Classifying the Top Utility-Scale PV Developers in the United States : Greentech Media

Classifying the Top Utility-Scale PV Developers in the United States : Greentech Media

The twelve project developers with the largest pipelines all share one thing in common: access to a large balance sheet

Assessing the size of the utility-scale PV pipeline in the U.S. is a highly subjective process. If you were to aggregate every project announcement, you'd find well over 10 GW of projects in various stages of development throughout the country. The BLM recently agreed to fast-track its review of 14 solar projects that alone add up to 6.5 GW, and prospective project developers are trawling much of the Western United States signing land leases for new projects.
But most of these projects will never be built. They'll run across siting, permitting, and interconnection hurdles. They'll have trouble signing PPAs at sufficient prices. Or they'll overcome the prior constraints and still be unable to close financing.
At GTM Research, we maintain a database of utility-scale PV projects in the U.S. We try to include only projects that have a reasonable chance of success given their current stage of development and their developer's track record. This whittles the total pipeline down to a more manageable 2.8 GW of projects that are likely to start generating power at some time in the next four years.
92 percent of this pipeline lies in the hands of the top twelve developers, indicating how consolidated the market remains today. Furthermore, a closer look at these twelve developers reveals that they all share a single characteristic: access to a large balance sheet. This enables them to contribute their own equity to projects, which in turn loosens the purse strings of lenders and tax equity providers.
So in an attempt to make sense of the fractured utility-scale PV market in the U.S., here is a breakdown of the top twelve project developers according to their source of balance sheet strength.


