Monday, January 28, 2013

U.S. natural gas prices encouraging - Pennenergy

FW: Solar Costs to Fall as REITs Emerge as Source of Funding | Renewable Energy News Article


Solar Costs to Fall as REITs Emerge as Source of Funding By Andrew Herndon,
Bloomberg January 24, 2013   |   3 Comments

SAN FRANCISCO -- A San Francisco startup may win approval as soon as this
month to become the first firm allowed to raise money for solar-power
projects as a REIT, the financing vehicle used in $637 billion of U.S.
property ventures.

Renewable Energy Trust Capital Inc., led by a former Moody's Investors
Service chief executive officer, has asked the U.S. Internal Revenue Service
to classify solar farms as the type of "real property" that may be included
in real estate investment trusts, or REITs. A ruling is imminent, according
to Kelly Kogan, an attorney with Chadbourne & Parke LLP, which advises
financiers on REITs.
A favorable decision may open the U.S. photovoltaic power industry to retail
investors at a time when it needs about $6.9 billion a year. REITs, usually
formed to develop commercial property like shopping centers, returned an
average 28 percent in 2012, data on 208 U.S. REITs compiled by Bloomberg
show. The format would offer tradable stakes while cutting the cost of
capital for developers, according to Felix Mormann, a research fellow at
Stanford University Law School's Steyer-Taylor Center for Energy Policy &

"REITs will significantly reduce the financing cost of solar energy projects
and with it, the overall cost of solar electricity," Mormann said. "They
will bring the solar industry a big step closer to subsidy independence."

Standard REITs own and generally operate income-producing property that pays
investors dividends. While they're marketed as more stable than many
investment classes, REITs fell along with most equities in the last
financial crisis.

Retail Investors

The 125-member Bloomberg Industries North American REITs index, which
excludes mortgage-related trusts, returned a negative 47 percent during 2007
and 2008. That's more than the 34 percent loss including dividends in the
same period for the 1,611-member MSCI World Index of global equities.

The REIT format was authorized by Congress in 1960 to give retail investors
a way to get into commercial real estate. REITs are required to pay at least
90 percent of their taxable income to shareholders, according to the
industry's Washington-based trade group Nareit.

Most are traded publicly and there were 172 REITs registered with the
Securities and Exchange Commission and trading on U.S. exchanges at the end
of last year, with a combined market value of $603 billion, according to
Nareit. The market value of the 208 U.S. REITs tracked by Bloomberg is more
than $637 billion.

REITs owned about $850 billion in real estate, as of December 31, according
to Nareit. The market value of traded equity REITs was about $332 million in

New Industries

The format has evolved to provide funding for other industries including
timber, data centers, mobile-phone towers, power lines and natural gas
pipelines. The common denominator is that all are tangible assets that
generate steady income over a long period of time, and photovoltaic power
plants fit that mold, according to Renewable Energy Trust's Chief Financial
Officer Christian Fong.

"Solar PV could be next," Fong said. The company, founded in 2011, is led by
CEO John Bohn, who stepped down from the same post at Moody's in 1996. He's
also served as a commissioner with the California Public Utilities
Commission and CEO of the Export-Import Bank of the United States.

A solar REIT would own and operate power plants that convert sunlight into
electricity, just as standard REITs acquire buildings and other
assets. Solar-energy REITs will make it easier for mainstream investors to
get involved in renewable- energy generation, Fong said.

Congressional Support

"There's no practical way for individuals to vote with their dollars and
invest in solar power generation," Fong said in an interview. "A solar REIT
would, for the very first time, give them a way to do that."

The idea has the backing of at least 26 members of Congress, including
Senator Lisa Murkowski, an Alaska Republican that's ranking minority member
of the Senate Committee on Energy & Natural Resources.

"Minor changes to the federal tax code could provide the renewable-energy
industry access to large pools of low-cost capital," the lawmakers wrote in
a letter to President Barack Obama Dec. 12. They called on the Treasury
Department to issue a broad ruling approving the use of REITs for renewable

Renewable Energy Trust asked the IRS at least four months ago for a private
letter ruling that would grant it permission to become a REIT. It typically
takes the IRS about four months to six months to respond to such requests,
Fong said.

Ruling Imminent

The IRS may issue its first decision on solar REITs this month, according to
Kogan, the Chadbourne & Parke attorney based in Washington. That's the only
regulatory hurdle Renewable Energy Trust will need to clear and a favorable
ruling will apply only to Fong's company.

CleanREIT Partners LLC, another San Francisco-based company
pursuing solar REITs, submitted a similar request to the IRS last year and
later stopped the process while it pursued additional capital, according to
co-founder Bill Hilliard. He's now planning to form a REIT in Canada to
invest in U.S. solar assets, and may pursue an initial public offering on
the Toronto Stock Exchange in the third quarter, he said.

