Solar power plant factory to open in New Mexico [Green Wombat].

BigSolar has been about Big Dreams - fields of mirrors carpeting thedesert to produce clean, greenhouse-gas free electricity. In anotherstep toward making that vision a concrete-and-glass reality, SchottSolar announced Monday that it is building a factory in Albuquerque, N.M., to manufacture components for large-scale solar thermal powerplants as well as photovoltaic modules for commercial rooftop arrays.

The German company’s news follows Silicon Valley solar startup Ausra’s announcement last month that it’s building a solar thermal factory in Nevada — the first in North America.

That solar companies are now investing capital to break ground onmanufacturing plants represents the creation of a Big Solarinfrastructure and, of course, a move to get on the ground floor ofwhat is expected to be a solar building boom in the sun-drenchedSouthwest of the United States. Utilities throughout the region arefacing mandates to dramatically increase their use of renewable energy.In California, for instance, PG&E (PCG), Southern California Edison(EIX) and San Diego Gas & Electric (SRE) are all negotiating bigmegawatt contracts for utility-scale solar power thermal power plants.A consortium of Southwest utilities meanwhile has put out to bid a250-megawatt solar station.

“We certainly see the opportunity for growth in the solar thermalmarket,” Mark Finocchario, CEO of Shott’s North American operations,told Green Wombat. “The concentration of solar thermal plants will bein the Southwest and we see that’s where the rest of the supply marketwill develop as well. But we would have the ability to ship product toanywhere in the world.”

The $100 million Albuquerque factory will manufacture solar thermalreceivers — long tubes that hang over curved mirrors called solartroughs. The mirrors focus the sun’s rays on the receivers and liquidinside becomes superheated to produce steam that driveselectricity-generating turbines.

Finocchario says the the plant, which will employ 350 people,  isset to go online by the end of the first quarter of 2009. Future planscall for another $400 million investment to expand the factory’sworkforce to 1,500.

Vinod Khosla plugs into the electric car [Green Wombat].

Silicon Valley green tech investor Vinod Khosla caused a stirrecently when he dissed plug-in electric hybrid cars as“toys” that would not contribute much in the way of fighting globalwarming. The blogs were buzzing from red-faced EV enthusiasts takingumbrage at Khosla, who has made big bets on biofuels and is never shyat expressing his opinions on all matters green.

But an investment Khosla Ventures announced this week in EcoMotors,a Detroit startup developing a high-efficiency diesel engines, showsthat the legendary venture capitalist is more eclectic when it comes toelectrics than his public pronouncements might make him seem.

EcoMotors founders Peter Hofbrauer and John Coletti, veterans ofVolkswagen and Ford (F) respectively, are engineering engines that theyhope will achieve 100 miles per gallon, run on gasoline, diesel orbiofuels and be used to power — wait for it — plug-in hybrid electriccars.

What drove Khosla to change his mind on hybrids? He didn’t, really.To understand why, we need to look under the hybrid hood. There are twotypes of hybrids. A parallel” hybrid contains two drive trains — anelectric motor to power the car at low speeds for short periods oftime, and a conventional gasoline engine for higher speeds. The Toyota(TM) Prius and Honda (HMC) Civic hybrid and most other hybrids on theroad today are parallel hybrids. (A plug-in version would allow for amore powerful battery pack that could be recharged from a standardelectrical outlet.)

In contrast, a series hybrid takes some of the complexity — andpresumably the cost — out of the design by using only an electric drivetrain to propel the car while relying on a small internal combustionengine to power a generator that charges the battery and provides powerto the electric motor when needed. The Chevrolet Volt, General Motor’s(GM) plug-in electric hybrid under development, is a series plug-inhybrid. And the EcoMotors’ engine will be designed for use in a serieshybrid.

“He was referring to parallel hybrids,” says Khosla Partner’s FordTamer of his boss’s anti-hybrid comments made in a speech at an investor conference. “We do believe a series hybridis the way to go. He was also referring to the fact that the hybridplatform is inherently an expensive platform.”

So is a series platform at this point, but Khosla’s vision is todrive that cost down by creating high-efficiency engines and batteries.Hence the investment in EcoMotors. And hence the hiring last Septemberof Tamer, a former top executive at chipmaker Broadcom and a co-founderof another chip company, Agere (later acquired by Lucent). “I’ve beenfocused on the efficiency side of Khosla — engines, motors, turbines,even solar and batteries,” says Tamer, Khosla Ventures’ operatingpartner.

Khosla is the sole funder of EcoMotors – and no, Tamer won’t revealthe size of the investment – which officially launched this month andremains so stealthy it doesn’t even have a website yet.

Tamer says EcoMotors CEO Hofbrauer developed a high-efficiencyengine under contract with the Defense Advanced Research ProjectsAgency, of DARPA, for use in military vehicles. EcoMotors has nowlicensed the technology for commercial use.

Here’s how it works, as explained by Tamer: the EcoMotors engine isbuilt of 2-cylindar “modules” that can be stacked depending on the needfor power – one or two modules for a car, three or four for a bigtruck. “If you have two modules, you can shut down one module for citydriving,” says Tamer. “But when you need to need to go uphill or needpower for highway driving, you engage the second module. That gives youbetter fuel efficiency and reduces emissions.” (EcoMotors’ renderingsof the engine’s design are above.)

With the recently enacted energy bill mandating automakers raise theaverage fuel efficiency of their fleets to 35 miles per gallon by 2020,EcoMotors aims to demo its first engine to potential customers by early2009.

A plug-in electric hybrid drive train will be further down the roadbut Khosla Ventures already has made investments in companiesdeveloping components for such a system. One such startup is Seeo, aBerkeley, Calif.-based company whose website cryptically says it is“developing advanced materials to revolutionize electricity storage anddelivery.”

“Our belief is that we have to get a fuel-efficient,emissions-conscious diesel engine on its own,” Tamer says. “Then goingto a hybrid becomes a bonus.”

One of Vinod Khosla’s mantras is that green technology must becomecheap and scalable enough to be adopted in China and India, countrieswhose impact on climate change is monumental. In other words, a $25,000plug-in hybrid doesn’t stand a chance against a Tata Nano, the Indianpeople’s car unveiled last week.

Remarks Tamer: “$2,500 will buy a Tata  – that’s a DVD upgrade on a Lexus.”

Clock ticking on crucial solar investment tax credit [Green Wombat].

When President Bushed signed the energy bill into law last month,much was made of the legislation’s mandate that automakers dramaticallyboost the fuel efficiency of their fleets. Less noticed was that thebill dropped a provision that would have extended the solar investmenttax credit — a measure viewed as essential to transforming solar energyfrom a niche business into a multi billion-dollar industry that cangenerate gigawatts of greenhouse gas-free electricity.

The timing couldn’t be worse. With the current solar credit set tosunset, as it were, at the end of 2008, Big Solar is at at a tippingpoint: Utilities and renewable energy companies are in the midst ofnegotiating massive megawatt power purchase deals whose financingdepends on the 30 percent investment tax credit, or ITC.

“I think there is a major concern that this will stall all thebeneficiaries of the ITC,” said Joshua Bar-Lev, vice president forregulatory affairs for solar power plant developer BrightSource Energy.The Oakland, Calif.-based startup is negotiating a 500-megawattagreement with California utility PG&E and is proceeding with plansto build a 400-megawatt solar thermal power station on the Nevada border (artist rendering above).

Solar energy companies, utilities like PG&E (PCG) and EdisonInternational (EIX) as well as financiers such as Morgan Stanley (MS)and GE Energy Financial Services (GE), had pushed for an eight-yearextension of the investment tax credit to give Big Solar projectsenough time to get off the ground and start to achieve economies ofscale. The provision also would have allowed utilities to claim thecredit for solar projects they build. The measure drew support fromboth sides of the aisle in Congress but died — by one vote in theSenate — when Bush threatened to veto the energy bill because the solartax credit would be financed by repealing previous tax breaks given toBig Oil.

