Solar Energy Isn’t Just for Electricity

Posted on May 5, 2019 by abrahamwien18

It can also provide carbon-free heat for a wide variety of industrial processes

By Steven Moss
View the original article here.

Part of the Miraah soler thermal project in Oman. Credit: GlassPoint Solar

The industrial processes that underpin our global economy—manufacturing, fuel and chemical production, mining—are enormously complex and diverse. But they share one key input: they, as well as many others, require heat, and lots of it, which takes staggering amounts of fuel to produce. Heat and steam generation is critical to the global economy, but it’s also an overlooked and growing source of greenhouse gas (GHG) emissions.

The good news is that innovative solar technologies can produce steam at industrial scale—reducing emissions and, increasingly, cutting costs. And given the current climate outlook, it’s urgent that industry adopt these new technologies.

Despite enormous progress around the world to ramp up renewables and increase energy efficiency, global GHG emissions reached an all-time highin 2018. In a report released in January, the Rhodium Group found that even though renewable energy installations soared and coal plants shut down, carbon emissions in the U.S. rose sharply last year. Emissions from industry shot up 5.7 percent—more than in any other sector, including transportation and power generation. The authors of the Rhodium Group study concluded that despite increased efforts from policymakers and the business to tackle emissions, “the industrial sector is still almost entirely ignored.”

This must change, at the global level. Worldwide industry is responsible for a quarter of total emissions. And while those from transportation and residential segments are trending down, the International Energy Agency (IEA) projects that industrial emissions will grow some 24 percent by 2050.

As people around the world continue to transition from living off the land to moving to cities and buying and consuming more things, industrial activity will continue to increase—and the need to reduce corresponding emissions will become all the more urgent.

Credit: GlassPoint Solar

This brings us back to heat. Industry is the largest consumer of energy, and a surprising 74 percent of industrial energy is in the form of heat, mostly process steam. Solar steam—making the sun’s heat work for industry—is a largely unexplored but promising avenue for reducing emissions.

While photovoltaic (PV) panels that convert sunlight into electricity are more common, thermal solutions are what’s needed to meet industry’s growing demand for heat. In a solar thermal system, mirrors focus sunlight to intensify its heat and produce steam at the high temperatures needed for industry. Another key advantage is the ability to store the heat using simple, proven thermal energy storage in order to deliver steam 24 hours a day, just like a conventional fossil fuel plant. With the right technology, solar thermal can be a reliable, efficient and low-cost energy source for industrial steam generation.

So-called “enclosed trough technology” uses sunshine to produce zero-carbon steam. Credit: GlassPoint Solar.

For example, renewable process heat provider Sunvapor is partneringwith Horizon Nut to build a 50-kilowatt solar thermal installation at a pistachio processing facility in the Central Valley of California. The companies are working to expand solar steam production for food industry processes, such as pasteurization, drying and roasting.

In Oman and California, GlassPoint Solar is operating and developing some of the world’s largest solar projects for industry. GlassPoint’s greenhouse-enclosed mirrors track the sun throughout the day, focusing heat on pipes containing water. The concentrated sunlight boils the water to generate steam, which is used by Oman’s largest oil producer to extract oil from the ground. The capacity of GlassPoint’s Miraah plant, which can currently deliver 660 metric tons of steam every day, will top 1 gigawatt of solar thermal energy when completed. This same technology is also being deployed in California to reduce emissions from one of the country’s largest and oldest operating oilfields.

Meanwhile, to meet the needs of extremely high-temperature (800-1,000degreesC) industrial processes, the European Union is developing SOLPART, a research project to develop solar thermal energy that can be used to produce cement, lime and gypsum.

While fossil fuels remain the dominant source of heat for industry across all sectors and regions, industry is beginning to explore cleaner alternatives—and in some cases, industry is leveraging solar steam on a significant scale. As technology advances, more and more companies will find that switching to solar steam can simultaneously reduce costs and emissions, improving business operations while shrinking its carbon footprint.

When it comes to mitigating climate change, most attention has been directed to the things we see, buy, or use on a daily basis—the cars we drive, the food we eat, the power plants that keep our lights on. But behind all these activities is process heat, an emissions source that has been largely ignored.

Now we must turn our attention to industry—the sleeping giant of climate action. Process heat is an overlooked opportunity to slash GHG emissions, and solar technologies operating at the scale needed by industry are currently available. It’s time to embrace them and stop industrial heat from heating up our planet.

How IoT Plays A Role In Developing Sustainable Transportation

Posted on March 25, 2019 by abrahamwien18

By Megan Nichols
View the original article here.

The Internet of Things is transforming the modern world in manifold ways. It’s making our homes smarter, our stores more connected and informed, our vehicles more powerful, and our equipment — especially the industrial variety — more capable.

“IoT” is a blanket term that refers to the entire network of connected devices, from smartphones to household appliances. IoT devices have the ability to connect with local or public networks to transmit, receive and process data streams. This means that, as a society, we can collect a lot more information about how our devices are operating. It also means we can interface with them remotely to do things like open a garage door or turn on a light from hundreds of feet or even miles away.

