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Which solar business models unlock value of solar PV energy as it grows?

With solar electricity generating more than one terawatt-hour (one billion kilowatt hours) of electricity in the United States in 2010 and continuing to expand rapidly, the key question is, "How can companies best capture value as the industry grows?", said Michael Rogol, global PV analyst and CEO of Boston-based PHOTON Consulting.

Solar business  opportunities in installation, financing and related services

"The U.S. solar power sector is very profitable, but value is migrating from companies that manufacture toward companies that provide installation, financing and other services. As profit migrates, solar companies and utilities have at least seven models to capture value," said Rogol, during his presentation at the 2010 Solar Terawatt-hours Conference Series  in San Francisco.

Models to capture value in Solar Business Opportunities

• Solar equipment and software engineering and manufacturing
• Related equipment manufacturing such as sensors, monitors and regulators
• Installation and maintenance of installed systems
  
• Regulatory auditing - zoning, codes, renewable credits, etc .
  
• Renewable Energy Credits
  
• Equity investment opportunities
  
• Sales, marketing and outreach about solar energy
• Research, management and strategic consulting services
• Financing of solar systems (residential, commercial and generation)
• Tax incentives and rebates can add to bottom line profitability
  

Value Creation with Solar Energy

Strong value creation, including being low cost suppliers, agile traders, value-added service providers, system developers and bundlers of solar power with other technologies. For traditional electricity companies, the biggest challenge, Rogol noted, is to adjust their traditional businesses to create value from solar electricity.

Rogol showed how Solar Business Opportunities focusing on lower module prices are enabling swift growth in the North American solar market and how, as this occurs, profit within the sector is shifting downstream. The key to success, according to Rogol, is a strong, profitable business model capable of "unlocking value." He provided several key examples of strategies for strong value creation, including being

• low-cost suppliers,
  
• agile traders,
  
• value-added service providers,
  
• system developers and
  
• bundlers of solar power with other technologies.
  

For traditional electricity companies, the biggest challenge, he noted, is to adjust their traditional businesses to create value from solar electricity.

Solar consultants model company, geographic and industry projections from the outside-in, cross checking company announcements with providers and buyers. Photon PV data consists of historical and five-year forward projections for price, volume, revenue, cost, operating profit, operating margin and demand for c-Si and thin film technologies.

"This is not the dot-com boom with easy access to capital. Alternative energy companies need to build profitable businesses largely on their own. To do this requires detailed understanding of changing solar power market dynamics and how the electricity sector is evolving across North America," said Rogol.

Electricity is becoming the energy source of choice for a greener economy because it is possible to generate and transport electricity without the greenhouse gas residuals of petroleum and coal based generation feedstocks.

To support companies as they assess strategic moves in solar power, PHOTON Consulting publishes three in-depth business research reports each year focused on

• company risks,
  
• market risks and
  
• sector risks.
  

PHOTON Consulting's research reports provide solar companies at every step of the supply chain with the tools to make fact-based decisions in terms of price, volume and strategy. 

PHOTON Consulting is the largest dedicated solar energy research consultancy and is a leading supplier of in-depth research, management and strategic consulting services specific to the PV sector. With the deepest, broadest integrated coverage, PHOTON Consulting tracks the solar energy sector from feedstock to factory gate to end customer in every active and emerging market.

PHOTON Consulting is a robust source for research and analysis in solar power based on extensive research and data in the sector. For more information on PHOTON Consulting, visit the Company's website: http://www.photonconsulting.com.

Control4 is a maker of home automation software, and have been pulled into the smart grid space by utility companies seeking suppliers with experience in home networking.

The Control4 Energy Management System (EMS) 100, is a combination of a Zigbee-enabled thermostat and touch-screen energy controller for viewing home energy data and accessing other home management applications. The EMS 100 package is set for launch in April.

The EMS 100 combines the functionality of a home area network controller with demand response support, with a wireless thermostat and energy management software to provide utilities a cost effective, flexible, home area network solution for their smart grid deployments.  

