Author: PV-Tech

German fund partners with ReNew Petra to develop annual 100MW of US solar

German clean energy fund Hep Kapitalverwaltung AG has entered the US distributed solar market with an investment in regional developer ReNew Petra.

The German fund will invest $50 million to $80 million annually in the North Carolina-based developer, according to figures reported by Bloomberg on Wednesday,

The partnership will allow the renewable energy construction and management company to develop 100MW of distributed solar annually and expand its reach beyond the south-eastern US.

The partnership marks a new chapter for Hep, which has developed and constructed €450 million (US$505 million) worth of solar projects worldwide. “Our partnership with ReNew Petra launches Hep’s new strategic endeavor in the US distributed solar market,” company founder Christian Hamann said in a news release on Wednesday. “We are excited about this new chapter for our investors.”

The new development entity will operate as Emerald Hills Holdings.

California-based advisory firm Zorya Energy Advisors advised Hep on the purchase.

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BlackRock buys majority stake in GE’s solar and storage business

General Electric (GE) has sold a majority investment in its seven-year-old distributed solar and storage business to global asset manager BlackRock.

BlackRock took an 80% stake in the new company, Distributed Solar Development (DSD). GE will retain a 20% stake. The financial terms of the deal were not disclosed.

The giant global asset manager’s backing is a positive sign for the solar segment, which has become increasingly attractive to big investors. “This investment will deepen our clients’ access to the tremendous growth potential in the US solar industry,” David Giordano, BlackRock’s global head of renewable power, said in a news release on Wednesday. “DSD offers end-to-end in-house capabilities and a strong team of experts from across the commercial and industrial value chain.”

The new business will design, build, own and operate distributed solar and storage solutions for industrial, commercial and public-service customers. With BlackRock’s help, DSD wants to quadruple the capacity of GE’s solar portfolio from 100MW to 400MW over the next five years.

It’s not the first time BlackRock has endorsed distributed solar. In April, BlackRock invested in small-scale solar specialist CleanCapital.

Erik Schiemann, who founded GE Solar’s business in 2012 and is now CEO of DSD, said that operating as standalone company will streamline operations. “Separating ourselves from GE in this fashion means I can now do things more simply, with lower costs of capital, lower transaction costs, (greater) speed to execution and kind of that one-throat-to-choke from our customers’ perspective,” he said.

BlackRock has invested US$5 billion into wind and solar utility-scale renewables, with 250 wind and solar projects with a total generation capacity of 5.2GW. It is the world’s largest asset manager and GE’s biggest investor.

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Close to 1,000 solar companies push for extension of US ITC

Close to 1,000 companies from across the US solar industry supply chain sent a letter to Congress this week calling for the extension of the Section 48 and Section 25D solar investment tax credits (ITC).

The ITC was passed by a Republican-controlled Congress in the 2005 Energy Policy Act and enacted by George W. Bush. It was extended in 2015 with bipartisan support.

Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), said: “If you want to show a commitment to addressing climate change, you extend the solar ITC. Supporting this proven policy is the first clear victory that lawmakers can deliver to Americans on climate change. As we debate long-term solutions, now is not the time to abandon the single most successful policy on the books to deploy clean energy in the near-term.”

The ITC is currently scheduled to start falling at the end of 2019, going from 30% for projects which started development/construction at the end of 2019 to 26% in 2020, 22% in 2021 and 10% in 2022. 

Since its initial passage, the ITC has generated more than 200,000 American jobs, added US$140 billion in private sector investment, and grown solar deployment by 10,000%. Since 2015, PV installations in the US have doubled, with more than 2,000,000 installations located across the country. 

Lynn Jurich, co-founder and chief executive officer of Sunrun, said: “Nearly 1,000 solar companies, big and small, are supporting an ITC extension because it continues to create hundreds of thousands of jobs, is driving innovation, and expanding solar access for Americans. Sunrun is an example of how smart policy like the ITC can work, employing over 4,000 people nationwide, installing solar on more than 240,000 homes, and constantly innovating with new technology and services that benefit all energy consumers.”

George Hershman, president of Swinerton Renewable Energy, added: “The ITC extension will help maintain a stable market for continued solar development in the utility sector. This directly translates into investments in our nation’s rural communities by supporting more jobs across the solar value chain, providing long-term energy solutions at a lower cost to rate payers, and increasing the state and local tax base. The solar ITC is a win for workers, ratepayers and for America’s energy future.”

