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China: The new wind superpower

Posted in alternative energy, climate change, energy, environment, global warming, green collar jobs, the green economy, wind power, tagged , , , on February 3, 2009| 15 Comments »

img_1216_1photo: Todd Woody

The numbers are in, and as expected 2008 set a record year for the worldwide wind industry as new wind farms generating a total of 27,000 megawatts of greenhouse gas-free electricity came online, according to the Global Wind Energy Council.

The quick-click headline was that the United States overtook the world’s green superpower, Germany, by installing 8,358 megawatts in 2008  – a 50% jump from the previous year and enough wind energy to power two million American homes. But the big story this year will be China’s rapid emergence as the next global wind power.

China last year doubled its wind energy capacity – for the fourth straight year – adding 6,300 megawatts of new electricity generation for a  total capacity of 12,210 megawatts.  A third of the world’s new wind capacity last year was installed in Asia, with China  accounting for 73% of that power. China reached its 2010 target of generating 5,000 megawatts of wind-powered electricity in 2007 and is expected to hit its 2030 goal of 30,000 megawatts years early.

“In 2009, new installed capacity is expected to nearly double again, which will be one third or more of the world’s total new installed capacity for the year,” Li Junfeng, Secretary General of the Chinese Renewable Energy Industry Association, said in a statement.

Of course, 30,000 megawatts of wind is but a flicker in a country with more than 300,000 megawatts of coal-fired energy online but it’s huge by world standards and has spawned both a burgeoning domestic wind industry and growing investment by overseas companies. Denmark’s Vestas, the world’s largest turbine maker,  will open its fifth factory in China this year and it received orders for another 200 megawatts’ worth of turbines at the end of 2008. General Electric (GE), one of only two U.S. turbine makers, also operates a factory in China and in January the company announced a joint venture with China’s A-Power Energy Generation to make turbine gearboxes. In a separate deal with A-Power, GE will supply the company with 900 turbine gearboxes starting next year.

As the financial crisis slows growth in the U.S. and Europe, India is another potential wind power. It ended 2008 with 9,645 megawatts of wind energy and added more capacity that year – 1,800 megawatts – than former world leaders Germany and Spain. Indian turbine maker Suzlon also has been moving onto European turf, relocating its international headquarters to Denmark and acquiring German turbine manufacturer REPower.

Installed global wind capacity now stands at 120.8 gigawatts with the 2008 turbine market worth $47.5 billion, according to the Global Wind Energy Council.

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Solar investor bucks the downturn

Posted in alternative energy, energy, environment, green financing, green tech, MMA Renewable Ventures, PG&E, renewable energy, solar energy, solar power plants, SunPower, Suntech, tagged , , , , on January 30, 2009| 1 Comment »

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photo: WorldWater & Solar Technologies

As the financial crisis short-circuits the ambitions of green tech companies, solar financier MMA Renewable Ventures is pushing ahead with raising its fifth fund. Meanwhile, its solar power plant joint venture with Chinese solar cell maker Suntech – Gemini Solar Development – has been selected by utility Austin Energy to build a 30-megawatt solar farm in Texas.

The San Francisco-based firm just completed its $200 million Solar Fund III, which invested in 20.6 megawatts of photovoltaic solar arrays for companies like Macy’s, the Gap, Lowe’s and utility FPL (FPL) as well as the Denver International Airport. MMA Renewable (MMAB.PK) provides the financing for the installation of large commercial solar arrays on big box stores and other locations while retaining ownership of the systems. The electricity produced is sold to the building owner under a long-term contract.

“The good news is that we can raise another fund in a tough market,” MMA Renewable Ventures CEO Matt Cheney told Green Wombat, adding that the company aims to raise $200 million or more for Solar Fund V.

That doesn’t mean it’ll be easy. Many of the Wall Street banks that invested in big solar systems are no more and demand for the tax credits generated by the projects has fallen faster than the Dow Jones as most companies aren’t piling up much tax liability these days.

“The ones that are left are being very picky and asking a lot,” says Cheney, adding that banks and other investors are demanding higher returns on their investments. Still, he notes, past MMA Renewable investors like Wells Fargo (WFC) remain relatively healthy. “If you look at every country in Europe and the U.S., there are good examples of financing institutions that were less impacted by the financial crisis, which is a deep one,” he says.

