By: Diane Cardwell
Via: The New York Times

Marc Steiner for The New York Times
A Roof Diagnostics crew installing panels in Holmdel, N.J. Creative financing has set off a boom in solar installations.

HOLMDEL, N.J. — Jay Nuzzi, a New Jersey state trooper, had put off installing solar panels on his home here for years, deterred by the $70,000 it could cost. Then on a trip to Home Depot, he stumbled across a booth for Roof Diagnostics, which offered him a solar system at a price he couldn’t refuse: free.

Mr. Nuzzi had to sign a 20-year contract to buy electricity generated by the roof panels, which he would not own. But the rates were well below what he was paying to the local utility. “It’s no cost to the homeowner — how do you turn it down?” Mr. Nuzzi said on a recent overcast morning as a crew attached 41 shiny black modules to his roof. “It was a no-brainer.”

Similar deals are being struck with tens of thousands of homeowners and businesses across the country. Installers, often working through big-box chains like Home Depot or Lowe’s, are taking advantage of hefty tax breaks, creative financing techniques and a glut of cheap, Chinese-made panels to make solar power accessible to the mass market for the first time. The number of residential and commercial installations more than doubled over the last two years to 213,957, according to Greentech Media, a research firm.

Major players in the installation business, like SolarCity, Sunrun and Sungevity, are thriving even as the other side of the industry — solar module makers — has been squeezed to the breaking point by fierce competition from Chinese manufacturers. In a case to be decided later this month, a coalition of solar manufacturers has asked the United States government to impose steep duties on the imports, arguing that the Chinese companies are violating international trade rules.

“You hear a lot of the gloom and doom about the industry and, you know, ‘The manufacturers are losing jobs, they’re shutting down,’ but if you look at where the actual money is in these systems and where the jobs are, it’s really in the installation,” said Lynn Jurich, Sunrun’s president.

Big corporations like Google, U.S. Bancorp, Morgan Stanley and Bank of America Merrill Lynch see the potential for steady profits in rooftop solar projects and have been supplying the capital to help cover the upfront costs, which typically run $30,000 or more for a single-family home. The investors say they believe the returns, generally 7 to 13 percent, are relatively safe because the solar providers generally sign up only homeowners and businesses with solid credit. In addition, installers say that people tend to pay their electric bills even when facing other financial problems.

“We have customers that are foreclosed,” said Lyndon Rive, chief executive of SolarCity, one of the largest installers. “They’re still paying their electric bill so they still pay us.”

The company has raised more than $1.4 billion to finance its projects and is so confident in its future that it is planning an initial public offering of its stock. The company has declined to comment on the stock offering.

Industry executives even predict that solar leases could one day be bundled and sold as securities like mortgages and other loans.

Some analysts caution that despite all the activity, the sector still faces hurdles, like the high costs of bringing in new customers and getting financing. “It’s not clear to me that anyone yet has cracked the code of scaling the business massively,” said Dickon Pinner, co-author of a recent McKinsey report on the industry.

Solar customers can finance their systems in a variety of ways. Businesses often purchase them outright so that they can reap the savings and take advantage of tax incentives and depreciation.

But homeowners are increasingly choosing to avoid the upfront costs. In California, the country’s largest market, more than 70 percent of residential customers putting in solar this year have opted to sign a lease or power purchase agreement with someone else owning the systems, according to PV Solar Report.

The structure of the deals varies by company and state, but the overall approach is generally the same: Customers agree to pay a fixed monthly charge or rate for all the solar power produced, and the companies that finance the systems pay for the installation and take the value of any tax breaks or renewable energy credits for which the customer would ordinarily be eligible. Some companies concentrate on financing and use local contractors for sales and installation, while others do everything themselves.

Through such arrangements, industry executives say, customers can lower their power bills, escape the uncertainty of fluctuating energy costs, and avoid the complex bureaucracy of federal and local credits, rebates, grants and tax breaks.

Marc Steiner for The New York Times
The co-founder of Roof Diagnostics, Kelcy Pegler Jr., started a solar division at his father’s roofing company four years ago.

However, the approach does not work everywhere. Thus far, installation companies have been most active in states where the price of electricity from the utility is high and there are robust incentives, like California, Hawaii and much of the Northeast.