“The Congressional leadership is very strong in their support of theITC; they will put this on the table In 2008,” said Chris O’Brien, aSharp Solar executive and chairman of the Solar Energy IndustriesAssociation, in an e-mail. “The solar industry will continue to contactlegislators in key states.”

House Speaker Nancy Pelosi and the Democratic leadership in theSenate have pledged to re-introduce renewable energy tax creditlegislation this session. “Speaker Pelosi has said repeatedly that shehopes to address that this year,” Drew Hammill, a spokesman for Pelosi,told Green Wombat. “We’re just getting started but there’s bipartisansupport for the tax credit.”

Publicly, at least, no one in the solar industry will say that theuncertainty over the tax credit is affecting planned projects. “Ourexpectation is that there will be another tax bill that will addressthis issue,” said Kevin Walsh, managing director of the renewableenergy group at GE Energy Financial Services. “We’re working on anumber of [solar thermal] deals but it’s too early to disclose them.”

In recent months, PG&E has signed deals for more than a gigawattof electricity — enough to light more than 750,000 homes — with solarpower plant developers. Such power purchase agreements can take morethan a year to hammer out and the permitting and construction of asolar power station can take another three to five years.

"We’re continuing to move forward with negotiations and withcontracts that have already been signed, but certainly the absence ofthe ITC could potentially impact future projects,” said PG&Espokesman Keely Wachs. “Without the credit, it does increase the costof that energy and of course it also sends a very clear market signalas to our country’s energy priorities.”

Silicon Valley solar startup Ausra is building a 177-megawatt solar power planton the Central California coast to supply electricity to PG&E andis pursuing deals with Florida’s FPL (FPL) and other utilities.

“Just like any business, the solar industry prefers a predictablesystem for the future,” wrote Holly Gordon, Ausra’s director ofregulatory and legislative affairs, in an e-mail. “It will be moredifficult to plan for our projects while the situation remainsuncertain. While we are currently seeing excellent demand for solarenergy at market prices, we need a long term extension of the renewableenergy tax credits to ensure market stability and investor confidenceas the market continues to grow.”

Big Bucks for Big Solar [Green Wombat].

Israeli solar power plant developer Solel announced Monday it hasscored $105 million in funding from London-based investment firm Ecofin-- yet another sign that the market for large-scale solar energyprojects is reaching critical mass.

Solel last July signed the world's largest solar power deal when it agreed to supply California utility PG&E (PCG)with 553 megawatts of green electricity to be produced by a massivesolar thermal power plant to be built in the Mojave Desert. Thecompany's solar trough technology is also used in nine solar powerplants (photo above) that were built in the Southern California desertin the 1980s. (In a solar trough power plant, long rows of parabolicmirrors focus the sun's rays on tubes of liquid suspended over thearrays to create steam that drives an electricity-generating turbine.)

Raising $105 million is impressive and it's certainly a big number.But given that a 500-megawatt solar power plant can easily cost $1billion or more to build, it's a relative drop in the bucket. However,it will allow Solel to move forward with the project and line upproject financing for the PG&E plant while it negotiates more dealswith other utilities -- it won't say which, but likely candidates areSouthern California Edison (EIX) and San Diego Gas & Electric (SRE).

Competitors BrightSource Energy and Ausra have solar power plantapplications before the California Energy Commission and have signed orare negotiating power purchase agreements with PG&E.

"Everyone is realizing that the market is there for thousands ofmegawatts of peaking power," Solel CEO Avi Brenmiller recently toldGreen Wombat. "As time goes by we see energy prices rising andutilities are focusing their efforts to get solar thermal power becausethis is the right solution in the southwest United States."

The Ecofin investment in Solel is notable also given the uncertaintysurrounding solar power at the moment due to Congress' failure toextend the solar investment tax creditin the recently enacted energy bill. The 30 percent credit isconsidered crucial to help solar energy companies secure financing forpower plants and achieve economies of scale. The tax credit expires atthe end of 2008 but solar energy proponents and their allies on WallStreet say they're confident that Congress will take up legislationthis session to extend it for as long as eight years.

Wall Street cools on Big Coal [Green Wombat].

Three majorWall Street investment banks have pledged to adhere to a set of “CarbonPrinciples” to assess the risk — ecological and economic — of investingin planet-warming fossil fuel power plants. But does this signal thatWall Street’s ardor for Big Coal is cooling, or are we seeing a rathersophisticated greenwash that will allow further investment in dirtypower to carry a green seal of approval?

Probably a bit of both.

Citi (C), JPMorgan Chase (JPM) and Morgan Stanley (MS) collaborated with with such coal-dependent utilities as American Electric Power (AEP), NRG Energy (NRG) and Southern Company (SO)along with national green groups Environmental Defense and the NaturalResources Defense Council to draft the Carbon Principles.

In short, the banks — all of which have come under fire fromenvironmentalists for financing power projects that are a majorcontributor to climate change — have agreed to evaluate the economicviability of coal-fired plants in light of a widely expected nationalcap on greenhouse gas emissions. Such a cap would force utilities toreduce their carbon spew or pay a price per ton of carbon dioxideemitted over the limit.

But there’s some caveats here. According to the Carbon Principles,the financing criteria “does not establish specific performancecriteria that companies or their projects must meet nor does it lay outspecific types of transactions that the financial institutions willavoid.”

In other words, absent a hard target for power plant emissions, thebanks can continue financing those projects, principles or not. (TheSierra Club lists proposed coal-fired power plants and their financiershere.)“There was resistance on part of the financial institutions to setspecific targets or reductions,” Mark Brownstein, EnvironmentalDefense’s managing director of business partnerships, told GreenWombat. “Banks do not see themselves as regulators but they areresponsible to shareholders and investors with regard to risk.”

Still, says Brownstein, “I think that if the principles are honestlyimplemented, if companies honestly wrestle with data they collect anddo honest due diligence, it will make a difference in the direction ofinvestment in the utility space. We’ll see much less conventional coal,and more investment in renewable energy and low-carbon coaltechnologies.”

“I think we’ve been surprised, frankly,” adds Brownstein, “for whomthese principles and this due diligence is in fact new.” Brownsteinpreviously was an executive with New Jersey-based utility PublicService Enterprise Group (PEG), which was one of the utilities that worked on the Carbon Principles.

Whether the Carbon Principles result in any canceled coal projectsremains to be seen, but Brownstein says that one consequence might be ahigher cost of capital for those plants that do obtain financing.

JPMorgan spokesman Brian Marchiony told Green Wombat in an e-mailthat, “We are certainly going to take a harder look at those projectsand encourage other alternative energy options.”

Citi and Morgan Stanley did not respond to requests for comment.

Marchiony says that JPMorgan already had been using someenvironmental criteria to screen fossil fuel power plants. “We’ve addedadditional questions to our checklist and strengthened those that wewere already asking in order to incorporate the carbon issue moreformally into the financing discussion,” he says.

Given growing opposition to new coal-fired power plants from localcommunities and regulators, the big investment banks had already beenreconsidering coal-related investments.

Brownstein says Environmental Defense will continue to push for WallStreet’s disengagement from Big Coal. “We very much look at theseprinciples as a floor and not a ceiling,” he says. “We feel as anorganization it would be both environmentally irresponsible andfinancially irresponsible for them to move ahead and invest inconventional coal.”

Back to main column

Another solar power plant play for Khosla, Idealab [Green Wombat].

A passel of high-profile tech investors  -- including KhoslaVentures, Paul Allen’s Vulcan Capital and Bill Gross' Idealab -- are backing yetanother new player in the increasingly hot market for large-scale solarpower, pumping $50 million into Infinia, a Kennewick, Wash., companymanufacturing a Stirling solar dish.

