$60 Million Solar Grant by U.S. DOE

The DOE will make available nearly $60M to increase the use of solar power across the country. Secretary Bodman announced: up to $2.5 million for Solar America Cities cooperative agreements, in which thirteen selected cities will receive awards to promote increased use of solar-powered technologies throughout each city; the issuance of a Funding Opportunity Announcement (FOA) for up to $30 million for universities to research near-term improvements in solar products; and the competitive selection of ten cost-shared Photovoltaic (PV) Module Incubator projects that will receive up to $27 million in DOE funding over 18 months. Click here for more.

Third Party Financing Gains Traction
Morgan Stanley has gotten into the solar third party financing game. Last week, it was announced that Morgan Stanley has agreed to own and finance solar electric power systems totaling more than four megawatts that SunPower will deploy on seven Wal-Mart facilities in California. Wal-Mart will purchase electricity generated from the solar power systems from Morgan Stanley through a long term purchase power agreement. Click here for more.

The Red Herring reports that San Francisco-based solar-energy services company Recurrent Energy received $10 million in a first round of funding from venture capitalists. Like Tioga Energy (see previous post), Recurrent installs, owns, and operates the solar power systems for property owners and sells the solar-generated electricity through a PPA.

...and So Does Thin Film
New Jersey-based Energy Photovoltaics, a manufacturer of amorphous silicon thin-film solar modules has raised $77.5 million in its Series B financing.

According to this story, GE's foray into the thin-film market has it purchasing thin film products from two California-based companies, DayStar Technologies and Miasole, both specialists of CIGS thin-film technology.

SANYO Electric Achieves 22% Solar Cell Efficiency in the Laboratory

A smattering of solar news...

Solarbuzz reports that SANYO Electric has broken its own record for what the company says is the world’s highest energy conversion efficiency in practical sized (100 cm2 or more) crystalline silicon-type solar cells, by achieving an efficiency of 22% at the research level for its proprietary HIT solar photovoltaic cells. The previous highest efficiency had been 21.8%.

Action on Capital Hill: The Gavel reports that the House Committee on Science and Technology’s Subcommittee on Energy and Environment today explored means to advance solar energy research and technologies. The Subcommittee addressed the topic in the context of pending “The Solar Energy Research and Advancement Act of 2007” bill, authored by Subcommittee Vice-Chair Gabrielle Giffords (D-AZ), which will soon be introduced to establish several important research, education and training programs to facilitate the adoption of such technologies.

A number of financing deals were announced:

• Advent Solar (adopter of "emitter-wrap-through" technology) raises $70 million in Series D financing;
• Silicon Valley Solar (manufacturer of cells with internal concentrator technology to amplifies the effect of the sun) raised $10.2 million for its acquisition of NuEdison;
• Deli Solar (USA), Inc. (OTC BB: DLSL.OB) (seller of hot water and space heating devices in China) raised $2.75 million in Series A financing.
• Engine manufacturer Infinia announced it has raised $9.5 million in venture funding to develop solar-based, non-combustible stirling engines.

In other news, San Francisco is set to launch a solar mapping web portal, using Google Maps as a visual platform, that estimates solar energy potential for commercial/residential structures in San Francisco, and allows building owners to visualize the potential environmental benefits and monetary savings resulting from installing solar energy panels on their property. Click here for the San Francisco Solar Map!

Google and Ascent

It was reported today that Google turned on the switches on their 1.6 MW rooftop solar infrastructure that will power up to one third of its Mountain View, California campus' energy needs. Learn more about Google's solar panel project.

On the same day, its philanthropic arm, Google.org, as part of its climate change initiatives, launched its RechargeIT program to beta test new plug-in hybrid and vehicle-to-grid car technologies. One angle Google is exploring is the use of renewable energy sources such as solar in plug-in hybrids; it will be connecting its test fleet of plug-in cars to solar charging stations on campus to demonstrate the role that renewable electricity can play in replacing gasoline and other fossil fuels in the transportation sector.

Relatedly, Akeena Solar, one of the U.S.'s biggest solar system integrators, announced that this Thursday on June 21 it would unveil solar-powered electric car-charging stations, the equivalent of gas stations dispensing solar energy instead of gasoline.

Ascent Ascending

Meanwhile, shares of Ascent Solar (Nasdaq: ASTI) edged up 9% last Friday after shareholders approved the options Ascent granted to Norsk Hydro (NYSE:NHY) which will enable Hydro, the third-largest integrated aluminum supplier in the world, to increase its equity stake in Ascent Solar from its current 23% to up to 35%. Ascent's stock price rose to $8.02 today, up substantially from $2.45 earlier this year. Hydro's relationship with Ascent is expected to be enhanced. Already, it is reported that the two companies are collaborating in the joint development of a building integrated photovoltaic (BIPV) product line

A Haiku for Hoku

Polysilicon
Build it and they will cometh
Sanyo then Suntech!