Conventional REITs typically pay dividends of about 3 percent to 4 percent,
according to Hilliard. The first solar REITs may pay more, as much as 6.5
percent to 7 percent, because they are a new format with potentially new
risks, he said.

Funding Needs

REITs paid out about $22 billion in dividends in 2011, according to the
Nareit group. That's more than triple the estimated $6.9 billion that
U.S. solar developers will need annually for photovoltaic projects through
2020, according to a June report by Bloomberg New Energy Finance.

Most funding for solar projects comes from bank loans or investors that
purchase stakes, in part to obtain a share of a 30 percent federal
investment tax credit that's set to fall to 10 percent in 2017, an
arrangement known as tax-equity financing. This is an expensive form of
capital, according to Hilliard.

A key advantage of the REIT format is liquidity, Hilliard said.

"Because of the way tax equity works, people are locked into their
investments for five-plus years," he said. "They demand a much higher return
than if you had a publicly traded stock that you could buy in the morning
and sell in the afternoon."

This new investment format may become an option just when it's needed, Fong

Growth 'Bottleneck'

"This industry desperately needs more capital," he said by telephone.
"Financing has become the bottleneck to growth."

Solar REITs would help resolve that issue, according to Stefan Linder, an
analyst with New Energy Finance.

"High financing costs are well recognized in the industry as a barrier to
growth," Linder said. "Any structures that allow a wider investor base to
get involved, increases liquidity, or lower taxes would be beneficial."

The 30 percent tax credit may be a barrier to using REITs for solar farms,
said Timothy Kemper, national director of CohnReznick LLP's renewable energy
industry practice. "It's going to be tough to compete against investors that
are utilizing tax incentives," he said.

Copyright 2013 Bloomberg

Lead image: Finances via Shutter
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Friday, January 25, 2013

GTM study: 450 MW to be installed in Latin America in 2013

GTM study: 450 MW to be installed in Latin America in 2013

25.01.2013: According to a report from US market research company GTM Research, Latin American and the Caribbean’s new installed solar capacity will be 450 MW in 2013, up from less than 100 MW in 2012. According to the report, solar projects with a combined capacity of 8.4 GW have been announced in the region in 2012. GTM Research expects the lack of domestic competition to be an opportunity for foreign solar manufacturers and developers. Chile, Brazil and Mexico will see a considerable growth of large-scale solar installations in 2013, according to the report. Source: GTM Research

The complete press release can be viewed in PHOTON's archive using the following link:



Monty Bannerman

ArcStar Energy


Thursday, January 24, 2013

Sky and Mainstream in Chile

Chilean solar pipeline keeps growing 24.01.2013: Chinese renewable energy company Sky Solar Holdings Co. Ltd. plans to invest $1,360 million in Chile, according to the Chinese press agency Xinhua. The article does not reveal if the company aims to invest in solar or other renewable energy projects. The announcement has been made by the company and the committee of foreign investors Comité de Inversiones Extranjeras (CIE). Sky Solar is currently developing a 18 MW photovoltaic plant in the Arica region of northern Chile and has proposed two PV projects with a combined capacity of 60 MW in the region of Antofagasta in October. Meanwhile, Andes Mainstream Spa, subsidiary of the Irish renewable energy developer Mainstream Renewable Power, has obtained the environmental authorization from Chile's Environmental Assessment Service (SEA) regarding its planned 75 MW Almonte Solar Park. The $250 million solar park will cover about 185 acres in the Tarapacá region in northern Chile and would rely on about 270,000 solar modules. The company started the authorization process in December 2011. Source: Xinhua, Servicio de Evaluación Ambiental (SEA)

Monty Bannerman
ArcStar Energy

Tuesday, January 22, 2013

Storage gaining market traction

GII predicts solar energy storage market to reach $2 billion by 2018

22.01.2013: According to the latest report of the US market research company Global Information Inc. (GII), the global solar energy storage market will reach a turnover of $2 billion by 2018. The report reveals that three main technologies will prevail in the market: the lead-acid batteries ($950 million), the lead carbon technology ($135 million) and the lithium batteries ($235 million). As for the latter, however, GII predicts that their development will still strongly depend on government incentives over the next years. Furthermore, GII expects the Latin American market to have the strongest development, as electric demand grows and plans have already been made to support the PV sector in the region. Source: Global Information Inc. (GII)

The complete press release can be viewed in PHOTON's archive using the following link:



