Colorado’s PV Industry Threatened by Xcel Energy

Posted by Laura Arnold  /   February 23, 2011  /   Posted in Uncategorized  /   1 Comments
By Blake Jones, Namaste Solar   |   February 21, 2011   |   22 Comments
Colorado, USA -- Last week Xcel Energy, Colorado's largest investor-owned utility (IOU) with over 90% of the state's PV market, announced catastrophic changes to its "Solar*Rewards" customer-sited PV incentive program.

The immediate result is that sales activity in Xcel’s customer-sited PV market has come to a grinding halt. Xcel Energy’s Solar*Rewards program will not accept new project applications until the Colorado Public Utilities Commission (CPUC) addresses the issue.  Unfortunately, Xcel’s actions parallel those taken by Colorado’s other IOU and second largest utility, Black Hills Energy, which took similar actions last October that have effectively killed its portion of the state’s PV market.  In the meantime, until this issue is resolved by the CPUC, local solar companies only have previously-approved projects, if any, to sustain them while the future of Colorado’s solar industry and customer-sited PV market hangs in the balance.  

Prior to the unexpected announcement, incentive levels for the Xcel Energy Solar*Rewards program had been set according to capacity-based tiers that Xcel published – and updated daily – on its website (see snapshot below -- more info in sidebar at end of the article).  Modeled after the California Solar Initiative (CSI), the capacity-based tiers were established in 2009 with the intention of providing a road map of how the solar incentives would decline over time, thereby providing critically important transparency and visibility. 

Solar companies used this information to plan their business operations and communicate to potential solar customers.  Last Wednesday, Xcel Energy detoured from this road map with their unexpected, unilateral announcement.  It was equivalent to immediately skipping over the remaining five steps that collectively represented over 36 MW in just one of the four Solar*Rewards incentive categories (first table in sidebar below).

Why is Xcel Energy doing this?  In its press release, it claims that, “The changes are prompted by the decline in solar panel costs and increasing subsidization from government programs. Together, these developments have reduced the level of Xcel Energy incentives needed to support customer participation in Solar*Rewards.”  Indeed, solar panel costs have declined over 50% in the past 2-3 years, but it’s unclear what government programs Xcel is referring to that are increasing their subsidization.

Either way, the decreasing cost of installing solar has allowed the incentive levels to be reduced proportionately over the same time period, in keeping with the program’s original outline.  As future cost reductions were realized, the capacity-based tiers should have allowed for a smooth transition, allowing demand and cost reductions to drive the decrease in incentives.  Demand would only be sustained if costs continued to decline – that’s part of the beauty of such a system – so it’s unclear why Xcel Energy felt the need to accelerate the incentive reductions and ignore their own previous road map to the detriment of the local solar industry.

Xcel Energy’s actions threaten to reverse the progress that Colorado has made since the Solar*Rewards program was launched five years ago as a result of a voter-approved Renewable Energy Standard (RES).  Colorado’s RES is one of the best in the country (30% by 2020) and Colorado has been among the top five PV markets in the U.S. for many years.  Since its launch in 2006, the Solar*Rewards program helped create over 5,300 local solar jobs at over 400+ companies that have collectively installed more than 70 MW of customer-sited PV systems (see graph below). 

If Xcel’s actions are approved by the CPUC, I predict that over 50-75% of these jobs will be lost by the end of this year, causing Colorado to lose valuable solar industry infrastructure that took five years to build.

According to the press release, Xcel Energy predicts that over 59 MW of PV systems will be installed in 2011.  Despite the information provided, it’s difficult to discern how much of this is customer-sited and how much is utility-scale.  For example, the 59 MW likely contains a single 30+ MW utility-scale PV project in southern Colorado that SunPower and Iberdrola have been contracted to install.  Xcel seems to claim that the existing backlog of approved, but not-yet-installed, customer-sited projects totals over 6 MW and that over 10 MW of customer-sited solar will be sold in 2011, but I personally don’t see how that can happen at their proposed incentive levels. 

