Environment Forum

Catching rays + cutting emissions

The phrase “catching a few rays” might conjure up images of lying on a sunny beach.

But Germany’s Renewable Energy Act has given that phrase a whole new meaning. I’ve discovered that you can get paid for capturing the sun’s energy on your roof, converting it into CO2-free electricity with the help of special equipment, and feeding it into the grid — and watch the investment yield handsome long-term returns.

The German feed-in tariff system is as simple as it is successful – which is probably why Germany produces as much solar power as the rest of the world combined. German utilities are obliged under the Renewable Energy Act to pay above-market feed-in tariffs to producers of photovoltaic or wind energy for a period of 20 years. Germany will add up to 3 gigawatt of PV electricity this year. 

Here’s how the system works. 

Two years ago, after writing this feature on why Germany leads the world in photovoltaic electricity production despite being covered by clouds half the time, I decided to crack open my piggy bank and borrow some money on top of that to invest in a modest 6.8 kWp solar power system for my roof (below left). I added a carport (above right) so that I could put up more solar panels. 

The system cost a total of 30,000 euros and it produces about 5,000 kilowatt hours of electricity each year. More importantly, that saves about 2,700 kg of CO2 emissions. The 5,000 kWh is about 500 kWh a year more than we use. The local utility is required to buy those 5,000 kWh of CO2-free electricity that spin through a meter and into the grid from me at 49 cents per kilowatt for a fixed 20-year period. I buy about 4,500 kWh back each year at the current market rate of about 18 cents per kWh. That amounts to about 2,400 euros of revenue per year, with monthly payments from the utility peaking at about 500 euros in June. (I pay a separate 70 euros per month to the utility for the electricity we use).

Which U.S. states make the grade on net-metering?

Advocates for renewable energy hail net-metering as a key policy so that electricity from solar and wind is generated at the same place where it is consumed.

Supporters refer to it as the policy that lets the electric meter spin backwards. It allows people who own solar power systems, for example, export electricity to the grid and earn credits — at retail prices — on their utility bill.

In a new report called “Freeing the Grid,” advocates with several groups grade each state on their net-metering policies.

Environmental trendsetter California tied for fifth, but Colorado got the top spot.

Delaware, Maryland and New Jersey followed Colorado in the ranking, while California, Oregon and Pennsylvania tied for fifth.

Seven states flunked by default. Those states  — Alabama, Alaska, Mississippi, South Carolina, South Dakota, Tennessee and Texas — have no statewide net-metering policy.

The report also looked at how states fare on another key policy: interconnection standards, which determine how a generator on a customer’s site plugs into the electricity grid.

The race for U.S. smart-grid cash

Utilities across the United States are rushing to a federal stimulus program that is doling out money to create a “smart grid” — systems that will upgrade the electricity grid.******In this story, Reuters correspondent Eileen O’Grady looks at the tough job facing the U.S. Department of Energy: They have to divvy up $4.5 billion in smart-grid money among some 565 applications.******Smart grid technology measures and modifies power usage in homes and businesses and improves grid reliability. Experts envision that it will open the door to a new era with “smart” appliances that turn themselves on and off, electric cars, more renewable energy and more efficiency on power lines.******San Diego Gas & Electric is one of the utilities hoping to launch a smart grid through the federal program and has applied for $100 million in stimulus funds.******Their plan would build micro smart grids at the University of California, San Diego and a residential community in San Diego County. They would work with companies like IBM, Cisco and Itron on the system technologies, software and hardware.******”They not only have to talk with each other but we have to make sure the entire network is secure. So from an intellectual security standpoint, we’ll ensure that we have that set-up, that we have the ability to communicate from one device and we make it seamless for the customer,” said Michael Niggli, chief operations officer at San Diego Gas & Electric.******Another major issue the utility hopes to solve is what happens when energy from renewable resources is intermittent, with its power generated fading or spiking.******”If the wind stops blowing or if the sun has clouds that intervene, so you can be in a situation where the power supply is affected,” Niggli said in a phone interview with Reuters.******”That’s a lot different than what we have today … where it’s like driving a car. If you want to go faster, you push the accelerator.”******Niggli envisions a system where customers can control their home energy use remotely, turning on the air-conditioning from a computer through the Internet or even on  their handset.******Some companies that are partnering with utilities are not putting all their eggs in one basket in the race for the smart-grid stimulus funds.******IBM is working as a vendor with a dozen utilities that have applied for money.******If the smart grid is done right, then customers won’t even notice a difference, said IBM’s Stephen Callahan, who leads the company’s Intelligent Utility Network unit for the Americas.******”Those customers shouldn’t see anything but improvement in cost, reliability, all those things,” Callahan said.******We wanted to know what readers think about the federal program to jump-start smart grid projects. What should the DOE prioritize? What kind of projects would you like to see?******(Photo: The sun is shown as it rises between power transmission lines in Burbank, California. Photo credit: Fred Prouser/Reuters)*********************

