NewEnergyNews: SUN SHINES BRIGHTER IN TOUGH TIMES

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

The challenge: To make every day Earth Day.

YESTERDAY

  • THE STUDY: WHERE U.S. OFFSHORE WIND WILL CONNECT
  • QUICK NEWS, Oct. 21: SOLARCITY TO CROWDFUND WITH $1,000 BONDS; NEW JERSEY LOOKS AT OCEAN WIND; SMART LED LIGHTING MRKT TO DOUBLE
  • THE DAY BEFORE

  • THE STUDY: NEW OPPORTUNITIES IN TRANSMISSION
  • QUICK NEWS, Oct. 20: ELEVEN GOOD THINGS ABOUT SOLAR ENERGY; YAHOO BUYS WIND; SMART THERMOSTATS’ BILLION DOLLAR FUTURE
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    THE DAY BEFORE THE DAY BEFORE

  • Weekend Video: The Ocean Speaks Out
  • Weekend Video: Adapting To The Inevitable
  • Weekend Video: The Joy Of Driving EVs Powered By The Sun
  • THE DAY BEFORE THAT

  • FRIDAY WORLD HEADLINE-HOTTEST SEPTEMBER EVER; WORLD’S HOTTEST MONTHS STREAK AT SIX
  • FRIDAY WORLD HEADLINE-EU WIND BEATS FOSSIL, NUKE ENERGY PRICES
  • FRIDAY WORLD HEADLINE-DESERTEC SUCCUMBS TO MIDEAST TURMOIL
  • FRIDAY WORLD HEADLINE-JAPAN UPS PUSH FOR GEOTHERMAL
  • AND THE DAY BEFORE THAT

    THINGS-TO-THINK-ABOUT THURSDAY, Oct. 16:

  • TTTA Thursday-THE MILITARY FALLS FOR THE HOAX
  • TTTA Thursday-FORTUNE 100 BUSINESSES BOOST SUN
  • TTTA Thursday-IOWA UTILITY BUYS WIND TO CUT COSTS
  • TTTA Thursday-GETTING ENERGY EFFICIENCY FROM THE CLOUD
  • THE LAST DAY UP HERE

  • THE STUDY: NEW ENERGY BECOMES PRICE COMPETITIVE
  • QUICK NEWS, Oct. 15: NEW NUMBERS SHOW BIG OCEAN WIND POWER; SOLAR TURNS IN A NEW DIRECTION; FUEL CELL MARKETS TO VARY, GROW
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    Anne B. Butterfield of Daily Camera and Huffington Post, is a biweekly contributor to NewEnergyNews

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT)

    November 26, 2013 (Huffington Post via NewEnergyNews)

    Everywhere we turn, environmental news is filled with horrid developments and glimpses of irreversible tipping points.

    Just a handful of examples are breathtaking: Scientists have dared to pinpoint the years at which locations around the world may reach runaway heat, and in the northern hemisphere it's well in sight for our children: 2047. Survivors of Superstorm Sandy are packing up as costs of repair and insurance go out of reach, one threat that climate science has long predicted. Or we could simply talk about the plight of bees and the potential impact on food supplies. Surprising no one who explores the Pacific Ocean, sailor Ivan MacFadyen described long a journey dubbed The Ocean is Broken, in which he saw vast expanses of trash and almost no wildlife save for a whale struggling a with giant tumor on its head, evoking the tons of radioactive water coming daily from Fukushima's lamed nuclear power center. Rampaging fishing methods and ocean acidification are now reported as causing the overpopulation of jellyfish that have jammed the intakes of nuclear plants around the world. Yet the shutting down of nuclear plants is a trifling setback compared with the doom that can result in coming days at Fukushima in the delicate job to extract bent and spent fuel rods from a ruined storage tank, a project dubbed "radioactive pick up sticks."

