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Opinion: Solar Tariffs are Throttling America’s Biggest Job Creation Machine

by Nick Blitterswyk, CEO of UGE

The U.S. Department of Commerce just announced that it will add high tariffs for solar modules imported from China. The Canadian government is also investigating the adoption of similar measures, following recent complaints filed by Ontario-based solar manufacturers. With the solar industry in hypergrowth, it’s not a surprise that these governments are interested in boosting new jobs, protecting their economies, and fostering the solar sector. The problem is that tariffs are a short-sighted approach that actually attack the future of North American solar on its home soil, and likely destroy more jobs than they create.

Our competitive advantage is in value-added services, not manufacturing

Manufacturing is a low-margin business compared to the higher margin solar sectors like installation, engineering, and operation. These value-added services comprise one of the fastest growing job markets in the U.S. Although tariffs are typically meant to protect domestic workers, that’s exactly who they will be hurting.

Currently, solar developers and installers — like Vivint, SolarCity, Sungevity, and UGE — are leading the world in renewable energy business model innovation. These companies have rapidly expanded in North America and have also exported these new business models to regions all around the world. This is a clear area where the U.S. has a competitive advantage. Each of these fast-growing businesses employs hundreds to thousands of workers, and these are service jobs that cannot be outsourced. (Meanwhile, SolarWorld, the German solar panel manufacturer who has led the charge in the U.S. against imported panels, just announced a massive expansion of manufacturing this will only add at most 200 jobs).

By comparison, U.S. solar manufacturing (and Canadian, for that matter) is a small industry. China has developed unparalleled expertise in this area, with Yingli and Trina solar modules the top two suppliers in the world, each holding more than 5% of total market share. Though that may be a threat to U.S. manufacturers, it can actually be a big benefit to the global economy in terms of providing the most cost effective solar panels, and by extension more affordable energy. The U.S. Commerce Department needs to take a look at the industry holistically, rather than focusing on such a thin slice of the solar economy. Tariffs are actually shrinking existing competitive advantages in solar, and harming the potential for local solar adoption, under the auspices of trying to protect this very small manufacturing sector.

More expensive U.S. electricity will force businesses to go elsewhere

Cheaper technology has spurred the dramatic rise in solar adoption that we’ve seen over the last few years. Deutsche Bank just issued a report anticipating that solar will reach grid parity in all 50 states by 2016, and these trends have been expected to continue. But this depends on technology costs staying competitive.

High tariffs significantly raise the material costs for U.S. solar developers and installers, driving project costs 5-25% higher than in a country without the tariffs. That same 5-25% cost addition means developers like UGE can offer electricity rates to companies outside the country that are 5-25% less than what is offered within the U.S. In our global economy, that means businesses will move their operations elsewhere. New facilities will open in locations where energy is cheaper, and with them, the US will lose out on new construction jobs, manufacturing jobs, and other economic benefits like tax revenue.

U.S. consumers — and our climate — lose out

Beyond the benefits to the U.S. solar industry, low module costs have impacted all energy consumers. For the first time, it has been possible to transition to renewable energy not only for the environmental benefits, but because it’s more cost effective. This has huge implications for mitigating climate change, improving our energy security, and stabilizing the cost of energy resources.

The U.S. and China just made a landmark agreement to reduce carbon emissions, and we are already seeing progress worldwide. Tariffs have the potential to derail this significantly. They hurt consumers who will either have to pay more to switch to solar energy or won’t make the transition at all, and the additional costs, in the form of those tariffs, go straight into government coffers. That will ultimately be the biggest cost of this policy if it stays in effect– it will stall the tremendous progress that the solar industry has been making to transform how the U.S. and the world gets energy.

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Nick Blitterswyk is the CEO and founder of UGE International, a leading developer of distributed renewable energy solutions for business and government, with projects in over 90 countries, including several for Fortune 1,000 companies.

12/23/2014 1 comment

Renewable Energy

Winter Is Coming! Five Ways the Changing Seasons Impact Renewable Energy

written by CleanTechies.com Contributor

By Connor Trujillo

In many parts of the northern hemisphere, the leaves are falling, temperatures are dropping, and winter is just around the corner. Many people pay attention to the turning of the seasons because it means they need a new coat — but for those who utilize solar and wind energy, it’s even more important to understand how this change affects PV and wind energy systems.

1. Renewable Energy Is Site Specific

Unlike coal or natural gas power plants, which basically function the same way no matter the location, both solar and wind systems are inherently dependent on their location and the time of year. Renewable energy system designers plan for these changes, utilizing weather data, insolation maps, anemometers, and modeling software to ensure the system is reliable and efficient all year round. Often this means designing a system based on the historically least sunny and windy day of the year.

For example, near the equator, insolation is almost constant year-round, whereas polar regions have very little sun during the winter months. Because this is so site specific, renewable energy systems are most productive and cost effective when they are customized to their unique environment.

2. Solar Panels Are More Efficient in Cold Temperatures, But Winter Days Are Shorter

Panels capture energy from photovoltaic light — not from the sun’s heat. In fact, heat actually reduces the efficiency of solar panels, but during colder months, their energy production can increase by up to 15 percent. Despite this benefit of cold weather, winter days have fewer daylight hours, so the net change of amount of energy produced will be lower than during other times of the year.

3. Winter Can Bring Stronger Winds

One way to make up for this loss of solar panel efficiency is to incorporate wind, creating a hybrid renewable energy system. Winters in most regions tend to bring stronger winds, which help offset the loss of production seen from PV. This same balanced system design can also be applied to differences between day and night, where solar panels produce energy from light during the day and wind turbines take advantage of nighttime winds.

4. Battery Chemistry Varies with Temperature

Batteries often have reduced efficiency at extreme temperatures. In order to account for this loss, renewable energy system designers must assess the energy needs and the site resources. In some extreme climates, it may be advised that electronics and batteries are housed in a temperature controlled enclosure.

5. Snow Falling on Solar Panels: Preparing for Storms

Snow and ice can cause added load on solar panels, so this possibility should be factored into structural design as well as energy production estimates for the winter season.

