Thursday July 16, 2009

In just a few short years, the Garden State has become the Sunshine State

BY JOE TYRRELL
NEWJERSEYNEWSROOM.COM

As Congress wrestles with national energy policies and gubernatorial candidates tout their plans here, New Jersey officials say the state deserves credit as a leader in promoting solar power.

In just a few years of coordinated efforts, New Jersey has gone from a non-factor to number two among the states in solar installations connected to the power grid. While far behind California, New Jersey currently generates about twice as many solar kilowatt hours as number three Colorado.

While applauding the gains, many in the industry also say the state, like the nation, has fallen well short of performance goals. New Jersey rose to the top of solar charts in a period when there was little competition from other states.

Now, as the federal government begins to pay attention to renewable energy, New Jersey is in the midst of a challenging transition away from an easy to understand program, which gave rebates to install solar power cells.

The new program shifts the focus away from consumers to utility companies and investors by creating a marketplace for renewable energy credits. The concept has its supporters, though many are more hopeful than confident.

Still, at a time when solar businesses believe the technology is on the verge of a belated boom in the United States, recent New Jersey statistics wowed some attendees at a recent industry conference in Philadelphia.

“Making this even more remarkable is that in 2001 New Jersey had only six” solar cell installations connected to the power grid, compared to more than 4,000 today, wrote Bob Haavind of Photovoltaics World.

His report can be viewed here.

During the session, the state’s top regulator, Board of Public Utilities President Jeanne Fox, proclaimed that when it comes to government policy, New Jersey is “the best place to do solar in the country.”

Around the country, many in solar trade groups and businesses credit New Jersey for showing what a small, partly cloudy state can do to grab its place in the sun.

“Obviously what they have been doing has worked,” said Monique Hanis, director of communications for the Solar Energy Industries Association in Washington, D.C.

“What makes New Jersey stand out is the specific language in the state’s energy master plan, calling for the generation of 2.1 percent of its electricity to be coming from solar in 2021,” said Neal Lurie, director of marketing and communications for the American Solar Energy Society of Boulder, Colo.

Closer to home, though, reactions are more muted.

The rebate program “came out of advocacy” by solar power proponents, “it was not a BPU idea,” said Delores Phillips, the society’s Mid-Atlantic executive director.

Even with improving technology and rising costs for fossil fuels, the cost of solar power remains higher than those dirtier energy sources. Solar advocates maintain other forms of energy benefit directly and indirectly from government subsidies, such as state funds to decommission nuclear facilities, or cleanups of coal ash landfills.

New Jersey’s small spurt of solar power materialized during a BPU rebate program that turned out to be too popular for the board’s limited financial commitment. The initial surge in applications eventually bogged down as the release of funds slowed.

So the board decided on an innovative approach, creating financial instruments, solar renewable energy credits, or SRECs. The idea is that investors buy credits from solar producers, each pegged to 1 megawatt of power. The investors help producers expand, while reaping benefits from energy sales to utilities.

“We’re all looking to see how it’s going to make out,” Hanis said.

Compared to the rebates, grants or tax credits offered elsewhere, New Jersey’s approach is more ambitious but “still a little bit vague for some people,” she said.

“It’s not really tried and tested,” Phillips said, adding it requires two inter-related factors to success.

To be attractive to investors, SRECs need to be based on reliable values, meaning utilities must contract for long-term power purchases, she said. To serve those utilities, the investments must finance enough power to meet their requirements for more clean power, she said.

Judged on that basis, “New Jersey’s program is good, but only half as good as they said it was going to be,” said Edward O’Brien, a partner in McConnell Energy Solutions of Wilmington, De. Last year, instead of a projected 90 megawatts of solar power, the state was at 45, the result of continuing uncertainty over credit values, he said.

The theory is simple, O’Brien said. While not completely supplanting the mom-and-pop approach to solar panels, securitizing the solar marketplace should put it on the same funding as other major energy sources.

“Why are you out putting solar panels up on your house, which is hard to do, instead of buying five kilowatts worth of solar power from some producer?” O’Brien said.

In practice, though, the SREC system “has not been fully thought out,” he said.

Added to the current recession, investors are cautious because of America’s patchwork of energy policies and regulations, which vary from state to state, O’Brien said. States have not helped by altering programs, he said.

“Every state is different, and every state has a bait-and-switch,” O’Brien said.

Still, he is optimistic that New Jersey will regain its momentum, and others in the field view the problems as a hiccough in the growth of solar power.

In the short-run, “there could be a shake-out” during the transition from rebates, said Rick Brooke of Jersey Solar in Hopewell. But 25 years in the business and a number of false dawns, this opportunity looks golden.

As long as the state SREC market allows small systems to participate, people who installed solar panels on the roofs of their homes or businesses still have a chance to participate, Brooke said.

Moreover, people in the industry are expecting good things from the energy bill making its way through Congress. Nearby states have launched incentive programs, whether inspired by New Jersey or California, which has roughly two-thirds of the nation’s grid-connected solar systems, Brooke said.

“It’s a good time to be in the business,” he said. “The state is committed to it, they have goals. People are moving ahead with it. Before, the interest came and went, but now it’s here.”

Rebates and SRECs are not the only way to support the growth of solar power. This month, Gov. Jon Corzine and Republican challenger Chris Christie each highlighted their support for renewable energy.

Democrat Corzine was able to announce the availability $20 million in federal grants for projects at public institutions in the state. Christie promised to create a new agency to promote clean energy technology and jobs, and would remove those functions from the BPU.

The Republican’s approach seemingly echoes Phillips’ complaints about the board’s “antiquated” procedures and primary purpose to regulate rates. But she said members of her association “were very underwhelmed by Chris Christie’s plan,” because it looks at the big picture and avoids the nitty-gritty.

While the Corzine Administration has set laudable goals for increasing clean energy, Phillips said most of the growth in solar power can be traced to his predecessor, former Gov. Jim McGreevey. There’s been “some stagnation” in state efforts since then, she said.

