Dirk Michels Promoting Solar Adoption with PPA's

THE INNOVATION:
Creating simple long-term financing options called "Power Purchase Agreements" which allow industrial electricity users to enjoy the benefits of renewable energy without up-front costs.

 

Dirk Michels, Partner,  K&L Gates
Solar-Powered Financing workshop

http://www.klgates.com

 

Watch our introductory video...

 

Listen to the podcast for the full conversation...

Excerpts:

-The most innovative thing I am doing is helping our clients in the solar industry reach the point when solar is at grid parity. This means that electricity from solar sources can be produced for comparable costs as electricity from fossil fuel sources of gas, oil and coal.  I am including taking into consideration all the current industry subsidies hidden in the production of gas, oil and coal fuels.

 

-Distributive commercial solar has become very innovative on office rooftops, parking lots, and even shopping center rooftops (Safeway) where the energy created by the sun is used right on the premises. What is specifically new is the solar panel system is not owned by the owners of the buildings using the energy. To support this innovation we needed something called a Power Purchase Agreement (PPA).

 

-Traditionally Power Purchase Agreements (PPA's) are two inches thick and have been an agreement between the energy producer and the local utility. The challenge and innovation was to reduce the agreement down to under ten pages so that it would be much more user friendly and able to be used in many more cases so that more companies could fund long term purchase agreements of distributed commercial solar systems.

 

-A great comparison of the Power Purchase Agreement is the thirty year mortgage. When you get to the point when a 200, 300 or 500 hundred kilowatt solar installation is an asset class like a mortgage that can be traded in the secondary market that is exactly where distributed solar energy power should go.

 

-Some regulation in the energy market is needed because energy is such an important thing in our daily life and the energy has to be there, guaranteed. But the more regulated the energy industry is the harder it is to break in to the industry. And that means the more costly it is to deploy a new invention. So the question I have is are we over regulating?  Having the knowledge and consultants to deal with all the regulations becomes a question of cost and then the question is can you afford it.