The Stirling dish has a storied — if unfulfilled - history in theannals of solar energy. It marries a Stirling heat engine, 17th-centuryinvention, with a mirrored dish that looks like a super-sized versionof a home satellite receiver. The solar dish focuses the sun’s rays onthe Stirling engine, heating a gas inside that drives pistons togenerate electricity. Stirling dishes are much more efficient atconverting sunlight into electricity than solar thermal technologiesthat use mirrors to heat liquid-filled tubes to create steam to driveelectricity-generating turbines. But while solar thermal plants existtoday, the Stirling solar dish has never been deployed on a large scalesince work on the technology began in earnest following the oil shocksof the 1970s.

Stirling Energy Systems of Phoenix in 2005 signed contracts with utilities Southern California Edison (EIX) and San Diego Gas & Electric (SRE)to build up to build tens of thousands of Stirling dishes to produce upto 1.75 gigawatts of greenhouse gas-free electricity. Though thecompany operates a six dishes in a prototype power plant at SandiaNational Laboratories New Mexico, it is still working to get productioncosts down and rivals have questioned whether Stirling Energy Systemswill be able to fulfill its deals. (See Green Wombat’s 2007 Business2.0 magazine article on Stirling Energy Systems here. )

ButInfinia CEO J.D. Sitton tells Green Wombat that his company hasperfected the Stirling dish to make it competitive with large-scalesolar thermal as well as new photovoltaic technologies like thin-filmsolar. Infinia aims to deploy its Stirling dishes in smallerconfigurations so that solar power plants can be located near citiesand at other sites that don’t require vast stretches of desert landwhere solar thermal plants are typically built. Each 21-foot-high,15-foot-wide solar dish can generate 3-kilowatts (compared to 25kilowatts for Stirling Energy Systems’ dish).

Infinia won’t itself become a solar developer but will provide itsdishes to for power plants that range in size from 1 megawatt to 150megawatts or more. In contrast, most solar thermal power plants nowbeing planned are in the 400-500 megawatt range.

“We fly in the face of what has been the conventional wisdom in thesolar thermal field that to be competitive you have to have a verylarge system,” says Sitton. “We can be deployed within city limits andbe connected to existing transmission systems. No additionaltransmission capacity is required.”

“Our approach is that the winning solutions will be those thatgenerate for most kilowatts for the least cost,” he adds. “This is agame about capital efficiency.”

That, of course, has been the mantra of leading green tech investorVinod Khosla, who has disparaged photovolatic solar systems as tooexpensive to displace fossil-fuel generated power. Khosla also isbacking Palo Alto solar thermal startup Ausra, which last year signed adeal to supply solar electricity to California’s largest utility,PG&E (PCG). Serial entrepreneur Bill Gross’ Idealab is funding solar thermal startup eSolar, which also is being backed by Google  (GOOG).

Infinia contends the design of its Stirling dish system makes itcompetitive with solar thermal technologies. First, the Stirling engineuses helium rather than hydrogen, which typically must be periodicallyreplenished. “We have no lubrication inside the machine and it needs nomaintenance,” Sitton says. “We use helium in a hermetically sealedsystem.”

Second, he says the Infinia dish is made of six panels of glassrather than the 76 panels on the Stirling Energy Systems dish. “Thatgives us lower production costs and lower capital costs,” says Sitton.“We brought in large-scale manufacturer from the beginning. It’s notlike we built a prototype and now have to reduce the cost to produceit.”

The first prototype went online last October and Sitton says Infiniais building a second at Sandia. Field tests will be conducted laterthis year in California and Nevada. He says Infinia is currentlynegotiating with solar developers and full-scale production is set tobegin in November. Infinia has been in business since the 198os,building Stirling engines for other applications. But the green techboom and demands from utilities for renewable energy led the company tofocus on solar.

Whether Infinia beats Stirling Energy Systems to market remains tobe seen but look for the deals it signs with solar developers for agood indication of just how viable its technology is likely to be.

Texas: Red state, green frontier [Green Wombat].

For a statesteeped in the mythology of Big Oil, Big Coal (plants) and well, bigeverything, Texas does not necessarily come to mind when you think ofBig Green.

It’s a reputation somewhat undeserved, given the Texas-sized windfarms sprawling across the hundreds of thousands of acres of thestate’s ranch lands. Now there are signs that California’s solar boomis spreading eastward. One leading indicator: Silicon Valley solarpower plant startup Ausra is opening an outpost in the Lone Star Stateand hiring an executive to “lead the development of stand-alone solarthermal power projects in Texas using Ausra’s proprietary CompactLinear Fresnel reflector technology and the sale of solar field toutility scale customers,” according to a job description posted last week at the Berkeley Institute of the Environment at the University of California, Berkeley.

Like a growing number of states, Texas has a so-called renewableenergy portfolio standard that mandates a certain portion of itselectricity supply come from green sources. (Unlike most other statesthat require utilities to obtain a set percentage of electricity fromrenewable sources, Texas sets a total green energy target and ups theante every two years. For instance, the 2009 target of 3,272 megawattsrises to 5,880 megawatts in 2011. Texas utilities are allocated a shareof those megawatts based on their sales.)

But if you want to sell solar to Texans you have to be in Texas.That’s because when it comes to electricity, Texas is literally acountry onto itself: the Texas power grid is not connected to the restof the country (except for some outbound transmission lines) and allrenewable energy must be generated within the state. (Unlike, say,California, which can buy electricity produced by solar power plants inneighboring Nevada or Arizona.)

“Texas is another California-sized market that’s growing rapidly andseeking clean options in the portfolio,” Ausra executive vice presidentJohn O’Donnell tells Green Wombat. “While solar resources are somewhatlower than the Mojave, west Texas is a very good solar region and wesee major opportunities going forward.”

O’Donnell wouldn’t reveal details about Ausra’s Texas plans (thoughthe job posting says Ausra aims to build 1-to-2 gigawatts worth ofsolar power plants a year). But Texas clearly is in the market forgreen energy. Utility TXU’s (TXU) cancellation of several massive megawatt coal-fired plants (and Wall Street’s growing aversion tosuch projects) along with the ratcheting up of renewable energymandates means the state will increasingly be looking to solar and windto fill the void.

Utility El Paso (EE) is accepting bids to supply for 300-megawatts of green energy while Austin Energy is committed to obtaining at least 100 megawatts of solar energy under the city’s goal of going carbon neutral by 2020.

With wide open spaces and plenty of sunshine and flat land, look forother solar power plant players to beat a path to Texas in the comingmonths.

 

Tech giants back green investment tax credit [Green Wombat].

Twice now the renewable energy industry has narrowly lost votes in Congress to extend an investment tax credit crucial to jump-starting the market for large-scale projects like solar power plants. In December, Big Oil outmaneuvered green energy advocates and their Congressional supporters by claiming that rescinding huge tax breaks for the fossil fuel industry to pay for renewables would cost consumers at the pump. A more recent attempt to revive the tax credit also failed.

Now the American Council on Renewable Energy is bringing out its big green guns. Representatives from Silicon Valley tech giants, Wall Street investment banks and utilities signed a letter sent to the congressional leadership late Wednesday urging the long-term extension of the 30 percent investment tax credit as well as the production tax credit for the electricity produced by solar, wind, geothermal and other renewable energy systems. Among the signers urging action by March 1 are executives from Google (GOOG), Hewlett-Packard (HPQ), Applied Materials (AMAT), Credit Suisse (CS), Wells Fargo (WFC), venture capitalists Kleiner Perkins Caufield & Byers and utility San Diego Gas & Electric, a subsidiary of energy giant Sempra (SRE).

Interestingly, the phrases “climate change” and “global warming” never appear in the letter. In a savvy move, the council has forsaken doom and gloom for a purely economic message: American jobs, competitiveness and innovation are at stake, the signers argue, and the tax incentive will spark a green tech boom at relatively little cost to the taxpayers. It’s a Silicon Valley mindset and its no surprise that while the signers represent companies from all over the United States, most hail from California.

The tax credits expire at the end of 2008 and proponents argue that a five-to-eight year extension is needed to create a stable investment climate, given that it can take three to five years for a large solar power plant to be permitted and built.

