Why SunPower Corporation's $568.7 Million Loss Isn't as Bad as It Seems

Why SunPower Corporation’s $568.7 Million Loss Isn’t as Bad as It Seems

Solar tariffs have been the headline story for SunPower Corporation ( NASDAQ:SPWR ) for almost a year now. The Trump administration’s 30% tariff on solar imports will impact SunPower more than most solar manufacturers because of its premium-priced products and focus on the U.S. as an end market. What […]

What fourth-quarter 2017 results told us was a lot more about SunPower’s strategy for the future than the impact of tariffs. In fact, the decision to focus more on component sales could have a much bigger impact on the company’s finances over the next year. And it’s those underlying results that are more important than the accounting that drove a $568.7 million loss in the quarter.

Fourth-quarter headline numbers

On a non-GAAP basis, fourth-quarter revenue was $824 million, gross margin was 11.9%, and net income was $35.8 million, or $0.25 per share. Results were in line with guidance for $800 million to $850 million of revenue and gross margin of 13% to 15% (once you account for one-time margin costs related to tariffs).

The one-time costs were related to bringing solar panels into the U.S. to avoid tariffs. Management said they have between three-and-a-half and six months of solar panels to fill U.S. demand, which means the company could last into the summer with tariff-free solar panels.

There’s also a process to evaluate products that should be excluded from tariffs, which SunPower will seek. Management said they expect to complete the exclusion application in the next month, and after a 30-day public comment period, the decision should come soon after.

Why SunPower’s loss is misleading

SunPower’s $568.7 million loss on a GAAP basis is what gave some in the investing community a little heartburn. But it has more to do with the strange accounting in the solar industry than anything else.

Management made the decision in the fourth quarter to sell about 45,000 solar leases, which are backed with $1.4 billion of long-term contracted payments. They anticipate the proceeds to be about $200 million in cash and the buyer will assume or pay off $436 million of debt for total proceeds of $636 million.

This decision led SunPower to re-evaluate whether leases were properly valued on its balance sheet. Based on accounting rules when the leases were distributed, SunPower had put the contracted payments on the balance sheet at a very low discount rate (based on real estate rules), which was lower than the 7% or 8% ballpark rate the leases are being sold for. The difference resulted in a $474 million charge to write down the assets on the balance sheet. It’s accounting, not fundamental weakness in the business, that drove the massive loss in the fourth quarter.

The sale of leases is part of a larger strategy to exit the project finance business. SunPower wants its business to be almost entirely the sale of solar panels and solutions in the future. That’ll make its income statement easier to read in the long term, but will lead to some odd accounting in the short term.

Distributed generation is still the name of the game

The residential and commercial solar business continued to be the highlight for SunPower. Residential revenue was $174.3 million with a gross margin of 16.7%. Commercial revenue was $318.2 million with a gross margin of 9.9%. But management also said residential and commercial margins were negatively impacted by about 4 and 2 percentage points, respectively. Without that, margins of around 21% and 12% would have been in the ballpark of what investors should expect long term.

Utility scale solar installation in a grassy field
Image source: SunPower.

SunPower also said it expects to gain market share in the U.S. residential and commercial markets in 2018, which is a bit of a surprise given the impact of tariffs. But the company wants to keep a big presence here, and that’s probably a good move in the long run, even if it sinks margins in the near term.

Power plants are growing, but not very profitable

The distributed solar business is SunPower’s bread and butter, but power plants are what could drive its long-term profitability. Power plant bookings for 2018 exceed 600 MW, and during the year nearly 1 GW of P-Series solar panels will be produced in China and Mexico.

I say this is the growth business because management expects to exit 2018 with about 2 GW of P-Series capacity, which will drive growth into 2019. Power plants won’t generate the revenue per watt or margin of a residential or commercial solar business, but 1 GW of sales could drive $600 million of sales or more, potentially doubling in 2019.

SunPower is a company in transition

The income statement and balance sheet will continue to be in flux in 2018 as SunPower sells assets like leases and its stake in 8point3 Energy Partners (NASDAQ:CAFD). But the company could reduce debt from $1.55 billion at the end of 2017 to around $811.1 million just from paying off 2018 convertible notes and reducing lease debt.

