FBI searches offices of Solyndra; lawmakers say they were misled about firm’s finances

By Carol D. Leonnig and Joe Stephens,

FBI agents executed a surprise search Thursday of a Silicon Valley solar company that collapsed last week, in an investigation that appeared to center on half a billion dollars in federal loan guarantees granted to the company by the Obama administration.

The search at the offices and plant of Solyndra, a California-based manufacturer of solar panels, came as Republicans on Capitol Hill demanded answers to questions about the company’s selection for the $535 million Energy Department loan guarantee. Some Democrats questioned whether the company misled federal officials about its deteriorating financial condition.

More…

COMMENTARY: Stories like this are why the American puiblic increaasingly does not trust the federal government to create jobs and solve problems.

The Obvama Administration gave this outfit a $535 million loan guarantee and touted this comoany as the future for renewable energy and jobs creation.

Looks like Obama got bamboozled. And us taxpayers are stuck with yet another bill from a corporate scamster.

SolarGate and green jobs

Solar company to file for bankruptcy despite $535 million loan guarantee

The problems with the Japanese nuclear reactors reminds us that when something goes wrong with reactors….the consequences are enormous.

All of our energy solutions require some sort of government subsidy and participation.

The real question is what do we get for our money.

We increasingly have a good idea of the downside risks of fossil fuels and nuclear power.

But some oppose the government helping make wind and solar and geothermal and bio fuels into viable energy sources. Let the market decide, they say.

If the true “negative externality” costs of nukes and fossil fuels are added onto the price of power generation, solar would be a heck of a deal.

The problem today is we think we have “cheap” energy and the renewable options are too costly. We are actually living in a fantasy land because the real costs of fossil fuels and nuclear power are hidden away with the bills coming due later.

Take the Palo Verde Nuclear Power Plant for example. Not included in the current electric rates for power generated from that facility are two enormous costs….the cost of decommissioning the plant when it is done, and the cost of storing spent fuel. Those are hidden costs because they haven’t been incurred yet. So who will pay… ratepayers? Or taxpayers? The costs are there…they just haven’t been charged through.

And if there is a massive accident at a nuclear power plant who pays for the damages?

If a solar panel falls down maybe a gopher is hurt. But if a nuke melts down an entire region of the country could be sterilized for hundreds of years.

The problem with all the safety arguments about nukes is that there is no technology that an idiot cannot defeat. And Mother Nature has a few surprises up her sleeves as well.

A very large portion of our electric demands can be met with solar…if one can overcome opposition from environmentalists who don’t want solar energy projects on public lands in western Arizona.

Hydroelectric power is another potential…but environmental opposition to dams has stopped that alternative.

Wind power is very promising….but opposition exists all over the country from the NIMBY forces.

One cannot be against fossil fuel reliance and nuclear power without supporting an alternative that will keep our lights on and our industry humming.

Appartently TEP is running out of money derived from a renewable energy surcharge on customer bills to fund the solar program.

Is there something seriously wrong with this picture?

I am finding it hard to understand whyt TEP cann’t earn a rate of return on solar systems put on people’s homes. They earn a rate of return from their coal-fired power plants. So why can’t the ACC allow them a profit from selling solar generated electricity from people’s rooftops? A kilowatt of energy production is a kilowatt of energy production, whether it comes from a 500 megwatt power plant in the Four Corners area, or a 5 kw rooftop system.

If the solar program is only going to function by subsidizing it with other ratepayers’ money, it is doomed.

TEP urges solar rebates be reduced
David Wichner Arizona Daily Star | Posted: Thursday, July 15, 2010 12:00 am |

Tucson Electric Power Co. is asking state regulators to lower subsidies for residential customers who install solar arrays, saying the utility is running out of funding for the rebates amid a surge in demand.

Nearly 1,100 local homeowners have reserved TEP’s SunShare rebates for solar photovoltaic (PV) systems this year, surpassing the total number of residential solar power systems completed over the previous nine years combined, TEP said.

TEP said residential customers have reserved more than $12.2 million of the $17.6 million in upfront SunShare incentives available this year, and at the current rate that money will run out in August. The rebates are funded by monthly surcharges paid by all electric customers.

Rebate requests from local businesses, meanwhile, have exceeded the $5 million budget for those upfront incentives. TEP business ratepayers interested in installing solar systems are being placed on a waiting list.

In response to the surging demand, TEP said it has asked the Arizona Corporation Commission to reduce residential SunShare rebates from $3 to $2.25 per watt for grid-tied PV arrays, for rebate applications received after the close of business on July 7.

That would cut the rebate on a 3-kilowatt system from $9,000 to $6,750.

The ACC could take action on TEP’s proposed changes as soon as an open meeting set for July 27-28.
“We looked at the trend and made the proposal that the incentive money would last longer if we lowered the rebate,” TEP spokesman Joe Salkowski said.

Reducing the rebate will allow more customers to take advantage of the program, TEP said.

TEP proposed several alternatives for commercial customers, subject to state approval. The company said it could wait until new resources are available next year; restore upfront rebates by tapping funds in a separate, “performance-based incentive” program normally paid out over 20 years, or raise more money through customer surcharges.

