Big News (4.8MW to be Exact) in Spain!

Today Recurrent Energy made some news with the announcement of our first 4.8MW of rooftop projects in Spain. These projects are the first projects to emerge from our efforts in Europe that were started last year. But what's really remarkable about these projects is how they were developed and what they indicate about the sizable role distributed-scale solar will play in the industry's future.

Recurrent Energy developed the Spanish projects through an innovative co-development arrangement with ProLogis (NYSE:PLD), the leading global provider of distribution facilities. Under the terms of the arrangement, Recurrent Energy leases rooftop space from ProLogis (which owns 450-million square feet of such roofs worldwide!) as a site for our projects. As the owner of the projects, Recurrent Energy provides the financing to construct and operate them. The projects generate income for Recurrent Energy through the Spanish feed-in tariff that provides 32 euro-cents per kilowatt-hour delivered to the grid.

To date, most commercial and industrial projects have been done one building or one owner at a time. That means for each rooftop, the developer typically had to negotiate a separate roof lease agreement and power purchase agreement (PPA). That's a lot of legal paperwork and expense to go through for smaller rooftop projects. Under Recurrent Energy's approach, we sign one master lease that covers a large number of buildings and sell the electricity under one tariff (or utility PPA in the US). That allows us to reduce the transaction cost associated with rooftop solar and aggregate significant generating capacity.

Why is that important? Because it points the way to a business model that enables us to do rooftop solar efficiently in large volumes. And that's important because it is business-model problems that have kept us from tapping the solar potential of large commercial and industrial rooftops. We've "cracked the code" on these types of projects, opening up a significant new resource for generating clean electricity right where it's needed most, in urban load centers.

Recurrent Energy has differentiated itself by pursuing a distributed-scale development strategy. Our vision is to build and operate a large fleet of 2MW to 20MW solar PV projects, selling clean electricity to utilities, governments, and commercial customers. Our Spanish project (and our pipeline of over 500MW across North America and Europe) demonstrates that we can aggregate small projects into a large portfolio and play a sizable role as a generator of clean electric power.

Comments

[ECD Fan]

Dear Mr. Harris:

Not sure exactly what code you have cracked, but can you explain why you have decided to use Unisolar laminates? Obviously, it is not because of their low installed cost or the quality of the product. Why then? Was UPC somehow stuck with some rotting inventory (after all, they owned a big chunk of SIT and chaired the Board)? Let us know.

Oh, by the way, have you looked at the performance of the 12MW GM/Opel Zaragoza gem? No? Invertors fail on a weekly basis (and some stay down for a month), according to the remote monitoring system. The system as a whole is underperforming, of course, even in its first year (before the serious degradation kicks in). And, of course, you are familiar with the fire on the rooftop of the Long Beach Convention Center in February 2008.

So, can you explain how you cracked the code? Because your colleagues at Clairvoyant (aka DEERS) thought to have cracked it too, but seem to have changed their mind (if the Oerlikon news is to be believed).

http://ecdfan.blogspot.com/

[Arno Harris]

Hi, ECD Fan:

Thanks for your comment. By "cracking the code", I was referring to the business model the project demonstrates that enables us to do rooftop solar efficiently in large volumes. Ultimately it is that innovation which will enable the industry to tap the solar potential of large commercial and industrial rooftops.

Per your question, there is no connection between our UPC transaction and our decision to work with ECD on the Spanish project. We work with a variety of suppliers and select specific technologies based on the appropriateness of the "fit" with each project's requirements.

We invest in our projects based on financial return. The cost of the ECD solution and its risks were thoroughly evaluated as part of the financing process. ECD provides a warranty on the product and the project's performance.

Regards, Arno