Warren Buffett’s ‘World’s Largest Solar Power Development’ Underway near LA

It’s being billed as the “world’s largest solar power development,” the joint construction effort started in January by Berkshire Hathaway’s MidAmerican Solar and SunPower Corp. north of downtown Los Angeles in Kern and Los Angeles counties. Officially called the Antelope Valley Solar Projects, the 3,230-acre development in two co-located projects are scheduled to generate 579 megawatts, or enough energy to power 400,000 average California homes or about 2 million people.

MidAmerican Solar is a subsidiary of MidAmerican Energy Holdings Co., which is controlled by Berkshire Hathaway. Warren Buffett is the primary investor, chairman and CEO of Berkshire Hathaway.

The two companies calculate that the electricity powered by the project will displace an estimated 775,000 tons of carbon dioxide annually, which they say is equal to taking about 3 million cars off the road over the next 20 years. MidAmerican  owns the development and SunPower is the designer, engineer and contractor for the construction and will operate and maintain the project. Southern California Edison is the customer that will purchase the power when it is completed by year-end 2015.

One of the other big solar power stories  of the week, “The Incredible Shrinking Cost of Solar Energy “(http://www.juancole.com/2013/05/incredible-shrinking-projects.html notes that thanks to the “dramatic fall in the cost of solar power generation” solar is at grid parity in many parts of the world, including Germany, Portugal, Italy and Spain, as well in the southwestern U.S.

Other data points in these stories include:

  • The cost of the best Chinese solar panels fell in cost by 50 percent between 2009-2012. Over the next two years, cost reductions will “slow” to a 30 percent rate.
  • By 2015 solar panels are expected to fall to 42 cents per watt.
  • U.S. solar installations rose 76 percent in 2012.
  • Hybrid plants that include both solar and wind turbines dramatically increase efficiency and help integrate into the electrical grid.

Given some of the interesting developments in solar power, how have some of the solar stocks fared in the past few months?

San Mateo, CA-based SolarCity Corp. (Nasdaq: SCTY, http://www.solarcity.com/ designs, installs and sells or leases solar energy systems to residential and commercial customers, as well as electric vehicle charging products.  It closed March 15 at $16.74 with a market cap of $406.5 million. By April 12 it was trading at $19.97 with a market cap of $1.5 billion. SCTY closed May 8 at $24.16, up 50 cents for the day with a market cap of $1.8 billion. Its 52-week trading range is $9.20-$28.23.

Ontario, Canada-based Canadian Solar (Nasdaq: CSIQ, http://www.canadian-solar.com/ ), which sells a variety of solar products, closed back on March 15 at $3.50 with a market cap of $151 million. It closed April 12 at $4.07 with a market cap of $176 million. CSIQ closed May 8 at $5.29, down 17 cents for the day, with a market cap of $228 million. Its 52-week trading range is $1.95-$6.09.

San Jose, CA-based SunPower Corp. (Nasdaq: SPWR, http://www.sunpowercorp.com/), which makes a wide variety of solar products and systems and is one of the principals in the Antelope Valley Solar Project, closed back on March 15 at $11.80 with a market cap of $1.4 billion. SPWR closed April 12 at $11.06. It closed May 8 at $15.36, down 6 cents for the day, with a market cap of $1.8 billion. Its 52-week trading range is $3.71-$16.04.

China-based Trina Solar Ltd. (NYSE: TSL, http://www.trinasolar.com/) designs, manufactures and sells photovoltaic modules worldwide. Back on March 15, TSL closed at $4.11 with a market cap of $291 million. It closed April 12 at $4.19 with a  market cap of $335 million. TSL closed May 8 at $4.72, down 22 cents for the day. Its 52-week trading range is now $2.04-$7.67.