Source: GTM Research
Vertically Integrated Manufacturers
First Solar, Sunpower and BP Solar USA all have strong internal balance sheets through their own PV manufacturing operations (BP obviously also has a much larger balance sheet through its fossil fuel activities).
First Solar has, by far, the largest project pipeline, with three multi-hundred megawatt projects contracted through PPAs with California utilities (Sunlight, Stateline and Topaz) and three smaller utility-scale projects. First Solar's strategy is to build projects and then sell them prior to, or immediately upon, commencing operation. Most recently, First Solar sold its 21 MW Blythe project to NRG in November 2009. At least one of the larger projects may run across insurmountable hurdles in development. But given its track record and access to capital, First Solar gets the benefit of the doubt here.
Sunpower entered the project development game in 2006 with its acquisition of Powerlight, and has since used its downstream arm as a mechanism to create additional demand for its own modules. In contrast to First Solar, Sunpower is willing to own and operate projects, as well as developing them. Sunpower was one of the lucky few developers to raise a large project fund in 2009, with $100 million in tax equity coming from Wells Fargo in June. Its largest project in development is the 250 MW California Valley Solar Ranch, which is expected to be completed in 2012.
Gemini Solar, which is a joint venture between Fotowatio Renewable Ventures and Suntech Power, could fit in a number of these categories depending on how you classify it; I'll place it here because of the Suntech connection. Gemini's first project, a 30 MW system built through a PPA with Austin Energy, is expected to come online this year.
BP Solar USA makes the list because of a single project: the 37 MW system to be constructed at Brookhaven National Labs through a PPA with the Long Island Power Authority in New York.
Private Equity-Backed Developers
NextLight Renewable Power LLC was founded by Energy Capital Partners, a private-equity firm with over $3 billion in funds under management. Although its projects have yet to generate any power, Nextlight's huge pipeline and management team (which has deep roots in the energy project development business) have placed it as an early leader in large-scale project development. Nextlight owns another of the largest projects in our database, the 230 MW AV Solar Ranch One project, which has a PPA from PG&E. It is expected to be completed in 2013.
Recurrent Energy vaulted into the top twelve just this week with its announcement of 50 MW of PPAs from Southern California Edison. The PPAs are comprised of three utility-scale DG projects that are expected to be completed in early 2013. Recurrent raised $75 million in corporate equity in July 2008 from Hudson Clean Energy Partners, a private equity firm with over $1 billion in management. This enabled Recurrent to purchase a 350 MW pipeline from UPC Solar in March 2009, a bold gambit in the midst of an economic crisis.
Developers Owned by Larger European Renewable Energy Developers:
Fotowatio Renewable Ventures and GA-Solar both benefit from ownership by larger renewable energy project developers, both in terms of balance sheet strength and project development experience.
Renewable Ventures was purchased from MuniMae in 2008 by Fotowatio, one of Europe's largest renewable energy companies, and the company has been among the most successful at raising project finance during the credit crisis. Its most recent fund, the $200 million Solar Fund V, was raised in August 2009 with its own equity capital (likely supported by Fotowatio), as well as equity investment from Wells Fargo and debt from John Hancock Financial.
GA-Solar is a newcomer to this list, having just announced a 300 MW project in New Mexico last week. This may be the shakiest project included on our list, since no PPA appears to have been signed yet. But GA-Solar has both the project development experience (over 200 MW commissioned worldwide) and the capital backing (its parent company, Corporación Gestamp, is a $5 billion Spanish corporation) to bring the project to fruition.
Developers with Other Corporate Parents
These four don't fit into any of the other categories, but they still have access to a large balance sheet through ownership by larger corporate parents. And in each case, the corporate parents have some attachment either to the PV industry or energy project development.
Sempra Generation and PSEG Solar Source are both owned by larger energy corporations that also have utilities within their portfolios (San Diego Gas & Electric and Public Service Electric & Gas, respectively). Sempra's inclusion comes from a 48 MW expansion of its existing 10 MW El Dorado project in Nevada. Sempra has also planned a much larger, 400 MW project called Mesquite Solar that is still in the permitting process. Sempra Generation's parent, Sempra Energy, produced $11 billion in revenue in 2008. PSEG Solar Source is developing projects for AEP in Ohio and Jacksonville Electric Authority in Texas, both of which are expected to be completed this year with a combined capacity of 27 MW. PSEG, the parent company, does around $13 billion in annual revenue.
Chevron Energy Solutions, a division of the oil major Chevron Corporation, develops both solar and biomass projects. CES is developing a 45 MW project in Lucerne Valley, CA through a PPA with Southern California Edison. The project will be constructed in two stages, beginning this year with expected completion in 2012.
SunEdison would have been the anomaly on this list if it hadn't been purchased by MEMC in October 2009. But as it stands, SunEdison will benefit from MEMC's roughly $2 billion balance sheet. Expect its pipeline holdings to jump upward significantly in 2010.

Environmental group sues to stop solar project

Riverside Press-Enterprise - Environmental group sues to stop solar project

By David Danelski, Jan 20

An environmental group has filed a lawsuit contending the federal government's "fast track" approval of a solar energy development -- already under construction in northeast San Bernardino County -- violated several laws.

The Western Watersheds Project, which works to protect watershed areas in six western states, wants a federal court to rescind the approvals and halt construction.

The complaint, filed Friday, names as defendants the U.S. Bureau of Land Management, the U.S. Fish and Wildlife Service, Interior Secretary Ken Salazar and other federal officials.

BrightSource Energy Co. broke ground in October on the 5.6-square-mile solar field in the Ivanpah Valley off Interstate 15 near Primm, Nev. The project was approved in an expedited process intended to help energy developers meet federal deadlines to qualify for stimulus subsidies.

BrightSource, based in Oakland, plans to focus heat from thousands of mirrors onto three "power towers" to generate steam and run turbines that would produce enough electricity for as many as 140,000 homes. The project is on public land controlled by the BLM.

"This project was just rushed," said Michael Connor, California director for Western Watersheds Project. "It was a rush to judgment. They had already decided they were going to build these things."

Lois Grunwald, a Ventura-based Fish and Wildlife spokeswoman, said she had not seen the complaint and could not comment on it. BLM officials also had no comment, spokesman David Briery said.

