Solar Rebates Target Corporations

Leave it to a company like Wal-Mart to swing an investment deal that the everyday Joe cannot ever dream of. Well, OK, it's not just Wal-Mart but also Whole Foods and many other corporations in the United States, which are getting solar electricity on their rooftops without paying the large upfront installation costs that the average consumer must pay. These companies are contracting with third parties that install, own and maintain solar power systems on the store's rooftops in exchange for a long-term contract to purchase solar electricity from the third party at a rate that is comparable or even less than what it would pay its traditional local utility supplier.

This power purchase agreement, offered by companies like SunEdison (Beltsville, Md.) and MMA Renewable Ventures (San Jose), raises the starting capital from investment banks that profit in two ways, according to a Forbes report.¹ They receive a tax break (the investment tax credit) in addition to a single-digit rate of return. These approaches have taken off in the states where significant solar rebate programs are in place, such as California and New Jersey. Other states that offer these rebates and deals with the utilities include Indiana, Minnesota, New York, Oregon, South Carolina, Wisconsin and Wyoming. Of course, the size of the rebate is key; in California, it recently fell from 39 cents per kilowatt hour to 26 cents per kilowatt hour from two of the largest utilities in the state.

At least one company, SolarCity (Foster City, Calif.), is trying to take the sting out of solar installations for the residential market — through a leasing agreement. In this case, a photovoltaics (PV) installation costing $25,000 might require a $2500 down payment, but a $200/month lease rate for 15 years. Other communities, such as Berkeley, Calif., are finding that it makes sense to roll up the cost of solar installations with property taxes. All of this makes sense, given the rebates and other incentives....

Which brings us to the question of grid parity. Many sources estimate that grid parity will be met in 3–5 years. I think it's coming sooner, given the pace of technological developments. But, as we all know, grid parity will be reached in different places around the globe at different times, depending on the local cost of power and availability of sunlight, among other factors. Mark Pinto, senior vice president and general manager of Energy and Environmental Solutions at Applied Materials (Santa Clara, Calif.), recently stated that even with a 21% CAGR of solar energy production from 2000 to 2040, only 20% of the world's electricity need will be met by solar.

As you've probably already gathered from our cover, we too are highlighting the promise of the solar industry in this issue. In our cover story, Aaron Hand, executive editor, electronic media, takes a look at thin-film solar cells, which have the advantage of not being subject to the high cost of starting silicon. Thin-film solar cells, an approach currently only being mass manufactured by First Solar (Tempe, Ariz.), is sure to give mono and multicrystalline silicon cells a run for their money sometime soon. We also have articles that explore the ways that TCAD can be applied to improve cell efficiency and the application of lasers to solar cells.

SEMICON West, for the first time this year, will be co-located with Intersolar North America, the North American version of the German show that took place in mid-June. Just as I was writing this editorial, I received a release stating that SEMI is partnering with the organizers of Intersolar, Solar Promotion GmbH and Freiburg Wirtschaft Touristik and Messe GmbH & Co. KG to expand the technology and manufacturing presence at Intersolar in Munich, Germany, in June 2009. This expansion of Intersolar is designed to make it a more comprehensive exposition — one that reflects the expected growth in demand for PV and solar thermal products, equipment, materials and services, which is projected to grow from $13B today to more than $40B in 2012.

While the SEMI step will no doubt prove to be significant, to gain more cross-fertilization in the semi/solar worlds, it is my contention that, unlike the semiconductor industry, PV will not be fueled mainly by technology developments, but by the ingenuity of practical minds that find ways to make it affordable to the average consumer. Power purchase agreements in the United States are a step in the right direction, but comparable deals for the average homeowners are the next step.