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</o:shapelayout></xml><![endif]--></head><body lang=EN-US link=blue vlink=purple><div class=WordSection1><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'>>…</span></b><span style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'> <b>On Behalf Of </b>Alfio Puglisi<br><b>Subject:</b> [ExI] The silent PV revolution<o:p></o:p></span></p><p class=MsoNormal><o:p> </o:p></p><div><div><p class=MsoNormal><span style='color:#1F497D'>>…</span> electricity markets this summer: there is a non-negligible chance that a major country is going to have so much production from solar photovoltaics that it will have to *export* a sizable fraction of it<span style='color:#1F497D'>…</span>Traditional energy giants are lobbying like hell the government to regulate the market<span style='color:#1F497D'>…</span> <span style='color:#1F497D'><o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>Ja, then what happens? The power companies which have had legislative mandates to buy a certain amount of power from renewable sources gets all it is required to buy, forcing the price of any additional solar power downward, which has an immediate impact on the value of solar installations. Before they were able to know the exact price at which the full output could be sold, and also to make a very good estimate of how much power it would make, which yields a highly accurate estimate of the income from an installation. Couple that with a highly accurate estimate of the cost to install, and the cost/risk/benefit equation is well understood and easily modeled.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>Now, as soon as solar power saturates that market and the power must be sold at a lower rate, then everything changes. You introduce a risk term and a reduction in revenue. <o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>I have a friend who is putting in a huge solar installation in eastern Oregon. This concern (that the local power company will get all its needed expensive renewable power, then offer him coal-gen prices for any above that) keeps my friend awake at night. His PV farm is the first to go in, but if a neighboring farm decides to follow his lead (farmers are bad to do that) then both eventually go broke. His long-term financial survival hinges on convincing all local land owners that he is not making money on those PVs.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='color:#1F497D'>>…</span> or it's just me having unhealthy interests? :-)<span style='color:#1F497D'> </span>Ciao,<span style='color:#1F497D'> </span>Alfio<span style='color:#1F497D'><o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>Healthy interests. Think long and hard on this. You are on something critically important: the first ground based PV installations are highly profitable, because they have legislated mandates for their product, they rely on existing electrical infrastructure for load leveling, they can sell power to the local utility for peak prices and produce it at low cost. The PV-farm owners provide baseline product and sell it at peaker prices. Cool! But as more ground based PV infrastructure goes in, the value of it goes down. The power company needs to supply power at peaker cost, and in some cases (rainy or snowy days) end up supplying power generated by peaker technology and selling it at baseline prices.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>This will hurt those power companies, aaaannnnd… the big mean power company is us.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>Currently we talk so much about PV dollars per peak watt, and ignore the costs associated with load leveling, since at first, someone else pays for it besides the PV-farm owner. As there is more of it installed, the PV owner pays. Then she goes bust.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>Alfio, fire up your spreadsheet, me lad. Find out all this the same way I did: calculate your way to wisdom.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>spike <o:p></o:p></span></p></div><div><p class=MsoNormal><o:p> </o:p></p></div></div></div></body></html>