One possible source of new tax-equity investment may come from well-capitalized utilities that, thanks to a change to the tax laws Congress made last October, can now claim tax credits for solar projects. PG&E (PCG) CEO Peter Darbee, for instance, has said his utility plans to invest in solar power plants.

A new and potentially bigger worry is whether MMA Renewable customers – big box retailers and the like – will be survive the financial crisis. MMA Renewable’s business is built on long-term power purchase contracts – as long as 20 years – that provide a predictable and steady revenue stream to investors.

“Would you buy a corporate bond from a large U.S. company that went out 20 years today?” Cheney asks. “You would most likely tell me that’s a long time. You don’t know if you want to take that risk beyond five or ten years. That’s the equation that’s present in the marketplace today.”

In California, at least, demand for solar has remained strong: This week state regulators reported that installed solar systems more than doubled in 2008 from the previous year.

One bright spot may be the market for smaller-scale photovoltaic power plants and MMA Renewable’s Gemini joint venture with Suntech (STP).  The Austin Energy project still must be approved by the city of Austin, but Cheney says Gemini is in the midst of negotiations with other utilities as well.

When SunPower (SPWRA) reported record fourth-quarter earnings Thursday, CEO Tom Werner said the Silicon Valley solar cell maker was shifting resources to its power plant building business in 2009 and had 1,000 megawatts of projects on the drawing boards.

There was just one catch:  money. “We have a strong pipeline of projects fully permitted, or with permits in process, that will be buildable,” Werner said, ” when financing becomes available.”

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Wind jobs outstrip coal mining

Posted in energy, environment, green cars, green collar jobs, wind power, tagged , , , , on January 28, 2009| 33 Comments »

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photo: Todd Woody

Here’s a talking point in the green jobs debate: The wind industry now employs more people than coal mining in the United States.

Wind industry jobs jumped to 85,000 in 2008, a 70% increase from the previous year, according to a report released Tuesday from the American Wind Energy Association. In contrast, the coal industry mining employs about 81,000 workers. (Those figures are from a 2007 U.S. Department of Energy report but coal employment has remained steady in recent years though it’s down by nearly 50% since 1986.) Wind industry employment includes 13,000 manufacturing jobs concentrated in regions of the country hard hit by the deindustrialization of the past two decades.

The big spike in wind jobs was a result of a record-setting 50% increase in installed wind capacity, with 8,358 megawatts coming online in 2008 (enough to power some 2 million homes).  That’s a third of the nation’s total 25,170 megawatts of wind power generation. Wind farms generating more than 4,000 megawatts of electricity were completed in the last three months of 2008 alone.

Another sign that wind power is no longer a niche green energy play: Wind accounted for 42% of all new electricity generation installed last year in the U.S. Power, literally, is shifting from the east to west, to the wind belt of the Midwest, west Texas and the West Coast. Texas continues to lead the country, with 7,116 megawatts of wind capacity but Iowa in 2008 overtook California for the No. 2 spot, with 2,790 megawatts of wind generation. Other new wind powers include Oregon, Minnesota, Colorado and Washington state.

But last year’s record is unlikely to be repeated in 2009 as the global credit crisis delays or scuttles new projects because developers are unable to secure financing for wind farms. Layoffs have already hit turbine makers like Clipper Windpower and Gamesa as well as companies that produce turbine towers, blades and other components.

The Obama administration’s $825 billion stimulus package includes a three-year extension of a key production tax credit that has spurred the wind industry’s expansion. But given the dearth of investors with tax liabilities willing to invest in wind projects in exchange for the credits, the stimulus is unlikely to be stimulating to the industry unless the tax credit is made refundable to developers.

The U.S. wind industry is dominated by European wind developers and turbine makers – General Electric (GE) and Clipper are the only two domestic turbine manufacturers – and those companies’ fortunes rise and fall with the global economy.  As the U.S. market has boomed, European companies have been moving production close to their customers – the percentage of domestically manufactured wind turbine components rose from 30% to 50% between 2005 and 2008, according to the American Wind Energy Association.

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Ausra exits solar power plant building business

Posted in Ausra, BrightSource Energy, energy, enviro startups, environment, eSolar, First Solar, green financing, green startups, green tech, PG&E, renewable energy, San Diego Gas & Electric, solar energy, solar power plants, Stirling Energy Systems, SunPower, tagged , , , , , on January 27, 2009| 5 Comments »

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photo: Ausra

When Green Wombat sat down for a chat with Ausra founder David Mills back in September 2007, he allowed that it was not unreasonable to expect the Silicon Valley solar startup to soon be building several massive megawatt solar power plants a year. The optimism was not unwarranted. After all, in the space of 12 months Ausra had relocated from Sydney to Palo Alto, raised $40 million from A-list venture capitalists and was about to ink a deal with utility PG&E for a 177-megawatt  solar power project.

