TiogaEnergy.com

by Preston Roper, EVP Corporate Development & Operations, Tioga Energy

General Comments:

• Huge attendance growth, doubling to 20,000 visitors from 2007, coupled with extreme segment optimism
• High optimism is not yet tempered to the financial/credit crisis and looming, global economic distress
• Great parties, with more free food and drink than one could wish for in the fabulous waterfront San Diego setting, which is about as good as one can imagine for a trade show (comfortable hall, great hotel and food access, perfect weather…)

2008 Takeaways:

• Average commercial PV project sizes continue upward – many, many 1-3MW projects in addition to the sub-megawatts (not to mention small utility and utility scale PV growth)
• New products announced last year to great fanfare are close to delivery and/or in low-volume production stages now – think micro-inverters, new CSP, thin film (e.g. CIGS) beyond the existing big names
• Big upstream players (cells/modules) are reaching further downstream, some testing the waters (sorry, it’s all NDA), some diving in head first (e.g. Suntech)
• Module supply is loosening, but still questionable versus growing demand.  Spot pricing may show much higher volatility than past
• This year, not a single person visiting our both – and we had a lot of visitors — asked “what’s a PPA?” High market acceptance
• The Germans are coming!!
• The suits are here
• Double Decker booths are in! (…to have Sharp’s marketing budget….that’s the life)

Looking Forward

• In many Europeans’ eyes, we are a fledgling industry, ripe for cost reduction, standardization (product, incentives, process, etc.) and large-scale deployment rolled out six-sigma style.  It’s going to be interesting.
• The big supply constraint for 2009 C&I PV may be financing.  Caveat Emptor.
• The utilities are on the way…think of the deafening, equipment sucking sound otherwise known as Spain…are the utilities, utilizing the ITC, to become the “Spain” of North America?
• Fancy trackers, intricate CSP devices…do we really need all that complicated stuff to make cheap electrons?
• The Germans are coming (did I already say that?).  The Spaniards are sitting across the aisle in first class, enjoying the exchange rate.

Great show, great week, huge opportunities.

Preston

by Marc Roper, VP Sales, Tioga Energy

The Solar Power International 2008 exhibit hall has a tradition of showcasing new product launches and the latest in solar technology, and this year was no exception. The hardware represented this year, as well as conversations in the halls and conference sessions, highlighted one notable theme absent from past solar industry conference tradeshows I’ve attended in the US: the PV industry is facing a shortage of qualified installers.

With increasing focus on clean, domestic energy generation and federal ITC support now in place, a lack of qualified technicians and installers presents a potentially serious bottleneck to industry growth. In California alone, if the state is to reach its 1 million solar roofs initiative in 10 years, it will require more than 10,000 additional certified installers. This year’s innovative products on the floor attempted to address the problem by reducing the time and complexity of the installation process.

Product Innovation Focuses on Installation

The expo floor showcased a new breed of simplified panel technologies, including wiring, grounding, and mounting elements incorporated into the module framing systems themselves, and simplified wiring harnesses. Developers of microinverters module-integrated inverter systems also demonstrated powerline communications that promise to virtually eliminate all DC and communications wiring, reducing system design and installation requirements to an absolute minimum.

As competion in solar technology intensifies and matures, margins will be tested throughout the entire value chain. These products represent a focus on reducing the labor cost component of installed solar systems, as well as recognition that for the industry to expand, the base of installers has to grow beyond those with years of PV design and DC wiring experience.

This same focus was reflected in several conference workshops and panel discussions bringing to light the importance of workforce development activities. As the U.S. economy and workforce facing challenging and changing times, the growth of the solar industry and development of integration technologies offers an economic opportunity to a new generation of skilled solar technicians.

The question begs asking: with all the hype around green collar jobs, where are all the green collar workers?

by Kristian Hanelt, VP Project Finance, Tioga Energy

Which do you want first? The good news or the bad news?

The good news is Congress extended the Investment Tax Credit for 8 years. This is both unprecedented and long overdue, and it’s got the body of the 2008 Solar Conference upbeat and jovial. People are a buzz about the support the industry has finally received from Congress – after 12 highly contested voting attempts to finally pass legislation this year and avoid a crippling lapse. Layer that on top of industry already high on rampant growth, and one might argue you run the risk of blindly marching a healthy solar market into distress over the greater financial elements at play.

So here is where the bad news comes in…the house of cards that is our financial and banking system is quivering and people in the exhibit hall or at events at Solar Power 2008 don’t seem to be fully aware of the extent of the damage currently happening in the credit markets.

Granted, clean energy investment seems to have found shelter during the initial stages of a credit fallout. But, there are some serious challenges for solar in 2009, depending just how extensive the current financial crisis shapes up to be.

Banks that have been traditional early adopters in financing renewable energy have either forced themselves to become regulated, or will not be paying taxes next year thanks to losses acquired in acquisitions or large write downs. The amount of taxable income in corporate America has shrunk. So investors sophisticated enough to work with solar providers could demand a premium for their investment.

That being said established companies with track records can and will weather the storm.  Tioga Energy is fortunate enough to have carefully chosen partners that have maintained their tax equity support of our projects, as they have largely shielded themselves from write-downs.  All of Tioga Energy’s 2008 projects are secure.

