Greening Your Organization with Solar Energy

Solar energy is becoming a more attractive clean energy solution for commercial organizations. A recent report from the Solar Energy Industries Association (SEIA®) and GTM Research reported that more than 27,000 U.S. homes and businesses installed solar energy systems between July and September 2010. The report also indicates that commercial installations grew 38 percent over the second quarter to reach 103 megawatts (MW).

Why are so many businesses turning to solar, you might ask? An investment in solar energy can provide significant value from a branding, costs-savings, and regulatory standpoint.

Branding. Carbon pollution produced by traditional sources of electricity has gained significant media attention in recent years. Companies that take action to reduce their carbon footprint by installing solar showcase their commitment to environmental stewardship. This effort may resonate with consumers and impact their decision to purchase the company’s products or services. Studies show consumer purchasing and patronage is influenced by their perception of a company’s commitment to environmental sustainability.

Cost Savings. Solar is not as expensive as it used to be. Previously, solar was regarded as an energy option reserved for those that could afford hefty, up-front equipment and installation costs. Today, innovative finance options like power purchase agreements and solar leases, along with state and Federal incentive programs are transitioning solar from what we call a “dark green” to “cash green” or affordable energy solution. In addition, installing solar can provide great savings on your monthly energy bill, serve as a hedge against rising electricity costs and help increase the value of your property.

Regulatory Compliance & Energy Independence. Some states have implemented policies that require the introduction of renewable energy sources to lead the nation towards an energy independent future. Large-scale energy users that install solar in advance of government mandates put themselves ahead of the curve and are positioned as leaders working towards a cleaner and more secure future for their state and the nation.

For more information about the commercial benefits of solar visit http://photonhq.com/what-we-do/solar-for-business.html.

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Environmental Leader Releases its 2010 Insider Knowledge Report (…and we’re included!)

Environmental Leader, one of the leading trade publications covering energy, environmental and sustainability news, recently released the inaugural edition of its “Insider Knowledge Report: Lessons Learned from Corporate Environmental, Sustainability and Energy Decision-Makers.” The report, which was sponsored by the Pew Center on Global Climate Change, is available for free download on our Web site.

Our CEO Reid Rutherford contributed several key learnings from 2010 and thoughts on what’s ahead in 2011 for distributed solar energy. Check us out on page 63! Reid’s comments are included with others from an elite group of corporate environmental, sustainability and energy decision-makers, including executives from Ford, Bank of America, Nike, Alcoa, Yahoo, eBay, Staples, Hormel Foods, Blue Shield of California, Dell, Anheuser-Busch, L’Oréal, Hasbro and Xerox.

Topics covered in the report include: environmental management, energy management, sustainability, green building, green IT, innovation and design, auditing and reporting, workplace, employee engagement, operations, waste and recycling, and strategy and leadership.

More information about the report is available on the Environmental Leader Web site.

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President Obama Affirms Support of Renewable Energy in 2011 State of the Union Address

Last week, President Obama delivered his 2011 State of the Union address before a joint session of Congress and the American public. Much of the President’s speech was focused on the role renewable energy can play in building the nation’s economy. He proposed a 25 year goal to have 80 percent of electricity in the U.S. generated from renewable sources like wind and solar, and called for investment in innovative technologies that will drive America towards global leadership in clean energy.

“We need to get behind  innovation and to help pay for it, I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don’t know if you’ve noticed, but they’re doing just fine on their own. So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.”

The President also alluded to America falling behind other nations in the pursuit of clean energy leadership referring to the struggle as “our generation’s Sputnik moment.”

“Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik¸ we had no idea how we’d beat them to the moon. The science wasn’t there yet. NASA didn’t even exist. But after investing in better research and education, we didn’t just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs. This is our generation’s Sputnik moment… We’ll invest in biomedical research, information technology, and especially clean energy technology – an investment that will strengthen our security, protect our planet, and create countless new jobs for our people.”

We applaud President Obama’s for his support of renewable energy and for making a strong case for its role in the economic development and security of our country.

The full 2011 State of the Union address can be viewed at http://bit.ly/fWf8bi.

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What’s Ahead for Solar in 2011?

2010 was a good year for solar.

The Los Angeles Times reported in December that commercial solar customers in the U.S. reached 103 megawatts of capacity in the third quarter of 2010 – a 38 percent jump from the same period in 2009 – and overall, more than 27,000 homes and businesses set up solar-power systems. President Barack Obama showcased his commitment to U.S. leadership in renewable energy by announcing plans to install solar panels on the White House, setting a strong example for the American public.

As we enter the New Year, there is much to look forward to – the extension of the Treasury Department’s 1603 Cash Grant program, possible regulations set by the Environmental Protection Agency on fossil fuels, and the approval of Tradable Renewable Energy Credits in the state of California – all of which may result in the expansion of and more attractive pricing for renewable energy in the U.S.

Our CEO, Reid Rutherford, recently authored a feature for SolarNovusToday.com that discusses what’s ahead for the solar industry in terms of finance and incentive programs. Read the article online here and share your thoughts on solar for 2011.

