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SFCE Dec 10
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Shunfeng Will Gain Some Ground In USA By Acquiring Suniva
Dec 9, 2015 | Seeking Alpha
Shunfeng International Clean Energy (OTCPK:SHUNF) is amongst the largest manufacturers of solar products in China. The company became a big player in the solar energy industry after acquiring the distressed Suntech, which increased its production capacity and enhanced its solar capabilities. The company has been using acquisitions... -
More Solar Manufacturers Are Focusing on Sustainable Practices
Dec 10, 2015 | Solar Novus Today
The Silicon Valley Toxics Coalition (SVTC) today released its Sixth Annual 2015 Solar Scorecard, which ranks manufacturers of solar photovoltaic (PV) modules according to a range of environmental, sustainability and social justice factors. This year’s respondents of PV companies more than doubled from last year... -
Photovoltaic solar panel market 2015 approach to $125.5 billion globally by 2016 according to new research report
Dec 10, 2015 | WhaTech
Large solar farms are more popular initially, but solar is anticipated to be built out on commercial roof tops in increased quantity. The electricity generated will be fed to local substations and distributed to homes from there. The electricity generated will be used for both stationary power and to charge electric vehicles. -
China to Require Companies to Submit to Clean Production Audits
Dec 10, 2015 | BNA Daily Environment Report
By Michael Standaert
China will take its voluntary clean production policies to a new level by requiring specific companies to undergo mandatory audits of their clean production practices, according to a draft document for public comment the Ministry of Environmental Protection and the National Development and Reform Commission (NDRC) jointly released Dec. 9. -
U.S. Solar Installations on Pace for Record Year
Dec 10, 2015 | BNA Daily Environment Report
The U.S. solar industry is on pace for a record year after adding 1.4 gigawatts of capacity in the third quarter. The fourth quarter is likely to be the largest in the industry's history, with more than 3 gigawatts of installations expected, the Washington-based Solar Energy Industries Association said in a report Dec. 9. -
Anger over threat of VAT hike on renewable energy
Dec 10, 2015 | The Guardian
By Terry Macalister and Emma Howard
The government has shocked the renewable energy industry by proposing a massive hike in VAT on solar panels and wind turbines from next summer. The moves, announced by the revenue and customs authority, HMRC, made “a mockery of (David) Cameron’s claims to climate leadership” say critics and come amid proposed cuts of almost... -
UK: proposed tax hike on solar panels could heap further pain on industry Read more: http://www.pv-magazine.com/news/details/beitrag/uk--proposed-tax-hike-on-solar-panels-could-heap-further-pain-on-industry_100022378/#ixzz3tuh3Q2ps
Dec 10, 2015 | PV Magazine
By Ian Clover
The British solar industry is readying itself for a further blow this week following confirmation that the U.K.’s tax regulator, Her Majesty’s Revenue & Customs (HMRC) has opened a consultation to remove a tax relief for solar panels (and solar thermal systems) from August 1 next year. -
Solar advocates warn of slump without extenders lifeline
Dec 8, 2015 | PoliticoPro
By Esther Whieldon
The solar industry is running out of time to secure a key expansion of its tax credit, and advocates warn that if Congress fails to act developers will struggle to finance new projects and the pace of new investments will slow. -
Ontario Funding Charging Stations for Electric Cars
Dec 10, 2015 | BNA Daily Environment Report
The Ontario government will invest C$20 million ($15 million) in 2016 to build additional public charging stations for electric vehicles, the Ontario Ministry of the Environment and Climate Change said Dec. 8. The funding from the C$325 million ($237 million) Ontario Green Investment Fund will provide grants to public and private sector partners... -
IBM Broadens Push in China, India on Air Quality Projects
Dec 10, 2015 | BNA Daily Environment Report
International Business Machines Corp., which has been developing artificial intelligence to help fight Beijing's toxic air pollution, plans to work with other municipalities in China and India on similar projects to manage air quality. -
Africa Renewable energy project receives $10 billion in backing
Dec 10, 2015 | ZME Science
By Mihai Andrei
A very ambitious initiative could make Africa the cleanest continent – Africa Renewable Energy Initiative (AREI) an African-led plan to add 10,000 MW of additional renewable energy on the continent by 2020, has received over $10 billion in funding from international sources at COP21.
Shunfeng/Suniva News
Suntech News
Industry News
Full Text of Stories Below
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Shunfeng Will Gain Some Ground In USA By Acquiring Suniva
Dec 9, 2015 | Seeking Alpha
Shunfeng International Clean Energy (OTCPK:SHUNF) is amongst the largest manufacturers of solar products in China. The company became a big player in the solar energy industry after acquiring the distressed Suntech, which increased its production capacity and enhanced its solar capabilities. The company has been using acquisitions to capture market share. The latest acquisition being USA based solar energy company Suniva Inc. in which Shunfeng bought a 63% stake. This is expected to drive stronger sales volume in USA, as Suniva's production will not be affected by USA anti-dumping duties. Shunfeng reported improved revenues and volume numbers in the first half of the year and also maintains a healthy pipeline of downstream projects in China. I remain bullish about the stock, given its reach across the global solar value chain.
