Money is available for utility-scale solar photovoltaic (PV) and concentrating solar power (CSP) projects, bank officers from CITI and Deutsche Bank said, but it is vital to know how to leverage every kind and source of financing.

It’s called financial engineering and it is the only way to fund big solar projects, CITI Managing Director and Alternative Energy Finance Head Marshal Salant insisted at the Smithers APEX solar event in San Diego last week.

The key differences between PV and CSP, Salant said, is that “PV can be done on a much smaller scale and be economic, and a large project can be done in phases. It’s a lot easier to finance $250 million or $500 million than it is to get $3 billion all at once.” CSP requires vital economies of scale “so you’ve got to raise $2 billion all at once. That’s a lot harder to do than to raise $500 million four times.”

For either technology, “the real mission is to obtain the lowest-cost capital,” Salant explained. That means “you want bank, bond, LOCs, fixed rate, floating rate, guaranteed, non-guaranteed loans,” he said. “You go wherever you have to go to find investors. It’s that simple.”

Things are more difficult now, he said. “1603 is gone — that was the most successful program Washington ever came up with.” CITI’s deal makers, a big and dedicated team that covers every aspect of financial engineering, Salant said, are turning to any and all federal, state and local programs, and “the funky structures, the partnerships, leveraged leases and inverted leases,” as well as “tax equity and project level equity.”

And, Salant said, “financing is more than ever about serious corporate relationships.” Everybody involved has to be invested. CITI is “absolutely adamant about this,” because “the days of casual dating are over — we’ve got to deal with people where it’s a serious relationship.”

It is vital, Salant warned, to “focus on interest rate risk, because if the Fed starts to tighten, the whole project can wither and die.” Commodities and foreign currency must be hedged, he added. And “on big solar projects, tax-exempt bonds are essential.”

“In this market,” Salant said, “size matters. The way you’re going to do a small deal is very different than the way you’re going to do a big deal.” CITI focuses on “super-large deals,” which it defines as $1.5 billion and bigger. “In 2010, we did the two largest financings in alternative energy. They both were wind deals. In 2011, we did the largest deal, a solar deal — Desert Sunlight. In 2012, we hope to again do the largest deal, which will again be a solar deal.”

Salant described the many parts of the 550-megawatt PV Desert Sunlight deal involving NextEra, GE and First Solar.

It was the “largest solar energy project financing to date, a $2.3 billion project with $1.7 billion of market financings.” CITI “locked in 4.27 percent as a blended cost, which I would argue for a long-term, non-recourse project financing is amazing, given that the Treasury, for most of the last twenty years, couldn’t finance at 4.27 percent.”

CITI has also “put over $200 million of our own money” in $100-million-or-less residential rooftop deals. “We’ve done five portfolio deals for SolarCity, Sungevity, Constellation Energy, SunEdison and SunPower,” said Salant. “We do stuff as principal. We also find investors. The long-term key is finding investors.”

The company’s 2012 undertaking is the 550-megawatt, $1.2 billion Topaz Solar PV project, which has “$850 million in project bonds.” They are, Salant said, “ten-year Treasuries with basis points, 5.75 percent on a $2.4 billion project — again, very large bond deals.”

The markets, Salant insisted, “are wide open. Deals are bankable. But they have to be well-structured.” Capital “in the bank market is relatively strong.” Though some institutions are reluctant, “the bond market side continues to grow.” And, he added, “long-term, the solution is not banks.” That is, he said, “an historical accident. The right source of long-term capital is equity capital. It’s bond and institutional investors.”

Right now, Salant said, “tax equity is available” but “there is a supply-demand imbalance.” CITI calculates there is a need in solar for $10 billion to $12 billion in tax equity for 2012 through 2014,  but not more than $5 billion in tax equity is available. That, Salant said, is “a massive supply-demand imbalance” that is not “going away anytime soon.”

On policy, Salant said, “I personally am an optimist.” But, he added, “You better start prioritizing and focusing on legislative policy objectives because it is going to be a difficult fight in Washington for limited funds.”

Sitting in was Stoel Rives law firm partner Morten Lund. “I am a professional pessimist,” he explained. “There is lots of money available” and “projects are being financed,” he agreed, but “only the good guys are getting the money.”

Financing is hard, Lund insisted, because big projects come with big challenges, and “that’s not the kind of conversation you have with a bank.” What he does all day, Lund said, “is tell people it’s really hard.”

Money is available, Lund concluded, “if your project is good — and only if your project is good. Therefore, be a good project. That is the very simple and straight road to financing.”

***

Coming in Part 2: the perspective of Deutsche Bank Director Vinod Mukani

Source:http://www.greentechmedia.com/articles/read/Solar-Banking-Part-1-Smart-Financial-Engineering-Funds-the-Big-Solar-Proj/

According to the scientists, who published their findings in the journal Nature Photonics, the folds acted as a sort of “wave guide,” channeling light waves and increasing the material’s exposure to light.

“I expected that it would increase the photocurrent because the folded surface is quite similar to the morphology of leaves, a natural system with high light harvesting efficiency,” said Jong Bok Kim, a researcher from Princeton University and lead author of the study. “However, when I actually constructed solar cells on top of the folded surface, its effect was better than my expectations.” And since the researchers used relatively inexpensive plastic materials — as opposed to the more expensive silicon commonly used in panels — they hope their findings will help lead to a cheaper and efficient source of solar power.