And the transactions are not without risks for both sides. If the systems do not produce the promised electricity, the agreements often require the companies to reimburse customers for what they have to buy from their utility instead. Customers are committed to a long-term contract, raising complications if they sell the house or want to get out of the deal.

Another concern is the trade case, brought by a group of manufacturers who say they cannot compete against Chinese companies able to cut their prices below their costs because of unfair subsidies from their government. The Chinese companies aim to monopolize the market and then raise prices, American manufacturers say.

“The game is simply rigged, plain and on its face,” said Ben Santarris, a spokesman for SolarWorld Industries America, which originally filed the trade complaint and makes panels in Oregon.

The Commerce Department has already imposed modest tariffs on Chinese-made silicon cells based on a preliminary finding of improper subsidies. On May 17, the department is scheduled to announce its determination of whether the Chinese companies engaged in dumping, or selling products below fair value, which could lead to steeper duties.

Those on the installation side of the business say that cheap imports benefit consumers, and they have urged the government not to penalize the Chinese manufacturers.

For now, those cheap panels are helping to keep business brisk for installers large and small across the country.

“We have our suppliers calling and dropping their prices on a daily basis to move inventory. That works in our favor,” said Heshy Katz, president of Green Power Developers, an installer in New Jersey. “We can offer our clients an installation at 30, 40 percent less than two years ago.”

Roof Diagnostics hired almost 50 new employees in March and April, said Kelcy Pegler Jr., who started the solar division at his father’s New Jersey-based company about four years ago and has expanded to Massachusetts and New York.

“We turned a roofing company that did solar into a solar company that does roofing in support of solar,” he said. “We’re really a solar company now.”

By: Matthew L. Wald
Via: The New York Times

In addition to enabling a company to pay nighttime prices for electricity, a big battery can step in during a power emergency.

Gills Onions, a food processing company based in Oxnard, Calif., needs copious amounts of electricity for refrigeration, lighting and other jobs, and it sets an example by making its own, using onion waste. But it recently became a little greener — and more economical — by adding an enormous battery.

Gills processes about a million pounds of onions a day. Of that, about 300,000 pounds a day — the tops, bottoms and outer peels — is waste. “We slice, we dice, we whole-peel,’’ said Nikki Rodoni, a spokeswoman. Disposing of that material involved considerable labor as well as diesel fuel for the trucks, and storing it on site made the company unpopular with neighbors, she said.

So a few years ago Gills switched to squeezing the wastes to produce about 30,000 gallons of juice. It might not be to human tastes, but it is rich in sugars and attractive to bacteria.

The juice goes into a device called an anaerobic digester, basically an oxygen-free chamber, where bacteria break it down and produce methane gas. After it is cleaned and dried, the methane is fed to two fuel cells that quietly and cleanly covert it to 600 kilowatts of electricity. (The remainder of the onion waste becomes cattle feed.)

That cost $10.8 million, but it worked well. Still, at some hours, Gills needs far more than 600 kilowatts — about three times as much. Then it must buy electricity from Southern California Edison, and for Gills, that posed two problems.

One was that it was buying energy at the most expensive time of the day, weekday afternoons, when the system’s loads are high. The other is that commercial customers like Gills pay not only for energy, but also for peak capacity, or the highest level of power demand that they require in the course of a month.

So it is now taking a second, unusual approach to electricity, harnessing a gigantic battery built by Prudent Energy of Bethesda, Md. The Prudent battery is the same in principle as many others, with a liquid electrolyte that can shuttle ions back and forth to absorb current or create it. But it has external tanks to store huge volumes of electrolyte and takes up a space the size of a tennis court.

The battery can absorb or give back another 600 kilowatts for as long as six hours. Fully charged, it holds enough energy to run a large suburban house for about four months.

In California, with time-of-use rates, the electricity can be bought at night for less than half what it costs during the day. It is not pure savings because the battery loses 10 to 30 percent of the energy in the round trip from the grid to the battery and back out again on its way to the electricity-using device.

But in addition to letting the company pay nighttime prices for electricity used in the daytime, the battery provides a kind of insurance: it can step in instantaneously if one of the fuel cells unexpectedly shuts down, according to Jeff Pierson, senior vice president of Prudent. That prevents a spike in Gills’s demand from the grid and thus eliminates higher demand charges.

