The time is right for an investment vehicle specializing in renewable energy.

We orbit the sun at a distance of about 150 million kilometres. The sun itself is a giant thermonuclear reactor, continuously fusing hydrogen nuclei into helium, producing both intense heat and light. Light leaving the sun’s surface takes eight minutes 19 seconds to reach the earth.  We have always relied on the sun to keep our small blue world warm and bright.

And now, increasingly, we are turning to the sun to power the society of the 21st Century, as well as reduce our global carbon footprint. 

Consider this: production of solar energy has grown by 30% each year over the last 15 years, with worldwide photovoltaic (PV) installations producing 7.3 gigawatts of electricity in 2009.

Some industry experts project that “grid parity” (the price of solar energy equalling the price of energy generated by fossil fuels) could occur as early as 2013 for 50% of the world, as the price of oil continues to go up while the cost of solar power continues to come down.

“Over the last three years the cost of solar PV has come down by 25%,” says Darryl Abbot of Fovere Investments Inc., which specializes in solar power. Moreover, he says, there is an over-supply that he expects will bring prices down even further. “Globally, in 2011 manufacturers of solar PV equipment will turn out an estimated 30 gigawatts of capacity, while the demand is only at 10 gigawatts.”

One example of solar power resurgence is the world’s largest photovoltaic farm near Sarnia, Ontario, owned by energy giant Enbridge and completed in October, 2010. With an output of 80 megawatts, the site generates enough electricity to power more than 12,000 homes. Enbridge purchased the project from developer First Solar Inc. last year and greatly expanded it, while First Solar continues to maintain and operate the facility. Enbridge has a 20-year agreement to sell the power to the Ontario Power Authority.

Governments around the world — including the UK, the U.S., China, Japan, Australia and Germany — are heavily subsidizing solar PV. In Canada, a Feed-in-Tariff Program (FIT)  was introduced by the Ontario government and is run under the auspices of the Ontario Power Authority.  The FIT program is aimed at boosting the production of alternative energy sources through guaranteed pricing over a 20-year period.

“I think the Ontario government is leaning more towards solar; and it’s not just solar in general, but to rooftop solar in particular,” says Mr. Abbot. “I’m finding that a lot more people are eager to get into rooftop solar generation.”

A recent study by ClearSky Advisors estimated that by 2015, more than 70% of new solar power installations in Ontario will be rooftop. Rooftop solar PV has several advantages over other solar systems, such as ground-based farms and rooftop thermal because the roof-mounting equipment is smaller, lighter, cheaper and easier to install. Rooftop thermal, which uses the heat of the sun for heating and cooling either residential or commercial structures, and solar farms, which produce large amounts of electricity from a single site, both require a significant investment in infrastructure.

According to a recent FIT update, there have been 732 megawatts of solar PV contracts executed under the program. A similar “feed-in” program in Germany led to that country becoming the largest market in the world for solar PV installations.

“We are on the cusp of something big here,” says Mr. Abbott.

By Michael Cnudde

For more information about Limited Partnership investment opportunities in solar power projects please visit League Assets.

Tags: (FIT), commercial rooftop solar leasing, Commercial Rooftop Solar PV, investment vehicle in renewable energy, League Assets, Member Partners' Solar Energy LP, Ontario Feed-in-Tariff Program, renewable energy investment, renewable energy Investment Opportunity, solar energy investment, Solar Leasing Investors

This entry was posted on Tuesday, February 15th, 2011 at 10:46 pm and is filed under Going Green, Investment Property, Sustainability, Technology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.