Retailers, seeking out bargains, continue to lead on solar

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Posted on 10/16/2014 by 

The top 25 companies in the United States installed 28 percent more solar capacity this year over last as the costs for doing so continue to decline and fossil-fuel prices increase and become more volatile, according to a new report from a solar trade association.

Since 2012, the top 25 companies have doubled the amount of capacity installed on their facilities, from 279 MW in 2012 to 569 MW as of August.

Among more than 40,000 businesses, nonprofit and governmental locations throughout the country, there was over 4,500 MW installed as of mid-2014.

The third annual “Solar Means Business” report was done by the Solar Energy Industries Association, a Washington, D.C.-based trade group. The rankings only counted photovoltaic systems connected directly to a company’s facility.

“Without question, continued cost declines and attractive financing terms are driving solar growth nationwide,” SEIA spokesman Ken Johnson said in an email. “But effective public policies, like the 30 percent solar Investment Tax Credit (ITC), are critically important, too, because they’re helping to bring down the cost of solar, making it more competitive with traditional energy sources.”

The report features some of the largest companies in the U.S., with several Midwest-based companies — such as Target, General Motors, Kohls and Walgreens — cracking the top 25 in the amount of capacity installed.

Walmart leads the country in capacity (105.1 MW) and number of systems (254) installed. Ikea, meanwhile, leads in the number of states where it has installed PV systems on its buildings (20) and the percentage of its buildings that include solar installations (87 percent).

Retailers in general lead among sectors of the economy.

“Long-term cost savings make solar an attractive option for businesses. Larger companies, like Walmart and Target, have hundreds of buildings that use a tremendous amount of energy,” Johnson said. “Simply put, they are saving real money on their utility bills — while helping the environment, too.”

Volkswagen leads the auto industry with slightly over 10 MW of solar installed at its U.S. facilities, which includes the 33-acre system next to its plant in Chattanooga, Tennessee.

As average electricity rates have increased for commercial users, the report says the costs for installing on-site solar are declining. For businesses sampled in the report, average electricity prices have risen 20 percent over the past 10 years while the average price of a PV project has dropped by more than 45 percent since 2012.

Midwest states ‘gearing up pretty quickly’

While companies in California and the East Coast continue to dominate the commercial market, southwest Ohio and southeast Michigan lead the Midwest in the number of installations, according to SEIA data. But favorable policies are leading to increased output elsewhere in the region.

“The Midwest hasn’t seen a huge amount of solar activity but Minnesota, Illinois and Missouri are gearing up pretty quickly,” Johnson said.

He added that growth is occurring “mostly in places with the right mix of forward-looking public policies, higher utility rates and, to some extent, days of sunshine. This translates mostly into coastal or high-population density states with transmission constraints that make utility rates higher.”

The report also recognizes third-party ownership — while more popular in the residential sector — as “a dominant force in the solar market.”

“Third-party ownership has been the clear leader in residential financing in recent years, but it has been more evenly split in commercial,” Johnson said. “That said, one challenge is financing small commercial systems since the companies that would host them often times do not have credit ratings or have other issues that complicate lending.”

Sustainability and economics

ConEdison Solutions, a New York-based energy services provider and subsidiary of Consolidated Edison Inc., started looking into installing solar systems for business and residential consumers around 2008, according to Michael Perna, ConEdison Solution’s vice president of marketing and business development.

At the time, solar manufacturing was rising in Europe, states were starting to set renewable portfolio standards and the federal government was providing a 30 percent tax credit for solar installations. By 2010, the company was installing systems for businesses.

“Now is a good time to get into solar,” Perna said of the time.

Now, he sees big businesses — such as those highlighted in the SEIA report — increasing their capacity for two reasons: Because it’s part of a bigger sustainability plan and because it makes financial sense to do so.

“While some customers may be doing it for a sustainability benefit,” Perna said, “a majority of sales are being done because the price point is cheaper than or competitive with the grid.”

Iowa Nearly Hits $1.5 Million Cap on Solar Energy Tax Credits


Businesses received 97 solar energy tax credits in 2013 worth $987,830

Original source: The Gazette

Iowa awarded $1.36 million worth of tax credits to individuals and businesses in 2013 for installing solar energy panels and related equipment, almost hitting the annual cap of $1.5 million for the green energy tax breaks.

The Iowa Department of Revenue, in an annual report released Thursday, reported it awarded 264 tax credits for solar energy systems through Dec. 27. The agency said that number could still grow as not all applications received in 2013 were processed at the time of the report’s release.

The solar energy credits awarded in 2013 were substantially more than the $621,100 awarded in 2012.

The Department of Revenue, in its forecast of potential future tax credit liabilities, expects $817,403 worth of solar energy tax credits in fiscal year 2014, $1.3 million in FY 2015, $1.4 million in FY 2016 and $1.5 million in FY 2017 before the total falls below $1 million in FY 2018.