The next step for SunPower will be growing the power plant business and adding energy storage to more residential and commercial installations, which will drive incremental revenue without adding manufacturing capacity. If it can do that with strong margins, the company could return to sustainable profitability by the end of 2018.

*Stock Advisor returns as of February 5, 2018

SunPower® Solar Panels Powering Three Solar Carports in Grenoble

SunPower® Solar Panels Powering Three Solar Carports in Grenoble

LA-TOUR-DE-SALVAGNY, France, Feb. 12, 2018 /PRNewswire/ — SunPower (NASDAQ: SPWR) announced today that 750 kilowatts of high efficiency SunPower® E-Series solar panels are powering three new carports in Grenoble. The project was led by regional utility GEG, in coordination with OSER and Grenoble Alpes Metropole, as part of its PARKOSOL program. PARKOSOL develops solar carport projects to serve the greater Grenoble area.[…]

“Solar carports make sense because they provide electricity as well as shade,” said GEG Production Director Daniel Besson. “High efficiency SunPower solar panels were the best choice for our carports because they maximize electricity output in space-constrained areas, and are recognized for high performance and reliability. The panels are manufactured sustainably, which enables these projects to meet environmental standards set by CRE, France’s energy regulatory commission.”

“Compared to conventional panels, SunPower E-Series solar panels produce 45 percent more energy in the same space over 25 years, and offer the solar industry’s best warranty, guaranteeing power and product quality for 25 years,” said SunPower Executive Vice President Peter Aschenbrenner. “SunPower is proud to partner with GEG on its innovative PARKOSOL program, promoting the increased use of cost-competitive, emission-free solar power in the Grenoble area.”

SunPower’s direct current E-Series solar panels, as well as its X-Series solar panels, are Cradle to Cradle Certified™ Silver. SunPower is the first solar panel manufacturer in the world to achieve this designation, which demonstrates a product’s quality based on rankings in five categories: material health, material reutilization, renewable energy use, water stewardship, and social fairness.

SunPower is a majority-owned subsidiary of Total SA.

About SunPower
As one of the world’s most innovative and sustainable energy companies, SunPower Corporation (NASDAQ: SPWR) provides a diverse group of customers with complete solar solutions and services. Residential customers, businesses, governments, schools and utilities around the globe rely on SunPower’s more than 30 years of proven experience. From the first flip of the switch, SunPower delivers maximum value and superb performance throughout the long life of every solar system. Headquartered in Silicon Valley, SunPower has dedicated, customer-focused employees in Africa, Asia, Australia, Europe, North and South America. For more information about how SunPower is changing the way our world is powered, visit www.sunpower.com.

©2018 SunPower Corporation. All Rights Reserved. SUNPOWER and the SUNPOWER logo are registered trademarks of SunPower Corporation in the U.S. and other countries as well. Cradle to Cradle Certified™ is a certification mark licensed by the Cradle to Cradle Products Innovation Institute.

SOURCE SunPower Corp.

Actis Acquires 110-Megawatt Solar Plant in Chile From SunPower

Actis Acquires 110-Megawatt Solar Plant in Chile From SunPower

“With a supportive regulatory environment and abundant solar resource, Chile is a market we know extremely well through our investments in the Aela Energía and Atlas Renewables platforms,” said Javier Areitio, director at Actis. “We are confident that in partnership with Metro de Santiago and SunPower, the El Pelicano […]

On January 11, Metro de Santiago celebrated completion of the plant with an event at the site, attended by Chilean President Michelle Bachelet and Metro de Santiago President Rodrigo Azocar. Metro de Santiago will buy the power generated by the plant under a power purchase agreement. SunPower is providing operations and maintenance services for the facility under a long-term contract.

“Actis is focused on sustainable value, which makes the El Pelicano Solar Plant a great fit for its portfolio,” said Chuck Boynton, SunPower chief financial officer. “High performance SunPower Oasis technology is designed to cost-effectively maximize power generation for decades. Forward-looking organizations like Actis and Metro de Santiago are a global model for the development of solar power, reducing reliance on unsustainable energy sources.”

