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Archive for the ‘Renewable energy’ Category

As the price of solar has plummeted and leases have become more widespread, many more Americans have been able to go solar. But what about the 75% who can’t?

More options are emerging for solar for the rest of us — including Mosaic’s new online marketplace, which is making it possible for people to invest in community solar projects and earn solid returns.

This three-part series profiles some other startups that are paving the way to spread solar to all.

Just across the bay from Mosaic in San Francisco, three young entrepreneurs are finding new ways to crowdfund solar projects — and include the 75%. Not content to wait for someone else to do something, they’re taking matters into their own hands, rolling up their sleeves, and making projects happen.

Empowering the 75% through co-ops

Evan Wynns founded the San Francisco Energy Cooperative in 2011 with the 75% in mind. He began with the question of why we don’t have more green energy in the United States: “It’s frustrating because we have this technology which can take off a lot of the load of consuming fossil fuels, and we have the will — we see green energy growing in popularity all the time — and the question is why don’t we have more. We thought about that, and the benefits of green energy, and how can we distribute those benefits to more people.”

In keeping with the philosophy of the Sharing (or Access) Economy, Wynns is seeking to give people who don’t own green energy technology access to the services the technology provides.

The SF Energy Co-op has found a way to make the benefits of green energy available to anyone, through the power of collective investment and organization. As Wynns puts it, “Say it costs $20K to put solar on your roof, but you can’t do that, for whatever reason. So you go to your neighbor and say, ‘I’ll pay to put it on your roof, and then you pay me what I would have been saving, and you’ll still be saving money on your power bill.’ And say instead you go to 100 friends and you all pay $200 to do the same thing. You can do the same good when people pool together small amounts of money.”

Being incorporated in California as a co-op makes it possible for the organization to crowdsource funding. This comes with some limits: for one thing, members must be California residents. And California co-op law requires that if you pay returns to individuals, the amount they invest has to be under $300. So the SF Energy Co-op has set their maximum investment at $250.

Being a co-op also means not being restricted under SEC rules, because the donations are kept low and members have a vote. In fact, the Co-op is very democratic: regardless of the amount you contribute, you get one vote. This gives people equal ownership in the green energy they’re supporting.

Unlike with a donation to a nonprofit, you will get a return on your investment in the SF Energy Co-op. Profits are shared equally among members who, with an expected rate of return of 5% – 7%.

And because the amounts invested are small, the SF Energy Co-op model lowers the bar for investment, allowing anyone to get a piece of green energy for as little as $10. Wynns likes to call it “solar for renters” — which is also solar for the 75%.

Wynns hopes there will be opportunities to raise the Co-op’s investment limit once the JOBS Act goes into effect in 2013. But in the meantime, the low bar to investment does allow most people to participate.

Even with small amounts, the SF Energy Co-op can do big things. As Wynns notes, “When we prove we can get a decent return on investment on a $50 share, we can prove that solar is profitable for everyone.”

Empowering communities

While funds for the Co-op projects come from member investments, financing structures can vary. For most projects, the Co-op will serve as a third-party owner, all Co-op members being part owners. As the owner, the Co-op will maintain a lease or power purchase agreement.

The first project is slated to be a solar PV system for the Bernal Heights Neighborhood Center in San Francisco. For this project, the Co-op might serve as financier rather than owner, because of a city solar program that allows the neighborhood center to get a bigger rebate for the system if they own it.

Whatever model is used, the payback period for the project is expected to be just a couple years.

Spreading the model

The message of the SF Energy Co-op is that we don’t need to wait for the government to take action but can act now at the grassroots level. Wynns is hoping that the Co-op will be a model for other communities and will serve as a seed to teach others how to follow suit.

Like the founders of the other startups profiled in this series, Wynns sees his role as going beyond the success of his own organization. While he hopes his model will succeed, he has a larger vision for what he’s doing: “Our job as community leaders on energy is not necessarily to make our own thing work (though we do have to prove that the models work) but to popularize that everyone should be invested in green energy.”

How you can get involved

If you’re a California resident, you can become a member of the Co-op or even work for them as a part-time canvasser. The Co-op also partners with other green businesses. If you’re not in California, keep an eye on the progress of the San Francisco Energy Cooperative — it may turn out to be a great model to emulate in your own community.

This is part 3 in a 3-part series on solar crowdfunding models in California and was originally published at Mosaic.

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We hold these truths to be self-evident: that fossil fuels cause climate change and the extreme weather we’ve been seeing — and that the world needs to wake up and kick the fossil fuel habit.

Sure, those of us who call ourselves environmentalists take those as truths, but a major coal company? Yet that’s exactly what the Australian BHP Billiton, the world’s largest mining company, has just copped to.

