Posts Tagged ‘Rocky Mountain Institute’

11 June

What Does A Downgrade of U.S. Electricity Sector From Barclays Mean


Dear Friends, Visitors/Viewers/Readers,

Distributed Solar Power at Googleplex (credit: Creative Commons)

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Have you ever heard of Barclays?

Barclays is a British multinational banking and financial services company headquartered in London. It is a universal bank with operations in retail, wholesale and investment banking, as well as wealth management, mortgage lending and credit cards. It has operations in over 50 countries and territories and has around 48 million customers. As of 31 December 2011 Barclays had total assets of US$2.42 trillion, the seventh-largest of any bank worldwide. This PLC (public limited company) organization has been around since 1690, obviously with plenty of experience in observing and forecasting trends of various types.

Well, recently Barclays downgraded the whole U.S. electricity sector, listing it as “underweight.” That means Barclays have little confidence in U.S. electric utilities being able to keep up with the broader economic growth trends. The critical factor lies in the disruptive solar-plus-battery systems. In this Barclays report:

Over the next few years… we believe that a confluence of declining cost trends in distributed solar photovoltaic (PV) power generation and residential-scale power storage is likely to disrupt the status quo. Based on our analysis, the cost of solar + storage for residential consumers of electricity is already competitive with the price of utility grid power in Hawaii. Of the other major markets, California could follow in 2017, New York and Arizona in 2018, and many other states soon after.

In the 100-plus year history of the electric utility industry, there has never before been a truly cost-competitive substitute available for grid power. We believe that solar + storage could reconfigure the organisation and regulation of the electric power business over the coming decade.

Some of you out there may have previously come across another recent report, The Economics of Grid Defection, with similar language or logic, by the Rocky Mountain Institute (RMI).  RMI was forecasting the declining costs of solar plus storage and the soon-to-arrive days when when those systems could reach parity with grid-sourced retail price electricity in a growing number of markets, including Hawaii, California, and New York. In fact, the Barclays report cites RMI as a key source in several of its analyses that lead to this conclusion.
Barclays believes we’re entering a post-monopoly world in which distributed energy resources will take place alongside large-scale central generation as a critical energy resource and a widely available and affordable customer option. In a surprisingly strong prediction for analysts, Barclays views this transition as inevitable: “Whatever roadblocks utilities try to toss up—and there’s already been plenty of tossing in the states most vulnerable to solar, further evidence of the pressures they’re facing—it’s already too late.”  A downgrade suggests two possible outcomes in the near future: 1) analysts tend to move in herds, so expect more news on the U.S. electric sector soon, and 2) capital is likely to get a bit more expensive for utilities, as millions of dollars shift out of the sector.  It’s not all bad news, as indicated recently in “Caveat Investor,” this should ultimately lead to a stronger, more resilient power sector with stronger overall valuations, but the transition is likely to be volatile. The Barclays report suggests we’re about to enter that volatile transition phase.
To learn and quote from Rocky Mountain Institute, what does a utility downgrade mean for the future of distributed renewables, 4 points are listed below:

1) Distributed energy is hitting the mainstream. Historically, it’s renewables’ creditworthiness that has been challenged (while utilities have been considered rock solid), but now this trend appears to be reversing. We’ve seen declining costs of capital in solar (as recent securitizations demonstrate), new financial instruments emerging for related technologies, and lower costs overall. Despite this progress, there is still a large gap between the market acceptance of renewables and the market acceptance of central, fossil-fueled generation. The recent downgrade suggests that people are starting to take distributed renewables seriously, and that utilities and renewables are entering a period of equal (or at least comparable) market strength.

2) Issuing new bonds for thermal fossil generation will become more expensive. While many people focus on the construction costs of new assets (central and distributed generation alike), it’s more often the cost of capital that determines project viability. Traditionally, utilities have almost always been the lowest-cost provider of new energy resources, and part of this advantage has rested on ready access to and favorable terms from the bond market. If that advantage is eroding, then expect new players to be able to compete for providing the nation’s energy, including providers of much smaller, distributed generation.