The SunPower Oasis system is a fully-integrated, modular solar power block that is engineered for rapid deployment and optimizing land use. The high-efficiency SunPower solar panels installed at the site will be cleaned using SunPower’s proprietary robotic solar panel cleaning technology, which uses 75 percent less water than traditional cleaning methods and can help improve system performance by up to 15 percent.

Worldwide, more than 4.6 gigawatts of solar power plants operate today using SunPower’s leading solar technology.

About Actis
Actis is a leading investor in growth markets with over US$13 billion raised since inception. Actis targets consistent, competitive returns delivered responsibly through insights gained from trusted relationships and local knowledge, set within a culture of active ownership across Asia, Africa and Latin America.

In the power sector, Actis has committed US$5 billion to 33 energy infrastructure companies across 25+ countries generating 18 gigawatts of energy capacity and directly impacted 80 million consumers. Actis’ investments in Chile include 1.2GW Pan-Latin American renewable energy platform, Atlas Renewable Energy and Chilean renewable platform Aela Energía which is targeting 330 megawatts of installed capacity.

Actis is a signatory to the United Nations backed Principles for Responsible Investment (PRI). Actis was awarded an A+, the highest grade attainable, in the PRI’s latest assessment.

About SunPower
As one of the world’s most innovative and sustainable energy companies, SunPower Corporation (NASDAQ: SPWR) provides a diverse group of customers with complete solar solutions and services. Residential customers, businesses, governments, schools and utilities around the globe rely on SunPower’s more than 30 years of proven experience. From the first flip of the switch, SunPower delivers maximum value and superb performance throughout the long life of every solar system. Headquartered in Silicon Valley, SunPower has dedicated, customer-focused employees in Africa, Asia, Australia, Europe, North and South America.

SunPower’s Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding project plans and deliverables, projected energy output, anticipated product performance, cost savings, and continuity of business plans and strategies. These forward-looking statements are based on our current assumptions, expectations, and beliefs and involve substantial risks and uncertainties that may cause results, performance, or achievement to materially differ from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: regulatory changes and the availability of economic incentives promoting use of solar energy, challenges inherent in constructing and maintaining certain of our large projects, competition and market conditions in the solar and general energy industry, and fluctuations or declines in the performance of our solar panels and other products and solutions. A detailed discussion of these factors and other risks that affect our business is included in filings we make with the Securities and Exchange Commission (SEC) from time to time, including our most recent reports on Forms 10-K and 10-Q, particularly under the heading “Risk Factors.” Copies of these filings are available online from the SEC or on the SEC Filings section of our Investor Relations website at investors.sunpowercorp.com. All forward-looking statements in this press release are based on information currently available to us, and we assume no obligation to update these forward-looking statements in light of new information or future events.

©2018 SunPower Corporation. All Rights Reserved. SUNPOWER, the SUNPOWER logo, and OASIS are registered trademarks of SunPower Corporation in the U.S. and other countries as well.

SOURCE SunPower Corp.

In Trump’s first year, U.S. agency doubles solar investments abroad

In Trump’s first year, U.S. agency doubles solar investments abroad

LOS ANGELES (Reuters) – The United States government doubled its financial support for solar power projects overseas during President Donald Trump’s first year in office under a climate-friendly investment policy inherited from the Obama administration, according to a Reuters review of government documents.

The growing U.S. support for foreign solar projects comes despite an ongoing federal investigation into past U.S. solar loans abroad. It also deepens confusion about Trump’s position on government support for renewable energy as his administration downplays the global warming threat and aggressively promotes fossil-fuel development.

The Overseas Private Investment Corporation, the government’s international finance institution, loaned more than $630 million to foreign energy projects in 2017, 90 percent of which were solar, wind, or other low-carbon ventures, according to the investment documents.

That compares to $797 million in total OPIC energy financing in 2016, 61 percent of which went to clean energy.

The agency’s lending to solar projects doubled to more than $250 million in 2017, supporting ventures in India, Africa and Latin America, according to the records.

(For a graphic detailing OPIC energy investments over time, see: tmsnrt.rs/2F0op2H )

White House spokeswoman Kelly Love did not respond to requests for comment.

OPIC is a self-funded government agency whose website says it aims to advance “U.S. foreign policy and national security priorities” by investing in ventures abroad. For 40 years, it has operated at no net cost to U.S. tax payers.

