These photovoltaic (PV) systems were buoyed by expanded federal tax credits and falling PV prices, causing them to produce 156 megawatts of electricity in 2009, up from 78 megawatts a year earlier, according to the Solar Energy Industries Association.

“Despite the Great Recession of 2009, the U.S. solar industry had a winning year and posted strong growth numbers,” Rhone Resch, the group’s president and CEO, said in the announcement. “We expect 2010 to be a breakout year for the U.S. solar industry.”

Last year, the U.S. government lifted its $2,000 tax credit cap on residential solar panels (also on windmills and geothermal heat pumps), allowing homeowners to deduct 30% of their total costs.  Also, the report says, the price of PV modules has fallen more than 40% from mid-2008.

Still, solar energy continues to provide only a tiny amount of U.S. electricity — less than 1% of the total.

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One study, accepted for publication in the journal Computers, Environment and Urban Systems, discovered that if choice roof tops in southeastern Ontario were covered with solar panels, they could produce five gigawatts, or about five per cent of all of Ontario’s energy. The study took into account roof orientation and shading.

“To put this in perspective, all the coal plants in all of Ontario produce just over six gigawatts. The sun doesn’t always shine, so if you couple solar power with other renewable energy sources such as wind, hydro and biomass, southeastern Ontario could easily cover its own energy needs,” Professor Pearce says.

A second study, published in May issue of the journal Solar Energy, looked at land in southeastern Ontario that could be used for solar farms. The study considered land with little economic value — barren, rocky, non-farmable areas near electrical grids — and concluded it has the potential to produce 90 gigawatts.

“Nuclear power for all of the United States is about 100 gigawatts. We can produce 90 on barren land with just solar in this tiny region, so we are not talking about small potatoes,” Professor Pearce says.

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Misery makes strange bedfellows. And so can a renewable portfolio standard. With about half of states now giving their utilities deadlines to get a certain percentage of their energy from renewables, utilities have been forging new relationships with real estate owners and the solar industry.

Utilities across the country are announcing plans to develop tens or hundreds of megawatts of solar generating capacity in partnership with building owners. It has the markings of a national trend that could be very good for the solar industry — and for companies with certain kinds of commercial real estate.

When you see solar modules on the roof of a building, they might not actually belong to the building’s owner. Two common ownership scenarios have been around for several years: Buying and installing a solar power array means taking the financial incentives and risks, along with the power, with a fixed up-front outlay. There’s no incremental cost for the power.

When a third party owns the array, they own the power, and sell it to the occupants. There’s no up-front cost to the building owner, just a monthly power bill. The rate per kilowatt-hour is negotiated for the life of the agreement, so it acts as a hedge against fluctuations in utility tariffs.

Lately, utilities have been pursuing more solar power projects, and devising new ownership models, to meet renewable energy requirements in their states. In one model, the utility signs a lease for the roof of a building and installs a solar array on it. The utility keeps the power to serve local customers.

Programs like SCE’s utility-owned rooftop solar could create the revenue certainty landlords need, to develop solar into new buildings — especially where net-metering rates are low or the electric load in the building is small.

But for now there are enough flat roofs, and willing owners. SCE calls it “harvesting a scarce commodity,” referring to the unused rooftop real estate in southern California, an area with an abundance of warehouses.

To be selected, a building has to have a large roof — 250 thousand square feet or more. And it has to be in Southern California Edison’s territory — for now. PG&E, in northern California, is expected to launch a similar program soon.

Exactly how this model will expand is uncertain. It’s not just implemented state by state, but utility by utility. Regions to watch are Northern Carolina, where Duke Energy has proposed an 8 megawatt program, and New Jersey, where PSE&G wants to install 120 megawatts. Utilities in Colorado, Arizona and Texas are also lining up to install distributed solar resources, using this new ownership model.

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One of the latest examples comes from Amesbury, Massachusetts. A report in the Newburyport Daily News notes that the town’s high school is set to receive a $150,000 energy efficiency and block grant that will be used to install photovoltaic panels.

The newspaper added that the system is expected to generate 35 kilowatts of electricity and that the array will be installed on the school’s cafeteria.

Many other schools around the country have invested in their own solar panels to save money and help improve the environment. When educational institutions go solar, they have the added benefit of providing a new learning tool for students who can get a firsthand look at clean energy generation.

Elsewhere, a number of businesses have also chosen to take advantage of state and federal tax incentives by investing in money-saving solar energy technology.

The projects are a way for businesses to cut energy costs, said Jim Lacanna, business management developer for Global NES, a North Brunswick-based solar energy consulting company. That could mean more jobs in New Jersey — for those working at the cost-saving companies and those installing solar panels, as well as a cleaner environment as companies use their own energy instead of relying on fossil fuels.

New Jersey has more solar panels per square mile than any other U.S. state, Board of Public Utilities Commissioner Joe Fiordaliso said. Now, with subsidies such as rebates and credits, solar energy is becoming a possibility for more business owners, large and small. Renewable energy sources such as solar panels will help pave the way to a better environment, he said.

Solar panels, which tend to have a high set-up cost, might make more sense for businesses, which typically use more power than residences, said Michael Kerwin, president of the Somerset County Business Partnership. The payoff for solar panels on businesses may be a few years versus more than a decade for some households.

“You cannot do a solar project without some kind of subsidy. The trick is how to get there?” Kerwin said. “At the end of the day, you have to go through the analysis and ask yourself, “Does this make economic sense?’ ”

Readington River Buffalo Farm, off (Hunterdon) County Route 523, recently secured several solar panels to the side of a barn that protects John Deere tractors and other equipment. Now the farm has the power to harvest the sun, which will provide 100 percent of the farm’s energy.

