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In the real world, solar often gets barely a passing grade

I’m a big fan of solar power. But as with anything, I like to know exactly what I’m getting. One of the big unspoken issues in the solar sector is the difference between the rated or estimated potential output of a solar system–and the actual production of kilowatt-hours. A range of factors from the margin of error in the modules, to temperature, dust and losses from wiring, conversion to AC power and any batteries all can contribute to as much as 30 percent lower actual power production–even in the first year.

Compounding this problem in my mind is that in California only about a third to half of our solar installations are actually independently monitored, according to one of my friends at Fat Spaniel, one of the leading monitors of solar systems.

The California Energy Commission did some good thumbnail analysis of solar in the real world several years ago.

Here’s the punch line from their analysis:

“So the ‘100-watt module’ output, reduced by production tolerance, heat, dust, wiring, AC conversion and other losses will translate into about 68 watts of AC power delivered to the house panel during the middle of a clear day (100 watts x 0.95 x 0.89 x 0.93 x 0.95 x 0.90 = 68 watts).” From A Guide to Photovoltaic System Design and Installation (PDF) by the California Energy Commission. If you are interested in solar, you need to read their report.

But this 68 watts is only part of the story. If you have battery storage on the system they say it could reduce the power another 6-10 percent. They then stated that poor installation layout problems–including shading can take an additional toll. Another big issue is the angle of the roof and the direction it faces (in California, where your roof faces can affect the power output up to another 15 percent for many roofs). And interesting enough, for all the talk about making windows out of solar in what is typically described as Building Integrated Photovoltaics (BIPV), a vertical installation can reduce the power output up to about half all by itself!

Their bottom line: if the system is perfectly installed under perfect conditions the best case scenario for San Francisco would be 1,724 kwh, or electricity per year for each kilowatt installed and for Los Angeles would be about 1,758. But that’s before all the “real-world” adjustments. When you make all those real-world adjustments–take another 25-30 percent or more off the top, even for a well designed system. This fits with our best San Francisco benchmark, our major 675 kW rooftop solar facility in the San Francisco at Moscone Center, which produces around 1,200 kilowatt-hours per year per rated kilowatt installed.

So when it comes to solar, let’s make the right choice for solar power, but make it with our eyes open to the real world.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Author for Inside Greentech, and a Contributing Editor to Alt Energy Stocks, and a blogger for CNET’s Green tech blog.

Reflections on Energy Policy

by Richard T. Stuebi

At the beginning of my career in the mid-1980’s, I participated in numerous economic analyses pertaining to the “acid rain” debates that were then raging in DC. This work ultimately culminated in the implementation of Title IV of the 1990 Clean Air Act Amendments, which included a cap-and-trade program on sulfur dioxide emissions. This program was among the first environmental policies to employ a market-based (rather than command-and-control) approach, and its widely-appreciated success has set the stage for the cap-and-trade programs now being considered for greenhouse gas emissions.

It was rewarding to know that I was part of an effort that had real impact in creating effective policy, but it was also incredibly draining and tiring — an emotional roller-coaster of optimism, disappointment and frustration. Correspondingly, I stepped out of the policy fray entirely, focusing the next 15 years of my career squarely on the private sector in an effort to achieve positive impact (and perhaps make a little money too) in the energy industry through the forces of thoughtful capitalism. I had had enough of the political arena.

Alas, flash forward to the mid-2000’s, and now I’m working again in energy policy, this time at the state (Ohio) level. The challenge today is to secure the adoption of a renewable portfolio standard (RPS) in Ohio, and it looks like the pro-RPS forces are making decent progress.

In late August, Governor Strickland released a comprehensive energy plan that includes an RPS, along with his proposed approach for cleaning up the messes created by Ohio’s flawed “deregulation” initiative back in 1999. Opponents of an RPS — primarily manufacturing/industrial concerns and (of course) electric utilities — have argued that RPS policy is “social crap”, which can be put off to another day so that everyone can focus on the electricity restructuring issues. The Strickland Administration forcefully insists that the two issues cannot be separated and must be dealt with holistically. This is fortunate, and wise, because bundling the two issues creates better negotiating leverage with the utilities and ensures more prompt attention to RPS.

Several RPS bills are in the pipeline. One was introduced last week by Representative Skindell (HB 313), another is in the works by Representative McGregor, and other bills will be released soon in both the Senate and the House to reflect the Governor’s proposal. Over the summer, I have spent considerable time with lawmakers and thought-leaders in Columbus to educate them on the RPS issue, and its importance in attracting/building an advanced energy industry in Ohio to create jobs and revitalize our struggling economy.

Anti-RPS parties argue that an RPS will raise electricity prices, that Ohio doesn’t have enough renewables to supply an RPS, and that renewables will make the grid more unreliable. A recently released study commissioned by The Cleveland Foundation found that an RPS in Ohio like the one next-door in Pennsylvania would have minimal impact on electricity prices — virtually no impact if Federal carbon legislation is implemented sometime in the next several years anyway. The other two concerns about an RPS are also refutable.

But, many opponents of an RPS are hard-headed, and some fall back on the weakest of threads: ideology. To them, it is abhorrent to contemplate the addition of mandates to the energy supply mix.

A conversation I had last week with an Ohio Representative was illuminating. This person, who I’ll leave anonymous, felt that renewables would come into the market once that their economics were competitive with conventional energy, which would be coming without government intervention sometime in the next 10 years anyway, so why force it?

To this legislator, the “free market” was paramount — never mind that we don’t have a free market for energy today — and he was only secure in the cozy bed of his pre-set beliefs. The legislator didn’t seem to understand (actually, didn’t want to listen) that many of the basic precepts for perfect competition weren’t in place: all participants in the market don’t have perfect information, and there are players in the market that do have market power. Either the Representative was satisifed with unregulated monopolistic behavior, or didn’t realize that it wasn’t just the private sector that needed to be competitive but the public sector as well.

You see, 25 (or 26 or 27, I can’t keep track) other states already have an RPS. The renewable industry is amassing in these states, largely bypassing Ohio. And, indeed, it’s not just competition between the states, but between countries. Ontario across Lake Erie has compelling renewable energy policy, and of course European countries far lead the list. Ohio is behind in capturing the renewable energy industry opportunity. If Ohio doesn’t want to capture that opportunity, we’re doing a good job.

I’ve come to conclude that, more than energy policy or environmental policy, RPS is industrial policy — and the U.S. just doesn’t do industrial policy very well. We’ve never needed to. We’re America: we have the most natural resources, the most talent, the biggest/free-est markets. Our country has always been ascendant. Well, I’m not so sure anymore.

In the 1950’s, the U.S. dominated the world scene in every respect. But in the past few decades, communism fell, Europe has rebounded from WWII, and the Asian economies have become tigers. While American entrepreneurs focused on high-tech opportunities, the U.S. let the industrial manufacturing sector largely slip away elsewhere. The rank-and-file has become an economy of Wal-Mart greeters: low wage employees selling low price products to customers who can’t afford high price products because of their low wage jobs.

I also see a significant difference between the mid-2000’s and the mid-1980’s in regards to policy: the rise of ideology and demonisation of the “other side”. It used to be that the pros and cons, the costs and benefits, of alternative policies were evaluated by both Democrats and Republicans with at least a modicum of objectivity. Now, dogma rules the day. Issues are labelled as “D” or “R”, not to be entertained (much less endorsed) by the other side.

As citizens, we must hold our politicians accountable to work together, to not be so closed-minded, to advance the true public interests (not to special interests of just a few wealthy constituencies). The urgency of the energy issues demands no less.

Lastly, I stand chagrined at the difference between Ohio and a state like California. Last year in California, the billionaire titans of the high-tech 21st Century economy went to their Governor (Schwartzenegger) to argue that the passage of climate legislation (what became AB32) was essential for their state to capture a significant share of the economic opportunity afforded by the cleantech sector, the biggest industry to arise in the next 50 years. This year in Ohio, the big corporates of the low-tech mid-20th Century — steel companies, industrial manufacturers, et al — are going to their Governor (Strickland) to argue that the passage of a measly RPS will kill our economy.

I am reminded by a quote about Ohio attributed to Mark Twain: “When the end of the world comes, I want to be in Cincinnati because it’s always twenty years behind the times.” It’s not just Cincinnati — Columbus may be there too.

Richard T. Stuebi is BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc.

PG&E’s Clean Fleet and Visionary Future

By John Addison (8/21/07). Years ago, you only had one choice for your telephone service – AT&T. Now you have a variety of choices from landline, wireless, cable, and Internet providers. Years ago, gasoline was your only fuel choice. Now you have a number of fuel and electric choices. In the future, your favorite provider may be your electric and gas utility.

PG&E – Pacific Gas and Electric – (NYSE: PCG) provides electricity and natural gas to over 5 million customers in California. With revenues exceeding $12 billion, PG&E has an opportunity to increase its services as we continue the shift from vehicles with gasoline engines to vehicles using electric propulsion and alternate fuels.

