Archive for energy

India accuses US of “ruining” domestic PV industry

20. August 2012 | Applications & Installations, Global PV markets, Industry & Suppliers, Markets & Trends| By:  Becky Beetz

ndia’s Centre for Science and Technology (CSE) has launched a scathing attack on U.S. photovoltaic manufacturers, claiming they are “ruining” India’s domestic photovoltaic manufacturing industry by taking advantage of the US$30 billion Fast Start Finance Fund.

First Solar thin film photovoltaic modules cadmium telluride

First Solar’s thin film modules have been heavily used in indian photovoltaic projects.

First Solar

According to the center’s researchers, which are reviewing the first phase of India’s Jawaharlal Nehru National Solar Mission (JNNSM), 80% of India’s photovoltaic manufacturing capacity is in a state of “forced closure and debt restructuring”, because Indian project developers are placing their equipment orders with U.S. manufacturers.

Currently, the JNNSM requires all crystalline photovoltaic projects to use domestically manufactured products. However, thin film projects may procure their equipment from other regions; a loophole, says the CSE, being exploited by the Export-Import Bank of the United States (Ex-Im Bank) and the Overseas Private Investment Corporation (OPIC).

The center claims they have been offering rates of interest as low as 3% and long repayment schedules of up to 18 years to Indian project developers under the fund – designed to enable developing countries tackle climate change – if they purchase thin film panels from U.S. companies. In comparison, it says Indian banks are offering interest rates of around 14%.

“This has skewed the market completely in favour of thin-film panels imported from US despite the fact that thin-film has lower efficiency when compared to crystalline panels,” says the center in a statement released, adding, “Close to 60 per cent of the panels installed in India are thin-film type even though only 14 per cent of global capacity is thin-film.”

CSE goes on to quote the U.S. Department of State’s report on U.S. Fast start climate financing between 2010 and 2011, which reportedly shows that $248.3 million was awarded by Ex-Im Bank and OPIC for grid-connected photovoltaic plants in India. “The major beneficiaries in this case have been American producers such as First Solar and the now bankrupt Abound Solar,” it says.

Furthermore, the center claims the US is “fudging” its data on fast start finance. “When giving loans as aid, only the difference of the rate of interest between the ‘soft’ loan and a commercial loan is counted as aid. However, in this case, the US has counted the entire loan sum as aid under fast start finance. If a fair counting would have been done, the fast start financing amount shown by the US would be reduced to a fraction,” continues the statement. The U.S. says it has contributed $5.1 billion to the fund to date.

Outwith the fund, Ex-Im announced in July that it had authorized two loans worth US$57.3 million to support the development of 3 photovoltaic power plants in India, which will use First Solar thin film modules.

In a statement announcing the loans, Ex-Im Bank chairman and president, Fred Hochberg said the bank will be supporting India’s green-energy push. “These important transactions will finance the purchase of American products and services and support jobs in our innovative renewable-energy sector.”

Overall, the bank says it has provided $500 million for the financing of solar projects in India. Its goal is to “promote both the bank’s financial products, but also facilitate the purchase of U.S. goods and services.”

Developing countries

In 2009, the Copenhagen Accord agreed to establish Fast Start Finance, a US$30 billion fund contributed to by developed countries for developing countries to support the implementation of climate change measures between 2010 and 2012.

“Fast start financing was supposed to benefit the developing country recipient. Instead, the US has managed to turn it into a game where funds registered as climate funding is given out as loans to projects that promise to buy equipment made in the US thereby benefiting themselves while knocking out the Indian manufacturing competition that doesn’t have the same government backing,” states Chandra Bhushan, CSE’s deputy director general.

Referring to the ongoing U.S.-Sino trade dispute over solar cells, Kushal Yadav, head of CSE’s Renewable Energy team adds, “Interestingly, the US government has put anti-dumping duties on solar equipment imported from China because of the alleged subsidies that China is giving to its solar manufacturers. However, the US is engaging in a similar practice in India by subsidising loans for buying American equipment!”

In the U.S. Department of State’s report, the funding transactions between 2010 and 2011 for India’s solar market include:

  • $719,985 awarded to Astonfield Renewables Private Limited from the U.S. Trade and Development Agency (USTDA) for a feasibility study for 2 photovoltaic plants in India. “The projects will serve as some of the first solar photovoltaic (PV) projects in India deploying U.S. thin film technology.”
  • $14.8 million from OPIC for the development, construction and operation of a 5 MW photovoltaic power generation facility in Gujarat. “The facility investor is a leading solar energy provider from the United States that will use advanced U.S. power generation technology in this plant in India.”
  • A loan totaling $84.3 million from Ex-Im Bank to finance photovoltaic modules and related equipment for the Dahanu Solar project located in the village of Dhursar, in India’s Rajasthan State. “The financing will support the export of thin film, photovoltaic solar modules produced by First Solar.”
  • An Ex-Im authorized a loan of $18.9 million to finance photovoltaic modules and related equipment for the Tatith Solar project located in Gujarat. “The project will utilize polycrystalline solar cells produced by Solarworld Industries America, LP.”
  • A financial guarantee from Ex-Im worth $18 million to finance photovoltaic modules for the Acme solar power plant to be located in Gujarat. “The Acme plant will utilize thin film technology photovoltaic modules supplied by First Solar of Tempe Arizona.”
  • An Ex-Im authorized loan of $15.8 million to finance photovoltaic modules and related equipment for the Azure Solar Plant project located in Rajasthan. “The photovoltaic farm will … consist of thin film technology photovoltaic panels supplied by First Solar of Tempe, Arizona.”
  • An Ex-Im authorized guarantee of $9.2 million to finance thin film, photovoltaic modules and related equipment to Punj Lloyd Solar Power Ltd. of India for a photovoltaic project located in Rajasthan. “The solar modules for the project will be produced by Abound Solar, Inc. at its Colorado facility.”
  • An Ex-Im authorized loan to Universal Solar System of India for $3.7 million to finance a photovoltaic power plant to be located in Gujarat. “The financing will support the sale of electrical inverters supplied by SMA America, LLC, of California as well as solar modules produced by Abound Solar Inc. at its Colorado facility.”
  • $30 million from OPIC for financing the development, implementation and operation of a 120 MW monocrystalline silicon photovoltaic module manufacturing facility located in Hyderabad.

