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photo: BrightSource Energy

As the Nevada legislature debates extending tax breaks for large-scale solar power plants, a new report finds that ramping up solar development in the Silver State could produce thousands of good-paying green jobs while generating nearly $11 billion in economic benefits.

The study from San Francisco-based non-profit Vote Solar concludes that 2,000 megawatts’ worth of big solar thermal and photovoltaic farms — needed to meet Nevada’s electricity demand — would result in 5,900 construction jobs a year during the plants’ building phase, 1,200 permanent jobs and half a billion dollars in tax revenues.

“It is likely that such an investment in solar generating facilities could bring solar and related manufacturing to Nevada,” the reports authors wrote. “The economic impact of such manufacturing development is not included in this analysis, but would add significant additional benefits.”

Vote Solar’s job projections are based on an economic model developed by the National Renewable Energy Laboratory to project the impact of solar trough power plants, the most common, if dated, type of Big Solar technology.

The different solar technologies set to come online in the next couple of years could change that equation. No doubt thousands of jobs will be generated by Big Solar but just how many will depend on the mix of solar thermal and photovoltaic power plants that ultimately come online. New technologies like BrightSource Energy’s “power tower,” Ausra’s compact linear fresnel reflector and Stirling Energy Systems’s solar dish may generate similar numbers of jobs. But then there’s eSolar’s power tower solar farms – which uses fields of mirrors called heliostats to focus the sun on a water-filled boiler, creating steam that drives an electricity-generating turbine.  eSolar’s small and prefabricated heliostat arrays cut out much of the skilled labor typically needed on such projects as they can be installed by two workers using a wrench.

Photovoltaic farms essentially take rooftop solar panels and put them on the ground and thus don’t require highly skilled laborers to build turbine power blocks, miles of piping and other infrastructure needed in solar thermal facilities. (They also can be built much more quickly than a solar thermal plant, which is why utilities have been striking deals with companies like First Solar (FSLR) and SunPower (SPWRA) for PV farms.)

A second report released this week — from the Large-Scale Solar Association, an industry group — found that Nevada could gain an edge over Arizona and California in luring solar power plant builders if it extended and sweetened tax incentives.  The three states form something of a golden triangle of solar, offering the nation’s most intense sunshine and vast tracts of government-owned desert land that are being opened up for solar development.

The timing of the reports was no accident. The Nevada Legislature held hearings earlier this week on extending tax breaks for Big Solar that expire in June, and Vote Solar’s utility-scale solar policy director, Jim Baak, went to Carson City to lobby legislators, hoping to head off one proposal to tax renewable energy production.

The Large-Scale Solar report, prepared by a Las Vegas economic consulting firm, found that if legislators let the tax breaks sunset, as it were, the developer of a 100-megawatt solar power plant would pay $55.1 million in taxes in Nevada during the first 15 years of the facility’s operation compared to $26.1 million in Arizona and between $36.1 and $37.9 million in California. If the current incentives are kept, tax payments drop to $25.1 million. A bigger tax break would reduce the tax burden to $14.3 million.

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Can Google help defuse a simmering green civil war between renewable energy advocates and wildlife conservationists in the American West?

That’s the idea behind a new Google Earth mapping project launched Wednesday by the Natural Resources Defense Council and the National Audubon Society. Path to Green Energy will identify areas in 13 western states potentially suitable for massive megawatt solar power plants, wind farms, transmission lines and other green energy projects. The app will also pinpoint critical habitat for protected wildlife such as the desert tortoise in California and Wyoming’s sage grouse as well as other environmentally sensitive lands.

“This was information that was unavailable or very scattered,” said Google.org program director David Bercovich at a press conference. “The potential cost savings from this will be enormous. If we can get people to the right areas and streamline the process that will have enormous benefits in getting clean energy online faster.”

NRDC senior attorney Johanna Wald said her group already is using Path to Green Energy in New Mexico to help plan a new transmission project. “Careful siting is the key to renewable energy development,” she said, noting that NRDC has mapped 860 million acres. “We’re not greenlighting development on places that are on our map but we’re providing a framework for discussion.”

siting2The unveiling of Path to Green Energy comes two weeks after California Senator Dianne Feinstein announced she would introduce legislation to put as many as 600,000 acres of the Mojave Desert off limits to renewable energy development to protect endangered wildlife and their habitats.  Solar developers have filed lease claims on a million acres of federal land in the California Mojave and there are state and federal efforts already under way to identify green energy zones across the West.

