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Our inaugural podcast covers a piece of highly charged news: the preliminary verdict from the Department of Commerce on the Anti-Dumping (AD) complaint which resulted in a 31 percent levy for most of the major Chinese panel manufacturers. We covered the verdict yesterday, as well as feedback from both sides of the dispute. Here's the text of the Department of Commerce fact sheet.

In today's podcast, Scott Clavenna, Greentech Media's CEO, leads a brief discussion on the short- and medium-term effects of the preliminary ruling and the story angles GTM will cover in the coming weeks.

We look forward to providing these podcasts as a regular feature and bringing you the events of the week in a different format. You'll hear from GTM research analysts, editors, reporters and the occasional special guest. Stay tuned.

The U.S. Department of Commerce (DOC) levied a second round of preliminary tariffs against Chinese solar module imports in the ongoing trade war between U.S. solar manufacturers and their Chinese counterparts. The following are the anti-dumping tariffs handed down in the ruling:

• Suntech: 31.22 percent
• Trina: 31.14 percent
• Named Chinese firms: 31.18 percent
• Firms that did not provide info to Dept. of Commerce: 249.96 percent

These anti-dumping tariffs will be compounded by the countervailing duties that the DOC levied on March 20. The countervailing duties are listed below:

• Suntech: 2.90 percent
• Trina: 4.73 percent
• Everyone else: 3.59 percent

The following is a series of comments from GTM Research’s Senior Analyst, Shyam Mehta on how the tariffs will affect Chinese suppliers in the U.S.
 

• “While the margins are not as high as those seen in many previous U.S.-China antidumping cases (electrical blankets, steel grating), they are certainly much higher than Chinese manufacturers would have hoped for,” said Mehta. “Stacked onto the margins for countervailing duties, they amount to levels of 35 percent to 36 percent, which is significant.”
• “Keep in mind that this is a preliminary decision. We expect Chinese manufacturers and CASE representatives to contest the findings in the days ahead.”
• “The margins were obviously driven in part by the Department of Commerce’s choice of the ‘proxy economy’ to estimate costs, as China is considered a ‘non-market economy.’”
• “At these margins, China-based manufacturers would certainly have to raise U.S. prices to turn a profit. It is not feasible for them to maintain prices at tariff-free levels and still be profitable. In the short term, this is likely to lead to module price increases in the U.S. which would serve to dampen demand and installation growth. If the Chinese were to absorb the tariff, it would place their costs close to parity with many U.S.-based suppliers.”“However, Chinese firms are hardly likely to stand still. Broadly speaking, they have two strategies: set up cell manufacturing outside China, or use the tolling services of Taiwan-based suppliers to turn wafers into cells there, and then assemble the modules in China. Both strategies would allow the Chinese to bypass import tariffs. We estimate that tolling cells to Taiwanese firms would increase Chinese costs by 6 percent to 12 percent, which is meaningful but manageable.”
• “Given this, we do expect that the decision will result in at least incremental investment in domestic manufacturing by Chinese firms. However, there are other, lower-cost manufacturing locations that these firms could set up manufacturing in, such as Mexico and Taiwan, for example that would still allow them to price their modules below that of U.S.-based suppliers. Therefore, we see the impact of this decision on U.S. manufacturing as positive, but spurring limited investment in the future and likely only temporary relief for existing U.S.-based suppliers.”

For further reading on the trade case from GTM Research and Greentech Media, visit here, and to read the Department of Commerce fact sheet, go here.

Getting later-stage VC funding for a photovoltaic module company with an unproven technology can't be easy. It might barely make any sense to launch a startup in the current solar market, either.

But Solexel, a Milpitas, California-based solar firm still in stealth, just closed on a $25 million C round, according to an SEC filing.

The firm has raised funding from Kleiner Perkins, Technology Partners, DAG Ventures, The Westly Group, EcoFin, Spirox, Oakhill, Univest, and Northgate Capital, closing a $15 million A round in 2007, an undisclosed B round in 2008, and some additional funding from The Westly Group in 2010. The company looks to have more than 100 employees. The CFO, Jonathan Michael, is the former CFO of Solyndra.

The firm also received a $13 million Sunshot grant in its Extreme Balance of System Hardware Cost Reductions section, along with partner Owens Corning, to "develop a building-integrated PV roofing shingle and installation accessories for residential sloped-roof applications."

