Daily Energy Report Editorial: California Solar Initiative for PV Succeeds: What’s Next?

By Cecilia Aguillon, Director of Marketing & Government Relations, Kyocera Solar, Inc.

solar-panelsCalifornia Solar Initiative (CSI), the groundbreaking solar incentive program for consumers that began in 2007, is coming to a successful conclusion. Most of its nearly $2.2 billion budget has been subscribed for photovoltaic (PV) rebates to be paid between 2007 and 2016, and its goal of bringing new solar generation capacity to the state has unquestionably been met. The program has already installed 86% of its 1.94 gigawatt (GW) target for new solar installations, supporting 44,000 solar jobs statewide[1], and creating a PV market that can thrive with very low or no state rebates.  Even the program’s early skeptics now acknowledge that CSI’s 1.94GW target will likely be exceeded.

As of this writing, CSI has received more than 114,000 applications, resulting in 1.66GW of PV installed — with residential programs in all three of California’s major investor-owned utility regions now either in their final phases or completed. And while the program is concluding, sales and leases of solar electric systems continue to grow. We know this because the CSI program publishes the most transparent data available. Its website at www.gosolarcalifornia.org was designed to let everyone see PV market growth in the residential, commercial, government and non-profit segments. This has made it easier for California residents to monitor the program’s impact, obtain information on solar installers and incentive levels, and even calculate their installation costs and projected return on investment.

Transparency, certainty and performance-based incentives have helped CSI attract millions of dollars in investment ― from average home and business owners to local banks and Wall Street. CSI was designed to bring certainty to the market by establishing a 10-step declining incentive program based on performance or kilowatt-hour (kWh) production. Transparency was added in the tools that provide market data, including an online incentive and interconnection application. The CSI program created further certainty in the market through smart design: it was based on the most successful models at the time, namely Japan’s model of upfront rebates for small systems and Germany’s feed-in-tariff model.

Under CSI, incentives for systems of 30kW to 1MW in size are based on actual production (in kWh), rather than on capacity or expected performance. Incentives were set at levels visible and acceptable to the industry and market. The incentives, approved after a series of meetings where stakeholders provided ample input, were designed to decline to zero over a period of up to 10 years. The incentive reduction was phased through a system of MW-based subscription “blocks,” in which a relatively small initial block received the largest incentive, and each subsequent, larger block received a successively smaller incentive. This system served to maximize incentive budgets while keeping pressure on the industry to reduce costs — and providing confidence to the finance community by clarifying future incentive levels.

As a result of CSI, California has maintained its number-one position in the U.S. solar market, enticing more PV manufacturers and installers into making significant investments that will help grow the solar market and reduce costs. For example, Kyocera built a second PV module plant in Tijuana, Baja California ― just minutes away from its North American headquarters in San Diego ― in response to the innovative and relatively secure market CSI helped to create.

While CSI attracted new financing products to the market, such as power purchase agreements (PPAs) and leasing, it did not attract local banks until very recently.  Unfortunately, the highly desired Property Assessed Clean Energy (PACE) program, whereby homeowners could take out a loan for efficiency upgrades or renewable energy installations and repay it through their property taxes, was unable to gain traction statewide. However, some institutions such as the San Diego Municipal Credit Union and other conventional banks are either already providing loans or looking into designing loan programs for customers who want to purchase PV systems. In addition, PACE programs for commercial projects seem to be taking off in California and other states. This is very encouraging as the process of financing PV systems becomes increasingly important without CSI incentives.

Where do we go from here?

Maintaining transparency and certainty in the PV market is crucial to keeping market momentum going. There is no question that solar power is popular: so how do we keep the market growing? How do we protect customers? How do we continue to grow and create new jobs statewide? Some suggestions:

  • Continue CSI’s data collection and publication through interconnection applications for new projects. This is crucial to help educate and protect solar customers and encourage high-quality products and installation. In addition, data collection will help utilities and regulators keep track of solar megawatt hours (MWh) for planning purposes.
  • Reduce costs and streamline permitting and interconnection. It is encouraging to see that the federal government is helping on this front through its Sunshot program.
  • Encourage local banks to finance solar projects. Also, the creation of a green bank from the state may help in lieu of a workable PACE program. When the German feed-in-tariff was promoted in the early 2000s, the German government offered loans for solar projects for a couple of years until local banks took over. The same could happen in California, post-CSI.
  • Find ways to settle the net metering dispute that is growing in California and other states. Utilities, policy makers, the solar industry, and solar customers need to work together to keep the PV market growing sustainably.  A stalemate or never-ending legislative and regulatory wars will help neither the utilities nor the solar industry. For the sake of our local economies and ratepayers, we must find win-win solutions where utilities, industry, and consumers can participate and benefit from locally produced solar energy.