Path to Green Energy is designed to give regulators and developers a tool to choose the best potential sites for solar and wind farms so they don’t get bogged down in years-long and multimillion-dollar fights over wildlife.  Ausra, BrightSource Energy and other developers of the first half-dozen solar power plant projects moving through the licensing process in California have spent big sums on hiring wildlife consultants who spend thousands of hours surveying sites for desert tortoises, blunt-nosed leopard lizards and other protected species.

The Google Earth app won’t do away with the need to do such detailed environmental review but puts in one package a variety of information that developers must now cobble together themselves — if they can find it. Path to Green Energy could also prove valuable to utilities like PG&E (PCG) and Southern California Edison (EIX) as more and more projects are proposed and regulators scrutinize the cumulative impact of Big Solar power plants across regions.

For instance, in California’s San Luis Obispo County, three large-scale solar farms are being planned within a few miles of each other by Ausra, SunPower (SPWRA) and First Solar (FSLR). That has resulted in delays as wildlife officials initiate studies looking at how all those projects affect the movement of wildlife throughout the area. Going forward, Path to Green Energy will give developers a snapshot of where the wild things are, as well as wildlife corridors to help them avoid siting one plant too close to another in a way that may impede animals’ migration. That could save millions of dollars in mitigation costs – money builders must spend to acquire land to replace wildlife habitat taken for a power plant project as well as avoid fights with environmental groups that have become increasingly uneasy about Big Solar projects.

If the desert tortoise is the critter to avoid when building solar power plants in the Mojave, the sage grouse poses problems for Wyoming wind farms. Brian Rutledge, executive director of Audubon Wyoming, said Path to Green Energy shows the densities of sage grouse across the state, allowing developers to stay clear of those areas.

“We get a solid indication of where energy development shouldn’t go,” he said. “Just as important, we get a better sense of the places that should be evaluated for wind turbine farms and transmission lines. The maps make clear that there is plenty of room for green energy.”

The payback from using Web 2.0 software could indeed be tremendous, given that Google (GOOG) spent a scant $50,000 in donations to NRDC and Audubon to create the maps.

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photo: WorldWater & Solar Technologies

The consolidation of the solar industry got underway Monday with the acquisition of San Francisco-based green energy financier MMA Renewable Ventures by Spanish solar developer Fotowatio.

The Madrid-based company will purchase most of MMA Renewable’s solar assets – including the world largest photovoltaic power plant and its pipeline of projects – making it one of the biggest solar developers in the United States.

The financial terms of the deal were not disclosed.

MMA Renewable CEO Matt Cheney told Green Wombat that he’ll continue as CEO of what will be called, for now, Renewable Ventures and that his staff will be joining him. MMA Renewable Ventures was a subsidiary of Municipal Mortgage & Equity, which has been hit hard by the financial crisis.

Fotowatio, on the other hand, scored $350 million in funding last July from General Electric (GE) and Grupo Corporativo Landon. “You’re taking a very robust player in the European market see how much opportunity and potential there is in the U.S. market,” says Cheney. “It’ll produce one of the biggest, if not the biggest, independent solar power producers. It’s the story of consolidation.”

MMA Renewable Ventures raises funds to invest in big commercial solar arrays and photovoltaic power plant projects. The company finances the construction of solar systems by companies like SunPower (SPWRA) and retains ownership of the arrays, selling the electricity under long-term power purchase agreements.

Last year MMA Renewable and Chinese solar giant Suntech (STP) created a joint venture called Gemini Solar to build large-scale photovoltaic power plants.  Cheney said Gemini will continue under Fotowatio.

When the deal closes, Fotowatio will gain 35 megawatts of solar projects in the U.S. with another 400 megawatts under development.

Cheney says the Fotowatio acquisition is a sign of the times as the global economic crisis and falling prices for solar cells disrupts the renewable energy market. “There’s a shakeout in the marketplace and there’s opportunities for consolidation.”

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photo: Sungevity

Berkeley on Friday hands over checks to the first two homeowners who tapped the California city’s pioneering solar financing program to install solar arrays.

The city fronts the cash for rooftop solar panels for any Berkeley business or homeowner, who pays back the cost through a 20-year surcharge on their property tax bill. If a home is sold, the surcharge rolls over to the new owner. The city council created a Sustainable Energy Financing District and launched a $1.5 million pilot program for the Berkeley FIRST Financing Initiative for Renewable and Solar Technology) in November to finance 40 rooftop systems. It took all of nine minutes for those 40 slots to be filled when the online application went live.

Berkeley issued a bond for the programs that was bought by Oakland-based Renewable Funding, which financed the solar arrays and whose president, Francisco DeVries, devised the Berkeley program when he served as Mayor Tom Bates’ chief of staff. Renewable Funding now is taking the program nationwide as cities from Portland to Tuscon consider adopting similar solar financing schemes. Under legislation enacted last year, any California city can implement a Berkeley-style program.

