States Take the Lead in Supporting Marine Energy Technology

Author: Jessica Morey, Clean Energy Group | Projects: Clean Energy Innovation, Clean Energy States Alliance

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John Miller of the Marine Renewable Energy Center (MREC) addressed the crowd. Behind him are Senate President Therese Murray (left) and UMass Dartmouth Chancellor Jean MacCormack.

On Monday, August 15th, representatives from the Massachusetts Clean Energy Center, UMass Dartmouth, Massachusetts senate and the New England Marine Renewable Energy Center, marked the completion of the state’s first in-ocean tidal turbine test. The Muskeget Channel Demonstration Project is a collaboration among Massachusetts state and local governments, universities and companies.

We write about it here to point it out as another example of state leadership in supporting new energy technology industries. This is the kind of leadership that federal officials should more fully support, work with and fund.

The Massachusetts Clean Energy Center (MassCEC) provided a $98,000 grant to support the project, which involves testing of Boston-based Free Flow Power’s underwater turbine technology. The energy from the turbine was captured by energy storage technology developed by another Boston-based clean energy company, FastCap Systems.  Free Flow Power also has a demonstration project underway in the Mississippi River.

As UMass Dartmouth Chancellor Jean F. MacCormack said, the demonstration project is “a unique opportunity to demonstrate the capability of Massachusetts and New England as a leader in marine renewable energy development… [it] is an example of the public/private collaboration that is necessary to launch new industries and create new job opportunities… Massachusetts is uniquely positioned to establish a whole new industry with potential to address our energy needs, reduce our carbon footprint, and create thousands of jobs.”

Mass CEC supports these companies, among other clean tech companies, through demonstration grants and venture and growth capital investments.

They are just two of the many companies and researchers working in Massachusetts and New England in a growing “marine energy cluster” – including device developers Resolute Marine Energy and Ocean Renewable Power Company and testing facilities such as Alden Labs.

State support programs, in addition to financing available from MassCEC, include:

  • A lease application to Federal agencies to create a national offshore renewable energy innovation zone, located in federal waters south of Nantucket. The lease would allow state officials to establish a permanent test and demonstration area for energy technologies, as well as study effects on marine life.
  • State lawmakers are considering a bill that would expand state net metering laws to include hydrokinetic technologies.
  • Massachusetts has also developed an Oceans Management Plan, which has helped companies reduce permitting risk and uncertainty by identifying pre-selected development areas.

Other states, including Hawaii, Oregon, Alaska, Florida and New York are also leading the way in support for marine energy technologies- both to meet their environmental and energy goals and to create jobs and industries in their states.

Group Buying the New Thing in Residential Solar – and Beyond?

Author: Anne Margolis, Clean Energy Group | Projects: Clean Energy Finance, Clean Energy States Alliance

blogphoto-ETO-SolarizeLast year, the Clean Energy States Alliance gave Energy Trust of Oregon (ETO) a 2010 State Leadership in Clean Energy (or SLICE) Award for its Solarize Portland program. SLICE awards are made to CESA member programs or projects that are especially innovative and effective at incentivizing, promoting, or deploying clean energy technologies, and the distinguished panel of judges determined that Solarize Portland deserved to be recognized for its innovative model of incentivizing residential solar.

In their comments, the judges noted, “Portland might not have the most sunlight, but it’s been able to move ahead with a major solar initiative in Solarize Portland. This grassroots effort, facilitated with a partnership between the statewide nonprofit and local neighborhoods, moved ahead in a really short time, using a relatively modest subsidy to command a good price for residents. The model is potentially replicable by communities across the U.S., and is particularly important to study in light of declining state incentives and challenges to the PACE residential financing program.”

Since then, several other “Solarize”-type programs have popped up all over the U.S. (and beyond), in cities, states, and utility territories, and, based on their apparent success, these programs may be just the ticket to keep up the solar energy momentum in these times of diminishing state and federal incentives.