When I met with a number of PG&E managers, Sven Thesen traveled from his Palo Alto home via bicycle and train, leaving his personal plug-in hybrid at home. Another traveled from his Alameda home via bicycle and ferry. Others used low-emission CNG and hybrid vehicles. The people managing PG&E’s clean transportation programs practice what they preach.

This article looks how PG&E runs a clean fleet, new programs for customers, and the exciting future potential of vehicle-to-grid (V2G).

Largest CNG Fleet in USA

As part of its larger environmental leadership strategy, PG&E owns and operates a clean fuel fleet of hybrid-electric and fuel cell vehicles, and more than 1,300 natural gas vehicles — the largest of its kind in the United States. PG&E’s clean fuel fleet consists of service and crew trucks, meter reader vehicles and pool cars that run either entirely on compressed natural gas or have bi-fuel capabilities. PG&E also has the largest fleet of Honda (HMC) Civic GX CNG cars.

Over the last 15 years, PG&E’s clean fuel fleet has displaced more than 3.4 million gallons of gasoline and diesel, and helped to avoid 6,000 tons of carbon dioxide from entering the atmosphere.

For any utility, Class 6/7 service trucks often need to idle their large diesel engines for hours in order to run heavy lifts and other equipment. As new lines are installed, customers complain of the vehicle noise keeping them awake at night. The maintenance crew is often forced to stop and start the engine so that they can shout between the ground person and the one in the air. The hybrid truck is especially valuable in neighborhoods with noise restriction laws.

Last week, I reviewed PG&E’s new hybrid service truck which already had over 6,000 miles of operation. Efrain Ornelas demonstrated the heavy lift and other accessories operating electrically with the engine off. In service, the vehicle is reducing diesel fuel use a dramatic 55% through regenerative braking on road, and engine-off electric operation during stationary work. The vehicle even included both 110 and 208V outlets for power tools.

At $3.00 per gallon for fuel, the potential savings ranges from $4,500 to $5,500 a year per vehicle. Each hybrid truck reduces greenhouse gas emissions an estimated two tons per year.

In addition to the dramatic diesel fuel savings, PG&E further reduces petroleum use and emissions by using B20 biodiesel. PG&E is increasing using B20 biodiesel with its entire diesel fleet.

“Hybrid-electric trucks are promising because of their potential to significantly reduce the use of petroleum-based fuel and help keep California’s air clean,” said Jill Egbert, manager, clean air transportation, PG&E. “We hope our involvement will lead to the accelerated development and mainstream acceptance of hybrids in our industry.”

PG&E is one of 14 utilities in the nation participating in the pilot truck program, sponsored by WestStart’s Hybrid Truck Users Forum (HTUF), a hybrid commercialization project bringing together truck fleet users, truck makers, technology companies, and the U.S. military, to field-test utility trucks with an integrated hybrid power-train solution.

This new Class 6/7 hybrid truck is built by International incorporating the Eaton (ETN) hybrid drive system with a 44kW electric motor. Eaton has produced more than 220 drive systems for medium and heavy hybrid-powered vehicles. Vehicle configurations include package delivery vans, medium-duty delivery trucks, beverage haulers, city buses and utility repair trucks – each of which has generated significant fuel economy gains and emission reductions.

PG&E sees a similar opportunity to save with its Class 5 trouble trucks. For this truck, PG&E partnered with the Electric Power Research Institute and other utilities to conduct a plug-in hybrid pilot project for a Ford F550 Super Duty Field Response Truck. PG&E currently has 350 Field Response Trucks on the road.

Cleaner Electricity

Some people are concerned that a shift to electric and plug-in hybrid vehicles will not reduce global warming. These people point to coal power plants producing electricity that goes into the vehicles. Because electric drive systems are typically 300% more efficient than gasoline engines, major emission reductions are achieved even from coal generated electricity.

PG&E provides much greater benefit, because it is eliminating coal power from its power mix. As a customer, my latest PG&E bill showed a reduction of coal from 38 to 2% of the power mix. In 2007, energy from RPS-eligible renewables is increasing to 12% of the delivered power mix, from 5% in 2005. Natural gas is 43%, nuclear 23%, and large hydroelectric is 17%.

By 2010, 20% of PG&E delivered electricity will be from clean renewable energy. A big part of the increase will be 553 MW of concentrating solar power (CSP) from a new Solel project. When fully operational in 2011, the Mojave Solar Park plant will cover up to 6,000 acres, or nine square miles in the Mojave Desert. The project will rely on 1.2 million mirrors and 317 miles of vacuum tubing to capture the desert sun’s heat. It will be the largest CSP project in the world.

PG&E is also expanding its use of wind, geothermal, large solar PV, and biomass energy.

Natural Gas and Hydrogen Stations

PG&E owns and operates 34 compressed natural gas (CNG) fueling stations, for its own fleet and more than 200 commercial and private fleets. This includes transit districts, private refuse haulers, school districts, municipalities, air/seaports, and other miscellaneous operators including taxi, package delivery, military, and private fleets. PG&E Clean Air Transportation Program

In addition, construction of a hydrogen fueling station in San Carlos, California is scheduled to begin. GTI will serve as a partner on the project, providing a mobile hydrogen unit (MHU) that uses GTI’s patented reformer technology. This self-contained unit will produce hydrogen from natural gas.

PG&E makes daily use of three Mercedes hydrogen fuel cell (F-Cell) vehicles. A variety of PG&E employees drive the vehicles including, fleet mechanics, inspectors, service planning representatives, project managers and officers.

Vehicle-to-Grid

A compelling idea for the future is to charge electric vehicles at night when electricity is cheap, and then buy the electricity from vehicles during peak hours. Some electric vehicles store enough electricity to power 50 homes. Sven Thesen at PG&E demonstrated spinning the meter backwards with their plug-in hybrid Prius with V2G. The Prius included a 9kWh plug-in kit from EnergyCS using Li-Ion batteries. A Sonny Boy power inverter, common in solar power installations, was used.

Today, utilities are powering vehicles with electricity, natural gas and hydrogen. In a few years, electric vehicles will also power homes with vehicle-to-home (V2H). Large batteries and fuel cells provide many times the electricity demand of a home. In a few more years, smart grids and intelligent power management will allow peak electricity demands to be met by utilities buying power from vehicles with vehicle-to-grid (V2G). U.C. Davis and PG&E have demonstrated V2H and V2G already.

With smart grid technology, customers could simply plug-in their vehicles to 110 volt outlets. At idle low-cost hours the vehicle would be timed to recharge. At peak hours, customers could agree to let the utility buy electricity at premium rates. In the future, expensive and polluting stand-by peaking generators could be eliminated with smart grid technology and V2G.

Leading the way to clean electricity and cleaner transportation are corporations like PG&E. In their own fleet they are proving that alt-fuels and electric drive systems can save money and emissions. As the technologies are proven, PG&E gives customers new ways to secure clean fuels and electric power.

John Addison publishes the Clean Fleet Report. Permission is granted to reproduce this article.

"Buy Wind Power, It’s a Breeze"

by Heather Rae (8/1/07)

The Natural Resource Council of Maine (NRCM) sponsored a tour of the Mars Hill wind farm this past Saturday. I went along to represent Maine Interfaith Power & Light (MeIPL) and to talk about Wind Watts, the renewable energy certificates (RECs) generated by the 28 turbine, 42MW project. MeIPL is the primary reseller of RECs from Mars Hill.

A group of about 30 made the trek by bus to the Big Rock Ski Area which sits below the project at the Canadian border. (The Boston Globe covered the trip.) We heard from a number of people involved in bringing the project to life. Dave Cowan, VP of Environmental Affairs for UPC Wind Management, the developer of Mars Hill, answered questions including the usual ones about bird kill and noise. Pat DeFillip, Project Manager for Reed & Reed which constructed the project — with Maine labor — showed pictures of the construction in all its phases. Ryan Fonbuena, a UPC technical manager originally from California, enlivened the crowd with a broad youthful smile, considerable technical knowledge, and a necklace of white shells (he’s been working on a Hawaii project as well).

The Mars Hill 1.5MW GE wind turbines are awesome by its most positive definition: breathtaking, formidable, stunning, wondrous, majestic. Try as I might, I cannot see them in any other way.

We heard from people in the community: a landowner who has multiple turbines on his property and wants to retail products oriented around the wind farm; a real estate agent who sees no decline in property values as a result of the wind farm; proprietors of a hotel; the town manager; the manager of Big Rock Ski Area. All were open and frank about the reasons for the complaints from a few vocal members of the community. Our group repeatedly asked, “is that the noise they don’t like?” expressing concern for the community and trying to get their heads around the complaints. One resident said he believes the opposition to the turbines is one of aesthetics and that leads to all the other complaints…which, he believes, are dying down. He also noted that he received his property tax bill; it’s $200 lower because of the money put into the town by the project.