“The United States is in a historic position to lead in innovation and competitiveness in the renewable energy sector,” wrote the council’s three co-chairs, which include Dan Reicher, Google.org’s director of climate and energy initiatives. “As with all energy markets and in plans for growth in any businesses, certainty and continuity in public policy provides the confidence needed for stability in investments. We must ensure we are not creating an environment for boom and bust cycles in renewable energy and that we are not tying the hands of business owners in the sector looking to scale their technologies to meet demand and price points.”

Without an extension of the tax credits, the council warns that renewable energy projects in the pipeline that would produce 42 gigawatts of greenhouse-gas free electricity — enough to power tens of millions of homes — could grind to a halt, giving competitors in Europe and Asia the upper hand when it comes to green tech innovation.

A green-collar recession? [Green Wombat].

It's all about the green economy, stupid.

The United States could lose more than 116,000 green collar jobs andforgo $19 billion in green tech investment in 2009 if Congress fails toextend two tax credits crucial to the renewable energy industry,according to a new study.

One red flag about this report: It was commissioned by the AmericanWind Energy Association and released by the Solar Energy IndustriesAssociation -- two trade groups pressing for extension of theinvestment tax credit and the production tax credit. Green Wombat tendsto look askance at studies paid for by business and whose conclusionssupport the sponsors' political agenda. But a review of the researchconducted by Navigant Consulting indicates that it is solid, based onfederal labor data and employment models as well as Navigant's ownmarket analysis.

Some background. The ITC provides a 30 percent tax credit for theinstallation of solar arrays and other equipment. Homeowners can claima 30 percent tax credit for solar arrays up to a maximum of $2,000.There's no cap for commercial solar arrays and the tax credit has beena key to attracting financing for large solar installations that cancost millions of dollars. (Several states, most notably California,offer even more lucrative incentives, which should help prop updemand.) The production tax credit provides a subsidy for thegeneration of electricity by solar, wind, geothermal and otherrenewable energy systems and has driven the construction of massivemegawatt wind farms.

Both credits expire at the end of 2008 and the renewable energy industry and their allies in Silicon Valley and on Wall Street arepressing Congress for a long-term extension -- five to eight years --to provide a stable investment climate for green projects. (Last week,executives from Google (GOOG), Hewlett-Packard (HPQ), Applied Materials (AMAT) and Credit Suisse (CS) were among those that signed a letter urging Congress to take action by March 1.)

The Navigant study projects that without the investment tax creditinstallations of solar arrays will fall from a projected 790 megawattsto 325 megawatts in 2009, eliminating 39,400 potential new jobs.

A couple of points to consider about those numbers. Navigant onlyconsidered the impact on the photovoltaic industry that manufacturesand installs rooftop solar arrays. It did not calculate theconsequences for the solar thermal business, which builds large-scalesolar power plants that use mirrors to focus the sun's rays onliquid-filled tubes or boilers to create steam to driveelectricity-generating turbines. The solar thermal industry is in itsinfancy but utilities like PG&E (PCG), Southern California Edison (EIX) and San Diego Gas & Electric (SRE) have signed several contracts for solar power plants and negotiations for gigawatts more of solar electricity are ongoing.

The first solar power plants in California won't go online untilaround 2010 but the construction and operation of those projects areexpected to create thousands of jobs. Like the PV industry, solarthermal companies are dependent on the investment tax credit to attractthe big money it takes to finance the construction of billion-dollarpower plants. The loss of the investment tax credit would hitCalifornia particularly hard.

While rooftop solar companies worry about losing business in thefuture if the investment tax credit is not renewed, the more immediateconcern among solar execs Green Wombat has talked to recently isfinding enough workers to keep up with demand, especially in California.

Navigant projects an even bigger crash for the wind industry shouldthe production tax credit expire, with installations falling from 6,500megawatts to 500 megawatts in 2009 with the lose of 76,800 jobs. Thewind industry has been continuously buffeted in recent years asCongress has allowed the production tax credit to expire repeatedlyonly to resuscitate it. In the past, the expiration of the tax credithas resulted in a 73% to 93% drop in the wind market, according toNavigant.

Arizona’s $4 billion solar deal [Green Wombat].

ArizonaPublic Service, Arizona’s largest utility, announced plans Thursday fora 280-megawatt solar power plant to be built 70 miles southwest ofPhoenix by Spanish company Abengoa Solar. What’s striking about thedeal is that it offers a rare glimpse inside the economics of BigSolar. And as the renewable energy industry pushes Congressto extend crucial green tax credits, the jobs that will be spawned bythe Solana Generating Station and the economic ripple effect of thehuge construction project is Exhibit A in why fighting global warmingcan be a win-win when it comes to the economy and the environment.

All the previous contracts for 100+ megawatt solar power plants have been in California, where utilities PG&E (PCG), Southern California Edison (EIX) and San Diego Gas & Electric (SRE) have shrouded power purchase agreements in secrecy.

APS (PNW),on the other hand, has lifted the green veil a bit, giving someindication of the current cost of producing utility-scale solarelectricity and the larger economic impact. According to APS, theutility will pay around $4 billion over 30 years for the greenhousegas-free electricity generated by Solana that will light 70,000 homes.That comes to about $133 million a year for the life of the powerpurchase agreement.

Abengoa spokesman Peter Kelley told Green Wombat that the exactkilowatt per hour rate the company is paying APS is confidential. Nodoubt though that the utility will pay a premium per kilowatt/hour forits first large-scale solar energy deal compared to electricityproduced by a coal or natural-gas fired power plant. That costdisparity is likely to evaporate when the United States moves to pricecarbon — either through a carbon tax (unlikely) or a cap-and-tradesystem that requires fossil-fuel power plants to pay if they exceedlimits on CO2 emissions. And the cost of financing carbon-spewing power plants will grow in coming years as Wall Street shies wayfrom projects that carry climate change risks. And as solar power plantcomponents and systems go from being one-off prototypes tomass-produced commodities, the cost of solar electricity is expected todrop even further.

Abengoa and APS are not revealing the construction cost of Solanabut solar power plants of that size can run half a billion dollars ormore. Of course, once built their operating costs are significantlylower than conventional power plants; the fuel — the sun — after all isfree.

In the meantime, the Solana Generation Station is expected to injectabout $1 billion into the Arizona economy as Abengoa hired 1,500workers to build the power station and 85 others to operate it,according to APS. The utility estimates that the ripple affect willcreate another 11,000 to 15,000 jobs.

Abengoa is using a solar trough design for the plant. A tried andtrue technology, solar trough plants deploy long rows of parabolicmirrors to heat liquid-filled tubes to produce steam that driveselectricity-generating turbines. The Solana plant will also store heatin silos of molten salt. The heat can be released when the sun is notshining to run the turbines. “The molten storage will extend theoperating hours of the plant both during cloud cover and when sun goesdown,” Kelley says. That means Solana can continue to generateelectricty as long as six hours after sunset.

The big “if” for Solana is the 30 percent investment tax credit thatexpires at the end of 2008. If Congress fails to extend the credit, thecost of such solar power plants will jump, jeopardizing their economicviability

Solana is likely to be just the first big solar power plant inArizona. Utilities there must obtain 15 percent of their electricityfrom renewable sources by 2025 and with little wind or geothermalavailable in Arizona, the state is likely to place a big bet on BigSolar.

Abu Dhabi: The capital of green energy? [Green Wombat].

While the United States Congress hems and haws over extendingrelatively modest tax incentives to encourage renewable energydevelopment, Abu Dhabi is spending $15 billion in a drive to make theoil-rich emirate an epicenter of green technology. Called the MasdarInitiative, it’s best known for plans to build Masdar City, a“zero-carbon, zero-waste” urban center.

But Abu Dhabi’s ambitions extend far beyond making Masdar City ashowcase for sustainable development, as Masdar Initiative CEO SultanAhmed Al Jaber made clear when Green Wombat sat down with him onTuesday when he was in San Francisco to accept the “Cleantech Leader ofthe Year” award at the annual Cleantech Forum. “We have decided toestablish the Silicon Valley of renewables in Abu Dhabi,” says AlJaber. “We want to cover the whole value chain - from research to labsto manufacturing to the deployment of technologies.”

