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The New Year | January 2012

What happened in

2011 and what does it mean for

2012? READERS

EIGHT PLACE BETS.

FINANCE

TWO ON INVESTING.

INTERVIEWS SIX ON STRATEGIES.


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If there is one consensus from our readers, experts and corporate executives, it is that they are not waiting for government to act. Faced with uncertainty, their choice is to make their own future. As clean and green technologies became mature, the clean tech industry executives started talking about what they are doing—not what they plan on doing or what’s next. This is a dramatic change from 2010 and 2009, and marks a movement away from “green” as an adjunct to marketing or a strategies for the large companies with greater risk capacity. For 2012, we see the green economy filtering down and changing the definition of “Businessas-Usual”for an ever wider range of industries and financial institutions. However, we also noticed that, as the field matures, entrepreneurs and start-ups in clean tech face stiffer competition from established players. An expected trend, in a field where projects have large time and financing challenges, smaller players are joining up to take slices of more predictable and tested clean tech opportunities. As industries come back to the US, the leaders are assessing where the demand is growing, and what kinds of new initiatives will fit into strategy sessions in the coming months. Finally, green is fuelling innovation in an ever wider range of companies. Some are changing their corporate direction, while others are looking to roll out new products and services that manage risk and increase compliance.

It is still a challenging environment for many—if not all—businesses. As the year evolves, THE GREEN ECONOMY will continue to ask the questions about our future: what is business friendly in the green economy? What are the relevant changes and how can executives put long term planning on new ideas into the quarterly reporting expected by investors. At THE GREEN ECONOMY, we look forward to a new year, which will include new apps for smart phones and tablets, along with a round of events to bring people together and examine the world of opportunities in the green economy. A belated Happy New Year! from us all at THE GREEN ECONOMY.

A. Tana Kantor Publisher


THIS ISSUE

What’s Next? 16 Speak 04. 6 Interviews | Panasonic, Mohr Davidow, Jones Lang LaSalle, Acorn Energy, Duke Renewable Energy.

26. 8 Readers | Urbana University, MCG Associates, Parmele McDermott & Thomas, Noveda, Psida GR LLC, CatStone Digital Publishing, BioMart, Crane Associates Research.

36. 2 on Finance | Rushton Atlantic LLC, Green Capital LLC. 3 THE GREEN ECONOMY November | 2011


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? What are the three technologies or trends that will emerge or gain importance in 2012 and how will they impact the green economy? Panasonic ■■ More Efficient Solar at Larger Scale ■■ Smart Homes and Products ■■ Resource Reuse

Mohr Davidow Ventures ■■ Natural gas ■■ Biochemicals ■■ Grid Scale Energy Storage

Acorn Energy

■■ Digitization o Infrastructure ■■ Self-Healing G ■■ Safer Shale G ■■ Giving Back

Duke Renewabl

■■ Solar Costs D ■■ Technology Im Existing Prod ■■ Smart Integra Pricing


of Energy e Grid Gas Extraction

le Energy

Dropping mprovements for ducts ation: Time of Day

Jones Lang LaSalle ■■ ■■ ■■ ■■ ■■

Cities Looking at Block Scale Adaptation for Climate Change Smart Buildings Large Scale Renewable Projects Green Building Standards

Advantage for Analysts ■■ Solar Prices Drop: Does Not Offset Slowdown for Renewables ■■ In 5 Years, Renewables Will be at Grid Parity (price competitive)

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THREE TRENDS: MORE SOLAR, SMARTER AND CLEANER MANUFAC 1. Growth of Solar Industry The first trend, a very powerful trend, is the growth of solar energy for home, business, and government. It’s a very positive trend, driven by the falling cost of deploying solar panels and the higher efficiency that solar is able to make converting the sun’s energy into electricity.

Solar can still cover the costs over a reasonable lifetime under less than optimal conditions. In Panasonic’s case, with the completion of our purchase of Sanyo Electric Company, we’re

expanding our solar cell and module production around the world. Here in the US, we’re already established with two photovoltaic ingot manufacturing plants — one near LA and one in Oregon near Portland. These generate sufficient material to be converted into the modules that make up solar panels for a lot of our sales here in the US. We then assemble those modules in Mexico, once they’re finished with the circuitry and electronics, for distribution in all of North America. We also just announced last week that Panasonic will build a new solar cell manufacturing facility in Malaysia that will nearly double the output capacity of our company. I’m distinguishing cells and modules from panels here. The important thing is to create the underlying solar cells that are then


Peter Fannon Vice President, Technology Policy @ Panasonic

HOMES CTURING assembled into different sized panels for different installations. We’re trying to take advantage of a much stronger growing awareness — at least the developed world and in some cases parts of the less developed world — that solar is a natural and readily attainable resource in almost any area of the world including overcast areas. As a result, all around the world, Panasonic companies in their various regions have ongoing working relationships with multiple installers and with financing companies that can help individuals and businesses on essentially a lease-back basis.

We finance the up front cost of the solar installation so that over the life of the system, typically 15-20 years, you only really pay a reasonable annual sum to pay down the up-front loan. And at the same time you will come out way ahead of what you might typically pay to get the same amount of energy from traditional carbon sources. Today, Panasonic’s photovoltaic cells are in fact the world’s most efficient cell. In their raw state, they are able to convert a little over 20% of the solar energy into electricity, meaning they exceed the next best thing from competitors by several

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percentage points. In addition, we have — coming to market soon — even more efficient panels.

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The other element of Panasonic’s products, which came through Sanyo, are the HIT solar panels. Essentially, it is a bifacial panel with two surfaces: the one facing the sun directly, and one underneath with the ability to collect reflected light or light that comes in on a perpendicular path. This panel can add as much as 20% efficiency above and beyond a single face panel. These are now going into lots of installations into the US. We have major installations going in at entertainment and sports venues, hotels and office buildings, high schools, grade schools and universities, and at some fascinating businesses. For example, we have an installation at a beer brewery in Southern California, at a Silly Sauce manufacturing plant in Oregon, and similarly diverse locations where businesses find that it is cost effective.

And of course a really good community feel-good action to get at least a part of their daily power from sun power.