The letter to Congress, which was signed by companies working in every state across a vast majority of red, blue and purple congressional districts, stands as the start of a multi-pronged advocacy campaign lead by SEIA and its partners.

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Cubico reaches financial close for 100MW solar PV project in South Carolina

Renewable energy investor Cubico Sustainable Investments has reached financial close for a 100MW solar PV project in Orangeburg County, South Carolina.

The Huntley solar PV project is one of a five-project portfolio spanning South Carolina, North Carolina and Texas that the London-based investment firm acquired from US-based solar developer Cypress Creek Renewables in January. Huntley is the third project from that package to achieve financial close.

Tax equity was provided by US Bank and project finance debt was provided by HSBC, Rabobank and Nord/LB. The same banks financed Cubico’s other utility-scale solar project in Orangeburg County, Palmetto, which started construction in December 2018.

The Huntley project is under construction and is set to become operational in the summer of 2020.

Ricardo Díaz, head of Americas at Cubico, said that it was “pleasing to see the build-out of our USA business continuing at pace. We are now one of the largest owners of utility-scale solar PV in South Carolina”.

According to the Solar Energy Industries Association, South Carolina is home to 18,133 solar power installations, producing 780.72 megawatts of energy annually and employing nearly 3,000 people.

Cubico is backed by two of Canada’s largest pension funds, PSP Investments and Ontario Teachers’ Pension Plan.

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Invenergy’s 23MW Illinois project lands refinancing

A solar-targeted insurance policy has helped Invenergy refinance a utility-scale plant it developed in Illinois earlier this decade.

The 23MW Grand Ridge Solar installation, some 90 miles southwest from Chicago, has been supplied fresh debt by Mitsubishi UFJ Financial Group (MUFG).

The facility, part of a solar-wind-storage complex in Illinois’ LaSalle County, was developed by Invenergy in the early 2010s.

In 2012, as the project secured its initial set of loans arranged by Union Bank, it was billed by Invenergy as the largest solar farm under construction in the US Midwest.

The installation’s refinancing this year was supported by an insurance policy from kWh Analytics, a San Francisco firm that works in solar risk management.

The so-called ‘solar revenue put’ acts, kWh Analytics explained, as a credit enhancement that protects cashflows.

On average, it helps solar portfolios reap 10% more debt when they opt to refinance, according to the firm’s estimates.

In Gran Ridge Solar’s case, the capacity of the insurance policy was provided by Swiss Re Corporate Solutions, kWh Analytics said in its statement.

The complex the solar plant is part of also features a 210MW wind farm, as well as energy storage systems of 31.5MW, 1.5MW and 3MW capacity.

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Capital Dynamics, Sol Systems form JV to invest in distributed generation market

The Clean Energy Infrastructure (CEI) arm of independent global private asset management firm Capital Dynamics has formed a joint venture with solar finance and development company Sol Systems. 

The JV, Sol Customer Solutions, is a partnership that will look to invest large portions of institutional capital into the distributed generation sector. Financial details of the transaction were not disclosed.

Tim Short, managing director at Capital Dynamics, said: “We are excited to partner with Sol Systems to acquire a significant portfolio of DG projects while working alongside a premier development platform in the space. The large scale DG market is rapidly evolving and this investment is a critical part of our broad focus on this important sector in the market. We are confident Sol Customer Solutions is well positioned to serve this expanding customer base.”

Since 2008, Sol Systems has financed and / or developed over 850MW of PV assets. Sol Customer Solutions team will remain in Sol Systems’ Washington, DC headquarters, and will be managed by Andrew Gilligan, Sol Systems’ Vice President.

Gilligan said: “Sol has strategically built and grown its solar development business over time based on a commitment to and reputation for excellence. This partnership enables Sol Customer Solutions to accelerate its growth as one of the preeminent players in the industry, and expand the deployment of DG solar throughout the United States.”

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Major gas, solar and storage plans unveiled in two US states

Utilities in New Mexico and Tennessee have both released plans for new solar, storage and gas infrastructure.