Municipal financing of solar arrays has become even more attractive since October when Congress lifted a $2,000 cap on federal tax credits for residential systems. Homeowners now can claim a tax credit for 30% of the cost of a solar system. When a state rebate is added, the cost of going solar in California has fallen by half.

Municipal financing programs are good news for solar panel makers and installers like SunPower (SPWRA), SunTech (STP), Akeena (AKNS) and First Solar (FSLR), the thin-film solar company that recently jumped into the residential market.

On Friday, Berkeley homeowner Jeanne Pimentel will receive a check from the mayor to hand over Borrego Solar, which installed her solar panels while homeowner Aaron Mann will sign his check over to Sungevity.

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optisolar-panels
photo: Optisolar

SAN FRANCISCO — With the financial crisis dimming solar’s prospects to become a significant source of renewable energy, utility giant PG&E on Tuesday said it will spend $1.4 billion over five years to install 250 megawatts’ worth of photovoltaic panels in California while contracting with private developers for another 250 megawatts. PG&E chief executive Peter Darbee said the utility is also prepared to be a “green knight,” rescuing distressed big centralized solar power plant projects by providing financing so they can get built.

“We have contracted for 24% of our energy to be renewable and we’re concerned whether our [developers] will have access to capital,” Darbee said at PG&E’s San Francisco headquarters during a press conference. “We think financing for these projects may be in jeopardy. PG&E is well-positioned with its $35 billion balance sheet to step up and help.”

PG&E’s (PCG) move to take a direct role in obtaining the renewable energy it needs to comply with California’s global warming laws could be big business for solar module panel makers and installers like SunPower (SPWRA), Suntech (STP) and First Solar (FSLR). The action was prompted in part by a change in the tax laws that lets utilities claim a 30% investment tax credit for solar projects.

Fong Wan, PG&E’s vice president for energy procurement, said most of the 500 megawatts of solar panels will be installed on the ground in arrays of between one and 20 megawatts at utility substations or on other PG&E-owned property. (The utility is one of California’s largest landowners.) A small portion may be installed on rooftops, he said.

PG&E said the solar initiative will generate enough electricity to power 150,000 homes and will provide 1.3% of the utility’s electricity supply.

“There’s no or little need for new transmission and these projects can plug directly into the grid,” said Darbee. “Given our size and our credit ratings and our strength, we can move forward where smaller developers may not be able to do so.”

The California Public Utilities Commission must approve PG&E’s solar initiative, which Wan estimated would add about 32 cents to the average monthly utility bill.  An $875 million program unveiled by Southern California Edison (EIX) last year to install 250 megawatts of utility-owned rooftop solar panels has run into opposition from solar companies that argue it is  anti-competitive and from consumer advocates who contend the price is too high. The state’s third big utility, San Diego Gas & Electric (SRE), has also proposed a rooftop solar program.

Wan acknowledged that objections to Edison led PG&E to design its program so that private developers would have a 50% stake in the initiative. PG&E will sign 20-year power purchase agreements for privately owned solar installations.

PG&E will also need regulators’ approval to inject equity financing into companies developing big solar power plants. The utility has signed power purchase agreements for up to 2,400 megawatts of electricity to be produced by solar thermal  and photovoltaic power plants to be built by companies like Ausra, BrightSource Energy, OptiSolar and SunPower.

“We are looking at the least risky and most developed opportunities to see where we can be the most helpful,” Darbee said.

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In the green stimulus sweepstakes, big potential winners are companies like Silicon Valley startup OptiSolar.

The solar-cell maker came out of nowhere last year to score a deal with utility PG&E to build the world’s largest photovolaic power plant, a 550-megawatt monster that would cover some 9 1/2 square miles on California’s central coast. OptiSolar subsequently began construction of a factory in Sacramento to produce the thousands of thin-film solar panels needed for the project. Then the economy tanked and as financing dried up, OptiSolar laid off half its workforce – some 300 employees – and halted construction of the Sacramento facility.

With a Colorado solar company executive joining President Barack Obama as he signed the $787 billion stimulus legislation into law Tuesday at a solar-powered museum in Denver, OptiSolar and other renewable energy companies stalled by the financial crisis may see their fortunes revive. The package allows builders of big renewable energy projects to apply for a government cash grant to cover 30% of construction costs in lieu of claiming a 30% investment tax credit. A dearth of investors who finance solar power plants and wind farms in exchange for the tax credits has put in jeopardy green energy projects planned for the desert Southwest and the Great Plains. The cash grant would shave about $300 million off the projected $1 billion price tag for OptiSolar’s Topaz Solar Farm.

