FPL Group Inc. (FPL) may receive up to 600 megawatts of solar
panels and trackers from SunPower Corp. (SPWRA) as the Florida
energy company pushes into developing solar projects both in its
home state and elsewhere.
SunPower can deliver its panels and trackers from 2010 to 2012.
In a Form 8-K filing with the Securities and Exchange Commission,
the San Jose company said that under the "master supply agreement,"
it guarantees delivery over the three-year period of up to 100 MW
annually as a base amount, and an additional 100 MW annually should
Juno Beach, Fla.-based FPL exercise its options to purchase this
extra amount.
These deliveries may come as part of SunPower's engineering,
procurement and construction services for FPL Group's solar
projects, the filing said. It's not clear whether SunPower would
still have to go through a competitive request for proposals
process to get these construction contracts or not.
FPL is already working with SunPower on two Florida projects
totaling 35 MW that will be owned by the utility part of FPL. FPL
is also planning a 75 MW solar thermal plant. All three will cost
about $728 million to build, according to FPL's 2008 annual
report.
"We are going to be the No. 2 producer of solar in the U.S. when
we complete 110 MW, and our goal is to make Florida No. 1 in the
nation eventually," said Jackie Anderson, spokeswoman for Florida
Power & Light, the utility subsidiary of FPL. "We will ensure
through a competitive pricing process that FPL customers receive
the best price available for delivering solar electric power,"
Anderson said.
The panels from the deal will go to new projects to be developed
by the FPL utility subsidiary in Florida, where an aggressive
renewable power standard is in the works, as well to its
independent project development arm, which has thus far focused on
wind, for projects outside Florida.
"SunPower's success on the DeSoto Next Generation Solar Energy
Center, the 25 MW project that we are constructing now, gives us
confidence that we can extend our relationship," Anderson said.
Anderson declined to disclose terms of the deal, and
representatives from SunPower didn't respond to a request for
comment by press time.
Such master supply agreements are also known as framework
agreements, meaning that the customer doesn't place a firm order
but the supplier sets aside so much of production for the customer.
FPL will pay a certain termination payment if it decides to reduce
or terminate the commitment to buy the 300 MW base amount.
FPL also reserves the right to terminate or reduce its base
commitment if the State of Florida and the Florida Public Service
Commission doesn't allow it to receive cost recovery for projects
for which these panels would be used by Sept. 30, 2009.
SunPower said that it is also planning to locate a research and
development center with up to 50 employees in Florida. Demand for
solar could lead to "manufacturing and distribution centers for
solar panels and tracking systems being located in the state,"
SunPower said in the statement. These goals are contingent on state
government support, according to the company.
The Florida legislature is now considering a renewable power
standard that would mandate that all utilities in the state get 20%
of their generation from renewable sources by 2020. "A lot of that
will be solar, because of the lack of wind resources in the state,"
said Gwen Rose, deputy director of Vote Solar Initiative, a
nonprofit that works to promote favorable solar policies across the
U.S. The opportunity for wind generation in Florida is primarily
offshore.
"You could see a minimum of 3 to 4 gigawatts of solar in Florida
by 2020" under this RPS, Rose said. She included in this estimate
concentrating solar thermal and photovoltaics technology. By
comparison, there are now 9.18 gigawatts of all kinds of solar
energy production installed in the U.S., according to the Solar
Energy Industry Association. Photovoltaics account for slightly
above 1 gigawatt of the total.
Still, a Florida RPS is not a sure thing. The state Senate has
introduced an RPS bill, but the House of Representatives has yet
introduce its own version, Rose said. "With the legislative session
ending next week, we're running out of time," she said.
"The RPS is dead for this year, as far as we can tell," said
Steve Chadima, spokesman for Suntech Power Holdings Co., another
solar panel maker.
Florida Power and Light's Anderson said that the deal with
SunPower is not contingent on the RPS per se, but on the utility's
ability to recover costs of solar projects through electricity
rates.
Florida has minimal solar installed right now - the state isn't
part of the top-10 states by solar photovoltaic installations, as
of 2008, according to SEIA.
Other Florida utilities are also trying to increase their solar
generation ahead of the state or a national RPS. JEA, of
Jacksonville, is negotiating a power-purchase agreement with Juwi
Solar for a 12.6 MW project, measured in alternate current, that
will use First Solar Inc.'s panels. Tampa Electric filed an
application in March with the Florida Public Service Commission to
buy power from a 25 MW solar photovoltaics project to be developed
by Energy 5.0. That project could be expanded to 75 MW.
The draft RPS rule passed to the Florida legislature in January
included a 7% intermediate renewable goal to be met by 2013 by
state utilities. The draft rule caps each utility's expenditures on
renewables programs to 2% of annual revenue.
Some of the SunPower panels and trackers will also go to support
projects to be developed by FPL Group's project development arm
NextEra Energy Resources. "It is too early in this agreement for us
to have specifics as to the breakdown between FPL and NextEra,"
Anderson said in an email.
NextEra is the largest owner and developer of wind projects in
the U.S., having added 1,300 MW in 2008 and with plans to add 7,000
to 9,000 MW between 2008 and 2012. But it hasn't been very active
in solar, aside from co-owning solar thermal facilities built in
the late 1980s in the Mojave desert.
"For NextEra Energy Resources, this agreement [with SunPower]
will further advance our solar development efforts in key markets
such as Colorado, California, Arizona and New Jersey," FPL Group
President and Chief Operating Officer Jim Robo said in a
statement.
(Dow Jones Clean Technology Insight covers news about public and
private clean-technology and alternative-energy companies)
-By Yuliya Chernova, Dow Jones Clean Technology Insight,
Yuliya.chernova@dowjones.com