The agency first set a goal to limit greenhouse gas emissions in 2007 and updated its policies several times during the Obama administration in ways that favor clean energy, most recently in 2017 as Trump prepared to take office.

The policy dovetails with Obama’s larger effort to fight climate change but clashes with the current administration’s priorities.

Since taking office, Trump has rolled back regulation limiting carbon dioxide emissions to help coal and oil firms; signed an executive order requiring government agencies to reduce the influence of climate considerations in decisions; and announced the withdrawal of the United States from an international pact to combat global warming.

That might seem to suggest the administration would oppose continuing generous government support for solar – a leading climate-friendly competitor to fossil fuels – but the administration has never made that clear.

Trump has never proposed repealing the billions of dollars worth of federal incentives for renewable energy, which were preserved by a Republican-controlled Congress in December tax legislation. But Trump has expressed skepticism about the viability of solar and wind, calling both “very, very expensive.”

In January, Trump slapped tariffs on solar panel imports, saying the move would help domestic manufacturers. But what helps manufacturers may hurt solar installers that have relied on lower-cost imported panels, often from China.

OPIC spokeswoman Andrea Orr said the agency adheres to the Obama-enacted low-carbon policy and that its portfolio is “demand driven” – reflecting both global development needs and American foreign policy priorities.

But policy “does not prohibit OPIC from considering the full spectrum of energy projects,” she said, including in impoverished nations where fossil fuels are the most feasible option. OPIC’s financing last year, for example, included $50 million for a power plant in the West African nation of Guinea that will run on fuel oil.

Last year, Trump sought to eliminate OPIC as part of his 2018 budget proposal “to reduce unnecessary federal interventions that distort the free market” – but Congress rejected the idea.

Trump has since appointed Texas businessman Ray Washburne to lead the agency. Washburne has said he would focus OPIC on two goals: empowering women in the developing world, and serving U.S. strategic national security interests.

Washburne was not available for an interview, Orr said.


Renewable energy projects that received OPIC funding last year include a Honduras geothermal plant sponsored by Ormat Technologies, a solar array in Zambia backed by First Solar Inc (FSLR.O) and solar facilities in Jordan and El Salvador by power plant owner AES Corp (AES.N).

Orb Energy, an Indian solar company backed by U.S. venture capital fund Acumen Fund Inc, secured $10 million in OPIC financing last year for commercial rooftop projects. Such funding would not be available from India’s conservative banking sector, the company said.

“Donald Trump does not go out of his way to support solar or renewables, so we were concerned,” Orb Chief Executive Damian Miller said in an interview.

But he was told there was “no fundamental change” in its priorities for selecting projects, he said.

Since 2011, more than three quarters of energy generation projects that have received OPIC funding were for solar, wind or other non-hydroelectric forms of renewable power.

That approach has been a boon for renewable energy developers, but has not always gone well for OPIC: the agency is currently under investigation by a federal watchdog over nearly $1 billion of loans to solar farms and a hydroelectric project in Chile that got into financial trouble when power prices in that nation plummeted.

At issue is whether OPIC properly stress-tested the projects adequately before offering loans. The agency’s losses on the deals could exceed $160 million, sources told Reuters last year. OPIC has said it is confident it will recover the loans over the coming decades.

AES – which received up to $89.5 million for its projects in Jordan and El Salvador in 2017 – said it has tapped OPIC financing for more than a decade. The shift in the priorities matches the evolution over time at AES, which now invests more in renewable energy and natural gas and less in oil and coal.

“That’s the angle that the company has taken,” AES Treasurer Daniel Stadelmann said in an interview, referring to the company’s shift toward cleaner energy sources. “So it matches.”

Reporting by Nichola Groom; Editing by Richard Valdmanis and Brian Thevenot

Trump’s Solar Tariffs Get Hit With a Wave of Legal Challenges

Solar Tariffs Get Hit With a Wave of Legal Challenges

Solar tariffs could trigger a broader trade war. The anticipated fallout from the Section 201 solar trade case is now officially underway. Three Canadian solar panel manufacturers launched a lawsuit against the Trump administration at the United States Court of International Trade last week, claiming the new global safeguard measures violate the Trade Act of 1974 and the NAFTA Implementation Act. The complaint was filed on February 7 — the same day President Trump’s tariff proclamation took effect. […]



The European Union also filed a request for consultations with the World Trade Organization that day, following similar steps taken by China, Taiwan and South Korea. Singapore subsequently filed for consultation at the WTO on February 9. Bilateral consultations between the parties are the first stage of formal dispute resolution.