To that end, Masdar is collaborating with European and U.S.universities - including MIT and Columbia - to develop a researchinstitute. The Masdar Clean Tech Fund has invested $250 million inrenewable energy ventures and Al Jaber says a second fund is in theworks. “We’ll invest wherever the opportunity goes,” he says. “We’rekeen on developing renewable energy infrastructure in California; we’rejust looking for the right opportunity.”

Masdar City will be a tax-free zone in a bid to lure makers ofphotovoltaic equipment and other green energy manufacturers. When AlJaber says Abu Dhabi wants to own the whole supply chain, he means thatliterally, beginning with polysilicon, the basic building block ofsolar cells. “We’re looking at manufacturing polysilicon, thin-film forphotovoltaics, wind energy components,” he says. “We’re no longerinterested in only being a consumer of technology or an off-taker ofspecific equipment. We want to transform ourselves into a moreknowledge-based economy. “

He expects the renewable energy and waste-reduction technologiesdeveloped to build Masdar City - its expected population is 50,000 - tobe exported to help retrofit existing cities. “A city of this sizewould require 820 megawatts of power, but we will reduce energyrequirements to 220 megawatts from integrating new designs from dayone.”

“This city is going to literally re-engineer urban planning,” he claims.

Abu Dhabi’s ambitions will create opportunities for U.S., Europeanand Asian green tech firms and Al Jaber acknowledges that forming theright partnerships will be the biggest challenge in fulfilling theemirate’s green dreams.

But he says he sees no irony in one of the world’s biggestoil-exporting nations going green. The bottom line: it’s all aboutpower and markets.

“Abu Dhabi recognizes that the global energy markets are evolvingand are evolving with substantial growth in alternative energy,” AlJaber says. “It’s only going to go up. Does that make it a threat or anopportunity? It’s a great opportunity if we invest in it now.”

Think unveils new electric car, GE investment [Green Wombat].

General Electric has officially confirmed its $4 million investment inNorwegian electric carmaker Think Global, a development Green Wombat reported back in December.  GE Energy Financial Services (GE)also has invested $20 million in Massachusetts lithium-ion batterymaker A123Systems, which will supply batteries to Think. GeneralElectric said its scientists will work with both Think and A123 toimprove battery technology for electric cars to “enable globalelectrification of transportation.”

And as Green Wombat reported last week, Think, formerly owned by Ford (F),unveiled its next model Wednesday at the Geneva Auto Show, a futuristicfive-seater called the Think Ox that will eventually be available as atwo-door coupe and possibly a taxi. The sleek five-door vehicleresembles a low-slung crossover SUV but maintains the signature touchesof the Think City — an urban runabout now rolling off Think’sproduction line in Norway — including the roof-to-bump glass rearhatch. The concept car also sports a translucent roof with a solarpanel, presumably to run radios and other equipment.

According to Think, the Ox will have a range of about 125 miles (200kilometers) on a charge and a top speed of about 85 miles an hour.Future models may include a range extender — a small flex-fuel enginethat will charge the battery and let the Ox go 280 miles. (The GeneralMotors (GM)Volt electric hybrid is based on the same concept.) Think also unveiledits “connect car” technology to make the Think City and Ox a rollingInternet-connected, GPS-enabled computer that will calculate thecheapest and most environmentally beneficial times to recharge as wellas give drivers access to the cars’ systems through their mobile phones.

When Green Wombat caught up with CEO Jan-Olaf Willums in San Francisco last weekhe emphasized that although the Ox is being presented as a concept car,the technology is almost ready for prime time and the car that isexpected to hit the market in 2011 will resemble the show version.

Electric carmaker Think hits the accelerator [Green Wombat].

It was a year ago that venture capitalist and solar energyentrepreneur Jan-Olaf Willums appeared at the Cleantech Forum in SanFrancisco shortly after taking over Think Global, a Norwegian electriccar maker once owned by Ford (F).Willums and his partners had just secured their first round of fundingand unveiled plans to revive Think and a zippy urban runabout calledthe Think City. This week Willums made a return appearance at the 2008Cleantech Forum and showed just how fast an automotivestartup can move amid the lumbering dinosaurs of Detroit.

Green Wombat caught up with the ever-cheerful Willums over coffeeWednesday (unlike his American counterparts he meets the press withoutthe PR minders that seem to accompany every exec everywhere). A dayearlier on a panel about alternative transportation he droppedsomething of a bombshell: At the Geneva Auto Show on Tuesday Think willunveil its next-generation car, a sleek five-seat sedan.

Willums, who has raised $93 million from U.S. and Europeaninvestors, was keeping mum on the identity of its big-league partneruntil Tuesday but did say that new model was not just a concept car."We have designed a five-seater show car but it really is much morethan that," says Willums (photo above). "It is very much a car that canbe produced and it looks like the car that will produced." The plan isto offer the next-gen Think in 2011 as an all-electric as well as wellas a so-called series hybrid that uses a small engine to charge thebattery and extend its range. (The current Think City has a range of180 kilometers --112 miles.)

The drawing Willums briefly displayed on the panel showed an stylishaerodynamic four-door sedan. He says Think is planning to later producea crossover SUV and coupe version of the car. Silicon Valley electriccar startup Tesla's next car also is a five-seater sedan, code-namedWhite Star. "We won't compete with Tesla," says Willums. "The Teslawill be more a BMW; we'll be more the Volkswagen."

In the meantime, the two-seater Think City is rolling off theproduction line at the company's factory outside Oslo and the first 500cars are set for delivery to customers in March. (For the Think backstory and my 2007 Business 2.0 magazine feature on the company and its innovative business model click here.) Production will be fully ramped up by the end of 2008 and Think aims to produce 10,000 cars a year.

Willums also tells Green Wombat that Think later this week willintroduce the City to London and Paris. Think's strategy is to pursueurban markets that offer incentives for electric vehicles. Forinstance, for electric cars London waives the $15 congestion"congestion fee" charged for driving into the city and offers freeparking. France gives EV buyers a $7,500 rebate. Think plans to beginselling the City in those markets in early 2009. Think has alsoestablished a subsidiary in Denmark

The company's North American plans are still in flux. "We hope tohave a plant in the U.S. in 2009," he says. As with Europe, Think willtarget urban markets in the U.S., such as San Francisco and New York.

Think has markedly picked up the pace since I last met Willums inOslo. That's due in part, he says, because of the big automakers' moreaggressive moves to get into the electric car market, such as GeneralMotors (GM) with its Chevy Volt electric hybrid.

It also seems increasingly clear that innovative startups like Thinkwill survive by making strategic partnerships with bigger players andmoving nimbly into select and potentially profitable markets. WhetherThink will be a drive-away success remains to be seen but its clearWillums is hitting the accelerator.

Abu Dhabi’s solar venture [Green Wombat].

Abu Dhabi is not content to just sell you the oil that fuels yourSUV; now its going to sell you sunshine to keep your lights on andpower your electric car when the internal combustion engine goes theway of the buggy whip. Masdar, the oil-rich emirate’s $15 billionrenewable energy venture, and Spanish technology company Sener onWednesday announced a joint venture called Torresol Energy to buildlarge-scale solar power plants in Australia, Europe, the Middle East,North Africa and the United States.

Torresol initially will invest $1.2 billion in three solar powerplants to be built in Spain but the company is targeting the global“sunbelt” for future expansion. Masdar will take a 60 percent ownershipstake in Torresol with Sener holding a 40 percent stake. A Torresolspokesman declined to reveal the dollar amount of the investment. Aprime market for Torresol will be the U.S. desert Southwest, wherecompanies like Ausra, BrightSource Energy, Solel and Abengoa Solar arecompeting for contracts with utilities PG&E (PCG), Arizona Public Service (PNW) and Southern California Edison (EIX).Torresol potentially could shake up that market, given its very deeppockets and ability to independently finance billion-dollar solar powerplants.