This unilateral move by Xcel Energy is a departure from the expectations of Colorado’s voters, explicit in 2004’s voter-approved ballot initiative, in which they states that the RES and solar incentive program should contribute to building a sustainable solar industry in Colorado. Businesses depend on transparent, stable, long-term policies to make hiring and investment decisions, and this move undermines the previously-established capacity-based tiers that Xcel Energy created and obtained approval for from the CPUC.  

With the national and international spotlight that President Obama put on the Colorado solar marketplace in 2008 (when he signed the historic American Recovery and Reinvestment Act at the site of a 100 kW PV system in Denver), this is an embarrassment to our state that might spoil Colorado’s “New Energy Economy” success story.  Xcel’s regrettable and surprising act demonstrates the urgent need for a reformed incentive program that will help build a sustainable solar industry, and in Colorado’s case, I strongly believe that this requires that the incentive program be independent from Xcel Energy’s and Black Hills Energy’s control.

The solar industry will be organizing a protest to Xcel Energy’s actions on the steps of the state capital in Denver next Friday, February 25, at 12:00 p.m.  Please join us there to express your support. This is not just about Colorado – it’s also about stopping a national precedent from being set by two Colorado utilities that have pulled the plug on a growing solar industry.  For more information or to get involved, please contact the Colorado Solar Energy Industries Association (CoSEIA) at www.coseia.org.

Sidebar: Xcel Energy Solar*Rewards Program

More info at this link.

Snapshots of three of the four incentive categories

  • Small – Customer-Owned (<10 kW)
  • Small – Third Party Developer (<10 kW)
  • Medium – Tier 1 (10-100 kW)

 Snapshot of the just the tiers:

Small -- Customer-Owned (<10 kW)
Step Upfront Price
per watt DC		 MW in step MW Confirmed MW Remaining
in Step		 Date Step Began
1 $1.50 0.5 0.518378 -.018378 10/25/09
2 $1.00 1 1.042552 -.042552 11/11/09
3 85¢ 1 1.028433 -.028433 12/2/09
4 70¢ 1 1.048483 -.048483 12/31/09
5 55¢ 1 1.006607 -0.006607 3/18/10
6 45¢ 3 3.051158 -0.051158 5/14/10
7*(current) 35¢ 4 1.786143 2.213857 10/14/10
8 25¢ 4   4  
9 15¢ 4   4  
10 10¢ 8   8  
11 5¢ 10   10  
12 5¢ 10   10  
           

 

Small -- Third Party Developer (<10 kW)
Step Price per
kWh generated		 MW in step MW Confirmed MW Remaining
in Step		 Date Step Began
1 11¢ 3 3.0323 -0.0323 starting price
2 7¢ 2 2.082185 -0.082185 9/08/10
3 6¢ 1 1.006397  -0.006397 12/23/10
4* (currentl level) 5¢ 1 0.365708 0.634292 01/26/11
5 4¢ 1   1  
6 3.5¢ 2   2  
7 2.5¢ 4   4  
8 2¢ 4   4  
9 1¢ 8   8  
10 .05¢ 8   8  
11 .05¢ 10   10  
12 .01¢ 10   10  
             

The information and views expressed in this article are those of the author and not necessarily those of RenewableEnergyWorld.com or the companies that advertise on its Web site and other publications.

Blowing coal away; Wind power now competitive with coal in some regions

Posted by Laura Arnold  /   February 23, 2011  /   Posted in Uncategorized  /   No Comments

Original Article: http://www.grist.org/article/2011-02-07-report-wind-power-now-competitive-with-coal-in-some-regions/?ref=se

by Todd Woody 

7 Feb 2011 4:45 PM

More good news on the renewable energy front Monday: The cost of onshore wind power has dropped to record lows, and in some regions is competitive with electricity generated by coal-fired plants, according to a survey by Bloomberg New Energy Finance, a market research firm.

"The latest edition of our Wind Turbine Price Index shows wind continuing to become a competitive source of large-scale power," Michael Liebreich, Bloomberg New Energy Finance's chief executive, said in a statement.