“Everybody likes to talk about clean energy job creation, but nobody explains how they’re going to do it,” she said.

Whether the New Jersey approach catches on remains uncertain. Around the nation, some communities are coming up with their own answers. Many solar advocates are looking beyond America to more successful programs abroad.

For more information on state incentives for renewable energy, visit njcleanenergy.com.

Our Perspective:

NJ has made great strides to join the alternative energy evolution. Not to say it is perfect, but for the first time people can see an acceleraed return on their investment that makes sense.

Rebates for systems under 5okw and the REC program has allowed funding to help underwrite these investments. Add the Federal incentives of a 30% tax credit and accelerated depreciation and the market is positioned to take off.

Would you like to know more? Contact us 856-857-1230 or email george@hbsadvantage.com.

We can provide an overview of your return on investment and help to develop the opportunity and make it become a reality.

Visit us on the web www.hutchinsonbusinesssolutions.com

 

Steve Marcus/Reuters

The largest photovoltaic installation in the United States, at Nellis Air Force Base in Nevada, uses SunPower panels.

 

Published: August 14, 2008
Correction Appended

Companies will build two solar power plants in California that together will put out more than 12 times as much electricity as the largest such plant today, the latest indication that solar energy is starting to achieve significant scale.

Skip to next paragraph

SunPower

Solar plants like this one in Bavaria, Germany, have taken photovoltaic technology from home rooftops to utility-size projects.

The plants will cover 12.5 square miles of central California with solar panels, and in the middle of a sunny day will generate about 800 megawatts of power, roughly equal to the size of a large coal-burning power plant or a small nuclear plant. A megawatt is enough power to run a large Wal-Mart store.

The power will be sold to Pacific Gas & Electric, which is under a state mandate to get 20 percent of its electricity from renewable sources by 2010. The utility said that it expected the new plants, which will use photovoltaic technology to turn sunlight directly into electricity, to be competitive with other renewable energy sources, including wind turbines and solar thermal plants, which use the sun’s heat to boil water.

“These market-leading projects we have in California are something that can be extrapolated around the world,” Jennifer Zerwer, a spokeswoman for the utility, said. “It’s a milestone.”

Though the California installations will generate 800 megawatts at times when the sun is shining brightly, they will operate for fewer hours of the year than a coal or nuclear plant would and so will produce a third or less as much total electricity.

OptiSolar, a company that has just begun making a type of solar panel with a thin film of active material, will install 550 megawatts in San Luis Obispo County. The SunPower Corporation, which uses silicon-crystal technology, will build about 250 megawatts at a different location in the same county.

The scale is a leap forward.

“If you’re going to make a difference, you’ve got to do it big,” said Randy Goldstein, the chief executive of OptiSolar. The scale of the two plants will “bring a new paradigm to bear” for the industry, he said.

At 800 megawatts total, the new plants will greatly exceed the scale of previous solar installations. The largest photovoltaic installation in the United States, 14 megawatts, is at Nellis Air Force Base in Nevada, using SunPower panels.

Spain has a 23-megawatt plant, and Germany is building one of 40 megawatts. A recently built plant that uses mirrors to concentrate sunlight, called Nevada Solar One, can produce 64 megawatts of power.

Solar power remains expensive compared with making electricity from coal or natural gas, but it is bounding ahead, driven by quotas set by the states.

California’s 20 percent renewable standard is one of the toughest, and companies there are afraid they will miss a deadline in 2010. Pacific Gas & Electric expects that when the new plants are completed, its total will rise to 24 percent, but not until 2013.

Both plants require numerous permits, and plans could still go awry. The companies involved said they expected that building gargantuan plants would achieve economies of scale in the cost of design, installation and connection to the electric grid.

The companies said they were forbidden by contract terms to talk about price, and a spokeswoman for Pacific Gas & Electric said her company was trying to obtain the best possible deal for ratepayers by not telling other suppliers of renewable energy what it was willing to pay.

But all three companies said the costs would be much lower than photovoltaic installations of the past.

SunPower’s panels are mounted at a 20-degree angle, facing south, and pivot from east to west over the course of the day to face the sun. OptiSolar’s are installed at a fixed angle. They are larger and less efficient, but also much less costly, so the cost per watt of energy is similar, company executives said.

Both are good at producing power at a time of day when the prices tend to be high, in the afternoon.

Neither approaches the economy of fossil-fuel burning plants, said Ms. Zerwer, the spokeswoman for Pacific Gas & Electric. But they will be competitive with wind power and with power from solar thermal plants, which are equipped with mirrors that use the sun’s heat to boil water into steam. And prices will fall, she predicted.

Her company, she said, was “going to contribute to the virtuous cycle of technology innovation and lower unit manufacturing cost, by purchasing on such a scale.”

Our Perspective:

This is a big step forward in solar evolution. Energy independence is no longer a topic of discussion but is becoming a reality.

For more information about solar opportunities in NJ and PA email george@hbsadvantage.com or visit us on the web www.hutchinsonbusinesssolutions.com . Ask about our free solar proforma.

Meanwhile, the industry holds its breath to see if a deal can be worked out to avoid a big setback

Posted July 28, 2008

Over the past few years, wind energy has experienced a tremendous, if precariously fragile, boom.

Last year alone, wind-power capacity jumped 21 percent in the United States. Wind is now one of the country’s fastest-growing electricity sources, buoyed by strong consumer demand, mounting concerns about fossil fuels, and—perhaps most notable—vital government support.

Wind turbines churn at Invenergy's Buffalo Mountain windfarm near Oak Ridge, TN.

Wind turbines churn at Invenergy’s Buffalo Mountain windfarm near Oak Ridge, TN.
(Charlie Archambault for USN&WR)

Nearly every American-bred source of energy, from coal to nuclear power, gets some sort of federal push, and wind and solar companies receive theirs in the form of tax credits, which enable them to line up investors and overcome enormous start-up costs. (Hundred-foot blades don’t come cheap.)