A BrightSource spokesman said in an e-mail that the company "does not comment on legal matters pertaining to governing bodies that regulate our industry."

The watershed group says the federal agencies cut corners on environmental reviews, violating the National Environment Policy Act and the Endangered Species Act, among other laws.

Among several allegations, the group accuses the government of inadequate reviews of alternatives, such as allowing BrightSource to build on nearby Ivanpah Dry Lake, which has little or no habitat value for desert tortoises, a species threatened with extinction, and other wildlife. The lawsuit says 30 tortoises have been found at BrightSource's current location.

The government also did not fully analyze how upgrading power lines will affect wildlife, the suit alleges.

The Western Watersheds lawsuit is one of several legal challenges to solar projects that the Obama administration approved last year on public land in the Mojave Desert.

The Sierra Club on Dec. 30 sued the California Energy Commission over its approval last fall of the Calico solar development, planned off Interstate 40 about 37 miles east of Barstow, said Gloria Smith, an attorney for the club. The suit, filed with the California Supreme Court, faults the commission for not detailing how the developer would compensate for lost wildlife habitat.

Also in December, a Native American cultural protection group and tribal members sued the Obama administration over the fast-track approvals of six large solar developments, including Ivanpah and Calico. They contend federal officials violated laws that protect sacred places.

Evergreen Solar's Failure Amid Solar Market's Success - Seeking Alpha

Evergreen Solar's Failure Amid Solar Market's Success - Seeking Alpha

Who killed Evergreen Solar (ESLR)?
The company’s String Ribbon technology -- which emerged in 1994 from research conducted at MIT -- promised to reduce the cost of solar panels AND increase power output. Payback could be achieved in 12 months, it claimed. A successful IPO in 2000 dovetailed with the subsequent explosion in solar. In 2008, it opened a factory in Devens, Mass. with the help of $58 million in state money.
This week, the company announced it would shutter Devens and lay off 800 of 925 employees. The firm lost $54 million in the first nine months of 2010. A European joint venture limped offstage last year. All this amid a booming solar market.
The company isn’t quite dead -- it plans to reposition itself as a wafer maker -- but the future looks cloudy.
Conventional wisdom blames Chinese solar panels, which began to emerge in notable numbers in 2006 and 2007. But it’s not a fully adequate explanation. First Solar (FSLR), the largest solar module maker in the world, has led the industry in driving out cost. It comes from Arizona and runs factories in Europe and Malaysia. It doesn’t exactly take advantage of Chinese labor rates or all that cheap capital.
SunPower (SPWRA), meanwhile, makes some the world’s most expensive silicon solar modules. Yet it has managed to defy predictions about its impending death for years. Suntech (STP), a Chinese company, has a new factory in Arizona.
How come they -- and others -- are surviving?
Blame it on the Rogue Ripple, or a series of small, seemingly sound management decisions that have a massive and unforeseeable impacts on the destiny of a company.
Back in 1994, serial entrepreneur Jerry Kaplan formed an online auction site that quickly gained buzz with the business press and web consumers. Legendary VC firm Kleiner Perkins backed it.
It wasn’t eBay. The company was called Onsale -- eBay emerged the following year. Onsale specialized in selling PCs and other remainders from manufacturer and distributor warehouses. Ebay trafficked in used goods from consumers. Ebay exploded. Onsale held a dot.com IPO, tried a merger with Egghead, and ended up on the scrap heap of history.
"If you don't get the model exactly right, capitalism can be unforgiving," Kaplan, laughing, told me once.
The same happened to Direct Hit. Who? What? Back in 1998, Direct Hit, backed by Draper Fisher Jurvetson, was the next big thing in search. (At CNET, my old job, the first reference to Google (GOOG) comes toward the bottom on a story about Direct Hit.)
What happened? Direct Hit based its back-end on servers from Sun (JAVA). The company soon maxed out its ability to index the web. By contrast, Google built itself around cheap, replaceable Intel (INTC) servers.
"We spent our entire hardware budget for the year, and we quickly reached its limits," CEO Gary Culliss once told me. "They were able to focus on other things.”
