward to a surge in demand after voters in the province returned the Liberal Party to power, albeit without a majority. . .
  • Tyler Hamilton: Liberals re-elected in Ontario: Green Energy Act and feed-in-tariff program live on–Happy to report that the re-election of the Ontario Liberal government last night means the province’s landmark Green Energy Act, which gave birth to the continent’s first comprehensive Euro-style feed-in-tariff program, has survived its first major challenge. The opposition Progressive Conservative party vowed to scrap the FIT program if elected and neuter the green energy legislation that has brought billions of dollars of investment to Ontario, thousands of jobs, and a new economic pathway for a province that needs to reinvent itself for the 21st century. . .
  • Summary of Sophisticated Sri Lankan Tariffs–In 2010, Sri Lanka launched a sophisticated program of feed-in tariffs. Sri Lanka now has some of the highest feed-in tariffs for wind, hydro, and biomass in the developing world. . .
  • Snapshot of Feed-in Tariffs around the World in 2011–[Updated 10/06/11] Feed-in tariffs are the world’s most popular renewable energy policy mechanism. Despite the economic recession, more and more jurisdictions are turning to feed-in tariffs to spur not only renewable energy development but also industrial development and the attendant jobs that it creates. . . The following article is a snapshot of where feed-in tariffs are being used, and the prices that are being paid. While extensive, this article is not comprehensive. It does not include every tariff for every technology in every jurisdiction, but it does give a flavor for the breadth of this policy mechanism with the odd name. . .

 

More California farmers invest in solar power

By Kate Campbell

Editor’s note: California farmers and ranchers lead the nation in use of solar power. At the same time, government renewable-energy mandates have added pressure for conversion of productive farmland for utility-scale solar energy projects. In a two-part series, Ag Alert® looks at the effects on agriculture from solar power. This week: how farmers have embraced solar power on their operations.

With harvest in full swing, trucks laden with bell peppers, watermelon and onions unloaded at a rapid pace last week at Morada Produce near Linden. Crews washed and packed the produce into boxes before a chain of forklifts carried the market-bound food to coolers.

Harvest activity is being played out across California right now, but there’s something different about Morada Produce: The company’s energy-intensive packing and cooling activities are costing a fraction of what electricity bills totaled in the past.

Skip Foppiano, owner of Morada Produce, pointed to a newly installed two-acre, 390 kilowatt solar energy system outside his office. The once-unpaved employee parking lot is now shaded by four canopies of solar photovoltaic panels that measure more than 40,000 square feet.

The company spent nearly a year researching solar technology to determine the best system for its needs and carefully analyzed the investment decision to determine cost benefits and eventual payback. Foppiano said the new system supplies 60 percent to 70 percent of the energy needed for the farm’s packing and cooling activities.

The solar energy is delivered from the onsite system when utility rates are at their highest, he explained.

“Our family has been farming here since the Gold Rush,” Foppiano said. “We’ve always tried new technology to stay competitive. Solar helps us do that and it’s the right thing to do for the environment.”

Foppiano said the farming operation worked very closely with Pacific Gas and Electric Co., county government and the equipment vendor to complete the project. An investment tax credit and historically low interest rates helped make the system “pencil out,” he said, adding that payback will take about nine years—or less—depending on future energy prices.

An increasing number of California farmers are doing the math and deciding that 20 to 25 years of reduced energy costs makes sense, solar experts say.

Already, California agriculture leads the nation in renewable energy production. But with state government incentives aimed at generating 33 percent of the state’s generating capacity from renewable energy sources by 2020, agriculture has been investing in solar technology at an increasing rate.

Many wineries, nut processing and packing operations have installed photovoltaic panels during the past decade. But now, lower-priced equipment and technological advances have encouraged more farms and agricultural businesses to consider solar power.

A 2009 U.S. Department of Agriculture survey found that California leads the nation in on-farm renewable power generation in all categories: wind turbines, methane digesters and solar panels. But when it comes to using solar panels, California farms account for about 25 percent of the total installed on farms nationwide.

“It all comes down to finding the technology that makes financial sense,” said Holli Tamas of Granite Bay Energy, which designs and installs solar energy systems, including projects for agricultural customers.

“Farms are unlike many of our commercial customers who look at shorter payback times,” Tamas said. “Farmers whose families have been in business generations are more likely to think ‘I’m still going to be here in 10 or 20 years.’ Farmers are very savvy about these kinds of investments.”

There is a distinct difference between energy generated on-site for equipment operation and heating and cooling. This is different than power generated for sale and distribution on the electric grid.

In Sierra County, hay grower and cattle rancher Dave Roberti has been putting the finishing touches on a 500 kilowatt system that tracks sunlight to power nine 100-horsepower irrigation pumps.

“Originally, we looked at wind power because we thought we were in a windy spot,” Roberti explained. “But instead, at 5,000 feet, we found we’re in an ideal location for solar energy production year-round, even when it’s cold and snowy. After we ran the complete analysis, we found solar gave us the best bang for the buck.”

He said the technology offered a way to lock in costs for operating the ranch’s irrigation pumps.

“When the system goes online, we’ll be producing power for just about what our retail rates are,” said Roberti, who is a California Farm Bureau director. “It’s a no-brainer. In about 10 years, the system will be paid off. I’m trading payments to my utility for payments on an equipment mortgage. The difference is, there’s a payoff on the equipment.”

Because Roberti buys power from a rural electric district, he was not eligible for incentives from the California Solar Energy Initiative, which is overseen by the California Public Utilities Commission.

The 10-year, nearly $3 billion program provides incentives for solar system installations to residential and commercial customers of the state’s three investor-owned utilities: PG&E, Southern California Edison and San Diego Gas and Electric.

