Recently in Commercialization Category

Environmental Protection Agency finalized its revision to the Renewable Fuel Standard (RFS) program in February, 2010. 

Under the Energy Independence and Security Act of 2007 (EISA), Congress created requirements for how much renewable fuel (corn ethanol, biomass-based diesel, cellulosic ethanol, and other "advanced "fuels) must be blended in the nation's petroleum supply.

Although the revision does not change the fact that 36 billion gallons of biofuels are required to be consumed in 2022, it does make two significant changes.

RFS is that lifecycle GHG emissions

First, one of the unique aspects of the RFS is that lifecycle GHG emissions of qualifying renewable fuel must be less than lifecycle GHG emissions of the 2005 baseline average gasoline or diesel fuel that it replaces. 

According to Green Tech Media, "when the EPA originally calculated indirect land use, corn ethanol was found to have a higher carbon footprint than an equal gallon of gasoline - and thus would not qualify under the RFS. The corn ethanol lobby (i.e. Big Agriculture) cried foul and claimed that since there was no universally agreed upon methodology for evaluating indirect-land use effects, the EPA should shelve it. The corn ethanol lobby also mobilized their Republican and Democratic friends in Congress who subsequently threatened to pass laws taking away the EPA's power to regulate "indirect land use" effects in life-cycle greenhouse gas analysis."

Under the final determinations established Wednesday, the EPA ruled that corn ethanol produced from a "new or expanded capacity from an existing natural gas-fired facility using advanced efficient technologies" complies with the 20% GHG emission threshold. 

Advanced Biofuels

While the EPA kept in place the target of 36 billion gallons of biofuel in 2022 (of which corn ethanol is not to exceed 15 billion gallons), it greatly reduced the amount of cellulosic ethanol required to be blended in 2010 (from 100 million gallons to 6.5 million gallons).

Cellulosic ethanol is a wonderful improvement over corn ethanol. There are a plethora of non-food based feedstocks that can be used (e.g. agricultural residues, woody biomass, municipal solid waste, etc) and lifecycle greenhouse gases are lower due to the ability to burn the lignin and co-generate electricity. Yet, the costs of producing a gallon of cellulosic ethanol still remains higher than corn ethanol, due to the expensive enzymes required for breaking down complex polysaccharides into simple sugars for fermentation. BUT...The  industry is coming to market much slower than anticipated.

While GreenTechMedia expects the first commercial facility to go online in 2010 (Range Fuel's 20 MGY facility in Colorado), 2012 should be the year where a massive ramp up occurs (see GTM report Biofuels 2010: Spotting the Next Wave).

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.