So what is so great about the Solarize model? For one thing, its marketing and promotion are usually community-led. For Solarize Portland, Energy Trust of Oregon (ETO) and the City of Portland took advantage of the existence of a strong network of neighborhood associations in Portland. ETO and the City worked with Southeast Uplift Neighborhood Coalition to directly engage citizens through grassroots outreach and education about solar options and costs, as well as providing free site assessments. The enrollment process was designed to be simple, and each step was facilitated by the project partners.

Next, it lowers the technology cost, through the use of group buying power (think Groupon and Living Social). The project partners in Portland facilitated a competitive RFP process for a contractor based on set pricing tiers – i.e., once certain participation thresholds were met, progressively lower system costs were triggered. ETO also provided its standard solar incentives to the mix: at that time, $2.25/watt; and residents were also eligible for federal and state tax credits.

Finally, it is of limited duration. While the grassroots education and group buying method were designed to address the previously slow pace of solar installations in Portland (38 were installed in all of 2008), the limited enrollment period addressed another problem, identified in a 2007 market study: most Oregonians thought about installing solar for over two years before finally taking action. A good deal with a deadline seems to consistently motivate more takers than a good deal with no end in sight.

In just six months from its inception, Solarize Portland resulted in the installation of solar systems on 120 homes (more than three times the 2008 number). The 120 installations added 347 kW of new solar photovoltaic capacity, estimated to produce over344,500 kWh of electricity per year. And, buzz generated by the program had a spillover effect: it generated downward pressure on area PV system costs and contributed to a 320% increase in area non-Solarize installations during the project timeline.

The project’s success has led to subsequent Solarize efforts in four additional Portland neighborhoods, one in the rural city of Pendleton, Oregon, and another for employees of Columbia Sportswear Company.  And the model is catching on country-wide.

As a direct result of Solarize Portland’s success (and, we’d like to think, of CESA members sharing their best practices and success stories at our biannual meetings), Massachusetts Clean Energy Center (MassCEC) – also a CESA member – launched Solarize Massachusetts this April, in collaboration with the Green Communities Division of the Massachusetts Department of Energy Resources (DOER). Solarize Massachusetts will target four towns across the state (selected by lottery): Harvard, Hatfield, Scituate, and Winchester, and will be targeted to both residents and businesses. The pilot program RFP sought bulk purchasing proposals from solar integrators, with tiered costs based on participation; MassCEC and DOER will work with the selected integrator(s) to provide education, site assessments, financing models, and installation services.

Other programs in the U.S. are demonstrating the program’s success at the municipal level. In the fall of 2010, Open Neighborhoods, an organization that connects neighborhoods with clean energy opportunities through social networking tools, launched the GoSolar campaign in the Los Angeles area to offer free solar assessments and group pricing to homes and businesses. Their 2010 campaign resulted in 200 solar installations at prices under $5.00/watt – on par with utility-scale solar installed costs – and they are proceeding with subsequent campaigns based on that success.

And in mid-July, the San Francisco Department of the Environment and the World Resources Institute launched the San Francisco pilot of Solar@Work, a program that helps companies implement solar projects by offering an up-front purchase, a solar lease, or loans, all offering group purchase system discounts of 10 to 15 percent.

Meanwhile, One Block Off the Grid (1BOG), in many respects the pioneer of solar group discounts, continues to aggregate group buying initiatives across the U.S. based on demand generated through their website; individuals (and I assume businesses) can enter their zip code and find out if there’s a solar group opportunity near them. (Also see Sunny Britain, which last week announced a similar program in the UK).

1BOG has found its niche, but the state- and city-supported initiatives of the Solarize type show great potential to motivate solar installations because of specific attributes, especially the way they partner with trusted institutions such as state energy offices, public works departments, and neighborhood associations. Pairing the national expertise of group buying facilitators and solar leasing companies with the local, city, or state brand, insight, and oversight is proving to drive demand for solar, which is in turn driving down system costs, demanding increases in manufacturer and installer accountability, and sparking healthy competition in the PV industry across the U.S.