2. Smart Products and Homes More and more entrepreneurs and companies like ours are making products that are smart products that can be networked and literally talk to each other. If products in your home can report what they are doing when they are doing it — with regard to energy creation or storage or use — then you as a homeowner or business, can manage energy costs much more effectively. You can buy power when it is lower cost, typically during off-hours when the rates are lower and store it in batteries. Products such as room air conditioners with occupancy

sensors, can sense that no one is in the room and turn themselves off. If they sense you are on one side of the room, they can direct the air to you. All of these things are becoming more and more common. To knit them all together, we have a home energy management system — ADSM — which is an application on your TV. These will be available on Panasonic Viera televisions, or can connect on your Blu-ray player. ADSM lets you easily and simply see where power is going, how much, what’s available if you have storage, and what’s being generated locally if you have solar panels, fuel cells or a wind turbine. You can see on a combination of pie charts what’s going in and out, what’s needed, and what it costs. It’s easy to understand. Our goal is to make this so attractive, simple and appealing, that with no more than two clicks, you get the information you need. This would become the norm, the routine. It will be so intuitive and simple — with no computer involved — that with a remote control or an iPad it’s just a natural part of your daily routine.

Your TV becomes your partner in electricity and home economy management. The information can come from smart devices, automatically through the power system in your house to the information hub of the home energy management system, or you can have individual plug-ins for devices that monitor and report to a wireless hub.

3. Recycled Content and Resource Conservation The third trend — a very happy trend — is for:


ƒƒ Ever more manufacturing for the end of life, that is smart manufacturing with an eye to developing products that are meant to be recycled at the end of their useful life; ƒƒ Using more recycled materials; and ƒƒ Developing cleaner manufacturing.

In our case, of course, we’ve been doing this to conserve resources and minimize production costs. To the extent that you can recapture resources and reuse them, at a minimum you cut out the transportation to get raw resources. To the extent that you can find the materials used in a current product locally, that have a useful afterlife, you can recoup production costs after the fact. The goal for Panasonic is not just to reuse resources to have as small an impact as possible on the environment, but to get to zero CO2 manufacturing — which we’re approaching in a some cases already. Secondly, we want to ensure that today’s products don’t contain the hazardous materials that many consumer electronics did in the past. We’ve completely eliminated lead in the TV glass and solder, as well as hazardous materials such as cadmium, mercury and chromium. Our company has established a goal for the coming year of increasing our recycled content for the entire product line by double. That means we will reuse materials by a little less than 10% to more than 10%. Over time, we plan to increase that still more as we find ways to recycle resins in plastics, and all the metals. This is a trend growing across the consumer electronics industry. We now have well over 1,000 drop-off locations where you can leave your Panasonic electronics, and we work with those locations to pick up and properly recycle these

materials. When we have to ship overseas we do audits and pay fair labor. We even manage the collection and recycling of products on behalf of 35 other companies, and we’re growing that business through a recycling management company that we set up 5 years ago. That is a growing business that, while not core, does cover its costs. Finally, we are developing new products from recycled materials.

For example, we are now testing insulation created out of television tube face panel glass. We already make products from face plate glass for insulation in hot pots that heat hot water in a hotel room, or line the walls of a microwave in order to redirect the heat inside the oven. But the new product is turning face panel glass into glass wool, spinning it into finer-than-a-humanhair fiber that becomes the core of an extremely efficient insulation material which we call Vacuua or UVacuua Ultra. Using a vacuum, we compress the internal insulation material so that something as thin as quarter of a deck of cards could be at least 8 times more efficient than insulation that is 10-15 times as thick. We expect to find a market for this in building insulation, which would make it possible to use less material by thinning the depth of walls in homes, saving on wood, plastic and other materials. And that’s just one example of our drive to use recycled resources in products as much as possible. All this is a growing and very welcome trend to end of life design which is both cost effective and utilitarian. In the past, some people thought that recycled materials weren’t as good as using original materials. I’ve heard of this in the case of post-consumer paper napkins and paper towels. But I think that negative notion is disappearing because more people recognize the importance of good resource reuse.

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WE ARE NOW SEEING THE FIRST WAVE OF VENTURE BACKED CLEAN ENERGY COMPANIES MATURE AND MATRICULA

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Despite the ongoing macro economic uncertainty, I think we will continue to see growth and the increasing impact of cleantech companies. I think 2012 will reveal the increasingly cooperative relationship between emerging technologies and incumbent players.

1: The domestic natural gas boom is undeniable. It has changed the way companies and the public view the energy challenge over the next decade. In 2012 the shale gas boom will continue to alter the way we think about energy needs and enable some direct and indirect opportunities in gas, renewables, chemicals, and beyond. Not all gas is created equal. The composition matters and in 2012 we will see people increasingly understand the different value and potential of different sources of gas. In general, the gas boom will continue to support low cost gas for energy. People will increasingly recognize and figure out how to harness the synergies between gas and intermittent renewables


N ATE.

in a way that will change our view of America’s energy path. Perhaps more importantly, gas will also emerge as one of the key feedstocks for chemicals. This will shift the balance of products and the geography of the chemical industry dramatically. I think we will see the beginning of this shift in 2012.

2) Biochemicals will take center stage. A significant number of emerging biochemical companies are beginning to hit commercial stage. Not all will succeed, but the ones that do will lead us to significantly rethink the conventional chemical refinery model. This trend will tie into the shale gas boom as major chemical companies rethink their platforms and product mixes with an

Will Coleman@ Mohr Davidow

eye toward biochemical processes that marry the best of chemistry and chemical feedstocks with the capacity of biological processes to create much more product flexibility.

3) Grid scale energy storage will emerge. Energy storage technologies have been a focus of investors for several years, but most still haven’t hit the cost points to unlock broad grid applications. In 2012 we will see a continued march down the cost curve and an increasing understanding of how to deploy storage on the grid in a valuable way, even at current costs. In the short term this will change the way we think about grid management and stability. In the long term, grid scale storage will combine with natural gas firming to complement the increasing penetration of renewables.

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WE ARE USING SMART DIGITIZATION ON TOP OF DUMB STEEL, WHICH IS KEEPING THE COST OF ELECTRICITY AFFORDABLE.

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Digitization is going to reduce the amount needed to spend for utility workers to be driving around in trucks, but it will increase the need for intelligent control workers and grid engineers. The bad side of digitization is that there are fewer manual high paying labor jobs like linemen, but digitization also means there are more very highly skilled jobs like network operations people.

The overall trend is digitization. once said that civilization advance more important things without th we’re going to have an accelerat happening in education, and hea also happening in banking — the card, internet bill, ATM machine travel with the way you buy ticket activities that are terrible for bank but great for consumers. And it’s the digitizing team.

Basically there’s a sec emerging, which is th and automatic world from the physical wo

It doesn’t really do anything — li but it makes the things that happ happen with fewer people and at to improve efficiency and energ we’re going to see more focus on on home applications as much as

You have to understand that ut problem.

