Apollo metaphor: crash and burn

The Merc’s website (but not the dead tree paper) had a story Thursday afternoon about the California branch of the Apollo Alliance, a lobbying effort by “business, labor, community and environmental leaders” for policies to support cleantech companies and cleantech jobs. The story wasn’t picked up by other outlets because there isn’t much new: the Apollo Alliance is based in San Francisco, already had a rollout effort in California in October 2008, and the group issued a press release three weeks ago supporting AB32 and attacking Prop 23.

The Merc story highlighted the support of cleantech businesses, but the website and the group’s publications suggest that the Apollo Alliance is more of a political group run by an alliance of labor and environmentalists. The New Apollo Program manifesto lists a 14-member board chaired by longtime legislator (later state treasurer) Phil Angelides, and the board also includes the head of three environmental groups, two labor unions and noted environmental activists Van Jones and Robert Redford.

While the Alliance seems intended to win clout through its big name backers, it seems an otherwise unremarkable example of the three factions to lobby for government regulation and spending to support cleantech companies and onshore jobs. For example, the Merc story says:

"We've seen energy policies stall at the federal level, and it makes what's happening in California all the more important," said Cathy Calfo, executive director of the Apollo Alliance. "It's important to have a comprehensive strategy to move toward a clean energy future."

However, there is the matter of the name. To the question of “Why do we call it the Apollo Alliance?” the group’s website says:

Like JFK’s Apollo Project, which put a man on the moon in under a decade, an Apollo project for energy freedom must be big, bold and fast. Here’s the speech President Kennedy gave when he announced his Apollo project at Rice University in Houston, September 12, 1962 …

The problem is, renewable energy or energy efficiency are not suited to an Apollo-like project. That’s not my conclusion, but that of three of the world’s leading innovation economists — David Mowery of Berkeley, Dick Nelson of Columbia and Ben Martin of SPRU — in an article they wrote just to rebut such policy silliness, who share the goals of the Apollo Alliance but explicitly reject its policy metaphor (if not its specific policies).

As they begin:

Many supporters of government action argue that the problem is so great, the need for new environmentally friendly technologies so urgent, and the time remaining for implementation of solutions so limited, that a “Manhattan Project” or an “Apollo Program” is needed.

and then note how the two metaphors have been around for more than a decade. From that, they summarize four reasons why the metaphors not only are wrong, but will lead to policies that won’t work

We emphasize at the outset that we share the broad concern of these authors about the immense risks of global climate change, and we agree that strong, well-resourced government technology policy is part of the solution. However, proposals to model such a policy explicitly on the Manhattan or Apollo projects are, as this paper will argue, wrongheaded, and if adopted could waste resources and limit the prospects for success. Although the prospect of global warming raises technical and economic issues that are, if anything, even more daunting than those posed by a lunar landing or the crash wartime program to develop an atomic bomb, the nature of these challenges is quite different. Most importantly, both the Apollo and Manhattan projects were designed, funded, and managed by federal agencies to achieve a specific technological solution for which the government was effectively the sole “customer”.

By contrast, technological solutions to global climate change must be deployed throughout the world by many different actors, and these deployment decisions will require huge outlays of private as well as public funds. Both the industries developing and producing these solutions and the sectors in which the technologies will be deployed comprise a very heterogeneous group, ranging from wind power to internal combustion and from electric-power generation to dairy farming. …

Another point of contrast between the R&D programs that will be needed to combat global warming and these earlier federal “models” is the relatively high degree of administrative centralization in both the Manhattan and Apollo projects. As we note below, the tension between centralization and decentralization in large-scale R&D programs is an important issue in program design for which broad prescriptions are likely to be unrealistic or vacuous. But government R&D programs to combat global warming will involve numerous organizations, and consequently mechanisms for the coordination of priorities, resource allocation, and performance evaluation will be essential.

Lastly, unlike the development of an atom bomb or of a manned space vehicle, halting or reversing global warming almost certainly cannot be achieved solely through ‘supply-side’ policies and the development of technological ‘solutions’. Indeed, one of the largest dangers created by the Manhattan or Apollo metaphor is that it may be adopted by politicians seeking to avoid the far more painful demand-side policies aimed at changing human behavior and halting the ever growing demand for energy previously regarded as a prerequisite of ‘human progress’.

I can’t possibly summarize a 14,000 word research article in a brief blog post, and I encourage people to read the article in its original — either the official version at the Research Policy or the working paper published by Britain’s equivalent of NSF.

