Saturday, February 28, 2015

Fwd: Leasing Option Now Available for Solar Plus Flow Battery Energy Storage Systems

Good leasing and cost data for small scale storage.

---------- Forwarded message ----------
From: Rebecca Van Nichols <rvan@tnag.net>
Date: Saturday, February 28, 2015
Subject: Leasing Option Now Available for Solar Plus Flow Battery Energy Storage Systems
To: mbannerman@arcstarenergy.com



Leasing Option Now Available for Solar Plus Flow Battery Energy Storage Systems

ViZn Energy Systems and LFC Capital teamed up to offer a leasing solution for commercial solar plus storage projects.

Meg Cichon, Associate Editor, RenewableEnergyWorld.com 
February 26, 2015  |  0 Comments

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Massachusetts, USA -- The leasing market has been a boon for the solar industry, ramping up residential installations for the past several years and with continued growth expected for the near future. Now the folks at ViZn Energy Systems hope to spark that same success for the energy storage market. ViZn has partnered with equipment leasing and financial services firm LFC Capital Inc. to offer a leasing program for its flow battery energy storage systems that are paired with solar PV installations for commercial and industrial microgrid applications.

The five- to seven-year lease will be available for 50- to 1,000-kW commercial solar projects that require 80- to 100-kWh of storage — typically up to $5 million installations, according to Ron Van Dell, CEO of ViZn. Customers will be able to purchase the system after the lease is up, similar to a car lease. The systems currently cost up to $540 per kWh for larger installations, according to Van Dell. The average monthly cost of the lease depends on the size of the system — for example, a 250-kWh ViZn system with solar generation would likely cost just under $10,120/month.

Projects where a power purchase agreement (PPA) is not worth the overhead are in the "sweet spot" for this deal where the simplicity of a lease works well, said Van Dell.

"Leasing make sense for solar, and storage allows for better returns, so why wouldn't you extend financing to solar plus storage? This is our first step in that direction," said Van Dell. "We're responding to what customers want."

Flow batteries are certainly nothing new in the energy storage space. Chemicals are stored in large reservoirs and pumped into the battery during charge or discharge cycles. Since the chemicals are stored in tanks, rather than within the battery, they can be scaled as needed without much extra cost and typically have a much longer lifespan than closed systems. Flow batteries are best at releasing power over a period of time, rather than lithium-ion batteries that are able to release power rapidly, which can help stabilize the grid. However, ViZn is fighting these issues with its non-acid zinc-iron technology.

Alkaline-based batteries can ramp up more quickly than other flow battery technologies. A zinc-iron chemistry allows for fast, deep discharge cycles, and provides safe, non-toxic, non-flammable performance, according to Van Dell, which will allow for a much wider range of applications. ViZn also claims that their system has a 20-year lifespan. 

"Batteries are not the friendliest technology around in terms of hazards and safety concerns, so being able to deliver a safe, low-cost energy solution in an environmentally friendly way is a big win for energy storage," said Van Dell. "We don't think energy storage will be battery packs stacked in buildings somewhere in the desert — we think it will be in neighborhoods near schools and substations."

Van Dell hopes to see this type of financing spark a similar growth period in energy storage that solar has seen in the past few years. ViZn has gained "dozens" of projects in its pipeline in just one year, and Van Dell said this program might ramp up business by a third. 

"The availability of various kinds of financing schemes for solar was fundamental for accelerating the adoption of residential solar," said Van Dell. "Our focus is more on commercial, but we think the effect will be exactly the same."
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Monty Bannerman
ArcStar Energy
+1 646.402.5076
www.arcstarenergy.com

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Fwd: First Solar and SunPower Plan to Form Joint-Venture Yieldco




First Solar and SunPower Plan to Form Joint-Venture Yieldco

Justin Doom, Bloomberg 
February 24, 2015  |  1 Comments

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NEW YORK -- First Solar Inc. and SunPower Corp., the two largest U.S. solar-panel manufacturers, are planning a joint venture that will own and operate some of their projects.

The companies expect to register for an initial public offering for the new venture, according to a statement Monday. They didn't say when that may occur or how much they would seek to raise through the IPO. The shares surged in after-hours trading.

The SunPower-First Solar venture would be part of a growing trend in the renewable-energy industry to pool projects into publicly traded entities that offer shareholders payouts, known as yieldcos. Companies that build power plants, includingAbengoa SA and NRG Energy Inc., sell completedprojects to their yieldco affiliates and use that capital to fund new power plants.

"The two companies have been cats and dogs in terms of whose technology is better, but at the end of the day it's less relevant as you look at the cost-effectiveness of solar and the value that can be extracted," Jeff Osborne, a Cowen & Co. analyst, said by telephone.

Yieldcos operate power plants and sell electricity, using that revenue to fund dividends to investors. SunPower has projects that could be included in such a vehicle right now, Osborne said.

"SunPower is doing the heavy lifting in 2015 and 2016," he said. "First Solar didn't have enough projects to create one immediately, but they do in the longer term. Getting together certainly makes sense."

Technology Mix

The partnership would be one of the only yieldcos to hold primarily solar farms; other similar ventures hold a mix of wind, solar and other generating technologies, said Jacqueline Lilinshtein, a clean-energy analyst with Bloomberg New Energy Finance. It will also combine SunPower's polysilicon technology with First Solar's thin-film panels.

"A portfolio of the two technologies, which operate in different sectors and geographies, could reduce risk, lower capital costs and widen the pool of operating assets that feed into the yieldco," she said in an e-mail.