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Financing Solar with Bonds… Build America Bonds

There are a number of different ways to finance solar projects.  For government agencies in California, bond financing can be particularly attractive. Bonds for use in solar projects come in several varieties.  In this article, we’ll discuss Build America Bonds (BABs) and their application to solar.

Build America Bonds were created under the American Reinvestment and Recovery Act of 2009. BABs have the characteristics of a tax-exempt bond, but are actually a taxable bond with an interest subsidy from the federal government.  For projects funded in 2010, BABs have a 35 percent interest subsidy.  Using long-term BABs can have a number of benefits, including payments that are lower than the value of electricity produced by the solar energy system, creating savings for the procuring government entity. Bond payment schedules can even be adjusted to balance savings over the term of the bond.

Ownership is another major benefit of bond financing. Government entities that use bond financing will own the solar electric generation system, which means there’s no buyout price at the end of the financing. As the system’s owner, the government agency retains all of the green tags associated with the project (renewable energy credits, carbon credits, etc.) and can use them to meet their own green objectives or sell them to generate revenue.

Financially speaking, bond funded solar can offer much more attractive rates than those available in the private market (e.g. power purchase agreement funded projects).  In addition, some states offer higher local incentives for government and non-profit agencies than for-profit corporations.  This is an important point to consider as third party ownership projects – like a BABs-financed project – receive state incentives based on the tax status of the owner, not the host.

BABs are scheduled to expire at the end of 2010, but may be renewed for 2011. Stay tuned, and we’ll cover additional types of bond financing in the coming weeks.

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Reid Rutherford Joins SolarTech Expert Panel to Introduce New Operating Lease Template Agreement

This Thursday (December 16), the SolarTech Finance Committee will host a webinar to discuss the release of its new Operating Lease Template Agreement that will create a way for companies to utilize federal tax incentives based on the lessor’s tax appetite.  This template draws on the legal and industry expertise of Davis Wright Tremaine, LLP and Wilson Sonsini Goodrich & Rosati to present a balanced agreement for broader use in the market.   Expert panelists will include: Doug Payne, executive director and co-founder, SolarTech; Todd Grenich, SolarTech Finance Committee chair and managing partner for Grenich Capital; Pamela Charles, partner, Davis Wright Tremaine, LLP; Michael Faber, partner, Wilson Sonsini Goodrich & Rosati; and our very own Reid Rutherford, co-founder and chief executive officer, Photon Energy Services. The webinar will include an engaging discussion of the impact the template agreement will have in the marketplace and a Q&A session. Check out details and register at http://bit.ly/dXGMKN.

Webinar Details at a Glance:

Event: Financing Best Practices: Introducing Solar PV Operating Lease Template

Date: Thursday, December 16, 2010

Time: 9:00am to 10:00am Pacific

Register at: http://bit.ly/dXGMKN

Panelists:

Doug Payne, Executive Director and Co-founder, SolarTech

Todd Grenich, SolarTech Finance Committee Chair and Managing Partner for Grenich Capital

Pamela Charles, Partner, Davis Wright Tremaine, LLP

Michael Faber, Partner, Wilson Sonsini Goodrich & Rosati

Reid Rutherford, Co-founder and CEO, Photon Energy Services

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Boston Consulting Group Issues Report on Alternative Energy

The Boston Consulting Group recently released a report called “What’s Next for Alternative Energy”. The report surveys seven alternative energy sources. The full report can be found here:  http://www.bcg.com/documents/file65187.pdf.

The report provides several key findings, including: Advanced biofuels, CSP, and solar PV will see accelerating adoption and growth and are on track to change the global energy mix far earlier than is often assumed. Their costs are falling rapidly, and they are on the path to becoming cost competitive within the next five to ten years, if not sooner.

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Join us for SolarTech’s EPC Template Webinar

Next Wednesday (November 17), the SolarTech Finance Committee will host a web panel to discuss the release of the industry’s first engineering procurement contract (EPC) template for solar finance. Our Executive Vice President Dustin Keele (and SolarTech Finance Committee member) is a panelist along with:

  • Doug Payne, SolarTech’s co-founder and  executive director
  • Todd Grenich, SolarTech Finance Committee chair and managing partner for Grenich Capital
  • Dirk Michels, partner, KL Gates, LLP
  • Howard Susman, partner, Stoel Rives, LLP

The session begins at 9am Pacific. Panelists will discuss barriers to commercial solar financing, SolarTech initiatives designed to lower the cost of solar financing, purpose and impact of the EPC template, and why prominent legal firms have supported its development.  It will be an informative session for solar industry professionals.

More information and details on how to register are available at http://bit.ly/EPCWebinar. Hope you’ll join us!