Solar electricity is shifting the energy paradigm worldwide as electricity is produced and sold from rooftops, not just power plants. California leads the U.S. solar market, and a growing number of states are also experiencing growth. This is challenging the status quo and providing an opportunity for California to increase the production of clean electricity within cities and counties, continue to grow cleantech jobs, reduce dependence on imported electricity and fossil fuels, and attract investment.

While the CSI program has been successful, its mission continues.  A lot of work must still be done to keep the market sustainable. The CSI program has taught us a lot about the California solar market. Perhaps the biggest lesson learned is that citizens want solar power, and are eager for effective ways to access and finance it. Now it is up to utilities, government and industry to increase the momentum behind solar power and other renewable solutions. The tools are available and the viability of solar energy is beyond question. Let’s ensure that our will remains strong.

The Benefits Of Distributed Generation

WHY LOCALLY PRODUCED SOLAR POWER IS GOOD FOR COMMUNITIES

by Cecilia Aguillon

solar-panels-1When it comes to solar power generation, there are different viewpoints on which is better: “utility-scale” solar, which produces large amounts of solar energy with huge installations in remote locations, or small, local rooftop installations that produce enough energy to power the building on which they’re installed (or maybe slightly more). While debates continue about costs and benefits to ratepayers, utilities, and the grid, some authorities hesitate to include the benefits of rooftop solar to the local community on the grounds that they are “unquantifiable,” so I’d like to add those to the discussion.

I use the term “Distributed Generation” to refer to the solar energy generated by users themselves, typically on-site, whether grid-tied or locally stored. The chief benefit of distributed generation is, of course, harnessing the clean, renewable energy of the sun to supply our country’s ever-growing need for electricity at a local level.

In addition to being good for the environment, there are other benefits for communities when solar installations appear on neighborhood rooftops, parking lots and shade structures:

1.      Employing Local Tradespeople

When you create markets close to homes and businesses, the people who design and install those projects tend to live within a local radius. It’s most cost-effective to employ local solar installers and technicians to do a local job. These skilled workers include roofers, electricians and plumbers (for solar water heating projects). On the flipside, large-scale installations import technicians from all over the country to remote locations, which produces a much more short-term impact on employment.

2.      Creating Small Businesses

Local solar installations encourage the creation of small businesses and the good jobs that come with them — including presidents, CFOs, accountants, marketing and sales professionals, in addition to engineers and installers. These are quality jobs that employ taxpaying members of our communities. According to the Solar Foundation’s 2012 National Solar Jobs Census report, the U.S. solar industry enjoyed a 13.2 percent employment growth rate over the past 12 months, and more than 90 percent of solar installers in the U.S. are in the residential, commercial, and industrial markets,[1] a strong testament to the job growth that results from locally installed solar power.

3.      Supporting Local Financial Markets

With local credit unions now starting to finance solar electric installations, users gain new opportunities to put their money to work in their own communities. When a local bank is involved in local projects, the money stays nearby. When a national or international bank provides capital, this may not be the case. In addition, the deployment of small rooftop projects encourages homeowners and businesses to invest in their own communities.

4.      Reducing Energy Imports

Electricity flows on the path of least resistance: if solar panels on your rooftop create energy and the house next door needs it, that’s where it goes. It doesn’t get on the electricity superhighway and travel hundreds of miles — it’s consumed almost exactly where it’s produced. When there is a lower importation of energy into a community, that community is more self-sustaining. It lowers the impact on existing transmission lines, and may avoid the need to intrude into the environment to build additional lines. This is good for both the local landscape and a community’s bottom line. This helps communities become less dependent on imports and fossil fuels. The savings in highly populated states can amount to hundreds of millions of dollars annually.

5.      Increasing Tax Revenues

A community benefits from the uptick in sales revenue, payroll taxes and the profit taxes paid by small businesses. Taxes support local schools, roads, police and firefighters, and other crucial services. This is an added benefit to the community that is rarely discussed.

One concern expressed by utility companies and policy makers is the intermittent nature of renewable energy — especially solar energy during cloudy or rainy days. There are already solutions coming out in the market dealing with energy storage and increased energy efficiency to address this issue, including Kyocera’s new Home Energy Management System, which is already on the market in Japan, and can also function as an emergency power supply in case of natural disasters or blackouts.

The bottom line is:  rooftop solar installations create a substantial number of proven benefits and a healthy return on investment. Large “utility-scale” solar installations are often built far away from the localities where the energy will be used.  While utility-scale PV is often touted as being cheaper per kilowatt hour than small installations, there are many hidden costs, including the transmission of energy over many miles, which results in a loss of about 7% of the energy generated, according to the U.S. Energy Information Administration[2]. In addition, the local community doesn’t always benefit from the added jobs and economic development from utility-scale installations that solar rooftops can bring.

