Stimulus keeps Sun shining on California’s solar market

EL SEGUNDO, USA: Installations of photovoltaic (PV) solar energy systems in California are set to more than double in 2009 compared to 2008 because of incentives from the US stimulus package, defying a major downturn in the global market, according to iSuppli Corp.

Installations in California, measured in terms of Megawatts (MW) of electricity production, are set to rise by 120.1 percent in 2009, compared to a 26.9 percent decline for the entire world. California’s outperformance is expected to continue in 2010 even as global installation growth will resume, as presented in the figure.

iSuppli: Photovoltaic Percentage Growth Installation Forecast in California and Worldwide 2008-2013 in MegawattsSource: iSuppli, Sept. 2009

“The market for PV solar energy systems has been severely impacted by the ongoing economic crisis gripping the world,” said Dr. Henning Wicht, senior director and principal analyst for PV at iSuppli.

“The debt financing of solar plants for commercial customers and investor syndicates has slowed dramatically across Europe, the United States and other regions that had been steadily growing in solar installations prior to the fourth quarter of 2008.

Wicht said, however, that those looking to install PV systems in the country have been helped by the American Recovery and Reinvestment Act of 2009—also known as the stimulus program—as well as the Solar Investment Tax Credit of 2008.

The government programs allowed 30 percent of a project’s cost to be rebated and also created loan guarantees for commercial projects. Because of this, iSuppli believes these initiatives will help offset, to a limited degree, the negative factors that have impacted the US PV market.

The new sunshine state
In particular, California has taken advantage of these incentives, causing installations in the state to rise even during the worst phases of the economic downturn.

At the height of the credit crunch in the first quarter, California’s installations increased to 77MW, up from just 38MW during the same period in 2008. Applications for rebates continued to increase, reaching 65MW in the second quarter, with only half the quarter counted in this data.

“This is a very encouraging sign for the solar market,” Wicht said. “It’s extremely beneficial for those investors wishing to take advantage of the new federal tax credit. It’s also a boost for those wanting to install residential household systems using the higher incentives from the California Solar Initiative Program (CSI).

Overall, iSuppli expects 350MW worth of solar systems to be installed in California during 2009. This is far and away the most of any state in America. The rest of the country is expected to install only 132MW in 2009.

Italy’s hot and cold
California isn’t the only region still pushing ahead with plans for PV installations. The Italian electricity administration authority, Gestione Servizi Electriche (GSE), in April announced that 338MW had been installed in 2008.

This far exceeds the 220MW that iSuppli originally forecasted for the country. Because of this, iSuppli is increasing its Italian forecast for 2009 to 580MW, up from 350MW.

Solar hotspots
According to iSuppli’s latest figures and feedback from companies, about 4 Gigawatts (GW) worth of new PV systems will be installed worldwide in 2009, with the majority of these installations coming from Germany at 1.5GW, Italy at 580MW and another 300MW to 400MW coming from Spain, California and Japan each.

California’s first utility-scale PV solar farm breaks ground

MENDOTA, USA: Cleantech America broke ground on California’s first utility-scale photovoltaic solar project to be approved under the state’s Renewables Portfolio Standard (RPS) program.

Named CalRENEW-1, the solar farm is located in the City of Mendota in California’s Central Valley and will provide 5 megawatts of emission-free solar electricity to PG&E under a long-term power purchase agreement. The facility is scheduled to begin operation before the end of the year and when completed will be one of the largest photovoltaic solar projects in California.

CalRENEW-1 represents a successful collaboration between the Company, PG&E and the City of Mendota to create green jobs, improve air quality and demonstrate the viability of large-scale PV solar to help California meet its renewable energy goals.

“As a zero emission, solar facility, CalRENEW-1 will move the San Joaquin Valley one step closer toward cleaner air and create dozens of green jobs in a city embracing the new clean energy economy. It has taken the support and hard work of many dedicated individuals and we are all extremely excited to be commencing construction,” said Bill Barnes, CEO of Cleantech America.

Mendota Mayor Robert Silva, who earlier shared a California Association for Local Economic Development (CALED) award with Cleantech America for the project, is looking forward to the facility’s construction and completion. “The City of Mendota is proud to be a leader in the new clean energy industry,” he noted.

Cleantech America was recently acquired by Meridian Energy Ltd. the largest electricity generator in New Zealand, which generates power entirely from renewable resources. CalRENEW-1 is the company’s first US solar project and is a model for its US growth strategy.

CalRENEW-1 will be one of the most advanced photovoltaic solar facilities in the world, helping California meet its stringent renewable energy and carbon reduction goals. Avoided emissions from CalRENEW-1 will be an estimated 6.3 million lbs/year of CO2, the primary source of global warming and climate change, plus 6,905 lbs/year of NOx and 5,451 lbs/year of SO2 (source: EPA eGRID2002 database). In addition to environmental benefits, the solar farm is anticipated to provide economic benefits.

Quanta Services will provide engineering, procurement and construction services for the project, which will utilize Sharp thin film modules, recently introduced in the US.

BP Solar to supply PV power systems for Wal-Mart

SAN FRANCISCO, USA: BP Solar recently confirmed that it has been selected to provide photovoltaic solar power systems for Wal-Mart stores in California. This agreement builds on an established relationship between the major retailer and BP Solar.

Under a power purchase agreement (PPA) negotiated for the projects, BP will finance, install and maintain the systems and Wal-Mart will have immediate access to clean electricity with no up front capital cost to the retailer.

BP said it will initially focus on building 10 to 20 rooftop systems at Wal-Mart locations in California, and would work with the retailer to evaluate the potential for additional projects. BP expects to complete the first set of projects, totalling up to 10 megawatts of installed solar power, within about 18 months.

"BP is pleased to expand our energy supply relationship with Wal-Mart through this series of new projects,” said Reyad Fezzani, CEO of BP Solar. "BP’s solar power systems have been shown to reliably perform for more than 25 years and this reliability - when combined with no up front capital cost -- will help drive further development of large-scale solar projects in California and elsewhere."

In 2008, BP Solar completed construction on 4.1 megawatts of solar energy systems for seven Wal-Mart stores and Sam’s Clubs in California.

Under the PPA, Wal-Mart is purchasing all of the energy produced by the solar power systems and BP Solar will operate and maintain the systems. BP leverages its own capital and also works closely with external finance partners to provide optimal value for its customers.

"BP Solar has been a great partner, and we look forward to accelerating our efforts to utilize more affordable renewable energy in our operations" said Kim Saylors-Laster, vice president of energy at Wal-Mart. "As we partner on this larger scale, our goal is to show how using affordable solar power benefits the environment and makes good business sense"

“With our proven long-term reliability, electricity produced from our modules actually offers the lowest lifetime cost of power among major PV companies today" Fezzani said. “Combine this with BP’s staying power and you have a very reliable, secure and cost-effective platform for large customers making significant investments in renewable energy"

BP already guarantees its modules for 25 years and pioneered this offer within the solar industry in 1998.

BP Solar, part of BP Alternative Energy, is a global company with about 2000 employees. BP Solar designs, manufactures and markets products which use the sun’s energy to generate electricity for use in the residential, commercial and industrial sectors. With over 35 years of experience and installations in most countries, BP Solar is one of the world’s leading solar companies.

BP is one of the world’s largest energy companies, with interests in more than 100 countries and over 96,000 employees.