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March 30, 2013

TMCnet GreenTech Week in Review



In green technology developments this week, there’s no such thing as easy money—as funding for a U.K. consumer program has been delayed, the U.S. solar industry pushes for new financing mechanisms, and Foxconn diversifies in China in order to cut possible losses.

Better late than never: A program offering payments to U.K. householders who install renewable heat technologies will be pushed back until spring 2014, the nation’s Department of Energy and Climate Change (DECC) confirmed this week. According to The Guardian, details of how the domestic renewable heat incentive(RHI) scheme will work, as well as tariff levels, will be published next summer—the time at which the government previously had said the program would start. To cover the gap in funding, the government will extend the Renewable Heat Premium Payment (RHPP) scheme through March 2014. The RHPP was earmarked to finish this month. Under that plan, householders may receive money to help defray the cost of installing renewable heating technologies—including: $453 for solar thermal panels; up to $1,889 for heat pumps; and $1,435 for biomass boilers. 

Recently, the U.S. solar industry has been pleading for access to previously untapped investment structures — including the master limited partnership and the real estate investment trust. While both options remain on the table, there’s now an additional proposal that could help pave the way for funding of substantial solar projects. The Golden, Colorado-based U.S. National Renewable Energy Laboratory (NREL) recently convened the Solar Access to Public Capital (SAPC) working group, with a mission to enable the securitization of solar photovoltaic assets and associated cash flows in the marketplace. SAPC’s primary efforts center on the standardization of power purchase agreements, leases, and other documents relevant to residential and commercial deployment, and the development of robust datasets to assess performance and credit-default risk. These activities are designed to allow projects to be grouped into tradable securities.  Securitization is expected to attract additional investors to the solar asset class, enabling the industry to tap a larger and more liquid pool of capital than is currently available. The working group includes over 60 members representing some of the leading organizations in the fields of solar deployment, finance, counsel and analysis.

As Samsung (News - Alert) surpasses its own sales records with its Galaxy S3 and S4 smartphones —and comes ever-closer to “upsetting the Apple cart” with its clever advertising campaign against the iPhone (News - Alert), companies in the supply chain are taking note. In fact, the company that is infamous for supplying Apple with low-priced overseas labor and manufacturing—Taiwan’s Foxconn—is looking for ways to cut possible losses, should Apple (News - Alert) take a market tumble. Now, according to ZD Net, China’s Ministry of Commerce has announced that Foxconn is investing heavily in the nation’s solar market—despite the disarray caused this month by the bankruptcy of Wuxi Suntech Power Co., Ltd.

The Ministry released word this week that Foxconn is investing in one research center, five solar-power components factories, and 20 solar-power plants in the southern province of Guangxi. Since 2012, Foxconn has been realigning its business and hedging its bets with a major investment in solar power—spending nearly ¥100 billion (US$16 million) in other provinces in China, where the government has provided solar manufacturers with heavy subsidies. Foxconn also has been continuing talks with the ailing Japanese LCD display manufacturer, Sharp (News - Alert), for a substantial share in that company.

Finally, in a very real sense in the renewable energy industry today, “money is power.” Now, through an innovative financing deal involving a private equity firm and a private equity fund, half a dozen major solar projects have been financed. Soltage— a New Jersey-based company that develops and operates photovoltaic solar power plants for large commercial customers—has secured $30.5 million in funding for the construction and deployment of six solar power generating stations in Connecticut and Massachusetts.  The financing is being provided by New York City-based NewWorld Capital Group, a private equity firm in the environmental opportunities sector, as part of an environmental infrastructure investment initiative with Minneapolis-based North Sky Capital's CleanTech Alliance Fund.  NewWorld Capital Group will make the investment through its infrastructure investment initiative—dubbed NewWorld Environmental Infrastructure, LP—in partnership with the CleanTech Alliance Fund. Since its founding in 2005, Soltage has successfully developed 10 solar power generating projects, representing more than 14 megawatts (MW) of distributed generating capacity. Soltage is backed by a group of investors, including Tenaska—one of the largest private, independent energy companies in the United States. Omaha-based Tenaska and its affiliates develop, own and operate non-utility power plants; market natural gas, electric power and biofuels; and provide energy risk management services. All six projects are slated to come online by year-end 2013.




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