However, this is yet another reminder (as if we needed another one) that innovation policy is too important to be left to politicians or lobbyists, but instead needs to be handled by people who know something about the subject.

End to solar thermal? Not so fast!

September and October have been great months for utility-scale solar thermal projects in California, as the state (with cooperation from the Feds) approved six projects with 2.8 gigawatts of capacity in the Mojave desert. Five of these are proven trough systems, while the sixth plans to use a Sterling engine.

However, Michael Kanellos and Brett Prior of GTM speculate it’s the beginning of the end for solar thermal. Their argument is sound in principle, but I wonder if their timing is premature.

Most of the advantages of the solar trough systems are also its disadvantages: it's low tech, decades-old proven technology that works well at scale. For years, the world’s largest solar facility — and California’s entire utility scale solar capacity — consisted of the nine SEGS sites totaling 354 MW in Eastern Mojave. The GTM argument is that the main solar thermal systems — both trough and tower — are about to lose to PV on cost per watt and LCOE, and that the price of PV technology will continue to improve more rapidly than that for thermal.

I think the latter is certainly true — PV costs have been coming down for decades, while many of the thermal parts are mature and proven. Also, the moving parts on heating water and running turbines guarantee significant operating costs that are not seen by PV, which are essentially semiconductors covered by glass windows that need to be washed.

Has it crossed over yet? I think the crossover is coming, but the fact that all six utility scale systems are thermal rather than PV suggests it’s still a ways off — or at least that PV manufacturers can’t ramp up production capacity quickly enough to generate gigawatt-capacity plants.

While the costs are attractive, PV clearly has more risk in the short term than the proven thermal technology. That (as they argue) other utility scale systems plan to use PV suggests the crossover is coming, but I don’t think we’re there yet.

The other thing about the argument is that it says little about the economic viability of thermal systems either operating or under construction. If utilities have signed a PPA with the RPS gun to their head, they still need the contracted capacity at the agreed-upon price.

In fact, if both Jerry Brown gets (re) elected (even odds) and Prop. 23 fails (it’s outspent 3:1), then utilities are going to need whatever capacity they can get to meet the RPS standard of 33% by 2020. Keeping the 33% requirement will give an extra 2-5 years of life to the solar thermal market (beyond whatever its natural lifespan is) as buyers wait for PV manufacturers to ramp up capacity to meet a global — not just California — demand for renewable energy.

Renewable energy is a capital-intensive commodity business. At some point solar thermal companies will have a hard time competing for the bulk of the market, but for now they can — in best Monty Python fashion — note that “I’m not dead [yet].”

Lessons from greening Google's billions

Although I don’t follow wind all that closely — if for no other reason that it will make a relatively small contribution to increasing California’s use of renewable energy — it was hard to miss news this week of Google’s investment in a planned $5 billion wind transmission line off the Mid-Atlantic coast.

The “Atlantic Wind Connection” (as it’s called) is interesting on several levels. The ownership is split between Google (37.5%), an investment company called Good Energies (37.5%), and the Japan trading company Marubeni (15%). The deal came about from a chance meeting between developer Trans-Elect Development and Good’s desire to find new projects to invest in.

The announcement is interesting on many different levels.

One is that this is a sizable bet among a series of ongoing RE investments by Google. It appears that it fits nicely with the founders’ philosophical support for renewable energy, as announced by Larry Page three years ago (and reflected in their personal investments in Tesla among other cleantech startups.) The announcement also reflects Google’s strengths at mass communications in web-enabled world, as much of the press coverage was just a paraphrase of the key details provided by Google and its partners in its posting and press conference. (A rare exception was the National Geographic story.)

The second point is that, as the Heritage Foundation noted, this is a rare example of a large RE project being funded by private investors rather than hefty government subsidies. They quote approvingly from the official announcement by Google’s “Green Business Operations Director”:

We believe in investing in projects that make good business sense and further the development of renewable energy. We’re willing to take calculated risks on early stage ideas and projects that can have dramatic impacts while offering attractive returns. This willingness to be ahead of the industry and invest in large scale innovative projects is core to our success as a company.

Third, this is a reminder of the importance of transmission infrastructure for any large-scale renewable energy projects: where the power is generated (wind coastal shelves, sunny deserts) is not where it needs to be consumed. The 350 mile transmission line would be built about 22 miles offshore, and come ashore in four places: Northern NJ, Southern NJ, Delaware and Southern Virginia. It would eventually have a capacity of 6 gigawatts of power. The project construction would take from 2013-2021.