The credits, which are set to expire at the end of the year, enjoy almost universal support on Capitol Hill. Politicians of both parties routinely champion them.

And yet because of continued bickering, Congress this year has failed to renew them—with potentially drastic consequences.

The mere prospect of these credits expiring, in fact, has already begun to rattle the renewable-energy industries. Some wind developers are putting projects on hold and, in more extreme cases, laying off workers. “We have four projects right now that are what we call construction ready—we could install them and get them up and running by spring 2009,” says Leon Steinberg, CEO of National Wind, one of the nation’s leading wind-energy developers. “But none of our financial institutions will finance these projects with just the hope that the tax credit will be renewed.”

As a result, Steinberg says, construction on these projects has yet to start. The rationale for waiting is simple: The wind-energy tax credit is good for 10 years and pays developers about 2 cents for every kilowatt-hour of electricity they produce, but it must be available on the date that a project comes online. If a new wind farm starts pumping out electricity in January 2009 but the credits haven’t been renewed yet, it loses out.

The solar industry, which gets a 30 percent credit on new investments, is in the midst of a similar shake-up. Some large-scale developers have tabled projects as they await Congress’s decision, while smaller operations are scrambling to get solar installations up and running by December. “With solar, we can put things in place a little more quickly, so you are seeing a tremendous jump in solar installations right now,” says Gilbert Metcalf, a professor of economics at Tufts University and noted tax policy expert. “It is driving up the cost of solar panels and installations.”

If the credits are not renewed, he warns, the solar market could collapse, and solar-technology firms may have to lay off workers. “It will retard the progress we are making,” he says.

The uncertain future, in turn, is sending ripples through the economy, affecting, in particular, the nation’s nascent “green” manufacturing industry, which has quietly emerged in the tow of the renewable-energy market. In the Midwest and other industrial regions, factories that manufacture turbine parts or solar panels are seeing a slowdown in new orders.

New York officials recently warned that the state could lose 7,000 jobs if the tax credits are allowed to expire, and national estimates put the potential losses above 110,000. In the past, green manufacturing in the United States has been somewhat stifled by volatile levels of government support, and industry observers warn that the trend could worsen—with more green jobs and companies going overseas—if Congress refuses to act.

History hints at the possible long-term damage if the credits expire in December—because it has happened before. In 1999, 2001, and 2003, Congress didn’t renew the tax credits, and in each of the following years, wind-power installations fell dramatically, according to the Department of Energy.

In 2000, there was a 93 percent drop in new wind projects; in 2004, a 74 percent drop. “This is not rocket science,” says Greg Wetstone of the American Wind Energy Association. “When the credit is in place, wind energy and renewable energy has grown dramatically. When the credit has lapsed, the level of wind development has fallen dramatically.”

The solar industry suffered a similarly dramatic bust in the early 1980s, when Congress, looking to cut spending, eliminated the solar tax credits and effectively cut the industry in half.

Today, ironically, there is overwhelming bipartisan support for the incentives—even Sen. James Inhofe of Oklahoma, a conservative Republican and vocal global warming skeptic, is a strong proponent. Few consider the tax credits’ estimated price tag of about $8.2 billion a significant drain on the federal budget, especially in light of the measurably larger incentives awarded to oil and coal. In fact, a recent study by General Electric found that the tax credits more than pay for themselves, because they create jobs and profits, resulting in 2007 in a net gain of $250 million for the federal treasury. Also, the American public is behind them: About 94 percent of Americans support government development of solar energy.

It is tempting to think that all this goodwill would have presaged easy passage. But Congress, despite its pledges of support, has lately ground into something of a stalemate, and on multiple occasions in the past few months it has defeated or blocked bills that would have salvaged the credits.

At the moment, the main obstacle to progress seems to be a philosophical one. House Democrats, led by the so-called Blue Dog Democrats, a group of fiscally minded moderates, have insisted that the cost of the credits be offset by savings elsewhere. Their solution, which would raise taxes on offshore companies, has rankled Senate Republicans, who insist that no offsets are needed in the first place. And so a parliamentary standoff has unfolded. Twice the Senate attempted to attach an amendment to the now recently passed housing relief bill that would have renewed the credits; twice it was stripped out by the House. Meanwhile, a House bill with similar aims was defeated last week by a Senate Republican filibuster.

At a breakfast meeting with reporters on Monday, Sen. Jeff Bingaman, chairman of the Senate energy committee, said that passing the tax credits this week is one of the Senate’s top priorities before it adjourns for its August recess.

It remains uncertain how he and his Democratic colleagues intend to reconcile the squabbling over offshore drilling and oil speculation that has tied up most energy legislation this summer.

Industry observers remain optimistic that the credits will get renewed, but they somberly note that each day Congress waits, the greater the financial loss becomes. They add that if Congress were really serious about supporting renewable energy, it would make the credits permanent, just like its support for fossil fuels, which they argue would spur green-collar jobs across the rust belt. But they’ll take what they can get, preferably sooner than later.

Our Perspective:

If Congress really believes there is an energy crisis in the making, they will extend the credit. The states are jumping in and passing provisions to make alternative energy affordable. This along with the Federal tax credits has spurred the growth of the alternative energy market.

If Congress drops the ball or continues to drag its’ heels, we will be right back where we began. We can all look forward to paying higher prices for electricity and face the possibility of rolling brownouts, for our local providers will be unable to meet the growing demand for electricity.

Let us know how you feel? Should you want to know more about solar opportunities email george@hbsadvantage.com

Another Test for the Shills on the Hill

Do the 535 elected leaders in the United States Congress have what it takes to help America solve its energy and climate crises?

Apparently not. Congress flunked a crucial test on climate change earlier this year when the Senate failed to bring a cap-and-trade bill to a vote. The House hasn’t even brought a bill to the floor.