At the end of a long day, as a thunderstorm moved in, I spoke about Wind Watts. I’m not fully comfortable with RECs for the many reasons that others like Richard Stuebi have written in this blog. However, Wind Watts I can pitch with equanimity, particularly after talking about how the Interfaith Power & Light organization came into being and why it exists: it’s a moral calling to support the planet and people with clean energy. It’s a faith-based response to climate change. Here’s this wondrous project, I could say with a swoop of the arm across the ridgeline and slowly spinning turbines. You’ve met the construction company and the developers, I could say, looking right at Ryan Fonbuena of UPC. You’ve heard what it means to the community, catching the sparkling and proud eye of the Big Rock Ski Area manager. Buy these RECs and you will support this project and encourage others like it.

I stumble in talking about RECs when they become entangled with carbon offsets, as if buying RECs to offset carbon emissions is the only reason to buy them. So I didn’t go there. I didn’t have to. The first question from the group was, ‘isn’t buying RECs simply a way for some people to go about their lives without making any changes, so they don’t have to feel guilty?’ This business of assuaging climate change guilt with RECS (like the business of bird kill and noise) is mass media at work. After a brief group chuckle around guilt, Dylan Voorhees, Energy Project Director for NRCM, explained the whole black electron, green electron, green attribute/REC thinking. I’ve been hearing this explanation for years and I’ll buy into it — so long as new wind is more expensive to build than the alternatives. Before carbon became all the rage, I could talk about RECs for what they are: financial mechanisms to encourage development of clean energy. To jump on the carbon offset marketing bandwagon for RECs is, I believe, limiting. And darn confusing.

Heather Rae, a contributor to cleantechblog.com, manages a ‘whole house’ home performance program in Maine and serves on the board of Maine Interfaith Power & Light. In 2006, she built a biobus and drove it from Colorado to Maine. In 2007, she begins renovation of an 1880 farmhouse using building science and green building principles.

Is IBM Going Solar?

Cleantech Blog has commented on the maturation of the solar sector for some time now. About a year ago, Cleantech Blog broke the story about Applied Material’s entry into the solar market with the San Francisco Chronicle. We have also written on solar concentrators, the coming of consolidation in the solar markets, inverter technology, and subsidy policy. And the fascinating look into the possible future of solar continues.

I had a chance recently to visit with one of the individuals responsible for IBM’s (NYSE:IBM) Big Green Innovations strategy – which has made a splash in the cleantech world over the last half year. We were talking on a range of topics, but one that piqued my interest was the description of IBM’s work in photovoltaics – and a few thoughts on where they were going. I did not ask, and he did not offer, any particulars on the work in progress, but he did make mention of a few points that I thought were well worth repeating:

  • IBM is expecting to be a player in the solar cell business – likely seeing commercial impact in the next 18 months to two years.
  • IBM is developing both advanced crystalline technologies and CIGS processes – relying on their semiconductor manufacturing expertise and nanotech research to make breakthroughs in controlling PV manufacturing processes.
  • You will not likely see IBM making branded modules – perhaps instead a cell production business strategy?
  • IBM sees the potential for very high efficiency multi-junction cells in foreseeable future.

The fascinating part is that IBM is not a newcomer to the game. When you do a little background research, you dig up some fascinating tidbits, including a couple of articles dated 1978 in the IBM Journal of Research and Development that are interesting given the historical perspective they add to the discussion. For those still thinking that Silicon Valley venture capital is the real innovator behind the solar sector – see below.

As far as the mainstream (or even cleantech) press on IBM’s solar photovoltaic development, though, there has been little mention, and no details. News.com had a recent mention (but no details) of IBM’s solar interests (along with an oblique mention of their work in developing desalination membranes for the water sector). There was a brief mention of IBM and an organic solar cell development in a 2004 year old Business Week article. And a brief mention of interest in solar technology in an Information Week article about the IBM Innovation Agenda – which the Big Green Innovations is a part. But that’s about it.

There are over a dozen recent US patents and published applications by IBM referencing a range of solar cells or photovoltaic technology, a few are listed below – that can give some indication of what work IBM has going on.

  • 7,109,584 Dendrite growth control circuit
  • 7,094,651 Hydrazine-free solution deposition of chalcogenide films
  • 6,933,191 Two-mask process for metal-insulator-metal capacitors and single mask process for thin film resistors
  • 6,875,661 Solution deposition of chalcogenide films
  • 6,774,019 Incorporation of an impurity into a thin film
  • 6,316,786 Organic opto-electronic devices
  • 6,351,023 Semiconductor device having ultra-sharp P-N junction and method of manufacturing the same
  • 20070057255 Nanomaterials with tetrazole-based removable stabilizing agents
  • 20060032530 Solution processed pentacene-acceptor heterojunctions in diodes, photodiodes, and photovoltaic cells and method of making same
  • 20050158909 Solution deposition of chalcogenide films containing transition metals

And here are the 1978 articles I promised above from IBM Journal of Research and Development. As I said – for those who still believe Silicon Valley is inventing solar.

Low Cost Silicon for Solar Energy Conversion Applications Economically viable means of producing silicon solar cells for the conversion of solar energy into electric power are discussed. Emphasis is given to the discussion of crystal growth techniques capable of growing single-crystal silicon ribbons directly and inexpensively from molten silicon. The capillary action shaping technique (CAST) recently developed by IBM has a good potential for producing low cost silicon sheets suitable for solar cells. This technique has produced ribbon 100 mm wide and 0.3 mm thick. Problems that CAST must overcome in order to supply material for low cost solar cells are discussed. Economic and technological computer-modeled comparisons indicate that continuously grown CAST ribbons of these dimensions can meet a cost objective below $50/m2 of sheet material. The results require that it be possible to fabricate a twelve-percent-efficient solar cell from CAST ribbon 100 mm wide and 0.3 mm thick at a polycrystalline silicon cost of $10/kg.

Fascinating enough – while much earlier, this looks very similar to the Evergreen Solar (NASDAQ:ESLR) story whose success helped launch the recent venture capital rush into solar just a couple of years ago.

Growth of Polycrystalline GaAs for Solar Cell Applications Films of polycrystalline GaAs have been grown on foreign substrates by the metal-organic process. The main objective was to produce films with as large a grain size as possible, so that high-efficiency photovoltaic devices may eventually be fabricated from such thin film/substrate structures. At 973 K the average grain size was less than 1 µm, and was unaffected by the choice of substrate. Increasing the deposition temperature to 1123 K, while maintaining all other conditions the same, resulted in grains as large as 10 to 20 µm in diameter. Grain sizes as large as 10 µm could be obtained by precoating the substrates with thin films of evaporated gold or tin. However, both of these methods gave films that were discontinuous. A two-step procedure in which the films were nucleated at 873 K prior to growth at 1123 K yielded continuous films with an average grain size of 5 µm. Schottky barrier solar cells fabricated from these films exhibited short-circuit current densities as high as 15.7 mA/cm2, even though the highest conversion efficiency (AM0, uncoated) was only 1.3 percent because of the low fill factor (0.28).

Novel Materials and Devices for Sunlight Concentrating Systems Photovoltaic conversion under concentrated sunlight is a highly promising technique that could make solar-electric power generation economically competitive with fossil fuel power generation by the mid-1980s. An economic analysis has been performed which demonstrates that solar cell efficiency, concentrator efficiency, and concentrator cost are the most important parameters in a concentrating photovoltaic system; solar cell cost is only of secondary importance (at least for Si solar cells). Six novel structures are described, including modified conventional Si cells, Ga1-xAlx As/GaAs devices, interdigitated cells, vertical and horizontal multijunction cells and “multicolor” devices.

So whether it’s high efficiency multi-junction cells to compete in the concentrator market, or organic or CIGS cells for BIPV, or providing advanced silicon cells to enable a new group of entrants into the rooftop module market, or something new entirely – IBM bears watching in the solar sector.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Author for Inside Greentech, and a Contributing Editor to Alt Energy Stocks.

The Problem With Polls

by Richard T. Stuebi

Recently, I’ve been working more closely with people who are active in setting and shaping policies, and it’s clear that they’re wired differently from me. As an economist, my first question in considering policy usually is: “What are the costs and benefits?”. The policy-wonks tend to first ask: “What do the polls say?”

When it comes to energy issues, it’s increasingly clear to me that an instinctual reliance by politicians and staffers on polling data is a dangerous thing. That’s because the average citizen/voter is so badly lacking in basic understanding of the key issues that the opinions of Joe/Jane Six-pack on energy/environmental matters, sadly but frankly, ought not to be given much weight.

That doesn’t seem to stop firms from conducting more and more surveys on energy topics, and from touting their fresh results to support their pet positions. For instance, Deloitte recently conducted a survey on alternative energy, and the generally pro-renewables press release claimed that “a majority of customers said they would pay more for clean energy because it is good for the environment”.