The New Mexico plan is more immediate as it is linked to the closure of the San Juan coal power station in June 2022. The utility PNM has asked the state’s regulator to approve “the securitisation of the unrecovered investment in the plant” and backing for replacement infrastructure.

It has suggested 280MW of gas peaker plants, 350MW of solar and 130MW of battery storage.

The plan is the result of PNM’s modelling. Compared to the continuation of operations at San Juan it expects to save customers US$7.11 per month in 2023.

“Each step we take toward 100% emissions-free must balance the cost, the environment, and reliability,” said Pat Vincent-Collawn, chairman, president and CEO, PNM Resources the parent company of utility PNM. “The San Juan replacement plan we put forth will not only save customers money but will have one of the largest solar facilities in the US and one of the highest percentages of battery storage anywhere in the country.”

Meanwhile, the Tennessee Valley Authority (TVA) has filed its latest Integrated Resource Plan. The utility’s 20-year plan includes up to 2.4GW of energy storage by 2028 and up to 5.3GW by 2038. It suggests a range of 1.5-8.0GW of new solar capacity by 2028 and 14GW by 2038.

The rollout of that energy storage pipeline will be dependent on the cost reductions achieved in the sector. The IRP states: “The trajectory and timing of additions will be highly dependent on the evolution of storage technologies.”

The figures include utility-scale and distributed solar and storage installs as appropriate. While various scenarios were mapped out, “solar expansion plays a substantial role in all futures”, according to TVA.

“The 2019 IRP emphasises the importance of flexibility in our generation in response to the changing energy marketplace,” said Laura Campbell, TVA vice president of enterprise planning. “TVA looked at a wide range of possible futures, and flexibility is important in every case to ensure a reliable power supply.”

As well as planned coal closures, a further 2.2GW of coal capacity is being considered for retirement.

Gas-fired additions will be dependent on the scale of solar deployment with up to 8.6GW of peaker capacity could be built. As such as 9.8GW of combined cycle gas could also be built by 2038.

The combination of solar and storage is increasingly competitive with gas generation.

US solar and storage prospects amid a changing policy landscape will take centre stage at Solar Media’s Solar & Storage Finance USA, to be held in New York on 29-30 October 2019

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WoodMac: Decarbonised US power needs trillions, time, flexibility

Longer timeframes and a more open stance with natural gas and nuclear would help the US overcome the “unprecedented” challenge of decarbonising its power sector, according to Wood Mackenzie.

New analysis by the firm estimates achieving a fully renewable electricity system would cost the US US$4.5 trillion over the next one to two decades, a “staggering” US$35,000 per household.

According to Wood Mackenzie, adding the necessary 1,600GW of solar and wind from today’s installed capacity of 130GW would constitute an “unprecedented buildout”, taking up US$1.5 trillion of the total US$4.5 trillion bill. Transmission upgrades would cost a further US$500 billion.

However, rolling out 900GW of energy storage – the scale required to ensure wind and solar are available exactly when needed, Wood Mackenzie said – would carry the highest price tag by far, demanding investments of US$2.5 trillion.

In its present state, the firm argued, the storage supply chain is proving inadequate to deliver a zero-carbon power system. Only 5.5GW of battery systems is up-and-running or under construction worldwide and what little is operational is too short-term to balance seasonal swings, it added.

Dan Shreve, Wood Mackenzie’s head of global wind research, said a fully renewable power system entails challenges “far beyond” new generating assets. It will require, he argued, a “substantial” shift from “traditional energy-only constructs” to a capacity-style market.

Moving the goalposts to 2040-2050

Given the scale of the challenge, Wood Mackenzie recommended a patient, flexible approach.

Pushing decarbonisation goalposts from 2030 to 2040 or 2050 would create room for emerging innovations – flow batteries, demand response, renewable hydrogen, carbon capture and storage – to mature and reach commercial scale.

Success with decarbonisation would also be helped along by a lenient stance with natural gas, Wood Mackenzie said. Having existing plants cover 20% of the US’ power mix – rather than opting for a fully renewable system – would make the roll-out of clean energy and storage cheaper by a respective 20% and 60%, the firm added.

According to the analysis, the zero-carbon agenda would also benefit from involving nuclear, which presently accounts for 60% of all US clean energy flows. Including existing installations in a decarbonised mix would save US$500 billion in investment in solar and wind, Wood Mackenzie said.