Another crucial test is scheduled this week on a proposal to extend tax incentives for renewable energy industries. The incentives are critical to the rapid development of wind and solar systems in the United States, technologies that are essential to reducing our greenhouse gas emissions. Unless Congress votes to extend them, the incentives will expire at the end of the year.

How much science does it take; how many droughts, wildfires and natural disasters; how many energy crises; how many entreaties from world leaders before Congress does the right thing?

For some historical perspective, here’s another question: What do Tim Wirth, Al Gore, Claudine Schneider, Ernest Hollings and Daniel Patrick Moynihan have in common?

The answer: They all are former members of Congress who sponsored legislation on climate change nearly 20 years ago in the 101st session. Yet today, U.S. carbon emissions are higher than ever and still growing rapidly.

To be fair, Congresses over the decades have approved 96 different laws that mention global warming, climate change or greenhouse gases. This week, the Presidential Climate Action Project (PCAP) is releasing a new study that identifies how the next president can use those statutes to act on climate change without waiting for further votes on the Hill.

Current climate statutes span a wide variety of topics in the U.S. Code, including agriculture, commerce, conservation, education, foreign relations, Native Americans, labor, public health, transportation and the Internal Revenue Service. They include provisions addressing coastal zone research, government conservation, federal procurement, R&D, small business loans, electric utility standards, forestry management, air pollution, energy independence, alternative energy resources, building codes, and more.

Many laws that do not mention global warming — for example, some of the country’s landmark energy and environmental statutes — also give the President, the Administrator of the Environmental Protection Agency and other federal officials authority to act on climate change. The federal government’s inadequate response can be blamed in part on past and current administrations. A key question for the next President is whether these laws are being fully obeyed.

But this week, the important question is what our elected leaders will do going forward, and that brings us back to renewable energy incentives in federal law.

If you ask an industrialist what public policies are most useful in moving a new technology to commercialization, he or she is likely to give three answers: some type of financial assistance, public and/or private, to help the technology reach market viability; consistent federal policy; and a sufficient sustained market. When a new technology is critical to national security, federal subsidies are both justified and important. That’s the case for emerging energy efficiency and renewable energy technologies in the United States.

But Congress apparently doesn’t understand the concept of continuity. It has been the renewable industries’ runaway bride. Since 1999, it has allowed the Production Tax Credit (PTC) for wind power and Investment Tax Credit (ITC) for solar power to expire three times. When it has extended the incentives, it has done so for only two or three years at a time — perhaps because it wants energy industries both for and against the credits to keep those campaign contributions coming.

The result has been recurring boom-bust cycles in the wind and solar industries. The American Wind Energy Association estimates that each time the tax incentives have lapsed, investment in wind projects has fallen 70 to 93 percent. As I noted in a letter to the New York Times last February, the fits and starts have led to “under-investment in wind turbine manufacturing capacity in the U.S. and variability in equipment and supply costs,” according to Lawrence Berkeley National Laboratory. The lab estimates that a 10-year extension of the PTC would bring the installed cost of wind power down by up to 15 percent compared with off-again, on-again credits in place today, and would create more local economic development and jobs.

In terms of the overall federal budget and America’s enormous energy industry, the cost of the two tax breaks is chump change — about $1.8 billion each year. But supporters on the Hill have been hung up by the majority party’s pledge to offset each new spending increase with cuts elsewhere — a necessary discipline to bring the federal budget deficit under control.

When the new energy bill moved through Congress last December, renewable energy supporters proposed to pay for the solar and wind tax credits by reducing tax breaks given to the oil industry a few years ago. After all, the oil industry is doing very well and is quite capable of taking care of itself. But the White House threatened a veto and a sufficient number of Members balked, killing the extension.

In February, supporters tried to include the tax credits in the economic stimulus bill. The Senate dropped them. In June, supporters tried again by including extensions of the credits in the Energy and Job Creation Act. A filibuster in the Senate blocked the legislation.

Now, proponents are proposing that the cost of the renewable energy credits be covered by closing a tax loophole that allows hedge fund and investment managers to shield income from U.S. taxes by parking the money overseas. That would seem to be a bullet-proof trade-off, but head-counters say it remains doubtful that the Senate can muster the 60 votes needed to bring the extension to a vote.

Why? Each time the solar and wind tax incentives come up, opponents roll out an old theme: that Democrats want to raise taxes. For example, Senate Republican leader Mitch McConnell of Kentucky issued a statement Friday complaining that the latest attempt to renew solar and wind incentives “permanently raises taxes on some to extend temporary tax relief for others.” McConnell is correct: Closing a loophole does raise taxes — for tax dodgers. It seems reasonable to argue that helping the solar and wind industries gain a stable foothold in the U.S. economy is more important than helping hedge fund managers evade taxes.

Democrats are in the majority of the Senate and House this session, but they clearly aren’t in control. On party-line issues, they don’t have enough votes to override a presidential veto or even to force a vote on the floor of the Senate.

But surely they can use their bully pulpits better to shape the energy and climate debate underway in Congress right now. They are letting the oil lobby hog center stage with its argument that we can lower gasoline prices with more drilling offshore and in environmentally sensitive areas. Yet the Bush Administration has been issuing oil leases to the industry for years, as quickly as federal agencies can process them. That hasn’t prevented the crisis at the pump today.

Someone has defined insanity as doing the same thing over and over again and expecting a different result. If that’s true, then it’s time to send drilling proponents to the funny farm. The dialogue we really need in Congress (dialogue, because it should be beyond debate) is how to create a new economy that works in the 21st Century and that’s fueled by carbon-free, limitless domestic fuels.

I’m a peace-loving guy. I would love to see the members of Congress have a collective epiphany and a big group hug, and start working together with the American people to secure that future.