Distributed generation is becoming a hot-button topic between solar manufacturers, installers and utility companies, with each presenting different points of view. Both distributed and utility-scale solar generation have a necessary place in our energy future — and any argument suggesting that one should be pursued in place of the other is flawed.  Both are priceless.

I am not saying that only small, distributed generation should be supported, as I believe that a portfolio of technologies including wind, biomass, geothermal, and solar should be pursued in whatever scale may be feasible. Within this mix, however, the many benefits of small, distributed renewable energy must not be ignored, and should remain an important part of any policy that tries to promote clean energy and economic development at the same time.

Written by Cecilia Aguillon, Kyocera Solar, Inc. Cecilia Aguillon is director of market development and government policy for Kyocera Solar, Inc.

[1] www.thesolarfoundation.org/research/national-solar-jobs-census-2012

[2] http://www.eia.gov/tools/faqs/faq.cfm?id=105&t=3

2012: Solar Revolution in the United States?

By Cecilia Aguillon

ASU Music

Sometimes the biggest stories go unreported. Of all the news that didn’t make headlines this year, the dramatic increase in U.S. solar installations ranks near the top of the list. While we were reading about weak demand for manufactured goods and a slow economy throughout 2012, Americans installed over 3 gigawatts of solar photovoltaic (PV) systems — an unprecedented level, up 71 percent year-over-year. Can you name another industry that grew this much?

Actually, America’s forecasted 3.2GW in 2012 is up from 1.9GW in 2011, and less than one gigawatt in 2010. Global PV demand is now shifting away from Europe, where new installations fell by about 3GW in 2012. And beyond the U.S., the addition of a feed-in tariff in 2012 has made Japan perhaps the world’s fastest-growing market for solar energy.
The U.S. industry grew despite questions about economic recovery, limited financing opportunities, polarizing viewpoints about renewable energy, an abundance of “cheap” natural gas, and a presidential campaign that made energy independence a political hot potato. One or two high-profile failures brought skepticism on an energy resource that, by all accounts, is one of the most promising ever discovered. The reality is that 2012 was the biggest year ever for U.S. solar installations.

American homeowners, businesses and utility companies drove investments in solar energy. California, Arizona, and Colorado accelerated the uptake of solar energy systems to the point of decreasing their incentive programs significantly. The lack of low-interest financing from conventional banks allowed third-party financing to sweep across states with leasing and “power purchase agreement” programs that encourage homeowners to install solar equipment without putting money down.

You could argue that the success was not evenly distributed. Insiders will look back on 2012 as a year of consolidation. Several well-known brands actually pulled out of the U.S. solar market in 2012, including Sharp, Schott, Siliken and Uni-Solar.

Further, the influx of PV modules from China drove prices down an astonishing 30 percent. And while lower costs are generally good for consumers, this sudden phenomenon resulted in U.S. trade sanctions amid charges of “dumping” ― the illegal practice of exporting products at prices below their manufacturing cost in an effort to disrupt markets. While installations expanded, only the industry stalwarts remained profitable within this tumultuous pricing environment.

Some of the PV highlights of 2012 included:

  • The National Solar Jobs Census reported that the industry enjoyed 13.2 percent year-on-year employment growth, significantly outpacing the overall economy. The U.S. solar industry now employs more than 119,000 Americans.
  • Sempra U.S. Gas & Power completed construction of the first 92 MW phase of its Copper Mountain Solar 2 solar PV plant in Nevada using First Solar modules. Another 58MW is planned for installation by 2015.
  • The NEDO Japan-U.S. Collaborative Smart Grid Project launched in Los Alamos, N.M., representing a landmark cooperative effort between top international researchers to develop the “smart grid” that will be instrumental for the further optimization of PV.
  • Kyocera celebrated its two millionth PV module produced in North America, with manufacturing plants that are generally running near capacity. As a reflection of growth, it took Kyocera five years to produce its first million modules in North America ― and less than two years to produce the second million.

This is all good news for consumers. It means the initial questions regarding the cost and reliability of solar energy have now been completely overcome. While concerns remain about the reliability of low-cost imports, polycrystalline silicon PV cells now have four decades of successful field experience behind them — and products from established producers represent a very reliable solution.

Consumers do need to be informed. According to SustainableBusiness.com, competition resulting from oversupply and plummeting PV module prices present a new problem: poorly made product. In their frenzy to enter the industry, many new companies were founded in the past 10 years, and some undoubtedly rushed to market. When a product competes solely on price, there is a real risk that cost-cutting shortcuts will affect performance and reliability. As with anything, the adage “You get what you pay for” holds true with PV modules.

A consumer might minimize risk by looking at the warranty on a PV module. If the module is guaranteed for 25 years, and the manufacturer hasn’t been in business that long, the lower price may merely represent a higher risk.