    With all these horrors to ponder you wouldn't expect to hear that you should also worry about the United States running out of coal. But you would be wrong, says Leslie Glustrom, founder and research director for Clean Energy Action. Her contention is that we've passed the peak in our nation's legendary supply of coal that powers over one-third of our grid capacity. This grim news is faithfully spelled out in three reports, with the complete story told in Warning: Faulty Reporting of US Coal Reserves (pdf). (Disclosure: I serve on CEA's board and have known the author for years.)

    Glustrom's research presents a sea change in how we should understand our energy challenges, or experience grim consequences. It's not only about toxic and heat-trapping emissions anymore; it's also about having enough energy generation to run big cities and regions that now rely on coal. Glustrom worries openly about how commerce will go on in many regions in 2025 if they don't plan their energy futures right.

    2013-11-05-FigureES4_FULL.jpgclick to enlarge

    Scrutinizing data for prices on delivered coal nationwide, Glustrom's new report establishes that coal's price has risen nearly 8 percent annually for eight years, roughly doubling, due mostly to thinner, deeper coal seams plus costlier diesel transport expenses. Higher coal prices in a time of "cheap" natural gas and affordable renewables means coal companies are lamed by low or no profits, as they hold debt levels that dwarf their market value and carry very high interest rates.

    2013-11-05-Table_ES2_FULL.jpgclick to enlarge

    2013-11-05-Figure_ES2_FULL.jpg

    One leading coal company, Patriot, filed for bankruptcy last year; many others are also struggling under bankruptcy watch and not eager to upgrade equipment for the tougher mining ahead. Add to this the bizarre event this fall of a coal lease failing to sell in Wyoming's Powder River Basin, the "Fort Knox" of the nation's coal supply, with some pundits agreeing this portends a tightening of the nation's coal supply, not to mention the array of researchers cited in the report. Indeed, at the mid point of 2013, only 488 millions tons of coal were produced in the U.S.; unless a major catch up happens by year-end, 2013 may be as low in production as 1993.

    Coal may exist in large quantities geologically, but economically, it's getting out of reach, as confirmed by US Geological Survey in studies indicating that less than 20 percent of US coal formations are economically recoverable, as explored in the CEA report. To Glustrom, that number plus others translate to 10 to 20 years more of burning coal in the US. It takes capital, accessible coal with good heat content and favorable market conditions to assure that mining companies will stay in business. She has observed a classic disconnect between camps of professionals in which geologists tend to assume money is "infinite" and financial analysts tend to assume that available coal is "infinite." Both biases are faulty and together they court disaster, and "it is only by combining thoughtful estimates of available coal and available money that our country can come to a realistic estimate of the amount of US coal that can be mined at a profit." This brings us back to her main and rather simple point: "If the companies cannot make a profit by mining coal they won't be mining for long."

    No one is more emphatic than Glustrom herself that she cannot predict the future, but she presents trend lines that are robust and confirmed assertively by the editorial board at West Virginia Gazette:

    Although Clean Energy Action is a "green" nonprofit opposed to fossil fuels, this study contains many hard economic facts. As we've said before, West Virginia's leaders should lower their protests about pollution controls, and instead launch intelligent planning for the profound shift that is occurring in the Mountain State's economy.

    The report "Warning, Faulty Reporting of US Coal Reserves" and its companion reports belong in the hands of energy and climate policy makers, investors, bankers, and rate payer watchdog groups, so that states can plan for, rather than react to, a future with sea change risk factors.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    It bears mentioning that even China is enacting a "peak coal" mentality, with Shanghai declaring that it will completely ban coal burning in 2017 with intent to close down hundreds of coal burning boilers and industrial furnaces, or shifting them to clean energy by 2015. And Citi Research, in "The Unimaginable: Peak Coal in China," took a look at all forms of energy production in China and figured that demand for coal will flatten or peak by 2020 and those "coal exporting countries that have been counting on strong future coal demand could be most at risk." Include US coal producers in that group of exporters.

