Starting this month, the Los Angeles Times published the first two articles in an occasional series about the impacts of large scale-solar projects on California’s desert. This most recent article, published last week, covers rising expectations for growth and its potential for inflated prices, with plenty of room for disappointment. Here’s our take on it.
Like so many land rushes and bubbles of the past (including the recent housing bubble and crash), the current solar land rush isn’t going to last. In bubbles, people invest based on half-truths, lack of information, rumors and the powerful emotions of crowds–essentially, enough hot air to leave that market vulnerable to a sudden burst.
In November, California regulators made some long-awaited changes to the CREST PPA offered by SCE, with a potentially more favorable climate for developers to finance their projects. This article from the January 2012 issue of Photon magazine features an interview with ASI’s Al Rosen and offers some additional background and views. How does it climate for solar development in California look to you – sunny and bright or slightly cloudy?
Note: After this article went to press, SCE withdrew its request for a CPUC rehearing and is signing these PPAs without reservation of rights or protest. Projects which will produce an estimated 70 MW signed the modified PPA before the end of 2011 (including two projects developed by ASI).
PPA fix beat the clock
Photon Magazine, January 2012
Al Rosen knows all about patience. Two years ago Rosen and his business partner, Peter Weich, who together operate California-based solar developer Absolutely Solar Inc., began installing photovoltaic (PV) projects under the CREST program from Southern California Edison (SCE). The program was created through the state’s Assembly Bill (AB) 1969, which was passed in 2009. Designed to spur the development of wholesale renewable energy projects 1.5 MW and smaller, CREST is SCE’s version of the feed-in-tariff program that was mandated for investor-owned utilities (IOUs) by the same legislation.
The most valuable distributed generation is located “closest to load”. The closer the power production facility is to the load (where the power can be used), the lower the transmission losses and easier it is to interconnect without transmission upgrades. The problem with locating utility scale PV production close to load is the dearth of affordable sites of an appropriate size.
Using “bad” land that has limited use and little value for other purposes is one way to make it easier to build PV projects closer to load. Brownfields and former landfills are good examples of low cost land that can be recycled to be used for renewable energy cites. Absolutely Solar is currently in preliminary discussions with a solar developer that is working on three closed landfills and with a county government that has similar sites available.