Why will Shunfeng gain
1) Shunfeng will benefit greatly from Suniva's acquisition - According to GTM Research, Suniva Inc ranks second in terms of total capacity as a silicone panel manufacturer in USA and with Shunfeng's investment, plans to increase its manufacturing capacity by 400MW within one year. Shunfeng will benefit from acquiring Suniva as it is not only a manufacturer of high-efficiency solar cells and modules but it will also help Shunfeng increase its distribution network in USA. Since Suntech products carry a cumulative duty of more than 50% when shipping to USA, Suniva's products will allow Shunfeng to compete effectively in the world's second largest market. Moreover, Suniva's products will be preferred because they are being manufactured in USA itself. To summarize Suniva acquisition will benefit Shunfeng in three important ways:
i) Increasing efficiency of solar products - Suniva's cell efficiencies are much higher than normal silicon panel makers at 21%
ii) Expanding production capacity
iii) Improving brand recognition and sales in USA
Shunfeng was a small company until it started its acquisition spree. With its acquisition of Suntech the company added 2.5GW of production capacity and increased its EPC skills by acquiring the German installer SAG Solarstorm. This year Shunfeng has acquired 51% stake in a JV with Shunfeng Nobao, which operates in the ground source heat pumps and acquired a 59% stake in Lattice Power, which is engaged in silicon LED product sales.
2) Acquisitions are bringing synergy through integration - Shunfeng holds majority stakes in many of its JVs. The acquisitions this year will help Shunfeng integrate different clean energy technologies. Solar, LED and ground heat pumps will bring synergy effects as Shunfeng becomes a one stop shop for different clean energy solutions.
3) Improving volumes & revenues - For H1'15, the company increased revenues by ~20% when compared to the same time last year. Total revenue for H1'15 amounted to RMB 3,520.4 million. Module volume increased more than 47% from the last year, while international sales s also increased to more than 42% of total revenue in H1'15 as compared to ~31% during H1'14.
Source: PR Newswire
4) Triple digit growth in solar development division - Shunfeng has been rapidly expanding its downstream project business with solar power generation increasing by 176% annually. The total number of grid-connected solar projects in operation increased to 1,622MW as of 30 June 2015, when compared to from 890MW one year ago. Most of the projects are operating in China.
5) Good Historical performance - The company has shown good annual performance over the years as can be seen from the below table, showcasing an increasing trend over the years.
Source: Morningstar
Shunfeng Risks
Dependence on China
Though Shunfeng showed immense improvement in its revenues and sales volume, it failed to convert these sales into increasing profit. Net income in the first half of 2015 declined 65% to RMB 172 million from H1'14. The main reason for the same is the absence of Shunfeng in the higher ASP regions. The company has most of its sales coming from China. This leads to low ASPs. Shunfeng also incurred expenses due to its efforts in expanding into international markets. The acquisition of Suniva might ease some of its worries, with increasing sales expected to USA now.
Even its solar power projects are currently present only in China where returns are not very lucrative.
Recent dip in stock price has made valuation attractive.
Shunfeng has most of its operations in China and hence suffered due to the recent weakness in the Chinese market. The stock is currently trading at $0.39 and has lost more than 55% since YTD. The market capitalization value stands at $1.2 billion, with a forward P/E of 17x. The valuation does not look challenging, given the company's large footprint in the global solar energy market.
Conclusion
Shunfeng gave good numbers for revenues and sales volume though net profit did not increase in tandem. The company is trying to expand its international presence and also acquired Suniva Inc for the same. Shunfeng has acted smartly by acquiring distressed companies in China, Germany and USA. Now it has a solid presence across major segments such as wafer, cell, panel manufacturing as well as EPC, development and O&M. It also has acquired major companies in leading markets such as USA. While Hanergy (OTC:HNGSF), the last Chinese company to embark on such a strategy did not meet a good fate, Shunfeng looks better positioned since it is acquiring viable companies with good business models. I would look to add Shunfeng on dips.
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More Solar Manufacturers Are Focusing on Sustainable Practices
Dec 10, 2015 | Solar Novus Today
The Silicon Valley Toxics Coalition (SVTC) today released its Sixth Annual 2015 Solar Scorecard, which ranks manufacturers of solar photovoltaic (PV) modules according to a range of environmental, sustainability and social justice factors. This year’s respondents of PV companies more than doubled from last year, including new participation from LG, Jinko, Kyocera, AUO and WINAICO.