String Ribbon wrings waste from wafer manufacturing. Traditionally, silicon manufacturers create a round log of pure silicon and saw off thin wafers, sort of like a butcher slicing mortadella. Square solar cells are then cut from the round wafer: silicon sawdust and the moon-shaped wafer edges need to be recycled.
In the String Ribbon process, two strings are placed in molten silicon. Gradually, as they are pulled apart, a thin sheet of silicon forms. No sawing, no lost corners, no waste. Brilliant idea.
Unfortunately, in the early version of String Ribbon, the silicon could only be stretched so far, leading to square wafers with a narrower X dimension than the diameter of traditional wafers. Unusually sized wafers led to unusually sized solar cells, which in turn required tweaks to solar modules.
Third-party module makers -- faced with the prospect of having to retool factories to adapt to Evergreen -- passed. Instead of selling wafers, the company’s module group became Evergreen’s captive customer.
When solar demand outpaced supply, the company could garner a profit (24.4 percent gross margin in 2007). Then the recession hit. Silicon dropped from a few hundred dollars a kilogram to $45. Module prices, goosed by an influx of suppliers, plummeted.
Suddenly, weird wasn’t a virtue. (Interestingly, Luminus Devices, an MIT alum with an odd-sized LED, is also undergoing challenges.)
Evergreen began to outsource module manufacturing and opened a wafer factory in China. It got the cost of its modules down from $3.18 per watt in early 2009 to $1.88 toward the end of 2010. Unfortunately, some are now selling modules for under $1.40.
Under the current recovery plan, Evergreen wants to sell its now standard-size wafers and cells to third parties. It could work, but the company carries debt and a whiff of failure. What kind of volumes can it achieve? What is the efficiency roadmap? What are the warranties and reliability test results? Evergreen needs to answer all of these questions.
Worse, many solar companies have gone vertical. What do we do with all of the factory equipment we bought last year if we adopt a third-party module?
China’s impact can’t be ignored. Everything costs less there and the government's programs to invigorate new industries are more consistent than ours. At times, the company has bought glass from China instead of nearby New Hampshire to cut costs.
Nonetheless, human decisions played a part in the drama. Think of it: if solar was really exclusively just about cost and losing out to emerging nations, you could replace executives at the VP level and above with rhesus monkeys.
When First Solar ventured into cadmium telluride, it went against the conventional wisdom that it could be done at scale. SunPower engaged in consumer advertising -- something other module makers ignored. It also pursued its development projects, a strategy Sharp (SHCAY.PK) and others are subsequently adopting.
AQT Solar got into commercial production of copper indium gallium selenide (CIGS) solar cell with $15 million. Others spent several hundred million. AQT guessed correctly that it could be done with standard factory equipment.
And look at Innovalight. The same year Evergreen opened its module factory, Innovalight decided not to build one -- instead, it retrofitted its business to just sell solar ink to established manufacturers. It now has five customers, all Chinese.
Innovalight CEO Conrad Burke tells me that the company made the decision before the 2008 crash. Luck or better foresight? Maybe you need a bit of both.

Silicon Ink Kingpin Innovalight Signs Up Another PV Customer: This Time, It's Motech : Greentech Media

Silicon Ink Kingpin Innovalight Signs Up Another PV Customer: This Time, It's Motech : Greentech Media

Innovalight is on a roll.
The VC-funded firm has developed a solar ink that boosts the performance of crystalline silicon solar cells. They've signed a series of deals to sell their efficiency-boosting material to a growing list of China-based crystalline silicon cell and module firms.
This morning, the firm announced yet another customer -- Taiwan's Motech. Motech builds single and multi-crystalline silicon solar cells in Taiwan and reached one gigawatt in production capacity in the third quarter of 2010, making them the largest solar cell manufacturer in Taiwan and one of the top ten manufacturers worldwide in terms of production capacity and output.
This is the fifth announced deal for Innovalight; the firm already has agreements with Asian solar powers Yingli Green Energy, Solarfun, Jinko Solar and JA Solar. This is a meaningful accomplishment for a 65-person Silicon Valley startup. Innovalight's nano-particle materials are produced in the U.S.
In Michael Kanellos' view, Chinese solar developers understand low-cost manufacturing and have the capital to build factories. Innovalight has innovative science on their side -- and these Asian solar giants recognize that value.