"For the past few years, wind turbine costs went up due to rising demand around the world and the increasing price of steel," he added. "Behind the scenes, wind manufacturers were reducing their costs, and now we are seeing just how cheap wind energy can be when overcapacity in the supply chain works its way through to developers."

Driving the trend are falling prices for wind turbines, which have dropped to their lowest level since 2005, according to Bloomberg New Energy Finance.

Bloomberg said it based its analysis on a review of wind turbine contracts provided by 28 turbine buyers in 28 markets across the world. Those contacts represent nearly 7,000 megawatts' worth of turbines.

Of course, that's not necessarily good news for turbine manufacturers in the short term. But it makes wind energy more competitive over the long run. Over the past year the industry in the United States, for instance, has seen the wind taken out of its sails as demand has fallen due to the economy and natural gas prices have plummeted.

According to Bloomberg, contracts signed in late 2010 for turbines to be delivered in the first half of this year this year fell 7 percent from 2009 to an average of $1.33 million a megawatt. That's a 19 percent decline since 2007.

In some regions of Brazil, Mexico, Sweden, and the United States, the cost of electricity generated by wind farms is on par with coal-fired power, the report said. In those areas, the cost of wind-generated electricity is $68 per megawatt-hour compared to $67 a megawatt-hour for coal power and $56 per megawatt-hour for natural gas.

Meanwhile on Monday, Interior Secretary Ken Salazar and Energy Secretary Steven Chu announced that the federal government would grant $50.5 million over five years to spur offshore wind farm developments on the East Coast.

The money will go toward developing offshore wind technology and removing market barrier to building coastal wind farms.

Todd Woody is a veteran environmental journalist based in California.

Chicago Tribune: Ind. activists oppose nuclear incentive bill; IDEA says bill contains little for the state’s renewable sectors

Posted by Laura Arnold  /   February 20, 2011  /   Posted in 2011 Indiana General Assembly, Uncategorized  /   No Comments

www.chicagotribune.com/news/local/wire/chi-ap-in-xgr-nuclearplants,0,5897625.story

chicagotribune.com

By RICK CALLAHAN

Associated Press

8:10 AM CST, February 20, 2011

INDIANAPOLIS

A bill that would offer Indiana's utilities incentives to build the state's first nuclear power plants is advancing in the Statehouse despite strong opposition from environmentalists, renewable energy boosters and industries that consume large amounts of electricity.

Supporters argue that the wide-ranging bill is needed to help the state meet its future energy needs, while opponents contend it would simply give utilities subsidies to design and construct multibillion dollar nuclear power plants without compelling them to control the costs of such big projects.

Opponents who include consumer and senior citizen groups also warn that the bill spurns Indiana's fledgling industry that's starting to tap into the state's wind power and other renewable energy sources.

The bill, which is scheduled for a vote Monday in the Republican-ruled Indiana Senate, would move to the GOP-controlled House for consideration if it passes.

One of the bill's authors, Sen. Beverly Gard, R-Greenfield, said it's needed to ensure that Indiana has enough power for its future needs.

"You want power. It's not going to fall out of the sky for free," she said Feb. 10 before the bill cleared the Senate's Utilities and Technology Committee.

Many of the bill's opponents warn that it would end up boosting the cost of electricity by shifting the risk of building power plants from utility companies to customers.

State Sen. Jean Breaux, D-Indianapolis, warns that the legislation "is being pushed under the guise of clean energy, but it's neither consumer friendly or environment friendly."

The bill contains three main elements, the first of which would allow utilities to quickly recoup their costs associated with complying with federal regulations.

A second provision would allow utilities to quickly recover the costs of designing, licensing and permitting nuclear power plants. Lawmakers have approved similar cost-recovery options in recent years for so-called clean-coal projects.

Indiana currently has no nuclear power plants. The state's first planned nuclear power plant, southern Indiana's Marble Hill power plant, was canceled in 1984 following billion-dollar cost overruns and safety concerns.