The focus on decarbonisation costs comes as US clean energy players fight to keep up the momentum towards raising a trillion dollars by 2030, an aspiration threatened by looming policy vacuums.

Incentives to solar have become a particular campaign issue for Democratic candidates vying to unseat Donald Trump at next year’s elections. Elizabeth Warren and 19 other senators recently urged for a continuation of investment tax credits until alternative incentives are found.
 

US solar prospects amid a changing incentive landscape will take centre stage at Solar Media’s Solar & Storage Finance USA, to be held in New York on 29-30 October 2019

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US senators join push for solar tax credit extension

US senators have pushed solar incentives into the spotlight one year ahead of the presidential election, urging policymakers to extend federal support.   

The planned phase-down of investment tax credits (ITC) starting this year should be delayed at least until the US can pass alternative incentives for clean energy, according to a letter penned by 20 US Democratic senators, including presidential hopefuls Elizabeth Warren and Kamala Harris.

“We are … concerned about the impact on jobs if the ITC decreases at the very moment it’s needed most,” the 19 June letter said, noting that the wind-down would kick in while the US continues to lack major federal programmes to foster renewables and discourage fossil fuels.

“Because of these credits, solar has averaged 50% annual growth for a decade,” said the missive, addressed to US Senate leaders Mitch McConnell and Charles Schumer. “There are 240,000 [solar] workers nationwide…we should make every possible effort to avoid putting these jobs at risk.”

US solar trade body SEIA endorsed the calls for an ITC extension, describing the scheme as a “common-sense policy” that has generated “hundreds of thousands of jobs” and triggered US$140 billion worth of private investment.

“The ITC has a record of bipartisan support, and circumstances since 2015, such as trade tariffs and a heightened awareness of climate change, only serve to bolster the case for extending the wildly successful policy,” said SEIA CEO Abigail Ross Hopper.

Duke Energy’s tax equity-backed 150MW plant

The ITC programme was first set up by the Republican administration of George W. Bush in 2005. Ten years later, Democrats and Republicans struck a deal at Congress to withdraw the tax credits over five years, culminating in a phase-out after 2021.

Polled investors recently predicted the scheme’s last few years will prompt a boom of US clean energy finance until 2022. Surveyed by renewable body ACORE, the financiers feared the momentum could wane after that point if the ITC is not replaced with new support programmes.

One to seize the closing tax credit window was Duke Energy Renewables. The firm recently switched on a 150MW project in California, financed via tax equity from US Bank’s tax credit division and three other backers.

The North Rosamond plant, boasting 477,000-plus panels at a site in Kern County, was bought from Clearway Energy Group and built by First Solar Electric California. It will supply power to Southern California Edison via a 15-year PPA. 

See here for the letter by US Senators and here for SEIA’s reaction

US solar prospects amid a changing incentive landscape will take centre stage at Solar Media’s Solar & Storage Finance USA, to be held in New York on 29-30 October 2019

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Bifacial modules now exempt from Trump’s trade tariffs

Bifacial solar modules are now officially exempt from President Trump’s trade tariffs.

Modules imported from all the major producing countries are levied at 25% currently, falling to 20% in February next year under the Section 201 measures.

A statement by the US trade representative yesterday confirmed that the exemption would be entered on the Federal Register on Thursday.

Many Chinese manufacturers face both anti-dumping duties and the Section 201 levies. Between January and September 2018, only 46MW of modules were imported from mainland China to the US. The latest twist creates a route to market for China-sourced modules into the US.

Bifacial breakthrough

The technology has spent some time hamstrung by a lack of performance data. This has made some investors wary of financing projects. As technology costs have continued to fall a new strategy has emerged to sidestep the ‘chicken-and-egg’ situation. Developers of three different projects on three different continents have told PV Tech that they are essentially financing bifacial solar projects based on projections of the front-side power only. After a few years of operation, site-specific data on the yield from the rear side will present the opportunity to refinance based on power from both sides, theoretically lowering the cost of that finance.

Meanwhile, Chinese module manufacturers are preparing for significant growth in bifacial demand.

Enel Green Power has been selecting bifacial modules for projects in Australia and Mexico. One Chinese module manufacturer told PV Tech it expects all Middle East utility plants to opt for bifacial panels from this point forward.

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