That was then. This month Ausra laid off 10% of its 108 employees amid a move to stop building Big Solar projects – for now – to focus on providing its solar thermal technology to other power plant developers and to industries that use steam. (Ausra’s compact linear fresnel reflector technology deploys flat mirrors that sit low to the ground and concentrate sunlight on water-filled pipes that hang over the mirrors. The superheated water creates steam which drives an electricity-generating turbine.)

“I think our competitors will figure this out sooner or later but nobody’s going from a five-megawatt project to a 500-megawatt project. No one’s going to finance that,” Ausra CEO Bob Fishman told Green Wombat. “If you look at the amount of money it takes to be involved in the project development business, that’s not something a startup can do.”

At least any time soon. Ausra last year opened a robotic factory in Las Vegas to make mirror arrays and other components for the many power plant projects it had on the drawing boards. Just three months ago the company flipped the switch on its five-megawatt Kimberlina demonstration power plant outside Bakersfield. But as the credit crunch hit, financing for billion-dollar solar power projects evaporated. Then in October, Congress passed legislation allowing utilities like PG&E (PCG), Southern California Edison (EIX) and San Diego Gas & Electric (SRE) to claim a 30% investment tax credit for solar projects. As the only well-capitalized institutions left standing in the energy game, utilities are stepping forward as investors.

PG&E CEO Peter Darbee says he’s prepared to make direct investments in solar power plants – projects the utility needs to comply with a California mandate to obtain 20% of its electricity from renewable sources by 2010 and 33% by 2020. Under pressure to meet those targets, California utilities have signed more than four gigawatts worth of power purchase agreements with solar power plant startups like BrightSource Energy, Solel, Stirling Energy Systems and eSolar. Utilities also have begun signing deals for electricity produced by smaller scale photovoltaic power plants built by companies like First Solar (FSLR) and SunPower (SPWRA).

Fishman said Ausra will complete the 177-megawatt Carrizo Energy Solar Farm in San Luis Obispo County on California’s central coast to supply electricity to PG&E. “If Peter Darbee wants to own Carrizo rather than buy the electricity, we’re willing to do it. It makes sense,” he says.

Ausra will also will complete a second big solar power plant planned for Arizona. But the company has quietly let drop a Florida project for utility FPL (FPL) and is negotiating to offload lease claims it filed on federal land in Arizona and Nevada for solar power plants during the solar land rush.

“Other projects in the pipeline we’ll be selling to utilities or developers for a modest amount of cash with a commitment that those developers must use our technology,” says Fishman.

Fishman notes that the cost of licensing a solar power plant can be $5 million to $10 million a year – and in California it’s a multi-year process – so Ausra will realize some immediate savings by morphing into a technology provider.

Customers for Ausra’s technology include oil companies that could inject solar-generated steam in oil wells to enhance recovery of thick petroleum as well as food processing plants and other heavy users of steam. Fishman just returned from a trip to the Middle East where he says he held talks in Kuwait, Qatar and Dubai about using Ausra’s technology for oil recovery and desalinization.

Going forward, he says Ausra’s focus will be on medium-sized power plants. “Maybe next year we’ll do four projects of 50 megawatts a year. It’s a walk before you run situation,” says Fishman. “The financial customers and financial community are going to insist we do medium scale before we do large scale. We’ll still want to do very large projects but given the project finance market, it’ll be a few years from now.”

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Green cement

Posted in Acciona, climate change, corporate green, corporate sustainability, energy, environment, global warming, wind power, tagged , , , , on January 26, 2009| 1 Comment »

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photo: CEMEX

The cement industry’s contribution to global warming is pretty concrete – it’s responsible for 5% of greenhouse gas emissions, fueled by demand from the rapidly industrializing economies of China and India.

Now CEMEX, the Mexican building materials giant, has taken steps to green up its operation. Not by changing the way it makes cement but how it powers the process. Late last week, Mexican President Felipe Calderón inaugurated the first phase of what will be a $550 million, 250-megawatt Oaxaca wind farm – Latin America’s largest – that will generate the equivalent of a quarter of the electricity CEMEX consumes in Mexico.