Leveraging Control4® Home Automation product technology, the EMS 100 is the only home energy management solution that delivers customer usage data via the smart meter and a standards-based, secure platform that can control many devices in the home.

Since research shows that information availability is essential to effective energy conservation, The EMS 100 serves as an effective communications tool, providing utilities an efficient means to alert customers of demand response events and send signals directly to devices in the home during peak times.

The EMS 100 solution features the following:

•    The Control4® Energy Controller EC-100 5-inch color touch screen display - The EC-100 delivers usage data and energy costs for the home and the ability for the customer to take such actions as powering down lights or adjusting shades to reduce energy use.
•    The WT-100 Thermostat - A simple, elegant, ZigBee-based programmable wireless thermostat that connects directly to the EC-100 for total control of heating and cooling throughout the home.  Programming the WT-100 thermostat is managed through the EC-100 display.
•    Control4® Network Management Software - Control4® Network Management Software enables the monitoring, optimization and reporting of all deployed energy controllers.  The network management tools provide cost effective Tier 1 technical support and remote diagnostic capabilities.
•    Control4® ECO Software - Control4® Energy Consumption Optimizer (ECO) Software collects, analyzes and compresses energy use and behavior data on the EC-100, then communicates with the utility's load management software to treat demand response events as a dispatchable resource.  
•    Control4® Platform - The standards-based, secure Control4® software platform is based on industry standards of embedded Linux and Adobe Flash Lite.  The platform is secured through ZigBee SE, SSL, and OpenSSH technology.  The platform is extensible, allowing third parties to develop new applications, providing enhanced functionality to the system over time. For example, utilities can develop their own applications such as the monitoring of gas and water or a home's carbon dioxide output.
•    Control4 Automation & Control -- Using ZigBee, Wi-Fi and Ethernet standards, Control4's solutions give homeowners the ability to control and automate their thermostats, lights, spa or pool, sprinklers and more, to manage power usage with one easy to use interface.

As the operating system for the connected home, Control4 brings home automation and control to the broad market. Control4 technology is at the heart of an expanding ecosystem of leading consumer electronics products designed to work together with ease.

By 2030, new commercial construction

in the United States will be zero-Energy.

This can be achieved by implementing

aggressive energy efficiency measures to

reduce demand by 70 - 80% and

meeting the remaining energy requirements through renewable resources.

The National Association of State Energy Officials (NASEO) will convene the Zero-Energy Commercial Buildings Consortium in order to support the U.S. Department of Energy's (DOE's) Net-Zero Energy Commercial Building Initiative.

NASEO is comprised of senior officials from the energy offices of both the states and territories, in addition to affiliates from the private and public sectors, and will provide leadership for the Consortium.

The Consortium will include representatives from more than 300 organizations from the following building areas:

• The design professions, including national associations of architects and professional engineers
• The development, construction, financial, and real estate industries
• Building owners and operators from the public and private sectors
• Academic and research organizations with extensive commercial building energy expertise
• Building code agencies and organizations, including a model energy code-setting organization
• Independent high-performance green building associations or councils
• Experts in indoor air quality and environmental factors
• Experts in intelligent buildings and integrated building information systems
• Utility energy efficiency programs
• Manufacturers and providers of equipment and techniques used in high-performance green buildings
• Public transportation industry experts
• Non-governmental energy efficiency organizations.

THE GOAL: Affordable and marketable net-zero energy commercial buildings in all climate zones by 2025

In turn, the Consortium will support DOE, DOE national laboratories, and the Commercial Building Energy Alliances and Commercial Building Partners in achieving affordable and marketable net-zero energy commercial buildings in all climate zones by 2025.

The Consortium will provide access to technical expertise, communicate the emergence of new technologies to the commercial building community, and promote the demonstration of high-performance building technologies. A steering committee made up of NASEO members and lighting, window, and heating, ventilation, and air conditioning suppliers will outline and drive the Consortium's goals and objectives.

More information can be found at the Net-Zero Energy Commercial Building Initiative Web site. Details about the Consortium and its membership are available at the Zero Energy Commercial Buildings Consortium Web site.

RESOURCE:  http://zeroenergycbc.org/