September 15 News: “The Solar Industry Is on Fire,” says Time, So Don’t Be Fooled By Solyndra Bankruptcy Circus

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"September 15 News: “The Solar Industry Is on Fire,” says Time, So Don’t Be Fooled By Solyndra Bankruptcy Circus"

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Don’t Be Fooled By the Solyndra Bankruptcy Circus — Solar Is Booming

By Time’s Michael Grunwald

I doubt the facts are going to matter much now that Republicans have latched onto the Solyndra solar “scandal,” and even if they did matter, I’d be the wrong guy to defend the Obama administration (and some of the world’s top venture capitalists) for making the same honest mistake I made.  After a few dozen Solyndra hearings like the one in the House today, nobody’s going to remember the Bush administration was just as hellbent to make this loan. Nobody’s going to care that all successful loan programs have failures, that the Solyndra venture was barely 1% of the Energy Department’s $40 billion clean-energy portfolio, that there will still be over $2 billion in reserves for busted loans no matter how Solyndra shakes out. That’s politics.

But I do want to push back against the idea that Solyndra’s failure reflects some kind of failure of the solar industry. That’s just wrong. The solar industry is on fire, thanks to the same collapse in prices that doomed Solyndra.

In just the last two months, about 7,000 megawatts of new solar projects were added to the U.S. pipeline. That’s the equivalent of seven nuclear reactors, , which is seven more than we’ve built in the last three decades.   [JR:  The lower capacity factor for PV lowers it by about a factor of 4 for nukes, which tend to be large in size — the analogy would be better for fossil fuel plants, which are smaller — JR]. And that doesn’t include residential projects, like the unprecedented “Solar Strong” effort to install photovoltaic panels on 160,000 rooftops on military housing that was just announced last week. The U.S. solar market doubled last year, and it’s expected to double again this year, even though many states are reducing their subsidies. How many other industries are growing that fast in this economy?

Like every other U.S. energy source, solar is federally subsidized. The loan guarantee program has been a particularly crucial driver for unusually large or innovative projects, like Project Solar Strong or a 250-megawatt solar generation plant in the Mojave Desert that just finalized a $1.2 billion loan guarantee on Tuesday, and will provide clean renewable power for more than 50,000 homes. Last week, the Obama administration approved a $150 million loan guarantee to 1366 Technologies, a Massachusetts firm with a new manufacturing process that could cut the cost of silicon wafers 50% and make solar even more cost-competitive.

It’s true that these are tough times for solar-panel manufacturers. Solyndra had a cool technology, but it couldn’t produce panels cheap enough to compete with Chinese manufacturers that received over $30 billion in government funding last year. It’s also true that government loan programs are inherently messy; former Obama economic adviser Larry Summers really hated them. Jonathan Silver, the head of the loan program, once told me he’d stipulate that a strict carbon-pricing regime that penalized fossil fuels for their pollution would be a more efficient way of helping green energy compete on a level playing field. But the same Republicans who are mocking the loan program killed Obama’s cap-and-trade regime.

It never ceases to amaze me how Washington wise men seem to think of renewable energy as some kind of gee-whiz Jetsons technology. I was on some TV show with Sam Donaldson after Fukushima, and he scoffed that maybe we’d have wind and solar someday, but not in his lifetime. Dude! It’s here! Wind is now a bigger employer than coal. Solar is finally scaling up, which is why its costs are falling down. The notion that you have to plunk down $50,000 for a solar system is totally 2008. In much of the country, companies like Solar City and SunRun now finance deals where you plunk down zero dollars to get a panel on your roof, then pay for it with a fixed monthly fee that’s less than what you save on your electric bill.

The collapse of Solyndra is an embarrassing bump on the road to a clean-energy future. Maybe it’s a coincidence that the politicians who are hyping Solyndra tend to be the politicians who want to close that road. But we’re getting farther down the road than people realize. And it’s taking us where we need to go.

Related Post:  Solar Stunner: America is a $1.9 Billion Exporter of Solar Products (source of chart at the top)

Climate investment needs “quantum leap”, says U.N. official

The private sector needs to make a “quantum leap” by joining forces in lobbying efforts, radically changing business models and increasing investment in order to combat climate change, the U.N.’s climate chief said on Wednesday.