But if old-think continues ruling on the Hill, it will be time to call on T. Boone Pickens. If he really wants to see wind and solar power take hold in the United States, the best investment he can make is to deploy his swift boats against the oil industry’s shills on the Hill, while giving the presidential and congressional candidates who are serious about America’s energy future as much of his money as the law allows.

To learn more about solar opportunities in the NJ and Phila surrounding area contact HBS Solar 856-857-1230 or email george@hbsadvantage.com Ask about our free solar proforma.

As reported in Huffington.com

Two years ago, under the auspices of the American Wind Energy Association, a group of us from the wind industry began working with the Department of Energy, General Electric, AEP, and many others to take a hard look at what it would take to get 20% of America’s electric supply from wind energy. The resulting report is helping lay the groundwork for a dramatic change in our approach to energy. For years, the wind energy community has argued that smart investment in transmission, siting, manufacturing and technology could allow wind power to take the main stage for our nation’s electricity. The report largely vindicates that belief, outlines the benefits, and illuminates the path to get there.

These past months have underscored the serious shortcomings in U.S. energy policy. $140 oil, $4 gasoline and run-ups in the cost of coal and natural gas are taking us to new price plateaus. Energy cuts across nearly ever issue that matters to our daily lives — economic well-being, national security, global climate change. As our energy woes devolve from concern to crisis, it is time we look more seriously — and honestly — for answers.

Renewables alone will not solve this crisis. Those of us with years in the industry know both the promise and limitations of renewable energy, and readily acknowledge that we don’t have all the answers. But renewables can make an enormous dent in the problem. According to our report, a move to twenty percent wind would decrease carbon emissions from electricity by twenty-five percent. Twenty percent wind would support about 500,000 jobs in the U.S., 150,000 of which would come directly from the wind industry. Revenues to local communities in the form of property taxes and other payments would run more than $1.5 billion annually. Twenty percent wind would significantly reduce demand for natural gas, our most versatile and cleanest-burning fuel, which is incredibly valuable for heating, petrochemical production, transportation and other uses.

All of these things can be achieved.

Similar investment in solar power could mean an additional 10% of our energy could be supplied by the sun. And long term investment in increased energy efficiency, including cars that can be powered by electricity, will mean a substantial reduction in our dependence on foreign oil.

What will be required is a national commitment on the part of elected leaders and substantial investment by the business community. There are certainly constraints to our ability to multiply our wind farms at such a serious rate, but, as the study suggests, these obstacles can be overcome. Chief among them is the need for significant new energy infrastructure, especially extensive transmission lines.

We have reached a turning point. Wind energy is no longer the pet project of environmentalists. It is a serious business with serious players, including General Electric, Mitsubishi, Siemens, and many other global titans. It is also part of a real answer to some of the most serious problems we face. If we combine our efforts to expand renewables with strong efficiency standards and a substantial increase in conventional domestic energy production, we can be within reach of solving our energy crisis.

This is not the kind of quick fix that Washington so often hopes for while doing nothing in the interim. There are no quick fixes. If we are going to confront our energy crisis successfully, we have to be focused on the long game. In ten years we were able to take our wind energy company from a two-man operation to the multi-billion dollar business it is today. In a similar time period Texas has seen wind grow to the point where we get nearly 5% of our electricity from the wind. We can get a lot done when we set our minds to the task. A national commitment today will mean economic growth, good jobs, a safer country, and a healthier planet. It’s time to get moving. :

Our Perspective

The alternative energy markets are taking steps to become mainstream. Solar and Wind are becoming the new buzzwords.

The future is now!

To learn more about solar and wind opportunities in NJ and PA contact HBS Solar 856-857-1230.

Smart Solutions for Smart Businesses

You may also email george@hbsadvantage.com 

 

Thanks to the State of New Jersey encouraging the use of green energy through its Clean Energy rebate program, it seems solar panels are cropping up all over the state.  From school rooftops to farmers to individual homes, using solar energy has become cost effective in the Garden State.

And now, New Jersey’s water utilities are also tapping into the power of the sun.

New Jersey American Water, the state’s largest water utility, now has the state’s largest ground-mounted solar electric system. Located at its Canal Road Water Treatment Plant in Somerset County, the 500-kilowatt ground-mounted system was designed and built by Dome-Tech Solar, a premier solar energy firm serving industrial and institutional clients in the northeast. The system includes more than 2,800 solar panels and New Jersey American Water expects it will be able to supplement 15% of the peak usage power needed to run the plant with solar energy, saving approximately $125,000 a year in reduced energy costs.  During peak production periods, the electricity produced by the solar system would be enough to meet the average electricity demand of more than 500 New Jersey homes. 

As part of its overall campaign to reduce energy expenses, now and over time, New Jersey American Water is working to keep its costs down, which may enable the company to pass those savings on to customers.  In fact, with the rebate from the New Jersey Clean Energy Program, the solar system alone will pay for itself in about seven years, possibly creating larger savings as the system continues to produce energy for many more years.

 “The state’s largest ground-mounted solar electric system by New Jersey American Water sets an excellent example of clean energy solutions that make sense for New Jersey businesses and residents,” said New Jersey Board of Public Utilities President Jeanne M. Fox.  “The solar rebate that the NJBPU is providing the company—almost 60 percent of the project’s cost—will help advance solar technologies that lower energy costs, reduce peak load and serve as an investment in the health and environment of Garden State residents for years to come.”

“New Jersey American Water’s corporate vision is driving today’s achievement—installing and activating the largest ground mounted solar energy system in New Jersey,” said Tom Kuster, president of Dome-Tech Solar. “We applaud New Jersey American Water for its long-term view and willingness to take action now to harness clean, renewable energy, reaping benefits today and well into the future for the company and its customers.”

This past December, the Atlantic County Utility Authority also took advantage of New Jersey’s commitment to green energy by dedicating the United State’s first wastewater treatment plant to be powered by a system that combines solar energy arrays with a wind farm. By capturing energy from the sun and the Atlantic Coast winds, rather than burning fossil fuels, the hybrid solar-wind power plant will produce enough energy to power the equivalent of approximately 2500 homes and displace the need for an estimated 24,000 barrels of oil per year.