Solexel received about $3 million in DOE incubator money in late 2008 with this description:

Solexel plans on commercializing a disruptive, 3D, high-efficiency mono-crystalline silicon cell technology, while dramatically reducing manufacturing cost per watt. At the end of this project, Solexel plans to deliver a 17-percent to 19-percent efficient, 156x156 mm2, single-crystal cell that consumes substantially less silicon per watt than conventionally sliced wafers.

In any case, it seems that Solexel falls in the very-thin-silicon, kerfless-wafer school along with Twin Creeks, AstroWatt, SiGen, Crystal Solar and 1366.

Last August, we reported that Solexel, the former Soltaix, was scouting out manufacturing sites in Malaysia's Senai Hi-Tech Park to build a multi-gigawatt-capacity photovoltaic cell manufacturing plant. The company will be in the business of building solar modules, according to a conversation with Ryan Brown, Director of Corporate Development at Solexel, in an otherwise uninformative phone interview.

The firm's LinkedIn blurb says its "approach is based on a disruptive, IP-protected, high-efficiency technology which reduces silicon consumption by a significant margin compared to the current paradigm and substantially eliminates dependency on the silicon feedstock, ingot, and wafer supply chain. Active cell area is made through the use of plentiful, inexpensive silicon gas, as opposed to costly bulk silicon wafers."

Judging by the NREL disclosures and patent information, Solexel is or was also working on an epitaxial lift-off scheme using Porous-Silicon-Process (PSI process) technology licensed from the Max Planck Society, as well as some 3D wafer features, including prisms and a "honeycomb" array.   

Here's the patent for three-dimensional solar cells with honeycomb prisms. Here's a patent for manufacturing three-dimensional thin film silicon solar cells. And here's a patent for releasing a thin film substrate from a reusable semiconductor template. Here are links to some other Solexel patents. Most of the patents are invented by Mehrdad Moslehi, the founder and CTO of the firm.  

One of Greentech Media's solar analysts was able to determine this about the firm: "They are similar to Crystal Solar in that they are depositing crystalline silicon via the gas phase onto a reusable substrate with a release layer (probably porous silicon)" but Solexel is "trying to save the cost of texturing by growing the light trapping texture into the "wafer" itself by having a substrate with a pyramid-like surface topography."
 

When Solexel was formed, solar modules were selling in the neighborhood of $4.50 per watt. Today you can buy a reputable brand's module for less than $1.00 per watt.

This is the new solar landscape that Solexel is going to have to play in -- a landscape the firm and its investors might not have imagined when it was first formed.

Now that AMI has become more of a steady-state business in the U.S., Gary High from Landis+Gyr talks about growth opportunities in emerging markets and innovation with utilities in the U.S.

If, as currently predicted, Southern California Edison is unable to get its 2,200-megawatt San Onofre Nuclear Generating Station (SONGS) back in service in time for the heat of the summer, California’s power generation and delivery system will be profoundly tested.

“An extended outage of both SONGS units may create local reliability issues during heat waves for San Diego and parts of south Orange County,” the California Independent System Operator Corporation (CAISO) said. “Parts of the grid serving the Los Angeles Basin may also be stressed during high demand periods.”

To meet Southern California’s demand for electricity without hamstringing its economy, the ISO is making plans that will put into action idled power plants, new transmission, the state’s best practices, renewables and cutting edge grid tools.

“Southern California Edison’s four replacement steam generators at their San Onofre Nuclear Generating Station failed in less than two years of operation, while the original equipment operated for 28 years,” noted a just-released Fairewinds/Friends of the Earth report.

SCE has, according to the Fairewinds report, acknowledged replacing the steam generators as “a strategic decision to avoid a more thorough license amendment and review process” by the Nuclear Regulatory Commission (NRC).

The right solution to the vibration problem that led to the shutdown, according to Fairewinds, requires “major modifications with repair and outage time that could last more than eighteen months if Edison and Mitsubishi are even able to repair these faulty designed steam generators,” adding, “the safest long-term action is the replacement of the San Onofre steam generators.”

While SCE continues to work with the NRC to bring SONGS back, the ISO is working to minimize impacts.

“We are not the safety experts. That’s the NRC,” said ISO Director of Communications and Public Relations Stephanie McCorkle. “Our job is to plan.”

The ISO is, McCorkle noted, doing “contingency planning in coordination with the Governor’s office, state energy agencies, federal officials and the utilities [because the loss of SONGS] reduces local electricity supply and the ability of the high voltage grid to import power into the region that already has limited transmission lines.”