This technology offers a variety of benefits, including more efficient use of resources and improved sustainability practices. That’s especially true of the transportation sector and modern travel.

Airports and Air Travel

The IoT provides an added layer of convenience for customers and better sustainability for parent companies.

For customers, the technology can be used to improve their travel experience. Miami International Airport, for example, relies on connected smartphone applications to provide real-time information to passengers about campus events and locations, baggage claim info, boarding instructions and more.

As for airports themselves, the technology can help eliminate excess waste produced as a result of high energy use. Smart bulbs and connected light fixtures, for instance, can turn off lights in empty areas of the campus. Efficient thermostats can better regulate and coordinate air temperatures within the facility — not just for keeping people more comfortable, but also to use less power in the process.

Logistics and Public Transportation

Whether you’re talking about buses, above-ground trams, or high-speed trains, the logistics involved are incredible. A transport company must consider how much room they have, how many people have booked a trip, what’s changed — such as who’s canceled or joined — and even how much luggage or storage space is available.

But it doesn’t stop there. Vehicles need fuel, supplies, and maintenance — and they’re all directly tied to a strict and comprehensive schedule. Like you see with flights, if a bus or other transport is late, it affects the entire day’s schedule.

IoT technology can help with this by providing more nuanced and real-time details about the goings-on within a facility or transport. This provides much more oversight for transportation managers and planners, if not automating the entire field outright.

GPS modules can be used to track each transport with up-to-date stats like speed, fuel levels and arrival times. Bluetooth beacons can be used to deliver local information to customers’ phones and devices, with real-time alerts about delays or on-time schedules.

There’s incredible potential here, and the industry is definitely starting to catch on.

Smart Roads

As you’d expect, smart and connected roads can help manage traffic patterns, accident response, and other related problems. Imagine receiving traffic updates on your phone directly from the very road beneath your vehicle’s tires. Highways and street surfaces can be outfitted with advanced sensors to collect usage information, which is then fed into a municipality’s traffic infrastructure. The system would be connected to traffic lights, security cameras, smart roads and much more.

It’s essentially a comprehensive modern and smart traffic management system. Sensors could pick up the impact of an accident, for example, and report that information to a remote agency or even take action via the network. As a result, nearby drivers are informed of the crash, traffic lights are changed to reflect the issue, and vehicles are rerouted until the area is cleaned up.

The technology can also be used for public road services like tollway, bridge and tunnel management — and even parking meters in urban areas.

Smarter Parking

Imagine pulling up to a parking meter, paying your fee on a mobile app, and then exiting your vehicle to be on your way. Upon your return, you simply hop in your car, tell the meter you’re leaving and away you go. The system registers the open space and alerts other drivers nearby looking for a space. As a result, the nearby roadways remain clear and less congested.

In urban areas and bustling cities, parking can be a real problem for the entire community. It can cause traffic disruptions and delays, accidents, and even dangerous scenarios — like when a vehicle is parked in front of a fire hydrant or unauthorized area.

Disney’s new parking garages in Disney Springs, Orlando, are a great example of how parking is getting smarter. Each parking row has a series of lights that turn red or green depending on whether or not space is available. As the end of each row is a digital display that shows the number of open spaces. It’s all updated in real-time so drivers can find a space quickly without driving around aimlessly. The system can also be used to locate vehicles for guests who are lost.

Supply Chain Management

In addition to self-driving transport vehicles and fleets, various other forms of transport in the supply chain are being outfitted with IoT technologies. This includes shipping trucks, containers, boats and ships, planes and more.

This provides a great deal of insight for management crews about travel times and external factors such as traffic or weather events. As with public transport, technology can be used to make more efficient use of resources like fuel as well as cut down on overall waste. More importantly, it can be used to identify new routes, transport solutions and even operational improvements.

Smart, Connected Technologies Are the Future

In the consumer market, IoT devices can help homeowners use their power supply more efficiently by cutting down on consumption, making better use of it in general and offering several new functions. Smart thermostats, for example, can auto-regulate heating and cooling in the home to make the space more comfortable and also eliminate excess use of electricity.

The same thing is happening in transportation, only on a much greater level. When an entire public transport operation is outfitted with more efficient vehicles and fuel-measuring sensors, for instance, the impact is much larger.

This shows that IoT and related connected technologies are not just a fad confined to modern-day operations — they are absolutely going to shape the future of the world. Backed by powerful data and insights, the organizations of tomorrow will be more efficient, more sustainable and much less impactful on the environment.

Solar farms in space could be renewable energy’s next frontier

Posted on March 25, 2019March 25, 2019 by abrahamwien18

Space-based solar power is seen as a uniquely reliable source of renewable energy. NASA / Artemis Innovation Management Solutions LLC

China wants to put a solar power station in orbit by 2050 and is building a test facility to find the best way to send power to the ground.

By Denise Chow and Alyssa Newcomb
View the original article here.

As the green enery revolution accelerates, solar farms have become a familiar sight across the nation and around the world. But China is taking solar power to a whole new level. The nation has announced plans to put a solar power station in orbit by 2050, a feat that would make it the first nation to harness the sun’s energy in space and beam it to Earth.

Since the sun always shines in space, space-based solar power is seen as a uniquely reliable source of renewable energy.