The good news? While winter weather often brings increased power outages, renewable energy systems designed for off-grid use can provide uninterrupted electricity, even when power lines go down. Microgrids, as well as backup storage, are becoming increasingly popular for the added resiliency and energy security they provide.

About Conor

Connor Trujillo is passionate about improving the world through a focus on energy and the environment.

12/03/2014 0 comment

Renewable Energy

Energy Efficiency and Renewables Are Lowest Risk/Cost Investments for Utilities

written by CleanTechies.com Contributor

By Sheryl Carter, NRDC

A new report by utility and finance experts contains positive news for the environment, our air and our (and our utilities’) pocketbooks — the economics of electric power resources have made zero-emissions energy efficiency and renewable energy technologies the most financially attractive options to meet the nation’s future energy demands.

The report by the nonprofit organization Ceres, entitled “Practicing Risk-Aware Electricity Regulation: 2014 Update,” says energy efficiency, distributed (onsite) energy, and renewable energy (whose costs, in some cases, have come down dramatically since 2012) are enticing investments for utilities because they bring lower risks and will cost less than traditional energy sources used to generate electricity.

And almost without exception, the report says the investments that could cause the most financial harm for utilities, ratepayers, and investors are large base-load fossil fuel and nuclear plants, which are riskier and more expensive.

“The report’s risk profiles make clear that energy efficiency is the cheapest, safest investment by far, followed by wind and solar energy technologies whose costs have dropped dramatically the past two years,” says Ceres President Mindy Lubber.

We already knew that energy efficiency — aka smarter use of energy — is the cheapest, most abundant investment out there, as I noted recently in discussing the International Energy Agency (IEA) Energy Efficiency Market Report 2014 that demonstrated the global savings from energy efficiency are greater than the output from any other single fuel source — including coal, oil, nuclear, and gas. Meanwhile, the first national limits on power plant carbon pollution will increase energy efficiency, which will reduce the cost of compliance.

But as Ronald Binz, one of the authors of the new Ceres report, says, “the dramatic decline in the costs of renewable energy, especially utility-scale solar,” represents a major development that could have far-reaching consequences.

The changing economic landscape combined with the pending EPA power plant standards to reduce carbon pollution, does not mean change will come overnight or that there will be any let-up by the supporters of coal and nuclear power. But the trend line is positive and strongly suggests that the old ways of doing business for utilities and state regulators are no longer as viable as they once were, and in fact carry significant financial risk.

The latest findings by Ceres, a nonprofit organization that seeks to mobilize business an investor leaders on climate change, reaffirms the conclusions and recommendations in its 2012 report, “Practicing Risk-Aware Electricity Regulation: What Every State Regulator Needs to Know,” that discussed the aging power plant fleets, evolving technologies and regulations for climate change, and the changing nature of the risks that these challenges present for utilities, customers and shareholders.

The Latest Findings

In examining the conditions facing today’s electric power industry, the new report cites a number of salient facts and reached some important conclusions that should be heeded by the utility industry as its plans how to address the nation’s energy needs, including:

There is a clear and durable imperative for clean energy in the United States, driven by advancing technology, federal air quality rules, and the lower cost and risk profile of renewable and demand-side energy resources. Renewable energy technology costs have fallen sharply, closing the cost gap between renewable resources and traditional fossil fuel resources. Solar photovoltaic energy costs, in particular, have declined precipitously in recent years while wind and solar costs are expected to continue to fall through at least 2020, a characteristic not shared by other generation technologies.

Utility business models conversations are shifting from a simple “cost of service” approach to consideration of one that expands utility service offerings and capabilities in light of carbon reduction goals, grid resilience needs, and customer engagement imperatives. This transformation is already happening to a degree that seemed unthinkable just a few years ago.

Distributed energy resources — that is smaller power sources like demand response (when customers alter their electricity use at certain times of the day), storage, and distributed generation, that can be aggregated to provide energy necessary to meet regular demand — will play an increasingly important role in the 21st century electricity system. As states grapple with this reality, they must begin to plan for a much more complicated system that includes new technologies and varied sources of energy.

The bottom line, as the report clearly suggests, is that the trend toward low-carbon energy resources, including energy efficiency and renewable energy, is unmistakable. When we don’t need to generate as much electricity and/or use zero-emissions resources, we reduce the amount of climate-altering pollution belching into our air and harming our health. In short, as the report notes, “There is a clear and durable imperative for clean energy in the U.S.” that is being driven by new technologies, more favorable economics, stricter federal air quality rules, and consumer demand.

This article was originally published on NRDC and was republished with permission.

About Sheryl

My approach to environmentalism was formed in large part by my practical MidWest upbringing. Growing up in Outstate Minnesota, I was taught to be fiscally conservative: to plan for the long-term, to invest in things that will last, and to save for the future. I was also taught to be socially open and aware: to be respectful of other people, places and nature. (You never knew when you were going to need help getting your car out of a snowdrift and you will definitely want to go swimming in that lake again someday.)

I grew up in a hunting and fishing family and community. We went camping practically every weekend in the summer, and played outdoors all winter. My love and respect for nature grew into a passion when I went to school in Colorado and got hooked on the mountains.

Advocating for energy efficiency and clean energy allows me to combine my passion with my practicality. In my mind, it is the most fiscally conservative and socially aware investment that we as a society can make. It saves money, makes people more comfortable, cleans the air, creates jobs, and it lasts!

12/03/2014 0 comment

Renewable Energy

Clean Energy and Job Creation Go Hand-in-Hand in San Antonio

written by CleanTechies.com Contributor

While many are prophesizing the Environmental Protection Agency’s Clean Power Plan (CPP) as doomsday for the electricity sector, Texas utilities are telling a different story. The CPP will limit – for the first time ever – carbon emissions from existing power plants. One utility in particular, CPS Energy in San Antonio, “has already embraced a low-carbon strategy that anticipates this rule,” making it the most well-positioned utility in the state, if not country.