The 13 companies that responded to the 2015 Solar Scorecard represent just 35.8 percent of the total PV module market share, with the remainder of the information gathered from publicly available documentation.
“The number of companies committed to reporting environmental practices continues to fluctuate wildly from year to year,” said Sheila Davis, executive director of Silicon Valley Toxics Coalition. “The inconsistent participation is largely due to bankruptcies, restructuring and new entries into the Solar PV manufacturing market. We need consistent industrywide sustainability practices and reporting procedures that consumers can expect from all solar companies.”
In November 2014, SVTC announced plans to expand its Scorecard into a standard that meets the criteria of the American National Standards Institute (ANSI). With participation more than doubling this year, SVTC believes that interest and participation will continue to increase as the Solar Scorecard transitions into a formal accredited standard by 2017.
Key findings from this year’s solar scorecard and SVTC’s research throughout the last six years include: SunPower (97), SolarWorld (93), Trina (92) REC (82) and Yingli (80) earned the top scores in 2015. Six PV manufacturers have written letters to the Solar Energy Industries Association (SEIA), seeking action on Extended Producer Responsibility (EPR) for PV modules in the U.S. This number has doubled from the 2014 Scorecard. Most PV modules sold in Europe are covered by a pre-funded Extended Producer Responsibility (EPR) scheme to ensure safe and responsible disposal. No PV modules in the U.S. come with EPR. Over the past six SVTC surveys, 14 companies have said they would support public policy for an EPR scheme for PV modules (Aleo Solar, Avancis, Eurener, First Solar, REC, SolarWorld, SOLON, SoloPower, SunPower, Suntech Power, , Trina Solar, Up Solar, Jinko Solar and Yingli). However, at least one company’s 2015 letter (SolarWorld) openly expressed concern regarding SEIA’s ability to provide leadership in EPR policy development. Methods used by PV manufacturers to report the use of hazardous chemicals to the public remains inconsistent. Only six PV manufacturers (Trina, AUO, SunPower, SolarWorld, Sharp and JA Solar) do extensive chemical emissions disclosure and reporting on their websites. Sixteen companies (three more than in 2014) report one or more categories of emissions (hazardous waste, heavy metals, air pollution, ozone depleting substances and landfill disposal). Fourteen companies manufacture PV modules with amounts of cadmium or lead below regulatory thresholds set by the European Union, the world’s most stringent standard (increase from 12 companies in 2014). This indicates that the maximum concentration found in any homogenous material that makes up these PV modules is less than 0.01 percent for cadmium and 0.10 percent or less for lead.
“The SVTC Solar Scorecard requires PV module manufacturers to report on sustainability performance metrics, disclose environmental, health, and safety certifications and report other information,” said Associate Professor Dustin Mulvaney of San Jose State University, who helped SVTC interpret the scores. “These practices are increasingly commonplace in other electronics and semiconductor industries. The fact that company scores continue to increase is a sign that solar industry leaders are integrating sustainability reporting into operations.” - See more at: http://www.solarnovus.com/more-solar-manufacturers-are-focusing-on-sustainable-practices_N9522.html#sthash.hwplr1SK.dpuf
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Dec 10, 2015 | WhaTech
Large solar farms are more popular initially, but solar is anticipated to be built out on commercial roof tops in increased quantity. The electricity generated will be fed to local substations and distributed to homes from there.
The electricity generated will be used for both stationary power and to charge electric vehicles. Photovoltaics PV market growth depends on volume production to achieve economies of scale.
Solar energy market driving forces relate to the opportunity to harness a cheap, long lasting, powerful energy source. Solar energy can be used to create electricity in huge quantity.
Solar panels are mounted in a weatherproof frame, are mounted in areas with direct exposure to the sun to generate electricity from sunlight.
Solar power systems are comprised of solar modules, related power electronics, and other components. Solar panels are used in residential, commercial and industrial applications.
Solar compositions of arrays that comprise electric utility grids appear to be the wave of the future.
Report: http://goo.gl/45rlVm
The demand for solar energy is dependent on a lower prices for solar and higher prices for petroleum. A combination of economies of scale being realized in the manufacturing along with increases in the current prices for petroleum will drive solar energy adoption.
The overall solar market has attained enough critical mass to boost competitive technologies of thin film and monocrystalline, polycrystalline, and multicrystalline silicon based systems.
First Solar, the market leader, in commercial systems is participating in the solar markets at a level of $1.9 billion of a total 2009 market of $19.6 billion for 2009. First Solar is well positioned to gain significant market share over the next five years.
First Solar basically does monolithic integration on glass, making things on the module level.
First Solar PV modules are thin film PV modules. The achievement of reaching 1GW of modules in installations bodes well for the entire industry, bringing credibility to the solar energy effort.