So, what’s next? Which state will next take up the Solarize torch? When will it catch on with utilities? Who of the Fortune 500 will catch the wave of company-sponsored Solarize programs for employees? What other groups/clubs/organizations could act as facilitators for these efforts? Is it too far-fetched to think my local cooperative-owned grocery store will be rolling out group discounts for its customers? Apparently not.

Innovative programs such as Solarize that leverage available funds are proving to drive down solar costs in a major way, while keeping solar installers and manufacturers employed as the states and the industry watch the federal government cut back on solar deployment in favor of next-generation R&D and manufacturing initiatives. Let’s hope the former can keep up the momentum and bridge the gap until the latter is ready for prime time.

Photo © Energy Trust of Oregon, 2010.

Fuel Cells for Supermarkets

Author: Warren Leon, Clean Energy Group | Projects: Clean Energy States Alliance, Clean Energy Innovation

Fuel cells for supermarkets coverSupermarkets are turning out to be an important early market for stationary fuel cells. Supermarket companies that are using fuel cells either to power their stores or for forklifts at distribution facilities include Albertsons, Central Grocers, H.E. Butt Grocery Company, Price Chopper, Safeway, Star Market, Stop & Shop, Wal-Mart, Wegmans, and Whole Foods Market.  State clean energy agencies that are interested in helping to bring fuel cell technology into widespread use would be well-served by explicitly supporting fuel cells for supermarkets as a key market niche.

The Appeal of Fuel Cells for Supermarkets

In recent decades, supermarkets have grown larger and some have moved to 24-hour operation, 7 days a week. Stores have added large banks of freezers and refrigerated cases, as well as sections where prepared foods are cooked and kept warm. These changes have not only significantly increased the electrical, heating, and cooling loads of supermarkets, but have made them well-suited to take advantage of the electricity and heat provided by fuel cells.

Fuel cells provide a constant supply of electricity, which is just what these new supermarkets need. The heat produced by the fuel cells can be used for a variety of purposes, from heating water to running absorption chillers for cooling the stores. Using both outputs is key to the economics of a supermarket strategy for fuel cells, and also yields significant greenhouse gas emission reductions and other environmental benefits. The total efficiency of supermarkets’ fuel cell systems can be quite high—often twice or more efficient as getting power from a central utility.

Because supermarket owners need to worry about the risk to the large inventory of cooled and frozen food during an interruption of power from the electric grid, they appreciate a fuel cell’s ability to keep operating during a blackout. With a fuel cell, a supermarket can remain open at a time when the surrounding community is vulnerable and in need of supplies.

Recent trends in fuel cell financing have made them more business friendly. Manufacturers and system integrators increasingly offer lease arrangements that reduce the up-front cost of an installation. Longer initial warranties and the option of purchasing an extended warranty reduce the risk to the supermarket company.

Reasons for State Agencies to Target Supermarkets

Fuel cells clearly have appeal for supermarkets, but why might state agencies want to give special attention to supermarkets? Most importantly, to commercialize a new technology, it makes sense to concentrate on a few niche markets where it can gain traction and become self-sustaining, rather than trying to spread the technology thinly over a small number of random installations in diverse settings.

The early installations among supermarket chains have created growing visibility for fuel cell technology within the industry. This is starting to stimulate other supermarket companies to want to learn about fuel cells and consider emulating the early adopters.

Beyond the essential starting point that fuel cells are a good match for the energy needs of supermarkets, there are other reasons why this is a promising niche:

  • Supermarket chains own multiple stores. As in the cases of Price Chopper and Whole Foods Market described below, a company that climbs the steep learning curve for the first installation can then take what it has learned and apply it to additional installations in other stores. Each new installation becomes easier and better adapted to the specific needs of the company.
  • Because of their many customers, supermarkets can educate large numbers of people about fuel cells through information panels and educational materials in those stores that have fuel cells.
  • Supermarket chains can use fuel-cell-powered forklifts and other materials handling equipment at their distribution centers, as well as stationary fuel cells at their stores.