Explaining the company’s decision to retrofit one if its coal-exporting facilities against significant weather events, BHP Billiton executive Marcus Randolph was quoted as saying, “As we see more cyclone-related events … the vulnerability of one of these facilities to a cyclone is quite high. So we built a model saying this is how we see this impacting what the economics would be and used that with our board of directors to rebuild the facility to be more durable to climate change.”

Yes, you read that right: climate change. You gotta love the irony. Not only is this major coal company acknowledging that climate change is real, but they’re investing in protections against the effects of said climate change — which they helped cause. They’re making a significant investment to protect themselves — from themselves.

At what point will a company like this decide that the costs of producing coal and other fossil fuels are no longer worth the return on investment? Weak prices have already led some coal companies, including BHP Billiton, to cut jobs. Add to this the cost of protecting their facilities from storms, and the ROI diminishes even more.

And there are other costs, as we’ve seen recently with Superstorm Sandy. We can’t put a value on people’s lives, the damage to communities, and the emotional effects of the storm. In pure financial terms, though, Sandy could cost $50 billion. What amount of retrofitting would it take to make cities like New York safe? Won’t we get a better ROI by investing in prevention?

Prevention would mean moving from fossil fuels to renewables. And Randolph seems to agree that we must at least limit fossil fuels. Referring to Australia’s carbon tax, he says, “there is not a qualifier saying it is okay to emit more greenhouse gases if the carbon tax is eliminated. An absolute ceiling is an absolute ceiling. Even if there isn’t a carbon tax, it still needs to be an issue we devote a lot of attention to.”

Randolph has even gone so far as to state, “In a carbon constrained world where energy coal is the biggest contributor to a carbon problem, how do you think this is going to evolve over a 30- to 40-year time horizon? You’d have to look at that and say on balance, I suspect, the usage of thermal coal is going to decline. And frankly it should.”

Strong words from a major contributor to the “carbon problem.” Why is BHP Billiton taking this position? Because climate change is affecting what the company cares about the most: their bottom line. Their main concern is profitability. Climate change is a threat to profits. So they’re doing what any sensible hard-nosed ballsy capitalist would do: they’re protecting their profits by investing in more durable facilities.

Could that same concern for profits lead beyond protecting against the effects of climate change to actually trying to prevent it? Maybe the lesson for environmentalists and policy makers is to understand what motivates fossil fuel companies. Forget about appealing to a green economy, solving world energy needs, and so forth. Tell them climate change is going to rob you blind unless you invest against it. And that means first admitting that climate change is real — real enough to affect your profits and maybe even put you out of business.

Randolph’s statements, and the company’s actions, are already making news — and they’re sure to make waves. If a large coal company like this one acknowledges the effects of fossil fuels, who are the climate deniers to turn to? Perhaps it’s time they faced reality and started working to reverse climate change. Perhaps concern for profits will force them to do so.

Originally published on Mosaic, also published on Care2.

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BHP_coal_admits_climate_change_0We hold these truths to be self-evident: that fossil fuels cause climate change and the extreme weather we’ve been seeing — and that the world needs to wake up and kick the fossil fuel habit.

Sure, those of us who call ourselves environmentalists take those as truths, but a major coal company? Yet that’s exactly what the Australian BHP Billiton, the world’s largest mining company, has just copped to.

Explaining the company’s decision to retrofit one if its coal-exporting facilities against significant weather events, BHP Billiton executive Marcus Randolph was quoted as saying, “As we see more cyclone-related events … the vulnerability of one of these facilities to a cyclone is quite high. So we built a model saying this is how we see this impacting what the economics would be and used that with our board of directors to rebuild the facility to be more durable to climate change.”

Yes, you read that right: climate change.You gotta love the irony. Not only is this major coal company acknowledging that climate change is real, but they’re investing in protections against the effects of said climate change — which they helped cause. They’re making a significant investment to protect themselves — from themselves.

At what point will a company like this decide that the costs of producing coal and other fossil fuels are no longer worth the return on investment? Weak prices have already led some coal companies, including BHP Billiton, to cut jobs. Add to this the cost of protecting their facilities from storms, and the ROI diminishes even more.

And there are other costs, as we’ve seen recently with Superstorm Sandy. We can’t put a value on people’s lives, the damage to communities, and the emotional effects of the storm. In pure financial terms, though, Sandy could cost $50 billion. What amount of retrofitting would it take to make cities like New York safe? Won’t we get a better ROI by investing in prevention?