Incentive funding for solar projects in PG&E and SDG&E service territory is no longer available for non-residential projects. Officials at the CPUC said commercial applicants will be put on a wait list.

Ventura County lemon grower Limoneira installed a 900 kilowatt solar array next to its processing facility about three years ago. Harold Edwards, Limoneira CEO, said the company had been exploring solar power generation for about 10 years, but couldn’t find a way to justify the investment economically.

“But, as the price of the panels has come down, and with a sale-and-lease-back arrangement, we began to see that the cost benefit was adequate,” Edwards said. “But it’s not just about dollars and cents. Not only is it good for the environment, but as we have the opportunity to host tours and school groups, it’s also a great opportunity to talk about agriculture and how it works with the environment.

“It’s amazing the way our investment in solar technology is working out,” he said.

Next week: Renewable-energy mandates touch off a new land rush, as developers of utility-scale solar projects propose to convert productive farmland.

(Kate Campbell is an assistant editor of Ag Alert. She may be contacted at kcampbell@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.

Spurned By DOE, First Solar Hunts For Solar Farm Buyer

By Cassandra Sweet and Ryan Tracy

-DOE says First Solar is not eligible for $1.9 billion loan guarantee for 550-megawatt Topaz solar farm

–First Solar says it is in “advanced talks” with potential buyers of the Topaz facility

–Shares close down 9% at $66.85, lowest level seen in more than four years

(Adds response from Royal Bank of Scotland in 9th paragraph.)

First Solar Inc. (FSLR) said Thursday that the Department of Energy will not provide a loan guarantee to help finance construction of a large California solar farm, but the company is in “advanced discussions” to sell the project.

The Tempe, Ariz., solar-panel maker and solar-farm developer said that the DOE informed the company that there was not enough time to process the company’s $1.9 billion loan guarantee application for the 550-megawatt Topaz solar farm to meet a statutory Sept. 30 deadline for closing the transaction.

“We weren’t able to meet the requirements in time for the deadline,” First Solar spokesman Ted Meyer said in an interview. He added that the company was in “advanced talks with potential buyers” to sell the solar power plant and would “utilize a different transaction structure that does not require a DOE loan guarantee.”

Meyer declined to name the potential buyers or provide details on the sale.

The DOE’s disqualification of First Solar’s Topaz project loan guarantee comes as the department faces intense scrutiny following the bankruptcy of solar-panel startup Solyndra Inc., which obtained a $535 million loan guarantee and a $527 million government loan to build a factory in Fremont, Calif. Solyndra is the subject of a federal criminal probe into whether the company misled the government in connection with the 2009 loan guarantee. It filed for bankruptcy protection earlier this month.

The loss of the Topaz loan guarantee sent First Solar shares tumbling 9% to close at $66.85, their lowest close in more than four years.

In June, the DOE offered First Solar conditional commitments of guarantees for $1.93 billion in loans to help finance the Topaz solar farm. Royal Bank of Scotland Group PLC (RBS.LN, RBS) and a group of unnamed institutional investors and commercial banks agreed to make the loans, which were to be guaranteed by the DOE.

It was unclear whether RBS planned to abandon the project or work on a new financial package with different terms.

An RBS spokesman said the bank declined to comment.

A DOE spokesman declined to comment directly on the department’s disqualification of First Solar’s loan guarantee for the Topaz project, but said that closing such transactions is a rigorous process.

“We have consistently said that we will not close any deal until all of the rigorous technical, legal, and financial review has been completed,” said the DOE spokesman, Damien LaVera. “Failure to close a loan application does not indicate that a project doesn’t have merit or a strong business case to succeed, but rather that all of the extensive due diligence and legal documentation simply cannot be completed by Sept. 30.”

First Solar has two conditional loan guarantees still pending, a $1.8 billion guarantee for a 550-megawatt solar farm in Riverside County, Calif., called Desert Sunlight, and a $680 million guarantee for a 230-megawatt solar farm in Lancaster, Calif., called Antelope Valley.

Company spokesmen declined to comment on the outlook for obtaining loan guarantees for the remaining projects. Some analysts expressed hope that First Solar would snag the latter two loan guarantees, although they acknowledged that investors remained jittery following the Solyndra bankruptcy.

“The Solyndra fallout has created a black cloud around the company that is unlikely to clear until projects are announced as sold,” said Jesse Pichel, an analyst at Jefferies Group.

First Solar obtained a $967 million loan guarantee for the 290-megawatt Agua Caliente solar farm in Yuma County, Ariz., which the company sold to NRG Energy Inc. (NRG). PG&E Corp.’s (PCG) San Francisco-based utility has signed a long-term contract to buy the output from the facility, which currently is under construction.

Together, the four projects are expected to create about 1,750 construction jobs and 53 permanent jobs, and generate enough electricity to serve about 470,000 homes.

In July, First Solar obtained a key construction permit to build the Topaz solar farm on previously disturbed land in San Luis Obispo County, California. PG&E has signed a long-term contract to buy the output from the Topaz facility.

In August, two local citizens groups filed a lawsuit against the Topaz project with the San Luis Obispo Superior Court. The groups did not file a request for an injunction that could delay construction, allowing the company to start building anytime.

First Solar initially planned to start construction on Topaz Sept. 30 to qualify for the loan guarantee. But the company said Thursday that it does not have a timetable for starting construction.

The company is likely to start construction for most, if not all, its shovel-ready projects by Dec. 31, when a key government incentive for renewable energy projects currently is set to expire.

Pending DOE loan guarantees must be closed and construction must be started on funded projects by Sept. 30, under Section 1705 of the Energy Policy Act of 2005.

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