US Investing More in Solar Energy

By Stephanie Taylor Christensen In 2008, solar power accounted for just 1% of energy in the United States. Now, it seems like solar farms are sprouting up everywhere, partly in thanks to federal support. In July, President Obama awarded $1.85 billion in loan funding to two solar companies -- Abengoa Solar and Abound Solar Manufacturing -- tasked with building solar farms in the United States. Abengoa Solar's “Solana” (currently in development about 70 miles northwest of Phoenix) is called the world's largest solar plant, estimated to “supply clean power to 70,000 homes and eliminate around 475,000 tons of CO 2,” according to the company's site.

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Abound Solar Manufacturing's 104-acre facility in Tipton, Indiana, is expected to be fully operational by 2012. Earlier this month, Duke Energy (DUK) and Sun Edison LLC (a MEMC Electronic Materials (WFR) subsidiary) announced final phases of a 17.2 megawatt (MW) solar farm in North Carolina. Panda Power Funds and Con Edison Development (ED) are constructing 71,000 solar panels situated on a 100-acre farm in New Jersey, making it among the largest solar farms in the nation. Ohio also has plans to turn 500 acres of reclaimed strip mine land into one of the nation's largest solar farms, and to open two solar component-manufacturing plants. Ohio-based American Electric Power (AEP) agreed to purchase the electricity generated by the solar farm over the next 20 years and invest $20 million into the project.

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On top of all that solar activity, the US Bureau of Land Management has about 30 projects in “fast track” review. Why all the interest in solar? The sun is a powerful energy source. According to Live Science, if you averaged the amount of energy the sun contributes to the entire surface of the planet, “roughly each square yard collects nearly as much energy each year as you'd get from burning a barrel of oil.” The goal of the solar farms is to harness all that energy and transform it into something useful. Developing a means to effectively transform solar power into a viable energy source has crept along steadily, albeit slowly, since the need for alternative energy entered the nation's collective consciousness following the energy crisis of the 1970s. According to Solar Energy Industries Association (SEIA), there are several iterations of solar power, including solar thermal, which is typically used for heating and cooling, and concentrating solar power (CSP), which uses reflective devices to concentrate solar energy.

(To see Quint Tatro's four weekly charts to start watching today, click here Perhaps the most viable is the photovoltaic (PV) alternative, which uses semiconductors to convert sunlight to energy, which is in turn stored in batteries. The US is currently the fourth largest market for PV installations.The problem with PV is that the batteries it requires have historically been expensive. But, thanks to the increased focus on solar, manufacturing and technological advances, the cost of PV has dropped significantly, a trend projected to continue over the next decade. The nation's utility companies are taking notice, revealing a whole new set of economic opportunities for energy. On February 8, Renewable Energy World reported that the California utility Southern California Edison recently filed for approval from California's Public Utilities Commission “for 20 solar PV projects worth 250 MW -- all of which are expected to generate a total of 567 GWh of electricity for less than the price of natural gas.” The details of the contracts are confidential and will remain as such for a few years. But, it is known “that all winning solar developers issued bids for contracts below the Market Price Referent,” according to Renewable Energy World. Translation? More and more solar PV project developers are confident that they can finally deliver solar electricity at a competitive price. Rhone Resch, president and CEO of the SEIA, told the magazine "solar energy is a natural hedge against rising energy costs -- a hedge that regulators and utilities are turning to lower electricity costs for their customers."

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