Legal actions follow Trump’s decision in the Section 201 case petitioned by U.S.-based crystalline silicon (CSPV) solar manufacturers Suniva and SolarWorld Americas. In a proclamation issued January 22, Trump decided to impose a 30 percent tariff on imported CSPV solar cells and modules — set to decline by 5 percentage points per year, over the four-year tariff period. The ruling also includes a tariff-free carve out for the first 2.5 gigawatts of solar cells imported each year.

Several developing nations, listed as Generalized System of Preferences beneficiary countries, were exempt from the tariffs because they currently account for a small portion of U.S. solar imports (although that could soon change).

In recommendations submitted to President Trump by the U.S. International Trade Commission (ITC) last fall, three of the four commissioners determined that imports from Canada are not harmful to U.S. producers. And the fourth commissioner did not explicitly address Canada in her proposal. Despite the negative findings, Trump’s ruling did not exempt companies from north of the border.

Similarly, all ITC commissioners exempt U.S. free trade partner Singapore (home to solar manufacturer REC Group) in their recommendations. However, Singapore was not exempt in Trump’s decision.

The Canadian lawsuit — brought by Silfab Solar, Heliene and Canada Solar Solutions — states that the president’s proclamation is “unlawful as applied to plaintiffs, and inflicts grave and irreversible harms on them.” They are now seeking an injunction prohibiting the enforcement of new tariffs against them.

Canadian manufacturers face layoffs and plant closures

The case argues that the U.S. violated sections 201 and 203 of the Trade Act by imposing safeguard measures on Canada without the required recommendation from the ITC. The plaintiffs also claim the U.S. violated sections 311 and 312 of the NAFTA Act because, as the ITC determined, Canada does not “account for a substantial share of total imports” or “contribute importantly to the serious injury, or threat thereof, caused by imports.”

The plaintiffs state that American-based solar manufacturers account for less than 5 percent of CSPV cells and modules used in the U.S., while Canadian manufacturers account for only 2 percent.

It’s worth noting Trump decided Generalized System of Preference countries are exempt from the tariffs until they reach 3 percent of U.S. CSPV cell and module imports. If the 2 percent figure cited by Canadian manufacturers is correct, it would seem to represent a reasonable level by the administration’s own standards.

But while the effect on the U.S. solar market is minimal, these exports represent the “bulk” of the Canadian solar manufacturing industry, according to a plaintiff memo. Because the plaintiffs produce CSPV modules, and not cells, Canadian solar products are immediately subject to tariffs.

“That tariff will make it prohibitively expensive for Plaintiffs to import CSPV modules from Canada to the United States, and within weeks, it will compel Plaintiffs to terminate employees, close manufacturing facilities, forego business opportunities, lose sales, and — in several cases — cease business entirely,” the memo states.

The Court of International Trade is a special court based in New York City with a very experienced group of judges looking to answer a very specific set of legal questions that differ from the WTO, said Allan Marks, energy and project finance attorney at law firm Milbank, Tweed, Hadley & McCloy.

“They’re looking at whether these tariffs, in particular as applied to Canada, comply with U.S. law,” said Marks, who teaches energy trade issues as an adjunct professor at U.C. Berkeley. “The WTO is looking at whether U.S. government safeguard measures, broadly applied, comply with international law. Those are different questions and the standards are slightly different.”

Action at the court level is also likely to be much faster than at the WTO level, which could take 18 months or more. In the Canadian company case, the U.S. government will have to respond within the coming weeks. The administration could choose to act through the courts, or the Office of the U.S. Trade Representative could modify the tariff order to exempt Canada, which would render the case moot. Marks noted the USTR has the authority to change or rescind the tariff at any point.

China threatens retaliatory measures

At the WTO, there are several different courses of action countries can take to challenge the tariffs. One route is to question whether or not the sudden increase in imports affecting U.S. companies was “unforeseen.” The Trump administration prepared for this challenge by requesting the ITC submit a supplemental report.