Article appearing courtesy Yale Environment 360.

Source: http://blog.cleantechies.com/2012/05/01/leaf-mimicking-design-boosts-output-of-solar-panels/?goback=.gde_1141957_member_111893892

Eight hundred miles away in Dallas, an event called Solar Power International 2011 (SPI) attracted more than 20,000 attendees from the U.S. and the world. This annual event is described as the “epicenter” of the solar industry and brought millions of dollars in local economic impact to Dallas.

Next year, SPI has announced that it is coming to the Sunshine State. Here is a suggestion to SPI: Go to New Jersey; we don’t deserve it.

Since more than 11,000 installations in New Jersey generate 490 megawatts of power, you might think that Florida’s elected officials would be embarrassed by the fact that the Garden State has rocketed past us in terms of widespread renewable energy development, but they aren’t. As we’ve seen, they waste little time allowing billions for nuclear development out of one side of their mouths while they simultaneously whistle the tired old “solar is too expensive” tune out of the other. They haven’t changed this tune in five years as they have watched the price of solar installations plummet by about half.

If our state doesn’t get real serious, real soon about renewable energy policy, bringing Solar Power International to Florida will give positive reinforcement to very bad decision-making by our elected officials. SPI should be a reward for states that take renewable energy seriously and place a high priority on solar.

Notwithstanding the failed rebate program, the only emphasis that Florida has placed on solar in the past five years has been giving about $400 million in ratepayer money to the state’s largest utility monopoly to build, own and operate its own solar farms. This approach isn’t a sustainable renewable energy policy; it is thinly veiled corporate welfare for a small handful of companies. It doesn’t help local contractors; it just gives massive out-of-state developers a brief window to get in line to compete to be the lowest bidder to these government granted solar monopolies.

To be clear, an investment in renewable energy development is well worth making for the ratepayers of Florida, and a sizable amount of utility-scale development is crucial to the development of the market. But the key to long-term growth and local job creation is to incentivize installations of all sizes through an open and competitive market.

This year, though, the consensus is already pointing toward the fact that Florida politicians are afraid of renewable energy heading in to the election season for one big reason – cost. That is understandable.

Fortunately for the elected officials, the Distributed Energy Coalition has a proposal that would cost nothing to the ratepayers. It is a measure that would allow for the free market sale of renewable energy from one entity to another.

Although it is only an incremental step toward a true comprehensive policy, it would create a platform on which to build policy that is based on a free and competitive market. This legislation will no doubt be faced with the usual barrage of opposition from the utility companies and the small handful of insiders that they do business with.

Our legislators again will be faced with a choice between doing the right thing for the handful of special interests or doing the right thing for the rest of the fledgling industry – namely, the roofers, electricians, installers and contractors who are out of work.

If Florida doesn’t get its act together this year, we don’t deserve Solar Power International 2012, and it would be rewarding bad behavior by giving our leaders the chance to play host to such an important event.

Mike Antheil is executive director of the Florida Alliance for Renewable Energy, which includes solar power companies.

Source: http://www.palmbeachpost.com/opinion/commentary/commentary-let-sun-shine-on-all-companies-not-1951588.html

“These incentives can help make investments in distributed renewable energy generation more affordable, and we are pleased that more of our customers will now be able to take advantage of the program this year,” said Marlene Santos, FPL’s vice president of customer service.

In an effort to reduce energy consumption in Florida, the FPL launched this solar rebate program. The company is adding continuing funding because of strong consumer demand for solar photovoltaic funding.

Another solar rebate program is being executed by SolarCraft, a North Bay solar electric and solar thermal installation company based out of Novato, California.

SolarCraft is reinstating its Marin County Solar Energy Rebate Program. The company is offering a $500 rebate for PV systems, $300 for a solar domestic hot water heater and $200 for a solar pool heater.

The goal of the program is to encourage residents to use sustainable energy sources that reduce greenhouse gas emissions while helping lower energy bills.

“The U.S. solar energy market continues to be a bright spot in an otherwise bleak economy,” said Rhone Resche, president and CEO of SEIA. “Solar energy is an industry invented in the U.S. that is helping our country reclaim our manufacturing leadership and creating tens of thousands of jobs.”

More findings from the report include that the two largest energy export products are polysilicon and photovoltaics – the United States exported $2.5 billion and $1.4 billion, respectively, in 2010.

Since the United States has become a bigger player in the solar energy industry and the U.S. presidential race is getting set to begin, the candidates’ views on energy could become a more important factor while campaigning.

Politicians can use solar incentives as part of their presidential campaign, as well as discussion about energy costs and global warming.

The Genesis project, run by NextEra’s Genesis Solar LLC and located in Riverside County, California, will have a 250 megawatt capacity, the company said. It will enter into operation in 2014 and will supply power to California Utility Pacific Gas and Electric Company.

The U.S. Department of Energy laid out a loan guarantee of 80 percent of the principal and interest on the project bonds and project term loan, the company said.

“We are very pleased with both the strong investor reception for this financing, which we view as a validation of our solar development efforts, and the receipt of a loan guarantee from the Department of Energy Loan Programs Office,” said Armando Pimentel, executive vice president and chief financial officer of NextEra Energy, Inc., the parent of NextEra Energy Resources.

The company, based in Juno Beach, Florida, is the largest generator of wind and solar power in the United States, according to the company, as it had a revenue of $15.3 billion last year and a renewable energy capacity of 43,000 megawatts.