“You don’t have to deal with the day and night cycle, and you don’t have to deal with clouds or seasons, so you end up having eight to nine times more power available to you,” said Ali Hajimiri, a professor of electrical engineering at the California Institute of Technology and director of the university’s Space Solar Power Project.

Of course, developing the hardware needed to capture and transmit the solar power, and launching the system into space, will be difficult and costly. But China is moving forward: The nation is building a test facility in the southwestern city of Chongqing to determine the best way to transmit solar power from orbit to the ground, the China Daily reported.

REVISITING AN OLD IDEA

The idea of using space-based solar power as a reliable source of renewable energy isn’t new. It emerged in the 1970s, but research stalled largely because the technological demands were

thought to be too complex. But with advances in wireless transmission and improvements in the design and efficiency of photovoltaic cells, that seems to be changing.

“We’re seeing a bit of a resurgence now, and it’s probably because the ability to make this happen is there, thanks to new technologies,” said John Mankins, a physicist who spearheaded NASA efforts in the field in the 1990s before the space agency abandoned the research.

Population growth may be another factor driving the renewed interest in space-based solar power, according to Mankins. With the world population expected to swell to 9 billion by 2050, experts say it could become a key way to meet global energy demands — particularly in Japan, northern Europe and other parts of the world that aren’t especially sunny.

“If you look at the next 50 years, the demand for energy is stupendous,” he said. “If you can harvest sunlight up where the sun is always shining and deliver it with essentially no interruptions to Earth — and you can do all that at an affordable price — you win.”

MAKING IT A REALITY

Details of China’s plans have not been made public, but Mankins says one way to harness solar power in space would be to launch tens of thousands of “solar satellites” that would link up to form an enormous cone-shaped structure that orbits about 22,000 miles above Earth.

The swarming satellites would be covered with the photovoltaic panels needed to convert sunlight into electricity, which would be converted into microwaves and beamed wirelessly to

ground-based receivers — giant wire nets measuring up to four miles across. These could be installed over lakes or across deserts or farmland.

Mankins estimates that such a solar facility could generate a steady flow of 2,000 gigawatts of power. The largest terrestrial solar farms generate only about 1.8 gigawatts.

If that sounds promising, experts caution that there are still plenty of hurdles that must be overcome — including finding a way to reduce the weight of the solar panels.

“State-of-the-art photovoltaics are now maybe 30 percent efficient,” said Terry Gdoutos, a Caltech scientist who works with Hajimiri on the space-based solar research “The biggest challenge is bringing the mass down without sacrificing efficiency.”

For its part, the Caltech team recently built a pair of ultralight photovoltaic tile prototypes and showed that they can collect and wirelessly transmit 10 gigahertz of power. Gdoutos said the prototypes successfully performed all the functions that real solar satellites would need to do in space, and that he and his colleagues are now exploring ways to further reduce the weight of the tiles.

THE ROAD AHEAD

China hasn’t revealed how much it’s spending to develop its solar power stations. Mankins said that even a small-scale test to demonstrate the various technologies would likely cost at least $150 million, adding that the swarming solar satellites he envisions would cost about $10 billion apiece.

Despite its exorbitant price tag, Mankins remains a staunch advocate of space-based solar power.

“Ground-based solar is a wonderful thing, and we’ll always have ground-based solar,” he said. “For a lot of locations, rooftop solar is fabulous, but a lot of the world is not like Arizona. Millions of people live where large, ground-based solar arrays are not economical.”

Mankins hailed recent developments in the field and said he is keen to follow China’s new initiative. “The interest from China has been really striking,” he said. “Fifteen years ago, they were completely nonexistent in this community. Now, they are taking a strong leadership position.”

The Price of Large-Scale Solar Keeps Dropping

Posted on February 4, 2019February 4, 2019 by abrahamwien18

JOHN ROGERS, SENIOR ENERGY ANALYST, CLEAN ENERGY | SEPTEMBER 13, 2018, 11:49 AM EST
View the original article here.

The latest annual report on large-scale solar in the U.S. shows that prices continue to drop. Solar keeps becoming more irresistible.

The report, from Lawrence Berkeley National Laboratory (LBNL) and the US Department of Energy’s Solar Energy Technologies Office, is the sixth annual release about the progress of “utility-scale” solar. For these purposes, they generally define “utility-scale” as at least 5 megawatts (three orders of magnitude larger than a typical residential rooftop solar system). And “solar” means mostly photovoltaic (PV), not concentrating solar power (CSP), since PV is where most of the action is these days.

Here’s what the spread of large-scale solar looks like:

In all, 33 states had solar in the 5-MW-and-up range in 2017—four more than had it at the end of 2016. [For a cool look at how that map has changed over time, 2010 to 2017, check out this LBNL graphic on PV additions.]

Watch for falling prices

Fueling—and being fueled by—that growth are the reductions in costs for large-scale projects. Here’s a look at power purchase agreements (PPAs), long-term agreements for selling/buying power from particular projects, over the last dozen years:

And here’s a zoom-in on the last few years, broken out by region:

While those graphs show single, “levelized” prices, PPAs are long-term agreements, and what happens over the terms of the agreements is worth considering. One of the great things about solar and other fuel-free electricity options is that developers can have a really good long-term perspective on future costs: no fuel = no fuel-induced cost variability. That means they can offer steady prices out as far as the customer eye can see.