Fourth, as an April paper in the Proceedings of the National Academy of Sciences points out, a wide geographic dispersion of wind farms can ameliorate one of the biggest disadvantages of wind power — dramatic fluctuations in output — by smoothing that output over a broader geographic base. The law of averages may make large scale wind generation more useful than the existing wind farms concentrated in a few localized areas like the Tehachapis and the Altamont Pass.

Fifth, the unique advantages of the Mid-Atlantic region point out the limitations of offshore wind more broadly. As the NYT article summarized:

The lure of Atlantic wind is very strong. The Atlantic Ocean is relatively shallow even tens of miles from shore, unlike the Pacific, where the sea floor drops away steeply. Construction is also difficult on the Great Lakes because their waters are deep and they freeze, raising the prospect of moving ice sheets that could damage a tower.

So if the plants have to be located far enough offshore to avoid objections over aesthetics but in shallow enough water to operate a fixed platform, there are limited opportunities to do so.

Sixth, it appears that local and state governments have conflicting motives between NIMBYism and a desire for local jobs — to the point of discouraging East Coast use of renewable energy generated in the Midwest. (A similar dynamic has occurred here in California). Again the NYT captured it nicely:

Nearly all of the East Coast governors, Republican and Democratic, have spoken enthusiastically about coastal wind and have fought proposals for transmission lines from the other likely wind source, the Great Plains.

“From Massachusetts down to Virginia, the governors have signed appeals to the Senate not to do anything that would lead to a high-voltage grid that would blanket the country and bring in wind from the Dakotas,” said James J. Hoecker, a former chairman of the Federal Energy Regulatory Commission, who now is part of a nonprofit group that represents transmission owners.

Finally, the construction of a transmission line does nothing to solve the daunting cost problems of offshore wind energy. Parochial governors aside, the cost of building and operating wind turbines in the ocean is higher than on flat dry ground: 50% higher is the estimate provided by the NYT.

More generally, the prices of wind generation are not falling as quickly as solar, and in fact ticked up last year at the height of a deep recession. (What’s up with that?) Blogger Tom Fuller argues that wind has a fundamental problem of lack of competition — where a cartel of a few large manufacturers controls the supply of generating equipment — and predicts an eventual triumph for solar:

There are a lot more [solar] manufacturers, and they are increasing capacity continuously. Each new generation of fab provides 20% performance gains, and the next generation of wafers is longer, wider, thinner and less likely to break. Innovations for their balance of system peripherals come from a variety of outside companies in their supply chain, and the inexorable march to grid parity is nearing its goal.

They both get the same level of subsidies, which amount to a pittance overall. So what’s the difference?

Solar sells to consumers, too. Residential, small business, offices and plants. Solar scales down as well as up. And their customers are you and me–cranky and demanding if things don’t work, unwilling to sign long term contracts, wanting to see bottom line improvements rather than brochures showing acres of installations.

So solar will win. Not because they’re nicer guys, but because their industry is more fragmented and they have more demanding customers.

Which, I believe, is the way the system is supposed to work.

So perhaps offshore wind will be the only local supply of RE available to the Northeast, but — as with everything else over the past 40-50 years — the region will remain an expensive place to live and work. In other words, not a good place to put a Google server farm.

Can we win the clean energy race? Should we?

Browsing the WSJ.com website, I found an advertorial that proclaimed

China Becomes “Clean Energy Powerhouse”

China, determined to be on the forefront of green technology, “is emerging as the world’s clean energy powerhouse,” according to a recent study from The Pew Charitable Trusts, an independent non-profit organization based in Washington, DC

For the first time ever, China topped all nations last year in investments in low-carbon energy like wind and solar power. Over the past five years, environmentally friendly energy finance and investments in China grew from $2.5 billion to $34.6 billion, almost double the $18.6 billion in investments attracted by the United States.

And that is only one part of the country’s growing emphasis on environmentally friendly products and practices. Along with ambitious targets for wind, biomass and solar energy, China aims to spend 34 percent of its $586 billion stimulus package on green projects.

The advertorial, sponsored by Hong Kong-based Cathay Pacific, went on to note the airline’s involvement in carbon offsets and the other customary forms of greenwashing used by big businesses. (I don’t take the dead tree WSJ anymore, so I didn’t see when/if it ran in the real paper.)

Pew is an environmental advocacy group that got a lot of coverage when their study of G-20 countries (entitled “Who's Winning the Clean Energy Race?”) came out in March. A well-orchestrated PR campaign — tied to legislative hearings in Congress — brought the issue back to the forefront last month.

