A shining example of using the sun's energy to heat, cool and light the homes and businesses of a desert community in California is poised to power up next year. It's due in part to the emergence of a technology that uses refraction rather than reflection to produce solar power on a utility-size scale at half the price of photovoltaic technology.

But major credit also goes to the pioneering efforts of REDCO, a privately held company, which Ryan Davies established last year to unite free-market concepts with sound environmental policy. The Energy Report caught up with Ryan in the midst of Solar Power International 2009, North America's largest B2B solar industry event. The event in Anaheim was about 250 miles from the forward-thinking community of Needles, where Ryan's company is awaiting permit approvals to build a solar thermal plant that will provide peak power to some 2,500 homes.

The Energy Report: Let's begin with a little thumbnail of REDCO—what your company is and what you do.

Ryan Davies: Sure. REDCO—the Renewable Energy Development Company—is a developer of renewable energy projects. We have a particular focus on wind and solar. We look for good pieces of land that have a strong wind and/or good solar resource and that have good proximity to transmission lines. Sometimes we do joint-venture projects, sometimes we sell projects; but, for the most part, we like to own and operate our own developments.

TER: What brought you to the solar arena? Why do you see solar as a great place for investors to be or for energy to be created?

RD: We have an abundance of sun, and our ability to harness the sun's energy and create Electricity is a pretty remarkable opportunity. The primary demand for power generation or power consumption is during the peak hours of the day; it's called peak power. That's when usage of electricity is the highest and also when the cost of the electricity is the highest. So utility companies are constantly looking for ways to increase that peak supply of power.

Because it's an intermittent power source—wind, sun, etc.—solar is not the answer. But it is an important part of the answer. It doesn't provide 24-hour-a-day, 7-day-a-week power. What is unique about solar is not only is it renewable but it also provides power during the peak periods of the day, when the sun is shining, which is very valuable to utility companies.

TER: The government is encouraging utilities and individuals to use solar. Could you talk a little bit about that, particularly the cities or utilities?

RD: A number of different mandates and incentive programs are sponsored by both federal and state governments. The most common of which is called a "renewable portfolio standard"—the acronym is RPS. There is not a federal RPS at this point, but I believe about 24 or 25 states have adopted their own programs. Much of the growth in demand stems from these mandates.

With an RPS, a certain percentage of power produced must come from a renewable resource. So the utility companies have to either go out and buy green power on the open market or build their own facilities. Every state is a little bit different. In California, for example, the goal is to have 33% of power come from a renewable resource by 2020, and that initiative, that mandate, kicks in next year, starting at 10%. Then it increases by about 2.5%, 2.7% per year until it reaches that 33% mark.

TER: And aren't some consumer incentives offered as well?

RD: Yes, from an individual standpoint, there are federal and state tax incentives and benefits if you include solar in your development or if you retrofit a business or home to include solar.

TER: You're involved with two solar projects for Needles, California. Could you describe how that's working?

RD: At REDCO we really pride ourselves in being technology agnostic; in other words, as we see our opportunity as a developer is to find a good piece of land with a strong resource, find the right technology for that development, put the entitlements and financing in place, build a project and sell the power. As we did our due diligence and looked for the right solar technology, we came across International Automated Systems, Inc. (IAUS:PK) and have become quite enamored with their technology. It's very different from the conventional, traditional solar that you see in the marketplace today.

TER: How does it differ?

RD: The majority of the solar systems in the market today are photovoltaic—it's a reflective, mirror-type technology where the sun's rays hit a reflective surface and bounce off into a collector shield above it. The IAS technology is very, very different in that they've created a technology using simpler, less expensive materials. It's easier and cheaper to mass-produce. Another unique attribute is that it is a refractive technology, wherein the sun's light passes through the panels instead off of them. They collect heat, which then heats up a water source. The hot water turns into the steam that propels a turbine. The turbine spins a generator, which creates electricity.

As a result, it's quite different from conventional solar and it's much, much cheaper—quite a bit less expensive to purchase. We're in the process of building the very first commercial plant using IAS technology. All of our engineering reports and research data indicate that this technology will be significantly more efficient than PV. We're quite excited about it.

TER: Is this a patented technology that IAS has?

RD: There are a number of patents on the technology, covering various facets from proprietary panels to the bladeless steam turbine. Several different patents have been issued, and several are pending on various other aspects of the technology and process.

TER: What are some of the companies in the flat panel technology?

RD: Suntech Power Holdings Co., Ltd. (NYSE:STP), First Solar, Inc. (NASDAQ:FSLR) ‎and BrightSource Energy, Inc. are a few. A number of companies that have good technology are doing very well. But it's almost an apples-and-oranges scenario in the solar market because IAS is quite a bit different. In our estimation it's much better alternative for utility-scale use. In addition to being less expensive to build and more efficient, it has a longer life and requires less maintenance. Plus, this technology has a lot fewer restrictions. For example, the way it's constructed and developed, you can put it on various types of terrain. You don't need costly grading plans prior to construction. It's easier to permit because it has a very low impact on the environment. We see a number of advantages.

TER: You say it's less expensive. Could you give us a relative cost comparison between IAS and photovoltaic technology?

RD: When you look at costs, you have to look at the entire system—not just the solar panel but the overall development, including the turbine and all of a project's components. From a turnkey perspective, the majority of the PV technologies sell somewhere in the range of $4 to $6 per watt. That equates to about $4,000 to $6,000 per kilowatt or $4 million to $6 million per megawatt. In most cases, the IAS technology is about half the cost.

TER: Wow! And that's total cost, when you boil everything down?

RD: When you compare all aspects of the development, yes.

TER: What's the timeline on your Needles project with IAS?

RD: Phase 1 is a 5-megawatt project. We have executed a long-term Power Purchase Agreement (PPA) with the Needles Public Utilities Authority, wherein they have agreed to purchase the power we generate for 20 years. We're in the permitting stage and hope to be in construction early next year.

TER: Once you get the permit, how long will it take to complete the project and when will the city of Needles be able to start using that electricity?

RD: We're looking at construction period of about four to five months, and then maybe a month beyond that for testing before we go online. So, all in, it's a five- to six-month process from the beginning of construction to when we begin selling the power. It's a relatively short construction time.

Post your comment  (1)

Connect:

Post to Twitter

Post to Facebook