The bill also would replace a renewable electricity standard -- the idea of requiring the state to get a set amount of its power from renewable sources -- with a voluntary goal that would include "clean-coal," nuclear, waste-burning plants and other sources among a broader set of "renewable and low-carbon power" sources that would count toward a state goal.

One of the bill's sponsors, Sen. James Merritt, R-Indianapolis, said it's simply aimed at addressing the growing energy needs of the state, which currently gets more than 95 percent of its electricity from coal-fired power plants.

Even as those power needs are growing, Merritt said increased federal regulation of coal-fired power plants is making it nearly impossible to build such plants.

"What we're trying to do is to provide incentives for Indiana utilities to diversify their power generation," he said.

Jesse Kharbanda, executive director of the Hoosier Environmental Council, said the bill as written would have a "devastating" effect on Indiana's renewable-energy sector. He said it could also hurt working class families and small businesses with higher energy costs in part due to "new ratepayer-funded subsidies for nuclear power."

"Utilities would have little incentive to control or manage costs," Kharbanda said.

Jack Wickes, an Indianapolis attorney who represents dozens of large industrial consumers of electricity, said the bill is actually "aimed at keeping utilities healthy" and would not encourage them to control project costs.

"The utilities would have no skin in the game really and it's pretty easy for them to just be seeking reimbursement, as opposed to having some responsibility for bringing projects in at the estimated price," Wickes said.

He noted that the cost of the $3 billion coal-gasification plant Duke Energy is building in southwestern Indiana is running about 30 percent above its initial construction cost estimate.

Indiana is one of 13 states without some form of a renewable electricity standard, according to the U.S. Department of Energy. Thirty states have mandatory renewable energy requirements, while seven others have goals.

A 2008 study by researchers at Lawrence Berkeley National Laboratory in Berkeley, Calif., found that about 70 percent of renewable investment in the U.S. is directed to states with renewable energy standards.

Indiana has seen big growth in the number of wind farms in the state, but the American Wind Energy Association said the current bill would do nothing to boost that industry.

"A missed opportunity here could cost Indiana thousands of jobs at a time of significantly high state unemployment," said Brad Lystra, the association's manager of state campaigns.

Laura Ann Arnold of Indiana Distributed Energy Advocates, a group that promotes renewable energy, said the bill contains little for the state's renewable sectors at a time when many states have progressive policies.

"Indiana is still behind -- we're really not with the program," Arnold said.

Indy airport’s planned solar farm would be the largest in the state

Posted by Laura Arnold  /   February 20, 2011  /   Posted in Uncategorized  /   No Comments
Original story: http://www.indystar.com/apps/pbcs.dll/article?AID=2011102190328
1:01 AM, Feb. 19, 2011  |  108Comments
Written by Bruce C. Smith
Solar panels like the ones planned at Indianapolis International Airport are already making money outside the Denver airport. / HYOUNG CHANG / The Denver Post

The warm rays of the sun may be the next big thing to make money for Indianapolis International Airport.

The airport is looking for a developer to build what would be the largest solar energy farm in the state on 30 acres of airport-owned land near the end of a runway.

It would generate 10 megawatts of electricity an hour -- enough to power up to 6,000 homes -- and that electricity would be sold to Indianapolis Power & Light. The airport would make money by leasing the property to a company that would build and operate the array of thousands of solar panels.

Other airports, including Denver and Fresno, Calif., have put money-making solar farms near runways on property not suitable for other types of developments.

It was not known how much revenue the solar farm would generate for the airport. The move is part of a larger plan approved by the airport Friday to generate more than $190 million over the next 30 years from hundreds of acres of its undeveloped land.

Industry experts estimate that a developer would have to spend $30 million to build the solar farm and that the equipment could generate electricity for at least 30 years.

"Solar power isn't just a hippie dream anymore," said Travis Murphy, who worked in the state's renewable energy agency and now sells solar systems for Johnson Melloh Solutions. "Solar energy is not just something that environmentalists will do anymore, but it has become an opportunity for businesses and homes."

The airport's solar farm would send a highly visible message of public support for renewable energy, said Mark Hedegard, the airport's senior business development director.