McCorkle was blunt. Without contingency planning and mitigation of that 2,200-megawatt loss, she said, “We would be in the hole.”

The focus of the ISO’s planning has been two gas-fired power plant units previously closed as a result of the state’s efforts to clean up its power supply and two under-construction transmission lines.

The ISO considered it “absolutely critical to get units three and four at the Huntington Beach Power Plant available for dispatch, and that was done as of Friday,” McCorkle said.

“The Huntington Beach units not only add 452 megawatts of capacity in the LA Basin,” the ISO reported, “but also enable 350 megawatts of additional imported power to transfer into San Diego.”

Bringing these units back will cost SCE and San Diego Gas and Electric (SDG&E) $2.5 million per month. Air quality regulators have permitted their service through November 1.

Completing the Sunrise Powerlink and Barre-Ellis transmission lines on schedule in June, before the summer’s peak demand hits, McCorkle said, will “strengthen the transmission system in general and allow us to import more power from the Southwest.”

Without these mitigations, McCorkle said, the LA Basin would be short 240 megawatts on a high-demand, hot day and the San Diego area would be short 337 megawatts. With them, she said, we only have reserve margins of thirteen megawatts in San Diego and of 212 megawatts in the LA Basin.

The ISO has also secured $9 million in funding from the California Public Utilities Commission (CPUC), McCorkle said, to reactivate its Flex Alert conservation campaign. Radio and TV ads will begin appearing in late June that will teach consumers conservation measures for Southern California’s 4 p.m. to 6 p.m. “air conditioner rush hour,” when load is most likely to exceed ISO capacity.

Finally, McCorkle said, the ISO and the utilities are “encouraging more participation in local voluntary demand response (DR) programs.” As a result, recent SCE and SDG&E smart meter programs may pay off sooner and bigger than expected in heading off rolling power outages.

“Because SDG&E has 100 percent smart meter penetration,” McCorkle said, “it can track how much customers are cutting back.” Customers who conserve will, for the first time in California, be compensated without having to enroll in a program. It is “a way for people to respond and be compensated,” she explained. And conserved energy, she added, “is counted like any other resource. This is where people power is going to pay off.”

The ISO is also, McCorkle said, “analyzing the potential long-term implications of being without the San Onofre units.” Its conclusion, she said, is “there aren’t adequate resources to replace San Onofre permanently. We’re just trying to fill the holes as best we can."

This video was part of the ISO's last Flex Your Power campaign.

Here's a reprint of the fact sheet just issued by the Department of Commerce on the preliminary decision on the anti-dumping complaint from SolarWorld. (Click on the images to enlarge.)

Shyam Mehta, Greentech Media's Senior Solar Analyst:

• While the margins are not as high as those seen in many previous U.S.-China antidumping cases (electrical blankets, steel grating), they are certainly much higher than Chinese manufacturers would have hoped for. Stacked onto the margins for countervailing duties, they amount to levels of 35 to 36 percent, which is significant.
• Keep in mind that this is a preliminary decision. We expect Chinese manufacturers and CASE representatives to contest the findings in days ahead.
• The margins were obviously driven in part by the DOC's choice of the "proxy economy" to estimate costs, as China is considered a "non-market economy".
• At these margins, China-based manufacturers would certainly have to raise U.S. prices to turn a profit. It is not feasible for them to maintain prices at tariff-free levels and still be profitable. In the short-term, this is likely to lead to module price increases in the U.S. which would serve to dampen demand and installation growth. If the Chinese were to absorb the tariff, it would place their costs close to parity with many U.S.-based suppliers.
• However, Chinese firms are hardly likely to stand still. Broadly speaking, they have two strategies: set up cell manufacturing outside China, or use the tolling services of Taiwan-based suppliers to turn wafers into cells there, and then assemble the modules in China. Both strategies would allow the Chinese to bypass import tariffs. We estimate that tolling cells to Taiwanese firms would increase Chinese costs by 6 to 12 percent, which is meaningful but manageable.
• Given this, we do expect that the decision will result in at least incremental investment in domestic manufacturing by Chinese firms. However, there are other, lower-cost manufacturing locations that these firms could set up manufacturing in, such as Mexico and Taiwan, for example that would still allow them to price their modules below that of U.S.-based suppliers. Therefore, we see the impact of this decision on U.S. manufacturing as positive, but spurring limited investment in the future and likely only temporary relief for existing U.S.-based suppliers.  

