The Green Skeptic on FOX Business: Solar Energy, Disgruntled Environmentalists and Rising Gas Prices

I sat down with Stuart Varney this morning on FOX Business News for a lightning round on solar power competitiveness versus conventional electricity, an environmentalist's dissatisfaction with Obama's lack of leadership on environmental issues, and $5 dollar gas.

Here's the video:



And here is a link in case your browser doesn't support the player:

http://video.foxbusiness.com/v/1457836159001/

Always fun to do these lightning rounds with Stuart.

Have a great weekend!

Cheaper Solar Energy Through Leasing: The Green Skeptic on LunchBreak

I sat down today with Wendy Bounds of WSJ.com's new LunchBreak program to talk about solar leasing and two companies, SolarCity and SunRun, making solar energy generation more affordable for homeowners.

Here is the video:



And her is a link to the program: The Green Skeptic on WSJ.com's LunchBreak

When Too Much (Solar) Success Is a Bad Thing

New Jersey is known as the "Garden State," but drive through it these days and you see a different kind of harvest: solar energy.

You'll find solar panels on large suburban homes and apartment complexes, solar panels on many of the light poles, solar panels on large warehouse facilities, and box stores.

There's even a 7,000-panel, 1.4-megawatt (MW) solar installation on the Livingston, NJ, Campus of Rutgers University. And last fall one of the largest solar developments in the country -- a 20 MW solar farm – sprouted up on former farmland in Pilesgrove.

In April, the state's Board of Public Utilities announced it had exceeded 300 MW of installed capacity and over 8,000 projects statewide.

New Jersey became a solar leader – second in the nation to California -- through an aggressive Solar Renewable Energy Certificate (SREC) program. To meet state Renewable Portfolio Standards (RPS) utilities purchase SRECs -- tradable certificates equal to 1000 kilowatt-hours (kWh) of electricity -- from producers.

But after several years of high, stable SREC prices – the NJ SREC spot market price increased from September 2008 to March 2009 – those prices have plummeted over the past few months.

Chart by EnterSolar

According to EnterSolar, a leading provider of solar photovoltaic systems for corporate customers in the Northeast, the price dropped from over $600 in May to almost $200 currently.

"The New Jersey solar market is coming out of a short-term installation boom," Peyton Boswell, managing director of EnterSolar, wrote in an email to me. "That was unsustainable in the sense that the solar MW capacity developed and installed was far in excess of what is required under the state's RPS."

Boswell remains optimistic about the long-term prospects for New Jersey's solar market. "It will remain vibrant over the long-haul -- over the next 10 years, but we are very concerned that the next 1-2 years could be extremely tough going."

As New Jersey State Senator Bob Smith (D) told the Philadelphia Inquirer recently, "We've done such a good job at stimulating solar that the market is now crashing."

Smith has sponsored a bill that will accelerate by one year requirements for how much renewable energy must be produced, which in turn will force power companies to buy more SRECs.

The question remains whether the government propping up the solar market further will have the desired effect when it is facing what is a fairly typical supply and demand problem.

"The basic SREC market structure in New Jersey is sound," says EnterSolar's Boswell. "Like many markets, there is a propensity for over-reaction and we think we are seeing that play out right now with SREC pricing."

What is needed, in Boswell's opinion, is for solar system owners to be able to sell long-term SREC contracts, exchanging lower SREC pricing for longer-term stability.

Another flaw in the New Jersey program, according to Boswell, is that all SRECs are treated equally, including those for both large-scale wholesale solar farms and distributed solar net-metered projects.

Boswell suggests it "would be better if these two types of solar installations were treated differently from an SREC standpoint as the project costs and related Internal Rates of Return (IRR) are dramatically different -- a 10-MW solar farm installed at $3/W can generate a far higher IRR given the same SREC price than a 1-MW rooftop net-metered system at same SREC price."

Sometimes too much success is too much of a good thing. For New Jersey's solar market, it sounds like some basic structural fixes may have more positive impact than accelerating an already flawed system.

Applied Materials' "Dr. Solar" Does "Ask Me Anything" Chat for Solstice

Dr. Charlie Gay, Applied Materials, on his computer.

To celebrate the Summer Solstice yesterday, Dr. Charlie Gay, a veteran of the solar energy space and currently Applied Materials' president of solar, participated in a "live" chat on Reddit.com.

"Dr. Solar," as he’s known in the industry, has been a proponent of solar energy since 1975 and fielded questions on a variety of topics, including China-US cooperation, solar and renewables as part of the energy mix, and even what you should do if you're considering a career in solar energy.