The EURUS wind farm is a joint development between CEMEX (CX) and Acciona, the Spanish renewable energy powerhouse. The first 25 turbines will go online by March and the final phase will be completed by the end of 2009. A CEMEX spokesman said Acciona will retain ownership of the wind farm and sell the electricity to CEMEX under a 20-year contract.  The electricity from EURUS will go into the power grid and CEMEX will receive “electricity credits” for the power produced.

Mexico has become the next frontier for the wind industry. The same day Calderón presided over the opening of EURUS he also dedicated a nearby 80-megawatt wind farm built by Spanish company Iberdrola Renewables.

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Utilities turn to thin-film solar for big power

Posted in alternative energy, Ausra, BrightSource Energy, energy, environment, First Solar, green startups, green tech, OptiSolar, PG&E, San Diego Gas & Electric, solar energy, solar power plants, Southern California Edison, Stirling Energy Systems, SunPower, Suntech, tagged , , , , , , on January 23, 2009| 4 Comments »

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With Big Solar thermal power plants bogged down in bureaucracy and facing environmental and financial hurdles, utilities are turning to smaller-scale thin-film solar stations that can be built in a matter of months.

In late December, PG&E (PCG), for instance, signed a 20-year contract for electricity generated  from a 10-megawatt thin-film solar power plant in Nevada owned by energy giant Sempra (SRE) that was officially dedicated on Thursday. The solar farm was built by First Solar (FSLR) in a scant six months. Meanwhile, the utility’s nearly two gigawatts worth of deals with solar thermal power companies won’t start producing power for another two years at the earliest. (Southern California Edison (EIX) and San Diego Gas & Electric signed agreements with solar dish developer Stirling Energy Systems for 1.75 gigawatts in 2005 and those projects are just now beginning to move through the regulatory approval process.) And the financial crisis has made it more difficult for solar thermal developers to obtain the billions of dollars needed to finance the construction of a massive megawatt power plant.

Solar thermal power plants typically use miles of mirrors to heat a fluid to create steam which drives an electricity-generating turbine. Photovoltaic (or PV) solar farms essentially take solar panels similar to those found on residential rooftops and mount them on the ground in huge arrays. (Thin-film solar panels are made by depositing layers of photovoltaic materials on glass or flexible materials.)

“In terms of construction, photovoltaic tends to have a much faster development and construction track,” Roy Kuga, PG&E’s vice president for energy supply, told Green Wombat. “There is a segment of mid-sized projects – in the two to 20 megawatt size – where PV shows a distinct advantage in that market. There’s a huge potential for the PV market to expand.”

That’s good news for companies like First Solar – the Tempe, Ariz.-based company backed by the Walton family that is often called the Google of solar for its stock price and market prowess – and SunPower (SPWRA), the Silicon Valley solar cell maker that’s moved into the power plant-building business.

The speed at which the Sempra-First Solar project went online owes much to the fact that it was built on the site of an existing fossil fuel power plant. “It was already permitted for power generation, transmission existed and it did not have to go through the laborious California permitting process,” says Reese Tisdale, a solar analyst with Emerging Energy Research. “As such, First Solar was able to essentially plug and play.”

Nathaniel Bullard, a solar analyst with New Energy Finance, says he expects utilities increasingly to bet on smaller-scale photovoltaic farms to help meet state mandates to obtain a growing percentage of their electricity from renewable sources. Just this week, PG&E CEO Peter Darbee said his utility plans to invest in solar power plant projects rather than just buy the power they produce.

“I think a utility could easily integrate, technically and financially, 100 megawatts of PV,” Bullard says.  If something is falling behind on your big solar thermal projects, you can plug in PV. I think you’ll see more of this with California utilities and I expect to see it more in Florida and North Carolina. It’s a great runaround to issues of siting and transmission.”

That’s because in California photovoltaic power plants do not need approval from the California Energy Commission. And smaller-scale plants take up far less land and can be built close to existing transmission lines. Most large solar thermal power plants typically are planned for the Mojave Desert and require the construction of expensive power lines to connect them to the grid.

The modular nature of PV solar farms means they can begin generating electricity as each segment is completed while a solar thermal plant only goes online once the entire project is finished.

“Certainly there is a sweet spot in which the project is large enough to gain advantages of scale,” says Tisdale. “Also, these small-to-mid-size systems can be spread about a transmission network, instead of at one site.”