Suntech (NYSE: STP):  "These duties do not reflect the reality of a highly-competitive global solar industry. Suntech has consistently maintained a positive gross margin as revenues are higher than our cost of production. We will work closely with the Department of Commerce prior to their final decision to demonstrate why these duties are not justified by fact," said Andrew Beebe, Suntech's Chief Commercial Officer. "As a global company with global supply chains and manufacturing facilities in three countries, including the United States, we are providing our U.S. customers with hundreds of megawatts of quality solar products that are not subject to these tariffs," continued Mr. Beebe. "Despite these harmful trade barriers, we hope that the U.S., China and all countries will engage in constructive dialogue to avert a deepening solar trade war. Suntech opposes trade barriers at any point in the global solar supply chain. All leading companies in the global solar industry want to see a trade war averted. We need more competition and innovation, not litigation," continued Mr. Beebe.

Yingli (NYSE: YGE)  “We felt validated after the Department of Commerce’s preliminary CVD decision in March, which determined that we are not being substantially subsidized as the petitioners claim. Today’s preliminary anti-dumping tariff recommendation was not unexpected given the historical tariff levels in these types of cases. We will continue to aggressively defend ourselves and remain optimistic that we will persevere in the final determination,” said Robert Petrina, Managing Director of Yingli Green Energy Americas, Inc., the Company’s operating subsidiary in the U.S. “The overwhelming majority of the U.S. solar industry supports access to affordable solar energy and fair market trade. We are grateful to the tens of thousands of U.S. solar installers, developers, manufacturers, and suppliers who stand behind us today.” “As we’ve stated before, tariffs are disruptive and destructive for the entire solar industry,” said Mr. Liangsheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy. “We remain fully committed to serving the U.S. market irrespective of the outcome

“The verdict is in,” said Gordon Brinser, president of SolarWorld. “In addition to its preliminary finding that Chinese solar companies were on the receiving end of at least 10 WTO-illegal subsidies, Commerce has now confirmed that Chinese manufacturers are guilty of illegally dumping solar cells and panels in the U.S. market. We appreciate the Commerce staff’s hard work on this matter.”
 
Brinser further stated, ““Commerce today put importers and purchasers on notice about the consequences of importing illegally subsidized and dumped products from China. We understand U.S. Customs and other federal agencies are already aggressively enforcing the countervailing tariffs in order to prevent circumvention, and we expect they will be equally vigilant with the anti-dumping tariffs.”

Tom Hecht, president of SCHOTT Solar, which produces solar PV panels in Albuquerque, NM: “The solar industry has been awaiting today’s decision from the U.S. Department of Commerce – and for good reason.  U.S. project developers and investors need clarity and confidence to make critical supply decisions. Today’s decision brings clarity – but creates another issue for U.S. developers. As they look to keep projects on track over the next three to four months, many will be trying to close on sources for PV panels not subject to the new tariff structure,” said Tom Hecht, President of SCHOTT Solar, which manufactures Buy-American compliant, high quality PV modules in Albuquerque, N.M.  “SCHOTT has over 50 years’ experience in solar. With factory sites in the U.S., Europe and Asia, SCHOTT Solar has been preparing to supply modules to our customers without interruption, regardless of the government decision." Hecht also noted, “Longer term, the U.S. solar industry and government must focus on energy policies that will provide long-term certainty to the market and continue to encourage investment.  Now is the time to support the industry in its efforts to create energy security for our nation and create additional jobs in manufacturing and services.”

Rhone Resch, president and CEO of the Solar Energy Industries Association (SEIA): "The solar industry calls upon the U.S. and Chinese governments to immediately work together towards a mutually-satisfactory resolution of the growing trade conflict within the solar industry.  While trade remedy proceedings are basic principles of the rules-based global trading system, so too are collaboration and negotiations. Importantly, disputes within one segment of the industry affect the entire solar supply chain--and these broad implications must be recognized.  In addition, the U.S. solar manufacturing base goes well beyond solar cell and module production and includes billions of dollars of recent investments into the production of polysilicon, polymers, and solar manufacturing equipment, products which are largely destined for export.  If the U.S.-China solar trade disputes continue to escalate, it will jeopardize these U.S. investments. Given these broader implications, it is imperative that the U.S., China, and other players in the dynamic global marketplace work constructively to avert or resolve trade disputes that will ultimately hurt consumers and businesses throughout the solar value chain."

