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Google's Solar Flair: $94 Million Investment in PV ProjectsAfter Google announced the phase out of its RE<C initiative last month, some in the press drew the conclusion that the tech giant was pulling out of renewables altogether. We quickly pointed out that it was a simple shift in Google's strategy — moving from R&D to deployment, where the company could make a bigger impact. Well, here’s more evidence of Google’s flair for renewable energy deployment. Adding to the $850 million in clean energy deployment investments,Google is putting another $94 million into four solar photovoltaic projects representing 88 MW of capacity around California. The projects will be built by a leading North American developer Recurrent Energy. (Here’s a little factoid about the relationship: Recurrent CEO Arno Harris is the former general manager of EI Solutions, the company that installed a 1.6 MW PV system on Google’s headquarters. That was back in 2007, when a 1.6 MW system was a huge deal. Now it’s a regular occurrence to quickly install PV projects with tens of MW of capacity.) This latest round of solar investments brings Google’s total clean energy portfolio to $915 million. Electricity from these installations will be sold to the Sacramento Municipal Utility District under a Feed-in Tariff over a 20-year period. The global financial firm KKR will co-invest with Google in the projects. This rounds out the year well for the U.S. solar market, which saw 140% growth in the third quarter of this year, bringing installs to over 1 GW. Developers are rushing to take advantage of the expiring Treasury Grant Program, which provides a 30% cash payment through the Treasury rather than a 30% investment tax credit. That program expires at the end of this month, and Congress does not look prepared to extend it. If the grant is not extended, solar analysts say the market could drop off substantially in 2012 —potentially preventing the creation of another 37,000 jobs, according to a report commissioned by the Solar Energy Industries Association. This article was originally published by Climate Progress and was reprinted with permission. The information and views expressed in this article are those of the author and not necessarily those of RenewableEnergyWorld.com or the companies that advertise on its Web site and other publications.
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Stephen Lacey
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Recently, there has been a lot of concern about the current low prices for solar panels. Since capacity of supply is double current demand and as a result production is out in front of demand, prices have dropped rapidly. You don't need conspiracy theories to explain this - simple supply and demand is sufficient. There are two ways you can approach such an imbalance: reduce supply or increase demand. On the supply side you can simply let some suppliers expire or otherwise withdraw from the market and/or you can create technical barriers that create a degree of exclusivity for some suppliers. The former puts people out of work and the latter creates structural inefficiency. On the other hand, you can do things to accelerate demand. In particular, you can make it easier for potential consumers to participate in the market. On the government side you can reduce structural impediments and use the big tool - tax measures - to accelerate demand. This is a better way to improve the economics of a market.
The simple fact is that meaningful R&D, particularly the D part, happens mostly in the context of a market for product. R&D spends by commercial enterprise tends to be pretty tightly coupled to markets in a percent of net revenue kind of way. Healthy demand for best available product will make it so.