What Is Holding Back Solar Feed-In-Tariff Programs In The U.S. Market?

eed-in tariffs (FITs) have spurred the installation of more than three-quarters of global solar capacity. Germany’s FIT – perhaps one of the best-known programs – has led to the development of more than 50,000 MW of solar power and wind power domestically since its inception in 1990.

But despite this roaring success – which has been duplicated on smaller scales in several other countries – FITs continue to fail to make inroads in the U.S. This market instead relies on a patchwork of often inconsistent federal and state incentives in order to make solar power projects work.

Could FITs ever take off in the U.S.? Where have existing local and state FIT programs failed, and what glimmers of hope can they provide? A recent report by John Farrell, senior energy researcher at the Institute for Local Self-Reliance (ILSR), recaps the frustrating path of the U.S.’ FIT programs and makes recommendations for successful future implementation.

FIT programs – generally branded as Clean Local Energy Accessible Now (CLEAN) contracts in the U.S. – currently exist in 14 states. However, installed capacity under all of the programs totals just 132 MW, according to the ILSR report.

Even if the U.S.’ CLEAN programs were built out to their caps, their installed capacity would represent 1% or less of each jurisdiction’s total electricity scales. In comparison, the cap-less German market already has allowed at least 20% electricity to come from FIT sources.

“Experience shows, not surprisingly, that the larger the scale of CLEAN programs, the greater the cost savings,” the report notes. “Germany has nearly a 50 percent price advantage in project-installation costs, due almost entirely to its large, streamlined market for solar.”

Another shortcoming of the U.S.’ CLEAN programs may be their emphasis on large-scale solar projects. Unlike in Germany, where individuals own 40% of the current renewable energy market, few U.S. programs allow participation by owners of residential PV arrays.

The Sacramento Municipal Utility District’s (SMUD) program, for instance, leads the U.S. in terms of installed CLEAN capacity, with two-thirds of the country’s total, but almost all of the capacity was allocated to projects of at least 1 MW, according to the report. A single 30 MW array took up half of SMUD’s capacity.

The ILSR believes that small-scale, locally owned PV projects represent a more effective use of CLEAN programs.

“It is true that larger projects will have lower per-kilowatt costs, although the difference may be minimal,” the report explains. “But many small projects mean [that] many households (and businesses) begin to have an economic self-interest in supporting further renewable energy developments.”

Better administration
All renewable energy incentive programs are dynamic works in progress, and the German government’s ongoing management of its FIT program has not been without controversy. Last year’s boom in PV installations, followed by an announcement of drastic FIT rate cuts, resulted in political wrangling and negotiations that have yet to be resolved.

It is also worth noting that the U.S.’ electricity market and regulatory environment differ from Germany’s – thus making exact duplication of the latter’s FIT program difficult or impossible.

Nevertheless, the U.S. can learn a couple important FIT/CLEAN program management lessons from Germany, according to the ILSR report.

Price differentiation – i.e., providing different rates for different types of technology and project sizes – has allowed various types of renewable energy to grow simultaneously, in addition to allowing more homeowners and their small-scale projects to participate competitively.

At the same time, Germany’s FIT pricing is “all in,” attracting project investors without the need to add other subsidies and partners – and, thus, streamlining investment. U.S. CLEAN contracts, on the other hand, must be employed in tandem with federal and/or state incentives in order to create an attractive investment.

“The reliance on tax incentives constrains U.S. CLEAN programs,” the report says. “Federal tax incentives are subject to the vagaries of congressional politics. Federal tax incentives also increase complexity, as developers often partner with companies seeking tax write-offs, which, in turn, encourages larger projects and increases the overall cost of the project.”

A successful FIT/CLEAN program must also be priced properly. According to the report, the most important feature of Germany’s FIT program has been its “accelerated” price reductions in recent years. In response to market conditions, FIT rates now drop much more rapidly than in the past.

“American CLEAN programs must similarly adapt to a changing market,” the report notes, adding that currently, few U.S. programs offer any year-to-year price transparency, thus making project development more challenging.

With new CLEAN initiatives forthcoming in the U.S. – including programs from the Los Angeles Department of Water and Power, the Long Island Power Authority and the State of Rhode Island – now may be an ideal time for intensive evaluation and possible restructuring.

Despite its criticism, the ILSR is optimistic about the future of CLEAN programs in the U.S. and the role that they can play as solar power continues its downward cost trajectory.

“The CLEAN program makes an ideal transitional incentive, one that can be tailored to the needs and capacities of different states and can be phased out gradually as renewable energy costs decline,” the report says.

Photo: A residential PV installation in Germany. Photo credit: Conergy AG

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

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.”

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.”

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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