China-based Yingli Green Energy Holding Co. (NYSE: YGE, http://www.yinglisolar.com/ makes photovoltaic products including cells, modules and systems. YGE closed back on March 15 at $2.47 with a market cap of $387 million. It closed April 12 at $2.12 with a market cap of $324 million. YGE closed May 8 at $2.20, down 7 cents for the day, with a market cap of $356 million. Its 52-week trading range is $1.25-$3.68.

China-based Suntech Power Holdings (NYSE: STP, http://am.suntech-power.com/), the world’s largest producer of solar panels, closed at $0.70 back on March 15 with a market cap of $127 million. It closed May 8 at $0.51, down 7 cents for the day, with a market cap of $92 million. Its 52-week trading range is $0.30-$2.67.

St. Peters, MO-based MEMC Electronic Materials (NYSE:WFR, http://www.memc.com/) manufactures and sells silicon wafers and photovoltaic materials. Through SunEdison, it’s a developer of solar energy products. It closed March 15 at $4.53 with a market cap of $1 billion. WFR closed April 12 at $4.76 with a market cap of $1 billion. WFR closed May 8 at $5.33, down 6 cents for the day, with a market cap of $1.2 billion. Its 52-week trading range is $1.44-$5.70.

Earth Hour Provides Glimpse Into Smart Grid’s Potential

The 3rd annual Earth Hour this past Saturday night resulted in some fairly dramatic before and hour photos of iconic skylines across the world. http://www.reuters.com/news/pictures/rpSlideshows?articleId=USRTXDD2Z#a=3. The event is not mainstream yet, but may be well on its way. Power companies throughout the world sprinkled press releases quantifying how much energy was saved. ComEd, a Northern Illinois division of Exelon Corp. (NYSE:EXC), noted that the 1 hour ‘lights out” event reduced electricity usage in its service area by 100 megawatt hours, which is the equivalent of removing 154,500 pounds of carbon dioxide from the atmosphere, or planting 19 acres of trees.

The visual reference of planting a mini-forest is both staggering and hopeful, but it is also a bit misleading and adds to the misconception that there is a direct correlation between energy production and usage. Consider this note from a blogger for treehugger.com. “Gas and coal fired plants dial up and down all the time to adjust for peak load, so an event like Earth Hour is actually turning down the dirtiest fossil fuel burners, taking it right off the top.” After being challenged by a reader, he did his own research and owned up to his mistake. Coal and gas fired plants do not crank up and slow down based on energy cycles during the day – that would consume more energy than producing at a consistent level. And they produce for peak demand, which means a LOT of energy is wasted. Think of a hosting a wedding for 300 guests. You know not everyone will show up but you have to have a seat ready for them anyway.

The ComEd release does not say whether it lowered generation in advance of the event so we do not know if energy was actually saved. We do know that The Independent Electricity Systems Operator of Ontario generated 920 MW less energy for its users. How did it know? It used data from Earth Hour 2008 to forecast demand for last Saturday night. What if we could replicate the IESO results every day? That in a nutshell, is the promise of the smart grid. Meters, networks, software, algorithms and storage devices will coordinate to create a structure where no more energy use is generated than is needed to meet demand.

Like the IESO example, Wake Forest, NC based PowerSecure International (Nasdaq:POWR) www.powersecure.com,  forecasts peak electricity and deploys energy loads in the most efficient manner. The company notched a profit of $10.66 million or $0.63 per share in 2008, compared to a loss of $1.61 million or $0.10 per share in 07. The stock trades at $3.42 – its 52 week low/high is $2.70/$12.70. American Superconductor Corp. (Nasdaq: AMSC), www.amsc.com, of Devens, MA recently has developed a new technology that allows electric utilities to optimize power delivery directly at the grid’s critical load-serving points by automatically adjusting the reactive power supply in real time. The first customer is Southern California Edison’s “Circuit of the Future” in a deal announced this month. The stock trades at $17.54, far down from its $47.53 high. Its CEO promised that the last quarter would be its last to end in the red. If he is right, the stock’s stay in smallcapdom will be a short one. http://www.forbes.com/2009/02/03/american-superconductor-business-energy_0203_power.html?partner=yahootix

Boston’s EnerNOC (Nasdaq:ENOC), www.enernoc.com, provides energy management technology to large users and is a leader in demand response management (a precursor to the smart grid) which limits electricity use during peak demand for participating customers in return for cash payments. The Company expects to generate positive cash flow from operations in the second half of 2009 and report a profit in 2010. At $14.60, it trades roughly halfway between its 52 week low ($4.80 and high $24.10.)