The two companies did not disclose the price of the battery. It will initially be owned by Prudent, with Gills having an option to buy it later.

Called a vanadium battery for the material used in the electrolyte, it is the largest of its kind in the world, Mr. Pierson said. He suggested that similar ones could be installed around the country.

“This time-of-use play is not unique to California,’’ he said. “There are plenty of other places around the country where you have that sort of differential between off-peak and peak.’’

Batteries like this one have a variety of potential uses. Grid operators around the country are looking for storage devices that can accept signals to draw power off the system or give it back on short notice — usually at four-second intervals — to balance supply and demand and keep the alternating current system properly synchronized.

And on the West Coast, electric grid operators are going to greater lengths to find ways to compensate for sudden surges or drops in generation from wind or solar installations.

Batteries like Prudent’s can do both, although the one at Gills is not currently set up for those tasks.

By: Kate Galbraith
Via: The New York Times

AUSTIN, TEXAS — Of all the types of energy embraced by the green community, “combined heat and power” probably has the clunkiest name. But proponents hope that C.H.P. systems, which can be installed in homes, will one day compete with better-known technologies like solar panels.

The idea is to capture two forms of energy at once, namely heat and electrical power (which is why the technology is sometimes called cogeneration). Large systems exist on college campuses like the University of Warwick in England and also at hospitals, chemical factories and even airports. These systems use the heat left over from generating electricity to produce either hot water, which circulates through pipes to nearby buildings to provide heat, or steam, which can be used for industrial purposes.

Because the process of making electricity wastes a lot of energy, combining heat and power generation leads to greater efficiencies, said Jürgen Weiss, head of the climate practice at the Brattle Group, a consulting firm based in Cambridge, Massachusetts.

“The idea of C.H.P. is to make electricity and not waste the heat that gets generated in the process, but rather to use it for something useful,” Mr. Weiss said. That means lower utility bills and fewer greenhouse gas emissions.

In recent years, engineers have started designing more residential-scale systems. These may be about the size of a refrigerator and can fit into a basement. In Britain, a system run by a Stirling engine may cost more than £6,000, or $9,500, including installation, and in Germany — where heating systems are generally more expensive — a C.H.P. system may run from €15,000 to €20,000, or $19,800 to $26,400, according to Delta Energy & Environment, a research company based in Edinburgh. Delta said it would often take homeowners 10 years to make back the cost, in the form of lower utility bills. Getting prices down will be critical, experts say.

The small systems work best in cold climates, where homes need plenty of heat. They are often fueled by natural gas and make a bit of noise, but the extra electricity they produce can be sold into the power grid. Big-name automakers like Honda Motor and Volkswagen have applied their technology to help develop small-scale systems, sometimes known as micro C.H.P.

Small systems are gaining traction in Japan after the nuclear disaster last year, which led officials to order that nearly all of the country’s reactors be taken offline. Orders have “increased dramatically” since that event and are likely to rise even more sharply in the future, according to a recent report by Pike Research, a research and consulting group in Boulder, Colorado. Honda has sold micro-C.H.P. systems in Japan since 2003 and said last year that about 108,000 households were using its units, called the Ecowill.

The home systems in Japan tend to be much smaller than those in Germany or the United States, according to Kerry-Ann Adamson, a research director for smart energy who is based in London for Pike.

Elsewhere in the world, the picture is mixed. In the United States, a basic obstacle is lack of knowledge, said Daniel Bullock, director of the Gulf Coast Clean Energy Application Center, a U.S. Department of Energy group based in a Houston suburb that promotes C.H.P. and related sources of energy.

“Most people don’t even know about C.H.P.,” Mr. Bullock said. As a result, he added, “People are willing to pay a lot more money for solar panels than what a C.H.P. system would cost.”

The low price of natural gas in the United States — a result of the plentiful supplies created by the hydraulic fracturing boom — may make the systems more appealing, Mr. Bullock said, though homeowners, lacking the negotiating power of large industrial users, may not reap the full benefit of the lower gas prices.

