Preview Newsletter
SFCE October 14
-
Leading solar entrepreneur to put business into liquidation
Oct 14, 2015 | The Guardian
By Terry Macalister
One of Britain’s leading solar entrepreneurs is set to announce that his business has gone into liquidation, in the third high-profile casualty for the sector this month. Howard Johns, the former chairman of the Solar Trade Association and a government adviser on renewable energy, is expected to blame the collapse of Southern Solar on the government for failing to support the industry properly. Earlier this month the Department of Energy and Climate Change (DECC) denied that proposed cuts of 87% in solar subsidy levels have tipped solar companies into crisis. -
Solar Overtakes Wind As Australia’s Number One Renewable Energy
Oct 14, 2015 | Clean Technica
By Joshua S Hill
Solar PV became Australia’s number one source of renewable energy in 2014, passing 4 GW of installed capacity, overtaking wind’s 3.8 GW. The new figures came by way of energy insight company, GlobalData, and its new report, Asia-Pacific Renewable Energy Policy Handbook 2015, which details renewable energy policy measures and incentives throughout the Asia-Pacific region. -
Renewable Energy Financing Hits a Snag
Oct 11, 2015 | New York Times
By Diane Cardwell
Only a few months ago, it seemed that the renewable energy sector could do little wrong: Stock prices were soaring and money was pouring in as investors flocked to get in on the action. That is no longer the case. Low oil and gas prices have roiled the energy markets, and the specter of rising interest rates has rattled investors’ confidence in the industry’s returns. Although energy and financial experts say that the basics of the business remain sound, the lofty stock prices have tumbled, leading renewable energy companies to scramble for new approaches to their businesses. -
Sunrun: Conservative Support for Solar Puts ITC Deal Within Reach This Year
Oct 13, 2015 | Greentech Media
By Bryan Miller
New polling conducted by three prominent GOP pollsters shows that 83 percent of Republicans support ramping up clean energy sources like solar. But most GOP lawmakers already knew that. Solar’s popularity among the conservative base has helped it grow at the state level for years. Case in point: Last year, South Carolina Republican Governor Nikki Haley signed historic legislation to open the market to competitive solar leasing, and this year, New Jersey Republican Governor Chris Christie supported solar by extending net metering. -
Brazil Approves Higher Auction Rate for Solar and Wind Energy
Oct 14, 2015 | Bloomberg Business
By Vanessa Dezem
Brazil approved higher rates for wind and solar farms that are planning to participate in an energy auction next month as the country’s currency slumps. The energy regulator Aneel approved a ceiling price of 381 reais ($97.86) a megawatt-hour for solar projects, according to a statement Tuesday. That compares with a maximum price of 349 reais a megawatt-hour in a similar auction in August. It also set a ceiling price of 213 reais a megawatt-hour for wind farms.
Industry News
-
Leading solar entrepreneur to put business into liquidation
Oct 14, 2015 | The Guardian
By Terry Macalister
One of Britain’s leading solar entrepreneurs is set to announce that his business has gone into liquidation, in the third high-profile casualty for the sector this month.
Howard Johns, the former chairman of the Solar Trade Association and a government adviser on renewable energy, is expected to blame the collapse of Southern Solar on the government for failing to support the industry properly. Earlier this month the Department of Energy and Climate Change (DECC) denied that proposed cuts of 87% in solar subsidy levels have tipped solar companies into crisis.
The latest collapse comes as the National Grid is expected to confirm that Britain faces the highest risk of blackouts in almost a decade this winter.
The company founded by Johns has played a major role installing solar power systems for schools, local authorities and businesses.
Its failure will add to the pressure on Amber Rudd, the energy and climate change secretary, to find a way of averting a growing crisis in the sector.
Lisa Nandy, the shadow energy secretary, accused the government on Twitter of overseeing a “chaotic energy policy (that) is putting jobs at risk particularly because of the severe cuts they have made to solar energy schemes”.
Speculation about the future of Southern Solar soured an already troubled atmosphere at the Solar UK trade show in Birmingham this week.
One delegate at the show, Jonathan Selwyn, managing director of another leading solar company, Lark Energy, said the industry was steeled for more business failures. “We are all pretty angry. Every company I know is thinking about redundancies.
“More companies will go bust if the government does not change track. This just puts more people on benefits. It really does not add up as a sensible government policy.”Advertisement
Selwyn and other executives insist the industry wants to move quickly to a point where it does not need more financial aid.
Last week, almost 1,000 jobs were lost when the Leicester-based Mark Group was put into liquidation. Climate Energy quickly followed, putting a further 128 jobs at risk.