Thousands of solar panels -- tinted black so the glare doesn't blind airplane pilots -- would be planted next to the airport's front door. Millions of airplane passengers going to the Col. H. Weir Cook terminal building each year and millions more motorists on I-70 would pass the solar farm.

The site is tucked next to a long, circular ramp that is used by vehicles getting off the interstate and heading onto the road to the new terminal.

By far, it would be the biggest single solar power site in the state, according to Murphy. He said a survey last year conservatively estimated about 750 kilowatts of solar power had been built in Indiana.

An additional 1.76 megawatt array of 5,700 solar panels is being built on the roof of the Emmett J. Bean Federal Center, the military's finance facility in Lawrence.

Andrew Crocox, project manger for electric contractor Ermco, said the Bean array should be making electricity for the IPL grid by April.

Several industry insiders said federal tax credits and accelerated depreciation on the equipment have sparked a national rush to invest in solar power, along with methane gas, wind turbines and other renewable sources of energy.

Locally, IPL's interest in developing alternative energy sources has triggered a stampede of solar developers quietly swarming over Indianapolis the past year, looking for good sites and workable financing for solar power farms.

IPL was the first Indiana electric power company to receive approval from the Indiana Utility Regulatory Commission to provide a rate incentive to solar energy suppliers to feed power into its network.

IPL's website indicates it would pay up to 24 cents per kilowatt hour for solar energy, which is several times the rate paid for other forms of electricity. There also is a national market for energy generated from renewable sources. And some states -- not including Indiana -- set a quota of energy from renewable sources that their utilities are to sell.

IPL spokeswoman Crystal Livers-Powers said IPL's goal is to generate electricity from all forms of renewable sources equal to 1 percent of its 2010 sales, or roughly 150,000 megawatt hours of power.

However, even as the solar power industry gets into gear, IPL has flashed a red light.

Livers-Powers said IPL has filed a notice with the IURC to temporarily suspend its offer of the rate normally paid for solar electricity "until we present changes that limit the participation in the program to existing IPL customers."

IPL's rate was so attractive that out-of-state solar developers have been considering very large projects that would have used all of its capacity for renewable-source electricity, leaving none for IPL's current customers such as the airport.

She said, "We just want to give our current customers an opportunity to participate."

Call Star reporter Bruce C. Smith at (317) 444-6081.

Senator Gard Amendment #6 to SB 251 is confusing at best

Posted by Laura Arnold  /   February 17, 2011  /   Posted in 2011 Indiana General Assembly  /   No Comments

The six-page amendment filed 02/17/2011 @ 10:24 am by Sen. Beverly Gard (R-Greenfield) on SB 251 the so-called Clean Energy Bill is confusing at best.

It is next to impossible to understand the impact of this proposed amendment without matching up the amendment with the February 8, 2011 printed version of the bill.

It is true that page one of the proposed amendment amends IC 8-1-8.8-10 and deletes a laundry list of technologies defined as "renewable energy resources". Why this is being done in this amendment is as clear as mud to me right now. Two other bills, SB 66 and HB 1128, have been moving through this session of the Indiana General Assembly amending this section of the law. I was told by an informed source that some of the language in this amendment was suggested by the Indiana Utility Regulatory Commission (IURC) but that doesn't make sense to me because the Commission's proposed new net metering regulations references this definition of "renewable energy resources" so why would they propose to delete it?

Does the right hand know what the left hand is doing?

There is another laundry list of "clean energy resources" which does include wind, solar, biomass, hydropower, hydrogen, algae, and geothermal in a new Chapter 37 creating a Clean Energy Portfolio Standard Program.

Again, I was told yesterday that a proposed amendment would create two buckets under this "VOLUNTARY" Clean Energy Portfolio Standard Program--one for true renewables and another for nuclear and coal. 

I guess I will just try to sit tight and listen to the explanation from the microphone IF SB 251 is called down for second reading this afternoon.

P.S. The Senate is on SB 217 right now on the Second Reading Calendar. There are two more bills--SB 222 and SB 240--before SB 251.

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