Iowa businesses received 97 of the solar energy tax credits in the last year worth $987,830. The other 167 credits were given to individuals for a total of $368,329.

Companies on average were awarded $10,184 for each tax credit, while individuals on average were awarded $2,206 for each credit.

Iowa’s solar energy tax credit was was enacted in May 2012, but was retroactive to solar energy systems placed in service on or after Jan. 1, 2012.

The Iowa tax credit for individuals cannot exceed $3,000. The tax credit for a corporation cannot exceed $15,000.

Federal Energy Regulatory Commission (FERC) Chair Jon Wellinghoff: Solar ‘Is Going to Overtake Everything’

One of the country’s top regulators explains why he is so bullish on solar.


If anybody doubts that federal energy regulators are aware of the rapidly changing electricity landscape, they should talk to Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission (FERC).

“Solar is growing so fast it is going to overtake everything,” Wellinghoff told GTM last week in a sideline conversation at the National Clean Energy Summit in Las Vegas.

If a single drop of water on the pitcher’s mound at Dodger Stadium is doubled every minute, Wellinghoff said, a person chained to the highest seat would be in danger of drowning in an hour.

“That’s what is happening in solar. It could double every two years,” he said.

Indeed, as GTM Research’s MJ Shiao recently pointed out, in the next 2 1/2 years the U.S. will double its entire cumulative capacity of distributed solar — repeating in the span of a few short years what it originally took four decades to deploy.

Chart: GTM Research/SEIA U.S. Solar Market Insight

Geothermal, wind, and other resources will supplement solar, Wellinghoff said. “But at its present growth rate, solar will overtake wind in about ten years. It is going to be the dominant player. Everybody’s roof is out there.”

And those other resources have not seen declining prices like solar has. “Solar PV is $0.70 or $0.80 per watt to manufacture. Residential rooftop is $4 to $5 per watt. But they are going to drive that down to $2 and then to $1 per watt.”

Advanced storage technologies also promise lower costs, he said. “Once it is more cost-effective to build solar with storage than to build a combustion turbine or wind for power at night, that is ‘game over.’ At that point, it will be all about consumer-driven markets.”

Wellinghoff was a consumer advocate early in his career and has not changed sides. “Even though the FERC oversees wholesale markets, utilities, and other jurisdictional entities at the wholesale level, the consumer needs to be our major concern,” he said.

If FERC does not ensure the grid is ready to integrate the growing marketplace demand for distributed solar and other distributed resources, Wellinghoff said, “We are going to have problems with grid reliability and overall grid costs.”

Transmission infrastructure will be able to keep up with solar growth. The big changes will be at the distribution level where FERC has less influence, he explained. But the commission has been examining the costs and benefits of distributed generation (DG) in wholesale markets.

“Rate structures need to be formulated in ways that fully recognize the costs and benefits of distributed resources,” Wellinghoff said. “In many utility retail rates, a disproportionate amount of the fixed costs are recovered through a variable rate. That is problematic when a lot of people go to distributed generation.”

The net metering controversy this has caused at utilities like Xcel and Arizona Public Service, he said, can only be resolved by “the fully allocated, fully analyzed cost and benefit study of distributed resources.”

There is value in distributed solar, Wellinghoff said, “that can be captured and realized by the distribution utility that is not being paid to PV system owners because they have not been analyzed, quantified, and monetized.”

The Crossborder Energy study in California concluded the benefits of DG are near retail rates, he noted. “If utilities say that study is wrong, let’s get their studies and the studies from the solar side, and let’s have a hearing, let’s have full discovery, and let’s have a fully litigated process. That’s what regulatory commissions at the federal and state levels are for, to put all that data on the table and see what the accurate answers are.”

FERC isn’t involved in that process because it is a retail rate issue, Wellinghoff explained. “But DG and distributed solar can be wholesale grid resources if a wholesale grid operator can access those resources and have some control over them. What FERC has to do is ensure these distributed systems get recognized and compensated and integrated into the wholesale grid.”

If he was put in charge of updating the retail utility business model and pushing it to incorporate DG, Wellinghoff said, he would introduce more competition.

“I would unbundle utility services,” he said. “I would do a full analysis of anything not now competitive, like the distribution system, and then try to ensure I could recover costs in a way that adequately reflected all costs and benefits for all users.”

The sales of retail energy, capacity, and ancillary services should all be competitive and coupled with the wholesale grid, he said.

“Consumers should have access to and be able to respond to five-minute wholesale prices. They should have the opportunity — not the requirement, but the opportunity — to respond to those prices and modify their loads and usages to lower their energy costs. The result would be an optimized use of the grid.”

Watch Wellinghoff answer a caller’s question about distributed solar:

Tags: capacity, competition, consumer-driven markets, distributed generation, distributed solar, federal energy regulatory commission, ferc, jon wellinghoff, net metering, utilities,wholesale markets