from Summit Notebook:

Echelon’s Ken Oshman on smart meter sector consolidation

Ken Oshman, the Chief Executive of Echelon, sat down at Reuters' Global Climate and Alternative Energy Summit in San Francisco to speak about revenue forecasts and smart meters.

The following is Oshman's thoughts on how the sector may consolidate as the market picks up.

(Editing/video by Courtney Hoffman)

Solar power that pays back fast

OK, solar panels are getting cheaper, but can it be possible to get back the $1,000 you invested in home solar in 45 days?

It couldn’t happen where I live, and maybe not where you do, but the owners of a solar electric company say the arithmetic worked for one of their customers. He is a chief executive with a six-bedroom, five-and-a-half bath Spanish-style hillside home in Fremont, California. Fremont is a stone’s throw from Silicon Valley, and home to many high tech firms.

This executive was paying a monthly electric bill of $3,492 on average, according to solar electric firm SunRun. The company was started by two finance experts who came up with their business model while still students at the Stanford Business School.

SunRun charges a relatively small price to install panels, then owns and services them for the life of the contract — 18 years.  SunRun said the Fremont executive paid $1,000 to have the $375,000, 55-kilowatt system installed. So far, it has cut his monthly electric bill to an average of $2,808.  SunRun collects $2,163 of that for electricity generated by the sun, while utility Pacific Gas & Electric collects $645 for electricity from its grid, on average.  At moments when there is surplus solar electricity, SunRun’s equipment automatically sends it to Pacific Gas & Electric for credit.

“You turn your home into a hybrid,” said Lynn Jurich, president of SunRun, and co-founder with chief executive  Edward Fenster. The occasion for her interview was to announce  $18 million of additional funds from two big Silicon Valley venture capital firms,  Accel Partners and Foundation Capital. They say because SunRun uses independent contractors it can quickly expand its business in California, Arizona and Massachuestts.

It’s not the only game in town.  SolarCity does something strikingly similar, working in California, Arizona, and Oregon. Its business model is a bit different. For example, it does all installation with its own employees. Its fee structure is also different.

The United States has lots of houses with roofs that catch rays, so it’s not clear yet if one company will drive the other out of business, or if there is room for both. U.S. Bancorp seems to be betting on both, because it has set up financing — sweetened by government tax breaks — to help each of the companies buy the solar equipment that they install.

One small step for green energy, one giant leap….