Gay has a 36-year career in the solar energy space, so his insights are worth searching for in the mix of questions and commentary by some of the participants:

Charlie Gay ‘Ask Me Anything’ LIVE on Reddit

 (Thanks for the head's up from Steve Place of StockTwits.  Disclosure: No position in AMAT. )

Clean Energy Trends 2010: Hope Springs Eternal

Green shoots are starting to poke up out of the ground in my yard, a sure sign that Spring is on its way.

Hope springs eternal for the cleantech sector as well, according to the folks who bring us the Clean Energy Trends annual report, despite the downturn in the overall economy and failure at Copenhagen.

The 2010 report was issued today by Clean Edge Inc., a research and publishing firm devoted to the cleantech sector.

In 2009, according to the report, "combined global revenue for the three major clean-energy sectors – solar photovoltaics (PV), wind power, and biofuels – grew by 11.4 percent over 2008, reaching $139.1 billion."

These three sectors are expected to reach $325.9 billion by 2019, according to Clean Energy Trends 2010.

Venture investing in the sector declined, according to Bloomberg New Energy Finance and quoted in the report, but as a percentage of overall venture funding the sector share increased from 11.4 percent in 2008 to 12.5 percent in 2009.

Readers of The Green Skeptic will be particularly interested on the report's take on China.

China was just a minor player five years ago and now leads the race for cleantech dominance. However, according to Ron Pernick and Clint Wilder, the principal authors of the report, despite the country's surge, it is "too early to declare China the de facto winner."

"No one country or region will lead in all energy sectors," the authors reported on a conference call this morning. "China also faces significant challenges dealing with air and water pollution, and entrepreneurship is difficult there."

This last point contradicts MIT political scientist and China expert Ed Steinfeld's assertion that China is "one of the most entrepreneurial places on earth," which appeared in a Business Week article last Friday. (The article cited China's rate of self-employment far exceeds that in the U.S.—51.2 percent to 7.2 percent.)

Nevertheless, as Pernick said in an interview after today's conference call, "The challenge for China is can you build cleantech on the back of polluted air and waters?"

Their sense is that China is working on this issue simultaneously with the cleantech build-out. "And they are taking the opportunity to leapfrog where they can," Pernick said.

Key findings of the Clean Energy Trends report include:

• The global production and wholesale pricing of ethanol and biodiesel reached $44.9 billion in 2009 and is projected to grow to $112.5 billion by 2019. In 2009, the biofuel market consisted of more than 23.6 billion gallons of ethanol and biodiesel production worldwide.
• Wind power (new installation capital costs) is projected to expand from $63.5 billion in 2009 to $114.5 billion in 2019. Last year’s global wind power installations reached a record 37,500 MW. China, the first-time global leader in new installations, accounted for more than a third of new installations, with 13,000 MW
• Solar PV will grow from a $30.7 billion industry in 2009 to $98.9 billion by 2019. New installations reached almost 6 GW worldwide in 2009, a nearly sixfold increase from five years earlier. But because of rapidly declining solar PV prices, industry revenue in 2009 fell about 20 percent, from $38.5 billion in 2008.
• The global solar PV and wind power industries together currently account for a total of more than 830,000 jobs worldwide. By 2019, global industry growth will push the total to more than 3.3 million jobs.

The report also includes an IPO Watch List tracks clean-technology companies that have recently filed for IPOs, including Codexis, Fallbrook Technologies, Solyndra, and Tesla Motors, as well as other likely candidates, such as Silver Spring Networks.

Finally, the authors identify 5 key trends for the coming years:

• Carbon as a Feedstock (They cite the Khosla-backed Calera and its captured-carbon cement, which may see investment from Peabody Coal)
• Steep PV Price Drops Redefine the Solar Industry (Companies to watch include FSLR, Sharp, SunPower, Trina Solar, and MEMC Electronic Materials)
• Biomass Utilities and District Heating (Adage Biopower, District Energy St. Paul, First Energy, Viessman, and Xcel are among their comapnies and projects to watch)
• Clean-Tech Megaprojects (Masdar City has delayed its construction targets; China has apparently abandoned plans for Dongtan, a new eco-city near Shangai; although hope is on rise for two solar megaprojects in China from FSLR and eSolar);
• High Speed Rail (China leading the way again; Central Japan Railway has two maglev joint ventures in the US)

Once again, the Clean Edge guys have provided a good overview of the state of cleantech trends. This is valuable information for investors and entrepreneurs in the sector.

For more information about the Clean Energy Trends 2010 report or the other research conducted by Clean Edge, go to http://www.cleanedge.com./

(Disclosure: I hold long positions in FSLR. This post is for informational purposes only and is neither intended to be investment advice nor an offer, or the solicitation of any offer, to buy or sell any securities.)

On Obama's Address to Joint Session of Congress and His Energy Investments

Tonight President Barack Obama addressed concerns that many of us were feeling the past few weeks, that the President who rode in on hope had changed to the steed of despair.