Leaders of 193 countries are set to meet for the next annual U.N. climate summit in November in South Africa, where governments will discuss ways to encourage investments to reach at least $100 billion a year by 2020 toward tackling climate change.

Companies that advocate climate change need to have a stronger, unified voice to counteract others that might oppose stronger action, said Christiana Figueres, executive secretary of the U.N. Framework Convention on Climate Change, in a webcast of a meeting of chief executives in London.

EPA Seen Likely to Miss Deadline on Rule for Greenhouse Gas Emissions From Utilities

Hard on the heels of the Obama administration’s decision earlier this month to scrap a new rule for ozone emissions, U.S. EPA appears poised to miss another major regulatory deadline — this time for greenhouse gas emissions.

Environmentalists are reserving judgment about the fact the agency has yet to send its proposed rule for greenhouse gas emissions from utilities to the White House Office of Management and Budget for vetting, a necessary final step before the rule can be released in compliance with the court-ordered deadline of Sept. 30.

But conservationists warn that if the administration delays another important rule for apparently political reasons, it will face stiff opposition from its sometime-allies in the green community.

“It’s starting to look as if EPA might blow another deadline,” said Frank O’Donnell, president of Clean Air Watch. “That would be very disturbing.”

Good Energies Venture Plans 990-Megawatt Wind Farm in Nevada

Champlin/GEI Wind Holdings LLC, a North American wind-energy developer backed by Good Energies Inc., asked state regulators for permission to build a 990- megawatt wind farm in southeast Nevada.

The project would use as many as 350 turbines, according to a permit application filed with the Nevada Public Utilities Commission. The cost wasn’t disclosed.

The project is one of the first proposed by Santa Barbara, California-based Champlin/GEI since its creation in November, after Good Energies agreed to provide as much as $50 million to co-owner Champlin Windpower LLC, a closely held company formed in 2006 to develop U.S. projects.

Florida congressman attacks EPA for ‘going wild,’ using ‘junk science’

Congressman Dennis Ross, R-Lakeland, again slammed the federal Environmental Protection Agency in an appearance today on Fox Business.

Ross has long been vocal in his opposition of the EPA-mandated “numeric nutrient criteria,” a set of standards that would govern water pollution in Florida.

Saying they are based on “junk science,” Ross argued that the criteria would have a deliterous impact on Floridians. “The EPA is going wild, and is not relying on genuine science or logic and reason in its implementation of its regulations,” Ross said. Shortly after, Ross said the EPA is hampering the fishing industry in Florida. “They [the fishing industry] can do a very good job making sure they’re policing it the way it ought to be policed because their livelihoods depend on it,” he said.

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14 Responses to September 15 News: “The Solar Industry Is on Fire,” says Time, So Don’t Be Fooled By Solyndra Bankruptcy Circus

  1. cervantes says:

    The whole point of loan guarantees is to make risky ventures possible. If you weren’t expecting a percentage of them to fail, you wouldn’t need the loan guarantees because the venture could easily raise capital without them. So of course you’re going to have some failures, that’s the whole point.

    duhh.

  2. Sasparilla says:

    Wow, $30 Billion in government support for the Chinese solar manufacturers, just last year? Shaking my head thinking of the direct attacks the solar industry is now getting from half the political parties at the Federal level.

    We better get anti-dumping regs with teeth for that industry in place cause our companies (most of whom produce overseas anyways) won’t be able to last many years swimming against that.

  3. While 7000 megawatts in the pipeline is an outstanding achievement, it is NOT equivalent to 7 nuclear power plants. Solar in good locations like the SF Bay Area, where I live, has a capacity factor of around 20%, which means you have to multiply 7000 times 0.2/0.9 to calculate the equivalent number of nuclear plants on a kWh generated basis, yielding about the equivalent of 1.5 1000 MW nuclear plants (nuclear plant capacity factors are about 90%). That’s still great news, I just want to make sure that people are not mislead by the statement in the first article.

    [JR: Yes, the reporter doesn’t understand capacity factor, so thanks for pointing this out. Of course, it takes 10 years to build a nuclear plant, so it’d be nice to factor that into capacity factor. Also, a great deal of PV delivers electricity directly, so it avoids line losses and replaces peak power.]