The idea to tap solar power from the Sahara desert to provide CO2-free electricity for Europe and northern Africa has captured the public’s imagination in Germany after the Desertec Industrial Initiative was formally launched in Munich on Monday. Several German commentators compared the notion of catching the sun’s rays in the Sahara to the boldness of the U.S. space programme in the 1960s with its drive to put a man on the moon. As my colleague Christoph Steitz pointed out in his report, 12 companies took the first step towards the project that could be delivering up to 15 percent of Europe’s power by 2050.Even if it was only the start and details on how it will all work remain sketchy, the Desertec story led the news broadcasts on all the major German networks on Monday and triggered an avalanche of front-page media coverage and editorials, most favourable. Germans see Desertec as a “win-win-win” prospect. It would a) produce CO2-free energy, b) create hundreds of thousands of jobs in Europe and Africa, and c) promote better relations between countries north and south of the Mediterranean through business and trade connections similar to the way Europe grew together after World War Two. There is, of course, another point — d) it could give German companies, many of which have spent the last decade building up their know-how with solar and wind energy, a chance to take advantage of their expertise on an even larger scale.”It’s rare that I’ve been so fascinated by a news item as I have by the idea of using the hot desert as a giant socket,” wrote Bild newspaper’s venerable Franz Josef Wagner, one of Germany’s most popular columnists known for his usual biting criticism. “Desertec is for me the greatest leap for mankind since Neil Armstrong’s moonwalk. The hot desert could save humanity. This project is greener than green. Desertec is the bright future.”And Michael Miersch, in a commentary for the conservative daily Die Welt, wrote: “It seems at first glance like some sort of Jules Verne Utopia but it’s nevertheless being backed by 12 large companies that want to invest in it. Even if it falls short of the goal of delivering 15 percent of Europe’s electricity by 2050, it is nevertheless a clear start signal — it could possibly mark the beginning of the end of the oil age.”Miersch also likened Desertec to the U.S. space programme and quoted President John F. Kennedy’s rallying cry “We choose to go to the moon in this decade and do the other things not because they are easy but because they are hard.” Miersch wrote: “There is a large choir of critics. But problems are there to be solved.”Joachim Wille wrote a column in the left-leaning Frankfurter Rundschau that also compared Desertec to the Apollo programme. “It is far more than just electricity for our sockets. It represents a quantum leap forward into a new energy age.”But Andreas Heitker cautioned in a page one editorial in the Boersen-Zeitung business daily that it was far from unsure if Desertec would ever be built: “Desertec could give a boost to renewable energy in Europe but whether the 400-billion euro project turns out to be anything more than a good idea remains doubtful. It shows quite clearly, in any event, that there is still a great untapped potential for solar energy.”Hamburger Abendblatt columnist Oliver Schade said: “It makes a lot of sense to put such a major project in an area where the sun shines brighter and more often than between Flensburg and Garmisch-Partenkirchen. Europe is moving in the right direction by launching a project like this. It sounds like a fairy tale — but in fact solar power plants in North Africa and Arabia could be delivering one in seven kilowatt hours that we need in Europe by the year 2050.”The Sueddeutsche Zeitung newspaper observed that after Monday’s news conference the executives from the 12 companies that signed the memorandum of understanding were lined up, as planned, for a group picture. But before the assembled photographers could start snapping, the stage quickly filled up with political leaders who were also attending the launch. “It was a situation that was perhaps symbolic — everyone wanted to be part of it and they wouldn’t feel they were part of it if they weren’t in the picture,” wrote the Munich daily’s Thomas Fromm.There is clearly a buzz about Desertec in Germany even if the same level of enthusiasm hasn’t yet been detected in any of the other countries that might be involved. Maybe it has something to do with Germans’ yearning for sunshine and fascination with the sun in their country that is often covered by clouds? Or maybe it has something to do with companies getting a whiff of profits in the air — the sun doesn’t send any bills, after all.PHOTO: A “solucar” solar park in Sanlucar La Mayor, near Seville, November 6, 2008. The solar thermal power plant uses mirrors to concentrate the sun’s rays onto the top of a 100 metre (300 foot) tower where it produces steam to drive a turbine, producing electricity. REUTERS/Marcelo del Pozo

PG&E takes smart meter lead in U.S.

California utility PG&E is at the head of the class when it comes to smart meters in North America, having installed 2.3 million of them. It is on track to have nearly 10 million working by 2011, according to figures gathered by the utility and a survey of smart metering programs by the Energy Retail Association, of Britain.Smart meters are in their infancy but their numbers are expanding rapidly in the United States and around the world. After PG&E, PECO in Pennsylvania has installed 2.2 million meters — all of its power and natural gas customers.  Even at 2.3 million, PG&E and North American utilities lag behind Italy and it biggest utility, Enel, which installed 30 million smart meters nationwide in four years.The digital meters allow for near real-time readings by customer and utility, allowing better informed decisions on cutting demand as well as getting a better handle on whether new power plants and lines are needed. Smart metering also offers the chance for customers to voluntarily set limits so that appliance turn off automatically if prices rise to high.It will cost PG&E customers — the cost is passed through to them — about $2.2 billion to install the 5.3 million electricity and 4.8 million natural gas meters.