Monty Bannerman

ArcStar Energy


Thursday, January 17, 2013

US military has no doubts about climate threat

US Navy develops new triple-junction solar cell

17.01.2013: The Electronics Technology and Science Division of the US Naval Research Laboratory (NRL) announced it has developed a new triple-junction solar cell with a potential 50 percent efficiency. The NRL research team, which has worked in cooperation with scientists of Imperial College London and MicroLink Devices, Inc., Niles, Ill., has designed the multi-junction cell with novel semiconductor, lattice-matched material to achieve direct band gaps of 0.7 to 1.8 electron volts (eV). According to Robert Walters, NRL research physicist, »having all lattice-matched materials with this wide range of band gaps is the key to breaking the current world record«. NRL scientists have recently been awarded a US Department of Energy (DoE), Advanced Research Projects Agency-Energy (ARPA-E) project to execute a three-year program on material and device development for industrial needs. According to NRL, the current world record efficiency for triple-junction cells under concentrated illumination is 44 percent. Source U.S. Naval Research Laboratory (NRL)

The complete press release can be viewed in PHOTON's archive using the following link:



Monty Bannerman

ArcStar Energy


Canadian Consortium signs 50 MW PPA in Ecuador

Canadian Consortium signs 50 MW PPA in Ecuador

17.01.2013: A Canadian consortium formed by Solexica Energy Corporation, JCM Capital and Radical Energy Inc. has signed a Power Purchase Agreement (PPA) with the Ecuadorian energy authority Consejo Nacional de Electricidad de Ecuador (Conelec). Under the terms of the agreement, the consortium will buy the electricity produced from several PV power plants to be developed in Ecuador with a combined capacity of 50 MW. According to the Ecuadorian legislation for renewable energies, issued in May 2011, the generated power from these plants will have a purchase price of $0.403 per kWh for the next 15 years and will be fed into the national grid. After the government’s introduction of a new incentive program, several projects have been approved by Conelec, among others, for Spanish module producer and project developer Solaria Energía y Medio Ambiente SA, in April, and for Spanish solar company Isofotón SA, in November. The approval of 17 PV projects with a combined capacity of 272 MW has been recently announced by Conelec. Source: JCM Capital



Monty Bannerman

ArcStar Energy


Wednesday, January 16, 2013

Los Angeles issues new 100 MW FIT solar program

Los Angeles issues new 100 MW FIT solar program

16.01.2013: Los Angeles Department of Water and Power (LADWP) has approved a feed-in tariff program aiming to install a PV capacity of 100 MW to 150 MW by 2016. LADWP said in a press release that the FIT program will start on Feb. 1 and will have an initial allocated capacity of 100 MW, although »a proposal for an additional 50 MW FIT Program will be discussed in March.« LADWP has set a 20-year contract for each project and has allocated 20 MW for the first quarter of 2013 and additional 20 MW every six months until 2016. The FITs will be granted to projects with a power range from 30 kW to 3 MW. Fixed pricing will be $0.17 per kWh for the first 20 MW. LADWP said that the initial price is »higher than what it would pay for other renewables« in order to provide the program with »sufficient incentive to become solid and sustainable«. Source: Los Angeles Department of Water and Power (LADWP)

The complete press release can be viewed in PHOTON's archive using the following link:



Monty Bannerman

ArcStar Energy


Energy Storage Wars: Which Technology Will Win the Battle? | Renewable Energy News Article

Monday, January 14, 2013

Worldwide bookings of PV production equipment industry decline 60 percent in 3Q

Leading indicator of supply contraction. These financial results will trigger large-scale consolidation and do a Darwin on the weak.


Worldwide bookings of PV production equipment industry decline 60 percent in 3Q

14.01.2013: SEMI PV Group, the solar division of the global industry association serving the manufacturing supply chain for the micro- and nano-electronics industries SEMI, has released the worldwide PV manufacturing equipment billings and bookings for the third quarter of 2012. According to the report, that includes also data collected by German Engineering Federation (VDMA), bookings for the third quarter amount to $234 million, down 56 percent compared to the same period of 2011. Worldwide billings for the quarter dropped to $609 million, down 60 percent year-over-year. Source: SEMI PV Group

The complete press release can be viewed in PHOTON's archive using the following link:



Monty Bannerman

ArcStar Energy


Friday, January 11, 2013

Mosaic uses Crowdfunding for Solar Projects | Renewable Energy News Article

Ontario expects to be free of coal-fired generation by end of 2013 - Power Engineering

it's important to check balance sheets before selecting panels

Market forecast: Less than one third of PV producers will survive solar shake-out in 2013

11.01.2013: US market research company IHS iSuppli predicts that the current consolidation of the world solar industry will lead to major losses among the around 500 global players still active in 2012. According to the company, around 150 companies will survive the solar shake-out. “Most upstream PV supply operations will simply cease to exist, rather than being acquired by other companies,” says IHS. It also predicts that especially Chinese integrated producers are at risk in 2013. However, IHS notes that low-cost players will play a major role in the global market also in the current year. Source: IHS iSuppli