Grants and other incentives from state agencies have been essential to make the initial fuel cell installations possible. Such support will continue to be important in the coming years. Through it, states can help to advance a promising clean energy technology, while helping important local businesses.

The Clean Energy States Alliance has just released a briefing paper with case studies of four supermarket chains’ use of fuel cells. This report, “Fuel Cells for Supermarkets,” is available at http://www.cesa.org/resource-library/resource/fuel-cells-for-supermarkets.

While fuel cells have had up and down cycles over the years, sellers are now finally focusing on niche markets that benefit from the many attributes of these technologies. This smart market strategy for supermarkets is a promising one, which policy makers should strongly support.

Debt Deal Puts States Back in the Clean Energy Driver’s Seat

Author: Lewis Milford, Clean Energy Group | Project: Clean Energy Innovation

blogphoto-Light-bulb-with-wind-turbineThe recent debt ceiling deal announced this week means two things for clean energy. One, forget Washington as a source of significant new funding and programs for a long time. Two, look once again to the states to keep momentum on clean energy alive.

The first point is fairly indisputable. Virtually every energy commentator has lamented how future, severe cuts to energy and environmental programs are an inevitable result of this new deal. Billions of dollars will come out of most clean energy and environmental programs for the next ten years, probably permanently below last year’s continuing resolution budget levels. DOE and Interior and EPA will see big hits to their programs. Unrealistic dreams of a new carbon tax are finally being put to rest. The cuts could well come to various renewable incentive and tax credit programs.

The second point of returning to the states is the only realistic answer. As Washington conducts a slash and burn campaign to gut clean energy and environmental programs the states are acting more responsibly. Just as they did under some rough times in Washington from 2000 to 2008, the states once again are stepping up their clean energy game.

Connecticut is the first state in the country, under Governor Malloy, to create a new green infrastructure bank, something that Washington has been unable to do. In Virginia, Republican Governor Bob McDonnell recently signed several initiatives into law: one would create a Clean Energy Manufacturing Incentive Grant Program; another raises the net metering limit for homeowners; and two others create a means for voluntary contributions on electric bills to a fund that will use proceeds to fund solar systems at residences, businesses, and nonprofits.

At the same time, Oregon and Massachusetts have created innovative new solar support programs (“Solarize Campaign”) that support communities and neighborhoods to use their collective purchasing power to help residents overcome the financial and logistical hurdles of going solar. The State of New Jersey is using its renewable portfolio program to support offshore wind and offering tax credits to build the associated supply chain to create local jobs and lower transmission investment costs.

Sure, some states are cutting back, or raiding some of their clean energy funds. But that is the rare exception. For the most part, we see steady state funding, and a renewed emphasis on the economic development benefits of clean energy programs, along with a raft of new economic development programs across the country. States are creating clean energy incubators, workforce training programs, technology innovation efforts and looking to major new projects like offshore wind to boost local manufacturing and employment.

So what gives with this schizophrenic state versus Beltway shift? It’s on old story. In Washington, the lowest common denominator policy prevails. The fossil fuel industry has enormous concentrated power to influence key lawmakers to do nothing on clean energy. It only takes a few no votes to kill federal legislation.

In the states, Governors of both parties tend to do what works, what creates jobs and brings in new industries. And for them, clean energy is the new nonpartisan economic driver. It is much harder for opponents to stop the spread of experimentation in 50 states.

This is clear from a recent study by the Brookings Institution that showed how renewable energy is one of the fastest growing industry sectors in the last ten years. It is perhaps the one bright spot in this bleak economy.

Governors get that story, and focus laser like on jobs. Unfortunately, some of our Washington politicians are now solely enamored of debt reduction and have forgotten the 16 million unemployed.

But the states have not. That is good news for clean energy. Now if only Washington understood how to work more with the states and ride that clean energy wave that is breaking outside the Beltway.