I think that we can all agree that renewable energy supplies are 30 to 40 years away from reaching parity with traditional energy sources. It is well documented that the road to energy independence does not come without some potholes and speed bumps along the way. The solar and photovoltaic market is the most visible victim of overpromising and under-delivering the American dream for sustainable technologies. Even still the solar solution seems more practical than its “green” sisters – wind and geothermal. The terrible trend of bankruptcies, IPO terminations and other signs of a distress market screams scam all around. Most notably, the alleged solar savior company Solyndra, received half a billion dollars in public subsidies before their ultimate failure.
Despite the recent $90 billion industry fiasco, investors are learning from their mistakes. Solar companies with strong licenses and the ability to augment commercial-off-the-shelf products with the application of advanced technology will differentiate themselves from the competition. Although control of the value chain by developers and owners of solar energy plants must insulate themselves from bad models and market variations, tax equity benefits still determine economic viability on a project-to-project basis.
Many independent developers are adopting a turnkey commercialization approach to deliver high quality construction and operation services after securing Renewable Energy Credits (REC) and Power Purchase Agreements (PPA) for project monetization. One North Carolina based company that is positioned to reduce capital expenditures by 50% with a 36% increase in year-to-year returns through its proprietary Scavenger technology has caught the attention of several public-private-partnerships where other firms have fell short. Their market specific model leverages capabilities that include: Financial Modeling; Finance Sourcing; Integrator and Construction Management; Energy Sector Analysis; Government Relations and Installation services towards maximum REC producing contracts and tax qualifying incentives.
A few bad apples really can spoil the bunch – but there remain a few bright spots in this bushel to keep hope alive. No matter the challenges and uncertainty of the renewable market today, natural sunlight remains the best no-cost, unlimited energy supply to be harnessed and should be strongly considered when planning for sustainability. Any technology designed to reduce the cost of utility-scale solar installation from today’s cost of $3.30/W to $1.50/W or lower is below grid-parity and still above standard. Public taxpayer dollars is obviously not the best financing solution. A much more organically governed strategy is welcomed and necessary to maintain momentum and move our people to the next level of economic prosperity and true energy independence.