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Frank Cestero is in a sweet spot. The Puerto Rican gets to enjoy the warm, tropical weather of Palm Beach County in the US state of Florida, while the small company he works for is booming thanks to robust growth in the global renewable energy sector.

Cestero is the chief financial officer (CFO) of SolarTech Universal, headquartered in the coastal city of Riviera Beach. Founded in 2012, SolarTech‘s panels are made using advanced robotics and solar cell technology designed by the company’s European partner, Meyer Burger, a Swiss firm operating in Germany and Singapore.

Its cutting-edge equipment allows the green energy company to focus on the premium end of the market. That seems to be working out. SolarTech will be adding a second production line by the end of the year, creating an expected 70 new jobs in the process.

“Demand is robust,” said Cestero. “We’re very bullish over the next 24 months.”

Favorable Business Climate

Governments and businesses have increasingly set their sights on harnessing the power of the sun to meet their energy needs. Furthermore, government policy changes in response to climate change have created incentives and mandates at the local, state and national levels.

Technological improvements, meanwhile, have slashed solar power production costs, making it more accessible to commercial and residential customers. Demand for clean power has also been on the rise over the past several years, with consumers seeing the benefits of shifting to clean sources of energy and decentralized power distribution.

Against this backdrop, companies big and small are optimistic about the future. Market players like CED Greentech, a large US solar panel distributor and SolarTech customer, have increased their investments over the past couple of months.

“The market is pretty dynamic,” said Tristan Tedford, a CED Greentech account manager setting up shop in Pompano Beach, a city just north of Fort Lauderdale. “Module prices have dropped and you have an emerging electric vehicle market coming.”

The Trump Tariffs

The industry’s growth and increasing strategic significance, coupled with complaints from American solar manufacturers about unfair trade competition, were all a part of the reason why US President Donald Trump zeroed in on solar panels, among other products, for tariffs in early 2018.

“The tariff narrowed the price gap between the Chinese product and US product and by highlighting the US product, it has increased awareness of US-made products among end-users and middle-market buyers,” Cestero said.

He claims that by the end of this year SolarTech will be the only domestic manufacturer of exclusively US-made panels, with over 70 percent of its inputs sourced domestically. This is significant because it gives a niche player like SolarTech access to the lucrative public sector, as state and local governments strive to meet CO2-reduction targets by increasing public investment in green energy.

Industry Backlash

But some in the US solar industry have aggressively pushed back against Trump‘s tariffs. One example is SunPower, which is majority-owned by French oil giant Total. The San Jose-based company threatened to curtail its new capital investments and slash jobs if it didn’t receive an exemption from Trump‘s tariffs.

The company builds most of its solar products in Mexico and the Philippines and has argued that the millions of dollars it would pay in import duties threatened its growth plans. After months of lobbying the Trump administration, SunPower received an exemption from the tariffs, boosting the firm’s stock price.

A Solar Slowdown?

The latest industry figures value the US solar sector at $28 billion (€24.13 billion). The industry employs more than 250,000 Americans, with about 40 percent of those working in installation and 20 percent in manufacturing. Five years ago, the sector was installing 3,000 megawatts of solar capacity annually. In 2017, the market grew by as much as 10,000 megawatts.

But experts fear this kind of growth will soon be a thing of the past. Dan Whitten, a spokesman for the US Solar Energy Industries Association, said that since January, more than $2.5 billion in solar projects have been canceled and roughly 9,000 American jobs have either been lost or have not been created as a result of the tariffs.

“If demand drops because products are artificially made too expensive for consumers, nobody wins. It’s unlikely that US manufacturing will expand enough to satisfy burgeoning demand,” Whitten told DW. “While we support new US manufacturing, companies are still going to have a hard time competing with products from overseas in the years ahead.”

Made In Jacksonville

China‘s decision to cut back installed solar capacity this year by reducing subsidies has severely affected the global market for solar panels. While surging capacity had left the country struggling to build sufficient national electrical infrastructure, cuts have forced Chinese panel makers to find new buyers overseas.

In March, Florida‘s largest utility NextEra Energy agreed to buy 7 million solar panels from China‘s leading solar maker JinkoSolar Holding. Alongside that agreement, JinkoSolar is building its first US solar panel factory in Jacksonville Florida‘s most populous city.