And, says LBNL, solar developers have indeed done that:

Roughly two-thirds of the contracts in the PPA sample feature pricing that does not escalate in nominal dollars over the life of the contract—which means that pricing actually declines over time in real dollar terms.

Imagine that: cheaper over time. Trying that with a natural gas power plant would be a good way to end up on the losing side of the contract—or to never get the project financed in the first place.

Here’s what that fuel-free solar steadiness can get you over time, in real terms:

What’s behind the PPA prices

So where might those PPA price trends be coming from? Here are some of the factors to consider:

Equipment costs. Solar equipment costs less than it used to—a lot less. PPAs are expressed in cost per unit of electricity (dollars per megawatt-hour, or MWh, say), but solar panels are sold based on cost per unit of capacity ($ per watt). And that particular measure for project prices as a whole also shows impressive progress. Prices dropped 15% just from 2016 to 2017, and were down 60% from 2010 levels.

The federal investment tax credit (30%) is a factor in how cheap solar is, and has helped propel the incredible increases in scale that have helped bring down costs. But since that ITC has been in the picture over that whole period, it’s not directly a factor in the price drop.

Project economies of scale. Bigger projects should be cheaper, right? Surprisingly, LBNL’s analysis suggests that, even if projects are getting larger (which isn’t clear from the data), economies of scale aren’t a big factor, once you get above a certain size. Permitting and other challenges at the larger scale, they suggest, “may outweigh any benefits from economies of scale in terms of the effect on the PPA price.”

Solar resource. Having more of the solar happen in sunnier places would explain the price drop—more sun means more electrons per solar panel—but sunnier climes are not where large-scale solar’s growth has taken it. While a lot of the growth has been in California and the Southwest, LBNL says, “large-scale PV projects have been increasingly deployed in less-sunny areas as well.” In fact:

In 2017, for the first time in the history of the U.S. market, the rest of the country (outside of California and the Southwest) accounted for the lion’s share—70%—of all new utility-scale PV capacity additions.

The Southeast, though late to the solar party, has embraced it in a big way, and accounted for 40% of new large-scale solar in 2017. Texas solar was another 17%.

But Idaho and Oregon were also notable, and Michigan was one of the four new states (along with Mississippi, Missouri, and Oklahoma) in the large-scale solar club. (And, as a former resident of the great state of Michigan, I can attest that the skies aren’t always blue there—even if it actually has more solar power ability than you might think.)

Capacity factors. More sun isn’t the only way to get more electrons. Projects these days are increasingly likely to use solar trackers, which let the solar panels tilt face the sun directly over the course of the day; 80% of the new capacity in 2017 used tracking, says LBNL. Thanks to those trackers, capacity factors themselves have remained steady in recent years even with the growth in less-sunny locales.

What to watch for

This report looks at large-scale solar’s progress through the early part of 2018. But here are a few things to consider as we travel through the rest of 2018, and beyond:

The Trump solar tariffs, which could be expected to raise costs for solar developers, wouldn’t have kicked in in time to show up in this analysis (though anticipation of presidential action did stir things up even before the tariff hammer came down). Whether that signal will clearly show in later data will depend on how much solar product got into the U.S. ahead of the tariffs. Some changes in China’s solar policies are likely to depress panel prices, too.
The wholesale value of large-scale solar declines as more solar comes online in a given region (a lot of solar in the middle of the day means each MWh isn’t worth as much). That’s mostly an issue only in California at this point, but something to watch as other states get up to high levels of solar penetration.
The investment tax credit, because of a 2015 extension and some favorable IRS guidance, will be available to most projects that get installed by 2023 (even with a scheduled phase-down). Even then it’ll drop down to 10% for large-scale projects, not go away completely.
Then there’s energy storage. While the new report doesn’t focus on the solar+storage approach, that second graphic above handily points out the contracts that include batteries. And the authors note that adding batteries doesn’t knock things completely out of whack (“The incremental cost of storage does not seem prohibitive.”).

And, if my math is correct, having 33 states with large-scale solar leaves 17 without. So another thing to watch is who’s next, and where else growth will happen.

Many of the missing states are in the Great Plains, where the wind resource means customers have another fabulous renewable energy option to draw on. But solar makes a great complement to wind. And the wind-related tax credit is phasing out more quickly than the solar ITC, meaning the relative economics will shift in solar’s favor.

Meanwhile, play around with the visualizations connected with the new release (available at the bottom of the report’s landing page), on solar capacity, generation, prices, and more, and revel in solar’s progress.

Large-scale solar is an increasingly important piece of how we’re decarbonizing our economy, and the information in this new report is a solid testament to that piece of the clean energy revolution.

Eggshells May Power The Renewable Energy Revolution

Posted on February 4, 2019 by abrahamwien18

View the original article here.

Ready for some happy news among all the gloom surrounding government shutdowns, border security, and malfeasance in high places? Here’s something that may put a smile on your face. According to researchers in Western Australia, eggshells may be the key to abundant, inexpensive energy storage.