3) Distributed storage, when combined with already mature trends in generation and energy efficiency, compounds the disruptive threat of consumer-scale investments in energy. Many people have worried that declining demand (through energy efficiency) and distributed generation are putting enormous stress on the traditional business model for investments in central generation. That has not changed at all. So why does the emergence of storage, something that doesn’t reduce consumption or increase generation, suddenly give the markets concern? Simply put, the addition of storage gives customers the option to entirely disengage from their relationship with the utility. While most customers won’t choose to leave, and for good reasons, the threat of grid defection creates consumer leverage that will slow recent upward trends in utility rates out of competitive necessity.

4) These trends are likely to accelerate. As capital shifts from central to distributed generation, this just improves the economics of distributed resources even further, through scale benefits as well as lower cost of capital. Few people would say that we’ve even come close to market saturation for any customer segment for renewables and efficiency. As the traditional electric sector becomes a more challenging place to park capital (or even just a less certain place), more investors will start to notice that investments in distributed resources have similar risk-reward profiles, and this movement of capital will be self-reinforcing.

Distributed generation is likely to be an affordable and accessible choice for more and more customers alongside traditional utility-provided electricity. More options means more competition and increased relevance of the customer. And that’s an upgrade for users of electricity everywhere.

Perhaps this is also a time of warning for the U.S. utilities to take action in making greater effort in encouraging environment that would help to provide incentives for consumers to stay on the grid rather than defecting from the grid. On this topic, please feel free to refer to one of our earlier posts, In-Depth Analysis of Renewable Energy Policy With Toby D. Couture.

~have a bright and sunny day~

Gathered, edited, and posted by sunisthefuture-Susan Sun Nunamaker

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1 January

Discussion of the Importance of Value of Solar With Karl Rabago


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Central Florida Sunset (Credit: sunisthefuture-Susan Sun Nunamaker)

Recall the book A Golden Thread (by Ken Butti and John Perlin) in the previous post on “Time To Let It Shine“? I’d like to point out and share with you a paragraph in the Foreward of the book A Golden Thread (by Amory B. Lovins) for it has pointed out  the  problem that appeared as far back in the 1970’s as it does now:

People who point out the obvious merits of solar energy still face the same obstacles  they have always faced: lack of fair and symmetrical tests (how do the costs, rates and risks of solar energy compare with those of not having it?), misinformation from competing vested interests, and above all a widespread ignorance of what has actually been accomplished, both recently and in prior ages.

Because of this, I am quite thankful to have learned about Value of Solar and Karl Rabago, presented below in the video (I also found out that Youtube seems to be having some storage issue with regard to the video interview with Mr. Karl R. Rabago momentarily. Please be patient and Youtube is working on the issue at the moment):

I wanted to post this interview on the January 1st of 2014 because this is an extremely valuable interview for any one interested in learning/solving issues in solar/renewable energy and most effective and fair way for our world to transition into a sustainable future quickly. Karl R. Rabago has over 20 years of experience in clean energy, electricity regulation, sustainability, and advocacy.


His resume spans across the full spectrum, from being: Major of U.S. Army, Associate Professor of Law of University of Houston, to Public Utility Commissioner of TX, Deputy Assistant Secretary in Utility Technologies of U.S. Department of Energy, Energy Program Manager of Environmental Defense Fund, Vice President of CH2M Hill, Principal Managing Director of Rocky Mountain Institute, Sustainability Alliances Leader of NatureWorks LLC, Energy Solutions Group Director of Houston Advanced Research Center, Government & Regulatory Affairs of AES Corporation, VP of Distributed Energy Services of Austin Energy, and Principal of Rabago Energy LLC.

Through his knowledge, insight and experience, we learn about this innovative “Value of Solar“, the missing link for widespread use of solar energy since the late 1970’s. Finally, with the long delayed fair and symmetrical tests (how do the costs, rates and risks of solar energy compare with those of not having it?) and availability of super data and technology, Karl R. Rabago will take us to the path of the inevitable Solar Age. After three decades of believing that solar energy is the only soft energy path we can truly afford-economically, politically, and environmentally while realizing the obstacles such as misinformation from competing vested interests and widespread ignorance of what has actually been accomplished….it’s been discouraging at times. This is the first time, I see the last piece of that incomplete puzzle surfacing and realizing that the solar transition that is already underway will gain the breadth and speed that will astonish every one! For Value of Solar is here! I hear drum rolls…Solar Energy Age has finally arrived! For more details on “Value of Solar”, Be sure to check out:……

Database of State Incentives for Renewable Efficiency (DSIRE)

Interstate Renewable Energy Council (IREC)

Any of your comments/questions/suggestions will be welcomed at
~have a bright and sunny day~

sunisthefuture-Susan Sun Nunamaker

gathered, written, and posted by sunisthefuture-Susan Sun Nunamaker

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31 December

Time To Let It Shine!