In Whitehall, DECC insists that renewable power must learn to live with zero or lower subsidies. It argues that consumer bills are being driven up by the cost of green energy and solar barely needs financial aid given a fall in industry costs.
The introduction of a levy control framework by the government means the total amount of cash made available to renewables and other technologies is capped. The industry insists the blame for this lies with George Osborne’s austerity programme at the Treasury rather than at the DECC.
Johns was unwilling to comment ahead of a formal announcement on Thursday when he is expected to launch an angry attack on the way he feels his business has been let down by the government.
One of the early pioneers of the British solar scene, Johns was chairman of the Solar Trade Association from 2007-12 and sat on a heat and water taskforce advising ministers on generating heat from renewable sources. He also founded a community energy cooperative, Ovesco, and is a trained plumber as well as holding a degree in energy and environmental technology.
Southern Solar has already laid off some staff in the past 12 months and more will now follow.
The Solar Trade Association lobby group has told the government that the industry’s long-term survival could be guaranteed by extending subsidies for four more years. But it said “draconian cuts” now will sink a major British success story at a time when ministers are doing all they can to support new nuclear plants.
The STA has previously warned that as many as 27,000 jobs could be in danger and has pointed out that there have been a series of earlier cuts in subsidy levels over many years.
http://www.theguardian.com/environment/2015/oct/14/leading-solar-entrepreneur-to-put-business-into-liquidation?CMP=share_btn_tw
-
Solar Overtakes Wind As Australia’s Number One Renewable Energy
Oct 14, 2015 | Clean Technica
By Joshua S Hill
Solar PV became Australia’s number one source of renewable energy in 2014, passing 4 GW of installed capacity, overtaking wind’s 3.8 GW.
The new figures came by way of energy insight company, GlobalData, and its new report, Asia-Pacific Renewable Energy Policy Handbook 2015, which details renewable energy policy measures and incentives throughout the Asia-Pacific region.
According to GlobalData’s accompanying press release, the report “states that renewables have become an integral part of the energy policy in Australia” — which could be argued, depending on GlobalData’s meaning here. While renewable energy is indeed an integral part of energy policy here in Australia, this is only the case insomuch as you consider the amount of time spent arguing about renewable’s place in energy policy here in Australia. There are any number of examples across Australia that show renewable energy is not an integral part of existing energy policy.
Nevertheless, recent leadership changes in Australia have bolstered renewable energy’s role in the future of Australia’s energy policy and energy mix, which bodes well for the future of the industry.
“The government recently announced the revised Renewable Energy Target (RET) to support emission-intensive industries and slightly reduced the RET from 41 Terawatt hours (TWh) to 33 TWh,” explained Siddhartha Raina, GlobalData’s Senior Analyst covering Power. “Despite this, new renewable energy capacity of 6 GW still needs to be installed by 2020.”
Despite all of the flux around Australia’s renewable energy industry over the past few years, GlobalData points to the continued growth of Australia’s solar PV industry, which in 2014 reached 4 GW of installed capacity, overtaking wind power’s 3.8 GW.
GlobalData also believes that, while solar and wind will continue their role as the two main renewable energy technologies in Australia, bioenergy is next to make a move.
“While feed-in tariffs and renewable energy target schemes, along with other subsidies and support initiatives, have had a major impact on the solar PV and wind industries, the impact of such programs on biopower and small hydro has been minimal,” Siddhartha Raina explains.
“Despite this, strong government backing is expected to promote stable growth in the bioenergy sector. Bioenergy capacity amounted to 573.9 Megawatts in 2014 and is expected to more than treble to 1.8 GW by the end of 2025.”
http://cleantechnica.com/2015/10/14/solar-overtakes-wind-as-australias-number-one-renewable-energy/
-
Renewable Energy Financing Hits a Snag
Oct 11, 2015 | New York Times
By Diane Cardwell
Only a few months ago, it seemed that the renewable energy sector could do little wrong: Stock prices were soaring and money was pouring in as investors flocked to get in on the action.
That is no longer the case. Low oil and gas prices have roiled the energy markets, and the specter of rising interest rates has rattled investors’ confidence in the industry’s returns. Although energy and financial experts say that the basics of the business remain sound, the lofty stock prices have tumbled, leading renewable energy companies to scramble for new approaches to their businesses.
Nowhere has the retrenchment been more acute than in a newfangled financing mechanism called a yieldco. Yieldcos, public companies conceived by renewable energy companies as a way to raise cheaper capital for project development, have attracted billions in new investments.