Dr Manickam Minakshi and his colleagues began experimenting with eggshells in 2017 using eggs purchased at the local supermarket. “Eggshells have a high level of calcium carbonate, which can act as a form of replenishing energy,” he tells the Canberra Times.

“What’s interesting is that the egg membrane around the yolk allowed us to cook it at a high temperature, crush it into powder and bake it at 500 degrees Celsius with the chemical still present.The final baking process changes the chemical composition from calcium carbonate to calcium oxide and allows it to become a conduit for electricity.

For Dr Minakshi’s team, this represents a first step towards work on an alternative battery to store energy from renewable energies such as solar panels and wind turbines. “Renewable energy resources are intermittent as they depend on the weather,” he says. “When we have an excess, we need a battery to store it. Ground egg shells serve as the electrode to store this.” Before being heated, the eggshell is a positive electrode but when heated it changes to be a negative electrode, he explains.

Dr Minakshi says he hopes his research will attract the attention of renewable energy companies. Assuming further tests prove the validity of his preliminary results, abundant and affordable materials like eggshells have the potential to provide energy storage from items that would otherwise be little more than bio-waste.

“You can buy them at a 12-pack from Coles for $4 or pick them up from the food court,” he says. “What’s even more important is that you can use the eggshells that are thrown into landfills. This brings in the potential to reduce the amount of bio-waste we produce.”

The research in the laboratory will continue to determine how much electricity the eggshell powder can store and for how long. Minakshi even has plans to test free range eggshells to see if they have better conductive properties, although why that would be is not clear. Perhaps free range chickens have higher levels of self esteem which lead to chemical changes in their eggs.

If anyone can peck out the answers, it is Dr. Manakshi, who may or may not have watched the adventures of Henry Cabot Henhouse III — a/k/a Super Chicken — as a boy. (There is a slight possibility I am not treating this topic with the seriousness is deserves.)

Warren Buffet’s MidAmerican Energy puts in Iowa’s latest big battery project

Posted on February 4, 2019 by abrahamwien18

Grand Ridge, an existing Invenergy project that combines wind power and energy storage, in Illinois. Image: Invenergy.

View the original article here.
The US state of Iowa got its first grid-scale solar-plus-storage system at the beginning of this year, and this has already been followed by the completion of another, larger battery project in the US state this week.

Energy-Storage.news reported last week on the completion of a solar PV system at Maharishi University of Management equipped not only with solar trackers but also with a 1.05MWh flow battery.

This week, project developer Invenergy said a four month “construction sprint” had been successfully undertaken and the company has begun commercial operations of a 1MW / 4MWh lithium iron phosphate battery energy storage system.

Located at a substation in Knoxville, Iowa, the project has been executed for utility MidAmerican Energy, one of billionaire investor Warren Buffet’s companies as a subsidiary of Berkshire Hathaway Energy. MidAmerican serves just under 800,000 electricity customers.

In a November press release, MidAmerican’s VP of resource development said the utility-scale storage system would teach lessons about “how best to use an energy storage system, and how it can serve our customers in the future,” adding that the primary purpose of the system will be to help manage peak loads on the utility’s network.

“Energy storage has the potential to allow us to retain energy when customer demand is low and release it during peak usage times. That would give us new options to manage peak loads, enhance overall reliability and help keep electric costs low and affordable for our customers,” Mike Fehr of MidAmerican Energy said.

The utility highlighted four of the main benefits of energy storage that it will explore through the application of the lithium system: flattening and managing peaks in electricity demand through storing off-peak energy for later use, reducing the required run times and capacities of natural gas peaker plants with energy storage, enhancing the value and usefulness of renewable energy through smoothing the output of solar farms before it enters the grid and improving power quality and extending the life of transformers and other grid infrastructure.

“Energy storage is still in the development stages and the economic feasibility on a larger scale is being assessed as well; however, prices are trending downward,” Mike Fehr said.

“MidAmerican Energy wants first-hand experience with the technology so we’re positioned to quickly and efficiently add it to our system in ways that benefit our customers when the price is right.”

For Invenergy, which already owns and operates four other large-scale battery systems it developed, this has been its first project as an EPC (engineering, procurement and construction) partner.

“We are excited by the new opportunities for battery storage that we are seeing around the country. We are grateful for partners like MidAmerican Energy who are seeking innovative ways to deliver value to their customers and are proud to have provided them with this solution in such a short time,” Invenergy senior VP Kris Zadlo said.

C-PACE Flips The Script On Energy Efficiency For Multi-Tenant Commercial Properties

Posted on December 14, 2018 by abrahamwien18

By Counterpointe Energy Solutions
You can view the original article here.

Historically, making energy efficiency improvements to buildings has been uneconomic for owners of commercial real estate. There are structural reasons why leased commercial properties have traditionally lagged all other properties types in terms of energy efficiency. The results? Billions of dollars of inefficiencies, hurting the environment as well as most companies bottom lines. “Energy use in buildings is a $400bn to $500bn a year problem,” according to Stephen Selkowitz of the Lawrence Berkeley National Laboratory. Worse, tenants are inhabiting buildings with outdated infrastructure for seemingly no reason. These problems are well-understood, and the solutions are readily available, so what is holding commercial properties back?