The numbers in the report compiled by Bloomber New Energy Finance seem accurate. However, the conclusions seem intended to stampede US public sentiment towards greater Federal spending (or mandated ratepayer spending) to subsidize the sale of RE equipment in the US. To quote from the executive summary:

This report documents the dawning of a new worldwide industry—clean energy—which has experienced investment growth of 230 percent since 2005. Demonstrating its strength, the clean energy sector declined only 6.6 percent in 2009 despite the worst financial downturn in over half a century. In 2009, $162 billion was invested in clean energy around the world. …

Within the G-20, our research finds that domestic policy decisions impact the competitive positions of member countries. Those nations—such as China, Brazil, the United Kingdom, Germany and Spain—with strong, national policies aimed at reducing global warming pollution and incentivizing the use of renewable energy are establishing stronger competitive positions in the clean energy economy. …

There are reasons to be concerned about America’s competitive position in the clean energy marketplace.

Relative to the size of its economy, the United States’ clean energy finance and investments lag behind many of its G-20 partners. For example, in relative terms, Spain invested five times more than the United States last year, and China, Brazil and the United Kingdom invested three times more. In all, 10 G-20 members devoted a greater percentage of gross domestic product to clean energy than the United States in 2009. Finally, the Unites States is on the verge of losing its leadership position in installed renewable energy capacity, with China surging in the last several years to a virtual tie.

The U.S. policy framework for reducing global warming pollution and promoting renewable energy remains uncertain, with comprehensive legislation stalled in Congress. On the other hand, America’s entrepreneurial traditions and strengths in innovation—especially its leadership in venture capital investing—are considerable, giving it the potential to recoup leadership and market share in the future.

Policy, investment and business experts alike have noted that the clean energy economy is emerging as one of the great global economic and environmental opportunities of the 21st century. …

Nations seeking to compete effectively for clean energy jobs and manufacturing would do well to evaluate the array of policy mechanisms that can be employed to stimulate clean energy investment. This is especially true for policymakers in the United States, which is at risk of falling further behind its G-20 competitors in the coming years unless it adopts a strong national policy framework to spur more robust clean energy investment.

In other words, the Pew argument is that there is a “race” and the US is losing. This is a proven rhetorical device: The “missile gap” was used during the Eisenhower administration and the Space Race during four administrations to build support for massive Federal spending on aerospace technology.

But perhaps the argument is less effective today. Some of a libertarian bent would argue against Pew by saying (roughly) “if other countries want to waste their money renewable energy, let ’em.” This is probably preaching to the choir — those who buy this argument weren’t going to listen to Pew and vice versa.

My own concern is: is it reasonable to believe that US mandates for RE will create jobs and a self-sustaining US industry? The success of Vesta and other Danish wind turbine companies is the best case. The NYT reported Wednesday about similar hopes by Silicon Valley companies using advanced technology to efforts to keep up with Chinese manufacturing costs.

Worst case is the ongoing collapse of the German solar industry (after years of the world’s best solar incentives). Another is the one-way shift of solar jobs by US designers to Chinese factories — in parallel to most other medium-technology manufacturing moving to China or other offshore locations.

But suppose we can win the race: Should we? The leading academic journal on innovation policy, Research Policy, ran a series of four articles this month on how innovation policy should respond to the global warming threat. The lead article by three of the world’s leading innovation economists emphasized the broad dissemination of clean energy technology to reduce global carbon emissions rather than hoarding to help domestic energy producers:

In recent years, the threat of global climate change has come to be seen as one of the most serious confronting humanity. To meet this challenge will require the development of new technologies and the substantial improvement of existing ones, as well as ensuring their prompt and widespread deployment.
…
Combating global warming, as we noted earlier, requires that technological solutions be deployed on a global scale as soon as possible. … Much more than “technology transfer” will be required, although support for the global dissemination of information and, potentially, subsidies for other nations to stimulate the adoption of technological solutions may be important parts of the international scope of such a program.

To put it in plain English: technological solutions to climate change must be shared and perhaps even subsidized for the rest of the world.

So for any US policy, I see at least a four-way tug-of-war of competing goals: helping the business growth and profits of US companies, providing US jobs, spending government (or ratepayer) money most efficiently, and saving the planet. When the US DoD invented the Internet we could have all four, but that outcome seems unlikely for today’s challenges due to both the capital investment and large number of foreign competitors and countries chasing these same clean energy jobs.

I don’t know which goal (or goals) will win out, and without knowing the specifics I can’t personally say which one should win out.