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Layoffs hit the wind industry

Posted in alternative energy, Clipper Windpower, energy, green collar jobs, green financing, green policy, wind power, tagged , , , on January 20, 2009| 15 Comments »

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photo: Todd Woody

As President Barack Obama embraced renewable energy in his inaugural speech Tuesday, Clipper Windpower laid off 90 employees – about 11% of its workforce – as the global financial crisis throws a spanner in the once-booming wind industry.

The Carpinteria, Calif.-based turbine maker has seen business slow as customers delay existing orders and put off new ones because they cannot obtain financing for wind farms, Clipper CEO Doug Pertz told Green Wombat.

“In the short-term, the impact to Clipper is a reduction in 2009 turbine production,” he said. “We know that 2009 will be a challenging year, however, remain optimistic that this economic situation is temporary.  We trust that the new Obama administration will, in the not-too-distant future, enact policy to enable better financing options for wind energy projects and aggressively promote the growth of renewable energy development.”

Clipper is one of only two U.S.-owned turbine makers – the other being General Electric (GE) – in an industry dominated by European manufacturers and wind farm developers.

Like their counterparts in the solar industry – which also has been shedding workers in recent weeks – wind companies depend on tax incentives to lure investors. But with traditional investment banks all but extinct on Wall Street and other investors hoarding their cash, there’s been little appetite of late for investing in so-called tax equity partnerships to provide funding for massive wind farms or solar power plants.

Pertz said Clipper’s production is down 20% from the 750 megawatts worth of turbines it manufactured in 2008 and that he expects double-digit declines for 2009. “Customers with large balance sheets are being much more conservative and smaller independent wind developers are seeing that it is much more difficult to obtain tax-equity financing,” he noted.

Wind and solar industry lobbyists are pushing Congress to make the investment tax credit and the production tax credit refundable so those companies that don’t have tax liabilities can trade the credits for cash that can be used to finance renewable energy projects.

Founded in 2001 by wind industry veteran James Dehlsen – his first wind company is now owned by GE –  Clipper makes a 2.5-megawatt turbine called the Liberty at its Cedar Rapids, Iowa, factory that powers wind farms built by FPL (FPL) and BP (BP). Other customers include Queen Elizabeth II, who bought the prototype of a 10-megawatt offshore turbine being developed by Clipper in the U.K.

One bright spot for the wind industry, said Pertz, is an expected move by well-capitalized utilities to take ownership stakes in wind farms if a national standard is enacted requiring them to obtain a certain percentage of their electricity from renewable sources.

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Not enough green in stimulus bill

Posted in alternative energy, electric cars, energy, energy efficiency, green policy, investment tax credit, OptiSolar, renewable energy, solar energy, solar power plants, Suntech, tagged , , , , on January 16, 2009| 9 Comments »

stirling-dishes

photo: Todd Woody

Fifty-four billion dollars is nothing to sneeze at, of course. That’s the amount in the $825 billion economic stimulus package –  introduced by House Democrats Thursday – set aside for renewable energy, electric car batteries, energy efficiency and other green projects.

It’s a start, but that’s less than 7% of the entire stimulus package (or, about enough to pay for the Iraq war for five months, or somewhat more than what the federal government is spending to bail out Bank of America). The lion’s share of the cash is devoted to smart grid technology and transmission lines, with a second big chunk going toward energy efficiency retrofits of public housing and weatherization of low-income homes.

That’s good news for a host of startups developing smart grid technology. But the the bill does not address the most pressing issue facing renewable energy companies today: the credit crunch has dried up financing just as billions are needed to fund factories and the construction of solar power plants and wind farms that will be connected to smart grids and new transmission lines. In recent weeks, layoffs have hit the solar industry. OptiSolar – a Bay Area thin-film solar startup that’s building a 550-megawatt photovoltaic power plant to supply electricity to utility PG&E (PCG) – reported to have furloughed half its workforce. And according to The Oregonian newspaper,  SpectraWatt, a solar cell maker spun off from chip giant Intel (INTC) last year, has shelved plans for a factory in Hillsboro, Ore.  Friday morning, Kate Galbraith at The New York Times’ Green Inc. blog reported that layoffs have now hit the wind industry.

