Archive for tax grant

ITC Cliff

The potential loss of solar capacity is about equal to the total amount currently installed

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What will happen if the federal investment tax credit (ITC) so many solar developers depend on isn’t extended?

“If the investment tax credit is not extended, we see it as a disruption, not a death for the industry,” said Maddy Yozwiak, U.S. Power and RECs analyst  and co-author of the recently-released report, “How extending the investment tax credit would affect US solar build,” from Bloomberg New Energy Finance (BNEF).

“It will be a disruption that will take years to recover from, but the recovery is there. Long-term costs continue to improve,” Yozwiak added. “That doesn’t go away, even without the ITC.”

For now, the ITC is a 30% tax credit, but that is slated to change at the end of 2016, when it would drop to 10% for business investments in solar, and nothing for residential solar projects.

With that policy change, BNEF calculated that  the US can expect about 73 GW of solar PV to come online by year-end 2022. Build rates will fall from “an average of 8 GW per year from 2014-16 to 6 GW per year from 2017-22.”

The solar industry is lobbying hard for a five-year extension of the 30% business and personal ITC. If congress puts it in place by mid-2016, that would boost average build rates to about 10 GW per year from 2017-2022, the analysis concluded, amounting to an installed capacity of over 95 GW.

Given the success of the ITC and the value of solar, Yozwiak said, the real question “is whether it is worth causing the change after 2016, and havingdisruption at the scale we forecast it.”

Standard Solar CEO Tony Clifford agreed.

“There are going to be changes in 2017, likely very dramatic changes,”  Clifford said. “But we shouldn’t spend time arguing about how big this cliff will be. We should be working to make sure we don’t go over it.”

Solar facility that could power 500 Marin homes

By Janis Mara, Marin IJ

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Roy Phillips, president of REP Energy, leads a tour of an abandoned quarry on June 9 in Novato. His company, REP Energy, wants to build a solar energy facility at the site near the McIsaac Dairy west of Novato. The quarry, no longer in use, was mined for the mineral serpentine, a source of asbestos. (Frankie Frost — Marin Independent Journal)

A proposed solar facility just outside Novato that could generate enough electricity to power more than 500 Marin homes is up for approval at the Marin Planning Commission meeting Monday.

Located on the isolated grounds of a former rock quarry, the solar farm would have 4,272 solar panels up to 6 and a half feet high on 11.5 acres of the 952-acre quarry. The $6 million project would generate 1.98 megawatts of electricity, delivered to Marin Clean Energy via nearby power lines.

The quarry was once mined for serpentine rock, which contains asbestos. Quarry operations shut down in 1990.

Installations like the solar project “are a good way to use formerly disturbed locations” like the quarry, said Andrew Campbell, the executive director of the Energy Institute at Haas, a research and teaching facility at the University of California at Berkeley.

Campbell said the proposed location also was beneficial because it is close to the people who would use the energy.

“Having the generation close to an area where consumers are also has benefits, since some power is lost when it is transmitted over long distances,” the executive director said.

The site is west of the city of Novato, east of Stafford Lake and about a mile north of Novato Boulevard. It is not visible from the road. County staff has recommended that the permit be granted, with some qualifications.

Crawford Cooley and Beverly Potter, who own the former quarry, would lease the land to San Rafael-based Danlin Solar, along with San Rafael-based REP Energy. Those two companies would own and build the solar installation.

“That’s a pretty typical arrangement,” Campbell said.

“Solar is a green energy source, no doubt about it. There is no pollution or greenhouse gas emitted at the place where you are generating the power,” the executive director said.

“This would be quite a win if it happened. The people who are very concerned about seeing beautiful agricultural land taken up with solar panels have a valid point. You’d hate to lose a lot of natural Marin. That makes this an ideal project because it’s sitting in an abandoned quarry essentially on bare rock,” said Bob Spofford, vice president of Sustainable San Rafael.

“Solar is in some ways the most ideal of all alternative energy because it doesn’t make noise, it doesn’t pollute, it produces power close to the time when it’s most needed, and it does not harm wildlife,” said Spofford.

Addressing Spofford’s last point, “Photovoltaic panels definitely do not kill birds,” said Michael D. McGehee, a Stanford University associate professor and a senior fellow at the university’s Precourt Institute for Energy. McGehee teaches classes on solar cells. Wind turbines such as the ones at Altamont do pose a danger to avian life, perhaps causing some to confuse the effects of this alternative energy source with those of solar, McGehee said.

No letters of opposition to the project had been received by the staff by Friday.

The state Office of Mines Reclamation and the Department of Public works oversaw the reclamation of the land since the 1990s, according to the county staff report. The project is exempt from the California Environmental Quality Act because it will not cause environmental impacts, the staff report said.

“My job is to work with clients to help them avoid environmental impacts,” said Dana Riggs, a project biologist with San Rafael-based WRA Environmental Consultants. “We planned it (the project) in a manner to avoid impacts on sensitive resources including species and habitat,” Riggs said.

If the permit is granted, construction could begin as early as mid-August and wrap up by November, according to Frank Gobar of Danlin Solar.

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.”

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.

Suntech Weathers Turmoil in Solar Industry

by Aaron Back
Wall Street Journal

China-based Suntech, the world’s largest producer of solar panels, hasn’t been immune to turmoil in the industry world-wide, but the company’s founder and chief executive, Shi Zhengrong, believes increasing consolidation in the sector will buoy large players.

Dr. Shi is a foreign-educated solar scientist. He earned a Ph.D. in electrical engineering from the University of New South Wales in Australia in 1992, and gained Australian citizenship. From 1995 to 2001 he was research director and executive director of Pacific Solar Pty. Ltd., an Australia-based maker of solar components.

