A photo illustration of a solar installation planned in Spain.
(Credit: ProLogis)Recurrent Energy announced on Tuesday a deal in Spain to install 4.8 megawatts worth of solar panels on several rooftops leased from distribution company ProLogis.
In this model, Recurrent owns and operates the panels and sells the electricity the panels generate. ProLogis gets a one-time construction management fee and an annual rental payment.
This distributed solar model, where an outside company rents rooftop space and sells the panels' electricity, is being pursued in the U.S. as well by a handful of utilities. Southern California Edison, for example, said it plans to install as much as 250 megawatts worth of solar energy capacity on hundreds of commercial rooftops.
There's been a sharp uptick in interest in centralized solar power plants over the past five years. But financing those large plants and finding sites for them, often in environmentally sensitive protected land in the southwest U.S., has slowed deployment of those large-scale systems.
The combined output of Recurrent's installations in Spain, which are set to go online in 2010, is enough to power well over 1,000 homes. By contrast, a centralized solar plant would be built with enough capacity to power hundreds of thousands of homes.
Still, the model can be expanded, Recurrent Energy CEO Arno Harris said in a statement.
"We have over 500 MW of distributed-scale projects in development across North America and Europe, and what this project successfully demonstrates is the sizable role commercial and industrial rooftops can play in large-scale solar deployment," Harris said.
Spain is a hotbed for solar energy because it has a good sun resources and because it has a feed-in tariff for renewable energy production, as does Germany. With a feed-in tariff, project developers are ensured that electricity will be purchased at a certain rate over a fixed term, such as 20 years, which many experts say creates a predictable financial incentive.
Solar company Recurrent Energy on Wednesday announced a $75 million partnership, a deal that highlights the financial models being developing to serve the clean energy industry.
Private equity firm Hudson Clean Energy Partners has committed the money to fund expansion of Recurrent Energy's business, where it installs and maintains large solar arrays at corporations and other organizations. The deal was announced at the Intersolar 2008 conference in San Francisco.
Rather than sell the panels, companies like Recurrent Energy install the solar panels on the customer's premises and then sell the electricity to the customer at a preset rate for 20 or 25 years.
This type of contract, called a power purchase agreement (PPA), is helping fuel the fastest growing segment in the solar business. Companies or municipalities don't need to front the expense of the solar gear, making a choice to use distributed energy much easier.
But these solar-as-a-service companies need to get financing to back their services. Venture funds focus on technology-oriented enterprises and don't have enough capital to finance large-scale solar projects.
As a result, private equity and hedge funds are starting to offer financing for clean-energy projects or to commercialize technology developed by clean-tech start-ups.
"We anticipate that this is just the beginning of an even larger financing relationship, and we are committed to providing Recurrent Energy with the resources it will need," said Neil Auerbach, founder and co-managing partner at Hudson, in a statement.
There are a handful of companies also seeking to apply the power purchase agreement model to residential solar installations.
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