As we celebrate a milestone year, we must also look ahead. In 2013, many solar incentive programs will be winding down. With current low costs and more consumers installing photovoltaic systems, we will likely see more financing models — not just solar leases and loans, but also “solar share” programs, which enable consumers to invest in single large-scale solar installations and “virtually” use the solar electricity in their own homes … even if they move! We must also address ongoing challenges that pit our nation’s utilities against the adoption of solar energy, resolve concerns about the grid, and identify what costs and benefits there are to non-participants in the American solar revolution.

Finally, there’s a great need for storage options for all the solar power being generated. These options will become more prevalent, as California and Pennsylvania begin pilot programs encouraging homes and businesses to include electricity storage options similar to the Home Energy Management System demonstrated at the NEDO smart grid project in New Mexico.

2012 was a year of solar revolution because, against the odds, Americans moved their solar market forward. We must recognize that the 30% federal investment tax credit helped accelerate the U.S. solar market, and that a growing number of states are encouraging solar adoption. Still, kudos go to the home and business owners who take the bigger step to install and use solar energy, and to the utilities serious about building a sustainable energy portfolio for their service territories.

One thing is certain: the new year brings new promise for America’s energy future. And there has never been a more exciting time for the U.S. solar energy industry.

Photo courtesy of APS-ES

Kyocera Solar director pursues calling to help humanity.

When Cecilia Aguillon, director of marketing and government relations for Kyocera Solar Inc., immigrated to the United States from El Salvador as a teen, she grew into a young adult with a lofty goal in mind: to save the world.

Her journey to a now multi-decade career at Kyocera was an accelerated one, placing her, as she sees it, in line toward accomplishing that goal without much delay. Following her completion of high school in Los Angeles, she began the journey at UCLA, where she studied political science and international relations.

Already a native speaker of Spanish, and an adopted speaker of English, she wanted to learn another language that would not only broaden her vocabulary, but provide an advantage in the worldwide market.

“Japanese seemed so foreign to the Romance Languages, and I wanted to study something that was different,” Aguillon said.

It was easy to pronounce, for a Spanish speaker, she said, and its perceived beauty to her further bolstered her desire to learn it.

So she did, adding to her credentials in with some time in Japan following the completion of her undergraduate studies in 1993.

In her time there, she didn’t just learn the Japanese language. She learned of the Japanese culture also, including how they view caring for the environment.

From then on, she knew working for a multinational Japanese company would be of interest to her after graduation.

Cecilia Aguillon is the director of marketing and government relations for Kyocera Solar Inc.  Photo by Laura Hansen

 

“I wanted to do something that was good for the environment, while at the same time helping developing countries, like El Salvador, to develop sustainably,” Aguillon said. “It was so natural to get into it, because at the time, Japan was the only market really viable in solar energy.”

When time came for graduate school at UCSD in 1995, she decided halfway through to again visit Japan for a year to study more in Tokyo.

“I knew Kyocera when I was there,” Aguillon said.

In fact, it was recommended by some even in those days for her to seek employment there, but she didn’t consider herself a good fit at what she viewed as such a high-tech company.

But Kyocera’s presence in San Diego, where Aguillon returned to study, and connections she had made within the company by then, made a difference after graduation.

While many of her friends gained employment in the months following graduation, Aguillon passed up five offers from various companies, holding out for a more perfect vision of what she wanted to do. Just as she began to feel the decisions to hold out weighing on her, she received an offer from Kyocera six months after graduation from UCSD.

“It was kind of like a miracle,” Aguillon said.

A job opened in the company’s solar division working with consumer products. She jumped onboard. Within another six months, another opportunity came when Kyocera bought a large solar distributor.

But the expansion of the solar division meant moving the solar hub to Scottsdale, Ariz. Rod Lanthorne, Kyocera International’s head at the time, didn’t plan on moving Aguillon with it. Instead, he saw a chance to keep her in San Diego, to promote her to the managing position in the company’s consumer products division.

She wasn’t sure she wanted the position, but Lanthorne’s offer for her to head a part of the company, and Lanthorne’s expression of trust in her to do so, were too much to pass up.

But in 2002, Aguillon decided it was time for a change. Though enjoying her time running around in cities like New York and marketing Kyocera products in large cooking magazines and publications, her heart wasn’t in it. And she knew it.

“Driving around with chefs in limousines, and going to New York at the food shows and all that, it was so much fun,” Aguillon said. “It was rewarding and I was also fulfilling my commitments to the company — it was profitable. So everybody questioned my sanity.”

But it came down to doing something more rewarding than that, she said, even if it meant moving to a financially struggling solar division in Scottsdale without being the top dog or going to Japan. She set goals while in the consumer products division, specifically the top goal to land an account with Williams-Sonoma for the marketing of Kyocera’s cooking products. She met that goal, which meant it was time to move on.

“I knew in my gut solar was going to change energy,” Aguillon said.