Canadian Solar CEO Shawn Qu: “Canadian Solar is disappointed by today’s decision from the DOC. Imposing an obligation to post large bonds on solar imports at this preliminary phase of the antidumping investigation is unwarranted and will inflict losses on the entire solar industry. Limiting trade in solar products will cause panel prices to increase, defeating America’s goal of driving down costs and hindering its move toward a clean energy future. Our first priority should be to support the health of the industry as a whole through the financing and installation of solar, which is the key driver to expanding jobs in the US solar market.”
 

Jigar Shah, the President of CASE, stated, “Today SolarWorld received one of its biggest subsidies yet – an average 31 percent tax on its competitors. What’s worse, it will ultimately come right out of the paychecks of American solar workers. Fortunately, these duties are much lower than the 250 percent tax that SolarWorld originally requested. This decision will increase solar electricity prices in the U.S. precisely at the moment solar power is becoming competitive with fossil fuel generated electricity.”

“At the same time, CASE recognizes that today’s decision is ‘preliminary.’ Between now and a final decision before the end of the year, there are many issues that will be addressed and whose resolution would lead to a significantly lower tariff. CASE will continue to fight SolarWorld’s anti-consumer and anti-jobs efforts to ensure a better result for America’s solar industry,” continued Shah.

 

According to Kevin Lapidus, Senior Vice President Legal and Government Affairs for SunEdison, “The U.S. solar industry has been growing, adding new solar electric systems, creating jobs and investing billions of dollars in the U.S. energy infrastructure. By increasing the price of modules and therefore the price of solar energy, these tariffs will undermine the success of the U.S. solar industry and reduce the ability of solar energy to compete with electricity generated from fossil fuel.”
 

Ken Button, co-founder and President of Verengo Solar, stated, “As the second largest residential solar company in the country, Verengo has helped thousands of middle class families save money during tough economic times by installing solar.  Because our customers are very price sensitive, today’s decision to increase costs for solar cells and panels will make it harder for American families to access solar.”   


Tore Torvund, CEO of REC Silicon, with 500 solar jobs in the United States, commented, “This decision is short-sighted in the extreme and a severe setback for President Obama’s clean energy program with its goal of expanding the use of solar and other renewables. Further, we are very concerned about the increased likelihood that China will retaliate with their own tariffs on polysilicon exports from U.S. producers such as REC Silicon. Triggering a solar trade war is not in the best interests of the U.S. solar industry or its customers.”

Tom Gutierrez, CEO of GT Advanced Technologies, with another 500 solar jobs in the United States, stated, “Today’s Department of Commerce decision subsidizes a German-owned company to the tune of an average 31% tax on its competitors and potentially harms U.S.-headquartered companies like GT Advanced Technologies, Dow Chemical, REC Silicon and MEMC. Ultimately, protectionism fosters dependence and high-cost business models, rather than the innovation and agile approaches required for companies to succeed in the global marketplace. Now is the time for the U.S. solar industry to move forward with the development of advanced technologies that create jobs and enhance our energy security—in spite of this new barrier. American solar manufacturing can compete without special protections.”
 

Jesse Pichel with Jeffries Group Inc., “Environmentalists and the unemployed should be equally disappointed with this decision because lower cost solar panels make solar more competitive with dirty fossil fuels. It should be clear by now that there are more U.S. jobs on the installation side of the solar business than on manufacturing. These cases have a chilling effect on business and it will linger for a long time. It’s unfortunate that SolarWorld has taken this scorched Earth approach and that they are distracting from the growth of U.S. jobs and affordable solar energy.”
 

 


 

Although the official pronouncement has not been made, we've learned from sources close to the case that the Commerce Departments's preliminary decision on SolarWorld's solar dumping petition against China has been handed down in a case that had the potential to rock the U.S. solar market's status as an emerging growth market.

Here are the preliminary tariff numbers in the anti-dumping piece of the case:

• Suntech: 31.22 percent
• Trina: 31.14 percent
• Everyone else: 31.18 percent

In short, China solar manufacturers have been accused of unfair trade practices in subsidizing solar panel manufacture and selling panels in the U.S. below their cost. Cheaper Chinese solar panel pricing has been a boon for consumers and solar installers, but a competitive challenge for the few crystalline solar manufacturers in the U.S.

SolarWorld accuses Chinese firms of dumping. Others suggest that China has a legitimate cost advantage. For the purpose of AD investigations, dumping occurs when a foreign company sells a product in the United States at less than fair value.