However, the frothing anti-renewables critic Robert Michaels, writing in the June 8 New Power Executive, offered an opposing interpretation of the Deloitte poll results: that the indicated support of the average customer is actually rather lukewarm when reviewed in detail.

Moreover, Michaels points out, rightly, that survey data often overstates customer enthusiasm for renewables, relative to what customers actually do decide to purchase when offered renewable energy.

And, Michaels brings up the inconvenient truth that I’m bringing up today: that Americans are clueless about energy. Michaels refers to a survey conducted earlier this year by Enviromedia Social Marketing, which reported in its press release that “more Americans have no idea what fuels their electricity than those who can name any particular source — either correctly or incorrectly.”

As an even more damning anecdotal piece of evidence, Michaels trots out a 2004 survey from Kentucky in which 41% of respondents identified coal, steel and oil as renewables. Yikes!

Do we really want the public sector following the wishes of the masses on energy, if this is what the public thinks it knows about energy?

I think the last word on the lunacy of polling Americans on critical energy issues must go to the blogger Engineer-Poet who posted the following missive on Alternative Energy Blog about two years ago in response to a Yale poll on environmental positions:

“92% considered dependence on imported oil to be serious or very serious. 89% considered the high price of gasoline to be serious or very serious. Only 19% supported a pollution fee on gasoline, and a mere 15% supported a general increase in the gasoline tax. It takes a lot of ignorance to hold such contradictory opinions.”

I think that little ditty says it all.

In general, I don’t know where I stand on the Jefferson-Hamilton spectrum, but I don’t think policy-makers ought to make policies just to appease and pacify the ignorant.

Richard T. Stuebi is the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President at NextWave Energy, Inc.

Big, Green Power is Flowing – But Where Are the Power Lines?

I had the opportunity recently to speak with Stuart Hemphill, the Director of Renewable and Alternative Power for Southern California Edison (SCE), the power company for Los Angeles and Southern California, on SCE’s activities and views of renewable and green power. SoCal Edison is a subsidiary of Edison International (NYSE:EIX). Stuart has a direct team of 40 staff working entirely on developing and managing new renewable generation, not including the teams across the company that support from legal, operations, transmission, and marketing.

One of big challenges for SCE in building its renewables portfolio is that even though they already stand at 17% of total generation from renewables (which Stuart touted as placing SCE the farthest ahead of any US utility), customer demand in SoCal is growing rapidly – 4 of the top 10 fastest growing counties in the country are in SCE service territory.

But SCE is working to do its part. They have been the leading purchaser of renewable power for the last 20 years and don’t intend to relinquish the crown any time soon. In 2006 they purchased 13 Billion kwh of electricity, about 17% of their needs. More than half of this green power is geothermal, with solar and wind making up the rest. 50% of the power was produced locally in Southern California itself, with most of the rest from Northern California, and the remainder from surrounding states.

The geothermal resources that make up the bulk of their green power come from three regions: The Geysers in Northern California – primarily developed by Calpine; The Salton Sea (better known for its status as a massive migratory bird stopping place and an environmental headache) – primarily developed by Ormat (NYSE:ORA) and CalEnergy; and Eastern California/Western Nevada in the Mammoth Lakes region – primarily developed by Caithness Energy. The wind power comes from all over the state.

In Stuart’s mind, the biggest issue is not supply of green power but transmission. He says they have plenty of contracts in the pipeline. But it takes roughly 7 years to permit and build major transmission lines, and the California RPS itself is less than 7 years old.

So even though SCE has several big lines proposed and under review, he considers it a major limitation to rolling out green power plants. This makes sense, as by their nature renewable power plants have to be built where the ground is hot, the wind blows, or the sun shines, not where the people and the transmission lines are. He reiterated, permitting is a real challenge.

As an example, SCE has a $1.8 billion transmission project to Tehachapi just north of L.A. which has finally received initial approval. They have a 1,500 MW wind contract in place in the region with Alta Wind Power, waiting on getting the transmission built. This is the single largest wind power contract ever developed (it was signed in December of 2006). The Tehachapi region already has 800 MW of wind generation (I drove through the pass just a few months ago – and am always awed by the site of spinning wind turbines), but Stuart says SCE believes there is the potential to get 4,500 MW more, if the transmission is built to bring it down to L.A.

He also took pains to mention a recently signed contract with Sempra Energy (NYSE:SRE) for a wind project which Sempra is developing in Baja, Mexico – I believe one of the only, if not the first cross-border Mexico – US wind farm projects.

They are also active in large scale solar – SCE buys 90% of the country’s solar energy now, according to Stuart, and has signed two recent agreements (2005) with Stirling Energy Systems and (2007) with California Sunrise to buy more solar power – both also waiting on transmission according to Stuart.

Stuart told me that SCE has $17 Billion in capital to be spent over the next 5 years in transmission and distribution to address these issues, but much of the solution lies in the hands of more aggressive stances by regulators and environmental groups, not just SCE. This isn’t just an SCE problem. The US has invested heavily in generation capacity in recent years, but our T&D investment has lagged – and the regulatory, environmental and political hurdles to get new power lines built may be even steeper than those for new power plants.

I asked why they weren’t building the new renewable power plants themselves. He indicated that they were prepared to, but currently saw no need because developers are really active these days – in the last 5 competitive solicitations they have received excellent response (including the 2007 solicitation). In short, there is plenty of interest and capital to build green power plants for SCE, and they have their hands full getting it to market.

When we got to talking about the future of energy in California, Renewable Portfolio Standards, greenhouse gas emissions and upcoming issues that concerned them, Stuart highlighted a few. SCE feels that while it is working hard to do its part, Energy Service Companies (ESCOs) as a group currently produce virtually zero percent of their eligible power from green sources as defined in the California RPS – but like the major investor owned utilities (SCE, PG&E (NYSE:PCG), and Sempra) ESCOs are also supposed to be generating 20% of their power of renewable sources by 2010. Stuart wasn’t sure where that supply was going to come from given long lead times to develop projects. We did discuss whether Renewable Energy Credits (RECs), which don’t currently qualify under California RPS standards, could play a role. Both he and I are personally fans of RECs and view this as an emerging area for opportunity and debate. If the free market is going to help meet our green power objectives, it needs more regulatory permitted tools to do so (the paradox of that statement notwithstanding).

We both also clearly see renewables as part of the overall solution for reducing greenhouse gases. Stuart quickly highlighted carbon credits, energy efficiency and reforestation as the other legs of that broader solution from a utilities’ perspective. But when I put to him the question of what should we be doing first on greenhouse gas emissions, he stated flat out that energy efficiency is the first area in his mind. “Energy not consumed is the best way of reducing any source of emissions.” Of course, SCE is a leader in energy efficiency, too. They don’t intend to be left behind there either.

I must admit, throughout the conversation I was struck by their insistence on maintaining a leadership position in clean energy for SCE. I guess this is just part of the California ethos about leading the nation in environmental issues.

And before I let him go, Stuart asked me to make sure to mention that they are always looking for new renewable power suppliers, and always looking to hire in renewables, so come find him. Their information is located at www.sce.com/renewables, and he can be reached at stuart.hemphill@sce.com.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Author for Inside Greentech, and a Contributing Editor to Alt Energy Stocks.

Real Companies Entering Renewable Energy

by Richard T. Stuebi

I reckon that relatively few readers have heard of the company called Preformed Line Products (NASDAQ: PLPC). I know I hadn’t, even though their headquarters is just a few miles from where I live in suburban Cleveland.

A couple of months ago, I came across a press release indicating that PLPC had entered the solar energy sector by acquiring Direct Power & Water of Albuquerque. I decided to investigate further.

PLPC is a real company, not some publicly-traded start-up venture. The company was formed in the late 1940’s, and has steadily grown to a worldwide operation based on core competencies in developing and manufacturing of high-performance cables and connectors for the electric utility and communications industries. PLPC net income in 2006 was $12 million on revenues of $217 million — certainly not anywhere near the size of a Fortune 500 corporation, but nevertheless a nice business.

The letter from the Chairman and CEO (Robert Ruhlman) in the company’s 2006 annual report provided some insight on the impetus for PLPC’s acquisition of Direct Power & Water:

“In addition to multiple opportunities in our traditional markets, there are exciting new opportunities in emerging technologies. One area we are exploring for growth potential is renewable energy. Wind and solar energy are becoming more economically feasible due to improved technologies, rising costs of traditional energy sources and increasing demand for energy independence. We believe PLP can play a significant role in these markets as these technologies develop.”

This kind of statement, and the subsequent follow-up action to make a real bet on solar energy, is exactly what the renewable energy sector needs a lot more of: the interest of mainstream corporate America, especially the small- and medium-sized manufacturing sector, seeing the opportunity to build a business in renewables — truly for profits and not just for PR purposes.