Homegrown energy, literally

CPS Energy has excelled using its commitment to create local, clean energy jobs. In its Request for Proposal (RFP) for a 400 megawatt (MW) solar energy plant, the utility included a specification for the creation of local solar jobs. And it worked. Most recently, the utility announced the launch of the Mission Solar Energy Plant – a 240,000 square foot manufacturing plant that will employ upwards of 400 San Antonians. To assist with future expansions, CPS also helped create a program at Alamo Colleges to train its future workforce for clean energy jobs and, admirably, almost one out of every five employees is a veteran.

Follow the jobs

CPS Energy is a national leader in its ability to recruit cleantech companies to San Antonio by tying the RFP to manufacturing. When the utility requests proposals for clean energy projects, it gives preference to companies willing to relocate offices to Texas – much like OCI Solar Power, the solar developer for the 400 MW Alamo solar plant. When CPS Energy selected OCI Solar Power to install the solar panels in San Antonio, the company moved its headquarters to San Antonio, bringing 800 permanent jobs and investing at least $115 million locally.

OCI Solar Power is not an outlier either. Consert Inc., a smart home energy management company, moved to San Antonio (and pledged to create 150 jobs) after CPS Energy selected the company to help reduce San Antonians’ electricity bills – by as much as 250 megawatts over the next four years, or enough energy to power 50,000 homes. So far CPS has recruited cleantech companies OCI Solar Power, KACO, Sun Action Trackers, Consert, and Greenstar for a total of 957 new jobs through its resource procurement process.

Not only is CPS Energy bringing more jobs to the city that can’t be outsourced, it is also saving money for residents and businesses. This is a win-win for everyone.

Time to take the bull by the horns

EPA’s Clean Power Plan presents an opportunity to grow and sustain Texas’ economy through clean energy. Much like CPS Energy has trail-blazed a new business model that serves its community in several ways, Texas needs to take the bull by the horns and create a plan that serves Texans and local industry. This is not rocket science and it’s not end-of-the-world superstition. The CPP is a smart policy well within Texas’ reach. All we have to do is amplify current trends – rely on more West Texas wind, take advantage of the state’s abundant natural gas supply, widen the use of Texas’ largely untapped solar potential, and use electricity more efficiently. We can start by looking at San Antonio and other progressive utilities in El Paso, Austin, and elsewhere, as well as by coupling Texas ingenuity with clean energy to give us more jobs and clean air. Let’s seize this opportunity, lest we lose economic growth to other states embracing the clean energy future.

Article by Jim Marston, Vice President, US Climate and Energy Program, Environmental Defense Fund.

11/24/2014 0 comment

Clean Transportation

Natural Gas Remains Viable But Niche Green Fuel

written by CleanTechies.com Contributor

It appears that in 2014 Honda will sell fewer than 1,000 Honda Civic models that run on compressed natural gas. CNG, a clean fuel produced in greatly expanding quantities in the United States, is also an economic greener alternative to gasoline and diesel. However, considering that Honda sold about twice as many Civic CNG cars (see photo) last year suggests that consumers remain hesitant about the gaseous fuel.

For years, automakers have promised to expand the number of CNG models available to U.S. shoppers. In February, Chevrolet announced that the 2015 Chevy Silverado 2500HD and 3500HD heavy-duty models would be available with CNG-capable bi-fuel 6.0-liter V8 engines, sold at all Chevrolet dealerships nationwide.

In the past few weeks, there were more announcements about new CNG offerings. Michigan-based Crazy Diamond Performance received EPA approval on two new retrofit compressed natural gas small passenger vehicles, the CNG Chevrolet Cruze and CNG Chevrolet Sonic. These platforms, which run exclusively on CNG, are the first of a series of small and fuel efficient vehicles coming from CDP.

“These vehicles provide flexibility for fleets looking to purchase a domestic small mono-fuel passenger sedan, but have not had an option until now,” said Michelle Fern, executive vice president at CDP Inc. “There are significant emissions benefits over its gasoline counterpart, with an average reduction in CO2 of 25 percent.”

Meanwhile, Mercedes in October shared information about a version of its B-Class compact that runs on natural gas. It will be sold in Europe, but could be made available in the U.S. in the future. Mercedes recently began selling an all-electric version of the B-Class in select U.S. cities. Both alternative drive Mercedes models used an “energy space” to store the fuel (or batteries) under the body of the vehicle.

The Mercedes B200 Natural Gas Drive features CO2 emissions that are 16 percent lower than ga

Article by Brad Berman, appearing courtesy ebay Green Driving.

11/10/2014 0 comment

Energy Efficiency

Energy Efficiency is Essential—and it Needs to be Sexy

written by CleanTechies.com Contributor

Why doesn’t energy efficiency excite people as much as a Tesla roadster? On the face of it, duh. It’s the brains of it that make it a head-scratcher.

An American Council for an Energy Efficient Economy (ACEEE) report released earlier this month ranked the U.S. among the least energy efficient of the world’s largest economies, at 13th overall. (Get the details in Climate Central’s summary.) This despite the fact that earlier ACEEE research found that economic data and the historical record suggest energy efficiency investments “can provide up to one-half of the needed greenhouse gas emissions reductions most scientists say are needed between now and the year 2050″ and “Investments in more energy-productive technologies can also lead to a substantial net energy bill savings for the consumer and for the nation’s businesses.” According to NRDC’s annual energy report, released in October, efficiency contributes more than any other resource toward meeting energy goals, and does so at less expense, saving billions of dollars and preventing millions of tons of carbon emissions.

In other words, energy efficiency is probably the single most effective greenhouse gas reduction strategy we have, and it saves you money. What’s not to get excited about?

Unfortunately, energy efficiency just isn’t sexy. Climate pundits have been lamenting this for some time: energy efficiency is the granny panties of the green economy. Many see the solution in language—what we need is a new term, one less evocative of slide rules and more inspirational. I’m all for optimal naming, but we need to look at the total package.

Energy efficiency faces two obstacles that strike me as more serious than its nerdy name: invisibility and implausibility. The beauty and the downfall of many energy efficiency measures is that they work in the background, without anyone being aware that they’re happening. And the potential savings from these measures often inspire skepticism more than any other reaction—people think that if a solution like that really were effective, it would already be standard practice. That assumption ignores the powerful forces of inertia and the culture of heedless consumption: most Americans haven’t worried much about saving energy because we haven’t had to.