And it was her passion to begin with, giving her more reason to wake up in the morning and want to work than she had felt in the consumer products division, she said.

By 2004, she returned to San Diego on behalf of Kyocera Solar, bringing her closer to ground zero in terms of the proximity to the company’s new solar factory in Mexico and action surrounding California’s work to create the California Solar Initiative, or CSI, at the time.

“The California market started to boom, and I’ve been here ever since,” Aguillon said.

While working with solar industry groups to help shape what eventually became the CSI, she pushed for the inclusion of performance-based incentives instead of rebates. But the industry was divided on the idea.

“There were some in the solar industry who were afraid of getting paid over time — you put in a meter and get paid per kilowatt-hour,” Aguillon said.

They thought the customers would be used to rebates and that the market might crash.

But Aguillon continues to push performance-based incentives to this day, feeling that’s the best way to ensure quality work in the industry that can continue its rise rather than diminish its perception.

“The philosophy of Kyocera is to do what’s right as a human being,” Aguillon said. “But in the end, the commission ó it was the Public Utilities Commission who I think (understood) it.”

But her work since hasn’t focused solely on California. Kyocera is a member of more than a dozen state chapters of the Solar Energy Industries Association, and as head of marketing and government relations, she has to keep tabs on their progress, add to it where she can and visit them all.

Forever needing that passion to feel her place in the company is the right one, she has goals yet to meet that won’t likely have her leaving solar anytime soon, like promoting feed-in tariffs for solar energy, which she thinks will be the next big leg-up for the solar industry as the California Solar Initiative winds down.

“What keeps me going now is, I’m working in so many different states now,” Aguillon said.

She also working across international borders again, helping to influence hopeful and developing solar programs now in Mexico and other Latin American countries.

As for the whole “save the world” thing, Aguillon finds herself a bit modest these days, but nevertheless feels she’s making an impact.

“I don’t know if I’m saving the world, but I’m thinking I’m making the best effort I can, and what I love about it is I’m with a company that has never told me, ‘This is my business model, and this is what I want you to promote,’” Aguillon said. “It’s a company that says, ‘I want you to do what’s right for the human being.’”

Feed-In Tariffs: A Good FIT for the U.S. Solar Market

The Great East Japan Earthquake and Tsunami of March 2011 was one of the worst natural disasters of modern times. Consequent meltdowns and explosions at the Fukushima Daiichi nuclear power station have left the Japanese people with deep concern about the safety of nuclear power, leading to a fundamental rethinking of their nation’s energy mix. As a result, Japan is now moving toward reduced reliance on nuclear power and much greater use of renewable energy.

On July 1, the Japanese government enacted a solar Feed-in Tariff, or “FIT,” enabling people who generate solar power to sell that renewable energy back to the grid at a fixed price – a price, in fact, about triple the rate paid by industrial users of Japan’s utility power. Industry analysts expect this new FIT program to stimulate investment of up to $9.6 billion in new solar installations throughout Japan while adding gigawatts of renewable energy capacity.

This new incentive has Japan poised to surpass Italy as the world’s second-largest market for solar power, and many believe Japan will even eclipse Germany as No.1.

You might be scratching your head at this point, thinking, “Why are Japan, Italy and Germany ahead of the U.S. in adopting solar power?”

Much of the answer lies in policy: The U.S. relies on tax breaks to incentivize solar, while the rest of the world uses some variation of the FIT program. The difference is key. A FIT program rewards people who invest in solar energy according to how much power they generate, in kilowatt hours (kWh). A tax incentive rewards solar adopters according to how much money they spent on their system.

Under a FIT, the system owner gets paid only for the electricity they produce, thus creating a strong disincentive against technologies that are unproven or don’t perform well over time. The U.S. tax incentive system, by contrast, doesn’t reward the performance of a system at all — only the cost.

America’s investment tax credit works poorly for two reasons. First, not everyone who wants the benefits of clean, renewable energy can benefit from tax incentives. Second, since U.S. tax credits are based on the system’s cost, higher system prices are rewarded as a matter of policy — doing little to make solar energy more affordable for consumers.

“The U.S. needs a system — like a feed-in-tariff — that rewards performance,” said Tom Dyer, a 40-year industry veteran who recently retired as Kyocera Solar, Inc.’s vice president. “This would promote systems that are more likely to produce optimum power for decades, as opposed to incentivizing financial investment and de-emphasizing power production.”

Already, in Hawaii and parts of California, it’s as economical to install solar as it is to buy power from the grid, according to Dyer, which is known as grid parity. Grid parity is key to making solar energy more widely available, and the FIT program offers a fast track to get there.