Prevention would mean moving from fossil fuels to renewables. And Randolph seems to agree that we must at least limit fossil fuels. Referring to Australia’s carbon tax, he says, “there is not a qualifier saying it is okay to emit more greenhouse gases if the carbon tax is eliminated. An absolute ceiling is an absolute ceiling. Even if there isn’t a carbon tax, it still needs to be an issue we devote a lot of attention to.”

Randolph has even gone so far as to state, “In a carbon constrained world where energy coal is the biggest contributor to a carbon problem, how do you think this is going to evolve over a 30- to 40-year time horizon? You’d have to look at that and say on balance, I suspect, the usage of thermal coal is going to decline. And frankly it should.”

Strong words from a major contributor to the “carbon problem.” Why is BHP Billiton taking this position? Because climate change is affecting what the company cares about the most: their bottom line. Their main concern is profitability. Climate change is a threat to profits. So they’re doing what any sensible hard-nosed ballsy capitalist would do: they’re protecting their profits by investing in more durable facilities.

Could that same concern for profits lead beyond protecting against the effects of climate change to actually trying to prevent it? Maybe the lesson for environmentalists and policy makers is to understand what motivates fossil fuel companies. Forget about appealing to a green economy, solving world energy needs, and so forth. Tell them climate change is going to rob you blind unless you invest against it. And that means first admitting that climate change is real — real enough to affect your profits and maybe even put you out of business.

Randolph’s statements, and the company’s actions, are already making news — and they’re sure to make waves. If a large coal company like this one acknowledges the effects of fossil fuels, who are the climate deniers to turn to? Perhaps it’s time they faced reality and started working to reverse climate change. Perhaps concern for profits will force them to do so.

Looking to invest against climate change? Check out MosaicSunfunderRE-volvThe San Francisco Energy Co-op, and Everybody Solar.

This post was originally published on Mosaic.

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You may have been hearing a lot lately about RECs — or Renewable Energy Certificates. But what are they, and should we be for them or against them?

Last Tuesday, those of us who attended the monthly meeting of the Local Clean Energy Alliance had a chance to learn more about RECs from Alex Pennock, manager of the Green-e Energy program at the Center for Resource Solutions.

According to the EPA, a REC “represents the property rights to the environmental, social, and other nonpower qualities of renewable electricity generation. A REC, and its associated attributes and benefits, can be sold separately from the underlying physical electricity associated with a renewable-based generation source.”

As Alex put it, RECs serve as a tracking and accounting mechanism that identifies the electricity they’re associated with as being from a renewable source. A REC is equivalent to 1 megawatt hour. And RECs must be tied to the grid — so you can’t get a REC if you power an off-grid home with solar.

How do we know that RECs are counted fairly? That’s where the Green-e Energy program comes in. They not only certify RECs, ensuring that they come from renewable sources, but also track them after they’re certified. They check that:
  • RECs are generated in or near the year they are sold.
  • RECs meet location requirements, which vary by region. (In general, they must be on the same grid system, which in some areas can be quite large.)
  • RECs aren’t double-sold or double-counted. For example, if you sell RECs for the renewable power you generate, you can’t then claim to be using renewable energy — instead, the buyer of your REC gets to make that claim. Similarly, RECs can’t be double-counted to meet requirements of two separate programs, such as to meet a state’s renewable portfolio standard in addition to the requirements of an individual program. And if you put solar on your roof, your utility company can’t count that as a REC.

So are RECs a good thing or not? That depends. They can be controversial because of concerns that they don’t provide “additionality” — that is, they don’t add renewable energy to the mix. And of course, that’s true if they’re from projects that would have happened regardless of whether they could sell RECs.

However, some projects may rely on RECs to help fund them, or to provide returns to investors — one example is University Park Solar in Maryland, where revenues from RECs help maintain the facility in addition to providing a return on investments that’s attractive enough to investors.

It’s also true that some states and government agencies use RECs to meet their renewable energy requirements, instead of producing more renewable energy. They can simply purchase RECs and say they’ve produced a certain amount of renewable energy. Given that these entities might not otherwise meet their requirements, it can be argued that at least their purchasing RECs can encourage other projects to happen.

Of course, this situation makes the REC market volatile. State renewable energy requirements can be great for sellers of RECs — till the state meets its requirements, at which time the price of RECs plummets. Beyond such compliance market issues, the price of RECs depends on the usual vicissitudes of supply and demand.

And whether RECs are good or bad depends on one’s perspective. For someone trying to fund a renewable energy project, they can provide an important part of that funding. As anyone who’s tried to start such a project knows, financing is often the biggest hurdle. However, if we had better ways to finance — even subsidize — renewable energy, perhaps RECs wouldn’t be necessary. Till we do, and while RECs still have some financial value, they’ll remain a fact of life. The best way to address concerns about them may be to find other ways to promote renewable energy.

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