When our own clients have faced this barrier, we’ve advocated “show, don’t tell” strategies. People need to see energy efficiency in action, and what they see has to be alluring, mesmerizing or at least moderately cool (to the intended audience, of course). There are many potential paths to this effect. The Nest thermostat is a great example of sexiness through design. The opposite of Nest’s chic minimalism could also be a winning strategy: show the energy efficiency happening through web interfaces, tickers, texts from your tires, whatever. Energy efficiency messengers and messages are also crying out to be amped up and taken out of the granny panties zone.

Will energy efficiency ever make our spines tingle? Maybe not (barring an electrical accident). But it can at least be made visible—and worth looking at.

Article by Sandra Stewart, a principal at Thinkshift Communications, which provides brand storytelling, messaging, PR and other strategic marketing services to cleantech and sustainable businesses.

11/10/2014 1 comment

Renewable Energy

5 Energy Trends that will Change the Balance of Power

written by CleanTechies.com Contributor

We no longer fret over taxes on tea, but there’s another American Revolution forming in our great nation today. Like the colonist uprising 241 years ago, it’s fueled by a need to stand up against an outdated system that threatens our way of life.

It’s a battle over the future of American energy and our antiquated electric grid. And it centers around the way consumers, utilities, and investors interact with this vast network of powerlines, substations, and plants.

As Cheryl Roberto, who leads Environmental Defense Fund’s Clean Energy program, notes, “The U.S. is poised to spend around $2 trillion over the next two decades replacing our outdated electric infrastructure.”

That’s a lot of coin and a tremendous opportunity.

We’ve detected five emerging trends that may forever change how we produce and consume electricity. It will be an American approach to energy that wastes less, pollutes less, and, as Cheryl likes to say, “puts customers in the driver’s seat.”

It’s made by, and for, you and me.

Trend #1: Utilities think quality, not quantity

Power companies, like people, respond to incentives. The current regulatory framework in the United States incentivizes utilities to invest more in power stations and infrastructure than in building value for consumers and the environment.

If they are to survive the Revolution, utilities need to re-think the model, and the regulatory framework needs to change to support utility investments in renewable energy and energy savings. It sounds daunting, but it’s already happening in New York State.

Trend #2: Clean energy finance takes hold

While rooftop solar panels are becoming more common, securing financing for these and other energy investments and retrofits can be tough. Clean energy is more than a way for homes and businesses to lower bills and protect the environment; these upgrades also represent a serious investment opportunity.

Today, states are beginning to connect investors with programs such as on-bill repayment for large and small residential projects. Commercial properties are getting in on energy efficiency, too, thanks to the Investor Confidence Project which brings standardization and quantifiable metrics to energy efficiency projects in the commercial building sector.

The result: lower operating costs, higher market value, and a significantly lower carbon footprint.

Trend #3: Everyone gets a stake in the grid

Going back to incentives, energy-savings programs like demand response help consumers adjust their power consumption during peak times by offering a financial reward for doing so. By empowering consumers (forgive the pun) we can use resources far more effectively and efficiently.

Distributed energy is a related concept, calling on smaller-scale clean energy resources such as energy efficiency, energy storage, and local, on-site generation to complement traditional sources. California is at the forefront in this area.

Trend #4: Vastly improved batteries open new doors

Rapid advancements in battery technology are making batteries a surprisingly disruptive – for the better – force in the modern American Revolution. EDF’s Midwest Clean Energy Director Dick Munson reports that improved batteries could put renewable energy sources in the lead.

“When the wind stops blowing or the sun goes behind a cloud, batteries are able to provide back-up power until those resources are back online,” he writes.

Until recently, battery cost was prohibitive, with systems costing as much as $1,500 per kilowatt hour. Today the average is between $500 and $700, and dropping. Bonus: Someone has to build these batteries, and that means jobs. Just ask North Carolina and Illinois.

Trend #5: Coming: Federal policies to support it all

All of these trends are independently worthwhile, but the Clean Power Plan may be the glue that binds them all together. In addition to putting the first-ever limits on power plant emissions, the plan offers states impressive freedom to choose how to meet their emissions goals, and the trends above will play out as states exercise that freedom.

Freedom is the hallmark of any true American Revolution, after all. As is our quest for a stronger, better, and more innovative nation.

To take a page from the classic 1980s cartoon He-Man: Americans can be masters of our energy universe. We…have…the power!

Article by Dan Upham, Editor, Environmental Defense Fund Energy Exchange Blog.

11/05/2014 0 comment

Clean Transportation

Finalists for 2015 Green Car of the Year Reveal Diverse Tech Strategies

written by CleanTechies.com Contributor

The five finalists for the 2015 Green Car of the Year award were announced earlier this week. The award is given out every year at the Los Angeles Auto Show. The finalists give clear evidence that green comes in many shades—using a diverse set of technologies and fuels, including electric, natural gas, diesel and even plain ol’ gasoline when efficiently burned.

In more than one case, a single model can use multiple fuels. For example, the seventh-generation Volkswagen Golf is available with a 2.0-liter clean diesel system, an efficient four-cylinder engine, and in select markets, a pure electric powertrain. The EV version is called E-Golf (shown above), the first of many battery-powered vehicles expected from VW.

The award committee, organized by the Green Car Journal magazine, also put the Audi A3 TDI on the finalist list. Like the diesel Golf, the A3 DI also uses a 2.0-liter diesel engine.

The all-electric BMW i3 is also a finalist. In a sense, the fuel diversification theme continues with the i3—because it’s available either as a pure no-tailpipe electric car, or with a small optional range-extending engine that holds a small tank of gasoline on reserve to extend the EV’s 80-mile range for an additional 80 miles. Engineers also increased efficiency by using a lightweight carbon fiber reinforced plastic (CFRP) body on an aluminum space frame for the BMW platform.

Meanwhile, the Chevrolet Impala Bi-Fuel, another finalist, gives drivers of the popular mid-size four-door sedan the ability to switch between natural gas and conventional gasoline.

Finally, the third-generation Honda Fit makes the list. The Fit has long been respected for providing big utility from a small car. It leads its class of compacts in interior space, while offering 41 miles per gallon on the highway—not from electricity, diesel or natural gas, but from a highly efficiency 1.5-liter gasoline engine.