    Our world is undergoing many sorts of change and upheaval. We in the industrialized world have spent about a century dismissing ocean trash, overfishing, pesticides, nuclear hazard, and oil and coal burning with a shrug of, "Hey it's fine, nature can manage it." Now we're surrounded by impacts of industrial-grade consumption, including depletion of critical resources and tipping points of many kinds. It is not enough to think of only ourselves and plan for strictly our own survival or convenience. The threat to animals everywhere, indeed to whole systems of the living, is the grief-filled backdrop of our times. It's "all hands on deck" at this point of human voyaging, and in our nation's capital, we certainly don't have that. Towns, states and regions need to plan fiercely and follow through. And a fine example is Boulder Colorado's recent victory to keep on track for clean energy by separating from its electric utility that makes 59 percent of its power from coal.

    Clean Energy Action is disseminating "Warning: Faulty Reporting of US Coal Reserves" for free to all manner of relevant professionals who should be concerned about long range trends which now include the supply risks of coal, and is supporting that outreach through a fundraising campaign.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    Author's note: Want to support my work? Please "fan" me at Huffpost Denver, here (http://www.huffingtonpost.com/anne-butterfield). Thanks.

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    Anne's previous NewEnergyNews columns:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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    Your intrepid reporter

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      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

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  • Tuesday, August 11, 2009

    SUN SHINES BRIGHTER IN TOUGH TIMES

    Weak economy makes solar panels more affordable to homeowners; Price cuts by manufacturers, tax credits, California incentives and innovative financing ease the cost of going solar.
    Marla Dickerson, August 1, 2009 (LA Times)
    and
    Half of All Solar Panels Made This Year Won’t Be Installed in 2009
    August 10, 2009 (iSuppli)

    SUMMARY
    Installing a home solar system has never been more affordable. Prices are falling, state and federal incentives are rising and ownership opportunities in the form of financing deals and lease or lease-like deals are expanding.

    The cost depends on 4 factors: (1) System size; (2) Panel price; (3) State rebate; (4) Federal Investment Tax Credit.

    Solar panel prices are falling because there is an oversupply of panels and silicon. It is a truly glutted market. One manufacturer predicts more than half of the panels made in 2009 won’t be used this year. It also predicts the glut will last into 2012 and has decided to cut its planned production all the way through 2013.

    click to enlarge

    Total world solar panel production will grow 14.3% this year to 7.5 gigawatts. (Total world solar panel production in 2008 was 6.5 gigawatts.) Only 3.9 gigawatts of solar panels will be installed in 2009. In other words, almost 1 of every 2 panels will be inventoried.

    To sell panels and clear their inventories, manufacturers are lowering prices. It doesn’t take a degree in economics to come to the conclusion that the price for solar panels has never been and may not again be so low.

    The U.S. wholesale price for top-quality crystalline silicon modules is less than half what it was last year, ~$2.40 per watt. The retail price of an installed system, before subsidies and tax credits, is down from $9-to-$10 per watt to ~$7.50 per watt. Volume buys warrant even lower, below-retail prices.

    click to enlarge

    California’s “million solar roofs” solar initiative (SB1) is an exemplary state program that provides rebates to buyers. Like many states, California’s rebate can put a significant dent in the cost of a system. (Every state’s program is outlined in detail at DSIRE)

    The federal stimulus bill that was passed in October 2008 extended an investment tax credit (ITC) of a full 30% of the entire system cost to every purchase of a solar system.

    click to enlarge

    A typical home rooftop solar system is 3-to-5 kilowatts (3,000-to-5,000 watts). The cost of panels constitutes about half the system’s cost. In addition to the panels, homeowners must pay for installation (labor, permits, taxes) and an inverter to transform the direct current created by the panels into the alternating current required to run home electronics.

    A well-built, well-installed, well-designed rooftop solar system should last 25-to-30 years and significantly reduce the utility bill.