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California Gubernatorial Candidates on Clean Energy Issues (And the facts on Proposition 23):

Today, the American public heads to the polls to cast their vote in the midterm elections. Clean energy and climate change are among the many important issues voters must consider. Taking into consideration the fact that decisions made on these key issues may drastically change the future of clean energy projects and climate change issues in California and nationwide, we as voters must be as informed as possible. In an effort to provide clarity on where both California gubernatorial candidates stand at present on environmental issues, we’ve outlined their stances below:

As Governor Jerry Brown Says He Will:

  • Reduce dangerous emissions that contaminate the air we breathe
  • Promote clean energy and jobs by opposing Proposition 23
  • Work to create 500,000 new jobs in renewable energy
  • Protect the California coastline and energy resources by opposing off-shore drilling in CA
  • Support the Green Chemistry Initiative to reduce dangerous chemicals in consumer products
  • Ensure the Strategic Growth Council provides resources for more sustainable local development
  • Protect parks, open spaces and wildlife by insuring existing funding for parks and wildlife areas
  • Conserve California’s farmland by directing growth away from the most productive farm land

As Governor Meg Whitman Says She Will:

  • Support and promote clean sources of energy like solar, wind and biomass
  • Remove regulatory barriers to new sources of renewable energy
  • Impose tough financial penalties on polluters
  • More rigorously enforce California’s environmental laws
  • Promote clean air transportation polices
  • Oppose offshore drilling until new technologies are proven to minimize environmental impact
  • Update the California Environmental Quality Act, a statewide environmental protection policy that requires state and local agencies within California to follow a protocol of analysis and public disclosure of the potential environmental impacts of development projects
  • Take a new look at nuclear as a carbon dioxide-free energy source

More information on the environmental plans for each candidate can be found on their official web sites: www.jerrybrown.org and www.megwhitman.com.

California Proposition 23

There has been a lot of recent debate around Proposition 23, which will suspend AB 32 California’s landmark global warming law until unemployment in the state drops to 5.5% or less for a full year – something that has occurred only three times since 1976. Proposition 23 supporters include large oil companies, which stand to lose financially from the state’s push toward less polluting sources of energy. Environmentalists and Gov. Arnold Schwarzenegger oppose the measure, which they say would set back efforts to curb greenhouse gases in California and elsewhere and undermine growth of the state’s green sector.

Jerry Brown says he opposes Proposition 23. Meg Whitman says she’ll vote against the initiative, but would none-the-less suspend the global warming law for one year if she is elected.  Below are the Proposition’s reported pros and cons:

Proponents say that voting yes on Proposition 23 will save:

  • More than 1.1 Million Jobs
  • Up to 60 percent in higher electricity rates
  • $3.7 billion a year in higher gasoline and diesel prices
  • Up to a 56 percent increase in natural gas rates
  • Local governments from hundreds of millions of additional budget cuts

Opponents say that Prop 23 will:

  • Create more air pollution in California and threaten public health.
  • Jeopardize 500,000 clean technology jobs and $10 billion in private investment in California clean energy businesses
  • Increase house hold electricity costs by 33%. As a result, these added costs would reduce economic output in California by more than $80 billion and cost over a half million jobs by 2020
  • Increase consumer energy costs by $650 per year, keeping Californians addicted to costly oil
  • Not only hurt competition from California clean energy businesses, it would also reduce consumer choices by making alternatives to fossil fuels much more expensive for consumers
  • Slow the effort to reduce our state’s (and nation’s) dependence on overseas oil thereby reducing our security

Before heading to the polls, consider the following resources for additional details on Proposition 23:

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Reflections on Solar Power International 2010

Solar Power International (SPI), the largest solar power conference and expo in North America continues its dramatic growth. This year’s event was held at the Los Angeles Convention Center October 12 -14 and attracted an estimated 30,000 attendees – a significant increase from its humble beginnings in 2004 with just 1,100 attendees.

Solar Power International, previously called Solar Power Conference and Expo, was created when the Solar Electric Power Association (SEPA) and the Solar Energy Industries Association (SEIA) partnered to build an event where solar industry professionals could come together with potential customers, policymakers, investors, and other parties to further drive rapid growth within the North American market. While some reports claimed that prior to 2006 solar industry participants were more likely to be “hippies and pot-growers,” SPI over the years has attracted a more business minded showgoer.

Several Photon staffers walked the SPI show floor this year taking inventory of the hundreds of exhibitors from around the world that were on site to showcase their products and services. The following are a few of our key observations:

  • Boomtime: Like any booming industry there are many new players. The number of exhibitors was impressive and varied. It will be interesting to see how many of the new exhibitors will be successful enough to return in five years.
  • International Participants: A surprising number of companies from Europe and Asia exhibited. It will be interesting to see how many of them can get a foothold in the North American market.
  • Financing: Project financing continues to be a major issue. It appears that many exhibitors still have a limited understanding of what is needed to obtain financing. An opportunity for solar developers like Photon to showcase our expertise in this area.
  • Featherization: A new term describing how new technologies might cross the barriers preventing them from being bankable. The idea is focused around how new technologies might be deployed in small portions of larger projects. By using a new technology in only 5-20% of a larger project it is thought that the new technology can gain the experience needed to become bankable.

For those of you that missed this year’s event, photos are available on flickr. Next year’s SPI event is scheduled for Dallas, TX, which is thought to become the next major growth area for solar. Stay tuned!

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