The venture is just the latest move by Abu Dhabi to control what Masdar CEO Sultan Ahmed Al Jaber described to Green Wombat recentlyas “the whole value chain” of renewable energy, from research anddevelopment to manufacturing silicon for solar cells to the large-scaledeployment of green technology.

The irony is too rich to leave unsaid: A leading oil producerinvests billions in carbon-free energy while a leading consumer offossil fuels - the United States - continues to subsidize Big Oil whilewhile offering only tepid support for green technology. It isinevitable that climate change will foster the rise of renewable energy- the only question is which countries and companies will profit fromthe new energy economics. It is entirely possible that the U.S. willtrade energy dependence of one kind - on Middle East oil - for another- on Middle East and European solar technology - in the era of globalwarming. It’s no coincidence that most of the solar energy companieswith contracts to build utility-scale power plants in California andthe Southwest have overseas roots - Ausra hails from Australia,BrightSource was founded by American-Israeli pioneer Arnold Goldman,Solel is based in Israel and Abengoa is headquartered in Spain.

Torresol plans to build solar power plants using a technology itcalls a Central Tower Receiver system. It’s similar to technology usedby competitors like BrightSource in that fields of mirrors calledheliostats focus the sun’s rays on tower that contains a receiver. Inthis case the receiver is filled with salt which when heated vaporizeswater to create steam that drives an electricity-generating turbine.The company says it intends to have 500 megawatts of solar electricityonline by 2012.

Greed is green [Green Wombat].

It is an article of faith these days thatany company worth its public relations budget must proclaim loudly andfrequently its good green intentions. So it was rather refreshing tohear one of Richard Branson’s top lieutenants – Will Whitehorn, chiefof Virgin Galactic – cast his company’s enviro-friendly initiatives asstrictly business.

“We’re not doing this to be environmentally kosher,” declaresWhitehorn, referring to Virgin’s efforts to develop greenhouse-gas freebiofuels for its jets and forthcoming spaceship, “we’re doing this toensure our company’s survival.”

The occasion for Whitehorn’s remarks was one of those “green salons”that have become popular in San Francisco of late. You know, gather agroup of so-called thought-leaders – executives, environmentalists,venture capitalists, journalists – in a chi-chi restaurant and let theideas and sauvignon blanc flow. Easy enough to skewer, particularlywhen the well-compensated are dining on ahi tuna skewers, but you neverknow where the conversation will go, and in this case it strayedinterestingly off-topic. The subject du jour was a white paper on corporate greenwashingfrom Bite Communications, the public relations firm that organized therecent lunch. Among those on hand were Whitehorn and exes from Chinesesolar panel maker Suntech (STP), fuel-cell maker Bloom Energy, utility PG&E (PCG),and VantagePoint Venture Partners, investor in electric car startupTesla Motors and solar power plant builder BrightSource Energy.

Whitehorn held center court, tracing Virgin’s trip down the greenpath back a decade when the company forecasted a dramatic rise in oilprices and tried to gauge the impact on its airline and new railwaybusiness. As a result, he says, Virgin spent big bucks onenergy-efficient locomotives to hedge against future fuel cost spikes.

“This is not really a question of being green,” says Whitehorn, whoexpresses annoyance that Branson’s pledge last year to invest $3billion in biofuels research and development was portrayed in the mediaas a charitable deed. “We’re doing this to make money and we’recreating a more sustainable economy in the process.”

“We’ve got to get away from this idea of doing these things as goodworks,” he adds. “We’re doing what we’re doing to create a profitablebusiness for the future.”

It’s a meme increasingly being advanced by some environmentalists,most notably by the black sheep of the movement, Ted Nordhaus andMichael Shellenberger, whose 2004 essay, “The Death ofEnvironmentalism” riled the green elite. The Berkeley duo’s new book, Break Through: From the Death of Environmentalism to the Politics of Possibility,calls for reframing global warming from a doom-and-gloom scenario to anopportunity for unbridled economic prosperity by investing in greentechnologies. Their central argument: only when people and societiesachieve a certain level of material wellbeing do they have the luxuryof supporting environmental preservation. In other words, greed isgreen.

Whitehorn also took aim at companies that proclaim themselves carbonneutral, scorning the notion that corporate greenhouse gas emissionscan be offset by merely buying carbon credits. “We’re not going to becarbon neutral – it’s impossible,” he says of Virgin. “You need to getout and do something other than buy someone else’s carbon problem.”

Still, Kristina Skierka, director of Bite’s cleantech practice,wanted to know just how green can Virgin Galactic be, given itsbusiness model of ferrying the rich into outer space for a couplehundred grand a pop. “If we use biofuels we will get the emissions downto near zero,” Whitehorn claims. “This is about a new type of launchsystem; the carbon impacts will be negligible.

He says space tourism is just the launching pad, as it were, for ahost of space-based ventures. “If you look at space as an industrialplace to conduct human activities, it has huge advantages.”

Virgin’s next frontier is the deep blue sea. According to Whitehorn,the company recently created a skunk works to develop a “radical” newsubmarine technology for a startup to be called, what else, VirginOceanic.

Florida utility jumps into California solar market [Green Wombat].

Utility giant FPL has filed plans with California regulators to build a $1 billion, 250-megawatt solar power plant in the Mojave Desert. The move marks the first time that a major player — in this case a Fortune 500 company — has jumped into the nascent Big Solar market.

Juno Beach, Fla.-based FPL’s renewable energy arm, FPL (FPL) Energy, will operate the Beacon Solar Energy Project, which will connect to the transmission system operated by Los Angeles’ municipal utility, the Los Angeles Department of Water and Power. FPL Energy spokesman Steve Stengel declined to say whether the company had struck a deal with LADWP to buy the electricity produced by the Beacon project. “We are currently in discussions with a potential customer on a power purchase agreement for this project,” he wrote in an e-mail. “However, due to confidentiality considerations, I cannot elaborate at this time.”

California law requires the state’s investor-owned utilities — PG&E (PCG), Southern California Edison (EIX) and San Diego Gas & Electric (SRE) — to obtain 20 percent of their electricity from renewable sources by 2010 and 33 percent by 2020. But public utilities like LADWP only have to set green energy targets, 13 percent by 2010 and 20 percent by 2017 in Los Angeles’ case. Under California’s global warming law, the state’s greenhouse gas emissions must be reduced to 1990 levels by 2020.

Those renewable energy mandates have been driving the market for large-scale solar power plants, but so far California’s Big Three utilities have placed their bets on startups like Ausra, BrightSource Energy and Stirling Energy Systems.

FPL Energy, however, is no stranger to the California solar market. It currently operates seven of nine “solar trough” power plants that were built by Israeli solar pioneer Luz International in the 1980s and early ’90s in the Mojave at Kramer Junction and Harper Dry Lake.

The plants use long rows of parabolic mirrors to focus the sun’s rays on tubes of synthetic oil suspended above the arrays. The hot oil is used to create steam which drives electricity-generating turbines. The company’s new power plant (artist rendering above) will built on 2,012 acres of former farmland near California City and will also use solar trough technology.

FPL tends to be tight-lipped about its plans but in a recent interview with Green Wombat, FPL Energy senior vice president Michael O’Sullivan acknowledged the company is bidding on contracts with utilities throughout the Southwest. “We do not develop through the issuance of press releases,” he says, “and there’s a lot of thinly capitalized solar developers trying to get attention by running around the Southwest announcing projects.” Unlike competitors developing new solar technology, FPL is sticking with the tried and true. “One reason we’re focused on solar trough technology like we have out at Kramer is that it’s a proven, financeable technology,” O’Sullivan says.

In a letter accompanying the Beacon Solar application to the California Energy Commission, O’Sullivan estimated the project would create 1,000 jobs during the two-year construction phase and 66 permanent positions once it goes online in 2011.

California utility to turn roofs into solar power plants [Green Wombat].

SouthernCalifornia Edison plans to install 250 megawatts’ worth of solar panelson commercial rooftops, generating enough electricity to power 162,000homes.