    After all the rebates and incentives, the price for a typical system is likely to be around $20,000. That’s like prepaying the utility bill for a quarter century. It may or may not be the right decision for a homeowner.

    There are other really interesting and exciting new options that make a lot of sense and will help make the use of solar energy more accessible. They include (1) volume buying, (2) power purchase agreements (PPAs), and (3) publicly-funded plans.

    (1) Volume Buying
    (a) SolarCity is a northern California-based business slowing spreading to other U.S. areas. SolarCity attacks affluent chunks of cities, organizing them for group solar system installations through which each homeowner in the group gets access to volume solar panel purchase discounts.

    click to enlarge

    (b) One Block Off the Grid (1BOG) is part of a national community solar movement in which groups of 100 or more homeowners self-organize for the same kinds of volume discounts SolarCity gets for its clients.

    The key for both SolarCity and 1BOG is effective community organizing. It slows the process and limits individual choices but, when effective and in big enough volumes, has brought the cost down to $6.05 per watt installed. That cuts $5,000+ from a 5-kilowatt system.

    (2) PPAs
    Even with the advantage of a volume discount and all the subisidies and tax credits, the upfront cost of a solar system is intimidatingly high. A way to avoid almost all upfront costs and still benefit from the long-term lowered price of electricity that solar systems provide is the power purchase agreement (PPA). It is like a lease.

    A company with solar system expertise and financial backing (like SunRun) buys, installs and maintains the system on a person’s house. The homeowner signs an agreement to purchase the power for an extended period approximating the life of the solar system at a guaranteed, below market rate.

    click to enlarge

    The homeowner can obtain such an agreement at virtually nothing down or can get better rates with a larger down payment. Most homeowners begin with rates 10-to-15% below the retail cost of electricity and can expect, a decade or more into the future when power prices are likely to be much much higher, to pay what will seem like bargain-basement utility rates (compared to a non-solar system owning neighbor, if there is such a thing in a decade).

    The PPA-holding company makes its money on the low cost and eventually free electricity it continues selling to the homeowner as the solar system pays itself off.

    In addition to its group purchase business, SolarCity also does PPA deals, as do solar industry giant SunEdison and many other finance companies and even some utilities, like the Los Angeles Department of Water and Power and Duke Energy. Bank loan departments and solar installers can steer interested parties in the right direction.

    click to enlarge

    The newest, hottest idea in beating the upfront cost of a solar system was born in the city of Berkeley, California, and was therefore known for some time as The Berkeley Plan. It was legalized statewide in 2008 as AB 811.

    AB 811 grants municipalies and counties the right to offer low-interest loans to residents for the purchase of rooftop solar systems and arrange for repayment through assessments that appear on the residents’ property tax bills.

    It could hardly be more convenient for the homeowner. The municipality/county handles everything, from site selection and installation to maintenance. If the house is sold, the assessments transfer to the new owner.

    Berkeley, Palm Desert and Sonoma County have programs. San Diego is planning one. Golden, Colorado, has its own version and cities around the U.S. and around the world are exploring the idea.

    Communities can obtain very low-cost loans for putting large amonts of money to work in what can only be perceived as very safe investments. The collateral is, after all, overseen by city and county governments. Palm Desert offers a 7% fixed rate in its program. A $30,000 system over 20 years raises a homeowner's property tax bill ~$3,000 a year. At the same time, the homeowner is saving perhaps as much or more on electricity.

