Signs of Recovery in Commercial Solar? Renewable Ventures moves forward on 65 MW in US as Fotowatio plans 1,000 MW worldwide.

On August 13 of this year, Renewable Ventures (formerly MMA Renewable Ventures) announced a long-term power purchase agreement (PPA) with NV Energy, Inc.  Renewable Ventures will fund, own, and operate a 26-megawatt solar power plant northeast of Las Vegas. The Apex, NV plant is expected to provide 200 new jobs and power the equivalent of 5,000 homes.

This is good news for Renewable Ventures and the commercial solar sector in general.  Renewable Ventures describes itself as an Independent Power Producer (IPP) that develops, owns, and operates solar power plants at commercial and utility sites.  They sell power to a host customer or utility through a long-term agreement. They are among 12 - 15 commercial US “PPA Companies” capable of funding such agreements.

Renewable Ventures surprised many by entering the Nevada market, first at Nellis AFB in 2007 and now at Apex, NV.  Many solar developers shun Nevada in favor of California’s higher net metering rates and production based cash incentives.

However, NV Energy purchases renewable energy credits (RECs) to meet Nevada’s Renewable Portfolio Standard (RPS).  Rather than build solar facilities, NV Energy meets its renewable energy obligations by purchasing clean power from independent power generator and paying a premium for clean power in the form of RECs.  In 2007, MMA made innovative use of RECs to finance the Nellis project.

2009 has been a tough year for commercial solar.  PPA Companies providing power purchase agreements are backed by complex funding commitments with major banks.  As the banking crisis deepened in November of last year, only 4 of the 20 banks funding commercial solar installation were still in the game.

As a subsidiary of Muni Mae, MMA Renewable Ventures may have also been adversely affected as the Federal Reserve sorted out Fanny Mae and Freddie Mac.  Though Muni Mae appears to have survived, it sold its Low Income Housing business and MMA Renewable Ventures, both powered by tax subsidy financing.

In stepped Fotowatio, a global renewable energy producer operating in the United States and Spain.  With the acquisition of MMA Renewable Ventures and its solar holdings, Fotowatio’s global portfolio will total more than 130 megawatts of solar installations.  Fotowatio also claims another 1,000 MW in some stage of development across the United States, Spain and Italy. Company press claims investments of over $880 million in solar projects since 2006 and plans to invest up to $3.2 billion by 2012. Fotowatio is one-third owned by GE Energy Financial Services.

Renewable Ventures has a short but storied history.  As MMA, they were a leading provider of solar power purchase agreements (PPAs) in the commercial sector with over 16 megawatts (MW) of installed power in 2008.  Only SunEdison installed more commercial MW in 2008.  Customers included Macy’s, the Denver Airport, the GAP, and Global Solar’s manufacturing facility.  In 2007, they completed the much-heralded 14.2 MW facility at Nellis Air Force Base in Nevada.

In October of 2008, MMA formed Gemini Solar, a joint venture with Suntech Power Holdings Co. to develop and finance photovoltaic projects over 10 megawatts.  Suntech Power Holdings is the world’s largest manufacturer of photovoltaic (PV) modules.  Gemini’s first project will sell the electricity to Austin Energy under a 25-year non-escalating power purchase agreement. Gemini will own and operate the 30MW power plant. Construction is schedules to begin in 2010.

In March, Renewable Ventures in association with Namaste Solar, Greenprint Denver, Oak Leaf Energy Partners, SunPower Corp., and Xcel Energy completed a 300 kW installation on the Colorado Convention Center.  Renewable Ventures financed, owns and operates the system and sells power to the convention center through a long-term contract known as a Power Purchase Agreement (PPA).

For PPA Companies, tax subsidy funding is essential.  In early August, Renewable Ventures announced new funding commitments from Wells Fargo and John Hancock totaling $200 million.  Designated as Solar Fund V, this commitment includes debt financing from John Hancock and equity funding from both Wells Fargo and Renewable Ventures.  A joint press release suggests that this fund will produce 35 MW in new installations over the next year. The first installation is a 2MW installation that will sell energy to Colorado State University in Fort Collins, CO, and renewable energy credits to Xcel Energy.  Completion is expected this year.

All of which might total 65 megawatts over the next 18 months or about 40 MW per year or roughly twice the installation rate of 2007-2008.