It’s a potentially game-changing move, one that could lower the costof solar cells as manufacturers ramp up production to meet theutility’s schedule of installing a megawatt-a-week of arrays until itreaches the 250-megawatt target. That alone is more than United States’entire production of solar cells in 2006 and will produce as muchelectricity as a small coal-fired power plant, albeit with nogreenhouse gas emissions. “This project will turn two square miles ofunused commercial rooftops into advanced solar generating stations,”said John Bryson, CEO of the utility’s parent company, EdisonInternational (EIX), in a statement Wednesday night.

The $875 million initiative also marks the first big move intoso-called distributed energy by a major utility. Instead of building acentralized power station and the expensive transmission system neededto transmit electricity to the power grid, Edison will connect clustersof solar arrays into existing neighborhood circuits. A significanthurdle for the massive megawatt solar power plants planned forCalifornia’s Mojave Desert is the need in some cases to build multibillion-dollar transmission systems through environmentally sensitivelands to bring the electricity to coastal metropolises.

Solar arrays of course only generate electricity when the sun isshining, but they produce the most power during the hottest part of theday when Southern Californians crank up their air conditioners. Thearrays could help spare Edison from having to fire up a fossil-fuelpower plant when demand peaks.

Edison spokesman Gil Alexander told Green Wombat that the utilityexpects the project’s scale to allow arrays to be placed on roofs athalf the cost of a typical installation. Edison’s ambitions could provea boon for solar cell makers like SunPower (SPWR) and Suntech (STP) as well as solar installation companies such as Akeena (AKNS).One unknown is whether the demand created by Edison will drive up costsin the short term, given ongoing shortages of polysilicon, the basematerial of solar cells. The Edison project could also help jump-startthe market for thin-film solar panels, which typically use far lesssilicon than conventional solar cells.

Alexander says Edison is already negotiating with solar panel makersand installers. Needless to say, the project will be a boon for greencollar workers.

Here’s how the solar roofs initiative will work: Edison will leasewarehouse rooftop space from building owners. (The target area is thefast-growing “Inland Empire” of Riverside and San Bernardino counties.)The utility will contract for the installation of the arrays and willretain ownership of the solar systems. California regulators appearinclined to approve the project, which will be financed by a hike inutility rates.

“This will be a utility-scale solar power plant, if one thinks ofthe 100 or so buildings on which the two square miles of solar panelswill be installed,” Alexander wrote in an e-mail. “One advantage ofthis project is that we will tap unused rooftop real estate directly inareas we serve where demand is growing rather than securing a majorplat of land in a remote area and then building transmission lines tobring the power to those areas of rising demand.”

Anyone who has driven through Los Angeles can attest to the endlessacres of big-box stores, warehouses and strip malls and the potentialto generate green power from sun-baked suburban sprawl.

Edison’s solar roof ramp up is likely to put pressure on California’s other big utilities, PG&E (PCG) and San Diego Gas & Electric (SRE),to follow suit. Like Edison, they face a state mandate to obtain 20percent of their electricity from renewable sources by 2010 and 33percent by 2020. California’s global warming law requires the state’sgreenhouse gas emissions to be rolled back to 1990 levels by 2020.

The Governator himself gave a not-so-subtle nudge to Edison’scompetitors. “These are the kinds of big ideas we need to meetCalifornia’s long-term energy and climate change goals,” said Gov.Arnold Schwarzenegger in a statement. “I urge others to follow in theirfootsteps. If commercial buildings statewide partnered with utilitiesto put this solar technology on their rooftops, it would set off a hugewave of renewable energy growth.”

Too late for Big Solar to save the day? [Green Wombat].

Californiautility PG&E on Tuesday announced contracts to buy up to 900megawatts of electricity generated by solar power plants to be built inthe Mojave Desert by BrightSource Energy. It’s one of the biggest solardeals to date -- enough to power some 600,000 homes -- and is another sign that that the shift fromfossil fuels to carbon-free energy is well underway, at least inCalifornia.

But is it too late? PG&E (PCG)first announced it was negotiating a power purchase agreement withBrightSource, then called Luz II, on Aug. 10, 2006. Around that time,the United States’ leading climate scientist, NASA’s James Hansen,warned that the world had only a decade to take drastic action to cutcarbon emissions and avert a global catastrophe from global warming.

It took nearly two years alone to just hammer out thePG&E-BrightSource deal and the world now has eight years left toradically ramp up alternative energy sources. By the time the firstBrightSource 100-megawatt solar power plant (imageabove) goes online it will be 2011 and the last one will begingenerating electricity for PG&E just as the climate change alarmclock goes off. If you believe Hansen, hitting the snooze button willnot be an option.

Of course, there’s no guarantee the BrightSource plants willactually be built — it will take billions to construct them and theinvestment climate is not exactly sunny these days, clouded by WallStreet’s meltdown and the looming expiration of a crucial solar investment tax credit.(Personally, Green Wombat is betting BrightSource pulls it off — thoughApril Fool’s Day probably was not the best date to unveil such a deal.The Oakland, Calif.-based company was founded by solar pioneer ArnoldGoldman, its CEO, John Woolard, hails from Silicon Valley and thestartup is backed by Morgan Stanley (MS) and some savvy venture capitalists.)

Given the moral and regulatory imperative — California utilitiesmust obtain 20 percent of their electricity from renewable sources by2010 and a third by 2020 — why is large-scale solar proceeding at thepace of a Mojave Desert tortoise? (Almost three years ago, forinstance, Southern California Edison (EIX) and San Diego Gas & Electric (SRE)unveiled agreements with Phoenix’s Stiring Energy Systems to buy up to1,750 megawatts of solar electricity. Ground has yet to be broken onany of the planned power plants.)

Partly it’s because the years-long negotiations between utilitiesand solar power plant companies is something of a black box. Details ofthese power purchase agreements are kept confidential but are estimatedto be worth billions — if a recent $4 billion dealstruckby utility Arizona Public Service with solar power plant builderAbengoa Solar is any indication. Regulated utilities are by theirnature big and bureaucratic and can be expected to be extra-cautiouswhen they’re placing bets on untried solar technology from companieslike BrightSource and Ausra.

“Transactions of this magnitude require a fair amount of time tonegotiate and due diligence must also be performed,” PG&Espokeswoman Jennifer Zerwer told Green Wombat in an e-mail. “Theoriginal [BrightSource agreement] announced in August 2006 was for 500megawatts; the final agreement expanded on the original . . . andculminated in the execution of five separate power purchase agreementsfor up to 900 MW.”

Another factor is a regulatory structure that is an artifact of thefossil fuel age. California requires extensive environmental review ofnew power plant projects — be they clean and green or down and dirty —a process that can take a 18 months or more. And the best solar sitesoften are on federal land in the Mojave — securing a lease for thatland is another 18-month-long process.

Still, when the United States faced a threat of a differentkind in World War II, it retooled its factories in a matter of monthsto produce planes and tanks. The fight against global warming willrequire a similar agility.

The clock, after all, is ticking.

The Dell of solar energy [Green Wombat].

Forlongtime Australian Greenpeace activist Danny Kennedy, one of theenvironmental group’s more memorable moves was when the Sydney crewclimbed the roof of the prime minister’s home and installed solarpanels to protest the government’s preference for Big Coal overrenewable energy. (Note: Do not try this on the White House.)

These days, there’s a new, greener PM in power and Kennedy is inCalifornia, running a solar startup that aims to minimize the timespent on rooftops by doing for the solar business what Dell did forpersonal computers: Digitizing the entire enterprise to cut costs andcreate a mass market.

Putting photovoltaic panels on residential rooftops remains largelya labor-­intensive cottage business, often involving multiple visits toa client’s home to make the sales pitch, measure the roof, and design acustom system. Sungevity, which officially launches Tuesday on Earth Day, takes all that online.

