NewEnergyNews: CPF Launches Assault on Rooftop Solar Costs With DOE Backing; Better system servicing and the right installer for each customer means less investor risk and lower-cost solar.

NewEnergyNews

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

Hey, hey, Ms. Abby!!! Go get 'em!!!

The challenge: To make every day Earth Day.

YESTERDAY

  • THE STUDY: THE IMPACT ON REAL PEOPLE OF RISING POWER PRICES
  • QUICK NEWS, Oct. 22: SCHOOLS SAVE W/GEOTHERMAL HEAT PUMP SYSTEMS; BUILDING FOR NEXT-GEN U.S. BIOFUELS; ENERGY STORAGE MARKET EMERGING
  • THE DAY BEFORE

  • THE STUDY: WHERE U.S. OFFSHORE WIND WILL CONNECT
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    THE DAY BEFORE 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
  • THE DAY BEFORE THAT

  • Weekend Video: The Ocean Speaks Out
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  • AND 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
  • THE LAST DAY UP HERE

    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
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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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  • Friday, October 26, 2012

    CPF Launches Assault on Rooftop Solar Costs With DOE Backing; Better system servicing and the right installer for each customer means less investor risk and lower-cost solar.

    CPF Launches Assault on Rooftop Solar Costs With DOE Backing; Better system servicing and the right installer for each customer means less investor risk and lower-cost solar.

    Herman K. Trabish, June 13, 2012 (Greentech Media)

    In pursuit of its mission to bring down the cost of solar, the Department of Energy (DOE)Sunshot Business Incubator Program has awarded Clean Power Finance (CPF) two grants. With one, CPF will create a marketplace for solar system operations and maintenance (O&M) services. The other will help fund a CPF online system to find and match prospective solar buyers with installers that best meet their needs.

    “CPF connects installers and financiers,” said Senior Director of Government Programs Management James Tong. Institutional investors like Google Ventures and Morgan Stanleyand venture investors like Kleiner Perkins and Claremont Creek have made a half-billion dollars available for CPF to place with its 1,550-customer network of qualified solar builders because, CPF CEO Nat Kreamer has pointed out, “rooftop solar is a low-risk, high-rewardinvestment in what is essentially a long-term asset.”

    As much as 45 percent of an investor’s capital outlay, Kreamer said, can come back as a tax benefit in the loan’s first year. And the overall return on investment is “anywhere from the high single digits to the mid-teens.”

    The fastest growing segment of solar system installation is financed by third-party providerssuch as CPF’s investors and companies like SolarCity and SunRun. The DOE-backed programs, Tong said, “will leverage our platform and network to create other marketplaces for third-party financiers.”

    The programs will reduce risk and provide services that are not now efficiently met. “Software is a big component of both projects,” Tong said, “but the DOE is paying for a suite of services that includes legal contracts, business development, finding the right people and monitoring the marketplace.”

    CPF has budgeted $1 million, $500,000 of which will come from Sunshot, to build an online marketplace for photovoltaic (PV) system operations and maintenance (O&M) services from which third-party financiers who own residential solar systems will able to choose providers.

    “Right now, there is no institution to efficiently find O&M vendors,” Tong explained. Financiers have little choice but to rely on their original installer and “exclusivity can be a very large risk.” Funders have no way of knowing if the cost of the O&M services is competitive, if the quality of work is adequate, or if the service will be done promptly. And, Tong pointed out, the original installer could be out of business by the time O&M services are needed.

    “A recent report from S&P cited three general risks to the residential solar finance market,” Tong said. “One was the lack of large-scale O&M services.”

    Tong likened the situation to buying a car but having only the dealership for service. “You get no guarantee on a competitive price or that the dealer will stay open for as long as you own the car. We’re trying to create a marketplace where you can go to your local mechanic or Midas or the dealership to get different pieces and choose your price and service quality.”

    CPF will create an “agnostic” O&M marketplace that includes its existing pool of installers and a full range of qualified competitors, from electricians to roofers to panel washers.

    “We’ve enlisted SolarCity to help us because they have enormous installation capacity,” Tong said. “With Clean Power Finance’s expansive vendor network, this O&M marketplace will create the large-scale services the S&P report mentioned,” Tong explained, and “remove a key barrier to massive consumer adoption.”

    CPF has also budgeted $2.2 million -- $1 million of which will come from Sunshot -- to create a solar customer acquisition brokerage.

    “Customer acquisition is one of the biggest costs in solar,” Tong said. “The brokerage will enable solar companies to focus on their core competencies and significantly lower their customer acquisition costs.”

    Installers depend on leads to customers, but the supply is inconsistent. A brokerage would allow installers to obtain and exchange customers and leads and avoid inefficiencies. “Having this brokerage,” Tong said, allows “pooling of what’s out there and choosing installations, prices and locations that work best for the installer.”

    “Pricing in these exchanges will adjust to prevailing market conditions,” Tong said. CPF hopes to eliminate the term agreements now common in the solar industry “which create more certainty by committing the parties to a contractual term but which can significantly disadvantage one side if market conditions like falling panel prices favor the other side.”

    The brokerage will also, Tong said, allow installers to take advantage of more successful companies’ resources. “If their crews aren’t working during slower months or they are carrying an excessive amount of inventory, they could use this brokerage to supplement their deal flow by connecting with companies that acquire customers more cost-effectively than they can.”

    The goal, Tong explained, is to help installers get marketing and sales help if they need it. “People who are good at marketing and sales are often limited by installation capacity and geographical coverage; installers are often limited by their sales and marketing capacity.” The brokerage, he said, will help them connect.

    “We see ourselves as facilitators to the entire industry,” Tong explained. Increased security from the O&M marketplace and increased business activity from the customer acquisition brokerage, CPF believes, could drive the price of installed solar down as much as 50 percent. “Both projects will succeed if this happens,” Tong said, and “it’s almost a virtuous loop. If this succeeds, prices go down, and if prices go down, these projects succeed.”

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