The stimulus package also includes $2.3 billion to fund a 30% manufacturing tax credit for equipment used to make components for green energy projects, a provision OptiSolar can tap to help finance its solar cell factories. And the company may be able to take advantage of the legislation’s government loan guarantees for large renewable energy projects.

“It will lower the cost of the factory we’re building in Sacramento and make it easier to attract financing,” OptiSolar spokesman Alan Bernheimer told Green Wombat, noting the company’s priority is to complete the facility and begin production of solar panels. “The factory is more than shovel ready – our shovels are hanging on the wall where we put them when we had stop work in November.” (OptiSolar currently manufactures solar modules at its Hayward, Calif., plant.)

Fred Morse, senior adviser to Spanish solar energy giant Abengoa, says the stimulus package puts back on track a $1 billion, 280-megawatt solar thermal power plant the company will build outside Phoenix to produce electricity for utility Arizona Public Service. “With the stimulus bill we’re very confident we’ll be able to finance the project,” says Morse. He says Abengoa expects to use the government loan guarantees to obtain debt financing to fund construction of the project and then apply for the 30% cash refund. “I think the entire industry is very optimistic that these two aspects of the stimulus package, the grants and the temporary loan guarantees, should allow a lot of projects to be built.”

Mark McLanahan, senior vice president of corporate development for MMA Renewable Ventures, agrees. “I expect the government grants to attract new investors,” says McLanahan, whose San Francisco firm finances and owns commercial and utility-scale solar projects.

There are some strings attached, though.

To qualify for the cash grants, developers need to start shoveling dirt by Dec. 31, 2010. That means only a handful of big solar thermal power plants planned for California, for instance, are likely to make it through a complicated two-year licensing process in time to break ground by the deadline. One of those could be the first phase of BrightSource Energy’s 400-megawatt Ivanpah power plant on the California-Nevada border. But BrightSource’s biggest projects, part of a 1,300 megawatt deal signed with Southern California Edison (EIX) last week, won’t start coming online until 2013 at the earliest.

Another Big Solar project, Stirling Energy Systems’ 750-megawatt solar dish farm for San Diego Gas & Electric (SRE), will be racing to meet the 2010 deadline. The project is in the middle of a long environmental review by the California Energy Commission and the U.S. Bureau of Land Management which currently is scheduled to stretch into 2010.

SolarReserve CEO Terry Murphy says his Santa Monica-based startup has a couple of solar power plant projects in the works that should be able to take advantage of the stimulus provisions. “The likelihood of us being able to close on a financial deal has increased,” Murphy says.

Solar analyst Nathan Bullard of research firm New Energy Finance expects the stimulus package to prompt a push for large photovoltaic power projects. That’s because in California such solar farms – which essentially take rooftop solar panels and mount them in huge arrays on the ground – do not need approval from the California Energy Commission and can be built relatively quickly.

That’s good news for companies like thin-film solar cell maker First Solar (FSLR), which builds smaller scale photovoltaic power plants, and SunPower (SPWRA), which has a long-term contract with PG&E (PCG) for the electricity generated from a planned 250-megawatt PV solar farm to be built near OptiSolar’s project.

“It’s great for PV because you can definitely can get construction done by the end of 2010,” says Bullard. “It’s also good news for smaller and mid-sized developers who couldn’t access tax-equity financing.”

The catch, however, is that renewable energy companies still must raise money from investors in a credit-crunched market to cover construction costs, as the government doesn’t pay out the cash until 60 days after a solar power plant or wind farm goes online. And as McLanahan points out, the cost of raising capital from private equity investors is typically higher and will add to the cost of renewable energy projects. Those costs will only rise if the government is late in paying out refunds.

MMA Renewable finances large commercial arrays and solar power plants and then sells the electricity under long-term contracts to customers who host the solar systems. The loan guarantee provision of the stimulus legislation will help secure financing from investors skittish that some of MMA Renewable’s customers may default on their agreements, according to McLanahan.

Says Murphy: “The fact that we’re getting iron into the ground and getting things moving helps us.”

The wind industry also stands to gain from the stimulus package through a three-year extension of the production tax credit for generating renewable electricity as well as the government cash grants and manufacturing tax credit. Despite a record year for wind farm construction in 2008, projects have come to a standstill in recent months as the financial crisis froze development and forced the European-dominated industry to lay off workers.

“I think it’s good down payment on what needs to happen,” says Doug Pertz, CEO of Clipper Windpower, one of two U.S. wind turbine makers. “A lot more needs to be done but I think this will start to bring a lot of people back into the marketplace.”

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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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