Green Wombat

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In one of the biggest solar deals to date, Wal-Mart will buy 22 million kilowatt-hours of greenhouse gas-free electricity produced from solar arrays to be installed as a pilot project at 22 stores in California and Hawaii. The retail giant estimates the move will reduce planet-warming emissions by 6,500 to 10,000 metric tons a year. The solar systems will be installed by SunPower’s (SPWR) PowerLight subsidiary at seven California stores, by SunEdison at four stores in California and four in Hawaii, and by BP Solar (BP) at seven stores in the Golden State. Wal-Mart (WMT) will buy electricity produced by the arrays at market or below market rates and retain ownership of any Renewable Credits. RECs potentially could be worth a bundle if they’re allowed to be traded on carbon markets under consideration in California and Hawaii. For instance, a company that exceeds its limit on greenhouse gas emissions could buy Wal-Mart RECs, which represent CO2 avoided through the use of solar energy. Hawaii late last week became the second state after California to pass a cap on greenhouse gas emissions. The solar companies will arrange financing and installation of the arrays and retain ownership. In SunEdison’s case, the Maryland company will finance, operate and own the solar arrays it installs for Wal-Mart. A SunPower spokesperson told Green Wombat that the San Jose company is working with a third party to finance the deal but hasn’t finalized the arrangements. When the power purchase agreements expires, Wal-Mart will have the option to renew the deals, move the equipment to other stores or buy the solar arrays. SunPower, which previously installed solar arrays at three other Wal-Mart stores, will build systems for seven stores to produce 4.6 megawatts of electricity. Each solar array will provide about a quarter of a store’s power, according to SunPower.

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A solar power plant in the Great White North? Thin-film solar startup OptiSolar has signed a deal to build a 40-megawatt photovoltaic power station about 180 miles west of Toronto. The project, to be rolled out in 10-megawatt stages, will be – for the moment – the world’s largest PV power plant. Canada isn’t exactly known for its sunny skies but it does offer something solar power companies won’t find south of the border: a premium price for green electricity. The Ontario government will pay OptiSolar 42 (Canadian) cents a kilowatt hour – nearly 10 times the standard rate. In this case, Ontario signed a 20-year contract at that rate with OptiSolar’s Canadian subsidiary. Germany, Portugal and Spain pay similar above-market rates and as a result Europe is experiencing a solar power plant building boom. It’s the kind of deal that thin-film solar startups like OptiSolar need to get their technology out of the lab and into the field. Thin-film companies promise to significantly lower the cost of solar energy by printing solar cells on metal sheets. Although the efficiency of thin-film cells is far less than the solar flat panel solar cells produced by companies like SunPower (SPWR), the ability to continuously produce them in rolls of thin material is expected to significantly lower production costs.  A 6-megawatt thin-film power plant recently went online in Germany using cells made by First Solar (FSLR). Another Silicon Valley startup, Nanosolar, has attracted $100 million in venture capital fundng and is building a factory in San Jose that would triple the U.S.’s solar cell manufacturing capability. OptiSolar has remained in stealth mode, saying little about its plans or business. (Though company representatives did show up at PG&E’s (PCG) bidder’s conference in April where the California utility solicited offers to build renewable energy power plants.)

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The land rush to build solar power plants in California is attracting prospectors from around the world. PG&E (PCG) earlier this month held its annual bidder’s conference to solicit proposals to supply the utility renewable energy. Green Wombat has obtained a partial list of attendees and it shows that everyone from Silicon Valley startups to Spanish solar power station operators are looking to cash in on the state’s growing demand for green electricity. Among those present:

• OptiSolar, a Bay Area thin-film solar startup.
• Bright Source Energy, the new incarnation of solar pioneer Luz, which built nine solar power plants (photo above) in the Mojave in the 1980s.
• FPL Energy (FPL), the renewable energy division of utility FPL and the current operator of seven of the old Luz plants.
• Green Volts, a San Francisco-based concentrating photovoltaic solar startup.
• Solucar Power, the U.S. subsidiary of Spanish solar power station operator Abengoa.
• SolarMission Technologies, the U.S. arm of Australian solar tower company EnviroMission.
• Boeing (BA), whose Spectrolab subsidiary makes high-efficiency solar cells. In the 1980s Boeing experimented with Stirling dishes designed to produce utility-scale solar energy.
• SunEdison, the Maryland solar developer which just broke ground on an 8-megawatt photovoltaic power station in Colorado to supply green electrons to utility Xcel Energy (XEL).
• Sempra Generation, the power plant subsidiary of energy giant Sempra Energy (SRE), which owns one California’s largest utilities, San Diego Gas & Electric.

Other participants came from China (Solarfun) and Japan (J-POWER USA Development). In the 2007 request for proposals, PG&E is looking for bids to build up to 800 megawatts of renewable energy.