In addition to providing solar product manufacturers with an incentive to improve system quality and long-term reliability, FITs can be designed to emphasize small installations close to home, rather than large utility-scale projects. This enables homeowners and business owners, the individual ratepayers, to benefit from “micro” power plants on rooftops throughout their city, producing power where it is used. This form of distributed generation helps to stabilize the grid, promotes efficiency by reducing transmission “line losses,” and reduces the need to build costly new transmission lines. And by using existing infrastructure – the rooftops of buildings where we already live and work – distributed generation won’t disturb protected lands or wildlife.

Europe and Japan have demonstrated that when a solar incentive program is based on actual power generation, owners get paid more for installing better-performing systems. If the system doesn’t produce energy, the owner doesn’t get paid. The investment and liability all rest on the owner of the system. And FITs can encourage the deployment of solar installations very quickly – hundreds can be installed at once, distributing economic development throughout many communities in the same way that distributed generation provides power “close to home.”

Because of these obvious benefits, some U.S. municipal utilities are actually creating FIT programs of their own on a voluntary basis. So why is there no active state-wide or national FIT program for the rest of America?

The problem seems to lie in a lack of understanding about the benefits of the FIT incentive model. Adopting a national FIT program will require utility companies and policymakers to undergo a paradigm shift. We are accustomed to thinking of wholesale energy in rigid terms, produced only by a central power plant in the middle of nowhere. National or state-wide FIT programs would make it more common for a collection of much smaller systems, integrated seamlessly into rooftops and parking lots, to power city blocks. However, getting there will require a new mentality that allows us to view roof-tops and parking lots as sites for small power plants.

FITs allow entire communities to “democratize” their energy production. Anybody can be a power producer. You and I can establish our own solar electricity generation plant on top of our own roofs and realize instant economic benefits. In Germany, church parishioners band together to install their own mini PV farms and sell the energy back to the community. It allows everybody to participate in producing renewable energy — not just those who are hungry for tax incentives.

People have heard that FITs make solar power too expensive because the contracted price paid for solar energy is too high, but this simply isn’t true. Those arguments consider only the nominal cost of electricity, ignoring the huge expense of importing power from outside the community through transmission lines that can cost hundreds of millions of dollars. FITs can delay, or in some cases prevent, the need for new transmission lines and bigger central power plants altogether.

To accurately judge the benefits of a FIT, we’ll need to consider the value of the kilowatt hour produced at the point of use. This will reveal the savings to ratepayers in the community that result from producing electricity right where it is used. With a FIT, the renewable energy is free – consumers only buy the ability to produce it.

The people of Japan appear to be on a fast track to national solar deployment, but they’re not alone. Nations all over the globe are investing in FITs to benefit from clean, renewable power that is locally produced, and generating thousands of jobs.

Isn’t it time for the U.S. to get FIT, too?

 

Cecilia Aguillon is director of market development and government policy for Kyocera Solar, Inc., recognized as a world-leading supplier of solar electric energy products since 1975.

Solar Pioneer Tom Dyer Explains How the Industry Evolved

TOM DYER, SENIOR VICE PRESIDENT, Government Affairs for Kyocera Solar, Inc., has devoted his 40-year career to developing and commercializing solar photovoltaic (PV) energy systems, and has quite a tale to tell.

Tom got into solar by happy accident in 1972, when he joined Spectrolab, a company that developed solar technologies for the U.S. space program: “In the early 1970s, the U.S. energy crisis was so bad that cars lined up at gas stations every other day, depending on whether their license plates were even- or odd-numbered,” he recalled. “My boss wanted to start a terrestrial solar cell program for use ‘here on Earth,’ and I was intrigued by the idea.” As project manager, Tom contributed to solar industry standards relating to cell fabrication, module packaging, system specification and sizing.

There were challenges in designing solar modules for terrestrial vs. space use. When developing solar technology, NASA emphasized the weight of the equipment, valuing watts per pound, but on Earth dollars per watt was — and still is — the name of the game. Thus began the challenge of lowering the cost of solar cells. “We also had to repackage solar cells so they would last for years despite the contaminants and moisture on Earth,” Tom stated. “This was imperative in making solar a viable energy source.”

The first practical application for solar in the U.S. was on lighted buoys in the Gulf of Mexico. They ran on batteries, which had to be periodically changed — a labor-intensive process. Solar power recharged the batteries, thus producing a continuously operating system.

From that small start, solar evolved. The industry began in remote places where there was no power grid, the wattage requirement was low, and solar was more economical than a generator or running electric lines. Mountaintop radio repeater stations, transmission equipment in rural locations, power for remote villages, water pumps, vaccine refrigeration, telemetering — anywhere there was no power grid, solar could provide the solution.