The average life of a about 40 years. And of transformation on


John Moore, CEO and Evangelist @ Acorn Energy

Alfred North Whitehead es as we do more of the hinking about it. In 2012 tion of this trend. This is alth care, and energy. It’s e examples are the credit e. And it’s happening in ts. These are the types of tellers and travel agents, great for you if you’re on

cond economy his vast, invisible d that is apart orld.

ike clean your clothes — pen in the physical world t a lower cost. It is going gy production. So I think n the smart grid, but not distribution optimization.

tilities in the US have a

transformer is the average age the US electric

grid is 37 years. So what that means is that a lot of existing transformers — which are the guts of a power plant — are approaching the end of life. But the utilities don’t have the capital to replace all of those transformers. Most were installed in the 60s, so we now have to monitor them, perform a kind of triage to find out which ones are trending toward failure in order to determine when and where we are likely to have outages. One of our companies is Gridsense, one of the world’s largest transformer monitoring projects with a major southeastern utility.

The job of such projects is to figure out how to fix those transformers and extend their life at the least cost to the rate payer. For utilities, the digitization trend started with the automatic meter reading equipment that replaced meter readers and it is accelerating into the grid optimization side. The utilities are using DMS software — distribution management systems software — to install intelligent devices in the field to detect faults and detect asset failures. It is converting the grid from a time-based operating and maintenance situation to condition-based maintenance through improved situational awareness.

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We’re developing a selfhealing grid. And we’re reducing the cost of maintaining the grid by knowing what’s wrong so that we can send the right equipment, the right truck, and the right technician to fix the problem in the field. So you’ll see more programs focused on the distribution grid particularly in the area of voltage conservation. Normally, the expectation is that the grid operates around a certain voltage band, but sometimes it operates hotter to avoid voltage sag. But to improve distribution, the utilities can more finely tune the voltage which will result in savings to the rate payers that will eclipse conventional energy savings gains in individual households. I think in 2012 we’re also going to see more oil discoveries because of new imaging technology for the oil industry, which will also mean less pollution because of the implementation of emissions technologies. Improved sensors in the

field for oil discoveries will remove a lot of the environmental concerns around shale oil and gas fracking.

that methane

We have a company called US Seismic Systems uses a device that can monitor a well to detect wicking up the well bore.

That will give, in real time, the oil and gas producers the ability to shut down a well that is endangering the aquifers. Technology will also increase production. US Seismic has fiber optic sensors for doing microseismic monitoring of shale gas, which offers the potential to increase the yield of natural gas from 30% to 60%. The improved economics of gas drilling in a low-priced environment like we have today is critical for reducing the carbon intensity of our electrical grid.


By improving productivity — potentially doubling production — of shale gas with advanced alarms for any potential poisoning of the aquifers, you’re going to continue to see reduced prices for natural gas. That means natural gas will continue to take market share from coal. One of the surprises is going to be that the people getting wealthy from the change will have to either accept more government intervention to support the people who are suffering as a result of these advances, or they are going to have to be more generous with personal philanthropy. The government is seeing that people are suffering and is trying to intercede. Basically the wealthy are going to have to decide to pay one of two ways — through sending the elevator back down voluntarily, or being forced by government intervention.

I’m super optimistic about the future. I think productivity gains are going to shock us, but you have to have an education and you’d better be part of the group that’s changing the world rather than the part of the world that is getting changed.

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THE GREEN ECONOMY IS REACHING BEYOND INDIVIDUAL BUILDINGS, CREATING NEW DEMANDS ON CITIES FOR LONG TERM STRATEGIES.


The Shard: London, England

Dan Probst, Chairman, Energy and Sustainability Services @ Jones Lang LaSalle

City and Community Level Involvement The first trend is that we see energy and sustainability being taken to a greater scale. We see a big focus on buildings — when you look at the carbon footprint of a city, buildings are one of the biggest emitters. Cities are looking at things to improve performance of city-owned buildings and what they can do to encourage private owners to improve their performance as well. We’re seeing a lot more activity at a city or community level, or with colleges and universities.

So instead of just looking at improving one building at a time, we are seeing a lot more interest, particularly at the city level, with initiating efforts to improve environmental performance on a larger scale. Indications are that being a greener city helps to attract business, which usually involves better transportation systems, water system, waste systems, and so on.

Dan Probst Chairman Energy and Sustainability Services @ Jones Lang LaSalle

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The Shard will be the tallest building in Western Europe, its crystalline façade transforming the London skyline with a mixed-use 310 m (1,016 ft) vertical city of high-quality offices, world-renowned restaurants, the 5-star Shangri-La hotel, exclusive residential apartments and the capital’s highest viewing gallery offering 360° views. The brilliantly clear low-iron floor-to-ceiling glazing floods the floors with natural daylight and naturally-ventilated winter gardens create breakout and meeting spaces that allow occupiers to enjoy natural light and air within the elegance of the building’s structure. The Shard has been designed to deliver exceptional environmental credentials, with sustainability a clear priority at every stage, from recycled demolition waste to the use of advanced technologies and sophisticated materials in construction. Website.

CDP Cities is one driver. This is a carbon disclosure project that allows cities to have a framework and format that enables them to measure their current performance and benchmark that performance. That reporting, if the cities allow, can be made public, and so this drives the transparency in terms of environmental friendliness of a city. There has been an increase in reports that rank the performance of cities in terms of the environment. Studies would indicate that people and businesses — when thinking about relocating — will consider how green a city is. So green may be a criteria that is on the list with other of factors that influence those kinds of decisions. Chicago is one city doing a lot of work to improve environmental performance. They’re creating new green space, planting lots of trees, having green rooftops, encouraging green buildings, designs and retrofits. Lots of cities are looking at creative ways to reduce their own energy consumption, such as using LEDs for street lights and traffic signalling. People are supporting biking through bike lanes and parking, and encouraging people to use bikes daily with shared bike programs.

Adaptation We’re also seeing focus on adaptation — cities are working to avoid the negative consequences of climate change. Cities in low-lying coastal areas are planning for the protection of coastal developments. So activity and thinking in these areas are impacting the city-level environmental emphasis.

Smart Buildings Technology — specifically smart buildings — improves efficiency and operations, and can dramatically cut costs. Smart systems collect information and route it back to a centralized operation, where it can be continuously monitored, controlled and fine tuned for operational performance. This is a whole area we’re seeing a lot of activity.

Regulatory Activity There is little if any activity at the federal level: most is occurring at state and city level. More and more cities are requiring building owners to measure and report energy and environmental performance of their buildings.