Richard T. Stuebi is the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc.

Cleantech or Status quo Jobs?

by Nick Bruse

One of the most exciting aspects of the cleantech/sustainability sector are the opportunities presented to create completely new industries over the coming years. Transforming the way we approach housing, feeding and powering our society. Whilst at the same time attempting to maintain the quality of life, and I emphasis ‘quality’ not gluttony, and improve the standard of life for the developing world.

As an optimist I believe that humanity can take on this challenge, with a realistic understanding that its going to take a lot of hard work, innovation and leadership. What frustrates me is when conservative governments stand up and expouse that by leaving our old industries behind we will force our economies to suffer and jobs to be lost.

This is the mantra that we have heard in Australia time and time again under the Howard Government. What i would like to hear in Australia is that with our high quality research institutions, and plethora of cleantech startups we are now putting our hand up to be a leader in clean technology.

So my next question is, how many jobs is the cleantech sector including the jobs that will be created through carbon emissions trading, for auditing and assessment, and how does this compare with and emission intensive industry like coal mining.

I hunted down some information on the Australian Coal Industries employment statistics and here’s what i found.

Around 30,000 people were employed at Australian black coal mines at the end of 2005. This represents a return to levels not previously seen since the mid 1990’s – the most recent peak being around 26,000 in 1996. Along with the decline in the number of underground mines, employment at underground mines declined significantly over the past decade – from around 11,000 in 1996 to just over 9,000 in 2005 – a drop of about 20 per cent. Employment in open-cut mines on the other hand increased from just under 15,000 to over 19,000 (30%) in the same period. 2006 statistics Australian Coal Association

Now I assuming that these figures don’t include all the jobs in processing and handling. Possibly another 20-50% the figure. Now at this point the data on cleantech jobs is fairly hard to find, as we are talking about multi-industry analysis, and new industries sectors like emissions trading. But i have found some stats from a Sustainable Energy Industries Report 2000

Total direct employment in the sustainable energy industry [in Australia] is in the order of 22,800 in 1999-2000 and 25,600 in 2000-2001. This represents an annual growth rate of 12%. The total employment effect of the sustainable energy industry on the economy is in the order of 64,000 in 1999-2000 and 72,000 in 2000-2001.

Now there is 6 years between these reports but i think we can assume that the sector in renewable energy has increased somewhat. Now theres not a huge amount of difference between these figures, So when the government talks about jobs what really is it talking about. My guess is that its talking not purely about economic losses from reducing the mining of carbon and our exports, but what its actually worried about is due to the nature of the way in which the coal mining industry differs from the renewables industry.

Centralised vs distributed. Fuel intensive vs Technology Intensive.

My gut feeling is that with coal mining being centralised around mines and distribution routes that means you make policy decisions on coal mining that you affect centralised populations of voters, all in one electorate. When you make decisions about the renewable energy industry you are actually talking about a broad range of technologies associated with many different services providers spread over a broad number of electorates.

Hence decisions on coal mining can flip an electorate to the opposition very quickly, whereas decisions to renewables have only until now had a marginal effect on individual electorates. Sentiment is changing substantially that the federal government can no longer hide behind this dynamic much longer. I don’t wish job losses on coal mining towns, but i do wish for the correct decisions to be made to not sell out the future of all Australians for short term political favour.

I’m interested in comments on this article, what’s the status in Europe, India, China or the United States. How do other issues of energy security and economic security bear out regarding job creation in these regions.


Nick Bruse runs Strike Consulting, a growth venture consultancy specialising in the cleantech sector and hosts the cleantech show, a weekly podcast of interviews with leaders involved in clean technology research, entrepreneurship, commentary and investment.

3rd Generation Solar Cells – Dyesol Interview

Nick Bruse runs Strike Consulting, a cleantech venture consultancy; hosts the cleantech show, a weekly podcast of interviews with leaders involved in clean technology research, entrepreneurship, commentary and investment; and advises Clean Technology Australasia Pty Ltd and the leading advocate of Cleantech in Australia.


It seems we cant go a day at the moment without hearing about a new commissioning of a energy plant, or new technology development, or fund raising in the solar energy space at the moment.

Last week on The Cleantech Show I interviewed Sylvia Tulloch (podcast), the Managing director and founding team member for 3rd Generation solar cell technology company Dyesol (ASX: DYE). 3rd generation solar cell technology utilises biomimicry of the chlorophyll dye in plants to produce energy from the sun.

You can access the interview here

Many of you may be aware of Dyesol which has been a pioneer in the field of Dye Sensitised Cells (DSC) over the last 10 years, now providing the key dyes and Titania pastes to some of the 800 research and commercial organisations around the world developing DSC applications.

Don’t miss this interview, as Sylvia goes into detail about how DSC technology will have a large roll in the coming decade. Dyesol has also recently signed a number of large partnership agreements and supply contracts to for new DSC applications.

We discuss the technology and the applications where its lower cost high volume potential for energy generation in building materials, consumer devices and a host of other applications means it will have a signifcant roll in the future.

Pepsi Generation

by Richard T. Stuebi

Today, PepsiCo (NYSE: PEP) announced that it was buying from Sterling Planet about 1.1 billion kwh worth of renewable energy credits (RECs) per year for the next three years to offset 100% of its corporate electricity requirements in the U.S., thereby making Pepsi the largest buyer of green power in the U.S.

Press release

According to reportage in the USA Today (article), PepsiCo will spend about $2 million on this REC purchase. That seemed like a steal to me: Pepsi probably got $20 million worth of good PR just by showing up with good press on the front page of USA Today‘s Money section.

PepsiCo’s action will serve as a catalyst to expedite development of renewable energy projects in the U.S. Since wind is generally the most economic form of renewable energy, windfarms will likely constitute the lion’s share of the new capacity that is added to serve PepsiCo’s needs. By my calculations, using some generic assumptions, I estimate that the Pepsi REC purchase could trigger about 350 new megawatts of wind development.

Given the high visibility impact that Pepsi was able to achieve at relatively low cost with their green commitment, I suspect that many other large retail and consumer products companies will be following suit in the coming weeks and months. If so, we could see many more megawatts of new renewables — primarily new wind — being built in the U.S. to serve the large corporates, which are now in a race to appear more green than their peers.

Richard Stuebi is the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc.

Which Way to the Sun? Where is Solar Headed?

I had a chance to talk with David Hochschild, the outgoing Executive Director of PV Now about his thoughts on the solar industry and recent changes. PVNow is an industry association that, among other things, helped lobby for the net metering and the solar initiative in California and increased RPS standards in Texas and New Jersey. David is a well-known advocate and speaker on solar issues.

David, can you give us a bit of background as to PV Now, and your role in the industry?

Sure. I co-founded Vote Solar in 2002 after working on the $100 M solar bond campaign in San Francisco. More info at http://www.votesolar.org/. For the last year, I have been Executive Director of PV Now, the consortium of major solar companies, working to promote pro-solar policy at the state level.

While PV is the only viable solution for small point of use electric generation, solar thermal is generally considered a hugely more economic solar solution at multi-megawatts scale than PV, but PV gets all the press in its drive to compete with the grid at large scale. Why is that? Understanding that your focus is PV, how would you like to see solar thermal fit in the solution set?

Am a huge fan of solar thermal and am getting a thermal system installed on my house this weekend, actually. I think PV gets more attention in California partly because we experienced an energy crisis that was really an electricity crisis and the blackouts were an electricity problem. But the contribution solar thermal can make is very real and very important and I think the passage of the ITC bill this year, if it happens, will do a great deal for solar thermal. States like Hawaii and countries like Israel already have a 30% market penetration for solar thermal and there’s no reason CA couldn’t as well. A little known fact – the country with the most solar thermal in the world is China. My personal view is that US should be leading in both PV and solar thermal and that if we can get the 8 year solar tax credit bill passed this year (HR 550), we will be in position to retake the lead.

It feels like there has been a changing of the guard in terms of the leaders in PV module production. What’s your take? Who would you rank as the up and comers?

I think China is emerging and we’ll see companies like Suntech really continue to grow rapidly. Older industry leaders, like BP, that used to dominate, are now sliding down the rankings of PV manufacturers. It’s also a good time for American solar manufacturers like SunPower and Evergreen, which are growing fast and are aided by the emergence of more state-based US PV markets like PA, TX, NJ, and AZ, in addition to CA.

And similarly on the integrator and installer side – what does the future hold? How do these companies best survive in a much more competitive environment?

I think there will be a major changing of the guard here too and things will get more sophisticated, which is long overdue. The installation cost of PV in Germany is about 30% less than the US so there is a lot of cost cutting to be found in installation. The savings are not just going to come from better manufacturing. Things like mountings systems, electronic shade analysis, snap-connects, better installation methods, customer energy calculators, reducing the # of site visits, all these factors bring down costs.