In 1977, Tom joined the solar energy subsidiary of a major petroleum company, managing solar applications engineering, manufacturing, and business development. From 1981-85 he worked in Japan, where he saw first-hand what then-competitor Kyocera was doing to revolutionize the solar industry. Dr. Inamori had started Kyocera’s solar division in 1975.
“We knew Kyocera was building the Sakura Solar Energy Center in Narita to demonstrate stand-alone solar power systems, but Japan was also one of the first countries to try grid-connected solar,” Tom said. “Dr. Inamori and others helped the Japanese government and utilities embrace solar by putting the right legislation and programs in place.”

Japan’s Sunshine Project became the gold standard in solar programs, and other countries began to emulate the success they experienced with grid-connected projects.
In 1996, Tom began working with Photocomm Inc., which soon became Golden Genesis Corp., and was acquired by Kyocera in 1999.

By the year 2000, Kyocera Solar, Inc.’s strategy began to change from supporting remote power applications to offering grid-tie systems. The U.S. grid-tie market was developed by replicating what was happening in countries such as Japan.

In the 12 years since, Tom has witnessed the solar market in the U.S. grow from remote power applications to 200MW+ utility-scale applications. What does he see in the future for the solar industry? “In the wake of the March 2011 Great East Japan Earthquake and Tsunami disaster, Japan is abandoning nuclear power and reinvigorating its solar industry, which will be a big boon to the industry,” Tom said. Kyocera recently announced plans to build a 70MW solar plant in Japan with two other companies, and the country has a large feed-in-tariff plan set to start this July.
The U.S. has been slow to deploy solar compared to Japan and Germany, two nations which are smaller and get less sunshine, yet install up to four times more solar capacity annually than the U.S. Why? “It’s partly because we use tax breaks to incentivize solar power in the U.S.” Both Japan and Germany use feed-in-tariff systems, which reward the performance of a solar electric system and put the responsibility for its operation and output on the individual system owner. In the U.S., the tax incentive system doesn’t reward the performance of a system, but rather the cost of the system. “Not everyone can take advantage of tax incentives, and it makes no sense to pay a higher incentive for a system that costs more,” he explained. “The objective is to lower the costs.

“The U.S. needs a system — like a feed-in-tariff — that rewards performance, so we can install systems that will produce optimum power for decades, as opposed to incentivizing financial investment and de-emphasizing power production,” he said. “Already, in Hawaii and parts of California, it’s as economical to install solar as it is to buy power from the grid, which we call grid parity,” Tom stated. As the cost of solar comes down and the cost of fossil fuels continues to rise, grid parity will be achieved in more and more places.

Tom is a man with a dream: “Imagine if the entire world was all interconnected on one giant grid. Wherever the sun is shining — and it’s always shining somewhere on Earth — power would be produced, feeding the entire worldwide grid and crossing national boundaries. We would all depend on our one, free, clean energy source, the sun.
“I ended up in the solar business by accident, but it’s been one heck of a great experience,” Tom said. “I saw the industry start out on a very small scale — on a boat checking buoys in the Gulf — and today, I’m seeing systems all around the world where people use solar power in their daily lives. It’s been an interesting career; it’s changed a lot in 40 years.” The sun is the largest source of power available to us. Eventually, Earth’s demand will grow to the point where there’s only one way to feed the entire planet with electricity. The sun is the answer. Kyocera is dedicated to doing the right thing. We’ve been in the solar business for 37 years, and we have a key role to play in the industry,” Tom said. “Dr. Inamori saw this inevitability long ago — he is a genius. He envisioned the benefits of solar and managed to make it happen in Japan and around the world. We are his legacy; Kyocera must continue to lead in that regard.”

Tom retired on May 31, 2012. He’s proud to have contributed to Kyocera’s efforts to lead the solar industry and his allegiance is strong: “I’m rooting for Kyocera; I know our company will continue to achieve great things.”

Solar Module Efficiency: Where Does It Matter?

Efficiency is a good thing. It can make cars go farther on a gallon of gas, and light bulbs brighter at the same wattage. But when it comes to solar cells, what exactly do we mean by efficiency? And how important are efficiency ratings when choosing a solar electric system? The answer may surprise you.

Simply put, the “energy conversion efficiency” of a solar cell is a measure of input vs. output. If 100 percent of the sunlight energy striking a solar cell could be converted into electrical energy, the cell would be “100 percent efficient.” However, the laws of physics apply to everything. Some energy always escapes through heat and reflectance — and efficiency is taxed further when individual cells are connected to form a usable solar “module.”

Today’s best-selling modules typically range from 12 to 18 percent in efficiency. Tremendous R&D investments throughout the industry keep these efficiency ratings rising. Companies like Kyocera pursue efficiency improvement as a strategic priority, because in the long term, better efficiency will make solar energy feasible in more and more applications. For these reasons, as buyers seek a common metric for comparing solar modules, it is natural to ask: Should efficiency be that metric?