To support the growing demand, First Solar continues to push the limits on volume manufacturing. First Solar is integrating each production step.
Sharp, the market leader, has achieved remarkable penetration of residential markets. Mass production of tandem?type thin?film solar cells means two types of cells are offered—crystalline types suitable for colder temperatures at high latitudes, and thinfilm types better suited to warmer regions.
Sharp is a unique manufacturer in that they offer both types.
Key market transitions are being made relative to smart grid, the increasing centrality of the local power substation, and implementation of the smart grid as a distribution center for electricity generated by solar power.
Solar energy is being adopted because the petroleum reserves are facing depletion. Solar offers plentiful, cheap energy source with panels that have a 25 year life and payback within 10 years.
The payback is within 8 months if the solar electricity generated is used to charge an electric vehicle.
Report: http://goo.gl/fsm9O4
Thin film batteries and new utility level electricity storage are evolving. Thin film batteries are expected to power electric vehicles and sit on the ground outside homes and apartment buildings to store the electricity generated by solar.
Thin film batteries provide the bridge to offer electricity when the sun it not shining.
Thin film batteries fuel growth in solar markets. These markets are set to evolve even faster than anyone has thought.
Sharp, First Solar, Trina Solar, Suntech, and Ascent Solar Technologies are among the companies anticipated to benefit from the build out of solar energy. These are the companies positioned to leverage solar energy market growth.
These market participants continue to be very aggressive in both internal innovation commitments, as well as partnership and acquisition strategies.
According to Susan Eustis, President of WinterGreen Research, “Worldwide solar markets are poised to achieve significant growth as solar energy is widely adopted, creating economies of scale and funding new technology efficiencies. Manufacturing efficiencies are expected to create new uses and permit users to leverage existing ones.
Costs of solar panels are expected to decrease rapidly in response to the continuing economies of scale. Market strategies of the leaders Sharp First Solar, and Trina are compelling in their innovation and flexibility”.
Emerging markets depend on 100 successful trials and reference accounts. Solar energy has now surpassed that magic number and is poised for rapid growth.
The reference accounts are in place, the prices of the solar modules are decreasing at a faster pace than the industry had predicted, grid parity has been achieved in some places and is on track to be achieved everywhere.
Investment in solar energy is anticipated to continue. Participants will come and go, industry consolidation and high growth patterns will alternate until the nascent industry stabilizes, but solar energy is here to stay.
Solar energy is in place. It works, it is no longer a dream or a long shot, it is real. Read the study, look at the pictures of the large number of installations, this is an amazing market, emerging long after early efforts to bring these technologies to reality: Why is it here now? Solar energy is evolving because the price of gasoline in going to continue to climb.
Solar energy markets are big. At $19.6 billion in 2009 solar panels are anticipated to reach$125.5 billion by 2016. Market growth comes because the technology has caught the imagination of everyone, consumers, vendors, governments, politicians, oil producers, and the utility industry.
The technology works, its benefits have a positive ROI over the useful life of the panels, even a significant payback. Solar provides the cheap, clean, dependable energy source needed to drive industrial growth, available.
Report Methodology
This is the 437th report in a series of market research reports that provide forecasts in communications, telecommunications, the internet, computer, software, and telephone equipment. The project leaders take direct responsibility for writing and preparing each report.
They have significant experience preparing industry studies. Forecasts are based on primary research and proprietary data bases.
Forecasts reflect analysis of the market trends in the segment and related segments. Unit and dollar shipments are analyzed through consideration of dollar volume of each market participation in the segment.
Market share analysis includes conversations with key customers of products, industry segment leaders, marketing directors, distributors, leading market participants, and companies seeking to develop measurable market share. Over 200 in-depth interviews are conducted for each report with a broad range of key participants and opinion leaders in the market segment.
Check Out These Key Topics Commercial Solar PanelsMulticrystalline ModuleSolar UtilityResidential SolarConsumer SolarSmart GridSolar Panel TechnologiesThin Film Solar CellsAmorphous SiliconThin Film Solar Cells Cadmium TellurideThin Film Solar Cells CIGS(Copper Indium Gallium Selenide)Copper Indium Gallium DiselenideConversion Efficiency Confirmation From NRELThin Film On Glass SubstrateSolar CIGS On A PolymericPlastic SubstrateSolar Monolithic Integration On GlassSubstrateSolar Modules Cadmium Telluride (CdTe)Semiconductor MaterialCIGS Photovoltaic EffectCrystalline Silicon Indirect Band Gap SemiconductorSolar Thin Film SubstratesGettering in Large Grained Thin PolycrystallineSilicon FilmsGlass SubstrateThin Film PanelsNanosolarHelioVoltMiaSoleFirst SolarPhotovoltaic TechnologiesSolar ShadingThird Generation Thin Film Solar ApplicationsFlexible Glass Solar PanelsPolysilicon ProducersSolar InverterSolar Micro InverterSolar Panel Electricity SolutionsSolar EnergySingle Crystal SolarPolycrystallineMulticrystalllineThin Film Panels
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China to Require Companies to Submit to Clean Production Audits
Dec 10, 2015 | BNA Daily Environment Report
By Michael Standaert
China will take its voluntary clean production policies to a new level by requiring specific companies to undergo mandatory audits of their clean production practices, according to a draft document for public comment the Ministry of Environmental Protection and the National Development and Reform Commission (NDRC) jointly released Dec. 9.