However, countries can also challenge whether the ITC did a good job in making its determination in the global safeguard case, or they can take issue with how the safeguard measures were implemented. To that end, several complaints submitted to the WTO center on the need for proper “consultation” and “compensation” between trading partners, in accordance with international law.

In a global safeguards case, trade authorities only have to find injury against their domestic industry — they don’t have to prove specific countries have broken the rules, as is required in an anti-dumping and countervailing duties case. As part of the Section 201 process, the U.S. needs to discuss its tariff decision with affected countries prior to applying the safeguard measures, said Marks.

“If the WTO finds that our injury finding wasn’t thoroughly done or it didn’t allow proper time for compensation and consultation, then retaliatory compensation would be allowed under international trade rules,” he said.

Retaliatory measures played a role in convincing the U.S. government to withdraw tariffs on imported steel products in a Section 201 case decided in 2002. Retaliation is intentionally designed to create political pressure, and is often targeted at unrelated industries, said Marks.

Chinese officials have already confirmed they’re launching an investigation into whether about $1 billion of U.S. sorghum exports were being dumped or receiving subsidies — a move widely viewed as a response to the Trump administration’s protectionist trade policies, The New York Times reports. According to Bloomberg, Chins is also looking to impose trade restrictions on soybeans imported from the U.S.

“If you’re smart, you [retaliate] on things being exported from districts of congressional leaders,” Marks said, assuming the WTO gives the go-ahead. “You could see [countries] imposing it on coal exports. I’ve also heard whiskey or bourbon mentioned. In the past, it was North Carolina textiles. If Paul Ryan is still Speaker of the House, exporting Wisconsin cheese could get harder. Whatever it’s going to be, it’s going to be something that moves the needle politically.”

The Trump administration is likely also thinking about the political dynamics.

“I don’t think they want to hurt the U.S. economy or even renewable energy; I think they just want to placate their base,” Marks said.

“They want to find a way to thread the needle that meets their political goals,” he surmised. “Whether or not it works is another question.”

As challenges move forward at the WTO and the New York court, individual companies have until the end of the month to request an exclusion from the new tariffs. With American jobs on the line, this decision also comes with political implications.

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INSIGHT: 5 opportunities and challenges with Trump’s solar panel tariff

INSIGHT: 5 opportunities and challenges with Trump’s solar panel tariff

The Trump administration recently announced plans to impose   solar panel tariff on solar panels imported from abroad. This decision came in response to a complaint filed by two solar companies, but much of the industry opposes the action, which trade groups say will increase the cost of solar projects and depress demand. To illustrate what’s at stake, energy scholar Joshua Rhodes provides some context on the U.S. solar industry and its opportunities and challenges. […]

How big is the U.S. solar industry, and what is its growth trajectory?

The U.S. solar industry generated $154 billion in economic activity in 2016, including direct sales, wages, salaries, benefits, taxes and fees. Its revenues have grown from $42 million in 2007 to $210 million in 2017.

About 25 percent of total new power plant capacity installed in 2017 came from solar. Total installed U.S. solar capacity is over 50 gigawatts – the equivalent generating capacity of 50 commercial nuclear reactors.

INSIGHT: 5 opportunities and challenges with Trump’s solar panel tariff










Solar is projected to continue to grow for the foreseeable future. However, recent events such as the solar trade tariff and tax code changes could dampen that trend. According to one estimate, the tariff alone will reduce solar installations by 11 percent from 2018 through 2022.

The industry directly or indirectly employs about 370,000 people in the United States, of which 260,000 are full- or part-time. Solar photovoltaic installers make up about half of this workforce. In fact, solar PV installer is currently the fastest-growing job in the nation, with a median annual salary of nearly $40,000.

For comparison, the coal industry only supports about 160,000 jobs. Electric power generation from solar and wind energy combined contributes about three times as many jobs as electricity production from fossil fuels.

INSIGHT: 5 opportunities and challenges with Trump’s solar panel tariff








Why are most of the solar panels that are installed in the United States manufactured overseas? Is this pattern likely to change?