“We are trying reduce our footprint and only leave a finger print,” Scarlett Doyle said about producing the farm’s 40,000 kilowatt hours of energy from the sun.

Readington River Buffalo Farm’s project cost approximately $275,000, said Jerry Doyle, who owns the 300-acre preserved farm with his wife, Scarlett and son Eric. In addition to the credits and rebates, the Doyles are applying the $600 they had been spending monthly on electric costs to repay the loan for the system, Jerry Doyle said. But once the loan is paid off — in five years — the price of the sun – unlike oil and gas – will be free.

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Roughly 320 people, out of 430 employed at the Maryland facility, will be let go, the company said. It is planning to keep positions in sales and marketing, research and technology, project development and business support.

BP Solar, which told Reuters in November it was planning to phase out module assembly at its Maryland plant, has been hit hard by falling prices for its solar systems.

“Solar prices declined between 40 and 50 percent since the onset of the financial and economic crisis, compressing industry margins and driving solar power towards grid competitive pricing,” BP Solar CEO Reyad Fezzani said in a statement.

“By shifting our supply to a high-quality, low-cost supply base to serve both distribution customers and large-scale projects, we have strengthened our position as a provider of competitive solar solutions with our offer of the highest lifetime value,” he added.

The company said that, with the closure of high-cost manufacturing locations, which began in the first quarter of 2009, it has cut unit costs by more than 45 percent.

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A growing body of studies detail the government subsidies, regulatory policies and private investments that have sent money flowing into the clean energy sectors of some of the leading developing countries. The most recent report (pdf), out today from the Pew Environment Group, finds that China for the first time now leads the United States and all other major countries in green energy markets. Its private investments of $34.6 billion over the past five years are almost double America’s.

China aims to spend 34 percent of its $586 billion stimulus package on green projects, as well as $100 billion to upgrade the rail and transmission grid systems that one report calls the “backbone of China’s clean energy economy.” Brazil has invested more than $11 billion into ethanol production and has created a $1 billion conservation fund to help meet its 36 percent emissions reduction pledge.

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In California alone, there are plans for 35 utility-scale projects that would generate approximately 12,000 Megawatts (MW) of energy annually — an amount of energy comparable to the combined power of ten nuclear power plants.  The Mojave Solar Project and the Genesis Solar Energy Project, both located in southern California, are two of the largest projects under consideration and are each aiming to generate 250M watts of energy. These projects are expensive, however, in terms of both dollars and natural resources required. The federal government has promised to help reduce the financial cost by allocating a portion of the stimulus plan for this purpose.  Companies that have their plants ready to be opened by the end of this year will receive a portion of the $67 billion of federal money that has been set aside for renewable energy projects (including loan guarantees and grant programs).

Despite these incentives, it is risky to undertake a large-scale enterprise like utility-scale solar power in an uncertain economic climate, as financial institutions are reluctant to be involved in billion-dollar projects.   Another issue is the fact that such solar ‘farms’ require huge tracts of land. Another challenging issue for utility-scale solar projects is the use of water.   Combined, the Genesis and Mojave projects would use 1.24 billion gallons of water per year due to the wet cooling systems involved.

An alternative to utility-scale projects is the use of distributed solar energy.  There are various types of renewable power technologies in use, but sub-utility scale power photovoltaics (PV’s) account for 98% of the distributed solar energy market.  Unlike utility-scale projects, distributed energy is solar power on a small scale and entails the installation of solar panels on the roofs of buildings.

Distributed solar power does not involve the legal red tape, the large tracts of land, or the vast quantities of water that utility-scale projects require, and has the ability to generate enough energy for homes, schools and hospitals.   Installation is easily addressed and solar panels can last for up to 30 years if well maintained.   The price of solar panels has dropped dramatically to approximately $2.40 per watt (price depending on scale of order) for silicon panels and is likely to drop even further in 2011.   Furthermore, unlike utility-scale projects, distributed solar projects such as the Southern California Edison’s Plan spread capacity evenly, distributing benefits and drawbacks.   If a utility-scale project “crashes,” it affects a huge area.  With distributed energy, only individual units are affected in the case of a power outage.

In many locations and in certain circumstances, distributed solar projects are less expensive than utility-scale solar projects because of the avoidance of both new transmission lines and line losses — the latter of which typically accounts for approximately 7% of the power shipped over transmission systems. The costs associated with utility-scale solar projects are often not included in the side-by-side economic comparison made between the two forms of solar power development.  An additional benefit of distributed solar is its ability, when developed in clusters (i.e., local micro-grids), to alleviate the need to upgrade distribution substations and add local peaking plant capacity.

As mentioned, distributed solar plans have their detractors. Solar certainly is not the cheapest source of electricity and is only effective in areas with a high percentage of sunshine.   More than 50 million Americans live in Community Associations where we might expect to see efficient adoption of distributed solar plans. But these locations commonly have policies limiting the use solar equipment due to height restrictions or other specifications regarding roofing materials.

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Over the past few weeks, some 1,300 megawatts’ worth of distributed solar deals and initiatives have been announced or approved. At peak output, that is the equivalent of a big nuclear power plant.

Two weeks ago in California, regulators authorized the utility Southern California Edison’s program to install 500 megawatts of solar on commercial rooftops. A few days later, they recommended that Pacific Gas and Electric, the dominant utility in Northern California, be given the green light for its own 500-megawatt initiative that aims to install ground-mounted photovoltaic arrays near electrical substations and urban areas.

“Distributed solar is faster on permitting, on environmental issues and interconnection to the grid,” said Arno Harris, Recurrent’s chief executive. “It offers a safety valve for utilities who don’t want to put all their eggs in one basket.”

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