References

David C. Mowery, Richard R. Nelson, Ben R. Martin, “Technology policy and global warming: Why new policy models are needed (or why putting new wine in old bottles won’t work),” Research Policy, Volume 39, Issue 8, (October 2010), Pages 1011-1023. doi: 10.1016/j.respol.2010.05.008

Pew Charitable Trusts, “Who's Winning the Clean Energy Race? Growth, Competition and Opportunity in the World’s Largest Economies,” Pew Charitable Trusts, March 2010

Innovative technology, commodity electrons

One of the points I make when teaching about solar energy — as I did for three classes this week — is that the economics of renewable energy are fundamentally different from that of IT, biotech, or earlier technology-based industries.

The challenge facing renewable energy entrepreneurs is that no matter how innovative a company’s technology, in the end it’s going to be used to produce commodity electrons. And even if the government has a policy that aggressively favors “green” energy over all others, makers of flat silicon panels have to compete with thin film CdTe, CIGS, CPV, solar thermal as well as wind, small hydro and anything else that comes along.

So in the end, really cool technology is going to be judged on cost and reliability during the long life of an expensive capital good. PCs may be thrown away after 3 or 5 years, but solar panels are expected to run 20 years or more. This means that high-volume, high-repeatability, low-cost manufacturing is usually more important than some great advance in science (unless of course that advance cuts costs or improves efficiency more than it raises costs).

Attacking this point is Thursday’s column in GreentechSolar by Tuan Pham, an energy analyst (and HelioVolt biz dev consultant) turned solar investment fund manager. The column’s subtitle says it all: “Considering the implications of the fact that solar is really an energy industry, not a technology industry.”

Some of his points are familiar: commodity electrons, the unsuitability of VCs to invest in capital-intensive projects, and unrealistic growth expectations. Others should be familiar, including the near-commoditization of high insolation land intended for solar farms:

Because we can site solar nearly anywhere the sun shines — solar resources at any given location have been studied for decades by NASA and the National Weather Service — our projects are much easier to develop than other energy projects. … Why would property owners expect to charge significant premiums for land if the sunlight is the same 50 miles down a transmission line?

Other points are more contrarian, including this:

Yet, despite all of the tech money that has flooded into solar in recent years, technological advances have not lived up to expectations. In fact, most of the "technology" that is being funded in solar projects is relatively old. Crystalline-silicon (c-Si) cells were invented at Bell Labs in 1954 and since c-Si efficiencies hit 14% in the 1960s, not very much has changed with the technology. Likewise, the other pieces (balance of systems) that go into a solar generating system involve fairly uncomplicated electrical work and few moving parts. These well-known and reliable generating assets, not an elusive magic technology bullet, are what energy and project investors will fund.

While some of Pham’s conclusions will create heartburn among solar activists, the nudge towards increasing accountability should not. Pham singles out “Pretend PPAs,” in which Purchase Power Agreements are quoted with unrealistic prices and costs that will eventually become obvious.

The recommended antidote for regulators and utilities being compelled to buy renewable energy:

• Increase and enforce penalties on non-fulfillment of projects
• Shorten execution time frames (at least for PV).
• Enforce stiffer penalties on projects that are late.
• Require bigger proposal deposits.
• Expedite the interconnection process.

Accountability is good and necessary for buyers, sellers, investors and society. A lack of accurate information and accountability creates market distortions that lead to bubbles and crashes.

The solar industry is approaching a shakeout period, with the strong consolidating the weak. Many venture investors supporting a company with more than $100 million of equity funding will eventually seek other exits if the firms are unable to IPO in the next 18-24 months. (Don’t ask me which ones will go first — my Ouija board is on the fritz.)

Let’s hope that more accurate information leads to the survival of the most efficient and best run firms, rather than those who were lucky at the VC roulette wheel but who lack the resources and capabilities necessary for long-term survival in this competitive industry.

Feed-in tariffs: an idea whose time still has not come

A group of renewable energy activists have been pushing for the US to emulate Germany by instituting a feed-in-tariff. The idea is that the more generous payment to RE generators would increase the installation of RE generating capacity.

The California Public Utilities Commission has been flirting with idea for years, with trial efforts at a smaller scale, and hosting a symposium endorsing the idea last year. The CPUC reportedly endorsed a FiT for systems from 1-20 MW in size, although the F-phrase doesn’t appear anywhere in its recent news.

Is this such a good idea?