On March 20 of this year, The Department of Commerce's preliminary verdict on unfair subsidies for Chinese solar panels was handed down, along with what amounted to low tariffs for the Countervailing Duties (CVD). The preliminary determination indicated the DOC’s intention to impose a duty of 4.73 percent on U.S. imports from Trina Solar, 2.9 percent from Suntech, and 3.59 percent from all other remaining Chinese manufacturers.

The AD (Anti-Dumping) tariffs will be added to the CVD (Countervailing Duties) tariff.

The CVD tariffs are retroactive. We're waiting for word on the AD duties and whether they are retroactive.

Gordon Brinser, president of Oregon-based SolarWorld Industries America, had this to say: “This is a bellwether case. It underscores the importance of domestic manufacturing to the U.S. economy and provides a clear indication of whether our country will be a global competitor in clean technologies or outsource them to China. The Commerce Department has already determined that the U.S. solar industry has been harmed by China flooding the market with illegally subsidized goods, and we are in need of relief that counts.”

Clyde Prestowitz, president of the Economic Strategy Institute, added this: “The president has said he will insist on a level playing field for U.S. industry and has said that America always wins when the playing field is level. Well, this week is the week when the administration must decide how to respond to China's industrial policy for solar panels. This decision will tell us whether Obama means business or whether all the activity around the creation of a trade enforcement unit is just a mirage.”

An anti-dumping tariff of 30 percent together with the CVD tariff could mean a difference of roughly $0.30 per watt on solar panel prices. Chinese module manufacturers could ship cells and modules through Taiwan at a cost of $0.06 to $0.08 a watt, which might help Taiwanese solar cell makers like Neosolar or Motech.

A report from The Brattle Group looked at 50-percent and 100-percent tariff scenarios and found that a 50-percent tariff will effectively shut the majority of Chinese imports out of the U.S. and result in a job loss of 15,000 to 50,000 -- even accounting for production gains in the U.S. The report also considers the impact of Chinese retaliation in importing polysilicon, which could result in a loss of 11,000 jobs in 2012, for a total of up to 60,000 jobs lost by 2014. The author of the report did acknowledge that there would be some gains among U.S.-based module producers -- albeit at higher module prices.

The Center for American Progress (CAP), a left-leaning think-tank, put out a release yesterday that considered if the "U.S. solar market would be much better off if SolarWorld would drop the petition and allow the U.S. government to negotiate a private solution with China." Their analysts' take was that "if U.S. companies drop trade petitions in response to China’s real or implied threats, then capitulation wins out over negotiation -- and capitulation is a losing game. As a result of this proposed balancing exercise, CASE expects that a bilateral negotiation would result in much lower tariffs (compared to what the U.S. Department Commerce might impose) or a price floor, possibly in exchange for Chinese promises to reduce or eliminate the contested subsidies. But such a balanced outcome is highly unlikely, either in the case of the solar industry or in the many other cases in which U.S. companies face unfair Chinese trade competition."

CAP concludes that the U.S. cannot capitulate to China’s solar market ambitions.

Hari Chandra Polavarapu of Auriga Research released a research note on the trade case, saying, "We have written extensively on this issue as part of industry debate and our viewpoints largely converge with Gordon Brinser/CASM that the insidious and predatory nature of Chinese state support (via subsidies, mispricing/misallocation of capital) has emasculated global solar PV manufacturing while propping up its large domestic base, which is littered with uncompetitive/unviable companies. Free of rules, China's state-sponsored capitalism in solar PV manifests as a massive employment welfare scheme engaged in asymmetric/unrestricted warfare against overseas competition."

Note that these tariffs and decisions are preliminary and can be decreased, refunded or increased in a final review by the Commerce Department.

A tsunami of Green Button applications is coming to an iPad, Android phone or computer near you, if you happen to be one of the 30 million or so Americans who has a utility that supports the Green Button initiative.

The Green Button, which was announced last fall, is a feature that allows residential and commercial customers to download detailed energy-use information in a standardized format to better manage electricity consumption and cost.

The U.S. Department of Energy has a total of $100,000 up for grabs for the developers of some of the best apps, which will be judged in the coming weeks by a team of experts.

One of the prizes is a popularity contest based on which app can get the most votes online. There are 55 apps in total, covering everything from assessing rooftop solar PV for your home to small business energy management applications.

There is a range of applications, but there is also an overwhelming amount of overlap. The bulk of the apps allow people to upload their Green Button data to the application and view it in some shiny graph format. A lot of the functionalities, such as getting an alert if your bill or energy use goes over a certain threshold, are increasingly being offered directly through utilities. Also, it is important to note that the apps that are entered into the contest are not the entire suite of apps that leverage Green Button data. 