Once the factory reaches full production after November, JinkoSolar expects it to churn out more than 1 million panels a year for the US market.

While JinkoSolar‘s new plant will boost overall US production, modern solar panel factories are increasingly automated, and profits will likely flow offshore.

Still, city officials in Jacksonville see the new Chinese investment as a major win for local businesses, particularly in services and logistics. The adjacent port expects to handle cargo shipments of raw materials and solar panel components needed for the new plant’s operations.

“In addition to creating 250 new jobs, we expect that JinkoSolar will expand its economic impact in the Jacksonville area as the demand for solar panels in the US grows,” said Tia Ford, a city spokeswoman.

 

Source: DW

Balenciaga has opened a new store in the Miami Design District.

The storefront is made of photovoltaic glass, and is said to be the first of its kind worldwide.

Each 10 foot by 5 foot glass panel generates 340 watts of electricity. The blue-tinted glass is also hurricane proof.

(Photo Credit: Onyx Solar/Miami Design District)

 

Source: The Next Miami

The most recent initiative makes it a goal for the costs of solar to continue their trend downward to meet those of conventionally generated electricity by the end of this decade.

This comes with the announcement by the White House reinvigorating solar energy through the Department of Energy’s SunShot initiative.  These goals don’t only come from government offices.  Laboratories too are leading the way. Technological advances are helping along the trend, as silicon may be able to be replaced as the main ingredient in solar panel construction.  A recent discovery that a light-absorbing material known for a century may work in solar panels and dramatically increase their efficiency has the industry talking.  Thanks to the combined developments, the cost per watt of solar-generated electricity may fall to the 10-20 cents per watt range where fossil fuel-generated electricity resides.

All that said, the opportunity for commercial space users to take advantage of these new technologies and for commercial landlords to convert their properties into energy-producing ones remains mired in the financial barriers and customs of an industry that views (and pays for) property improvements for multi-tenant buildings in very specific ways.  To answer the question of how the costs and benefits of solar improvements are apportioned usually needs to begin with how such improvements are paid for.

One California company says they have used real estate legal forms to address this problem. Working with a leading law firm, EPR Squared, a real estate firm specializes in cracking the tough problem of opening commercial rooftops to solar.  In solar improvement,  as with most other features of commercial property usage, the all-important capital source is the third party financier.  But the territory is new and forms and deals have little precedent to work with.  Establishing revenue flows on a tenant or space subdivision basis to cover construction costs and to apportion energy-generation benefit requires a new kind of real estate deal. EPR Squared says they’ve constructed such a boilerplate.

According to real estate research firm data cited by Energy Producing Retail Realty, Inc. Founder/CEO, Chris Pawlik, 90 percent to 95 percent of commercial building rooftops remain essentially beyond the reach of third-party financing, “When you have a commercial building with multiple tenants,” Pawlik said, third parties “can’t technically finance those unless the owner takes it on, and commercial owners won’t do that.”

Third-party financiers, he explained, “can get an agreement signed or financing in place because they have the credit of the off-taker that takes care of the risk.” With a twenty-year commitment, third-party financiers have certainty that their loan will repaid. But, Pawlik said, “owners typically own properties five to seven years and tenants are typically in properties five to ten years. You can’t have a ten- to twenty-year agreement in situations like that.”

EPR Squared’s idea is to create a real estate interest on the property and have it be a separate interest from the improvements and from the land. It is similar to agreements with property owners for cell tower and billboards, though, Pawlik stressed, the solar legal structure is not identical. DLA Piper, which Pawlik called “the gold-standard, top-tier law firm” for commercial real estate, “has finalized the form documents we need to take to the owners to show them how this structure would work.”

EPR2 has “a dozen or so deals in the pipeline with groups that have either portfolios of properties or single properties,” Pawlik said. The first deal, he explained, must be one that demonstrates to the 60,000 California real estate brokers, agents and mortgaging agents that “this is almost identical to a real estate transaction.” When they see commissions in it for themselves, he said, “we can really scale the idea and bring it to a size at which pension funds and insurance companies will start looking at it.”

 

Source: Commercial Source