The ministry and the NDRC have compiled lists of companies that would have to follow mandatory clean production practices, which are expected to be disclosed at a later date.
In addition to undergoing clean production audits, the companies will have to publicize their emissions data and information on whether they use or emit any toxic or hazardous chemicals.
The audits will determine whether companies have surpassed national or local pollutant emissions quotas, with orders for compliance action if they have exceeded those amounts.
The companies undergoing audits will primarily be high-energy consuming operations and those that use toxic or hazardous chemicals or emit them during the production process, or emit heavy metals such as lead, mercury, chromium, arsenic and materials included under the Stockholm Convention on Persistent Organic Pollutants.
The public comment period on the policy runs through Dec. 22.
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U.S. Solar Installations on Pace for Record Year
Dec 10, 2015 | BNA Daily Environment Report
The U.S. solar industry is on pace for a record year after adding 1.4 gigawatts of capacity in the third quarter. The fourth quarter is likely to be the largest in the industry's history, with more than 3 gigawatts of installations expected, the Washington-based Solar Energy Industries Association said in a report Dec. 9. The U.S. now has 24.1 gigawatts of installed capacity, enough to power 5 million homes. The industry has surged in the U.S. as national and state mandates encourage wider use of renewable power. A looming decrease in a federal tax credit for solar, scheduled for the end of next year, is also boosting demand now as utilities and homeowners rush to finish projects. Lawmakers in Washington are debating whether to extend the credit. “This past quarter marked the calm before the storm,” Cory Honeyman, an analyst with report co-author GTM Research, said in a statement. “The one-gigawatt mark for quarterly capacity additions will serve as a distant floor as project developers ramp up installations in the next five quarters.” Total installations will almost double between now and the end of 2016, bringing the nationwide total to 41 gigawatts, according to the report.
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Anger over threat of VAT hike on renewable energy
Dec 10, 2015 | The Guardian
By Terry Macalister and Emma Howard
The government has shocked the renewable energy industry by proposing a massive hike in VAT on solar panels and wind turbines from next summer.
The moves, announced by the revenue and customs authority, HMRC, made “a mockery of (David) Cameron’s claims to climate leadership” say critics and come amid proposed cuts of almost 90% in some solar subsidies.
HMRC blamed the planned increase in VAT from 5-20% on a European commission ruling covering energy saving materials used in the construction trade and said the EC decision had been upheld by the court of justice of the EU.
But the UK tax authorities stoked anger within the industry by claiming the changes would do little damage. “The measure is likely to affect fewer than 500,000 individuals and households and the impact … is anticipated to be negligible,” it wrote in a consultation document released on Wednesday.
The Solar Trade Association (STA), lobby group for the photovoltaic sector, said it was an astonishing and avoidable blow that could add £900 to a typical domestic rooftop installation and would only serve to suck even more potential investment from low carbon power.
‘As countries are racing to secure the new global climate agreement, the UK has just proposed quadrupling VAT on solar installations for people’s homes to 20%, while oil heating, coal and gas remain on 5%. The International Energy Agency is in Paris right now calling for an end to fossil fuels subsidies just as the Treasury proposes tilting the playing field here away from clean power for British households,”
“This is clearly absurd. We will be strongly urging the Treasury to treat solar the same as they propose for oil, gas, heat pumps and biomass boilers. But it is incredible to have to argue for even level VAT treatment for solar VAT just as the Paris conference demands greatly accelerated action to avoid dangerous climate change.”
The solar industry is already nervous as it waits to hear next week whether ministers will proceed with a swath of cuts to the feed in tariff subsidies.
The STA said it was hopeful ministers would reach a compromise but remained concerned thatthe cuts could still be too heavy to save a sector reeling from thousands of redundancies as business confidence evaporates. Advertisement
Greenpeace said the government should be resisting any misguided regulations from Brussels at a time when it was pushing for lower carbon emissions at the UN climate change talks.
“A vital part of the sustainable energy future being championed in Paris today is being undermined in London by changes to VAT that must be resisted,” said Doug Parr, chief scientist at Greenpeace UK.