  4. Todd says:

    Germany is already tuning its PV project loan conditions to effectively keep out the lower quality Chinese panels. This is done using a set of technology requirements and standards that only the higher quality products can meet, typically made in Germany (surprise), N. America or Japan.

  5. ecospam says:

    “In just the last two months, about 7,000 megawatts of new solar projects were added to the U.S. pipeline. That’s the equivalent of seven nuclear reactors, which is seven more than we’ve built in the last three decades. ”

    How can renewable energy advocate continue saying this kind of complete nonsense over and over?

    [JR: He isn’t a renewable energy advocate. He is a national correspondent for Time. If he were a renewable energy advocate, he’d have gotten the math right.]

    You perfectly know (at least I hope so…) that a given installed PV power (like 1 GW) will not produce the *same amount of energy* over the year compared to a same 1 GW of say nuclear, gas or coal right? Because in average a nuclear, gas or coal will produce between 75 and 90% of the time and a PV station something like between 10 or 15%, so basically a factor between 7 and 9.

    [JR: No. The ratio is more like 4 or 5 — though new nukes are too expensive to build and take 10 years so that is also apples oranges.]

    Installed power is one thing (that make sense when speaking of “peak power” at a precise time), produced energy in another one. Both part of equally important.

    Renewable energy advocate : *please* try to be more focused and precise (more “honest” I would say…) when giving those kind of numbers.

  6. Bill G says:

    Americans just have some innate feeling that fossil fuel is the ONLY way to generate power.

    Our sailboat uses three 75 watt solar panels and a wind generator for electricity (they charge the battery bank). This has worked wonderfully for over 16 years while cruising places like the Caribbean.

    Yet some cruisers will just not trust solar and wind for their power needs, so they buy a generator, listen to it disturb peace at sea, then have to find, buy and lug fuel to their boat over and over again.

    We on the other hand do nothing except benefit by the daily sun and wind power giving us free energy year in and year out. Our KISS wind generator is powerful and silent.

    Somehow this false distrust of anything but fossil fuel generated power must be defeated. It is a completely bogus belief.

  7. Colorado Bob says:

    “It’s an unmitigated disaster,” says Darren Hudson, director of the Cotton Economics Research Institute at Texas Tech University in Lubbock. He says production in West Texas could fall from the 10-year average of about 4.5 million bales to 1.5 million.

    The industry, which employs an estimated 38,000 in the state, generates about $6 billion of economic activity in West Texas. This year may slice that amount by 75 percent, Hudson says.
    http://www.bloomberg.com/news/2011-09-15/record-texas-drought-burning-cotton-farmers-as-their-white-gold-withers.html

  8. James W. Crissman says:

    In my town, Midland, MI, Hemlock Semiconductor, part of Dow Corning, is working full speed ahead, hiring people and increasing capacity to make solar grade silicon. They can’t make it fast enough. And Dow Chemical has invented solar shingles. You simply shingle your house with these things, wire them into your electrical system, and watch the meter run backwards. They’ve also built a huge new car battery plant, and are contemplating expansion almost before it opens. This is the future for those bright enough to see it. The rest will realize it later — too late to invest. BTW, Detroit has tons of idle manufacturing capacity and a Great Lakes port. Good place to make generating wind mills for off-shore placement, eh?

  9. Edith Wiethorn says:

    The only circus is the political & media circus. In the world of sustainable business outside that noisy tent, Chapter 11 is a business reorganization process, wherein the business principles retain control of the company & assets, with legal protection from outside interference while they tune their business model for the next phase, sometimes with the aid of Trustees.

    Wikipedia has a simple description of the differences between a Ch. 11 filing, where businesses re-emerge with an updated revenue model & a Ch. 7 filing, which serves to dismantle a failed business.

    In 2009, the last year for which numbers are readily available, there were 11,785 Ch. 11 filings & 819,362 Ch. 7 filings post GFC: great financial crisis. The names of American companies that have filed Ch. 11 & re-emerged with an updated revenue model are still familiar business names.

    Climate Progress has noted some of the global solar production issues that comprise Solyndra’s ever-changing playing field. I haven’t seen any analysis anywhere of the business credit markets that would have funded Solyndra’s customers for major, commercial, flat-rooftop installations – except that US business credit went moribund with the overall financial crisis.