Efficiency and Cost
For years, energy conversion efficiency was the most important variable influencing the cost of solar power. This was especially true when the raw materials for producing solar cells, like highly purified silicon, were in short supply. Greater efficiency meant getting the same amount of power from less silicon. However, the industry has evolved rapidly in recent years. Silicon supplies have expanded dramatically and their cost has stabilized. Finally, mass production has created unprecedented economies of scale — influencing the price of solar power more than the cost of raw materials. In fact, the declining price of solar modules over the past five years has had almost nothing to do with improvements in energy conversion efficiency.

Where Solar Efficiency Matters Most
Improving energy conversion efficiency is a strategic priority for most solar module manufacturers because it holds the key to opening new applications for photovoltaic technology. Efficiency improvement helped bring solar electricity out of the lab and into the NASA space program in the 1960s. It helped create terrestrial applications for solar energy in the 1970s, and it also enabled residential and commercial solar power starting in the 1980s. The dream of solar energy costing less than conventional power will be achieved someday, in part, through better efficiency. But what about today?

Today, solar modules with higher efficiency ratings generally cost more. Because of this, buyers may equate efficiency with quality and reliability, although they are not necessarily related. They may also assume that installing higher-efficiency solar modules guarantees you’ll produce more power. But is this really the case? In a word, no.

For today’s consumer, module efficiency matters most where space is limited. Obviously, your rooftop system can’t be larger than your roof. If the available space isn’t enough to meet your power goal, then you may need higher-efficiency modules. But for the needs of most home and business applications, space is not the limiting factor. In some cases, in fact, a user could install a greater number of lower-efficiency modules and actually produce more energy for the same total investment. It pays to compare.

What Are You Actually Buying?
For the consumer, it’s crucial to understand what you’re actually buying when you install a solar electric generating system. You’re buying electricity, measured in kilowatt hours. It is not the efficiency rating that runs your appliances; they run on kilowatt hours. For this reason, if you’re considering solar power, estimating the system’s long-term, real-world output, in kilowatt hours, is much more useful than comparing efficiency ratings.

The Dashboard Analogy
One helpful analogy is the dashboard of your car. The speedometer measures speed at any given moment, the way “instantaneous output” may be measured in a solar installation. Like a car, which rarely (if ever) operates at top speed, your solar installation reaches “peak rated output” only on the best part of the best sunny day.

A car’s odometer measures miles traveled, the way a solar electric system measures “kilowatt hours produced.” This is the most important gauge of a solar installation’s usefulness. Kilowatt hours are the power you use. If you can accurately estimate the number of kilowatt hours a system will produce in a year, you can estimate when your investment will pay for itself.

A dashboard “miles-per-gallon” readout displays your car’s efficiency. In a car, this is a very useful rating, since it tells you how far you can go on a gallon of gas. But on your roof, efficiency does not predict how many kilowatt hours a solar module will generate. In fact, two 300-watt modules with different efficiency ratings should generate the same amount of power, given the same sunlight exposure. For today’s buyer, the main difference is size — the higher-efficiency module is slightly smaller than a lower efficiency module of the same wattage.

Getting What You’ve Paid For
In the end, the “return” you receive from investing in solar power depends on three variables: cost, annual power production, and longevity. Your installer can inform you of the first – the cost to install and maintain your system over its expected lifespan. Your installer can also estimate the system’s annual production of kilowatt hours, which can help you estimate how many years it will take to recoup your investment. But what about longevity? Can you trust a 25-year warranty from a manufacturer that has only been in business a few years? This may be the most important question.

Fortunately, you can review unbiased research analyzing the performance of various technologies and brands side by side, and form your own conclusions.

Desert Knowledge Australia Solar Centre
Some of the most advanced research in real-world solar performance is publicly available from the Desert Knowledge Australia Solar Centre (DKASC), an independent demonstration facility for commercialized solar technologies. This government-funded public showcase features a broad range of solar power technologies from manufacturers like BP Solar, First Solar, Kaneka, Kyocera, Sanyo, Shurjo, Sun Grid, Sunpower and Trina Solar. Observing different solar installations under the same real-world conditions allows meaningful comparisons of performance among various brands. You may be surprised by what the data show. Anyone can view live data feeds comparing the performance of various solar technologies at no charge. Visit www.dkasolarcentre.com.au for more information.

In summary, if you’re shopping for solar, don’t get distracted by peak ratings or efficiency percentages. These are calculated under laboratory conditions and may not predict your system’s real-world performance.

Look for a solar module that delivers the most kilowatt hours per installed kilowatt — with minimal degradation over time. Has the manufacturer been around long enough to see its earliest products go out of warranty? Are its oldest modules still delivering trouble-free performance? Will that manufacturer still be around in another 25 years? The answers to these questions will predict your satisfaction better than any individual performance rating.

Written by Cecilia Aguillon, Kyocera Solar, Inc. Cecilia Aguillon is director of market development and government policy for Kyocera Solar, Inc.