The yieldcos buy and operate power plants, mainly those that their parent companies develop. The yieldcos then collect the contracted electricity fees and pay the bulk of them out as dividends. With investors hungry for stable returns, energy yieldcos were greeted with enthusiasm through initial public offerings of their stocks over the last year and a half.
Last week, though, one of the most aggressive companies in the sector called a timeout.
SunEdison, which has bought several companies in recent months in a bid to become the world’s largest renewable energy developer, told investors it would not sell any more projects to its yieldcos, TerraForm Power and TerraForm Global, until conditions change. The company said it would trim expenses and streamline operations, including reducing project development by 20 percent, withdrawing from Britain and cutting roughly 15 percent of its work force.
“We need to adjust our tactics, at least in the short to intermediate term,” Ahmad R. Chatila, SunEdison’s chief executive, said in a conference call with financial analysts on Wednesday.
That adjustment is hardly unique to SunEdison, or even to yieldcos. Last month, NRG Energy announced that it would separate its once-heralded green enterprises — which include a home solar division and an electric vehicle charging network — into a separate company with a tight budget. It also said it would pursue a more limited strategy with its yieldco. On Tuesday, Moody’s Investors Service downgraded that company, NRG Yield, saying the 30 percent decline in its share price in recent months would inhibit its ability to raise money for new projects.
Still, executives and analysts say that the industry’s long-term prospects remain sound.
“Since July, the sun has continued to shine and the wind has continued to blow and the performance of the wind farms and solar farms that are in the ground hasn’t changed at all,” said Paul Coster, an analyst at J. P. Morgan. “This is really in large part turmoil of the market’s own making.”
Nonetheless, that market churn is complicating efforts to push renewable energy to mass scale at a critical time in its development. As subsidies, incentives and mandates totter on the brink of planned and potential extinction, it is more important that the industries reduce costs to compete in the marketplace, experts say. Yieldcos were to be an important part of solving that puzzle. Without them, advocates say, it may be harder to reach that goal.
AdvertisementContinue reading the main story
“Initially there was some euphoria and some market overreaction to the idea,” said Aneesh Prabhu, a credit analyst at Standard & Poor’s. “But the bloom has come off the rose.”
The idea behind yieldcos was simple on its face: Bundle together completed or nearly completed power projects that ostensibly offered steady, low-risk cash flows in the form of power purchase agreements covering electricity payments over 15 years or so. Because they were tied to power plant developers — including Abengoa, NextEra Energy and Pattern Development — the yieldcos would have steady pipelines of projects from the parent companies and the parent companies could replenish their capital through those sales.
Part of the rationale was that energy development is expensive and renewable energy projects do not have access to tax-advantaged financing mechanisms like master limited partnerships. Those partnerships have spurred the building of oil and gas infrastructure like pipelines over the decades. “This was an inventive twist on master limited partnerships, and provided some of the same benefits,” said Dan W. Reicher, executive director of the Steyer-Taylor Center for Energy Policy and Finance at Stanford. But, he said, they do not get all the tax benefits.
Nonetheless, for a while, the system proved attractive to investors, and analysts and clean-energy advocates predicted ever more activity and success in the sector. More than a dozen yieldcos have formed since 2013, and many have gone public, including 8point3 Energy Partners, a joint venture of First Solar and SunPower that raised $420 million in its initial public offering in June.
But as yieldcos proliferated — each with a hunger to bring in new projects to satisfy investor demand for growth — they drove up competition and prices for projects. Investors began to lose confidence that there would be enough projects to go around. In addition, the threat of rising interest rates made the yieldcos less attractive than more conventional financing. And depressed prices for oil and gas brought down energy values over all.
“Your growth story is only as good as your last project or your pipeline that you’re projecting,” said John J. Marciano III, a lawyer at Chadbourne & Parke who focuses on the development, financing, purchase and sale of energy and infrastructure projects and aviation equipment. “Once one started to go down, the others just probably followed the pack.”
Several analysts and executives attributed the declines to a mismatch between the investors — which include hedge funds looking for a relatively quick return — and the investments, intended to pay back over a long time. Others said investors who were losing money in oil and gas began dumping their renewable stocks to cover those losses.
Either way, the new companies became caught in a kind of self-reinforcing downward spiral in which the drop in share prices raised dividend yields, making it more expensive to borrow money or issue equity. That, in turn, lowered the returns on new projects and pushed down share prices even more.
“Pretty soon, a number of investors got scared to the point of saying, ‘Look, do we really understand this model and is it broken?’ ” said Michael Garland, chief executive of Pattern Development and Pattern Energy Group. He and others argue that the model works but must go through a market correction and attract different kinds of investors.