I admit, the above haiku is not exactly mindblowing...but Kapolei, Hawaii-based Hoku Scientific's (NASDAQ: HOKU) 46% surge in the stock market earlier today certainly is!!

The reason for the surge? Hoku signed up a 10 year agreement to supply Suntech Power (NASDAQ: SPWR), one of the world's leading manufacturers of PV panels, with polysilicon, the raw ingredient to crstalline-based PV panels that is currently in short supply, starting mid-2009, for a total contract value of $678 million (read press release for more details of the agreement). The Bard I am not, but Hoku's energy transformation is poetic to solar bulls like me.

Hoku has historically been in the fuel cell business. The Company is currently expanding its business to manufacture polysilicon and install solar modules for the solar market. Hoku doesn’t currently make silicon and doesn’t operate any silicon plants but according to Red Herring, Hoku estimates it will cost $260 million to build its first polysilicon factory, which is scheduled to begin operations in Pocatello, Idaho next year. T he company also said it wants to raise $150 million in debt capital to finance construction. The plant will be capable of producing 2,000 metric tons of polysilicon per year in Pocatello, Idaho.

This news comes on the heel of Hoku's annoucement in January of the signing of a seven-year polysilicon supply contract with SANYO Electric Co., Ltd. that would provide for approximately $370 million in payments to Hoku over the term of the agreement.

The polysilicon bottleneck has forced the hand of leading solar players like Suntech and Sanyo to enter into long-term supply contracts and locking in the price for polysilicon at today's prices.

This strategy may or may not pan out to be wise in light of the forecasts that polysilicon shortages will start to ease as early as 2008 as more production capacity come online, such as that from Hoku's, start to come on line. But it is precisely such long-term contracts that spur investment in polysilicon production and entice enterprising companies like Hoku to be part of the solar solution.

Europe's Solar Manifesto

RenewableEnergyAccess.com reports of the release by the European Photovoltaic Technology Platform of an authoritative report dubbed the Strategic Research Agenda (SRA) , which will serve as a roadmap for short-, medium- and long-term research priorities for Europe in order to consolidate its global leadership position in the solar industry. The overarching goal is to make photovoltaic solar electricity competitive with conventional electricity in Southern Europe by 2015 and in most of Europe by 2020.

The SRA states in no uncertain terms that it is afraid of China's emerging success in the PV industry and the threat it poses to Europe's solar industry. Specifically, it describes China as the second country (after Japan) with an industrial policy specifically focused in the solar industry, with a goal of covering the solar value chain from silicon feedstock to complete systems. Hence, the SRA outlines the R&D priorities across the full spectrum of PV technologies, including crystalline-based, thin-film and concentrated solar technologies, as well as balance-of-system components.

The SRA also discusses non-technological issues such as standards, quality assurance and government R&D policy, although not to the same degree of detail and thoughtfulness as Solartech's white paper for turning the Silicon Valley into Solar Valley.

Fat Spaniel: Increasing Solar Adoption by Reducing Information Asymmetry

In the advocacy of renewable energy, it is useful to think about the market failures which stand as obstacles to the adoption of renewable energy such as solar. One notable market failure in solar adoption is the lack of information in the hands of consumers, installers and utilities on just how productive solar panels are at producing electricity (and accordingly, how cost-effective solar power is compared to conventional power).

But one San Jose, California start-up, Fat Spaniel, which recently announced a strategic alliance with DRI Energy, aims to change all that with a small device that links up to existing solar equipment and monitors energy collection. The data the device gathers is fed into servers at Fat Spaniel, where it's digested and distributed live via PC or cell phone to the consumer, the utility company, the solar installer and/or others who need to know the information. User can get real-time and historical information about amount of solar power produced by their solar systems, and even what that translates to in terms of avoidance of greenhouse gas emissions (see above pictured example of web interface).

With this technology, utilities of solar financiers like SunEdison can more accurately better monitor a solar energy system's productivity and more accurately monetize their power purchase agreements in an arrangement where it purchases, installs, owns and maintains the systems while charging its customers periodically simply for the purchase of solar power.

System installers can use the technology to ensure that the systems have been properly installed and remain effective and productive throughout its lifespan, or undertake necessary maintenance work if it is not. In an interview with Green Wombat, founder of Fat Spaniel, Chris Beekhuis accounts:"[Our clients] want to be able to forecast and guarantee performance. But it is very difficult to monitor those remote sites. We have an installer in Southern California who is approaching 100 installations. They can see a problem online and then go out and fix it. They leave a door hanger that says, 'I’ve improved performance of your array.' "

Individual users of the technology can benefit by becoming more conscious about their energy usage in the context of the supply of power generated from their PV systems. As Chris Beekhius, founder of Fat Spaniels, explains in his article in RenewableEnergyAccess, "real-time access to these types of data helps maximize system efficiency—you can't improve the efficiency of a system for which you have no data."