The winner will be announced on Nov. 20 at the L.A. auto show.

Article by Brad Berman, appearing courtesy ebay Green Driving.

10/27/2014 0 comment

Energy Efficiency Renewable Energy

Lessons From Germany: How Can the U.S. Succeed at its Own Energiewende?

written by CleanTechies.com Contributor

Germany has put itself on the world map in the past decade as an early adopter of energy generation from renewable sources. In 2013, 25% of the country’s energy came from renewable sources – the highest percentage in the world. By 2050, as part of the country’s Energiewende (or “energy transition”), Germany expects this number to be at 80%. This is an incredibly ambitious goal, as Germans and the rest of the world will agree, but Germany is preparing now to make this happen.

As part of the Transatlantic Program hosted by the German American Chamber of Commerce, I had the incredible opportunity to meet with many of Germany’s energy influencers, and learn directly about how Germany is transitioning to carbon-free energy. It hasn’t been all smooth sailing, but there are key lessons that the U.S. and the rest of the world can learn both from Germany’s successes and plans for improvements.

Consistent Policy is Critical
The Bundesnetzagentur in Bonn is Germany’s Federal Network Agency for electricity, gas, telecommunications, post, and railway, and they had many insights to share about the reason for such high rates of renewable penetration to date. In particular, they attribute this adoption to policy, and more specifically, three aspects of the current renewable energy policy in Germany: guaranteed grid and market access for renewables, priority dispatch of renewables over conventional generators, and guaranteed financial support for 20 years through the feed in tariff. These three traits have provided great incentives for installers of renewable energy, paving the way in some cases for high profit as competition from solar producers caused panel prices to drop rapidly. This is a key lesson the U.S. can learn from Germany: consistent policy is critical for a similar large-scale transition to renewables, and it’s currently missing in our market.

Though policy incentives are often criticized, for a transition of this size predictability of expected returns throughout the expected life of renewable equipment is essential in the early years. With policies that are inconsistent or absent from state to state and year to year, individuals, businesses, and even utilities are hesitant about investment in newer technologies. Germany’s foresight on this front has resulted in solar capital costs that have reached grid parity – a great thing that much of the world can take advantage of as we follow suit.

Negative Pricing is a Double Edged Sword

Structure Incentives for Success

The transition to renewables has not been all smooth sailing for Germany. The sudden drop in solar prices was not anticipated, as the German market and German manufacturers were flooded by low-cost Chinese suppliers. The large influx of intermittent sources has made grid management difficult. Only 5% of the renewable capacity on the German market is owned by the primary utilities, with the rest being owned by individuals, communities, industry, and smaller utilities. The complexity of planning for these scattered sources (which are guaranteed access to the grid), and existing baseload plants like nuclear or coal that are difficult to shut down quickly, resulted in a “perfect storm,” with overproduction of supply and negative pricing on the spot market. This actually incentivized demand to increase in order to balance supply and demand on the grid, and stabilize the voltage and frequency output of the system.

Germany is now adjusting their incentive structure to adapt to these unforeseen effects. The feed in tariff will soon become a feed in premium, where eligible producers of renewable energy will need to bid their production into the market just like all other providers. They will then receive a bonus or premium price over the resulting market price. In this way, all generators have an incentive to curtail production when the market price and demand are low (thus avoiding negative pricing), and produce when the price (and subsequent demand) is high.

Though Germany went through some growth pains to arrive at this stronger footing, they have also paved the way for greater understanding and policy structures for other markets. As other nations look to implement a similar transition, we have a head start with Germany to thank, and can structure incentives that are implemented in a way that rewards responsible installation and management of clean technology projects.

Diverse and Rapid Innovations
Despite the challenges, Germany’s negative pricing phenomenon led to the need for very creative energy solutions. Germany has had unparalleled development and deployment of new and emerging energy technologies, many of which now have strong potential to scale. Our delegation met with many of these new companies and it was exciting to see what’s on the horizon:

Researchers at EFZN in Goslar are evaluating the feasibility and economics of wind powered pumped water storage in abandoned mines in Germany. A storage capacity of 40 GWh is likely available in 100 existing mines at a current cost of €0.05-0.10 per kwh. When the market price of electricity drops below zero, grid electricity can be used to pump the stored water to a higher elevation. When the grid price is high, the potential energy in the water is used to generate electricity and sell it to the grid, and the economics of this solution start to become viable.
A delegation tour of a hydrogen fuel production station revealed a similar economic concept, though the technology involved is significantly newer and still more expensive. Hydrogen technology has gotten much criticism for the high cost and safety concerns associated with producing, storing, and transporting compressed hydrogen gas, however, the hydrogen production and fueling station in Hamburg’s HafenCity, provided by Vattenfall, is proving that the technology is feasible. The plant was designed to produce hydrogen gas through electrolysis of filtered city tap water from renewable energy at low or negative cost, and sell the hydrogen to fuel the city’s fleet of hydrogen fuel cell city buses and personal cars.
Many battery storage technologies are also undergoing research and demonstration for expanded uses in the transition. Lead acid batteries remain the most common technology for use with renewable energy systems due to their low cost and high availability. However, this solution is bulky, heavy, and limited to low power applications. The battery research center at MEET in Munster is conducting extensive testing with Lithium ion batteries, which provide many advantages in both mobile and stationary applications and performance as part of the energy transition. Better understanding of this technology coupled with industry partnerships at the research center will allow for greater adoption and lower costs.
In another energy storage development, the delegation met with the Project Manager of the Smart Region Pellworm project, an island community that generates all of its energy plus some through renewable sources on the island. As part of this project they have installed a vanadium flow battery to help with response to grid demand for electricity and improve the economics of the renewable investment. This type of battery is new to the market, but has the potential for tremendous benefits and applications for community scale renewable microgrid systems which are larger than what is practical for traditional batteries. This installation was reported to have been very reliable so far, and is expected to have at least a 20 year life with only minor maintenance.