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Solar panel maker SunPower’s (SPWR) acquisition last year of solar systems installer PowerLight is looking more and more like a savvy move, judging by the first quarter earnings the San Jose company released Thursday. It was the first earnings report since the deal closed, and it was no coincidence that revenues jumped 92 percent over the previous quarter and that SunPower said it was on track to take in more than a billion dollars in 2008. Based up the road in Berkeley, PowerLight installs large commercial solar arrays and lately has been expanding into photovoltaic solar power plants. Last month a 11-megawatt solar plant it built in Portugal opened. Just this week, PowerLight broke ground on a 15-megawatt solar power station in Nevada and announced that it is building or supplying equipment to PV power plants in Spain that will produce a total of 61 megawatts. (About 35 percent of SunPower’s revenues came from Spain in the first quarter, according to ThinkEquity.) Closer to home, PowerLight recently installed a 1.3-megawatt rooftop array on two Tiffany’s (TIF) warehouses in New Jersey and signed a deal to build a 1-megawatt system for chip equipment maker Applied Materials (AMAT) at its Silicon Valley campus. SunPower CEO Tom Werner said in a statement that the company anticipates that by 2012 it will have cut in half the cost of an installed solar array by integrating its high efficiency solar cells with PowerLight’s systems.

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Solar power company SunEdison today broke ground on a 8-megawatt photovoltaic power plant at Alamosa in south central Colorado. The Maryland-based company will sell the electricity produced by the plant to to utility Xcel Energy (XEL). Colorado law requires the state’s utilities to get 10 percent of their electricity from renewable sources by 2015. Xcel Energy execs have pledged to generate 20 percent of the  utility’s electricity from green power by 2020. There seems to be a boomlet in utility-scale PV solar power plants: Also today, PowerLight (SPWR) was to put the shovel to the ground on a 15-megawatt solar panel power plant at Nevada’s Nellis Air Force Base. Berkeley-based PowerLight is building the plant, which will be financed and owned by by San Francisco’s MMA Renewable Ventures (MMA). Like PowerLight, SunEdison has been best known as a designer and installer of commercial rooftop solar arrays. But as utilities turn to solar power plants to meet their green energy obligations, the companies are expanding into the utility-scale solar business. Unlike solar thermal plants – which use the sun to heat synthetic oil, hydrogen or other substances that then create steam to drive electricity-generating turbines – PV power stations convert sunlight directly into electricity like home rooftop arrays do. PV power is more expensive and the plants tend to be smaller scale than solar thermal stations. But such plants are increasingly fulfilling a niche – particularly in rural areas like Alamosa. PowerLight, for instance, last month opened an 11-megawatt PV power station in Portugal (photo above) and is building three more in Spain.  When it comes to renewable energy, Colorado’s blue-state governor and Nevada’s red-state governor want to be green. Both leaders attended today’s solar power plant groundbreaking ceremonies in their respective states.

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Ground will be broken Monday on a 15-megawatt photovoltaic solar power plant at Nellis Air Force Base outside of Las Vegas. The plant is the latest utility-scale solar project from PowerLight (SPWR), which is building the facility. Last month a PowerLight-built 20-megawatt solar power plant opened in Portugal and the SunPower subsidiary is building three more PV solar power stations in Spain. The Nevada solar plant will be financed and operated by MMA Renewable Ventures (MMA), a San Francisco firm that finances large-scale commercial solar arrays and now is getting into the solar power plant business.
"At the end of the day, the real upside for us is doing the bigger deals…the big PV plants," MMA Renewable exec Mark McLanahan recently told Green Wombat.

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Everything’s bigger in Texas, they say, and so Australian solar energy company EnviroMission today said it is proposing to build a 200- megawatt solar tower outside El Paso that could be as tall as 3,000 feet. The company announced it has submitted a bid to El Paso Electric (EE) in response to the utility’s request for proposals to supply 300 megawatts of electricity. EnviroMission didn’t specifiy the size of the tower but a 200 megawatt plant it earlier proposed building in the Australian Outback would have reached 3,000 feet (1,000 meters). The company subsequently scaled down the tower in an unsuccessful bid to get Australian government funding for the project last year. Since then the company has turned its attention to the United States, studying potential sites in the Southwest. Green Wombat chronicled the company’s six-year quest to build the solar tower in "Tower of Power," which appeared in the August 2006 issue of Business 2.0 magazine. Here’s how the technology is supposed to work: A glass canopy – a mile or two wide – heats the air underneath. Hot air rises and the tower operates as a vacuum. As the air is sucked into the tower, it will produce wind to power an array of turbine generators clustered around the structure. The turbines in turn generate electricity.

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Less than a week after PowerLight (SPWR) opened an 11-megawatt solar power plant in Portugal, the Berkeley, California-based company said today it will build a third photovoltaic solar power station in Spain. The newest project is a 4.8-megawatt plant to be constructed north of Seville and about 105 miles east of the Serpa, Portugal, facility that opened last Wednesday. As with the Serpa plant, which was financed by GE Energy Financial Services (GE), PowerLight will design and build the plant, which will cover about 50 acres with thousands of solar panels that track the sun. The project will be developed, owned and operated by two Spanish companies,  Agrupacion Solar Llerena-Badajoz 1 and Solarpack Corporacion Tecnologica. PowerLight, a subsidiary of solar panel maker SunPower, is already building two other Spanish PV solar plants in the 20-megawatt range. Like Portugal, Spain promotes renewable energy with a feed-in tariff that guarantees solar power plant developers a premium rate for the electricity they produce over a long-term contract.