The panels for the system contain photovoltaic solar cells that are made of silicon, a semi-conductor material that directly converts sunlight into electricity. Photovoltaic cells are sensitive to light and will produce an electric current when exposed to sunlight. The panels are being installed by WorldWater/Conti as part of a contract that provides the ACUA with ownership of the solar power system. The ACUA will be responsible for maintenance and operation of the alternative energy system. All electricity produced by the solar panels will be used for ACUA operations at the wastewater treatment plant; none will be sold to the power grid.

The new power plant is also one of the largest hybrid solar-wind power plants in the world. The 8 megawatt (MW) hybrid solar-wind power plant will generate an estimated 40,800,000 kilowatt hours of clean electricity annually. In addition to cost savings, there are significant environmental benefits solar and wind energy bring. The reduction in fossil fuel generated electricity needed will translate into an annual reduction of over 460,000 tons carbon dioxide emissions. Carbon dioxide is the main gas associated with global warming.

The entire solar energy system, that will cost $3.25 million, is also supported by a $1.9 million rebate from the New Jersey Board of Public Utilities Office of Clean Energy and a low-interest loan from the New Jersey Environmental Trust.

The efforts by the BPU have made New Jersey a leader in solar power generation comparable to California. The state now produces 4.5 megawatts of electricity, enough to supply 4, 500 homes, from solar power. Only three years ago, the state produced just 1 megawatt.

If New Jersey American Water and the Atlantic County Utility Authority’s plant’s are as successful as planned, they both may serve as models for the rest of the country.  

For more information about becoming part of the solar solution contact HBS Solar. Email us and ask about our free solar proforma george@hbsadvantage.com

Saw an intersting article in Huffington Post green section. Thought I would share it with you.

July 10, 2008

Solar1

A “solar concentrator” might sound like something an evil genius comes up with to destroy the Big City in a comic book, but it’s actually a way to make solar power more accessible. Engineers at in MIT’s electrical engineering and computer science department recently made it possible for regular old windows to harness solar energy and power a building with it.

Marc Baldo, associate professor of electrical engineering at MIT, led a team of scientists that used special dyes to coat the windows, which helps them effectively absorb the light. The light is then successfully collected around the window edges by solar cells (see the rad photo). Baldo and his team knew solar collectors had been used in large, pricey mirror setups, and thought they could work on a smaller scale.

In an article set to be published in tomorrow’s issue of Science, Baldo reports that solar collectors increase the amount of electricity a solar cell can harness by a factor of over 40, and they can make existing solar panel systems 50 percent more efficient. Those are some sunny numbers. That efficiency could make solar power cheaper. In addition, three grad students from the research team are starting their own company, called Covalent Solar–gotta love that name–to bring this technology to a store near you. I’ll be sure to keep an eye out for it…after I figure out how to get my windows to close completely.

To learn more about the growing solar opportunities email george@hbsadvantage.com

July 11, 2008

 

New Jersey’s Experiment With Solar Energy Is Watched by the Nation

Source:  Copyright 2008, New York Times
Date:  June 25, 2008
Byline:  Anthony DePALMA
Original URL


With oil prices skyrocketing, demand for solar power is booming. And New Jersey, which has used a rebate program to help install more solar panels than any other state but California, is getting burned by its own success.

There is a backlog of more than 700 applications for the rebates, and property owners have to wait months, even years, to get solar panels installed. The program, which is paid for by surcharges on all utility bills, has been shut down several times over the last three years because applications far outpaced rebate money. Some solar installation companies have had to lay off workers while they waited for rebate checks to be sent.

All this has convinced New Jersey regulators that it is time to wean solar energy from public subsidies altogether. The state plans to replace rebates with energy credits that can be bought and sold on the open market.

As it works out the details of the transition, New Jersey — not the place most people associate with solar innovations — finds itself at the forefront of a growing national debate about the role of government in helping stimulate this sector of the energy economy.

New York, Colorado, Maryland and several other states with incentive programs are considering whether to scale back public subsidies so solar power can compete more extensively in an open market. And they are confronting another difficult question: Is that best done by turning to a few large companies, or sticking with smaller businesses that can create more local jobs?

“Obviously, big systems get us to our goals much faster, but we want everybody to participate,” said Jeanne M. Fox, president of New Jersey’s Board of Public Utilities, which proposed the changes and is expected to give them final approval next month.

Ms. Fox said she believes it will be possible to phase out rebates, create a secure market for trading energy credits, welcome large solar system operators and still protect many — if not all — small installers.

But some of those smaller operators think the proposed transition will replace a proven success with an untested experiment from which they — the entrepreneurs who started the solar boom with the help of rebates — will be excluded.

“The state wants to build a market to suit big companies that have access to huge sources of capital,” said Bill Hoey, managing member of N.J. Solar Power L.L.C., a $10 million company. “They could just crush the mid- and small-size market.”

At SunEdison, one of the largest installers in the state and the nation, Mark R. Culpepper, the vice president for strategic marketing, enthusiastically supports New Jersey’s transition. He called it “a pretty normal market evolution” in which “very small players will probably go away, while small to mid-sized companies will be acquired by others or go into specific niche markets where they can specialize.”

Similar conflicts are arising all over the country, but the battle is most clearly drawn in New Jersey, where state officials feel compelled to act decisively.

Under a state energy master plan, solar power should account for 2.12 percent of New Jersey’s electricity by 2020. But even though more than 3,100 residential and commercial solar systems have been installed during the six years the state has offered rebates, they generate only 0.07 percent of current energy needs.

To reach even that, New Jersey has handed out more than $170 million in rebates. The Board of Public Utilities has estimated that if rebate rates remained unchanged, it would cost nearly $11 billion to get to the 2020 goal. According to state calculations, that would add about 7.5 percent to New Jersey electricity rates, which are already among the highest in the country.