Most apps in the contest allow people to track overall usage, but a handful are focused squarely on vampire power, a term for energy use caused by appliances that are sucking standby power when they’re not in use. RemindMeGreen is an app that sends you a reminder to shut things down totally when they’re not in use. There’s also the literally named Exploring Background Energy Use that does just that.

Looking into appliance energy use is a steady focus of many of the apps, and while it might be interesting to some people, it is vastly overrated. Few of these apps, in their current iteration, seem to link to current rebates through governments and utilities allowing people to replace their energy-sucking appliances. Also, newer appliances just aren't the energy hogs they used to be. 

Plus, you’re just not going to turn your refrigerator off at night. Knowing your refrigerator is using twice as much energy as it’s meant to is helpful, but just knowing how much energy your refrigerator is using is less helpful.  

Many of the savviest energy management companies have learned the hard way what many of these app developers have missed: few people care about crunching their energy data. People will engage a few times to get a little insight, then they’re not coming back.

A question that could have maybe been asked more often when developing some of the apps is, “Who cares?” Does your mother care about this stuff? The average college kid? Your grandmother? Who pays the electricity bill? Who is this app for? Who has time for this?

Give ‘Em Something They Can Use

Generally speaking, people don’t like their utility or thinking about their utility usage. What people do like, though, is control. And there are some apps in the contest that offer that.

Schneider Electric’s Wiser app allows homeowners to control their Wiser thermostat and smart plugs, along with the ability to see their energy usage. WattCafe brings in weather data and provides detailed information on how to best set your AC to save money.

Other apps also leveraged weather data. One such example is Energy Forecaster, which lets people see how much energy or money they can save for lowering or raising their AC settings. However, the app relies too heavily on kilowatt-hours, a metric which means nothing to the average person.

Then there is a suite of evaluation apps for electric vehicles or rooftop solar. Some other apps integrate tracking and monitoring with helping a person evaluate if an EV or solar is right for his or her lifestyle. While the apps could be helpful, the question remains whether people are searching for an app to evaluate rooftop solar or buying an EV.

Building on the success of Efficiency 2.0, which was recently acquired, there are also a handful of apps that leverage rewards or points for energy saved. And of course, there are various competition apps, or competition is built into some of the more general apps.

In one of the boldest proclamations of the contest, Urbien Energy Referee assures users that “No one says you can’t save the world while destroying your friends’ self-esteem at the same time.” Good to know.

Novel Apps Peek Through

A few apps took a totally different approach. Watt@Home leverages Foursquare to build a profile of when you’re home and away to help you understand vampire power. Obviously it’s focused on the set of people that check in every time they get home, which leaves out a vast swath of the population (read: people over 30.)

VELObill looks to replace the utility bill experience, a worthy goal indeed. It is one of the few apps that clearly states that it will help people find the cost and payback of energy efficiency upgrades and then link you to a local contractor. How the contractors are vetted, however, is not clear from first glance at the app.

Peaktweak allows users to understand their peak usage and see where they can shift use. The app is useful in places where people might be considering peak pricing plans, but those places are still few and far between, so this app is likely ahead of its time. 

Melon Power belongs to a group of apps that is zeroing in on small and medium commercial – an untapped market that could benefit the most from Green Button. Melon Power offers Energy Star benchmarking, the only app of its kind in the contest.

But there are other small business apps, including BEST application, eEnergy Manager, Power Drop, Watt Ease and GEMS, the latter of which can help businesses evaluate energy efficiency upgrades and track energy use. The small business apps are some of the most focused on actionable information, rather than just presenting data. 

The apps are just the beginning of what will be available for Green Button. What is missing from the competition are the most active players in the space that are already supporting Green Button, including Opower, Tendril, eMeter and Aclara.

Although the applications aren’t incredibly novel, considering what’s already in the marketplace, they show the various ways to skin a cat. There will be more than one way to provide a basic level of insight for the average consumer, but information is truly just one piece of the puzzle. The best apps will make people's lives easier, and maybe save some money at the same time. 

Apparently, the energy apps that completely knock our socks off are still off in the future.

A decision at the California Public Utilities Commission (CPUC) on May 24 could determine the future of distributed generation (DG) and, especially, of rooftop solar in the state.