About 80 percent of solar panels installed in the United States last year were built overseas. While the industry was invented here, China has poured up to $47 billion into tax breaks and incentives in order to develop what it views as a strategic capability. Along with an abundant supply of cheap skilled labor, these investments reduced the price of solar panels by 80 percent between 2008 and 2013.

Some foreign solar panel manufacturers are negotiating to open factories in the United States, much as foreign car manufacturers did during the Reagan administration. However, any new manufacturing is likely to be highly automated, so it might not generate major numbers of new jobs.

Which sectors and states produce the most solar power today?

About 60 percent of total U.S. solar generating capacity is in a relatively small number of very big projects owned by power companies. The rest is what’s known as distributed capacity, meaning small-scale projects that generate energy at many sites. It includes rooftop solar power on homes, community solar projects and commercial installations, such as solar panels on the roofs of big-box stores like Walmart.

California has nearly half of all U.S. solar electricity generating capacity, followed by Arizona, New Jersey and North Carolina. Alaska, North Dakota and South Dakota are the only states with less than one megawatt of small-scale solar photovoltaic capacity.

How affordable is solar power for customers who aren’t affluent?

Affordability can be a barrier to going solar, but there are ways to reduce it. For example, some utility customers can subscribe to community solar programs – projects that serve multiple customers in a single area – and even reduce their rates by doing so. Community solar projects do not usually require customers to own their homes, so renters can take part.

There are also peer-to-peer networks that allow homeowners with solar to donate their excess energy to those in need. Instead of receiving credit from their utility for generating more electricity than they use in a given month, these households authorize the utility to apply that credit to a needy household’s bill.

It is also important to note that utility-scale solar power can lower the cost of electricity for all of that utility’s customers. In Texas, where I live, adding wind and, soon, solar generation has kept wholesale electricity prices low as the price of renewable electricity has fallen. Keeping these prices low makes it harder for power companies to justify raising electricity rates, which directly helps lower-income customers.

What are the biggest challenges that U.S. solar companies face today?

There are signs that the residential solar market is slowing down. Some companies are shifting their focus from deploying as much capacity as possible to trying to maximize revenue by scaling back expansion, so that they can focus on a few states that offer the best returns on investment.

In some major markets, such as California, bringing large amounts of solar generation online is depressing wholesale electricity market prices, which erodes the value of the electricity that these systems produce. This makes projects gradually less economic to install.

The Trump administration’s solar tariff will be more challenging for utility-scale solar projects than for residential, because the modules account for a larger share of the total cost of large projects. A 30-percent tariff will likely increase the costs of solar installations by about 11 cents per watt, or roughly 10 percent, which could reduce the amount of solar installed over the next 4 years by five to eight gigawatts of capacity, mostly at the utility scale.

In my view, the biggest challenge for U.S. solar companies – particularly installers – is uncertainty. Congress recently tried unsuccessfully to cancel tax credits for installing new solar capacity, and the tax cut bill that was enacted in December includes some changes that may affect credits for investing in solar. Companies need certainty to create value and jobs – and for solar and other renewable energy sources, certainty is in short supply at the moment.

Rhodes is a research fellow of energy at the University of Texas.

Rebates on solar panels decline but still a growing trend

A Case Study In Solar Energy Rebates

Alternative energy made a grand entrance five years ago as Northwest Missouri was booming with solar panel installations. City records in St. Joseph, for example, showed 51 permits issued between four contractors for both commercial and residential projects in 2012. And the permits kept coming in for at least two years following.

JR Cheek jumped on the opportunity to cut down his $650 a month electric bill at his business, JR’s T.B.A. and Service, 405 S. 36th St.

“In the peak of summer, when there’s the most rays, it’s saving me over $450 a month,” Cheek said. “I’ve had a low bill of $57 and that’s the business talking.”

During the winter, when the sun is limited and he uses more electricity, his bill was $309, which is still less than half of what it was.

If a customer is using the acquired panel electricity, it’s free, but the electricity garnered from the panels can roll over with Kansas City Power & Light and create a credit. At Cheek’s home, his family doesn’t use as much electricity as those panels generate. Therefore, his residential bill usually has a credit.

“But when you use (their electricity), you have to pay (the bill),” Cheek said.