The financial crisis and its fallout will not only reshape the game of solar, it could also freeze out new US companies looking to get in and play.  Hopefully the provisions of the $700 Billion bail-out will have the desired effects and quickly enough that naïveté and exuberance floating around the industry won’t run flat into the stark reality of the crisis as it is today. From what I’ve read recently, the bailout is having a mild effect to where bankers are seeing credit loosen a little and their consensus is it’s not a matter of if anymore, but when.

by Matt Lugar, VP Sales and Marketing, Tioga Energy

The fact that I am writing this post at almost 2am speaks directly to the enthusiasm and excitment around the celebrations happening all over downtown San Diego this week.  There have now been three nights straight of various parties and gatherings that have been hosted by companies and organizations who want to show their appreciation for their customers, partners, each other, and well… just about anyone who wants to celebrate the continued growth and strength of our industry.  It is not lost on all of us who have wandered the streets of San Diego’s Gaslamp District and waterfront that we seem to be an industry almost alone in the world in our joy and excitement while global financial markets shake.

Could it even be appropriate and logical that our trajectory as an industry will help the rebuilding of the economy?   Ok, that’s a little heavy, but there is no doubt that the leaders of the solar industry say they believe this to be true… and some even more so as the nights wore on and glasses were emptied.  It has been great seeing old friends, colleagues and business partners again, and meeting all the newbies who have finally seen the light that solar is great place to be.  Here’s to being part of the solution!  Now let’s all get back to work and sell some megawatts…

by Paul Detering, CEO, Tioga Energy

Right now I’m in San Diego, which has become the Mecca of Solar, literally overnight. Solar Power International 2008 has drawn thousands of people from around the world to talk shop and deals. And where I feel like I am living The Strange Case of Dr. Jekyll and Mr. Hyde.

There is tremendous excitement and enthusiasm here in San Diego’s convention center and Gaslamp district.  My breakfast meetings start early (7AM) and the days are filled with meetings about very real opportunities and projects.   Finding a quiet corner to meet is impossible.  Occasionally, I meet in one of the private meeting rooms hosted by some of the big players attending the conference. But usually it is in one of the many large “meeting rooms” on the upper level.

These rooms are great.  They typically have 5 to 10 tables and are well stocked with water, sodas and ice where 3 or 4 meetings are underway simultaneously in multiple languages – German, Spanish, Japanese, English – the Solar World right before my eyes. Very exciting.

At the conference day’s end, its thousands of solar enthusiasts spill out of the convention center and cross the street. Some people are so eager to get to the Gaslamp District and continue making their solar connections, that they attempt jaywalking. A crossing guard, looking out for our safety, has been kindly, but firmly, threatening people with tickets to keep us in line.

The Gaslamp District is San Diego’s historical heart along the water, bustling with shops and restaurants. Here the solar industry discussions carry late into the night over fine food and drinks at the many parties lining the streets. The excitement in the air is electric (renewable of course) from the estimated 20,000 people in attendance. That is up from 6,000 in 2006 and 9,000 in 2007. Clearly, solar is on a roll in America.

So these are my Dr. Jekyll days. As you well know, it’s in the dark where Mr. Hyde emerges. About half way through the day yesterday, I was riding the escalator up to the meeting rooms and the banker I was meeting with told me the Dow was down 730 points! Wow! I had not checked the WSJ service on my blackberry all day.

What a roller coaster. Flying down to San Diego on Monday, the Dow was up 940, Tuesday was relatively normal and now another 730 point drop. I think everyone at the conference is optimistic, as I certainly am, about solar energy’s long-term future. But Wall Street is not helping us right now. We are fundamentally changing the power industry in this country and building a better, more sustainable, and decentralized energy future. However, in the short term we must navigate some difficult and choppy waters.

At the end of the day, we depend on our customers, be they residential homeowners installing solar panels on their roofs and large commercial entities looking for less expensive green electrons, to utilities looking to fulfill state renewable portfolio standards and diversify away from fossil fuels. In these uncertain times every customer, understandably, is proceeding more cautiously. To top it off, this fundamental, low carbon economy switch needs a lot of money and that means the banking industry’s participation is important. Unfortunately, they are rather preoccupied at the moment.

Everyone I talk to in the banking industry agrees that their highest priority, once the global banking industry returns to some level of normalcy, is the clean tech industry and specifically new renewable energy. They know it’s the one sector of the global economy with the strongest potential for growth. So while I feel like I’m living the Jekyll and Hyde story, here in San Diego, the condition of Mr. Hyde will not prevail.

Coming this week:

• Business ramp up from ITC Extension
• Crisis on Wall Street impacts to Solar Main Street.
• The Best of the Tech
• C-Sweet: Solar Power’s social scene
• The ongoing quest for grid parity
• SP08 in review

Paul Detering

CEO, Tioga Energy

Link to SP08 Press Release

http://www.solarpowerconference.com/news/news.php?id=96

More on ITC Extension: Tax credit extension gives huge boost to solar industry

http://www.mercurynews.com/vc/ci_10692136

Credit Crunch and Renewables: Green Meltdown: Credit Crunch Whacks Renewable Energy, Too

http://blogs.wsj.com/environmentalcapital/2008/10/09/green-meltdown-credit-crunch-whacks-renewable-energy-too/