The decision involves two questions, a legality explicitly before the commission and an implied dispute between the state’s three investor-owned utilities (IOUs) and renewables advocates.

California has a net energy metering (NEM) program that allows owners of distributed generation systems of up to one megawatt in capacity, like small wind turbines, combined heat and power systems and rooftop solar systems, to reduce their electricity bills.

For the kilowatt-hours they send to the grid, system owners’ meters turn backwards as they are credited at the same retail rate they pay for the kilowatt-hours they consume.

When California established its NEM program in 1995, it imposed a 0.1 percent cap but used the ambiguous language of “aggregate customer peak demand” to define what the total megawatts of net metered systems should be divided by to calculate the cap percentage. And that calculation remained undefined, even as the CPUC expanded the cap to today’s 5 percent.

The differing methods used by the IOUs to calculate the bottom term of the cap equation, and the differing percentages thereby obtained, were recently observed by the Interstate Renewable Energy Council (IREC) which, among its other activities, acts as a watchdog group on U.S. net metering programs. IREC filed a motion asking the CPUC for clarity. Commission President Michael Peevey issued a proposed decision April 5.

In it, he noted the legislature had “several goals” in creating the NEM Program, “including encouraging substantial private investment in renewable energy resources and stimulating in-state economic growth.”

He pointed out several differences in how the IOUs calculate the percentage of their NEM, but noted one key commonality: PG&E, SCE and SDG&E all use “coincident” peak demand. Renewables industry advocates argue vehemently in favor of “non-coincident” peak demand.

Coincident peak demand is the designated period when all sectors (residential, commercial and industrial) reach their maximum electricity consumption together. It is the time period when the state’s consumption peaks.

Non-coincident peak demand is the sum of the peaking demand of each individual customer across the three sectors. Residential peak is typically late afternoon, commercial peak is early mid-afternoon, and industrial peak can be at night. It is a larger number because that sum of peaks at different time periods is greater than the total peak demand at any one time of the day.

The installed DG capacity eligible for NEM is the same. Dividing it by the peak demand number gives the cap percentage. When that number gets to 5 percent, the utilities are theoretically off the hook. So they want that bottom number to be smaller. Renewables advocates want just the opposite. As long as the number doesn’t get to 5 percent, renewables developers have what one called their “backbone” incentive in place.

The question before the CPUC is the intent of the law. Here’s what Peevey wrote: “The phrase 'peak demand' is used to refer to coincident peak demand in multiple occurrences in the Pub. Util. Code. [...] The words 'aggregate customer' would be superfluous if the Legislature had intended 'aggregate customer peak demand' to mean coincident peak demand. [...] Use of the phrase 'aggregate customer peak demand' in § 2827 of the Pub. Util. Code to mean coincident peak demand when the phrase 'peak demand' is used elsewhere in the Pub. Util. Code for that purpose would constitute the use of inconsistent and confusing terminology by the Legislature.”

These observations led Peevey to conclude that “The Legislature did not intend 'aggregate customer peak demand' to mean coincident peak demand. […] It is reasonable to interpret 'aggregate customer peak demand' as meaning the aggregation of individual customer peak demands, i.e., customers’ non-coincident peak demands, [... and] SCE, SDG&E, and PG&E should use the aggregation of customers’ non-coincident peak demands to calculate their caps on NEM participation.”

In comments filed by their attorneys, the IOUs dispute these conclusions. PG&E wrote that “the best choice for the denominator for calculation of the 5 percent cap is the highest peak ever achieved in the utility service territory. […] For PG&E, at least to date, this was 20,883 megawatts reached on July 25, 2006.”

PG&E’s filing also complicates the basic dispute by suggesting a change in the way the top number is calculated, concluding, “PG&E estimates that reversing these two decisions would reduce the amount of generation that can fit under the cap by about 10 percent, although the exact amounts will vary depending on participation in each group. PG&E recognizes that this means more net metering. However, [... it] is the better measure of the impact on the grid.”

By raising the issue of the impact of renewables on the grid, PG&E opened the door to the implicit debate between the IOUs and renewables advocates.

The utilities point out that of the three parts of the standard electricity bill, only one covers the price of electricity generated. The other charges cover the costs of delivering electricity through the transmission and distribution infrastructure. When NEM customers’ bills are reduced by the retail rate, they escape paying their fair share of costs for infrastructure they use as much as non-NEM customers.

And, the utilities say, it shifts costs to other ratepayers.

More on the costs and benefits of NEM in the next installment in this series.