“In addition to the confusion created by dramatic cuts to solar support, this creates a new round of uncertainty for business, and more expense for homeowners who are seeking to do their bit for the climate, as loudly requested by David Cameron last week. This move makes a mockery of Cameron’s claims to climate leadership, and shows once again that is Osborne who is ultimately holding the reins on energy policy in the UK.”
Leo Murray, a campaigner for the 10:10 climate change charity, added: “Our government promised to fight this. Something very wrong is going on with the EU tax system when short haul flights are zero rated for VAT meanwhile people who are trying to do the right thing by generating their own energy are being massively penalised for buying products that are absolutely essential to meeting legally binding targets on renewable energy and our climate change objectives.”
Critics want to know why some technologies such as insulation, draft-proofing, central heating and biomass boilers will not be affected by the change and yet wind and solar seem to have been singled out.
They suggest the government can avoid VAT increases if it shows that the solar panels or wind turbines are being used as part of a wider strategy to beat fuel poverty.
A spokesman for HMRC said the British tax authorities had done all they could by arguing in court for a different outcome. “We lost the case. We cannot appeal or go any further so we have to make changes to the rules to comply with European law.”
A government spokesperson said: “The government remains committed to improving UK homes to help tackle fuel poverty and keep energy bills low. Despite the EU’s ruling, we will continue to help the most vulnerable, such as the elderly, with the installation of energy saving materials, by retaining the vast majority of the relief on energy saving materials.”
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Dec 10, 2015 | PV Magazine
By Ian Clover
The British solar industry is readying itself for a further blow this week following confirmation that the U.K.’s tax regulator, Her Majesty’s Revenue & Customs (HMRC) has opened a consultation to remove a tax relief for solar panels (and solar thermal systems) from August 1 next year.
Solar panels are currently subjected to value-added tax (VAT) of just 5%, but that could rise to 20% next summer if the HMRC accepts a ruling issued this year from the European Court of Justice (ECJ) that states that solar panels cannot be considered a "renovation to a property" and thus are not eligible for the lower VAT rate.
Following the ECJ’s policy about-turn in the summer, HMRC told industry that it would still be pursuing means to protect solar panels from any VAT rise. But the opening of a proposal on this matter yesterday suggests that the government is going to let the directive pass unchallenged.
If solar panels are subjected to the higher VAT rate, then the solar industry in the U.K. – already the recipient of a series of injurious policy changes in recent months – could be dealt a fatal blow.
Calculations by the Solar Trade Association (STA) show that his 15% increase in VAT could add more than $1,300 to the cost of a typical 4 kW solar array, while further instability in PV policy will harm investor confidence that is already decidedly shaky.
Commenting on the government’s seeming acceptance of the ruling, STA’s head of policy Mike Landy said that “urgent action” is required from the U.K. government in London and the European Commission in Brussels in order to halt this potentially disastrous policy.
"Instead of just accepting the EU ruling, HMRC needs to push back and argue for solar to keep its reduced VAT rate," Landy said. The Department of Energy and Climate Change and the Treasury also need to take this massive hike in end prices into consideration in their imminent decision on how far to cut the FIT for solar."
The FIT for residential-scale solar arrays is set to be reduced by 87% within the next few months, pending a possible delay. With a scaled-back FIT and a hike in VAT, the attraction of solar PV will be diminished further for British homeowners already subject to minimum import price (MIP) tariffs levied on solar panels from China – a tariff that has just been extended by the European Commission.
While delegates, dignitaries and scientists discuss ways to engineer a cleaner future at the COP21 summit in Paris, efforts to undermine the solar industry in the U.K. continue, seemingly, unabated.
"A vital part of the sustainable energy future being championed in Paris is being undermined in London by changes to VAT that must be resisted," said Greenpeace U.K. chief scientist Doug Parr. "In addition to the confusion created by dramatic cuts to solar support, this creates a new round of uncertainty for business, and more expense for homeowners who are seeking to do their bit for the climate."
Alasdair Cameron, renewable energy campaigner at Friends of the Earth, said that it is "crazy" that solar many soon be subjected to a higher VAT than oil. "It’s another sign of the British chancellors incoherent approach to energy policy, and completely at odds with the U.K.’s rhetoric on tackling climate change," Cameron said.
The EC has regularly trumpeted its efforts to support energy efficiency uptake measures and the proliferation of renewable energy. However, by exempting solar panels from "energy saving materials" for the home, the ECJ is undermining solar’s growth in the U.K. and many other parts of Europe.
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Solar advocates warn of slump without extenders lifeline
Dec 8, 2015 | PoliticoPro
By Esther Whieldon
The solar industry is running out of time to secure a key expansion of its tax credit, and advocates warn that if Congress fails to act developers will struggle to finance new projects and the pace of new investments will slow.