The retrenchment comes as utilities are counting on solar power plants and wind farms to come online in the next two years to help them meet mandates to obtain a growing percentage of the electricity they sell from renewable sources. In California, for instance, PG&E, Southern California Edison (EIX) and San Diego Gas & Electric (SRE) have signed more than four gigawatts’ worth of contracts for electricity to be produced by large-scale solar power stations that will cost billions to build.

Solar startups rely on a provision that allows them to take a 30% tax credit on the cost of building a power plant. Now most of these companies are startups and have no way to use those tax credits as they’re not profitable. Instead, a solar company must essentially trade the tax credits to a firm that can use them in exchange for cash to finance construction. But investors in these deals have all but disappeared as the financial crisis takes its toll. Which is why solar and wind lobbyists are pushing Congress to make the tax credits “refundable” – meaning those companies that don’t have tax liabilities can trade the credits for cash that can be used to finance power plants. “Due to the recession, projects are now being put on hold, factories are closing and workers face potential layoffs unless Congress refines the tax credits now so they work as originally intended,” said Solar Energy Industries Association CEO Rhone Resch in a statement.

The stimulus package unveiled Thursday undoubtedly will be subject to change, but as written it will boost efforts to modernize and digitize the United States’ aging analog power grid. The bill includes:

  • $11 billion for smart grid research and development, pilot projects and the construction of new transmission lines to connect green energy power plants to the power grid. The government will fund 50% of the cost of utilities’ smart grid investments.
  • $8 billion in loan guarantees for renewable energy transmission projects.
  • $6.9 billion in grants to state and local governments for energy efficiency and carbon reduction programs.
  • $6.7 billion for renovation of federal buildings, of which $6 billion must be used for energy efficiency retrofits.
  • $6.2 billion for home weatherization programs for low-income families.
  • $2.5 billion for energy efficiency retrofits of public housing.
  • $2.4 billion for carbon sequestration – so-called clean coal – demonstration projects.
  • $2 billion for energy efficiency and renewable energy research (which includes $800 million for biomass and $400 million for geothermal research).
  • $2 billion in loan guarantees and grants for advanced vehicle battery research.

The smart grid billions will be a boon to companies like Silver Spring Networks, Gridpoint and eMeter that develop software to allow utilities to monitor and manage electricity use in real-time and provide that data to their customers.  “We think 2009 is going to be a good year for us,” eMeter president Larsh M. Johnson told Green Wombat last month. “We’ve seen continued demand from utilities for our services.”

But the billions for the smart grid can be considered a down payment: According to an estimate by research firm New Energy Finance, the price tag for modernizing the power grid over the next 15 years will be $450 billion.

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Report: The dark side of solar

Posted in corporate sustainability, energy, First Solar, solar energy, SunPower, Suntech, tagged , , on January 14, 2009| 6 Comments »

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Solar cells may generate clean green electricity but manufacturing them involves a witches brew of toxic chemicals that could harm the environment if millions of solar panels end up in landfills, according to a report issued Wednesday by the Silicon Valley Toxics Coalition.

The California environmental group is calling for solar manufacturers to take back and recycle their panels at the end of their 20-to-25 year lifespan. “We feel it’s a very important time for the solar industry because it is getting ready to take off and before that happens it’s time to look at important issues around designing out some of the toxics,” Silicon Valley Toxics Coalition executive director Sheila Davis told Green Wombat. “The big issue is whether there is a transparent supply chain and whether solar companies monitor their supply chains.”

The solar industry’s trade group says it embraces the report’s recommendations. “We completely support take-back and recycling,” says Monique Hanis, a spokeswoman for the Solar Energy Industries Association in Washington. “We’re in a fortunate position in that we’re still an emerging industry and have an opportunity now to establish standards and proactively set up processes before we end up with solar panels on every rooftop.”

Julie Blunden, vice president of public policy at San Jose solar cell maker SunPower, points out that an industry-backed group called PV Cycle in Europe is developing worldwide standards for the take-back and recycling of solar panels. “It’s not uncharted territory for the solar industry – we have actually been working on it for a while,” she says. “The idea is for industry to design something that makes sense for a global value chain and a global market.”

The toxics coalition was born in the early 1980s after chip plants were found to be contaminating groundwater with carcinogenic chemicals, setting off years of litigation and turning Silicon Valley into a Superfund hot spot. In more recent years, the toxics coalition has pressed computer manufacturers to take back and recycle PCs and reduce the use of toxic materials that often ended up discarded in Third World countries.

Silicon is the key material used in both semiconductors and conventional solar cells and its production and refinement involve various toxic chemicals.