[O]ur impact for U.S. clients in 2010 is equivalent to removing over 100,000 passenger vehicles annually from the road; saving CO2 emissions from more than 60 million gallons of gasoline consumed;and reducing CO2 emissions from the electricity use of 68,000 homes. CSR Report.

New York City was the first city to begin such a program. In fact, this is the first year certain building owners were requirement to report, and next year they will have to make that report public. This is positive because transparency will drive the market and cause owners of corporate buildings to improve their performance. San Francisco, Seattle, Washington DC, and Austin, all have some kind of legislation. Most of the city legislative changes are similar to the New York program. The things that we’re seeing repeating over and over are some form of reporting and measurement of current performance. Then, like in NY, they are requiring periodic building audits or building retro commissioning to take it a little bit further. If you’re doing retrofits on a certain scale in a building, sometimes the retrofits will trigger other requirements for other upgrades like lighting.

For our clients that have national portfolios, the fact that the legislation is primarily occurring on a state or local level is frustrating. They would

prefer this would happen at the federal level. For owners of large portfolios, the fact that reporting requirements aren’t always identical from one city or state to the other makes reporting more onerous. Some have pushed for federal level legislation, and out of frustration and gridlock at the federal level, they are moving their policy advocacy activities to the state and local level. State and local level legislation is happening more to fill the void that people were hoping to have at the federal level. Local and state programs are good, but not ideal.

To overcome this problem, some portfolio managers are adopting ENERGY STAR as a foundation, which we think is good. It’s been out there for a long time and is creating a standard many are using anyway, so if they point to that as a basis for other disclosure, that helps.

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Regulation & Financing 20

The other regulatory activity that facilitates green building improvements is financing for building retrofits. In San Francisco, they are reintroducing commercial PACE (Property Assessed Clean Energy) financing — a property tax mechanism that enables owners to get financing for building retrofits.

Large Scale Renewables More activity is also being seen in renewable energy: a lot more on the large scale. This is mostly via utility-grade solar, wind and biomass plants. The key driver is that utility companies all have mandatory requirements to have certain percentages of their supply to be sourced through renewables, called renewable energy portfolio standards. So the clock is ticking and is starting to have an impact on the renewables market.

This doesn’t usually involve putting solar on rooftops, but utilities are going to need to do some big scale installations, and you’re starting to see that happening. California has a lot of this, but you’re starting to see it happening in more places. For building owners, the economics for installing renewables aren’t quite there in most places, and the places where it makes economic sense, for building owners, is the places where there are incentives in place. That’s been bit of a moving target. Right now in the US, New Jersey has some state incentives that help to put economics over the

finish line to put solar on the roof of a building and have a reasonable payback. But for most locations in the US, it’s just not there yet. It’s getting closer. Panel prices have come down substantially in the last few months, partly because of the drying up of the European market, which flooded the market with panels. But we expect the panel prices to continue to come down and get more attractive for building owners.

Adoption of Green Building Standards We’re definitely seeing continued increase in things like LEED. In the US, there’s not a lot of activity in new buildings, but buildings that are being built usually have LEED certification incorporated into their plans. We’re seeing a fair amount of activity on the existing building front. A couple of years ago for the multi-tenant office building market, we didn’t see a lot. Now we see more activity and find that tenants are beginning to ask questions about the environmental performance of a building, and some are incorporating that into their shopping criteria. The General Service Administration (www. gsa.gov), one of the biggest tenants in the US, won’t lease space in buildings that aren’t at least LEED Silver, for instance.

So if you want to be competitive, more and more building owners are seeing that it is necessary to improve energy and environmental performance.


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We will build and bring on line approximately 800 megawatts of new renewable power generation next year. To put that into perspective, we currently own and operate over 1,000 megawatts of wind and solar generation, and it took us four years to reach that milestone. So 2012 will clearly be a pivotal growth year for Duke Energy Renewables. I lead the development of our commercial solar portfolio, and I think next year will be a momentous one for the U.S. solar industry in particular. There are three trends that will contribute to a transformative year in the solar power sector in 2012.

First, the cost of building new solar power infrastructure continues to drop precipitously, which will benefit utilities,

municipalities and electric cooperatives looking to boost their renewable energy portfolio. At the consumer level, rooftop and distributed generation-type solar projects – where the power is produced close to where it is used – will also grow more affordable. It’s no secret that solar panel prices have plummeted in recent years due to intense competition and manufacturers achieving better economies of scale. Whereas panel prices used to represent 60 to 70 percent of a large-scale solar project’s costs, today panels only represent 30 to 40 percent of a project’s costs. That means that the cost pressure is moving from the panels to the balance-of-system


DUKE ENERGY RENEWABLES WILL MAKE TREMENDOUS INVESTMENTS IN BUILDING WIND AND SOLAR FARMS IN 2012. Brian Stallman, Senior Vice President of Development for Duke Energy Renewables @ Duke Energy

components — the DC-to-AC inverters, mounting structures, and various other pieces of equipment that make up a photovoltaic system.

That’s the second trend. We don’t need massive technology leaps to keep the solar power industry on a healthy upward trajectory. We need continued cost improvements on the balance-of-system components.

Finally, I believe we’ll see the beginning of improved integration with smart grid

technologies and growing interest in time-of-day pricing. The benefits of the former are intuitive, while the benefits of the latter rarely make headlines. But I think time-of-day pricing makes solar power even more compelling. In addition to producing no greenhouse gas emissions and using a free, inexhaustible resource to create electricity, solar power helps meet demand when it is at its peak. If solar is powering homes and businesses when demand is highest, then the value of that solar power is heightened. In talking to utility executives and industry peers, I am hearing increased interest in the benefits of time-of-day pricing and the impact this model can have on the economics of solar-powered generation.

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THERE ARE SOME STRONG ECONOMIC HEADWINDS THAT ARE GOING TO IMPEDE AND CHALLENGE RENEWABLE ENERGY DEVELOPERS IN UTILITY SCALE SPACE.

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Back in 2008, we had a dip in the overall demand for electricity in the United States. In 2008 and 2009 the demand for electricity went down by about 5%, which is a reflection of what happens to us in a recession. That, combined with access to cheap natural gas, has diminished the appetite among utilities for signing up new agreements, whether that would be for renewable technology or any other technology for producing electricity. The demand for electricity is low for any new sources, which puts a stress on those folks hoping to develop renewable energy projects. The other thing that goes along with that trend is that utilities, because they are regulated entities and closely tied to state governments, have a strong disincentive to put a burden on the rate payers by increasing rates.