Dear Friends, Visitors/Viewers/Readers,

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Please show your support for Renewable Energy by visiting-signing-sharing Renewable-FIT For Sunshine State!


Let It Shine:The 6,000-Year Story of Solar Energy by John Perlin (posted here with permission from John Perlin)

For the last post of 2013, I’ve reserved sharing the most special chance meeting of the year with you all.  It is either an event of kismet or a reflection of the fact that Solar Energy Age has truly arrived in mainstream! So much so that every corner one (at least is in the case for yours truly) turns toward, one would run into some one who is connected to the solar industry. Or perhaps I have simply become a magnet attracting all kinds of solar enthusiasts…take your pick.

It happened on the last day of the conference of SPI2013 (Solar Power International 2013) in Chicago. We (hubby Mike-my camera man and tech support, and I) stayed at the Palmer House (mind you, this is not the hotel where the conference was being held). We simply have a soft spot for those nostalgic hallway photos of stars from yesteryears and the beautiful architectural details  rarely found in most other hotels. As we were getting ready to leave the hotel to catch our flight back to Florida,  some one entered our elevator with a beaming smile on his face.   Interestingly enough, this person, Thomas Barr, from Jacksonville, FL,

Thomas Barr, General Manager of Oncology Matrics, a part of Altos Solutions, who also worked for solar back in the 70's

turned out to be in Chicago for a different conference,  actually worked in solar business back in the 70’s-80’s and now is working as a General manager in Oncology Metrics (a division of Altos Solutions, Inc.), providing information products and services for the oncology community to promote and measure quantitative improvement in clinical and business processes at the provider, practice and enterprise level.

In the few minutes of this chance meeting in the elevator, Mr. Barr highly recommended a wonderful book, A Golden Thread: 2500 Years of Solar Architecture and Technology by Ken Butti and John Perlin. I found out later that:

A Golden Thread by Ken Butti and John Perlin

Its author John Perlin

John Perlin, sole author of Let It Shine , co-author of A Golden Thread, now at University of CA-Santa Barbara, Physics Dept.

has also authored Let It Shine: The 6000-Year Story of Solar Energy (cover above) and From Space to Earth: The Story of Solar Electricity. As a matter of fact, I just purchased Let It Shine’s kindle version  right before starting the trip to Chicago for SPI2013.  So, what do you think: are these chains of coincidences… or am I simply a magnet for all things and people that are solar…or perhaps we have simply arrived at a time in human history when solar has finally become sufficiently mainstream…as now that America has more solar or wind-power jobs than it has coal or steel jobs. As investments are shifting dramatically from coal and nuclear to wind and solar, will renewables finally have sufficient political clout to fend off increasingly desperate attacks by its endangering rivals? Time will tell….

Until the fickle finger of fate and time will unfold their mysteries, I will continue relishing each and every one of these events presented along my journey of advocacy for solar energy.

Finally, I implore all of you solar enthusiasts out there to take a look at these two books.  I love how Amory B Lovins, cofounder and chief scientist of Rocky Mountain Institute of Old Snowmass, CO, puts it:

Switching at last to renewables will be one of the greatest transitions in the history of our species: inventing a new fire that finally makes us safe, secure, healthy, and durable.  Even if we need never again reinvent this renewable-energy wheel, we must understand where it came from. Let It Shine shows how today’s renewable revolution builds on the tenacious efforts of countless generations of innovators whose vision we may finally be privileged enough to bring to full flower.

Yes, this has definitely been a cumulative effort for many generations. If I or any of us has been able to make a dent in pushing the slope at the inflection point, it would have been a great privilege.  And let us hope that the Renewable/Solar Energy Age is finally ready to blossom, for the sake of all human kind.

~have a bright and sunny day~


Below are web links to “Let It Shine” shared by author John Perlin:



Review of the book-,Socrates+didnt+invent+solar+architecture,60,a27294.html

Strictly photovoltaics-


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gathered, written, and posted by sunisthefuture-Susan Sun Nunamaker

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