A comparatively balanced article by veteran Eric Wesoff of Greentech Media earlier this year discussed the pros and cons of this approach. One important requirement — as with any government manipulation of the market — is predictability:

Gary Kremen, solar entrepreneur and founder of Clean Power Finance, had this to say on the subject: "FiTs are great if they are a long-term commitment on the part of government and utilities. Off-and-on FITs make planning and the mandatory required financing hard, if not impossible."

Those promoting feed-in tariffs tout the undeniable effectiveness of FiT in promoting solar adoption in Germany. However, as Wesoff notes, that comes at a price:

Germany is experiencing a bit of a feed-in tariff backlash as their citizenry reacts to FiT dollars going to Chinese, rather than German, solar module manufacturers. FiTs can also be construed as a tax -- and that's political poison in the U.S.

In other words, subsidies for inefficient power producers are politically palatable if it creates domestic jobs, but not if it ships domestic funds overseas.

The big disaster of FiT is that it doesn’t set prices right, because it uses government fiat rather than the market to match supply and demands. The €15+ billion fiasco in Spain is Exhibit A. Because they are expensive, even some progressive consumer groups oppose their use.

For more than a year, the state has been toying with a modified FiT that it now calls a renewable auction mechanism. The Aug. 24 CPUC decision to create this mechanism seems to be a compromise that pleases everyone and no one.

In particular, it’s design to correct the most egregious errors of the government-set pricing. As Nikki Chandler reported:

Some governments have used fixed-price feed-in tariffs to incentivize renewable energy development. One point of difficulty has been getting the fixed pricing right. If the price is set too low, it does not stimulate the desired level of market activity. If the price is set too high, ratepayers pay unnecessary costs, suppliers throughout the value chain are not encouraged to reduce prices, and the program can lose political support. In contrast, the CPUC program uses competition to establish a price that is both sufficient for project development and protective of ratepayers.

The plan seems to please one group (Interstate Renewable Energy Council) lobbying for a FiT and anger another (the FiT Coalition).

If the supporters are right, the RAM will increase solar adoption in California without paying too much (and also not violating federal restrictions on cross-subsidies issued in July by the Federal Energy Regulatory Commission.) If RAM opponents (or hard-core FiT supporters) are right, the market-oriented tariff won’t be enough to stimulate a supply of renewable power. I guess (as in Spain and Germany), time will tell.

A completely different Akeena

Anyone who lives in the South Bay has probably seen or heard from Akeena. The company occupies a former car dealership in Los Gatos, and has been aggressively promoting sales workshops at our local wine bar. I kept telling my wife we should go, but apparently now it’s too late.

Last May, Akeena agreed to effectively become an arm of Westinghouse, which didn’t actually have to put up any money to buy the company. Instead of selling “Akeena” solar panels, the company agreed to sell its future panels under the Westinghouse brand, including those it’s already selling at the Lowe’s home improvement warehouses. Akeena Solar, Inc. is now doing business as (d/b/a) Westinghouse Solar.

(Akeena’s already-distressed stock has drifted off into penny-stock land, which will allow Westinghouse to eventually buy the company for less than 5% of what it was worth at its peak.)

Now two different blogs have reported that Akeena is getting out of the installation business to (it claims) avoid competing with dealers. As PV-tech reports:

"Expanding our channels to include authorized dealers in California will accelerate the growth of our distribution business," said Barry Cinnamon, chief executive officer of Westinghouse Solar. "California is the largest state in the country for solar products, accounting for approximately 50 percent of the U.S. market… As we transition to a distribution model in California and sign up new dealers, we will continue to focus on securing new distribution partnerships and adding dealers around the country. We will honor all outstanding installation obligations, and in many cases expect to work with new Westinghouse Solar dealers to take over our remaining backlog of California installation projects."

When GreentechMedia reported on the shift last week, it was generally optimistic. Akeena had already exited installation elsewhere in the US, because it was competing with its installers. However, as it also reported:

A strategic shift like this, however, also means layoffs. Employees said that began today.

Alas, no more sales seminars at the wine bar, and one less large-scale California installer. Some 19 months ago, Borrego Solar got out of residential installation, selling its California and Massachusetts operations to Vermont-based groSolar for an unspecified amount.

So according to a 2009 analysis, that’s two of the four largest California residential installers changing hands in the past two years. Only SolarCity and REC Solar are bigger in the state: while I’d like to say that’s the end of it, clearly more consolidation is coming to the installation industry — not just to panel manufacturing.

Update, Sept 14: Akeena later sold their installation backlog to Real Goods Solar.