The surge in demand for TEP’s SunShare subsidies has been driven in part by reduced costs for solar power systems, said David Hutchens, a vice president of TEP and parent UniSource Energy Corp.

Prices for installed PV systems in the Tucson area have dropped to about $5 per watt from nearly $12 per watt in 2006, while TEP’s incentives have remained unchanged, TEP said.

A local solar system provider and longtime industry advocate said lowering the rebate makes sense.
“With the price of the PV systems dropping … it makes sense to drop the rebates. It allows more people to participate,” said Katharine Kent, president of The Solar Store.

“Electric rates continue to increase, so consumers (who install solar) are going to get their money back,” Kent added.

At the same time, she said, the solar industry should be looking beyond government incentives.
“It’s appropriate for government to help get an industry up and running, but for this industry to survive in the long term, we need to survive without incentives,” she said, adding that ratepayers also need to recognize the true costs of electricity.

TEP said the pace of rebate applications quickened after Phoenix-based Arizona Public Service Co. reduced its PV incentive levels to $1.95 per watt in April, with approval from the Corporation Commission. That encouraged PV installers to step up their marketing efforts in Tucson, TEP said.

DID YOU KNOW

In late January, Trico Electric Cooperative said it was at least $1 million behind on paying its solar rebates, leaving some Trico customers waiting months for thousands of dollars in promised rebates. Trico won approval to raise its monthly renewable-energy customer surcharge and cut back its rebates.

solar panels on commercial building

One of the things that puzzles me about Tucson is why it isn’t the solar capitol of the region?

You’d think that between all our sunshine, the environmentally oriented public and the desperate need to develop a real economy in the region, there would be a huge push to maximize solar energy development in the area.

The only thing that seems to be pushing solar development in the region is the Arizona Corporation Commission’s mandate that regulated electric utilities must produce 15% of their energy from renewable sources by 2025.

Tucson Electric Power has several large projects in the works. TEP will add 1.8 megawatts of additions to TEP’s photovoltaic plant near the coal-fired Springerville Generating Station which alread has 4.6-megawatts of capacity. The Springerville project is one of the nation’s biggest utility-owned solar plants. TEP will also construct a 1.6-megawatt solar array at Tucson International Airport.

The City of Tucson has a number of solar projects in the works for city buildings, and has proposed that a major solar facility be located on lands it owns in the Avra Valley. The city’s Avra lands are a perfect site for a large solar facility because the property was formerly irrigated farm land the city bought for water rights decades ago.

Davis Monthan AFB is in the process of looking at a major solar project to supply the base with electricity, similar to one developed for Nellis AFB in Nevada.

There are lots of pending applications for huge solar projects north of Tucson on state lands along the I-10 corridor, mostly in Pinal County.

But one does not get the sense that there is a really major push to maximize solar energy development in the area.

One reason may be that TEP is heavily invested in coal-fired power plants in northern Arizona and must recapture its investment in those plants before relying more heavily on solar. Were that utility facing major energy demand growth and needed another new major power source, more solar might make sense. Oddly growth could fuel more solar development in the city.

Rather than build giant new central generating facilities, some utilities have opted for more “distributed generation” meaning small sources all over the place. In Sacramento, for example, their electric utility leases warehouse rooftops for solar panel generation. Californbia has a mandate that their utilitiers get 20% of their energy from renewabkle sources by 2016.

When one flies in or out of Tucson one thing is obvious…there are a lot of large flat roofed buildings in the industrial and commercial areas of the city. A lot of solar energy generation capacity could be developed on these rooftops without destroying virgin desert.

There are some innovating financing options for governments wanting to go solar. Called “third party financing” companies will come in and install and operate solar systems at “host” sites, with the host agreeing to buy solar generated electricity from the project for 20 years.  This is a great benefit to governments who get a secure flat rate for their energy. Since the governments cannot get the tax credits available for solar installations, the third party financing outfits get the tax credits. An example of this type of project is a deal the Sahuarita School District recently made. Tucson’s school districts could insulate themselves from rising energy costs by doing third party financing deals and putting solar systems on the roofs of all area schools. Add the U of A, Pima College, Pima County and all the other governments in the area and that’s a lot of solar energy development potential in the region.

This gets really interesting when you consider that most schools are closed in the summer, and their rooftops could be generating summer peak period energy to power everyone else’s air conditioning, making money for the third party solar generators.

One of the drawbacks to more solar energy development is Arizona’s approach to selling solar energy back to the grid from homes and businesses. The sell-back rate is an average number, and doesn’t recognize the difference between costs of generating electricity during summer peak demand periods.

In some jurisdictions the amount one can get paid for selling home-generated energy back to the grid is based on time-of-day pricing. For example, solar energy which is generated during the day in the summer when energy production costs are the highest brings a premium price. Not so here.

A huge energy demand exists in the region due to summer air conditioning needs. Using solar to power that air conditioning demand makes enormous sense. Having time-of-day pricing for both energy use and rooftop energy generation would radically alter the economics of solar.