So in addition to lower demand, there is also lots of pressure to

keep the costs of electricity low during this period of recession. What results from this is that since there are a lot of developers trying to get renewable energy projects across the finish line, there is intense competition in the face of low demand and fairly intense price pressure. That means it is going to be difficult to receive off-take agreements that have really strong economics for the project developer..

Unfortunately, I don’t have a whole bunch of positive things to say about the renewable energy future, other than the fact that the cost for equipment and technology has come down dramatically. That has been good and has been giving wind a fighting chance to compete with traditional sources of electricity. It’s pretty much at grid parity now. And we have hopes that solar may get to


E

Richard Homich, Principal @ Advantage for Analysts

grid parity before the ITC (Investment Tax Credit) expires in 2016. In addition to the economic issues, we know that the 1603 cash grant expires at the end of this year. The challenge is that traditional sources of tax equity don’t have a huge amount of tax capacity and there aren’t a whole bunch of new players that have been coming into the market. So it’s going to be very difficult for developers to get financing for their projects in the next 12 months. What are some of the repercussions? If the folks that do receive an off-take agreement don’t have a strong balance sheet and are not part of a large organization, they will be looking to sell their projects to developers that have significant backing and a large balance sheet. This will result in consolidations in the next year or so. The residential space can operate fairly unimpeded and experience significant growth, as long as they can find sources of tax equity capital to support their operation.

To give you an example, we’ve been watching some of the request for bids in California, and observing that there are an enormous number of developers participating in those bids. From what we’ve seen, the bids for those off-take agreements have been extremely aggressive. Based on what we know of the current costs for these technologies, it’s difficult to see how some of those developers will be able to support the economics or achieve project financing in some cases.

Nevertheless, for 2012, I expect to see utility renewables to show growth from a percentage standpoint simply because it’s coming off a small base. Five years out, I’m expecting to see primary renewable technologies operating at grid parity, including concentrated photovoltaic which holds a lot of promise for helping PV to reach grid parity.

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  New Directions: What’s Next in 2012?

What Read


ÂÂ “Green” makes philosophical and practical sense only as part of the greater whole. True “green” is driven by the free enterprise system, recognizing that using less pays... ÂÂ There’s going to be tremendous contraction in the venture industry... ÂÂ [C]ompetitiveness will shift in 2012 to include “relevant and local job creation” and this will be a big challenge to American businesses..., ÂÂ [T]he switch to tablet usage [means that] our dependence upon paper will turn instead into honoring a valued resource. ÂÂ There will be the super-big: the dedicated and successful players in the global economy. Then there will be everyone else... ÂÂ Funding for new R&D in green will come from Europe and Asia.

ders

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STEVE JONES, President Urbana University

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True “green” is driven by the free enterprise system, recognizing that using less pays; that not depending upon unreliable, foreign carbon assets pays (economically, politically, and environmentally); that freeenterprise-based sustainability pays. As a forest and natural resources scientist (Ph.D. with 12 years industrial sector application and now more than 25 years in higher education) and avocational climatologist, I risk alienating some with my response to your query. What I hope has happened in 2011 with the reality of Solyndra and other such misguided ventures is that we all begin to realize that “green” and “sustainability” do not stand as something different, set apart as a “green” economy from the holistic, all-encompassing economic world. “Green” makes philosophical and practical sense only as part of the greater whole. True “green” is driven by the free enterprise system, recognizing that using less pays; that not depending upon unreliable, foreign carbon assets pays (economically, politically, and environmentally); that free-enterprise-based sustainability pays. I hope also that we not continue the movement toward bowing to the false deity of atmospheric

carbon, assigning economic “value” to something that likely is not a significant causal agent of cyclical climate shifts, which are better correlated with solar activity and oceanic perturbations. The real danger we face as enthusiasts of sustainability is that once the climate bubble bursts entirely, we will lose the sustainability followers who have based their beliefs solely upon atmospheric carbon worship. When the effects of the atmospheric carbon Kool-Aid wear off, will these people still follow the essential tenets of sustainability? We must embrace sustainability — we occupy a world of ultimate scarcity for all but renewable, sustainably-managed natural resources. Using less of anything has economic value, now and into the future. Let’s practice the science and art of sustainability because it makes sense; not because fear-mongers have conjured up an atmospheric carbon bogeyman.


Not what you know today. It’s what’s in the

future. Yesterday was to

it

enough know

a c ce l e ra te d depreciation, EBITDA, earnings per share, capital ratio. Today, leading companies are reporting carbon risk, developing the ROI for efficient energy and resource management, and looking at ESI statistics. With all these new initiatives, how do you measure the opportunities and avoid the risks in new investment strategies?

Finding the right metrics—and having the tools to analyze them—is the job of CRD Analytics. CRD reports on the market strength of companies by analyzing their reporting procedures through a series of metrics including financial, environmental, social, governance and patent information. The SmartViewtm algorithms give a better, holistic view of corporate performance, as well as an index for measuring the competitive advantage of a company witin their market sector.

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GOVI RAO, CEO Noveda, Inc.

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In 2011 we saw ecosystems squeezing out inefficiencies, across the board, and really pushing expectations and performance to higher standards. Market forces forced business to get tighter in operational costs and smarter in how they do business. This leads to a real need for trained employees who know how to extract savings across the board. This isn’t something that can be done with existing, in-house expertise. Companies are already forced to get people pulling 110%, working smarter and staying on the edge. So what is urgently needed is retraining in order to build a new workforce to manage these economies of efficiency. The two biggest areas where we need most help in the US is:

E

nergy efficient infrastructure.

The United States is universally, abysmally behind in audits from Alaska to Florida, and California to Maine. This is something that China cannot do, and that we can do for ourselves. What we need is the educational background to ensure that we have the talent available to do building audits. We need to retrain people to save dollars, yet there are not enough people at the moment.

Training the trainers.

There is a real role here for companies to group together to do regional training. Our paradigms

on competitiveness will shift in 2012 to include ‘relevant and local job creation’ and this will be big challenge to American businesses that have been “free-loading” on local infrastructure and creating jobs elsewhere! This is not rocket science and not new: there are already engineering companies with in-house staff that could provide training support for regional initiatives. In addition, USGBC (United States Green Building Council) holds LEED (Leadership in Energy and Environmental Design) training. The savings from increased efficiency pays for itself. The government is already laying out billions of dollars for such programs, and it is paying off. Look, the toughest and the smartest will survive and survive well ! 2012 will be a watershed year for SMEs (small and medium enterprises) as well as some large corporations! We can only hope to see a revitalization of the workforce to implement the energy, water and gas savings that are needed.