THE SPLIT INCENTIVE

Common types of commercial leases, such as triple net or modified gross leases, make tenants responsible for energy bills. As a result, the benefits of any reductions in operating costs from energy efficiency upgrades accrue to tenants. As great as that is for the tenant, it leaves the property owner holding the bag and bearing the total cost of those capital improvements. So not surprisingly, property owners have virtually no reason to invest in improvements. They utilize equity for no return. This conundrum is known as “the split incentive”. Given this raw deal, it is no wonder that property owners have been reluctant to engage in energy efficiency projects.

PACE IS THE SOLUTION

Enter Commercial Property Assessed Clean Energy (C-PACE), an innovative financing option that can be used to finance 100% of renewable energy, energy efficiency and resiliency improvements to commercial properties. PACE financing also covers all development and soft costs, so there are no out-of-pocket expenses for the property owner. C-PACE solves the split incentive problem and uses the commercial lease structure to the owner’s advantage. Since it is an assessment, not a loan, C-PACE payments are paid with property taxes. And in most triple net and modified gross leases, tenants pay their share of property taxes. So now, the tenant who benefits from the upgrade is also responsible for repayment – thereby solving the split incentive problem.
For property owners, C-PACE is a definite win. They get to upgrade their assets, with no out-of-pocket expenses. The improved properties have lower energy bills, resulting in lower operating expenditures and higher valuations. The properties can also be marketed as “green”, allowing owners to take advantage of any rent premiums for environmentally friendly buildings, as well as better cap rates upon sale

Recently upgraded buildings are also an added selling point when attracting new tenants and buyers. For example, the World Green Building Council reported in 2016 that greener retail buildings correlate with happier customers and higher revenues for stores. When it comes time to find new tenants or renegotiate terms of a lease, property owners will benefit handily from having made a C-PACE assessment.

Tenants also benefit from C-PACE. Most C-PACE programs require energy efficiency improvements to have a savings-to-investment ratio greater than one. This means that tenants should be able to make each C-PACE repayment with only the funds they have saved from lower energy bills – and still have cash left over that they can pocket. Tenants additionally get to inhabit improved buildings with brand new HVAC, windows, chillers, and other features.

The community likewise benefits from the environmental impact of C-PACE. Energy efficiency reduces the emissions of greenhouse gases, minimizing smog and asthma-inducing particles and diminishes the need for environmentally disruptive fossil fuel extraction methods.
Energy efficiency has long been a difficult investment for owners of commercial real estate. C-PACE flips this script – energy efficiency projects are now not only a good idea but are a slam dunk for commercial property owners.

PACE for Nonprofit-owned Buildings: Cutting Energy Costs to Serve Communities

Posted on December 14, 2018 by abrahamwien18

By Bracken Hendricks
You can view the original article here.

Every day nonprofit community-based institutions work hard to raise money and deliver mission-driven programs and services. Whether providing affordable housing for the homeless, assisting at-risk youth in gaining job skills in public charter schools, or ministering to the conscience of a community in houses of worship, these institutions regularly push their internal capacity and strain their budgets just to advance a public mission of service.

When choosing to install new energy saving technology like more efficient lighting or boilers, or upgrading to renewable energy with solar panels, the choice too often comes down to a trade-off between using scarce capital resources to either upgrade their physical plant or carry out their mission.

Financing building improvements using Property Assessed Clean Energy (PACE) can enable nonprofits to overcome these upfront cost barriers and easily access capital that is paid for over time through savings on utility bills. PACE offers low interest rates, long terms to minimize payments, and a solid value proposition for mission driven organizations. That’s a good deal not only for the community, but for local clean energy businesses, the regional economy, and our shared environment.

Today, PACE programs in Washington DC and New York State can provide important lessons to help other communities around the nation access these benefits from what we call “Civic PACE”. Both Energize NY and Urban Ingenuity are finding that the nonprofit sector is a huge opportunity for clean energy sector growth. Considered part of the commercial building stock, most nonprofits have underinvested in energy related improvements.

These community-based organizations often have constrained budgets, substantial deferred maintenance challenges, and very large unmet capital investment needs. Nonprofits are typically underserved in debt markets because they have unusual forms of credit or cash flows, making PACE an ideal mechanism to finance building upgrades because it attaches to the land record of the property not the credit of the borrower. For this reason, nonprofit properties frequently have low debt levels, further simplifying PACE underwriting by reducing the need for lender consent to establish a special PACE tax assessment.

Although PACE is a powerful tool for nonprofit institutions, it has not been widely available or accessible to these critical community-based institutions… until now. The cost of capital can be a major factor for institutions that low priced debt. In order to serve this important market, it is essential to structure creative financing solutions that bring down pricing for nonprofits.