PV concentrators – I have long felt that concentrators are in a catch-22: if PV module costs don’t fall rapidly (as the industry works hard to drive them down), then the solar industry will struggle anyway, but if PV costs do fall as rapidly as expected – then why would the industry need concentrator technology whose primary advantage is reducing the amount of PV module? What’s your take?

If you are referring to technologies like Solaria’s – that take a concentrating lens and amplifly the amount of light on a PV panel – that will move forward and be important no matter what happens to the cost of PV because the lens will always be cheaper than silicon and the benefit you get from them is profound. I am optimistic about this sector in particular because, if they get it right, it could bring PV costs for conventional silicon technology down by 30% or more, fairly quickly. But there are still obstacles to be worked out such as heat gain and how you deal with that, which is a major issue in PV performance.

And where the rubber meets the road, do you have a PV system on your roof? If so, who did you buy it from, whose technology did you pick and why? If not, whose technology would you use?

I live in San Francisco by Dolores park and my wife and I have a 2kW system on our house that we installed in 2000. BP panels. If I were doing it today, I would opt for a higher efficiency panel such as SunPower.

After thinking about it a bit, I’d asked David to clarify a couple of his comments.

Can you elaborate a little on large solar thermal – like parabolic trough projects. I see little reason to do a large grid connected 5-10+ MW PV system, instead of a solar trough system. What are your thoughts on the competitive situation between PV and solar thermal trough power as PV tries to get to “grid scale”?

You’re absolutely right about CSP. I just visited the new CSP plant outside Las Vegas – 64 MW. And it is a superior technology for central station solar generation. No question. And that will only get better as newer synthetic oils come on to the market that can be heated to hotter temperatures than are currently possible (750 degrees is about the limit and that is a major constraint on how much power CSP can produce but this is likely to change soon). The federal ITC was the only reason that Nevada CSP plant got built so we can expect a lot more if the ITC gets extended.

I think the role that PV is best suited for is rooftop applications and there is so much available roofspace in this country, it’s ridiculous. So large scale PV is great, but in my view, it is best for rooftops rather than deserts.

Also, as to our discussion on changing of the guard, BP Solar among others has announced some major expansions.

Does this indicate that the “old guard” is likely to retake market share? It has been suggested to me that the some of the market share changes were related to silicon supply constraints that are now easing.

Regarding BP, yes they are making capacity expansions, but so is everyone. Nobody in this sector is NOT growing. The question is how fast they are growing. And I do think we are witnessing a major shakeup and many of the companies that were top market leaders over the last 5 years will not be over the next 5 years.

Myself, I tend to agree with David on this. While it is hard to pin down winners and losers, rapidly growing markets and changing competitive dynamics and cost curves do not make for stable market shares. It will be interesting to watch.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Author for Inside Greentech, and a Contributing Editor to Alt Energy Stocks.

$2 Bil Wind Acquisition

The cleantech sector received a huge boost this week from the news that Portugal’s EDP anounced the acquisition of Texas based Horizon Wind for a price of over $2 Bil. EDP operates globally in Spain, Portugal and Brazil.

One of the intriguing aspects of this deal is the history. Horizon Wind was formerly Zilkha Renewable Energy, before it was purchased by Goldman Sachs in 2005.

According to their websites Selim and Michael Zilkha were the previous owners of Zilkha Energy, which started in the mid 1980s and grew to be one of the largest privately held independent E&P companies in Texas, before selling it to Sonat in 1998 for $1.04 billion plus debt. Zilkha primarily operated in the shallow water Gulf of Mexico, and was one of the early users of 3D seismic on a large scale.

Starting after that 1998 sale they moved into renewables, and built Zilkha Renewable Energy into a sizeable player in the wind market before selling to Goldman Sachs in 2005. The Zilkhas are now involved in a biomass power business. It is interesting to note that both Zilkha Energy and Zilkha Renewables’ claim to fame was having gotten in early and built an aggressive leasehold position. In some respects, they grew their wind business in many respects like a traditional oil exploration company, build a large lease portfolio first, prioritize your development resources, apply best available technology, build out your infrastructure.

It is also highly instructive to see traditional energy capital plowed into a wind company, only to sell it to a major Wall Street firm, which after additional investment subsequently flipped the business in less than 2 years to a major European utility. Texas oil money makes good in renewables? No wonder Texas has passed California in wind energy generation. Perhaps we are finally entering a new era of maturity in renewables.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog and a Contributing Editor to Alt Energy Stocks.

Will Small Wind Get the Love that Solar Has?

Investment and growth in the cleantech sector has been driven in the last 2 to 3 years by the solar photovoltaic, large scale wind, and ethanol sectors. For years solar PV has, on a per kw basis relative to other technologies, received massive rebates and tax credits that underpinned its growth, and large scale wind power has had its production tax credit to anchor the industries’ rise, but solar thermal and small wind systems have been largely left out in the cold in this cleantech boom.

Perhaps that is changing for micro wind?

The CEO of Mariah Power, one of the micro wind turbine startups we follow, turned me on to a recent bill in Congress that might even the playing field for small wind. I’ve excerpted his notes in quotes below.

“Recently, Senator Ken Salazar (D-Colo.), along with Senator Gordon Smith (R-Ore.) introduced a bill that would provide $1500 per 1/2 kilowatt (kW) of capacity to customers seeking to purchase a small wind turbine, the same credit that solar is currently pursuing. In addition to this credit, the bill would provide accelerated 3-year depreciation and an Alternative Minimum Tax exemption.

A press release on this bill, S. 673, the Rural Wind Energy Development Act, can be found here.

This bill will provide an investment tax credit for the purchase of small wind systems (rated at 100 kilowatts and below) for homeowners, small businesses, and farmers. This credit is critical to sustaining the growth of this clean, renewable, and emissions-free energy technology while helping individuals and communities become more independent from unpredictable prices and supplies of traditional sources of energy.

Currently there is no federal support for small wind systems. Residential solar and fuel cell systems, however, which share the same competitive market as small wind, have been receiving a 30% federal tax credit. The federal Production Tax Credit (PTC) applies only to large utility-scale wind projects, not to individuals who want to install their own wind systems for on-site power. Federal support would help broaden the industry on a national scale.”

The growth of our cleantech and alternative energy industries have always been heavily influenced by the policy and subsidy environment, so how the debate plays out is critical to understanding where the product and investment opportunities may lie for any given clean technology.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog and a Contributing Editor to Alt Energy Stocks.

Turns Me Off

by Heather Rae

I drove along a dirt road to a place in the woods where the plow had left a berm of snow. Sasha, the cocker spaniel, and I continued on foot along a path, crunching through the ice-caked snow. The natural and architectural beauty of Sheepscot, Maine Hollywood could not hope to imitate. We followed the Sheepscot River which feeds to the Atlantic. We were – it turned out – trespassing: The path was a driveway leading to a 19th-century cape, pastel green and cream-trimmed, beside a modest cedar-shake barn. The house overlooked a sweeping field, an ice sheet glistening in the sun sloping down to the muddy flats of low tide.

Standing on the old lichen-dappled rock wall, I saw a lamppost alongside the driveway, its shade missing. The lamp held a compact fluorescent bulb. The bucolic setting was no worse for this swirly bulb.

Two days earlier in another reality, I was driving by WalMart with Rush Limbaugh on the radio. He was mocking a Barbara Walters interview with Laurie David, wife of “Seinfeld” producer Larry David and producer of “An Inconvenient Truth” – otherwise known as “Al Gore’s movie” which later in the week would win an Oscar.

Limbaugh said David was nothing but a Hollywood activist and as such, he questioned her qualifications to comment on climate change. He played a clip from Walters’ interview in which David says that if every homeowner in the country were to change five ordinary incandescent light bulbs to compact fluorescent light bulbs, it would be the equivalent of taking eight million cars off of the road. This “stat” sent off Limbaugh (apparently), and he said something to the effect that if anyone listening believed David about the light bulbs…if anyone thought changing light bulbs would make a bit of difference in addressing climate change…then “turn me off.”

So I did.

I can’t help but wonder…who is Rush Limbaugh to think he is any more qualified than Laurie David to comment? In adolescent, mocking tones, he chooses only some words carefully, like “climate change” in Luntzian fervor to align himself with science. Translation: his is not the global warming of Hollywood liberals and their politicized Oscar winner whom Limbaugh loves to deride. Call it global warming or climate change, to Limbaugh, it’s politics.