At home, Cheek’s average bill was anywhere from $175 to $200 before installing solar panels. The family generated a lot of credits before putting up a swimming pool. That uses more electricity so there’s not as much rollover, Cheek said. But they still don’t use all the credits.

“When we went into winter we had $283 in credits earned so that took out October, November, took out some December but I expect a bill soon,” he said. “Last year he had only two bills. One for $25 and one for $50. So a total of $75 out-of-pocket.”

Just three and a half years after installing solar panels at his home and business, Cheek said he has recouped all of his out-of-pocket money for the system. And that doesn’t include the tax credits he earned for the installation.

Government subsidies are a large part of the appeal. While there are still federal tax credits available, the rebates through Kansas City Power & Light are spoken for.

In 2011, the utility’s rebate was set at $2 per watt with a maximum rebate of $50,000. That rate was good through 2014. The rebate has since gone down to 50 cents per watt for those receiving it now.

“We have committed all of our rebates,” said Drew Robinson, sustainability products manager with KCP&L. We’ve come to the end of about $86.5 million in rebates given out and there are no plans to extend anymore.”

Missouri law established the amount per watt used to calculate rebate payments every year until 2020, when the rebate program will end.

Today, the only federal tax credits for energy efficiency improvements that remain in effect are for solar energy systems (solar water heaters and solar panels). These federal tax credits remain in effect through December 2021.

“I see it more as a potential partnership moving forward,” he said. “We are very aware of societal opinions to move away from fossil fuels. We have efficient coal plants but we’re starting to look at other renewable resources.”

While in their infancy, Robinson said there are two alternatives on the horizon.

There is a proposed community solar program where the utility would build large-scale installations of solar panels and customers could subscribe to that. Another project is a green subscription geared toward larger customers to aggregate their interests to wind farms.

When he first started back in 2011, panels cost about 80 to 85 cents per watt. Now it’s just over 50 cents. With the tariffs in place, Collins figures it will increase his spending by about 10 to 15 percent, which is still less than what it cost him when he first started.

The SunPower Difference: EnergyLink Ecosystem

Want control over your energy usage? SunPower and EnergyLink are the answer to those questionable utility bills.

When you pay your energy bill every month, have you ever taken the time out to read through your meter recordings to get a better understanding of your usage? Have you ever wondered why you’re paying money for an estimated reading versus what you’re actual usage is? Did you know that you must pay the bill whether it was based on an actual or estimated reading? Frustrating, isn’t it? Now is the time to consider taking control of your utility bills. How? By investing in solar. Not only will you save a significant amount of money by going solar, you will also gain access to tools that will give you, in real time, info on how much energy you use and how much energy you create.

When it comes to paying utility bills, customers generally like to pay what they owe – no more and no less. Some customers become frustrated when their bill is estimated. A high estimated bill usually results in overpayment, while a low estimate often requires a large “catch up” bill later. SunPower solar panels completely eliminate this monthly gamble with your utility bill. As we discussed in solar panel basics, if your home is using more energy than your solar power system is producing, you will pull energy from the utility grid, meaning you will always have energy. Extra energy generated during the day flows back into the grid and is used elsewhere through a process called net metering. In this instance, the homeowner receives credit for what is produced, thereby lowering the electric bill.

One of the tools you’ll get with a SunPower system is the EnergyLink Ecosystem. EnergyLink provides real time insight into your solar panel system, from energy usage to energy created. It also gives you the power to control all of your settings. The best part? It requires no special equipment. All you need is a computer or mobile device to monitor your energy production and consumption. All of the information is literally in the palm of your hand.

Perhaps one of the most beneficial perks of EnergyLink is the communication it allows you with your SunPower dealer; the technology is so smart that not only is it always monitoring your system and its function, should a problem arise, it will contact your SunPower dealer directly to make sure you stay up and running.

Considering that many utility companies are now charging monthly subscription fees for consumption monitoring, it can often feel like you’re getting robbed when you’re already paying for estimated rates that don’t accurately reflect your usage.

We know that installing solar will reduce your environmental footprint substantially, and of equal importance, it will reduce your financial exposure to rising energy prices and put you, rather than your utility company, in control of your energy with the help of EnergyLink.

Let’s talk about taking control of your energy usage today.

SOURCE: http://nyssf.com/sunpower-difference-energylink-ecosystem/