Govi Rao is President and CEO of Noveda, a company that does real time monitoring and management of water and natural gas to optimize for buildings worldwide. Using GPS, they provide locators for energy, water, and natural gas for a portfolio of buildings world wide.


[O]ur paradigms on competitiveness will shift in 2012 to include “relevant and local job creation” and this will be a big challenge to American businesses that have been “freeloading” on local infrastructure and creating jobs elsewhere!

Measuring = Evaluating = Savings = Jobs.

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GABRIELE CROGNALE PE MCG Associates

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For a corporation, green is both about the bottom-line cost savings, and protecting the environment...

1. Shareholder resolutions that zero in on key environmental issues — such as the entire sustainability spectrum, social responsibility, etc. — will begin to gain measurable traction, and help bring such issues even more into the mainstream. Prominent groups such as Ceres, regularly track such efforts, and have reported seeing an uptick in such resolutions as of the last proxy voting season (2011). Such external efforts may surely be added to the responsibilities of the newly-crowned c-suite CSOs. 2. Energy efficiency will gain additional attention as an area of huge cost savings and as an opportunity to lessen an organization’s carbon footprint via its energy usage ­— less energy used translates to less fossil-fuel derived energy needing to be generated. While sustainability concerns may have been the initial driver to push energy efficiency into the forefront, the recently issued ISO standard geared toward energy management systems (EnMS), ISO 50001, will act as a booster rocket to propel ISO-centric management systems into the forefront of sustainability initiatives, especially the somewhat neglected ISO 14001 environmental management system standard. For a corporation, green is both about the bottom-line cost savings, and protecting the environment, and with the ISO “twins” of 14001 and 50001, corporations can achieve both in a structured, cohesive and easy-tofollow format. Just remember, though, that with any structured system, the devil is in the details. 3. By default, the role of the newly-minted CSO will evolve from its present across-the-board of previous experience format to one that is more aligned with capturing the most from what sustainability initiatives can provide.

Gabriele Crognale, P.E., is an ISO 14001 columnist at Business and the Environment (Aspen Publishing); an ISO 14001 consultant at LRWWU, and a book author/ editor at Prentice-Hall, PTR.


Several things happened in 2011. The first part of the year was very active in mergers and acquisitions (M&A) and early stage investing by the venture community. Things seemed to hum along until late June / early July when the Stock Market tanked. That seemed to slow down investing activity by VC’s and deal activity. Throughout the year raising money by venture funds themselves has been quite difficult and will probably continue into 2012.

CHARLES R PARMELE IV, CLU Parmele, McDermott & Thomas

There’s going to be tremendous contraction in the venture industry, Quite frankly, it’s been tough for venture funds to raise as illustrated by the their own money going back to 2008. The top tier funds will never have problems raising new money, decline in the number of but the rest find it to be a struggle. There’s going to follow-on-funds over the be tremendous contraction in the venture industry, as illustrated by the decline in the number of follow-onpast 5 years. funds over the past 5 years.

Charles R. Parmele IV, CLU, is a business consultant at Parmele, McDermott & Thomas in the Princeton, NJ area. I believe that work done in 2011 addresses many of the issues in regard to the use of solar and wind. Reliability – in terms of on-demand power – has always been a long term issue with renewables. Work on electric regeneration, using closed loop hydrogen based fuel cells with hydrogen chemical carriers, are now providing 24 hour x 365 day Solar PV UPS (uninterruptable power supply). Our present system for energy, especially transport energy, is unsustainable: a fact amply demonstrated by continued high fuel prices, issues with fracking, the ongoing effects of the BP Gulf oil spill, Fukushima nuclear failure, mercury poisoning in the great lakes, a China sea oil spill and the continued damage in the Nigerian delta. It’s time to roll up our sleeves and get to work on how to truly impact our security by becoming energy independent. Foreign oil and involvement in foreign wars to protect oil interests should not be part of US policy.

JOHN NISLER Psida GR LLC

[E]lectric regeneration, using closed loop hydrogen based fuel cells with hydrogen chemical carriers, are now providing 24 hour x 365 day Solar PV ...

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CINDY MARKS, Owner CatStone Digital Publishing

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One of the biggest changes ...is the switch to tablet usage by magazine and book readers. ... [M]y hope is that ...our dependence upon paper will turn instead into honoring a valued resource.

STEVE REICHENSTEIN, CEO BioMART

There will be the superbig... Then there will be everyone else, which will force people and businesses to discover and re-focus their strategies on a local economy.

One of the biggest changes that began in 2011 is the switch to tablet usage by magazine and book readers. I think multi-purpose tablets are going to create a sea change in reading behavior and I think that overall, that will be positive. I know many avid readers are sad to even consider fewer printed books, but my hope is that our unnecessary paper and waste paper streams will start to dramatically dwindle and our dependence upon paper will turn instead into honoring a valued resource. I think that printed items will always be valued and have a place as physical and artistic manifestations. But I’d love to see all the useless paper become obsolete as we find more reusable ways to communicate our more mundane messages. I think 2012 will continue to see massive experimentation in how to deliver content on tablets and mobile devices. I hope that some of the dust might start to settle so smaller publishers can relax back into creating beautiful content instead of worrying over how they will be able to present it. I think it’s an exciting and creative time for publishing and being able to enmesh text with both static and moving images and content is a boon for everyone.

There will continue to be two-Americas and twoworlds, but they will be divided differently. There will be the super-big: the dedicated and successful players in the global economy. Then there will be everyone else, which will force people and businesses to discover and re-focus their strategies on a local economy. Although it is unclear how local will be local, the trend will affect where products are made and the sources of making them. (Services too.) For example, a national US green energy grid is unlikely in near future, but many county and municipal scale grids are likely. The same is true of water supplies. Cost, security, and product safety concerns will further spur locally grown foods (as well as hydroponic and aquaculture). Locally manufactured is also gaining ground.