In Europe, Delta Energy & Environment forecasts that 40,000 to 70,000 units a year will be sold by 2015, but “an outcome with substantially lower sales is possible,” said Jon Slowe, a director for the company, adding that Britain and Germany are using incentives to push the hardest for micro-C.H.P. technology.

Germany has a target of getting 25 percent of its power from C.H.P. systems of all sizes by 2020. A draft proposal now under consideration would increase incentives for the systems, although Ulrich Fikar, a spokesman for the industry group Cogen Europe, said it was “not ambitious enough for micro-C.H.P.”

The Netherlands used to be a promising market, but the new government sharply cut spending and incentives, according to Mr. Slowe. Belgium, too, is cutting spending.

“It’s a really tough time in Europe, with governments trying to tighten their belts,” Mr. Slowe said.

The United States has even fewer incentives for micro-C.H.P., as it does for most alternative energy sources.

“Look at the difference between the U.S. and, say, Germany,” Mr. Bullock said. In Germany, “you’ve got feed-in tariffs, a much more active regulatory environment, you have programs that support financing and implementation.”

At least one U.S. company has struggled to introduce the technology. Freewatt, a micro-C.H.P. unit developed by ECR International in Utica, New York, was installed by some U.S. customers. But “it’s unavailable commercially right now,” said Maggie Reed, a representative for the company.

Nonetheless, some analysts view the United States, with its large number of buildings and potential for energy-efficiency gains, as a sleeper market.

“The Japanese market is a given,” said Ms. Adamson, the researcher for Pike. “What will change the face of the residential C.H.P. market is if the U.S. wakes up to this.”

via the Google Green Blog

Imagine a renewable energy resource capable of producing more than 10 times the energy of the installed capacity of coal in the US. That’s the potential for Geothermal Energy in the United States, according to a recently completed 3-year project supported by Google.org to update the Geothermal Map of North America.

The study conducted by SMU Geothermal Laboratory, led by Principal Investigator Dr. David Blackwell, incorporated tens of thousands of new thermal data points to create the most data rich perspective on US geothermal resources to date. The full results can be seen in the updated Google Earth layer on U.S. Geothermal Resources and in SMU’s paper to be presented at the Geothermal Resources Council Annual Meeting.

The project estimates that Technical Potential for the continental US exceeds 2,980,295 megawatts using Enhanced Geothermal Systems (EGS) and other advanced geothermal technologies such as Low Temperature Hydrothermal.


2011 Geothermal Heat Flow Map of the US

The new estimates are compliant with the new global geothermal mapping protocol developed by SMU, Hot Dry Rocks PTY, GeoWatt Ag, and Google.org which is now recognized by the International Energy Agency and the International Geothermal Association. Under the protocol, Technical Potential is limited to depths of 3.5 to 6.5 km (6.5 to 10 km is considered “Theoretical Potential” under the protocol) and inaccessible zones such as national parks and protected lands are eliminated.

How’d they do it?

The SMU team has been developing entirely new pictures of the earth’s geothermal resources. They started by aggregating thousands of new Bottom Hole Temperature (BHT) readings from oil, gas, and water wells in previously under-sampled regions of the U.S. For example, The 2004 Geothermal Map of North America used only 5 heat flow points informing geothermal estimates for West Virginia, compared to the additional 1,455 BHT points in the updated version. In addition, the team has improved estimates of heat flow through the earth’s crust with better regional lithologic data.

The updated map is a testament to the incredible SMU team: Dr. David Blackwell, Maria Richards, Zachary Frone, Joseph Batir, Ryan Dingwall, Andrés Ruzo, and Mitchell Williams.

We’re excited that with improvements in EGS technology, all of these resources could one day be harnessed to provide clean, reliable, baseload power — energy that’s available every hour of every day.

via NPR Planet Money

I went looking for a bubble the other day. I’d heard that prices for American farmland were spiking – up thirty percent over the past year, and double what people were paying five or six years ago. It sounded like irrational exuberance.

I flew to Iowa, drove to the town of Colo, an hour north of Des Moines, and dropped in on a land auction. It was a great scene: A hushed crowd of farmers, an auctioneer with a voice made for opera, and a climactic duel between rival bidders, one of whom raised the price with a wink, the other with a slight nod.