The smart grid will take years to build out but the key contracts that will power it are happening now. Keep your eyes open.

For Solar Stocks, Stimulus May Brighten ‘Dour’ 2009

Photo courtesy of American Council On Renewable Energy
Photo courtesy of American Council On Renewable Energy

It was just last summer that solar companies were among the high fliers of the stock market, stoked by the buzz of alternative energy and the good clean tech vibes about energy from the sun. But lower oil prices and the economic downturn brought many solar stock prices down to earth. Indeed, in an earnings wrap-up this week, Reuters reported a “dour view of 2009” for solar companies (http://www.reuters.com/article/marketsNews/idUKN2444206220090225?rpc=44).

The stimulus package signed into law by President Obama should be good news, however, in part by prompting some large utilities to jump aboard, according to Julia Hamm, executive director of the Solar Electric Power Association. She noted the stimulus allows utilities a 30 percent tax credit and “more utilities will build and own solar facilities” (http://news.cnet.com/8301-11128_3-10171036-54.html?part=rss&subj=news&tag=2547-1_3-0-20). Sure enough, California’s Pacific Gas & Electric (http://www.pge.com/) announced a five-year program to produce 500 megawatts of solar power not from one plant but from a collection of small projects (from 1-20 megawatts) on rooftops and poles in Northern and Central California. It was the first time in 10 years that PG&E has invested directly in renewable energy, according to CNET. Then Princeton, NJ-based NRG Energy (NYSE: NRG, http://www.nrgenergy.com/) made headlines this week by investing in Idealab company eSolar Inc (http://www.esolar.com/) of Pasadena, CA. That paves the way for NRG to invest in solar plants, including the 240-megawatt project eSolar intends to build for Southern California Edison, a division of Edison International.

Perhaps awaiting a stimulus effect, many smallcap solar companies are limping along at 52-week lows. China-based ReneSola Ltd (NYSE:SOL, http://www.renesola.com/) has dropped down to $2.56 from a high of $29.48 last summer. Merrimack, NH-based GT Solar International (Nasdaq: SOLR, http://www.gtsolar.com/), which manufactures equipment used in making solar modules, trades at $4.42, up from its 88-cent low in late fall but still off its high of $14.45. And Marlboro, MA-based Evergreen Solar (Nasdaq: ESLR, http://www.evergreensolar.com/), a pure solar play, is languishing at $1.33, way off its summertime high of $12.64.

New Roof in Fontana (CA) uses 33,700 Solar Panels

As if to help Los Angeles’s recently announced goal of being 10% solar in 10 years or so,  Southern California Edison (http://www.sce.com/) has completed the largest solar installation in California — part of an SCE program to install panels on over 2 square miles of rooftops in southern California.  Provided by First Solar (http://www.firstsolar.com/), the panels, on a  ProLogis (http://www.prologis.com/en/default.aspx ) warehouse in Fontana, should generate enough electricity for 1,300 homes. 

Solar panels on a ProLogis warehouse will generate electricity for 1,300 homes

Solar panels on a ProLogis warehouse will generate electricity for 1,300 homes

Duke Energy postponed a similar program in northern California recently.  Renewable programs face financial roadblocks in many cases, due to the falling price of fossil fuels and the scarcity of financing in today’s economy. 

In order for large-scale solar installations to feed electricity into the grid, energy storage solutions are a necessary part of the mix, for load balancing.  Energy storage companies include Enersys (http://www.enersys.com/), Axion Power* (http://www.axionpower.com), and others.