    A look at Solyndra’s website shows in part how they coped: ~60% of their business clients are overseas. But the rest of the globe has not escaped the effects of the crash of massive derivatives markets & subsequent de-leveraging turmoil, even to sovereign funds. Solyndra had two clients in Greece …

    For an RSS blog with clear perspectives on global finance markets, see Satyajit Das, at Wilmott.

    So – when Solar City seems to have developed an improved business model for “doubling” solar rooftop installations – in fact, they have escaped the prevailing lack of US business credit in the short term by having the US. Government as their paying client for installing PV solar rooftops on homes & buildings on US military bases. Overall, this is a worthy strategic tactic for furthering solar adoption – at the same time it obscures the stalled state of business credit markets in the US.

    Solyndra has brilliant technology for maximizing solar gain from less than maximum solar input, in places such as Germany & the Pacific Northwest; a great track record for delivering performance-value in turbulent financial times; and the confidence of astute investors & customers. An interesting clean-energy-development story to follow is how Paul Allen made Qwest Field stadium in Seattle 100% solar with Solyndra & all local jobs. Now he’s enlisted a larger consortium of sports stadiums into the 100% solar movement. There are several articles posted on the Facebook page for his memoir, Idea Man.

    Solyndra is aptly described by a recent statement from Eric Schmidt, now Chairman of Google:
    “The media loves to report “the death of” something – my sense is that companies don’t die, they morph.”

  10. David B. Benson says:

    From following World Nuclear News, I’ll state that new nuclear power plants (NPPs) take about 50–56 months to build, dated from the end of site preparation to grid connection. But the point about accounting for the construction time in the capacity factor is of interest; I’ll think about it.

    Of course there are some NPPs which take a longer time. I know of one which was 55% completed in 1985. The remaining construction is now being bid. So do we say that this plant took more than 26 years to build? :-)

    • David B. Benson says:

      The FERC has a glossary of terms; we should stick with those. As for plant construction times (any plant), the main issue is the financial burden; account for that by appropriately raising the overnight capital costs, often measured per kilowatt-hour (kWh).

      As for transmission losses, one could again offset that by using vernight capital costs per delived kWh instead of the usual busbar kWh value; the former might be about 5% higher than the latter, but it dpends upon the particular grid.

      However, to compare distributed generation (your very own solar PV, for example) you’ll need the Levelized Cost of Electricity (LCOE) to compare against the retail rate your utility changes you. That retail rate includes all the costs of generation, transmission and distribution; it is the rate you are hoping to better.

  11. prokaryotes says:

    16 Sep 2011: More Americans Believe
    Climate is Warming, Poll Finds

    A new poll finds that the percentage of Americans who believe that the climate is warming has increased in the past year, a shift in opinion that follows one of the warmest summers in U.S. history and increased debate about climate change among Republican presidential candidates. According to the Reuters/Ipsos poll, conducted from Sept. 8 to 12, 83 percent of respondents said they believe the climate is getting warmer, compared with 75 percent last year. Seventy-one percent said they believe human activities are partly or mostly to blame for climate change, while 27 percent said they believe it is the result of natural causes. Stanford University Professor Jon Krosnick said this summer’s wild weather — including prolonged heat waves, droughts in some regions, and flooding in others — is changing public opinion. He also said that discussion of climate issues during recent Republican presidential debates seems to paradoxically have caused more people to believe the climate is warming; most of the Republican candidates have attacked climate science, but Krosnick said those attacks appear to have led more Americans to think about global warming and conclude that, in fact, its is real. While more Americans believe in warming, the poll found that so-called climate skeptics are becoming more entrenched in their positions, with 53 percent saying they are certain in their views, compared with 35 percent last year. A recent Yale survey found that respondents who identify themselves as Tea Party members are much more likely to say they “do not need any more information” on the issue to make up their minds. http://e360.yale.edu/digest/more_americans_believe_climate_is_warming_poll_finds/3124/

  12. Lewis Cleverdon says:

    Sorry – The key sentence above is not correct and should have read:

    “This gives a net import value of $221M, which is very different from the conflated figure of a net export value of $1,880M.”