VICTOR CRAIN, Sr. Partner Crain Associates Research

Funding for new R&D in green will come from Europe and Asia. The financial crisis in Europe will push the Continent into recession in 2012. The continued focus on deficits will curtail government spending in all countries. The lack of advocacy, at the Federal level, coupled with the ideological impasse over the budget, means that government spending on green energy and the environment will be curtailed. The effects of spending cuts are showing in other areas as well. The “hourglass� society, that has developed in the US, effectively places green energy solutions out of reach financially for over 80% of households. The continued declining rate of home ownership and real estate values is a further disincentive for investment, even among those who can afford it.* China has experienced an economic bounceback and a desire to improve its environment image globally. The government is the global leader in spending on green energy and this is likely to continue well into the future. Chinese government

paranoia regarding security of oil supplies is another major incentive for investment in green sources. Brazil has the resources to invest in green, but is also an emerging, major oil exporter. Given past battles over the rain forest, it is to be seen whether the country is ready for a meaningful investment in green energy. Funding for new R&D in green will come from Europe and Asia. The three key organizations to watch are GE, MIT and Fraunhofer-Gesellschaft.

*It could be exciting for AARP to develop a cost effective green energy conversion program for older home owners. Those living on fixed incomes would see a definite benefit and it would be an effective way to switch over a large amount of housing stock.

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KENNETH KRAMER Managing Partner Rushton Atlantic, LLC ...a well designed incentive system would produce the most investment capital, tapping a much deeper pool... PANO KROKO Green Capital LLC ...loans issued at market rates by multilateral lenders are typically leveraged with private capital by a factor of three to six, and soft loans and grants by a factor of eight to ten.

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Report from IPCC: The International Panel on Climate Change – o


Extreme weather events will spur new investments globally.

on extreme weather events.

Blog Excerpted by THE GREEN ECONOMY

Climate change is likely to cause more storms, floods, droughts, heat-waves and other extreme weather events, according to the most authoritative review yet of the effects of global warming. * PANO KROKO, Green Capital LLC

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Jake Schmidt of the US-based Natural Resources Defense Council said: “This report should be a wake-up call to those that believe that climate change is some distant issue that might impact someone else. The report documents that extreme weather is happening now and that global warming will bring very dangerous events in the future,” “This is a window into the future if our political response doesn’t change quickly.” The Red Cross warned that disaster agencies were already dealing with the effects of climate change in vulnerable countries across the world. “The findings of this report certainly tally with what the Red Cross is seeing, which is a rise in the number of weather-related emergencies around the world,” said Maarten van Aalst, director of the Red Cross / Red Crescent Climate Centre and coordinating lead author of the IPCC report. “We are committed to responding to disasters whenever and wherever they happen, but we have to recognise that if the number of disasters continues to increase, the current model we have for responding to them is simply impossible to sustain.”Insurers are also worried. Mark Wey, of the insurance giant Swiss Re, said that the massive increase in insurance claims is causing serious concern. He said that between 1970 and 1990, the insurance industry globally had paid out an average of $5bn a year in weatherrelated claims, but that this had increased to $27bn a year. He said insurers wanted governments to get to grips with the effects of climate change in

order to prepare for likely extreme damages from extreme weather and frequent storms and tackle the root causes of global warming.

“Rapid urbanization and the growth of megacities, especially in the developing countries, have led to the emergence of highly vulnerable urban communities, particularly through informal settlements [slums] and inadequate land management,” the report said.

[A]mid the wreckage of the 2009 Copenhagen climate summit, an agreement that rich countries would, by 2020, furnish the developing world with $100 billion a year to help mitigate and adapt to global warming. But with almost no hope of a big new pact, many expect progress on the formation of a global Green Climate Fund to be one of its few successes. Yet there is huge uncertainty about how developed countries will deliver on their promise,

Yet there are some good news too. And the good news is that there is already a surprisingly large flow of climate finance investment into renewable energy around the world. Because renewable energy replaces CO2 emissions act as a warming abatement and resilience measure indirectly. The greening of the industrialized economies also helps, but with the vast majority of new emissions loads coming from the developing world, and it’s need for electrification and economic


growth, we need to focus there for deploying renewable energy technology and infrastructure.

According to the first big study of the issue, by Climate Policy Initiative Think tank (CPI), at least $97 billion a year is going to developing countries, mostly from private lenders in rich countries. They contributed around $55 billion, with another $39 billion drawn from public budgets and capital markets by multilateral and bilateral development banks. Western taxpayers provided at least $21 billion of the latter amount. Less than $3 billion flowed from carbon markets and western philanthropy.

A more coherent view is [that money] should be used to cover the “incremental costs” of low-carbon developments. This is a term in the growing lexicon of climate finance that refers to the additional cost of low-carbon investments – building a wind or solar farm, – as compared with seemingly lower-cost alternatives such as coal-fired power stations.

Last year about $200 billion was invested in renewable energy, low-carbon transport and energy efficiency in developing countries—more than a third of the global total. The magnitude of the private sector’s contribution to climate finance suggests an obvious lesson for the Green Fund. It needs to be designed in such a way as to encourage much more of the same.

And with the global investment industry sitting on over $100 trillion of assets, this would be true even if Western governments had $100 billion to spare from their budgets, which they do not.

According to the World Bank, loans issued at market rates by multilateral lenders are typically leveraged with private capital by a factor of three to six, and soft loans and grants by a factor of eight to ten. This suggests the promised $100 billion a year could, if loosely defined, be raised with a relatively small contribution from Western taxpayers. According to a proposal by Green Capital New Energy Investment and Development Bank – the Environmental Parliament’s Finance Initiative for Renewable Energy Finance – a fund could be easily raised and it might consist of just a mosaic of $30 billion of basic equity and the rest can be leveraged from existing trillions of assets sitting presently on the sidelines. Naturally the $50 billion of this would still come from private lenders. Having thus brought down the cost of capital, the “incremental costs” of renewable-energy projects over the standard sort would be relatively low. These could be covered by between $5 billion and $10 billion a year from public budgets, philanthropy and new sources of cash, such as taxes on bunker fuels or carbon markets. That way we can achieve grid parity with coal in the developing world and scale up renewable energy to the much needed level of reducing emissions.

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KENNETH As the Section 1603 cash KRAMER, grant in lieu of investment tax Managing Partner credit approaches expiration, Rushton Atlantic, how should the US renewable LLC energy industry think about future subsidy models? Two of the highest profile recently announced renewable energy investments have been KKR’s investment in the Sorgenia windfarms in France and Blackstone’s investment in Germany’s offshore Meerwind project.

While both firms are experienced international investors, it is worth noting they found European renewable energy deals, even with the costs and risks of offshore construction and operation, more attractive than the windpower investments available in the US, their original home market. In this context, and, absent unexpected Congressional action, as the Section 1603 cash grant approaches expiration, it is appropriate to compare the effectiveness of the US and European approaches to subsidizing renewable energy.