    COMMENTARY
    Until last year, solar panel prices were elevated by a scarcity of silicon, a vital semiconductor ingredient. Demand was greater than supply because the refined material supply was inadequate and, at the same time, Spain radically ramped its demand up with a very generous feed-in tariff (FiT). Silicon refining and panel manufacturing capacities were ratcheted up. Then, the burden of the FiT became too great for Spanish ratepayers, especially in the context of the global financial meltdown. Spain lowered the amount of megawatts on which it would pay the subsidized tariff. Demand immediately dropped off. Prices followed.

    click to enlarge

    Even with the lower prices for panels, not all houses are good places to install rooftop systems. Ones with high utility bills and sunny, south-facing roofs are best. Even those houses can take 8-to-10 years to return enough in utility bill savings to pay off the installation. A good installer will provide a thorough assessment. Back-of-the-envelope sketches are available from any number of good website calculators, including a list of reliable ones at Go Solar California and the state of California Clean Power Estimator.

    An atypical but substantive way of thinking about an investment in a rooftop solar system is that in comparison to all the uncertainties associated with other investments, putting money into a guaranteed energy bill reduction could be the smartest use of present money against future returns.

    click to enlarge

    Whether now is the best time to buy requires a full and careful evaluative process. Panel prices are down but a lot of state incentives, like California’s, have fallen and may continue falling either because the rising volumes they were designed to drive have started to be realized or because the recession has made it necessary for states to hesitate on incentive programs.

    The California Solar Initiative is a 10-year, $3-billion program. Launched in 2007, it is funded by California utility ratepayers. Designed to drive volume, the amount of the rebate drops as the state’s installations reach progressively higher levels of total megawatts. For big utility customers, the rebate started at $2.50 per watt. It is now $1.55 ($1.90 for SCE customers) and will shrink to 20 cents per watt by 2016, the last year of the program. On that schedule, the sooner a system purchase is made, the better. The difference between a 2007 purchase of a 5-kilowatt system and a 2016 purchase is $11,500.

    click to enlarge

    Many states have or will be adopting such programs, especially those whose state Renewable Electricity Standards (RESs) have carve-outs requiring specific portions of the standard to be met with solar energy.

    Many U.S. utilities also have their own solar rebate and New Energy incentive programs. That information is invariably prominent at a utility’s website and is usually featured as part of the communications the company has with its ratepayers (like in the billing statement).

    The federal investment tax credit was, until last fall, a limited incentive that covered perhaps a quarter of the sytem’s value and, dependent as it was on the political winds that whipped Washington, D.C., was never very certain. All that changed with the bailout package.

    Homeowners now get federal tax credits for 30% of the total cost of the system (after deducting the state rebate). A bigger rooftop system can have an after-state rebate value of $30,000, making the tax credits worth nearly $10,000. That’s a big deal.

    click to enlarge

    QUOTES
    - Nathaniel Bullard, solar analyst, New Energy Finance: "It's really a precipitous drop [in the price of solar panels]…The mood in the industry is grim."
    - Henning Wicht, senior director/principal photovoltaics analyst, iSuppli: “The solar industry in 2009 has been undermined by collapse in demand due to the decision by Spain—which accounted for 50 percent of worldwide installations in 2008—to change its feed-in-tariff policies…This demand drop led to a massive buildup of inventory throughout the supply chain, from the raw material polysilicon, to Photovoltaic (PV) cells, to complete solar systems. Despite this, solar panel makers have continued to increase capacity and production, exacerbating the inventory buildup.”
    - Wicht, iSuppli, on the duration of low panel prices: “This inventory glut will have a long-term impact on the solar business, with panels set to remain in a state of oversupply until 2012…After that year, fast-growing demand for solar installations will be able to absorb global panel production and inventory…iSuppli’s updated forecast now shows supplier production flattening for the years from 2011 through 2013 compared to the old forecast.”

    click to enlarge

    - Ron Kenedi, vice president, Sharp Solar Energy Solutions Group: "Jobs are very competitive, and that's translating into lower prices…This is the perfect time to buy solar."
    - Dorothy and Walter Harris, community solar system purchasers, 1BOG: "They presented things clearly . . . and made the whole process easy…"
    Ned Araujo, homeowner, SunRun PPA signatory: "Anything that happens [to the system], it's their responsibility…"

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