The complete press release can be viewed in PHOTON's archive using the following link:



Monty Bannerman

ArcStar Energy


Thursday, January 3, 2013

New Study Finds the U.S. Wind Power Market Riding a Wave < Berkeley Lab News Center

Algonquin Power acquires 109.5 MW Shady Oaks wind facility - Pennenergy

FW: Energy Tax Law Alert: Fiscal Cliff Bill Includes PTC Extension and Other Energy-Related Provisions




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Legal News Alert from the Stoel Rives Energy Development Team

Fiscal Cliff Bill Includes PTC Extension and Other Energy-Related Provisions

January 2, 2013


Congress yesterday passed the American Taxpayer Relief Act of 2012 (the Act), which averted the so-called "fiscal cliff." The President is expected to sign the Act shortly.

The Act includes a number of energy-related tax provisions, including a one-year extension and modification of the production tax credit under Section 45 of the Internal Revenue Code (the PTC) for certain renewable energy facilities. The energy-related provisions in the Act include:

  • PTC Extensions and Modifications – The PTC is extended and modified for certain types of facilities. These extensions and modifications include:
    • In the case of wind, geothermal, landfill gas, trash, marine, and hydrokinetic facilities and certain closed-loop biomass, open-loop biomass, and qualified hydropower facilities, the PTC will apply if construction begins before January 1, 2014 (rather than if the facilities are placed in service before January 1, 2014). The Act does not specify what it means to begin construction for this purpose, although there are analogous authorities that have been adopted for other purposes that may be applied. Note, however, that a facility to which this extension applies may qualify for the PTC even if it is not placed in service before January 1, 2014.
    • The PTC for municipal solid waste facilities is modified to exclude from the definition of municipal solid waste certain paper that is commonly recycled and that has been segregated from other solid waste.
    • The election to claim the investment tax credit rather than the PTC for certain facilities is extended to apply to certain facilities with respect to which construction begins prior to January 1, 2014.
    • The PTC for Indian coal production facilities is extended for one year, to apply to sales of qualified production during the eight-year period (rather than the previous seven-year period) beginning on January 1, 2006.
  • Fuel Incentives – The Act extends and modifies the cellulosic biofuel producer credit and certain incentives for biodiesel and renewable diesel. These provisions include:
    • The cellulosic biofuel producer credit is redesignated "second generation biofuel producer credit" and is (i) expanded to apply to liquid fuel derived from cultivated algae, cyanobacteria, or lemna and (ii) extended to apply to qualified fuel production before January 1, 2014.
    • The biodiesel and renewable diesel income tax credit is retroactively extended to qualified fuels sold or used on or before December 31, 2013.
    • The excise tax credit for biodiesel mixtures is extended to qualified fuels sold or used on or before December 31, 2013.
    • The excise tax credit for alternative fuels is retroactively extended for two years, to apply to sales or use of alternative fuels or alternative fuel mixtures on or before December 31, 2013.
    • The additional depreciation deduction allowance for cellulosic biofuel plant property is extended for one year, to apply to property placed in service before January 1, 2014, and modified consistent with the expansion of the former cellulosic biofuel producer credit to apply to "second generation biofuel" facilities (i.e., to include fuels derived from algae).
  • Other Incentives – The Act extends and modifies a number of other energy-related federal income tax incentives. These include:
    • Extension of 50% bonus depreciation for property placed in service before January 1, 2014.
    • The nonbusiness credit for energy-efficient existing homes is retroactively extended for two years through 2013.
    • The alternative fuel vehicle refueling credit is retroactively extended for two years through 2013.
    • The credit for two- or three-wheeled plug-in electric vehicles is modified and retroactively extended for two years through 2013.
    • The credits for energy-efficient new homes and energy-efficient appliances are retroactively extended for two years through 2013.
    • The special accounting rule applicable to sales or dispositions of certain electric transmission facilities to implement FERC or state electric restructuring policies is retroactively extended to apply to sales or dispositions occurring prior to January 1, 2014.

If you have questions regarding the PTC extensions and other energy-related provisions of the American Taxpayer Relief Act of 2012, please contact one of the attorneys listed below.

Greg Jenner at (612) 373-8857 or
Adam Kobos at (503) 294-9246 or
Carl Lewis at (206) 386-7688 or
Kevin Pearson at (503) 294-9622 or  

IRS Circular 230 notice: The information contained herein was not intended or written to be used, and cannot be used, by you or any other person (i) in promoting, marketing or recommending any transaction, plan or arrangement or (ii) for the purpose of avoiding penalties that may be imposed under federal tax law.

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