Enter your address on its website, and satellite-imaging softwarezooms in on your home, and Sungevity’s proprietary algorithm calculatesthe roof’s dimensions — the pitch and azimuth — selects appropriatelysized solar arrays, and shows what they will look like installed —while computing your return on investment. Once the order is placed,one of five off-the-­shelf prepackaged solar arrays is shipped to thecustomer’s door, and an installation crew is dispatched. A databasetracks local building and permit requirements, sending the necessaryforms to the homeowner for their signature while beaming localregulations governing solar arrays to the installation crew.

“This changes the game,” says Kennedy, 37, who co-founded Sungevitylast year after leaving Greenpeace and relocating to Berkeley. (Fulldisclosure: Kennedy’s kids and Green Wombat’s son attend the sameelementary school.)

Kennedy and his partners have raised $2.7 million from investorsthat include German solar giant Solon and actress Cate Blanchett. “Ourtechnology allows us to size up an entire city remotely and work outwhat the solar potential of the roof space is,” adds Kennedy, who willbe speaking at Fortune’s Brainstorm Green conference on Monday. “This is the real secret sauce, the thing that rocks the house.”

Says Joe Kastner, an executive with solar financier MMA (MMA)Renewable Ventures: “If you do a lot of site visits, that can end upbeing a big portion of the cost. Anything that can make these projectsmore efficient and cut the costs on the front end is good.”

Rather than employ its own installers, Sungevity will work withunions to train electricians and other contractors so that it can tappools of green-­collar workers in local markets. “That’s probablylong-term what’s most needed to achieve a million solar roofs,” saysKennedy, referring to California’s solar target. “[Solar panel] supplyis not the big constraint. The real issue is labor — it’s the limitingfactor in the growth of the industry.”

At the company’s Berkeley offices down the street from Chez Panisse,Kennedy and Andrew Birch, a board member and solar economics expert,run through a live demo of the Sungevity system. In about 15 minutes, aspokesmodel had walked a potential customer through the sales pitch andordering process while on the backend a consultant is sizing up theroof with the software tools. Within a day or so an e-mail will be sentto the customer with different solar array options and the relativereturn on investment. “With a traditional solar installer, that wouldhave been about a two week process,” says Kennedy.

The limits of the system become apparent when Birch types in myBerkeley address and the picture shows a large tree overhanging myhouse, which would have ruled out a solar array except the tree hadbeen removed a year and a half earlier. Kennedy acknowledges that leafycities like Berkeley with its mishmash of architectural styles andevery-which-way rooflines are problematic. Instead, Sungevity’s targetmarket is middle-American suburbia, with its vast tracts ofcookie-­cutter houses.

That’s just fine with potential rival SolarCity, the Foster City,Calif., solar installer backed by PayPal co-founder and Tesla Motorschairman Elon Musk. “Their technology works very well for track homes —that’s maybe 2% of our business,” says SolarCity CEO Lyndon Rive. “Ourmarket is more retrofit homes, existing homes in well-established areasthat are looking to go solar.”

“I like it when companies like Sungevity get into the market,” headds. “They’re forcing innovation and the most important thing is thewidespread adoption of solar.”

Sungevity’s launch comes as utilities like Southern California Edison (EIX) and PG&E (PCG) and tech giants like Google (GOOG) are pushing for a mass expansion of solar energy.

Nat Kreamer, president of San Francisco-based solar installer SunRun, says Sungevity’s move to digitize the solar business is valuablebut it will have to focus on the installation process to really getcosts down. “Once you figure out how to size up someone’s system, thechallenge is the speed you can get it built,” he says.

Installation costs account for roughly half of a solar system’s costand solar installers like Akeena Solar have developed modular arrayscontaining wiring and other components to minimize the time spent oninstallation.

Sungevity will not focus on zeroing out customers’ electricitybills, but like Sun Run, will push the “hybrid home” - selling smaller,cheaper solar systems that will cover that portion of a home’selectricity use that is the most expensive to buy from a utility.

For instance, after rebates, a standardized Sungevity solar arrayfor a four-bedroom home in Northern California will cost about $21,000and deliver an estimated return on investment of 13% over the system’s25-year life.

“We’re selling this as an economic asset,” says Kennedy, “not just as a way to go green.”

Follow Green Wombat to Fortune [Green Wombat].

Dear Readers,

As you may know, Green Wombat moved to Fortune Magazine some months ago. I have been mirroring the Fortune posts here on the old Business 2.0 site until Fortune added e-mail subscriptions and other features.

That now has all been done and I will no longer be updating this version of the blog, which will be shut down soon. So please bookmark the Fortune Green Wombat, where you'll find the entire Wombat archive.

cheers,

Green Wombat

Microsoft buying Facebook? Not likely. [Netly News].

Two words: Marc Andreessen. I suspect he'd never join Facebook's board if he thought that selling out to Microsoft was an option. (I love taking  one rumor to debunk another.)

The Coolest Thing That Ever Happened To Me [Netly News].

Immortalized in Episode Two of Sn4tchbuckl3r's's Second Chance. Thanks, guys!

Craig's Gist [Netly News].

[Image: LA Times.com]

Last night, I was in New York for the Time 100 dinner, and arrived at the same time as Craig Newmark. There was a long, red carpet out front and people lined up at the curb to see the celebs. (Robert Downey Jr., Rupert Murdoch, John McCain, Mariah Carey & etc.) Mike Arrington, Jay Adelson, Jeff Bezos, and Mark Zuckerberg were among the geeks honored this year.

One of the things about the 100 is, once you're inducted, you can return to future Time 100 dinners—which is why Craig was there. As we walked in, he told me he'd been to three so far. I trotted along behind him but stopped when we had to go through a kind of chute that was lined with with photographers. "Who are you?" one of them yelled. "Craig Newmark," said his publicist. I hung back with her as Craig sauntered onto the firing line.

You would have thought Paris Hilton had just arrived. The paparazzi went nuts, blasting away at old Craig. I figured he'd be mortified, but no, he was clearly enjoying himself and even pulled out a Coolpix and snapped some shots of the shooters shooting him. "For my blog!" he explained. I wish everyone were sa sweet as that guy.

Google Wants to Friend You [Netly News].

Thanks to a new Google project, soon any Website can be its own Facebook.

Upping the stakes in its ongoing battle with the popular socialnetwork, Google announced today that it was getting into the "socialplumbing" business — giving every website a way to add a limitlessnumber of applications and a means for those sites' users tocommunicate among themselves.

The initiative is called Friend Connect and it begins tonight when anysite can apply to be in the Google pilot program (they call it a"preview release") here.Note: that site won't be live until Monday night. During the next fewdays, Google will choose one or two dozen sites to participate. Overthe course of the next several months, the company will collect site,user and developer feedback on how the program is working. Then, if allgoes well, in a few months Google will open up Friend Connect to anywebsite or blog that wants to participate.

Here's how it'll work. (And forgive me for using my blog as an example; we need the traffic.)

(The rest of my time.com story is here.)

Facebook Wants to Friend You

In Search of a God Shot [Netly News].

Technology put a man on the moon, but it has yet to enable the averageJoe to make a perfect shot of espresso. Scores of websites are devotedto this topic. For my money, none is better than Coffeegeek.comwhich I scoured some years back to come up with my current rig: aRancilio Silvia. I adore Miss Silvia and use her daily while my dogSticky sits at my feet. But the machine is for people who like tofiddle--and not everyone wants to grind beans, pre-heat demitasses,tamp at just the right pressure, "temperature surf" and do all theother hoo-ha necessary to produce a perfect shot (or "God shot," asthey call it on Coffeegeek). Even the lazy have a right to God shots athome, I suppose.

(Read the rest of my column here.)

Stuff I didn't have room for in the magazine: One disadvantage of the Francis Francis X7 is, you must use Illy's coffee capsules. Not that the coffee is bad—it's delicious, if you want a classic cup of Italian espresso. But it limits you.

Indeed, for the past few years, I've been using Miss Silvia to make my version of Cuban-style, cafe con leche. I buy delicious, whole beans, from a site in Miami,