Ultimately, the increased information serves to heighten transparency in the renewable energy markets, and reduces the risk premiums for investments in such technologies. This is best described by Beekhuis himself, in the following excerpt from his article:

As the U.S. moves into a national regime of renewable energy standards and regulated carbon markets, system owners and operators will want to maximize the financial value of their investments in renewable generation. The best way to track a system's real energy output to ensure accurate Performance Based Incentive Payments, protect ratepayer investments in capacity-based or expected performance-based rebate programs, and to grow vibrant and trusted financial markets for Renewable Energy Credits and Carbon Credits, is through independent metering and monitoring.

While no one would question the good intentions of the clean energy community, financial markets do not run on good intentions. In fact, a fundamental economic tenet is that markets don't function at all without meaningful, verifiable information that comes from trusted sources. If buyers and sellers are uncertain about the products they're trading, or can't reliably compare apples to apples and oranges to oranges, they have no way to accurately assign a value to those products.

Tioga Energy and Enervision

Two innovative solar companies made venture financing news this past week. The Red Herring reported that California-based Tioga Energy launched operations with $10 million in venture financing from NGEN Partners, Draper Fisher Jurvetson, Rockport Capital Partner, DFJ Frontier and Kirland Ventures. Tioga Energy's business model is to serve as an intermediary by financi Posting ng, purchasing, installing, owning and operating solar panels while bringing solar power to its customers through 20 year power purchase contracts, thereby reducing the upfront capital costs of solar panels that have made it so prohibitive for prospective solar power consumers. As mentioned before, MMA Renwewable Ventures and SunEdison are other notable companies that engage in this form of third party financing, which will further SolarTech's goal of encouraging solar adoption.

San Diego based Envision Solar has one of the coolest solar array concepts that I've seen in a while--"Solar Groves." According to Rob Day, author of blog Cleantech Investing, Envision raised $600,000 as part of a $2 million Series A round. Partnering with PV module maker Kyocera, architectural firm Tucker Sadler, and construction firm Midwest General, Inc., Envision Solar provides solar shading structures composed of "Solar Trees" from design through construction. A "Solar Tree" consists of a central pole that supports a "canopy" of solar panels, which are designed to be built above cars in parking lots to create shade and generate solar power without encumbering the parking spaces. The first Solar Grove was completed in May 2005 in San Diego at the car park of Kyocera (see picture). Consisting of 25 Solar Trees, the Solar Grove has produced more energy than predicted, about 427,000-kilowatt hours the first year, the equivalent requirement for 68 average homes for a full year.

Non-Technological Cost Reductions to Solar Power

Last week, SolarTech, a collaborative initiative of a dozen solar technology companies in the Silicon Valley, launched the Solar Center of Excellence, with the goal of transforming the Silicon Valley into a Solar Valley, and serve as a model of solar power adoption to the rest of the U.S. and the world. It released a highly informative white paper outlining the areas and issues where opportunities for cost reductions exist.

Most interestingly, the paper starts with the proposition that PV installation costs in the US are twice of that in Germany and Japan, and that building permit and utility interconnection costs in the U.S. are also significantly higher than in Germany and Japan, and proceeds to focus on primarily on non-technology issues (i.e. the price of silicon or increasing conversion efficiencies) such as harmonizing standards for PV performance installation, utility interconnections and building permits; promoting workforce training in the PV industry; and promoting third-party financing mechanisms (through power purchase agreements) to reduce upfront capital costs of solar installation for consumers. It is the hope that the combination of these measures will substantially reduce installation costs and also reduce installation times from 29-50 weeks (as is the case now) to as little as 9 weeks. [See related blog post by the Spicy Solar Guy on why solar installation in Germany significantly lower than that of the U.S.]

An interesting side note is that solar modules only account for 50-60% of the costs of a solar system's price. The remainder consists of installation, as well as various "balance of system" components such as the inverter and mounting systems. Thus, apart from increasing conversion efficiencies of PV cells and reducing installation costs through the above measures, a meaningful opportunity exists in reducing the costs of inverters and mounting systems, components that are hardly as sexy or get the press attention as solar modules themselves. Indeed, the white paper reports that the "learning rate" for inverters is only about 10%, compared to 20-25% of PV modules and other balance if system components. One of the paper's recommendations is thus increased R&D in inverters.