“Although the solar PV boom is still in its early stages, disturbing global trends are beginning to emerge,” the report states. “For example, much of the polysilicon feedstock material (the highly refined silicon used as the basic material for crystalline silicon PV cells) is produced in countries like China, where manufacturing costs and environmental regulatory enforcement are low.”

But unlike computer makers in the 1980s and ’90s, solar companies like SunPower (SPWRA), Suntech (STP) and Sharp are not about to resist efforts to green up their business. “The people working for these companies are completely committed to preserving the environment and it drives the reason for being in solar,” notes Hanis.

And recycling solar panels can be good for business. When Green Wombat visited SolarWorld’s new solar cell factory in Oregon in October,  COO Boris Klebensberger touted the German company’s recycling program as a competitive advantage, both with customers and as a way to reduce manufacturing costs by recovering expensive polysilicon.

For instance, thin-film solar manufacturer First Solar (FSLR), whose cells are made from cadmium telluride, pre-funds the cost of its take-back program through an insurance program so customers are assured that the panels they buy will be properly disposed of at the end of their lifespan. That addresses a particular challenge the solar industry faces: Will the company that makes a particular solar panel be around a quarter century later to take back and recycle its products? And if not, who takes responsibility for doing so?

Davis says the toxics coalition has approached some solar companies but declined to identify them. “We haven’t talked to a lot of them but the ones we have talked to have been responsive,” she says. “I think that’s because most people in these companies do have an interest in being green. They’re much more receptive to looking at models that would promote their environmental performance.”

Beyond corporate self-interest, government policy considerations are likely to drive the solar industry to devise alternative manufacturing processes and implement recycling programs. For instance, European Union restrictions on various toxic materials in electronic products have encouraged computer makers to green their machines lest they be shut out of a major market. And these days, Dell (DELL) and even Apple (AAPL) see a marketing advantage to touting environmentally friendly computing.

The solar industry has time on its side when it comes to developing toxic reduction and recycling programs. While an iPod may end up on the trash heap in 18 months, the typical solar panel won’t come off the roof for decades.

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Solar jobs head south

Posted in alternative energy, climate change, energy, First Solar, green collar jobs, OptiSolar, PG&E, renewable energy, solar energy, solar power plants, SolarWorld, Solyndra, SunPower, tagged , , , , , on December 11, 2008| 6 Comments »

Amid the daily drumbeat of mass layoffs, here’s some sunny news: Solar startup Suniva cut the ribbon Thursday on a photovoltaic cell factory outside Atlanta.

As solar factories go, Suniva’s plant – the first such facility in the Southeast – is relatively small, making 32 megawatts of solar cells annually until  production is fully ramped up to 175 megawatts in 2010. But the factory will create 100 green collar jobs and it follows the opening of  SolarWorld’s new solar cell fab outside Portland, Ore., that will  produce 500 megawatts’ worth of solar cells, and thin-film solar startup HelioVolt’s factory in Austin. Meanwhile, Solyndra, a Silicon Valley thin-film solar startup, is expanding its production facilities while Bay Area rival OptiSolar is building a Sacramento factory that will employ 1,000 workers to produce solar cells for the power plant the company is building for utility PG&E (PCG). (Leading thin-film solar company First Solar (FSLR) operates a factory in Ohio as well as plants in Malaysia.) But Chinese solar giant Suntech (STP) last week said it has put plans for U.S. factories on hold due to the credit crunch.

The Suniva grand opening comes on a good news-bad news day for the solar industry. On one hand, President-elect Barack Obama is expected to nominate alternative energy proponent and Nobel laureate Steven Chu, director of the Lawrence Berkeley National Laboratory, as Secretary of Energy. But the solar industry faces a tough year ahead. On Thursday, research firm New Energy Finance, echoing other analysts, predicted prices for polysilicon – the base material of conventional solar cells – would fall 30% in 2009. That’s bad news for conventional solar cell makers like SunPower (SPWRA) and Suntech if they’ve locked in silicon supplies at higher prices but provides an opening for further growth for thin-film solar companies that make solar cells that use little or no polysilicon.

“We expect to see significant drops in the price of modules next year,” wrote New Energy Finance CEO Michael Liebreich.  “Any manufacturer who does not have access to cheap silicon and who has not focused on manufacturing costs is going to be in trouble. The big shake-out is about to begin. The next two years will change the economics of PV electricity out of recognition.”

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