With support from the U.S. Department of Energy’s Sunshot Initiative, The Solar Foundation, Urban Ingenuity, and Clean Energy Solutions Inc. (CESI) are working with program administrators across the country to open up the nonprofit market beyond Washington DC. Through outreach and collaboration, the team is working to demonstrate the viability of using PACE with HUD-assisted multifamily housing, the value of PACE-secured PPAs for non-profit solar projects, tax-exempt bond financing considerations, and other creative credit enhancements. The team is finding opportunities to build this market to use PACE financing to expand deployment of solar energy and energy efficiency projects for nonprofit organizations, working closely with houses of worship and local Public Housing Authorities in Washington DC, New York, and many other communities around the country to make low-cost, long-dated debt and appropriate equity available for PACE projects.

For example, in the District of Columbia, Urban Ingenuity is currently structuring credit enhancements and tax-exempt PACE capital to bring down interest rates. They are currently closing a tax-exempt PACE note at less than 4% for 20 year debt, representing perhaps the first tax-exempt PACE financing, and demonstrating a new potential opportunity for PACE investment.

In New York, Energize NY has used Qualified Energy Conservation Bonds (QECBs) to bring down the cost of clean energy upgrades to under 3% for 20 year funds, as well as offering direct property owner support to help overcome the capacity gap that is a common barrier to upgrades in this sector. In addition, New Market Tax Credits (NMTC) and other forms of innovative, low-cost capital are available to credit-enhance PACE notes.

Nonprofit owned buildings are not currently well served by solar tax equity markets; these markets are not always transparent for consumers, and the pricing and structure is traditionally designed to benefit the investor and developer, instead of maximizing the flow of resources to advance a non-profit’s mission. The PACE-secured PPA, on the other hand, reduces credit risk, drives transparency in solar markets, and presents improved pricing and terms for customers. DC PACE has proven a “pre-paid PPA” approach, and Energize NY is close to closing three PPA’s with non-profits and others unable to take advantage of federal tax credits.

More broadly, NY State is addressing the challenges facing non-profits and Low and Moderate Income (LMI) housing by supporting Energize NY PACE financing as well as through the State’s energy agency (NYSERDA) and a range of utility initiatives. These efforts combine to form a compelling package that can include direct project support, financing with long-terms and low interest rates, and energy upgrade standards that encourage improvements which provide significant financial gain to LMI housing and other non-profit customers.

The energy burden is disproportionately high for almost all nonprofits and especially for affordable housing owners who struggle with balancing operating needs and serving their mission. Reducing energy costs and consumption make good financial sense for these property owners, and accessing upfront capital to pay for needed project level investments, paid for over time with utility savings, is one key piece of the solution. Now, with PACE, which can be enhanced through QECBs or other tools and paired with direct incentives, nonprofits can access the capital they desperately need to improve their property while saving money to advance their mission, foster public welfare and a higher quality of life while giving back to communities in ways that extend well beyond greening the environment and protecting global climate.

Five Financial Benefits of Using C-PACE (In Language Your CFO Will Understand…)

Posted on December 14, 2018 by abrahamwien18

By Larry Derrett, Founder, EnFlux Building Solutions
You can view the original publishing of this article here.

The C-PACE funding program has grown extensively and has the potential to become a game changer for the funding of energy efficiency projects. The market potential is immense, and the benefits of the program are compelling. But it is relatively underutilized. For the program to accelerate its growth, constant messaging is required for building owners, contractors and legislators to learn about the benefits of the program. Out of all these stakeholders, perhaps the building owner’s CFO is the most important target as they are the key decision maker when considering this type of funding.

My goal here is to provide a snapshot of the financial benefits of using C-PACE. This article is purposefully narrow in scope and is written in the CFO’s language.

C-PACE Testimonial

As of June 30, 2018, building owners have chosen the C-PACE program to fund 1,790 projects. That’s a 75% increase above the 1,020 projects closed through the end of 2016. However, it’s just the tip of the iceberg for C-PACE’s market potential. Financial decision makers all over the US have validated the benefits of C-PACE 1,790 times. That says something about the program.

“As a former CFO, I would not hesitate to recommend C-PACE to the CEO, board or investors. The benefits are compelling.”

Why? Let’s look at five reasons.

#1. Increase Net Cash Flow from Efficiency Retrofits

C-PACE funding is repaid through a 20+ year assessment to a building which is collected similarly to traditional property taxes. This causes annual payments to be very low, especially when compared to 5- or 7-year traditional financing. As a result, energy and maintenance savings will exceed the annual C-PACE assessment for virtually any pure efficiency retrofit. In other words, if companies use C-PACE to fund pure equipment retrofits, their cash flow will increase.

The positive net cash flow can also ease the ability of commercial office building owners to pass along the costs and benefits of a retrofit to tenants. That’s because it’s easier to demonstrate savings will cover financing costs spread over 20 years versus a more traditional repayment period of ~ 7 years.

This is a win-win. Building owners receive an upgrade to the building that could last 15 to 20 years. Tenants enjoy lower overall net expenses and a more comfortable work environment.

What is outlined above is reason enough for many to use this type of funding. But that’s just scratching the surface…

#2. No Acceleration of the Assessment

The C-PACE lender is not allowed to accelerate the full amount owing even if a scheduled payment is past due. Only the unpaid amount that has been billed but not paid is recoverable. This is a very small amount when compared to the capital involved in a total debt restructuring. Therefore, it should not carry enough voting power to complicate the restructuring process.