“We need to do things differently because ratepayers can’t keep paying for rebates indefinitely,” Ms. Fox said.

Rebates, which have averaged $20,000 for residential projects and more than $1 million for large commercial installations, would virtually end this year under the state’s plan. A limited number for small residential projects producing less than 10 kilowatts would be phased out over the next four years.

In their place, the state would turn to a program it started several years ago that issues energy credits. The concept is simple: Solar projects generate energy credits every year, and the state requires utility companies like PSE&G to buy them to offset carbon emissions from their power plants and to help meet renewable-energy targets. By purchasing credits, the utilities do not actually generate solar power, but they offset the cost of installing and operating solar equipment.

New Jersey plans to greatly expand the program by allowing the credits to be bought and sold like commodities, with long-term contracts and prices set by the open market.

Regulators say that will be fairer to ratepayers and help the state reach its renewable-energy goals faster. They also say the plan provides safeguards for small installers and ensures competition by prohibiting any company from capturing more than 20 percent of a utility’s yearly credits.

But the small companies fear that large businesses are poised to take particular advantage of the credit system. Being bigger, they can handle more credits, cover more long-term commitments and secure more advantageous financing than mom-and-pop operations.

SunEdison, based in Maryland, has already made inroads in New Jersey using a new approach — called power purchase agreements — that smaller companies do not have the capital to duplicate.

Under those agreements, which the state first allowed in 2004, property owners do not have to buy or operate their solar projects, or handle the sale of energy credits. Instead, they avoid all up-front costs by contracting with SunEdison or other large companies, and bill property owners at fixed rates that are lower than utility company rates.

SunEdison has put up more than 22 solar systems in New Jersey, along with dozens in others states, mostly for large retail companies like Kohl’s.

Experts say these purchase agreements can promote the move to solar power. And regulators hope that a vibrant market for energy credits will speed that growth to the point where solar power can compete with conventionally generated electricity.

But Lyle K. Rawlings, president of Advanced Solar Products, in Hopewell N.J., and vice president of the Mid-Atlantic Solar Energy Industries Association, a trade group, said those attempts to make the solar market more competitive could backfire, actually hindering competition by squeezing out smaller companies.

He said that the state’s proposed safeguards did not go nearly far enough. While a portion of new projects would be subject for a few years to caps on how many credits one company can control, he said, those caps would not apply to existing solar installations.

“The model they’re creating is overcomplicated, fraught with uncertainty and really doesn’t protect the small installers who’ve created this industry,” Mr. Rawlings said. He said his own company had laid off 4 of its 15 workers in the last few months, and several New Jersey solar companies had gone out of business. “This is going to lead to a kind of unhealthy market concentration and chaos, like what’s already happened in other states.”

Blake Jones, president of Namaste Solar Electric, in Boulder, Colo., and a board member of the Colorado Solar Energy Industries Association, said his state was considering changes similar to New Jersey’s.

He said a major goal of solar incentive programs is creating green jobs. “On a per-kilowatt basis, more jobs, more local business and more rural economic development is created by small projects and small businesses than medium or large ones,” he said.

In Maryland, installers hope to persuade regulators to raise the value of energy credits in order to provide more income for small companies.

New York is several steps behind the other states in developing its solar market because of regulations that have limited solar installations to small-scale residential projects. Installers there are watching what happens in New Jersey because they expect to enter a similar debate in the next few years.

To learn more about solar opportunities in NJ email george@hbsadvantage.com . Ask about our free proforma.

 

New Jersey has a backlog of more than 700 applications for solar power rebates, and property owners have to wait months, even years, to get solar panels installed, according to a report in The New York Times.

The report said the program, which is paid for by surcharges on all utility bills, has been shut down several times during the past three years because applications far outpaced rebate money. Some solar installation companies have had to lay off workers while they waited for rebate checks to be sent.

All this has convinced New Jersey regulators, the report said, that it is time to wean solar energy from public subsidies. The state plans to replace rebates with tradeable energy credits.

With oil prices skyrocketing, demand for solar power is booming, the report said, and the decision is significant because New Jersey has used the rebate program to help install more solar panels than any other state but California.

“We need to do things differently because ratepayers can’t keep paying for rebates indefinitely,” Jeanne Fox, president of New Jersey’s Board of Public Utilities, told The Times.

Our Perspective:

NJ is taking great strides to introduce solar and other forms of alternative energy resources. Faced with an annual projected 1.5% increase in energy demand over the next 8 to 10 years, they fear they will be unable to meet the demand. As a result they have introduces a Energy Master Plan calling for a decrease in demand by 20% by the year 2020. They have also established as a goal to have 22.5% of their energy produced by alternative resources ( solar, wind, geothermal ) by the year 2020.

To provide incentives they have reworked the SREC ( solar renewable energy certificates ) program, increasing the value of the SREC from just over $200 TO $711 as of 6/1/08. The SREC is a commodity that will be traded, you will be assigned a SREC account as soon as a solar panel has been installed and you are producing electricity. One SREC will be paid for every 1000kw of electric produded.

The SREC program is designed to cover 60% – 70% of the installation cost of a solar system. My calculations show that it will cover the cost of the installation over a 15 year period. The payment of The SRECs along with the 30% Federal Energy Tax Credit makes this a home run for businesses.

Gov Rendell is busy persuing a similar plan to promote solar in PA. More on that as the news becomes available.

Bottom Line

With the inabilty to build new power plants to meet the growing demand for energy, the providers are using these funds to underwrite the opportunity of making you the provider and pulling usage off the grid.

Solar has come full circle and has become the talk of the town.

Solar…The New Sexy

Would you like to know more about solar opportunities in NJ and the surrounding Phila areas email george@hbsadvantage.com

On any sunny day at the Pennsauken Landfill, 13,000 solar panels sit quietly atop 15 acres of sealed-up garbage, pumping out the power.