The winking man won, if you can call it a win when you have to hand over $1.5 million for 158 acres of corn stalks. The seller, a sweet middle-aged woman, seemed genuinely conflicted about selling her inheritance. But she needed the money, she said. And she said it: “It just seemed like we had this bubble going on with agricultural properties.”

But the more I learned about the economics of corn farming and farmland, the less bubble-ish it seemed.

Consider what our local expert, the Iowa State economist Bruce Babcock, told me: Farmland in Iowa changes owners, on average, every thirty years. Buyers generally put down 30 percent of the purchase price, and 60 percent is common. This isn’t a no-money-down, buy-and-flip kind of market.

And at today’s corn prices, you can earn a tidy 4 percent return on your investment, just by growing corn. In that light, it all seems terribly rational. (Relevant side note: Babcock was so convinced about his calculations that he bought some farmland for himself a few years back.)

Of course, it all hangs on those corn prices. They’re way up, too. As it turns out, corn farmers are in the energy business. You can convert their corn into ethanol, and put it in your gas tank. This is happening on a massive scale: More corn this year will go to ethanol factories than will feed farm animals. And the higher gas prices go, the more profitable the ethanol business, and the higher the demand for corn.

Introducing the Pecan Street Project


via the Texas Tribune By KATE GALBRAITH

One morning this week, several dozen residents of northeast Austin gathered to inspect three plug-in Volt cars. They peered at the electric and gasoline engine components beneath the hood and took turns sitting behind the wheel.

“I really hate buying gas,” said one of them, Joan Neuberger, a history professor at the University of Texas, who is among more than 140 local residents who have expressed interest in buying or leasing a heavily discounted Volt next year.

The plug-in cars will be part of the continuing roll-out of an Austin smart-grid study called Pecan Street, which on Friday is announcing partnerships with a handful of major companies, including Whirlpool, Best Buy and Chevrolet, the Volt’s manufacturer. The companies will test how people use New Age products and systems, including solar panels and “smart appliances” as well as plug-in cars, and how it all affects the electric grid.

There are about 200 residential participants so far in Pecan Street, which is financed partly by a 2009 federal stimulus award of $10.4 million. Besides monitoring how participants use electricity, researchers are also measuring water and natural gas use.

Early results from just a few houses are already showing interesting trends. For example, in the spring, electricity use dips lowest on Thursdays (the reason is a mystery). In the winter, natural gas use is highest in the hour after 7 a.m.

The project is also looking into whether south-facing or west-facing solar panels work better for the grid. One hundred Volts will be offered to participants with a special rebate of either $7,500 (in addition to a federal tax credit of the same amount) for those who buy or $3,000 for those who lease, both courtesy of federal stimulus money. Researchers intend to measure how car charging can be integrated with solar panels.

Pecan Street, which is affiliated with the University of Texas, is one of several smart-grid projects in the state. Another, by the Center for the Commercialization of Electric Technologies and also financed partly with federal stimulus money, will include studies on a new Houston neighborhood that people are still moving into. Texas is a good place to conduct smart-grid research, experts say, because the deregulation of the electricity market roughly a decade ago means that electric companies are motivated to offer consumers different ways to monitor and pay for their power.

“Texas is really leading the nation with respect to promoting a well-balanced approach to smart-grid,” said Jerry Jackson, a former Texas A&M professor who now leads a national smart-grid research consortium based in Orlando, Fla.

More than four million “smart meters” are already installed in deregulated parts of Texas, according to the Public Utility Commission, and many more should be installed by the end of next year, said Donna Nelson, the commission’s chairwoman.

The installation of smart meters has been slightly contentious in Texas, but not nearly as controversial as it has been in California, the other major smart-meter state. Smart meters allow many Texans to monitor their electric use on a Web site in 15-minute intervals, if they choose. This information allows people to know when they are using more electricity than expected.

For Pecan Street researchers, one of the surprising findings to date is that there is little difference in energy use between homes in Mueller, a new, green-built Austin neighborhood, and older homes outside that neighborhood.

What that suggests, said Brewster McCracken, the project’s executive director, is that personal behavior appears, so far, “to be much more important than the green-building rating of the home.”

kgalbraith@texastribune.org