His address tonight was to the Joint session of Congress, but he was also delivering a message to the American people: "We will rebuild, we will recover, and the United States of America will emerge stronger than before."

He needed to reassure us that his economic solutions were not a pump and dump play, that he remains confident and hopeful that the American people have the wherewithal to succeed.

"It begins with energy," Mr. Obama said. "We know the country that harnesses the power of clean, renewable energy will lead the 21st century. And yet, it is China that has launched the largest effort in history to make their economy energy efficient. We invented solar technology, but we’ve fallen behind countries like Germany and Japan in producing it. New plug-in hybrids roll off our assembly lines, but they will run on batteries made in Korea."

All valid points and something a number of us have been saying for some time: we need to lead in this space and others are already at the table.

President Obama sounds much like candidate Obama on this point, "I do not accept a future where the jobs and industries of tomorrow take root beyond our borders – and I know you don’t either. It is time for America to lead again."

He is still calling for doubling the US supply of renewable energy in the next three years, and for laying down "thousands of miles of power lines that can carry new energy to cities and towns across this country."

Even energy efficiency got its due: "We will put Americans to work making our homes and buildings more efficient so that we can save billions of dollars on our energy bills."

He pushed the point further by saying that "to truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy."

He asked Congress to send him legislation that "places a market-based cap on carbon pollution and drives the production of more renewable energy in America."

In support of that, he outlined how the US "will invest fifteen billion dollars a year to develop technologies like wind power and solar power; advanced biofuels, clean coal, and more fuel-efficient cars and trucks."

I got some flak for defending clean coal in Obama's list. (It's okay, I'm used to it.) I simply think we need to invest in figuring out whether clean coal technologies CAN be developed before we dismiss it outright. (Someone on Twitter reminded me of GreenFuel Technologies Corporation, which "recycles" CO2 emissions using high-yield algae farms. The CO2 recyclers seemed to get stiffed in the StimPack, which is unfortunate in my view.)

I'd like to see more details and look forward to tracking this as it develops.

For now, the message was positive: "We can and will," rather than, "Holy Shit, this is worse than I thought." Thank you, speechwriters!

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Clean Tech: Senate Extends Renewable Energy Tax Credits

Image via WikipediaLate Tuesday afternoon the Senate voted to extend renewable energy tax credits for the wind and solar industries. The final tally: 92-3; a surprising slam dunk.

Surprising because the tax credits had been held hostage by partisan politics for much of this year and, as deadlines loomed, it didn't look good for getting it passed.

But concern on both sides of the aisle about the economy and energy forced the hand of compromise. Extending the credits now also happens to secure something on the order of 115,000 jobs and at least $19 billion in renewable energy investments.

This is a good thing and has largely gone unnoticed in all the hullabaloo around the $700B Bailout plan. And, I believe, this has the potential to have more and longer impact on the economy than Paulson's Power Play.

Why? Because this investment in the new green economy can unleash opportunities for alternative energy investors and companies, opportunities that have been waiting in the wings for too long.

The Bill, known as the Energy Improvement and Extension Act of 2008, stipulates

* $18 billion in tax credits for using wind, solar, and geothermal
energy sources.
* 30 percent tax credit for the purchase of residential, commercial, and
utility-scale solar PV systems with no cap for eight years.
* Extension of the production tax credit for wind for one year.
* Extension of tax credits for wave and ocean tidal energy.
* Qualification for residential and commercial small-scale wind and geothermal heat pumps.
* Taxpayers subject to the Alternative Minimum Tax are now eligible for the tax credit.

Removing the cap for the maximum available 30 percent tax credit is a big deal for for both residential and commercial solar project developers. The previous cap was a paltry $2,000, which doesn't go far with most solar projects.

Now financiers of larger projects are eligible to get back at least 30 percent of their investment with no cap. And those who were on hold waiting for tax credits to pass, may now be gearing up.

In addition, utilities, which heretofore were not allowed to receive solar tax credits, are now able to realize the benefits. This could increase solar spending among utilities in states requiring minimum percentages of electricity from renewable resources.

Effects of the passing of this legislation were already having an impact on solar stocks yesterday.

Now it's up to the House to polish it up and for President Bush to put his veto stamp away. He has, according to sources familiar with the situation, expressed his support for renewable energy tax credits and even the ATM provisions.

We'll see.

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Clean Tech: Biomimicry May Unlock the Power of Solar

"In a revolutionary leap that could transform solar power from a marginal, boutique alternative into a mainstream energy source, MIT researchers have overcome a major barrier to large-scale solar power: storing energy for use when the sun doesn't shine."

Read the full story by Anne Trafton from MIT and watch Dan Nocera's video description: http://tinyurl.com/5uu53h

Click To Play

(Composed on BlackBerry; UPDATED with embedded video content.)