Innovalight manufactures a nanotechnology-based silicon ink and licenses a platform process that allows c-Si firms to upgrade solar cell manufacturing production lines, boost performance, and lower production costs.
The platform license business model is novel and seems to be working. Innovalight provides their silicon ink at a nominal cost -- that's not the primary source of their revenue. The licensing model is structured so that Innovalight's customers pay a fee for every wafer produced that uses the Innovalight special sauce. And with a world market of approximately five billion silicon wafers -- there's a large and growing total available market.
The value of the Innovalight product is that it fits gracefully into a customer's production process. One process step is added at the front end, after the wafer texturing step, and the Innovalight ink step is integrated into the customer's production line.
Innovalight owns a small ten-megawatt cell production line, which looks a lot like the production lines used by the Asian solar vendors. This allows Innovalight and its partners to develop their product and processes in a real world test bed and garners the credibility necessary for a VC-funded David to work with the gigawatt-scale Asian solar Goliaths.

DOE Finalizes $1.45 Billion Loan Guarantee for One of the World's Largest Solar Generation Plants

Department of Energy - DOE Finalizes $1.45 Billion Loan Guarantee for One of the World's Largest Solar Generation Plants

Washington D.C. - U.S. Energy Secretary Steven Chu today announced a $1.45 billion loan guarantee has been finalized for Abengoa Solar Inc.'s Solana project, the world's largest parabolic trough concentrating solar plant. Located near Gila Bend, Arizona, the 250-megawatt (MW) project is the first large-scale solar plant in the United States capable of storing energy it generates. Solana will produce enough energy to serve 70,000 households and will avoid the emissions of 475,000 tons of carbon dioxide per year compared to a natural gas burning power plant.

"As the world's largest solar plant of its kind, the Abengoa's Solana project is playing an important role in creating jobs and clean energy for Arizona as well as fostering innovation in the U.S.," said Secretary Chu. "As today's announcement and other recent announcements of completed loan guarantees for wind and solar projects demonstrate, the Department's loan program is gaining momentum, creating jobs in communities across the country while putting us on the path to a clean energy future."

"I congratulate Abengoa Solar and the administration for developing public-private opportunities that will create well paying, highly valued jobs for Arizona," said U.S. Rep. Raul M. Grijalva. "This is yet another example of stimulus funds helping to lead our nation's and Arizona's economy back to recovery, while transitioning our energy policies to allow us to become a national and world leader in alternative energy generation."

Abengoa Solar Inc., the project sponsor, estimates that the Solana project will create between 1,600 to 1,700 new construction jobs and over 60 permanent jobs. The jobs created by the project will be located in Arizona and in neighboring states. To accommodate the project's need for over 900,000 mirrors, a mirror manufacturing facility will be built outside of Phoenix. As a result, the company anticipates the project will create additional direct investment in Arizona's economy.

U.S. providers and manufacturers will supply 70 percent of Solana's components, such as mirrors, receiver tubes, and the heat transfer fluid. Electricity from the project will be sold through a long-term power purchase agreement with Arizona Public Service Company.

The Department of Energy, through the Loan Programs Office, has issued loan guarantees or offered conditional commitments for loan guarantees to support 16 clean energy projects totaling nearly $16.5 billion. Together, the 16 projects will produce over 37 million megawatt-hours, enough clean energy to power over 3.3 million homes. Additional DOE-supported projects include the world's largest wind farm and a 2,200 MW nuclear power plant - the nation's first in three decades.