At SunEdison, one of the most prominent companies involved, there were additional pressures. Its acquisition spree — especially its purchase in July of Vivint Solar, a fast-growing rooftop solar installer that markets its services to residential customers — left investors wary and confused. Executives at SunEdison, whose stock has declined by 70 percent since the Vivint announcement, acknowledged last Wednesday that they needed to do a better job of explaining to investors what they were doing and why.
Despite all the turmoil, executives say interest in clean energy remains robust. “There may not be that much enthusiasm for yieldcos, but the pendulum has swung to the opposite direction,” with private lenders and corporations making investments, said Lyndon Rive, chief executive of SolarCity. That company has not yet created a yieldco but Mr. Rive said it was “keeping an open mind” to the approach, saying, “Financing is still very strong.”
http://www.nytimes.com/2015/10/12/business/energy-environment/renewable-energy-financing-hits-a-snag.html?_r=0
-
Sunrun: Conservative Support for Solar Puts ITC Deal Within Reach This Year
Oct 13, 2015 | Greentech Media
By Bryan Miller
New polling conducted by three prominent GOP pollsters shows that 83 percent of Republicans support ramping up clean energy sources like solar. But most GOP lawmakers already knew that.
Solar’s popularity among the conservative base has helped it grow at the state level for years. Case in point: Last year, South Carolina Republican Governor Nikki Haley signed historic legislation to open the market to competitive solar leasing, and this year, New Jersey Republican Governor Chris Christie supported solar by extending net metering.
Now we’re seeing this same conservative support bubble up to the federal level. Legislators will decide this year whether to give certainty to the solar industry by acting on the solar Investment Tax Credit. The ITC is a 30 percent federal tax credit for solar systems and the fundamental policy that’s helped bring close to 200,000 solar jobs to the U.S. over the past decade. Conservative lawmakers aren’t being shy about their support for this critically important policy.
Republicans like Nevada Senator Dean Heller and Ohio Senator Rob Portman have been vocal proponents of extending the ITC. They are providing necessary leadership. These lawmakers know that solar is popular, but now they’re also arguing that supporting it through the tax code is about parity.
The ITC is the sole federal tax incentive that goes to the solar industry, and it helps level the playing field against dozens of tax cuts and decades of preferential treatment for fossil fuels. The most recent data from IEA shows that globally, fossil fuels receive more than four times the amount of subsidies as renewable energy.
National groups like the Christian Coalition are weighing in saying it’s about parity, and about being good stewards of the earth.
And of course, it’s also about jobs. If the ITC isn’t extended, Nevada could go from the fastest-growing solar market in the country, with the most solar jobs per capita, to a state with thousands of unemployed workers. States all over the country will feel the effects.
Recent analysis from Bloomberg New Energy Finance and the National Renewable Energy Laboratory shows that failure to extend the ITC would result in 7,000 small businesses closing and up to 100,000 U.S. employees losing their jobs.
Solar is popular and it comes with a myriad of benefits. Failure to include solar in legislation this year isn’t fair, and it could decimate the industry. Republican and Democratic lawmakers alike understand these arguments.
And that’s why there’s hope for a deal this year.
http://www.greentechmedia.com/articles/read/sunrun-conservative-support-for-solar-puts-itc-deal-within-reach-this-year
-
Brazil Approves Higher Auction Rate for Solar and Wind Energy
Oct 14, 2015 | Bloomberg Business
By Vanessa Dezem
Brazil approved higher rates for wind and solar farms that are planning to participate in an energy auction next month as the country’s currency slumps.
The energy regulator Aneel approved a ceiling price of 381 reais ($97.86) a megawatt-hour for solar projects, according to a statement Tuesday. That compares with a maximum price of 349 reais a megawatt-hour in a similar auction in August. It also set a ceiling price of 213 reais a megawatt-hour for wind farms.
The real has declined more than 60 percent since Oct. 31, when more than 1 gigawatt of solar farms won contracts in the country’s first-ever national solar auction. That’s making imported solar panels and wind turbines more expensive.
In Brazil’s energy auctions, regulators set a ceiling price and developers bid down the price at which they are willing to provide electricity from planned projects. The lowest bids win contracts to sell power.
Energy developers in Brazil applied to sell power from 1,379 plants with a total of almost 39 gigawatts of capacity in the Nov. 13 auction, according to Brazil’s energy research agency EPE. That includes 20.9 gigawatts of solar capacity and 17.9 gigawatts of wind power.
http://www.bloomberg.com/news/articles/2015-10-13/brazil-approves-higher-auction-rate-for-solar-and-wind-energy
Industry News
Add recipients
Suggested