As a responsible service to his listeners, Limbaugh could (but likely won’t) read and talk about the benefits of CFLs. He could (but likely won’t) review the cost-benefit evaluations of CFLs out of California, Vermont, Minnesota and other states. Nor will he (likely) read a roundup, “Findings and “Gaps” in CFL Evaluation Research: Review of the Existing Literature” by Skumatz and Howlett. Below are some findings from that research (citations removed):

  • “CFLs were invented 25 years ago at Royal Philips Electronics. Compared to standard incandescent light bulbs, CFLs provide several key advantages: they use less energy, generate less heat, and last up to 10 times longer than standard bulbs. However, in the year 2000, after 20 years in the market, they still made up less than 0.5% of the market for light bulb sales – even with program efforts by utilities.”
  • “Nationally, it is estimated that CFLs comprised about 2% of screwbase lamp sales in 2004.”
  • “Although manufacturers have made inroads in compatibility between CFL and standard bulb fixtures, consumers may have had difficulties finding CFLs in locations where they normally purchase incandescent bulbs. One study has shown that while the greatest share of incandescent light bulbs are sold in grocery stores (31%), only 1.3% of CFLs are sold in the same location. Rather, the vast majority of CFLs (57%) are sold in home centers, with the next-largest share sold in hardware stores.”
  • “Results indicate that energy savings vary from 20-80 kWh per unit, depending on the situation, and the peak savings in watt per unit range from 2 to more than 5 watts per unit. Residential CFL loads peak at 20:00 to 21:00 and generally do not contribute to overall load during peak periods.”
  • “Retailer perceptions of the key advantages of CFLs align with those of householders. According to a study in California, they include: lower operating cost/energy savings, longer life, lower life-cycle costs, and less damage to the environment. Eighty percent of CFL purchasers reported they were at least as satisfied with the CFLs they purchased as with purchases of incandescents. More than one-third said they were more satisfied.”
  • “The review indicates that CFL technology has advanced and provides products with appealing features including performance similar to standard bulbs, good fit in fixtures, long lifetimes, and excellent savings. Early technical problems have been overcome for the most part, and price differentials are falling. However, prices in most areas still seem to be higher than most residents are willing to spend.”

Limbaugh might add that light bulbs are not the silver bullet, but they are part of the solutions for economic viability, national security, ecological sustenance and healthy futures for our children.

Limbaugh may think he needs to ask me to “turn him off” if I agree with an energy “stat” simply because it is voiced by a “Hollywood liberal,” but as a woman with an appreciation for integrity and intellect, I’m already so turned off by this man, he needn’t ask.

Heather Rae, a contributor to cleantechblog.com, manages a ‘whole house’ home performance program in Maine. In 2006, she built a biobus and drove it from Colorado to Maine. In 2007, she begins renovation of an 1880 farmhouse using building science and green building principles.

RECs and Carbon Credits are a GOOD Thing

RECs and carbon credits are a GOOD thing, so stop bashing them.

As an example a few months ago Inside Greentech had an article attacking renewable energy credits, singling out one such purchase by Wells Fargo, and comparing them to the indulgences sold by the Catholic Church to save your soul in the middle ages.

“In the 16th-century church, those who were long on cash but short on righteous living could balance the equation by buying “indulgences”, representing a sort of absolution for sinful behavior.

Indulgences may have disappeared about the time of Martin Luther, but they seem to be alive and thriving in a more contemporary religion – the Church of the Green.”

I find this rather exasperating.

All renewable energy, carbon and energy efficiency credits are, is a simple derivative.

Devolving the “power” produced by one company into its components a) the electrons, b) the “green strip”, c) the “low carbon strip” (though often for conservatism only one of b or c can often be claimed), and selling these components to different users.

There is nothing more wrong or complex here than is done with collateralized mortgages and exchange traded funds everyday on Wall Street. The only caveat is ensuring you don’t sell the same thing twice, but that’s what certifications and audits are for.

By defining the property rights for the green portion of the power as separate and detachable (just like oil and gas mineral rights and water rights are detachable from land ownership) from the electron stream, we enable the market to act more efficiently, give the consumer choice, and change the world for the better.

It’s not a matter of asking why a company should be permitted to make or sell a credit. The real question should be, why can’t I? If I’m the producer, it’s my power, I can split it up anyway I want as long as my customer agrees. Once it is in the grid, the electrons don’t care. And as a buyer, if my current provider won’t sell me green power because they don’t produce enough (and in a regulated world I don’t have a choice about who to buy from), I can buy my electrons from my regulated provider, and buy the green power portion from a third party who does makes the product I want, but whose electricity customer doesn’t care or won’t pay as much as I will.

This is especially true for someone like Wells Fargo, who operates across state and national borders. In their infinite wisdom, the energy regulators don’t let Wells Fargo aggregate its retail power purchases from one single provider or buy power from Xcel Energy’s Colorado wind farms for its California offices. Without green credits, Wells Fargo could not put their money where their mouth is and go green. Do we really want to punish good behavior?

So why are RECs and carbon credits important? It’s all about giving the consumer (whether that’s residential or commercial) a choice. Nobody screams when Fidelity or Vanguard creates a new ETF, why would we complain when someone does the same thing with green power? Whether you are liberal or conservative you should be able to understand that.

Author Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is the founding contributor of Cleantech Blog, and a Contributing Editor to AltEnergyStocks.com.

A (Re)Birth for Offshore Wind

by Richard T. Stuebi

In the early 2000’s, much of the interest of the worldwide wind energy community was focused on offshore opportunities. This was because the world’s largest wind market — Europe — was getting developed towards saturation, and the best wind resources were offshore where population density was not going to be a factor. Several high-profile projects — such as Middelgrunden off the shores of Copenhagen, and Ireland’s Arklow installation by GE (NYSE: GE) — generated arguably more publicity than kilowatt-hours.

In the past few years, the momentum for offshore wind has reversed. Completed projects cost more than expected to developers and manufacturers alike, and — in the U.S. — the siting controversies associated with the ignominious Cape Wind project have cast doubt on the near-term viability of offshore wind. In the meantime, the fortunes for onshore wind have never been better, especially in what is now the world’s largest market: the U.S., where population density and land availability is not a constraining factor for the foreseeable future. The wind industry overall is booming, the current opportunities are all onshore, and everyone’s making hay while the sun shines. Correspondingly, offshore wind has been shunted to the back burner.

Here in Cleveland, a contrarian view is emerging. The Cuyahoga Regional Energy Development Task Force recently issued Building a New Energy Future, a report outlining the concept of a Lake Erie Wind Energy Center. This would be comprised of two components: a 5-20 megawatt demonstration project 3-5 miles offshore downtown Cleveland, and an affiliated research center to enable the invention and testing of next-generation wind energy technologies optimized for offshore application.

The next step is for a team of advisors to be retained to perform a detailed feasibility study to ensure that there are no truly insurmountable obstacles — technical/engineering, economic/financial or legal/regulatory — to its completion. If/when completed, the vision is for the Cleveland area to seize leadership in offshore wind, tackling the fully-acknowledged challenges now while the rest of the wind industry is preoccupied with capturing the onshore opportunities, so that when (not if) the offshore wind industry really blossoms, Cleveland will be the acknowledged center of offshore research, deployment and manufacturing.

I was privileged to serve on the Task Force that developed this report, and am pleased that its release has generally been well-received. However, there are some who wrinkle their brows and question the sanity of focusing on the offshore wind opportunity at this time.

Why not focus on onshore wind? Because the private sector is aggressively pursuing good onshore wind opportunities already, because Ohio’s onshore wind resource is modest, and because onshore wind deployment even in large volumes does not generate many ongoing jobs. Economic revitalization for our region will only come with high-paying research and manufacturing jobs, which in turn will come by addressing the needs of the wind industry that others are avoiding for the time being.

We cannot afford to wait until others start focusing on offshore wind. We will break down the barriers of offshore wind development on the Great Lakes to build the market demand. We will work with manufacturers and researchers to break down the technical and engineering barriers and improve the economics of offshore wind supply. In so doing, in decades to come, we can see gigawatts of wind offshore in Lake Erie, generating a large portion of our region’s energy requirements without producing any air emissions, built with equipment supplied by local manufacturing operations, installed and maintained by offshore wind service companies (akin to the base of expertise in offshore oil/gas E&P that resides in Houston and New Orleans).

It’s a bold vision, certainly with risk, but it’s doable, and worth doing. Wish us well and keep your eyes on us.

Richard Stuebi is the BP Fellow for Energy and Environmental Advancement for The Cleveland Foundation, and is the Founder and President of NextWave Energy.

Light Bulbs Replace Coal Power Plants

By John Addison (2/23/07). California media, business and government leaders gathered at the CFL Summit in San Jose on February 22 to discuss an important subject – changing a light bulb. Yes, it was an all-day meeting about a light bulb – the compact fluorescent lamp (CFL).

A summit meeting about a light bulb? I had to attend. I thought it would be like the light bulb joke that asks “How many Californians does it take to change a light bulb?” Correct answer: Eleven. It takes four to create a space for it to happen, one to change the bulb, four to share in the experience, one to write a book about the experience, and one to negotiate the movie rights to the book.