 

When finished in February, it was called the biggest solar project east of the Mississippi.

But not for long. Work began in March on an even bigger spread, a 16.5-acre array of 17,000 panels next to the GROWS Landfill in Lower Bucks.

 

And this week, the Atlantic City Convention Center announced plans for panels atop its roof, in what executives say will be the largest single-building solar-energy project in the United States.

 

With solar energy on the rise, there’s likely no end in sight to the leapfrogging claims of “biggest.”

 

The nation and the region are seeing a burst in solar-power projects, especially in New Jersey, now the nation’s second-largest solar market after California.

 

The newest incarnation are mini-power plants, like those above, that power energy-hungry facilities or just feed the electrical grid.

 

Long built by idealists, these solar systems now can pay for themselves in less than five years, at least in New Jersey, where incentives are high. Energy costs also can be locked in, insulating companies from future price hikes.

 

“This is just the beginning of a huge potential,” said Steve Gabrielle, who helps develop renewable energy projects for PPL Corp., the utility that owns the Pennsauken installation.

 

Solar companies are scouting the region’s rooftops and vacant land, intent on moving quickly if Congress decides to extend a tax credit, enabling firms to recoup 30 percent of a commercial system’s cost.

 

New Jersey’s rebates for homeowners and businesses this year are oversubscribed. Applicants are being put in a queue for next year’s funds.

 

Growth has lagged so far in Pennsylvania, but that could change quickly. Incentives are being debated in the Pennsylvania legislature that could reenergize the state’s lapsed rebates.

 

One financial benefit of solar is its predictability. The system has a set cost up front; after that, the fuel – sunlight – is free.

 

That allows solar generators to offer long-term contracts for energy prices to large customers. For instance, much of the power from the Pennsauken array goes to a nearby customer, the Aluminum Shapes foundry.

 

The Atlantic City project will be built and owned by Pepco Energy Services of Virginia, which has a 20-year contract to sell the power back to the Convention Center, saving it about $4.4 million in energy costs.

 

These “power purchase agreements” are the financial backbone of many new deals. They allow firms to do what they do best under their roofs, while solar companies reap the potential from atop their roofs.

 

Those who have watched the growth – such as Philadelphia’s Andrew Kleeman, who left the real estate consulting and investment world last year to begin a solar-power company, EOS Energy Solutions – have noted how even the key players’ clothing has changed. “It’s gone from sandals to suits,” he said.

 

Kleeman, one of many, says he is “prospecting” and has a pipeline of projects where the building owners have pledged to go solar “as soon as the numbers line up.”

 

The cost of solar is decreasing due to new technologies and larger systems. At the same time, the cost of traditional nonrenewable sources is escalating wildly.

 

“Those lines are going to cross in the next couple years,” Kleeman said.

 

Besides its environmental benefits, solar energy bolsters the regional power grid by making the most energy when the need is greatest – those sunny summer afternoons when air conditioners are sucking maximum juice.

 

Nationwide, solar remains tiny. It is one-fifth the size of wind power, accounting for a fraction of 1 percent of the nation’s energy supply.

 

But solar installations grew by 45 percent in 2007. Much of the growth was due to what the Solar Energy Industries Association dubbed a “big-box boom” among companies that included Safeway, Whole Foods, Staples, Target, Home Depot, Macy’s, Wal-Mart and Best Buy.

 

The boom is further fueled – or perhaps forced – by 27 states that have annually raised requirements for the percentage of energy coming from renewable sources, such as wind or solar.

 

Utilities can either generate the power or buy credits issued to others who generate the power. The price of these credits is expected only to grow, making the deals more attractive to solar developers.

 

What makes the Mid-Atlantic region so attractive to solar developers is that several states, including Pennsylvania and New Jersey, have made specific requirements for solar.

 

Solar proponents think there is so much potential here that the organizers of a national conference on solar power opted to bring the event to Philadelphia next year.

 

“We specifically chose that location because we see Mid-Atlantic as an emerging market for solar,” said spokeswoman Monique Hanis of the Solar Energy Industries Association.

Others credit steeply rising energy prices in this region for propelling solar here beyond other parts of the country.

 

That said, Pennsylvania and New Jersey are worlds apart in solar energy production.

 

New Jersey has already had robust solar development because of financial incentives. As of March, more than $220 million in state rebates had helped build nearly 3,000 systems, capable of delivering 54 megawatts of power. New construction in 2007 was 114 percent greater than in 2006.

 

When the conglomerate Cox Enterprises decided to look into solar power, it wound up putting 705 panels – enough to power 12 homes – atop the roof of an auto-reconditioning shop in Bordentown owned by a division, Manheim, a car auction dealer.

 

“New Jersey had the most attractive incentives of all the states in the union,” said Cox vice president Mike Mannheimer. “It had, by far, the best return for us financially.”

Although he refused to give a financial breakdown of the incentives, Mannheimer said he expects the $1 million system to pay for itself in 41/2 years.

 

“These systems don’t cost much to maintain. They just crank away.”

 

Until now, Pennsylvania hasn’t even been counting systems. Production estimates range up to about two megawatts, enough to power 300 homes.

 

That could all change with legislation being hammered out in Harrisburg. Plenty of rooftop projects await the outcome.

 

One is Stable Flats, a 70-unit residential development in Northern Liberties where plans call for a $2 million, 260-kilowatt system to make the power.

 

It’s scheduled to be completed in 2009. But that hinges in part on a state rebate that will bolster a $700,000 economic-development grant, said developer Tim McDonald of the group Onion Flats.

The solar firm will still own the panels. It will get the federal tax credit, sell the solar credits to utilities, and provide residents with low-cost power.

 

“Building sustainably,” McDonald said, “doesn’t have to cost more money.”

Would you like to know more about solar opportunities in New Jersey and Pennsylvania? You may email george@hbsadvantage.com

Solar ….The New Sexy

Come join us and be part of the solution!