Though the technology and progress enabled by the Energiewende is incredible to behold, this still comes at a cost. The renewable feed in tariff is funded by rate payers, and many in Germany agree that its implementation created excessive windfalls for some. Though the rate of the FIT is declining for new installations, projects that are already operational are still reaping massive benefits. With all of its ups and downs along the way, Germany is leading the way in the energy transition, and we all have much to learn from their experience.

Katrina Prutzman leads the system design team at UGE, and recently returned from the Transatlantic Program for Young Technology Leaders, a delegation trip to Germany focused on smart grid and energy storage. UGE (TSX: UG.V) is a leading developer of distributed renewable energy solutions for business and government, with projects in over 90 countries, including several for Fortune 1,000 companies.

Article by Katrina Prutzman. A version of this article first appeared on GreenTech Media.

10/26/2014 2 comments

Renewable Energy

Germany’s Energiewende Proves Electricity can be Clean and Reliable

written by CleanTechies.com Contributor

Since 2004, the year of the first major revision of Germany’s Renewable Energy Act (EEG), the country has added at least 35 gigawatts (GW) of solar and 35 GW of wind to its electric grid – enough to offset upwards of 35 coal plants. What’s more impressive is during the first half of 2014, close to 29 percent of Germany’s electricity came from renewable sources. For perspective, America’s renewables percentage, at about 14 percent, was half of Germany’s during this timeframe.

Meanwhile, the country has improved its status as a grid reliability leader, causing the Heinrich Böll Foundation’s Energy Transition blog to conclude, “Clearly, installing the equivalent of 100 percent of peak demand as wind and solar capacity does not bring down the grid.” Renewables International further asserts, “Renewables have not yet reached a penetration level that has detrimentally impacted grid reliability.”

This success runs contrary to the predictions of Energiewende’s critics, who have sounded the alarms about investing in “too much” renewable energy. Some of these concerns are more valid than others, but the truth is, most of these claims are blown out of proportion, fixable with solutions that are not overly complex, and/or based on no empirical data.

How did Germany do it?

The System Average Interruption Duration Index (SAIDI) measures the average interruption time per electricity customer, and it is the foremost metric used internationally for assessing electric grid reliability. This past August, Germany’s Network Agency announced that the country’s SAIDI value dropped from 15.91 minutes in 2012 to 15.32 minutes in 2013.

This improvement is especially impressive considering Germany’s 2012 SAIDI score was the third best in Europe and less than a tenth of the value of 244, the most recent statistic from the United States (see graphics below).

The indicator that most strongly correlates with grid reliability, and could explain why Germany outperforms the United States, is the level of undergrounding of low-voltage (LV) and medium-voltage (MV) cables. As the name suggests, underground electricity wires are buried and sheltered from inclement weather and thus more reliable than aboveground electricity transmission. Over 70 percent of both LV and MV cables are underground in Germany (see figure below).

By contrast, 2012 survey results from the Edison Electric Institute indicate that underground cables only serve about 39 percent of homes in the United States (see below).

Critics are not always right

Despite this success, the Institute for Energy Research asserted just last month that “the outcome [of the Energiewende] for Germans will be a higher potential for blackouts” due to an increased number of grid intervention events. From 2010 to 2012, grid intervention events increased fourfold in Germany. Similarly, Nature Publishing Group claims,

“The rapid rise in wind and solar power has created a nightmare scenario for grid operators, who face surges when the wind blows and the sun shines, and shortages when they don’t. In 2011, more than 200,000 blackouts exceeding three minutes were reported – and experts warn of a growing risk of major power failures.”

But this criticism is shortsighted. SAIDI specifically measures blackouts exceeding three minutes, and since 2006 Germany’s solar and wind capacity have increased by 70 GW while its SAIDI has improved from 21.53 to 15.32. Furthermore, as argued by Craig Morris for the Heinrich Böll Foundation’s Energy Transition blog, all ‘grid intervention’ events mean is that “instead of merely sitting there looking at screens, the engineers now have to press buttons”; as a result, there is a “slightly” higher likelihood of human error.

The most valid concern

Of all the criticisms against Energiewende’s reliability success, the issue of cost is the most valid. As it turns out, upgrading the electric grid to a state-of-the-art, 21^st century machine is pretty expensive, and that cost is mostly borne by utilities.

Too rapid an increase in generation from renewables is financially weakening German utilities, which make only a fraction of the revenue dispatching renewable power as from conventional sources. The value of Europe’s top 20 utilities has fallen from €1 trillion (USD $1.3 trillion) in 2008 to €500 billion (USD $630 billion) in 2013. According to The Economist, European grid upgrades by 2020 are expected to cost up to €1 trillion, and “companies worth €500 billion cannot finance anything like that amount… In their current state, utilities cannot finance Europe’s hoped-for clean energy system.”

Thus, crippling these utilities is potentially problematic for reliability because it lowers the potential for investment in the modernized grid. This concern, however, has yet to erode Germany’s electric grid reliability in practice.

Solutions exist

According to the Heinrich Böll Foundation, “even the strongest proponents of Energiewende agree that Germany needs to reform its energy system to accommodate the next influx of renewable energies.”

However, solutions exist to this problem that are not revolutionary. For example, a shift away from the “energy-only” market, in which utilities are only paid to produce and deliver energy, to one that is more profitable for utilities as renewables take over the generation mix. Potential structures include “capacity” and “capabilities” markets.

In a capacity market, utilities are not compensated for the energy they produce, but instead for what they have on reserve for immediate use when faced with reliability challenges. But this model does not give preference to any particular energy source. A capabilities market, however, attempts to prioritize power generation that guarantees low CO2 emissions. Natural gas-fired plants, energy storage, demand response, and renewable energy resources are just a few examples of the reliability measures that might be prioritized over a coal-fired “peaker” plant when trying to meet the demands of a strained electric grid.

The highest quality data supports the conclusion Germany’s grid reliability during Energiewende has been an unequivocal success so far. Opponents levy negative commentaries on this subject, and there is certainly still room for improvement regarding energy markets, but there is no doubt the German experience, as an international model, proves a clean grid can also be a reliable one.

Article by Peter Sopher, Clean Energy Policy Analyst, appearing courtesy Environmental Defense Fund Energy Exchange Blog.