It turns out that the right light bulb is no laughing mater. CFLs are an important part of saving billions, achieving energy independence and averting a climate crisis. If each American replaced only one conventional 60W bulb with a 13W ENERGY STAR-labeled CFL, it would prevent the burning of 30 billion pounds of coal, and save $8 billion in energy costs.

This enormous potential for change brought 200 to the meeting including a Hollywood producer, Washington officials, environmental leaders, and corporate executives from around the country.

Producer of an Inconvenient Truth, Lawrence Bender introduced the significance of 18seconds.org, named for the 18 seconds it takes to change a bulb. “This movement is about empowering the individual — to say to every person in America that with one easy step, they can become part of a movement that will literally change the world,” said Bender. An Inconvenient Truth is nominated for two Academy Awards including best documentary. Mr. Bender’s past films Good Will Hunting and Pulp Fiction won multiple Oscars.

Co-founder of Yahoo, David Filo, talked about the unexpected rewards for doing the right things. He knows a lot about empowering people to make a difference. When he co-founded Yahoo in 1994, 99% of us were unable to navigate and communicate using the Internet. From the early years, Yahoo has supported a wide-range of non-profit causes, bringing together those that want to help with those in need. Yahoo for Good (http://brand.yahoo.com/forgood/) provides details about programs including Earth Day, Breast Cancer, and Disaster Relief. Amy Lorio, Yahoo News GM, shared how environmental news is reaching many of Yahoo’s 500 million users.

Yahoo manages 18seconds.org and helps sponsor summits like this one. Yahoo also goes to lengths to empower employees to enjoy sustainable living and avoid gridlock traffic. (Cool Commutes) http://www.cleanfleetreport.com/vault/cool_commutes.htm

Environmental Defense offers details about a wide range of compact fluorescent lamp for different lighting and decorative requirements at their website.

One of the CFL Summit sponsors is public utility PG&E which actively promotes fuel efficiency and is investing billions in renewable energy. Not all utilities are promoting efficiency. Making daily headlines is TXU’s controversial proposal to build 11 to 19 inefficient coal power plants that threaten all of us with the planned emission of 78 million tons of annual greenhouse gas emissions. In the past month, Americans have installed enough CFLs to more than offset the power that would be produced by these plants.

18seconds.org provides good information and tracks success. For example, since the start of 2007, over 14 million CFLs were purchased in the U.S. During the life of these lamps, $400 million will be saved; 1.4 billion pounds of coal will not required for fueling unnecessary power plants. Over 6 billion pounds of greenhouse gas emissions will be prevented.

“A journey of a thousand miles begins with a single step, observed Confucius. Ending global warming begins by installing one CFL. It only takes 18 seconds.

John Addison is the author of the upcoming book Save Gas, Save the Planet. This article is copyright John Addison with permission to publish. For years, he and his wife Marci have lighted their home with CFLs. This article appears in full at the Clean Fleet Report. http://www.cleanfleetreport.com

Big Ideas from Cleantech

I just returned after two days of action at the Cleantech Forum in San Francisco.

Over 600 venture capitalists showed up, representative of the tremendous upsurge in investment in the sector.

In huge investment news announced in conjunction with the forum – CalPERS commits $400 mm in investment to Cleantech. California strikes again.

I tried to distill the conference to 3 Big Idea Takeaways in Energy and Cleantech:

BP on the Future of Automotive Fuel – Paraphrasing BP Distinguished Scientist Theo Fleis – Stop thinking in terms of “ethanol” or “hydrogen” or “biodiesel” – the future fuels will be blends. Think hybrid fuels, just like hybrid cars. (A sentiment we have blogged about before, and with which we wholeheartedly agree.)

His BP prediction on our future fuel mix in the year 2100 – gasoline from crude oil – 30%, gasoline fro gas to liquids, coal, syngas, or other “synthetic” source, 50%, hydrogen, included in the “other” category.

Steven Chu on Global Warming – Paraphrasing Steven Chu, Nobel laureate and Director of Lawrence Berkeley Lab – one of the most untalked about issues with global warming – water storage. For example, we here in California get a large portion of our water (and power) from snow melt – ie, water (and energy) stored or “banked” in the form of ice until needed as a way to balance the fact that we get most of our rain fall in a very short period of time. If global warming reduces the snowpack, it will also massively affect the water storage system that underpins our society.

Walmart on the Next Big Thing – Again to paraphrase “We’ve done a huge amount in energy efficiency already – the next thing we’re turning our attention to is water reduction and resuse – how to make our stores more sustainable.”

Author Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is the founding contributor of Cleantech Blog, and a Contributing Editor to AltEnergyStocks.com.

The more things change…

by Heather Rae

My favorite book on clean energy is Energy for Survival: the Alternative to Extinction written by Wilson Clark and published in 1975. I was barely in high school then. It wouldn’t be for another 20 years that I would hear the words ‘compact fluorescent bulb’ and another 28 before I would discover Clark’s book. It was in the library of an energy engineer in Denver.

Some of the energy technologies in Clark’s book have evolved into the marketplace, though not enough to avoid wars over oil and not enough for solar to be commonplace in the United States. Some things stay the same.

Polar bears perch on bonsai-shaped ice floats, and The Boston Globe writes about the possibility of drilling in the melted Arctic and the opening of new shipping routes due to climate change. Some things do change.

Amidst the bit of progress in energy technology, the lack of political will to invest as much in war as in the R&D and the science of life remains. So I wonder, is this new, these mangled priorities, or is this just more of the same? In the context of marketing and new technology adoption, do people, can people, change? In America? What will it take – other than the fear-mongering that backfires – to get people on board with new energy technologies and new behaviors? I don’t have the answers, but I have an inkling and am paying close attention. It comes in handy when marketing everything from solar to air sealant to biofuels to building science.

An energy consultant with a vast reference library passed along Energy Efficiency: Perspectives on Individual Behavior, a compilation of articles published twenty years ago by the American Council for an Energy-Efficient Economy. (One thing that needs to change is the term “energy efficiency.” I won’t get back on that soapbox.)

Take a peek back in the past:
On information and economic incentives: An article in the volume shoots holes in the argument that attitudes (education and information around energy) and reason (cost-effective economics) will lead to behavioral changes like buying those CFLs.*
On weatherization lacking glamour and appeal in the marketplace: “[the lack of glamour] is why so many of our respondents are willing to spend thousands of dollars on solar water heaters that can never pay for themselves, while they are unwilling to take an afternoon to caulk cracks and save hundreds of dollars in the first heating season. As specialists we may laugh at such behavior, but in the interests of further energy conservation in the country it behooves us to learn to work with the existing set of cultural values rather than to challenge them.”
On energy consumed by a town in Minnesota called Foley: “Many Foleyites felt powerless and angry in the face of rising fuel prices and an uncertain energy future. They trusted neither government nor utility companies, which they felt gave them mixed messages about energy: the denial of an energy crisis by the Reagan administration; conflicting reports on existing fuel supplies and natural resources; and the sharp reversal of former encouragement to consume “penny cheap” fuel. Foleyites felt trapped as dependent fuel consumers. Many chose to reassert a sense of personal power through maintaining or even increasing their household fuel consumption levels. They legitimated these “rebellious” decisions with the third rationale, the ability to afford the consequences…Sobel (1981) depicts consumption as a “sacrosanct” area of American life, one in which feelings and power and control are experienced. Foleyites resented attempts to constrain their freedom of consumption, especially since the inalienable right to cheap fuel was being abridged.”
On energy consumed by a town in Sweden called Munka Ljungby: “The confidence that most Swedes place in their government and its policies contrasts markedly with the hostility exhibited by Foleyites in the face of energy ambiguities and with their suspicion of collusion between government and “big business” to profit from energy crises. The Swedish welfare state is based upon humanitarian and moral principles, and its policies result from an elaborate process in which academic and scientific specialists, labor unions, businesses, and all public interest groups are consulted. Decisions issued are thus based on consensus, and Swedes can accept them with confidence, knowing that the “right” conclusion has been reached and that all Swedes will be treated equitably.”
On self-image and change: “Foleyites were apologetic, and the Munka Ljungbyans smug, about their ways of life with regard to energy use. These attitudes helped to precipitate the changes made by Foleyites and to deter changes on the parts of the Munka Ljungbyans.”

Beyond the science and the engineering are the governments and the utilities…and people who are just as hard to figure out as the technology.

Other Going On This Week:
The New York Times throws questions to a NASA climate scientist who says global warming “is a bad name.” It sounds “cozy and comfortable…Climate meltdown sounds a little more ominous.”

Australia (which like the United States did not sign on to Kyoto) has new rules around light bulbs. By 2009-10, regulations will ban incandescent light bulbs. Some changes just take some political will.

Heather Rae, a contributor to cleantechblog.com, manages a ‘whole house’ home performance program in Maine. In 2006, she built a biobus and drove it from Colorado to Maine. In 2007, she begins renovation of an 1880 farmhouse using building science and green building principles.