QUICK NEWS, March 19: WORLD SUN TO GO ON SHINING; NEW MONEY FOR NEW ENERGY; DISTRIBUTED WIND TO DOUBLE IN 5 YEARS

WORLD SUN TO GO ON SHINING Reaching New Heights: Cumulative PV Demand to Double Again by 2015

Michael Barker, March 15, 2013 (SolarBuzz)

“Although [solar PV] end-market demand in 2012 did not achieve the levels many had hoped for, it still set a new record in terms of annual installed capacity…reaching a 100 GW cumulative installation level for PV systems.

“…[The recent trend continued of] cumulative demand doubling every two years. It took more than 30 years for global cumulative demand to reach 2 GW but only four to surpass 4 GW in 2004. Since then, the industry has seen cumulative demand doubling every two years…Annual growth rates have been declining, however, and the next doubling of cumulative demand is anticipated to take slightly longer at three (rather than two) years, under current policy and installed pricing conditions.”

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“This trend has been driven first by attractive policy mechanisms designed to drive downstream demand and, more recently, by rapid price declines throughout the upstream PV value-chain…[P]olicies have…been adjusted downwards, thereby slowing the pace of growth. However, given the maturity of the industry and the potential for continuing cost reductions, the PV industry is still poised for strong long-term growth and will increasingly be seen as a major source of power generation…

“…[U]nder upside scenario forecasts, the market could…[double] again in both 2014 and in 2016, and exceeding 450 GW of cumulative installed capacity by 2017.”

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NEW MONEY FOR NEW ENERGY New Push to Securitize Renewable-Power Pacts

Ryan Tracy and Cassandra Sweet, March 14, 2013 (Wall Street Journal)

“The Obama administration and some on Wall Street are laying the groundwork for bundling renewable-power contracts into securities, part of an effort to make it cheaper to finance alternative energy…The initiative aims to extend to renewable energy a financial tool already used in the mortgage and credit-card industries. The securities could be sold to pension funds or other investors, who would receive a return funded by payments from users of electricity where solar panels or other equipment is installed…

“Administration officials say they are approaching the prospect with caution, aware that mortgage-backed securities played a key role in the 2008 financial crisis and the ensuing recession. But officials view the financing structure as a possible avenue to lower the cost of buying renewable energy…The idea of securitization is to spread risk across hundreds of contracts and ensure a steady return for investors. That is much easier to do with home mortgages than it is with solar- or wind-power contracts, due largely to the relative immaturity and small size of renewable-energy markets. Also, doing a deal with the government might be trickier given the possibility that future power shifts in Washington bring different priorities concerning military spending…”

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“…[An early focus is the military, which is preparing to spend billions of dollars on electricity from solar, wind and other renewable sources during the next decade. The military services can enter into electricity-purchase agreements without new appropriations from Congress. The] U.S. departments of Defense and Energy are exploring the idea and taking steps toward making it more attractive to investors, including standardizing the terms of power-purchase contracts…The Army is preparing to buy up to $7 billion of energy from projects that private developers build and finance, part of a goal to add 1,000 megawatts of renewable-electricity capacity by 2025…The Navy wants to add an equal amount of capacity…

“Solar- and wind-power developers generally raise money for new projects through private deals with banks, insurance companies or corporations. But they are eager to tap public markets, where the pool of investors would expand to include pension funds or individual investors… Some in Congress have proposed changes that would provide favorable tax treatment and the ability to sell ownership shares publicly…[A]real-estate investment trust…could be available for renewable-energy projects if the Internal Revenue Service allows them to qualify…[A] master limited partnership…won't be available unless Congress passes new legislation…Bankers say a renewable-energy security would have to be considered fairly low-risk in order to earn a high mark from ratings firms and attract large, conservative investors like pension funds. The terms of each of the contracts involved also would need to be relatively similar so that investors could make an educated guess about the group's overall risk…”

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DISTRIBUTED WIND TO DOUBLE IN 5 YEARS Small Wind Power; Demand Drivers, Market Barriers, Technology Issues, Competitive Landscape, and Global Market Forecasts

1Q 2013 (Pike Research/Navigant)

“…[T]here are many signs the [small wind turbines (SWTs)] industry is maturing, including the expanded role of SWT certification, hundreds of manufacturers located around the world, expanding dealer networks, and a growing number of national and regional industry associations…

“…There are also a growing number of applications across telecommunications, defense, and other remote locations being enabled by the growing interest and investment in microgrids and hybrid systems that integrate small wind with solar PV and diesel generators, among other renewable distributed energy generation technologies.”

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“The overall market for SWTs is growing as a result of feed-in tariff (FIT) policies in the United Kingdom and Italy. While there are a few bright spots in the United States market, in general, manufacturers in the U.S. are trying to regain their momentum after rebates and other key incentive programs in leading states have stalled, decreased, or expired in the past 3 years…

“…Pike Research forecasts that global installations of SWTs will grow from an estimated 85.8 MW in 2012 to 172 MW in 2018, representing $3.3 billion in revenues.”

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