10/21/2014 1 comment

Renewable Energy

Living The Green Life – Halloween Decorations

written by CleanTechies.com Contributor

Halloween decorations are irresistible, whether you’re looking to enhance the spooky or sweet side of the holiday. For the environmentally aware consumer, it can be even harder to decide whether it’s worth spending money on these bits and pieces. Don’t despair – we have some tips for putting some green into your Halloween décor.

Appearing courtesy SaveOn Energy.

10/18/2014 1 comment

Clean Transportation

Auto Executives: Electric Cars Will Soon Offer Range of 200 to 300 Miles

written by CleanTechies.com Contributor

General Motors is working on a new pure-electric car that it expects will go 200 miles on a single charge. That’s according to Mark Reuss, GM’s global product chief, who confirmed the project last week during a presentation to investors.

As reported in Automotive News, a trade publication, two other people familiar with GM’s plans, said it would be based on the Sonic subcompact model (shown above). While Reuss didn’t offer specifics about the nameplate or timeline, the unidentified sources said an electric car based on the Sonic is scheduled for about 2017.

Today’s electric cars have the capacity for between about 80 and 100 miles per charge—except the expensive Tesla Model S, which already offers between 208 and 265 miles per charge, depending on the model.

If Reuss’s comment about a pending 200-mile EV sounds optimistic, then consider what Dr. Heinz-Jakob Neusser, chief of powertrain development at Volkswagen, said earlier this month. Speaking at a conference, Neusser said that a range of between 300 and 370 miles is possible in about five years. Until then, we should expect suite of plug-in hybrids from VW and other automakers. Plug-in hybrids are capable of combining grid-supplied energy and petroleum—an approach characterized by Neusser as a “bridge technology.”

Plug-in hybrid versions of the Golf and Passat have recently been introduced to European markets, and might come to the United States in the next couple years.

The 2015 VW E-Golf goes on sale in the U.S. (in select states) later this month. “We can look [today] to the E-Golf, which has an operating range of around 115 miles,” said Nuesser. “I expect the next generation in 2015-17 will increase to around 185 miles, and the following step will be around 300 to 370 miles.”

If EVs can offer 200 to 300 miles on a single charge, while keeping costs in check, then the popularity of battery-powered cars will rapidly increase.

Article by Brad Berman, appearing courtesy ebay Green Driving.

10/16/2014 0 comment

Energy Efficiency

Five Energy Hogs You Can Humble

written by CleanTechies.com Contributor

Energy hogs are all around your home. They lurk in kitchens, hide in attics and basements, even root around home offices. They’re wasting energy and costing you hundreds of dollars every year. Here are the top five biggest energy wasters in most homes:

1. Electronics – Energy consumption in U.S. homes for electronics is up 10 percentage points in the last 10 years*. Not surprisingly, because we have so many more electronics: set-up boxes, computers, TVs and game consoles. These devices constantly draw power simply because they’re plugged in.

Solution: Plug your electronics into a smart strip and turn the strip off when the devices aren’t in use. When shopping for new electronics, look for the Energy Star label.

2. Heating and Cooling – Heating and cooling still take up a chunk of your energy bill… so, upgrading can save you a chunk of change. An older conventional heating system operates at 75% efficiency—which means that 25 cents of every dollar you spend on heating your home is wasted. A new high-efficiency furnace operates at more than 90% efficiency.

Solution: Look at the Energy Guide labels of your heating and cooling systems to see how efficient they are. If the units are old, plan to replace them with higher efficient units. In the meantime, clean or replace the filter as indicated on the system, and vacuum vents and ducts regularly to help increase efficiency.

3. Air Leaks – Air leaks are responsible for a lot of wasted heating and cooling. Every place conditioned air is leaking out of your home—whether it’s through windows, doors, attics or foundation cracks—is like money leaking out of your pocket!

Solution. Find and seal leaks. Check for air entering through doors and windows and also electrical outlets, switch plates and baseboards. Think about places you’ve noticed a draft and look for a leak. Plug up the leaks with caulk, weather stripping or even a rolled up towel. An energy auditor can tell you if you need to upgrade your insulation.

4. Energy-saving Light Bulbs – Energy efficient light bulbs, like LEDs and CFLs, can last up to 10 to 20 times longer than a regular incandescent bulb and use up to 75% less energy. A single 10 watt energy-saving bulb provides as much light as a 60-watt incandescent bulb while also emitting less heat.

Solution: Switch to an LED or CFL when you need to replace an expired bulb. Additionally, use a lower wattage where you don’t need so much light.

5. Large Appliances – Large appliances, like water heaters, clothes washers and dishwashers, can use up a lot of energy. Trying to remember efficiency actions for each appliance can seem overwhelming, but there are a lot of similarities that actually make it easier.

Solution: Keep your appliances clean: Dust the fridge coils, defrost the freezer, clean dryer vents, etc. Run with a full load: Not just clothes washers and dishwashers, but think about using smaller appliances, like using a toaster oven for smaller meals, when appropriate. And if an appliance is older, consider replacing it with a high-efficiency Energy Star-certified model—especially appliances that run continuously, like water heaters and refrigerators.

Article appearing courtesy Xcel Energy Blog.

10/10/2014 0 comment

Renewable Energy

While Critics Debate Energiewende, Germany is Gaining a Global Advantage

written by CleanTechies.com Contributor

Economics is the focus of many debates surrounding Germany’s aggressive “energy transition” (or Energiewende), which plans to move the country to nearly 100 percent renewable energy by 2050. Critics say Energiewende’s costs are unjustifiable, arguing they hurt the country’s international competitiveness and systemic inefficiencies exacerbate these costs.

At first glance, it’s hard to argue with them. The scale of investment in Energiewende can seem intimidating: So far, Bloomberg New Energy Finance estimates the total cost of Germany’s clean energy expansion at €106 billion. Furthermore, the Wall Street Journal quotes government sources when predicting total costs through 2040 to be about €1 trillion.

By contrast, however, Germany’s annual investment in fossil fuels has been €90 billion; and, investments in Energiewende go into electric grid upgrades that would need to happen in Germany anyway, whereas fossil fuel investments leave the country.