#3. Freedom to Sell the Building

The C-PACE lender does not have approval rights regarding a sale. That’s because the assessment is an attachment to the building and becomes an obligation of the buyer. This eases how owners can optimize holdings, particularly for larger commercial real estate developers.

#4. Absence of Constraints Typically Imposed by a Lender

The C-PACE lender does not impose traditional lender protections such as quarterly reporting, maintenance of debt covenants or similar requirements. There is no need for an inter-creditor agreement and the building owner has one less creditor to deal with in case of a debt restructuring.

#5. Reduced Weighted Average Cost of Capital

This applies primarily to new construction and major renovations where the project is part of a new or restructured capital deck. The concept is simple – to the extent lower cost C-PACE funding can be used in lieu of higher cost equity (common or preferred) or traditional mezzanine debt, it lowers the overall cost of capital to building owners.

As mentioned earlier, an important element in C-PACE’s continued growth is for CFOs to understand the financial benefits of the program. You can help get the word out by sharing this article with financial decision makers in your network. If they are not familiar with C-PACE, they will appreciate the heads up. And please comment below if you have encountered additional financial drivers for embracing C-PACE.

Don’t Confuse the Causes and Solutions of Climate Change with Sea Level Rise

Posted on November 2, 2018 by abrahamwien18

By John Englander
View the original article here.

With the growing awareness of the threat from rising seas, there is a fundamental point of confusion. It is widely believed that “green projects,” energy efficiency, and better public transportation can “solve sea-level rise.”

This popular notion is even showing up in candidates’ platforms for the upcoming election. It is simply wrong.

The warming of the planet, now about 1.5 degrees Fahrenheit over the last century and headed for at least double that level, correlates with increased carbon dioxide levels in the atmosphere from fossil fuel use — the so-called greenhouse effect. Even the controversial 2015 Paris Climate Agreement only aims to keep the temperature rise to 50 percent further warming, and recognizes we are not instituting the changes to reach even that modest goal.

Efforts to slow and reverse that warming should be our highest priority. Those efforts should focus on reducing energy consumption and switching to renewable sources, such as solar energy. Improved mass transit, electric vehicles, and more use of bicycles are all efforts that will contribute to slow the warming.

Also, developing technology to remove carbon from the atmosphere or lock carbon in plant matter — trees, the Everglades and even algae — can help reduce the warming atmosphere. But none of those efforts can soon stop sea-level rise.

Rising sea level is primarily caused by the melting of the ice sheets on Greenland and Antarctica, which is happening at an accelerating rate because of the extraordinary heat alreadystored in the oceans. The oceans also expand slightly as they continue to warm. Those two causes of rising sea level cannot be stopped in the next few decades, even if the entire world could magically switch to 100 percent solar energy right now.

Our oceans, atmosphere, and planet have gotten warmer primarily because the heat-trapping CO2 (carbon dioxide) level is now 410 PPM (Parts per million), 40 percent higher than any time in the last 10 million years.

That greater atmospheric insulation adds heat to the sea equivalent to four nuclear bombs every second of every day. Like a giant outdoor swimming pool, the ocean retains heat even if the air temperature cools. That extra ocean heat will continue to affect our weather and melt glaciers for many decades, even if we can slow the warming.

The latest projections from International and national science organizations and the Southeast Florida Regional Climate Change Compactsay that we need to plan for a few feet of higher sea level by mid-century and as much as 6 to 8 feet by the end of the century.

Thus, it is imperative that we now separate three quite distinct problems and solutions. A solution to one will not soon have any effect on the other two.

Reduce emission of greenhouse gases and even remove them from the atmosphere. SOLUTIONS: Energy conservation, switch to renewable energy sources, improve public transportation, promote bicycle use, plant trees and develop affordable technologies to take carbon dioxide out of the atmosphere.
Prepare for extreme weather events. More heat in the oceans and atmosphere produces stronger storms, more rainfall, droughts, and wildfires. SOLUTIONS: Buildings, infrastructure, and building codes should be designed to accommodate periodic flooding, improve drainage, use less energy, etc.
Adapt for rising sea level: Higher sea level will change coastlines and marshlands all over the world and means ever increasing high tides and worse temporary flooding from storms, rainfall and runoff. SOLUTIONS: Elevate buildings and infrastructure (better building codes), install temporary flood barriers for extreme events, and ultimately, accept that coastlines will change.

Our futures require that we design and implement personal, community, and governmental policies to respond to these three threats: elevated greenhouse gases, extreme weather events, and sea level rising ever-higher.

It is great to see that politicians, the public, and professionals are developing greater concern for climate change and rising sea level. Recognizing that these three challenges demand separate solutions is the only smart path forward — and upwards.

John Englander is an oceanographer and author of “High Tide On Main Street.” He is also President of The International Sea Level Institute, a new nonprofit think tank and policy center. His weekly blog and news digest can be found at www.sealevelrisenow.com

“The Invading Sea” is a collaboration of four South Florida media organizations — the South Florida Sun Sentinel, Miami Herald, Palm Beach Post and WLRN Public Media.