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Public projects boost solar power firms
GERARD WYNN
Sunday, February 08, 2009
GUILDFORD, England — JohnFitzpatrick is in a buoyant niche of construction. Building subsidizedhomes for disadvantaged people, with solar panelled roofs forenvironmentally friendly power, he is funded by the government.
A British scheme to halve the cost of installing solar panels onschools and social housing is aiding a solar power industry hit by thehousing slump.
It's tiny compared with U.S. President Barack Obama'smultibillion-dollar plans to invest in cutting carbon emissions fromgovernment facilities. But as a slowdown threatens many renewableenergy projects, such schemes offer hope for jobs.
“We were set up four years ago to do the predominantly social housing.We're not seeing any tail-off,” says Mr. Fitzpatrick, site manager forthe public housing arm of developers Croudace Homes.
New orders in the construction industry fell 14 per cent in the 12months to November, 2008, according to the Office for NationalStatistics. In the third quarter of 2008, orders for private homes fellby one-third, while those for public housing were steady.
Pitting bailout funds against climate change to boost “green growth”has been a mantra among business and political leaders including thosemeeting in Davos, Switzerland, last week. Mr. Obama has promised tospend $150-billion (U.S.) on clean energy to create five million jobs.
Outside Mr. Fitzpatrick's office sprouts a clutch of half-built homes,each sporting glinting blue silicon solar panels, intended for peopleon low incomes in Guildford, a prosperous town 50 kilometres southwestof London.
Britain will spend about £80-million ($142.3-million Canadian) through2010 subsidizing low-carbon energy generation on buildings, much ofthat on public housing. This has offset declining interest fromresidential home owners.
For private homeowners it costs up to £15,000 to install solar panelsto meet half their electricity needs, not including grants, saysprivately owned Solar Century Holdings Ltd., which is supplying solarpanels to the Guildford site.
That is a significant cost in a recession, especially when mortgagelenders are cautiously eyeing falling house prices. Solar Century saysthe cost will fall 10 per cent in the second half of 2009.
“New-build is probably at least 25 to 30 per cent down, year-on-year,”says Derry Newman, Solar Century's chief executive officer, referringto installations on new private homes.
“So we've redirected our efforts. We do a lot of work with schools,public buildings and government agencies. That's obviously a sectorwhere revenue isn't falling. If anything, government is trying to pushforward purchasing.”
Britain says it plans to bring forward to this year and next spendingof £3-billion on houses and roads, to stimulate the economy. PrimeMinister Gordon Brown has voiced support for measures to ease socialhousing construction to house 4.5 million people.
Under an economic stimulus plan, which may cost up to $900-billion(U.S.), Mr. Obama plans to spend tens of billions to cut carbonemissions from federal facilities.
The details are not yet clear but the plan being rushed through U.S.Congress is expected to include about $15-billion in grants and loanguarantees for local renewable energy generation and efficiencyimprovements.
“That will be enough to keep every renewable energy developer busy,”says entrepreneur Jigar Shah, founder of America's biggest operator ofsolar panels, Sun Edison LLC, a company he recently left to pursuefresh startups.
Tens of billions of dollars of clean energy tax breaks may also beincluded under the stimulus plans. The solar sector has the advantageof being zero-carbon emitting, but needs public subsidy because it isstill more costly than rivals such as coal-fired power plants.
The British approach of supplying grants for residential home energygeneration – also called microgeneration – differs from that inGermany, the world leader in solar power generation whose model Britainaims to emulate.
Germany guarantees prices for “green” electricity for 20 years,encouraging homeowners to feed their solar-generated electricity backinto the national grid using a so-called feed-in tariff.
According to Citigroup analysts, German residential installations wereproceeding “flat out” at the end of last year, reinforcing the successof the model. Britain is to launch a feed-in tariff for microgenerationfrom 2010.
Home installations are a slice of a bigger, global solar power marketwhich includes large, centralized clusters of panels in solar parks.
Banks repairing their balance sheets are now reluctant to lend to suchprojects, so project developers say they are trying to “educate”alternative investors including any cash-rich private equity firms.
Coupled with Japan's goal to bring back solar power subsidies forhomes, emergency stimulus funds may help bridge a difficult 2009 untilrenewable energy is revived by countries trying to meet pledges tofight climate change.
But a sweeping transformation of the building sector is still far off, for some.
“Carbon neutral homes? I think it's going to be impossible, absolutelyimpossible. I've no idea how we're going to achieve that,” says Mr.Fitzpatrick, referring to a British goal to make all new homes net zerocarbon-emitting from 2016.
European solar power capacity nearly doubled in 2008 to about ninegigawatts, enough to power two to three million homes, according to theEuropean Photovoltaic Industry Association. But that is still onlyabout 1 per cent of European power generating capacity.
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