Associated PressShi Zhengrong, founder and chief executive of Suntech Power Co. Ltd.

The solar industry globally has fallen on hard times, beset by falling subsidies in Europe, a key market, and global overcapacity for solar panels and their components. In a recent high-profile case, the German government has been in talks with the solar industry to begin monthly reductions in feed-in tariffs, the fixed price at which solar energy is purchased. U.S. trade authorities are also investigating complaints of alleged dumping of solar panels on the U.S. market by Chinese producers, including Suntech.

Dr. Shi has said he sees consolidation of the sector ahead, which could benefit large players like Suntech. Still, the company has been vulnerable to forces buffeting the industry. Suntech posted a $116 million loss in the third quarter, compared with a year-earlier profit of $33.3 million, hurt by a foreign-exchange loss due to volatility in the euro and dollar exchange rates. The company said it expects to post revenue of between $3 billion and $3.1 billion for 2011, up from $2.9 billion in 2010.

Dr. Shi talked with Aaron Back in Davos, Switzerland. The following interview has been edited.

WSJ: You earned a Ph.D. in Australia and took an Australian citizenship. How did this experience shape your management philosophy?

Mr. Shi: I spent 14 years living in Sydney, Australia. When I first went to Australia I was 23 years old. I was a young man. I did my Ph.D. with professor Martin Green, and to be honest, before that I never thought I could be a good scientist.

After [finishing my Ph.D. in] 2.5 years, record time at the University of New South Wales, and afterwards working in the laboratory for about 2-3 years, based on my patents together with the professor, we were able to raise about $50 million to start a spinoff company called Pacific Solar, and I was appointed as deputy research director. So that was actually very important for my career in a way. Before, my background and research specialty was on laser physics, and that really changed my specialty to solar.

WSJ: So was it something of a coincidence that you became involved with solar technology?

Dr. Shi: It was a coincidence for me to come to know professor Martin Green. I knocked on his door at 5 p.m. to ask him for a job. So then I said “I don’t want a full-time job, I just want something like part-time research assistance or something.” So then he said, “OK, come in.” So we started chatting, and he knew my background, he knew I had masters degree, I think based on the credentials of other Chinese students he guessed I was at least above average. That’s how I got into solar.

WSJ: Has your dual role as a Chinese entrepreneur and an Australian citizen been key to your success?

Dr. Shi: I think it’s extremely important for Suntech. If you look at our culture and DNA, a lot of things have to do with my experience in Australia. I got to know Western culture a lot, their way of thinking, their way of doing things. Of course I also kept the essence of Chinese culture, if you look at the style of management in the company, we’re really multinational with a global management team. For our regional sales and operations, we really depend on local culture, local faces and local language to really represent Suntech. And also, because as we know, Australia has leading technology in crystalline silicon solar cell technology, so that also gives us a leading position in research and development and innovation.

WSJ: You’ve said recently that the solar sector will face consolidation. How do you see this playing out?

Dr. Shi: If you look at China there are probably more than 1,000 companies in this sector, but at this moment, 50% at least have either shut down production or partially ended production. Whether they are going to shut down permanently or whether there will be some M&A I think all depends. You know, Chinese companies have very strong survivability. So it all depends on how long this situation will last. But the market consolidation is already happening. If you look at 2011 Q2 and Q3 figures, the top six manufacturers (globally) had 55% to 60% of market share. But in 2010, it was only about 25%. So it’s already happening because customers care more about brand, R&D, sustainability, service and so on.

WSJ: But are you yourself going to go out and buying any struggling rivals? Is that something you would consider?

Dr. Shi: Not really, but we are open-minded to seize any opportunity that fits with our strategy…Anything is possible.

WSJ: Germany has recently cut its solar feed-in tariffs, and it seems around the world in this era there is less money for solar subsidies. So what does that mean for you?

Dr. Shi: Well, I think its natural and it’s the way it should be. If you look at the [German Renewable Energy Act] initiated by the German government in 2004, that was just trying to help the industry to create a market. So once you have a market, industry will innovate and try to reduce costs. So in the last few years, costs have come down so dramatically…The law was designed to reduce feed-in tariffs annually, say once a year maybe around 10%, but in the last two years, apart from this annual reduction, there were additional 15% feed-in tariff cuts. So that gives you an idea—there’s an accelerated reduction of feed-in tariffs, due to accelerated reduction of solar panel costs.

WSJ: Late last year, some U.S. solar-panel manufacturers asked for anti-dumping investigations against Chinese rivals, including Suntech. Where do you think this is headed?

Dr. Shi: Unfortunately it’s a lose-lose situation. Nobody wins: The U.S. government, U.S. consumers, and the solar industry are all losers in this game. We believe the accusation is not true.

If there’s a tariff or trade war, it would really be a big setback for the industry…Because of [a possible tariff] many projects that were realistic due to reduced prices become impractical because the economics doesn’t work anymore. What does that mean? It means, you will lose jobs. I think in the U.S. currently there are about 150,000 people employed in the solar industry. Globally around 800,000, with 300,000 in Europe. For every 10 jobs we create in factories, there will be 15 jobs created downstream, in installation, financing, project development, distribution.

Write to Aaron Back at aaron.back@dowjones.com

Résumé

Education: Ph.D. in electrical engineering from the University of New South Wales (1992)

Career: Pacific Solar Pty. Ltd. research director and executive director (1995-2001)

On antidumping investigations: “If there’s a tariff or trade war, it would really be a big setback for the industry…Because of [a possible tariff] many projects that were realistic due to reduced prices become impractical because the economics doesn’t work anymore.”

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.

Copyright © 2011 Dow Jones Newswires