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Amid undulating hills dotted with olive groves and grazing sheep, the world’s most powerful photovoltaic solar energy station officially went online Wednesday outside Serpa, a village of white-washed, orange-tiled homes about 125 miles southeast of Lisbon, Portugal. Green Wombat was there for the dedication ceremony for the 11-megawatt power station – built by Berkeley, California-based PowerLight (SPWR) and financed and owned by GE Energy Financial Services (GE) – that is now powering 8,000 homes. PowerLight is known for its
commercial and residential rooftop solar arrays but has found a niche building utility-scale PV power stations in Europe. The reception given PowerLight and GE shows why countries like
Portgual, Spain and Germany have become attractive markets for solar power plants.   

Unlike the United States’ complex and undependable system of state and federal tax
credits for solar power, Portugal supports renewable energy with a simple "feed-in tariff" that will
pay GE a premium rate for 15 years for the electricity produced by the $75 million Serpa power plant. Portugal modeled its policy on Spain’s, were PowerLight is building two 20-megawatt range power stations. [Update: Powerlight has announced it will build a third PV solar power plant in Spain.]

Government support for renewable energy was on display at the opening ceremony for the plant – 52,000 solar panels that track the sun. As waiters served port and wine outside a tent set up for the dedication luncheon, Portugal’s minister for the economy and other government dignataries arrived to join PowerLight CEO Tom Dinwoodie, GE Energy Financial
Services managing director Kevin Walsh and executives from Catavento, the Portuguese renewable energy company that will manage the plant. Inside the tent, the officials made speeches against a backdrop of 150 acres of solar panels glistening in the sun. "We commend you for your leadership and
vision of clean energy and encourage you to continue to adopt policies and economic incentives that stimulate renewable energy production," Walsh said in his remarks, referring to Portugal’s left-leaning government as economics minister Manuel Pinho
languidly smoked a cigarette
at a nearby table. Portugal’s government has pledged to invest nearly $11 billion in renewable energy to reach its exceedingly ambitious target of getting 45 percent of its
energy from renewable sources like wind, waves and sun. (The day before the Serpa plant dedication Portuguese utility EDP announced it would acquire the U.S.’s biggest wind energy company, Horizon, for $2 billion from Goldman Sachs (GS) )

It’s hard, of course, to imagine anyone holding a four-course luncheon complete with fine Portuguese wines to celebrate the opening of, say, a new coal or gas-fired power plant. But the solar power plant’s appeal – for the government, the developers and the towns of the Alentejo region – are clear: Despite the substantial power it produces, the Serpa station is all but invisible. The panels take up considerable acreage but are only chest-high and make nary a sound. In fact, the plant looks more like a modern art installation than an industrial facility, blending in with the agricultural landscape of this grape and olive-growing region. Imagine dozens of such PV solar power stations spread across rural Europe  – the EU this month ordered greenhouse gas emissions be reduced 30 percent below 1990 levels by 2020 – and you can why the future looks bright to PowerLight and GE Energy Financial Services.

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photo illustration: PG&E

Even Major League Baseball is going green. Sort of. In a made-for-TV-news media event, executives from the San Francisco Giants and PG&E (PCG) will join SF Mayor Gavin Newsom today to announce that the utility will install a 120-kilowatt solar panel system at AT&T (T) Park. The catch: the 590 Sharp solar panels won’t power the park itself but will feed into San Francisco’s grid. Still, the solar panels that will serve as awnings (photo illustration above) might raise the eco-consciousness of the ticket holders that drive to the bayside park in their Suburbans and Tahoes. Beyond the PR value of portraying San Francisco’s team as the jolly green Giants, there’s a more interesting dynamic at work here: the growing value of commercial  rooftops – or awnings in this case – as prime real estate for solar energy companies. In the April issue of Business 2.0 now hitting the streets, Green Wombat edited a story by senior writers Paul Kaihla and Michael Copeland on the land rush to lock up solar and wind sites and the opportunities to
become a renewable energy broker, selling the rights to locales for wind farms and solar arrays. Typically, solar energy companies like PowerLight (SPWR) and financiers like MMA Renewable Ventures (MMA) install and/or own and operate the solar array and sell the
electricity it produces at a discount to the building owner. Just take a look around at amount of rooftop square footage at the local Costco or regional shopping mall and you’ll get the idea of the opportunity. The Giants-PG&E deal is structured differently but the idea is the same: the utility installs the solar system – PG&E hasn’t disclosed the cost but given similar sized arrays it’ll probably be around $1.2 million – and reaps the benefits of an additional clean, green source of electricity.

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