Negotiations remained stalled Tuesday over a large tax extenders deal that would have made permanent some incentives favored by members of both parties. Details of the bill remained in flux, but sources had said it likely would have phased out wind and solar tax credits over a number of years.
Solar developers have lobbied Congress to extend that deadline and make it easier for developers to qualify for the credit, and combining that proposal with other reforms to the tax code was a leading strategy to secure those changes.
While House Speaker Paul Ryan said Tuesday he is not willing to give up on cinching a large tax deal, House Ways and Means Chairman Kevin Brady (R-Texas) is preparing a fallback option that would effectively punt the issue until after the 2016 election. That would leave solar developers struggling to finance new projects and maintain the rapid growth advocates say happened because they have had a tax credit available since 2006.
"There is no question that extending the ITC and adding a provision to allow the tax credit to take effect at the commencement of construction can move our nation further on a number of truly important fronts," Clean Power Finance CEO Nat Kreamer, who chairs the Solar Energy Industries Association board, wrote in a Tuesday letter to Ways and Means members.
Under current law, solar developers must complete projects by the end of next year to claim a 30 percent investment tax credit, after which its value falls to 10 percent. The industry has sought more time for the larger credit and asked Congress to base eligibility on when construction begins rather than when a project is complete.
The Brady proposal would reinstate dozens of expired incentives, including the wind production tax credit, and keep them in place through the end of next year. But it does nothing for solar.
The two-year bill could come up for a vote as soon as Thursday in the House, Minority Whip Steny Hoyer (D-Md.) predicted Tuesday. Hoyer said Democrats are "pretty strongly against a $800 billion package of tax extenders" senior lawmakers from both parties had been negotiating. The package would have made permanent some business credits favored by Republicans alongside credits for low-income families that Democrats support.
Renewables advocates say the tax credits give wind and solar developers access to lower-cost financing options, spurring additional investment in those industries. However, the head of a major residential solar energy provider, Sunnova Energy Corporation, has suggested the industry will remain more robust in both the long and short term regardless of the outcome.
But many industry advocates see Sunnova as an outlier. In fact, the expected step down of the ITC to 10 percent "is already having a very significant negative pinch on renewable energy and solar investment and deployment," said Todd Foley, senior vice president of strategy, policy and government relations for the American Council on Renewable Energy.
Utility-scale projects may be especially vulnerable if they are not on track to be complete next year, said tax and project finance expert Keith Martin, a partner at Chadbourne & Parke. Moreover, solar power purchase agreement prices have been falling, "so it is not clear how many projects will be economic with only a 10 percent credit."
The credit's reduced value also will squeeze rooftop solar companies because their projects generally cannot compete with gas-fired generators or wind farms without a subsidy, Martin said.
"Assuming tax equity is the cheapest funding source, the companies will not be able to raise as much of it with only a 10 percent tax credit than they can with a 30 percent tax credit," he said. "They will have to fill in the gap with more expensive sources of capital."
SolarCity has said residential rooftop companies need to reduce installation costs to $2.50 a watt for their existing business model to remain viable with only a 10 percent credit, Martin noted. But the company's current costs are $2.90/watt. "It is not easy to reduce costs by another 40 cents a watt. Other rooftop companies are behind SolarCity in making cost reductions and are in the $3-plus range," he said.
Commercial and industrial companies likewise will face a higher cost hurdle, Martin added.
State-level debates over net metering policies could also be affected if the 30 percent credit is not extended, he said. State officials will have to think twice about whether it is wise to pull back on their own rooftop solar incentives, given that net metering policies and the ITC are the two main props for solar.
Passage of Brady's bill would set the stage for another extenders debate next year that could slip into 2017, Martin said.
A two-year deal is the most likely outcome, predicted Timothy Fox, vice president of research and investment firm ClearView Energy Partners.
"However," he added, "with time running out for extenders (as well as the omnibus), we wouldn’t rule out the prospect that Congress may be overcome by events and could return to the tax debate next session."
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Ontario Funding Charging Stations for Electric Cars
Dec 10, 2015 | BNA Daily Environment Report
The Ontario government will invest C$20 million ($15 million) in 2016 to build additional public charging stations for electric vehicles, the Ontario Ministry of the Environment and Climate Change said Dec. 8. The funding from the C$325 million ($237 million) Ontario Green Investment Fund will provide grants to public and private sector partners to establish a network of fast-charging electric vehicle stations in cities, along highways and at workplaces, apartments and other public places, the ministry said in a statement. “This initial investment is just the start of many more bold steps we'll be taking to promote electric cars as a sustainable transportation choice and to reduce greenhouse gas pollution in other sectors,” Environment and Climate Change Minister Glen Murray said in a statement issued at the global climate change summit in Paris. Full details of the program are to be unveiled before the end of December. The Canadian Vehicle Manufacturers Association welcomed the announcement as another step in transitioning the province's infrastructure to support electric vehicles and other autonomous car technologies that can reduce greenhouse gas emissions. “Consumers want confidence that the recharging infrastructure is in place to support a decision to buy electric,” Mark Nantais, the lobby group's president, said in a statement Dec. 8. “CVMA supports this investment, as well as other mutually supportive policies such as consumer purchase incentives, supports for home and workplace charger installation, HOV lane access and building code changes.” Ontario has about 5,400 registered electric vehicles, the ministry said.