Another paper (titled "What the Solar Industry can learn from Googel and Salesforce.com"; free registration required) by The Topline Strategy Group discusses the challenges that must be overcome to make solar power a "short fuse technology" (i.e. a technology that has a shorter early adopter period and achieves widespread mainstream adoption far faster than traditionally thought possible). This paper covers makes many of the same proposals as the SolarTech white paper, including harmonizing standards, streamlining utility interconnection and permitting processes, and increasing innovative financing mechanisms to reduce upfront capital costs of installation. Another proposal unique to the Topline paper is to create a secondary market for solar equipment (this way a homeowner won't feel stuck with fixed costs of a PV system which lasts 30 or more years when such homeowner doesn't think he'll stay in the home for that long a time) by making the accompanying warranties to the PV system transferable (currently they are not transferable).

All these kinks suggest how very much in infancy the solar industry is (even thought the technology has been around for decades), and how much opportunity lies ahead to proliferate PV's use.

I'm salivating.

Note: Thanks to the Green Wombat for first bringing Solartech's efforts to my attention.

Last one there is a rotten egg!!

Everybody's doing it!!

In what's becoming a trend of retailers, Macy's announced today that 26 of its stores in California will be going solar, with the help of PowerLight, subsidiary of Sunpower Corp (Nasdaq: SPWR). According to the press release:

For 15 of the 26 stores, Macy’s will purchase solar-generated electricity under
the SunPower Access™ program, a solar services agreement that allows the
retailer to purchase just the electricity generated at its stores – not the
solar power systems themselves — from a third-party financier. At the end of a
10-year term, Macy’s will have the option to renew the agreement, transfer the
equipment to a new site, or buy the system. Macy’s will buy solar power systems
for the remaining 11 stores through an outright system purchase.

According to greenblog Environmental Leader, other retailers going yellow recently include Kohls, Target, BJ's Wholsale Club, Costco, Staples, Tesco and of course, Walmart.

Automaker Nissan also announced today that it will install 606 solar panels (480 PV, 126 solar thermal) in its Barcelona plant. This is part of Nissan's plant to reduce its carbon dioxide emisssions by 7% of 2005 levels.

But if a clearer message about solar being the right thing to do needed to be sent, then the Vatican's move to go solar will be heard loud and clear.

The Dawn of Big Solar?

Utility-scale solar farms seem to be making the news more and more. Just yesterday, Canadian Solar (Nasdaq: CSIQ) announced that it has begin delivering solar modules to City Solar AG for the construction of 7 different large-scale solar farms in Spain and Germany totaling a solar capacity of 31 MW in all.

An article in Business 2.0 provides a great overview on the state of large-scale solar, the major players, and the evolving economics and technologies that make it increasingly attractive.

But query if such solar farms nullify one of the main advantages of renewable energy--that of an off-grid and autonomous source of distributed power. Utility-scale power just puts electricity production back in the hands of big companies (which are the only ones that can afford the huge capital outlay of a large-scale solar farm), increasing their political clout because they control such a vital resource, and setting them down the path of Big Oil and Big Coal...would love to hear thoughts of anyone out there...

Book Alert: The Clean Tech Revolution

A forthcoming book "The Clean Tech Revolution" by two staff members of Clean Edge, the leading authority in clean tech market research, highlights, amongst other technologies, the latest trends and future opportunities of solar power. In fact, the complete chapter on solar is available on the book's website as a preview for a free download. It reviews the declining price and increaseing competitiveness of solar power, identifies the break-through solar technologies and applications such as concentrated solar power, building integrated photovoltaics (BIPV), thin-film solar, utility-scale solar farms, and innovative third-party financing techniques (see my blog posting on third party financing) that will power solar into a market breakthrough.

Additionally, the article highlights ten companies in the solar space that embody the above-mentioned technologies and trends to keep an eye on:
1. Applied Materials: Semiconductor powerhouse now venturing into solar, including thin-film technolologies
2. Miasole: Founders were technology pioneers in hard disk storage, which requires thin-film technology applications; now parlaying this knowledge to CIGS (copper, indium, gallium, selenium)-based thin-film technologies in solar
3. MMA Renewable Ventures: Innovative financier, operator and owner of renewable energy projects. See e.g.
4. Nanosolar: An innovator of "photovolatic ink", the next generation in thin-film technology
5. Q-Cells: A leading German crystalline player
6. REC : Diversified Norwegian wafer and module producer
7. Sharp: The global leader of solar module supply with a 25% market share.
8. Sun Edison: Systems integrater and installer, and provides third-party financing to make PV systems more affordable for the consumer.
9. Sunpower: Maker of the most efficient PV modules commercially available, and one of the first vertically-integrated solar companies.
10. Suntech Power: China's leading solar company, previously focused on crystalline-based modules, but now venturing into thin-film and BIPV (see report)