When viewed in context, there are many reasons to believe investments in Energiewende will reap economy-wide rewards, giving Germany a competitive global advantage over other countries that lagged behind investing in the future.

Energiewende is creating jobs, raising GDP, and attracting business

The German example shows an energy transition can lead to overwhelmingly positive, balanced, and pervasive employment impacts.

In 2004, Germany’s renewable energy sector employed 160,500 people, and that number doubled to 367,000 by 2010. The net employment gain from renewable energy in 2009 alone was 70,000-90,000, compared to the “business-as-usual” scenario in which energy was provided by fossil fuels. And this trend is only expected to continue.

The projected net employment gains for 2020 and 2030 are 23,000-117,000 and 105,000-241,000, respectively. Furthermore, because of indirect employment from supplying intermediate products and components to the renewables sector, all regions of Germany are set to benefit from renewable energy expansion.

As with employment, Energiewende also promises to positively impact Germany’s GDP. By 2030, German renewable energy exports are expected to reach €47–69 billion (€33-48 billion in 2005 Euros). In addition, relative to a scenario with no renewable energy policy, costs to the German economy are negative for all realistic scenarios. In 2009, total profits of German manufacturers of renewable energy facilities were €16.4 billion. Projected profit ranges for 2020 and 2030 are €28 billion-€42 billion and €43 billion-€60 billion, respectively.

Large industries, small businesses, and residential consumers share these economic benefits. Heinrich Böll argues, “contrary to one common misconception, renewables have turned Germany into an attractive location for energy intensive industries.” In 2012 alone, renewables had driven down wholesale electricity prices by over 10 percent; and, cheaper electricity prices translate to lower business expenses. In addition, as of 2013, farmers and individuals owned renewable energy investments amounting to over €100 billion.

Paying for renewables now makes practical sense

The costs of renewable energy, such as wind, solar, and others, in Germany have fallen and are expected to continue to fall in the future as manufacturers accumulate experience, make improvements, and enjoy economies of greater scale. At present, premier wind farms produce electricity at a price comparable to that of gas and coal plants. In addition, the levelized cost of energy for solar PV has fallen 78 percent over the past five years, and PV is now competitive with residential electricity tariffs in many countries, including Germany.

Furthermore, while renewables fuel sources have no fuel costs, Germany’s costs of importing oil, gas, and hard coal have increased by factors of 2.77, 2.68, and 2.26, respectively, over the past ten years. In addition, steel and cement prices jumped between 2000 and 2011, contributing to the cost of constructing a new power plant rising by 70-100 percent in many cases.

While the costs of Energiewende are growing, the majority of electricity price increases in Germany have been a result of rising fossil fuel costs. Energiewende costs were only responsible for about 29 percent of the average electricity prices’ jump of €0.118/kWh between 2000 and 2012. During this same period, costs of electricity generation, transport, and distribution of conventional power have risen by 46 percent of the entire price increase.

Finally, we can’t forget the societal costs associated with continuing to rely on fossil fuels for electricity. CESifo DICE quotes Küchler and Meyer when reporting, “The societal costs of one kWh of wind energy amount on average to 8.1 cents, and those of hydropower to 7.6 cents. In comparison, one kWh of coal power costs on average 15.6 cents (lignite) or 14.8 cents (hard), of natural gas 9.0 cents, and of nuclear 42 cents.”

All of this is to say, capitalizing on renewables now makes for a prudent investment that will pay for itself as both the actual and societal cost of obtaining, generating, and moving conventional energy sources continues to increase.

Cost vs. price: understanding the difference matters

Spiegel Online International points out that “German consumers already pay the highest electricity prices in Europe.”

But such a position is short-sighted. While the price of a kilowatt-hour of energy is high in Germany, the cost of electric bills is not unreasonable. The average German and American electric bills, at about $100/month, are the about same. Germany’s energy efficiency leadership enables them to afford high rates without especially high bills.

An additional insight into Energiewende’s industrial affordability comes from the World Wildlife Fund (WWF), which states, “averaged over all industrial enterprises, energy costs account for a mere 2 percent of a company’s gross production value.” Similarly, CESifo DICE finds Energiewende affordable on the residential level; as of 2012, electricity expenditures only accounted for 2.5 percent of a private household’s consumer budget.

Putting “low income” in context

All sides agree heightened energy costs due to Energiewende have a greater adverse impact on the poor than on other social classes.

As Spiegel Online International expresses:

“In the near future, an average three-person household will spend about €90 a month for electricity. That’s about twice as much as in 2000…But despite those price hikes, government pensions and social welfare have not been adjusted. As a result, every new fee becomes a threat to low-income consumers.”

To this point, WWF notes “private households on low incomes need energy advice and support, e.g. to buy highly efficient appliances. Needy households which are hit especially hard by rising electricity prices should be supported with subsidies.”

For international context, however, even when compared to some of the most developed countries in the world, such as the United States, energy poverty is less prevalent in Germany. In 2011, 600,000 German households had their electricity cut off, far fewer than 16 million in the United States.

Conclusion

Energiewende has already positively impacted the country’s GDP and employment situation, and this state of affairs promises to continue as renewable energy prices trend downward and the costs of importing fossil fuels trend upward.

Moreover, criticisms of Energiewende’s costliness tend to lack perspective. While electricity prices are high, electricity bills are as affordable as those in the United States. Renewables have caused electricity prices to rise in Germany over recent years, but conventional fuels have contributed to even larger increases. And energy poverty is a serious issue, but relative to other developed countries, Germany has fared favorably.

Regarding Energiewende’s long-term economic ramifications, Heirich Böll foresees even more economic benefits. Germany’s goal is to gain “first-mover advantage” and develop high value engineering technologies, such as those required for solar panels, wind turbines, biomass and hydro power plants, battery and storage systems, smart grid equipment, and efficiency technologies.

Finance professionals spend their careers searching for investments that entail manageable upfront costs, low risk, and extraordinary potential. So far, Energiewende has fit this mold.

Article by Peter Sopher, Clean Energy Policy Analyst, appearing courtesy Environmental Defense Fund Energy Exchange Blog.

10/07/2014 1 comment

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