E

uropean vs. US Perspective

From a valuer’s perspective, the European model is more straightforward than the US model. Revenues are more consistent and predictable, and cash flows are not as dependent on the project’s ability to utilize tax benefits, or on complex disproportionate partnership structures to capture


the available subsidies. The European model has focused on feed-in tariffs (FIT’s), providing long-term, above-market, fixed price guarantees, while the US has focused on providing indirect subsidies through tax incentives. The systems have also differed in consistency of application. The European environment has generally been more stable, and friendlier to long-term investment in renewables than the US system, with its history of periodic cliffhangers as short-term extensions of tax subsidies are debated down to the wire.

As a result, a large proportion of the financial investors in US renewable projects are passive, tax oriented structured finance investors, rather than equity investors interested in owning and operating power plants.

D

Although corporate profits have been improving, the general level of taxable profits is below precrash levels, and the ability, and inclination, ofthirdparty investors to absorb energy tax benefits is limited –i.e. tax equity is expensive financing.

rawbacks of Tax Credits

Rather than focusing on the revenue line, US federal tax incentives include investment and production tax credits (ITC’s and PTC’s), and accelerated and bonus tax depreciation. While these credits are significant (up to 30% of qualifying capital cost for ITC and grants, up to 85% first year depreciation deductions and 2.2¢ per kwh PTC), they cannot be realized unless the owner of the generating facility has sufficient taxable income to utilize the benefits, or brings in an external tax investor, either through a tax equity investment or sale/leaseback.

Philosophical issues aside, while the total pool of tax-oriented investors is not large in capital market terms, institutional investors such as private equity funds are not structured to utilize tax incentives, and some types of strategic investors, such as foreign utilities, don’t have the US income to shelter.

1

603 ARRA Cash Grants

When ARRA [American Recovery and Reinvestment Act] created the Section 1603 cash grant in lieu of ITC, it was in recognition that the full value of the available ITC was frequently not reaching the project developer. A developer that

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...a well designed incentive system would produce the most investment capital, tapping a much deeper pool than a system limited to tax-oriented structured finance investors, and ultimately get the most renewable power online in the shortest time, hopefully bringing costs down faster towards grid parity and the eventual sunset of the incentives.

retained the ITC would likely have to carry it forward for years before it could be fully utilized, and if the credit were effectively sold to a tax equity investor or lessor, its economic benefit would be shared with the financing party.

given the current outlook for the banking sector. Without new corporate investors, such as Google, tax equity, already insufficient to meet demand, will become even scarcer, and presumably more expensive.

The 1603 cash grant program has been very successful, effectively providing balance sheet equity for many projects. Its impending expiration underlines two weaknesses in the current system.

In the current US political environment, the difficulty of passing any form of renewable energy subsidy, or even extending an existing program, should not be underestimated. Politically, it is probably easier to legislate a tax benefit than a subsidy payment for the same dollar amount.

The first is that it is difficult for businesses to commit to significant investments in any industry with an unstable business environment and a “moving target� tax policy. The second, more specific to the renewable energy industry, is that there is nothing obvious to replace it. The closest candidate will be tax equity, sourced primarily from the banking sector, which is now primarily used to monetize depreciation deductions. Unfortunately, as the tax benefits to be absorbed by third party investors approximately double with the addition of ITC, there will not be a corresponding increase in the supply of tax equity

A

lternatives

On the most basic level, however, feed-in tariffs [FIT] work better than tax incentives because every business can utilize top line revenue, but not every business can utilize the full value of tax benefits on a current basis. Some states have instituted tradable renewable energy credits (REC’s) as well as renewable portfolio standards (RPS), and some of the REC programs have been very successful, as they provide a significant pretax revenue stream.


What’s Missing from Your Wind Project? When Competitive Power Ventures Inc. (CPV), a power generation development and asset management company with extensive wind energy development experience, decided to sell Phase I of its Keenan wind farm project to Oklahoma Gas & Electric Company, CPV turned to Dickstein Shapiro’s experienced wind energy and corporate counsel to structure, negotiate, and document the transaction. CPV continues to rely on Dickstein Shapiro’s energy transactional and regulatory attorneys in connection with all aspects of its wind energy development program to help ensure that it remains a significant player in the North American wind energy sector.

“In today’s ever-changing energy market, the success of our power generation development program requires a unique mix of regulatory and transactional experience, and Dickstein Shapiro excels in both.” Doug Egan Chairman, Competitive Power Ventures CEO, CPV Renewable Energy Company

However, they are not consistent from state to hopefully bringing costs down faster towards grid Larry Eisenstat, Energy Practice Leader eisenstatl@dicksteinshapiro.com state (and nonexistent(202) in 420-2224 some I states), and have parity and the eventual sunset of the incentives. been subject to severe price swings. Arguably, the least intrusive system the Federal government could implement would involve leaving the existing power market system in place and incorporating As the system evolves, it will be important a system of renewable power price supports to for market participants to retain competent supplement existing power sale revenues (and advisors, and specifically with regard to valuation state REC proceeds) to guarantee the equivalent requirements, professionals who understand the of a premium feed-in tariff rate. Such a program economic, tax and accounting consequences of would be partially analogous to a cash grant in lieu the different investment and financing structures of the PTC, although the contemplated payment available in the renewable energy sector. would vary such that total combined revenues to the renewable power producer would provide an effective fixed rate. WASHINGTON, DC | NEW YORK | LOS ANGELES | IRVINE

Prior results do not guarantee a similar outcome.

© 2010 Dickstein Shapiro LLP. All Rights Reserved.

C

1825 Eye Street NW, Washington, DC 20006 (202) 420-2200 | dicksteinshapiro.com

Clearly the determination of the optimum price support system would be complex and contentious, and a perfect structure may not exist. The politics of getting a program enacted are beyond both the scope of this article and the author’s expertise. But a well designed incentive system would produce the most investment capital, tapping a much deeper pool than a system limited to tax-oriented structured finance investors, and ultimately get the most renewable power online in the shortest time,

onclusion

Ken Kramer is a founding partner of Rushton Atlantic, LLC, a member of the Rushton Partners Group, a global valuation consulting practice in New York, Chicago, London and Manchester, focusing on renewable and conventional energy, infrastructure, manufacturing and transportation. The firm’s services support financing, investment, financial reporting, tax and insurance. (and state REC proceeds) to guarantee the equivalent of a premium feed-in tariff rate.

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Where did the money go? Create yo ARRA (American Recovery and Reinve states, for what kinds of projects, and


our own chart, and see where the estment Act) funds went, to which d how many jobs were created. Recovery.gov::GO>

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