First Solar gained 12 percent to $55.11 at 5:43 p.m., after the close of regular trading in New York. SunPower climbed 11 percent. Both companies report quarterly earnings Tuesday.

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Monty Bannerman
ArcStar Energy
+1 646.402.5076
www.arcstarenergy.com

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Fwd: In the Time It Takes to Read This Story, A Solar Array Will Go Up Somewhere




In the Time It Takes to Read This Story, A Solar Array Will Go Up Somewhere

The marketplace for solar power isn't cooperating with pessimists.

Eric Roston, Bloomberg 
February 25, 2015  |  6 Comments

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Solar is so cheap, the problem now is how to pay for it. Prices for panels are down more than 65 percent in five years, to less than 70 cents a watt. What's next? One word: financing.

Building a solar generating facility — either a massive one in a desert or a tiny one on the roof — involves serious up-front costs. In extreme cases, the cost of capital can make power almost 50 percent more expensive than it would otherwise be, says a report released Tuesday by the independent German research group Agora Energiewende. These costs can even influence the ultimate price of electricity more than the amount of sunlight a region receives.

But the industry is growing up in ways that are leading to both lower costs overall and faster installations. Solar developers, banks, nonprofits, and other industry players are creating tools that are standard in mature financial markets. These are the business practices that don't make for dramatic headlines but need attention if the industry is going to reach adulthood: credit ratings, due diligence standards, and, in general, cheaper ways to find and close deals. The easier these things become, and the more deals are done, the less risk investors face.

It's gradual, but gradual like a locomotive.

"Most scenarios fundamentally underestimate the role of solar power in future energy systems," says the Agora report, which focuses on larger systems. In many cases, it says, "this can easily be explained by the use of outdated cost estimates for solar photovoltaics." 

So when do these things start showing up around the neighborhood?

The U.S. solar market continues to grow at a gallop in many parts of the country. California is responsible for about half of the total installations, with huge opportunities on the horizon in Texas. Arizona, Hawaii, New Jersey, New York, and the Carolinas have all seen solar boomlets.

To see why, watch the yellow bars shrink from left to right: 

The chart shows two key trends in past and projected costs of U.S. solar installations. The yellow is the cost of silicon, which continues to decline toward 30 to 35 cents a watt by 2020, according to Bloomberg New Energy Finance. The Agora report is even more bullish. "An end to cost reduction for power from solar photovoltaics is not in sight," the analysts write. That holds even if solar systems see no more technological improvements, a conservative and unlikely assumption.

Critically, the red bars in the chart show a similar decline, mostly in "soft costs," a grab-bag term that can include the many impediments to closing deals, such as high marketing, sales, and development costs, or the expense of hiring lawyers to research and design every deal. These costs should shrink as the solar industry abandons ad hoc practices and makes itself more attractive to large investors with enormous sums of money.

"That's now the hard work being done," said Jeff Weiss, co-chairman and managing director of BeEdison, which has developed software that helps investors standardize the diligence and risk-assessment work that goes into every deal. "If that gets done, that will unleash tens of billions of dollars for investments."

The chart is based on data included in a January Bloomberg New Energy Finance report on the North American market. The totals represent an average of data on residential solar markets in all 50 states, including all the laggards.  

And when do they show up on my roof?

You don't have solar?

Kidding. As much as Americans might want to tell off their power utilities and cut the wire forever, we're not there yet, even in the states that are ahead of the game. There are still a few things that keep us tethered to the grid.

First, and most famously, the sun doesn't shine all the time. So unless you have enormous batteries to run the house on, which no one does (yet), phone charging and refrigeration would serve at the pleasure of cloud cover and time of day. 

Second, state subsidies that pay residential solar generators for power they send back to the grid are another thing helping keep prices down in several regions. Why cut off from the grid when you can reduce your bill, or even make money, by selling the power you produce but don't use? 

Finally, grid backup isn't such a bad idea as insurance. If your inverter blows, it'd be nice to have a fallback until the new one arrives. 

Remember Solyndra?

The anti-hero of renewable energy in the 2012 presidential election was Solyndra, the solar start-up that failed spectacularly by defaulting on $535 million in loans backed by the U.S. (The same Department of Energy loan guarantee program would go on to make money, through interest.)

Earlier this month, SolarCity, the residential solar company founded by Elon Musk, leased Solyndra's old factory. It's the perfect symbol for solar's transition from federally supported, promising technology to a self-sustaining industry. 

Good timing, too. This chart shows the projected U.S. solar build through 2017, when federal tax credits will drop from 30 percent of investment in a project to 10 percent.  

Large-scale, utility-type deals, in red, are expected to take a big hit right away, which is why developers have pushed all the deals they can into this year and 2016. Note that residential and commercial projects, in yellow and purple, are expected to stay about the same in 2017, despite the cut in U.S. subsidies. There's a case to be made that the subsidy cut will actually encourage solar deals, because qualifying for the tax credits puts onerous, often expensive requirements on the parties involved. 

That doesn't mean the pressure to make the economics work is off.

It does mean than in a few years, technology long confined to environmentalists' fantasies has become a viable source of power for many places under the sun.

Copyright 2015 Bloomberg

Lead image: Solar roof via Shutterstock‎
Sent from my BlackBerry 10 smartphone.



--
Monty Bannerman
ArcStar Energy
+1 646.402.5076
www.arcstarenergy.com

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