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IBM Broadens Push in China, India on Air Quality Projects
Dec 10, 2015 | BNA Daily Environment Report
International Business Machines Corp., which has been developing artificial intelligence to help fight Beijing's toxic air pollution, plans to work with other municipalities in China and India on similar projects to manage air quality.
IBM Research, a division of the company, will help an advisory body known as the Delhi Dialogue Commission to understand the link between traffic patterns and smog in the Indian capital so that decisions related to improving air quality can be backed with modeling, the Armonk, New York-based company said Dec. 9.
The announcement comes as smog continues to enshroud Beijing this week, prompting city officials to issue a red alert for the first time since a four-tier warning system was put in place in 2013. Air quality in the Chinese capital is expected to remain at hazardous levels until at least the morning of Dec. 10, according to the U.S. embassy in Beijing.
The undertaking is an offshoot of a similar initiative started last year to address air pollution through a partnership with Beijing's municipal government. In collaboration with Beijing, IBM has been testing a computer system capable of learning to predict pollution patterns 72 hours in advance, along with pollution trends as many as 10 days into the future (130 DEN A-5, 7/8/14).
IBM Research also will assist the city of Johannesburg and South Africa's Council of Scientific and Industrial Research in modeling air pollution trends and quantifying the effectiveness of the city's actions to tackle the issue, according to the statement.
Computer Modelling
The company is also working with local authorities in China's northern cities of Baoding, Zhangjiakou, and in the Xinjiang region.
IBM's model is able to estimate where pollution is coming from, where it will go and then analyze possible government responses, said Dong Jin, associate director of IBM's China research unit. The systems apply IBM's cognitive computing, which is capable of taking unstructured data, understand it, learn from mistakes and offer improvements, Dong said.
The company uses data drawn from air monitoring stations, meteorological and environmental satellites, emissions, land use, traffic patterns, social media and the macro-economy, said Zhang Meng, chief meteorologist at the research unit.
IBM also is using similar technologies to help forecast the availability of renewable energy in the U.K., the U.S., Japan and China, according to the statement.
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Africa Renewable energy project receives $10 billion in backing
Dec 10, 2015 | ZME Science
By Mihai Andrei
A very ambitious initiative could make Africa the cleanest continent – Africa Renewable Energy Initiative (AREI) an African-led plan to add 10,000 MW of additional renewable energy on the continent by 2020, has received over $10 billion in funding from international sources at COP21.
The mega-scale initiative wants to develop all sectors of African renewable energy by 2020, adding at least 10 GW of new renewable energy generation by then, and 300 GW more by 2030. If successful, it would make Africa the country with the largest percentage of renewable energy usage. African Development Bank (AfDB) President Akinwumi Ayodeji Adesina said:
“Africa is tired of being in the dark. The Lack of electricity has put the brakes on Africa’s industrialization. Through the Africa Renewable Energy Initiative, we can sustain fast economic growth in Africa and on a low carbon development pathway.”
The plan is to accelerate solar, hydro, wind and geothermal energy, with a special focus on solar energy – for obvious reasons. Africa is a sun-rich continent almost throughout its entire landscape, and many areas unsuitable for agriculture or anything else could be used for solar energy.
“We are ready to engage in massive solar and wind energy production to attain 100% electricity reach for our people,” said Judi Wakhungu, Kenya’s environment cabinet secretary.
Africa is also at the forefront of fighting poverty, with 600 million people with no access to electricity, relying on wood or other biomass to cook and heat their homes, leading to hundreds of thousands of deaths each year from indoor air pollution. Adesina also addressed the economic damage caused by lack of access to electricity, saying that the continent loses 4% of its total GDP because of the lack of clean energy.
“Africa is the continent suffering the most from the scorching heat from rising temperatures, and droughts have become more frequent and with greater intensity than ever before. Africa needs more money for adaptation. The continent has been short-changed by climate change. But we must ensure that it is not short-changed by climate finance. AfDB will triple its climate finance to $5bn a year by 2020,” he said.
Direct and separate plans for individual countries will be drawn in the next five years. The news comes as a coalition of 12 countries, including the Democratic Republic of the Congo (DRC), Ethiopia, Kenya, Liberia and Malawi announced a goal to replant 100m hectares (247m acres) of forest across Africa in the next 15 years.
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