Apple Reveals Solar Energy Programs To Clean Up Its Manufacturing Partners In China

Apple has plunged billions of dollars into making its global operations more efficient with renewable energy. The bulk of that push, which has won praise from Greenpeace, has come in the U.S. and Europe, but today Apple unveiled a suite of initiatives designed to make its business in China — the country where its revenue is positively booming — greener, too.

Timed in conjunction with CEO Tim Cook’s visit to the country, the U.S. company revealed that it will work with its manufacturing partners in China to help them “become more energy efficient and to use clean energy for their manufacturing operations.” Apple further explained that it is working with said suppliers, which include Foxconn, to add more than two gigawatts of ‘clean’ energy to those operations in the next few years.

That move alone is notable, since Apple’s China-based manufacturers have long been accused of polluting the environment. Back in 2011, iPhone supplier Pegatron was reprimanded over environmental concerns, while Apple reportedly clamped down on Foxconn and UniMicron in 2013 following accusations that they released water tainted by toxic metals into rivers.

One company’s initiatives won’t elicit a full clean up of China’s manufacturing industry, but Apple putting pressure on its partners to be more environmental friendly is a major development. Indeed, Foxconn’s own pledge today to create 400 megawatts of solar power by 2018 — the equivalent, it said, of the energy it uses for “final production” of the iPhone — is proof of the potential for change.

Apple also revealed today that its operations in China are now carbon neutral. That’s because — thanks to the completion of a 40 megawatts solar power system in the Sichuan Province — the company now produces more electricity in China than it uses in its offices and retail stores in the country.

The U.S. giant said it isn’t done there, and it plans to extend its solar projects with an additional 200 megawatts through projects in the north, east and south of China. It claimed that, once these additional facilities come online, its green energy production “will produce the equivalent of the energy used by more by than 265,000 Chinese homes in a year and will begin to offset the energy used in Apple’s supply chain.”

“Climate change is one of the great challenges of our time, and the time for action is now,” Cook said in a statement. “The transition to a new green economy requires innovation, ambition and purpose. We believe passionately in leaving the world better than we found it and hope that many other suppliers, partners and other companies join us in this important effort.”

Apple is certainly setting the bar for others to follow. The company is carbon neutral in the U.S. and China, while it claimed that renewable energy powers 87 percent of its international operations.

Source by: http://techcrunch.com/2015/10/21/apple-reveals-solar-energy-programs-to-clean-up-its-manufacturing-partners-in-china/

Solar panels on a garage near a house in Marshfield.

By Lorne Bell

Across the state, solar company sales representatives are marching door to door, offering installation contracts that seem hard to refuse: solar panels for no money down, with no maintenance, and electricity at prices significantly below those of utilities.

So, is it a good deal?

These contracts are known as power purchase agreements and they are largely responsible for the boom in residential solar panels here and across the country. Of the 189,000 residential solar units installed in the United States last year, more than 70 percent were power purchase agreements, according to Cory Honeyman, senior analyst with Boston-based GTM Research, which provides data and consulting for the green tech industry.

Power purchase agreements offer an alternative to buying and installing residential solar panels, which cost about $21,000 for a typical 6,000-killowatt-hour system, according to GTM. Instead, solar companies purchase, install, and maintain panels on customers’ homes at no cost for a contractual period of 20 to 25 years.

In return, homeowners pay the solar company for the energy produced by the panels, usually at discounts up to 25 percent lower than utility rates. The contracts also fix annual rate increases to offer predictability in the erratic energy market.

Residential solar systems can produce anywhere from 40 to 95 percent of a home’s electricity, and they can lower overall electric costs by 10 to 20 percent, says Jonathan Bass, spokesman for SolarCity Corp. of San Mateo, Calif., the nation’s biggest residential solar company. SolarCity has about 15,000 customers in Massachusetts.

For homeowners who cannot afford or do not want to pay the upfront costs of solar panels, power purchase agreements offer immediate savings and cleaner energy. Still, said Honeyman, consumers should carefully weigh their options.

“There is a lot of fine print in those contracts,” he said, “and there are important risks and considerations to keep in mind.”

The first consideration is the 20- to 25-year contract. That commitment means that if a homeowner sells his home, he must buy out the remaining years or transfer the contract to the new owner.

The balance owed when a contract ends early is based on projected solar electricity rates, average usage, and remaining time on the contract. In a typical contract charging 13 cents per kilowatt hour, for a typical home consumer 6,000 kilowatt hours a year, buying out the last 10 years could cost more than $8,000.

Solar companies say that in nearly all cases — SolarCity estimates 98 percent — homeowners transfer their contracts to the buyers.

Another consideration: the falling price of solar panels could make buying a solar power system more attractive than a power purchase agreement. The average cost to install residential solar power has plunged 73 percent since 2006, according to the Solar Energy Industries Association, a Washington trade group, and those costs are expected to decline further.

For those who can afford to buy or finance solar panels outright, owning a system can provide additional financial benefits. For one, instead of paying a solar company for the electricity produced on the homeowner’s roof, that energy is free.

Owning the panels also allows residents to reap state and federal tax credits and other incentives, which under purchase agreements, go to the solar companies. A typical $20,000, 6,000-kilowatt-hour system could generate $1,200 to $1,800 annually through the incentives — enough to cover the cost of loan payments, said Josh Mailloux, sales manager at Boston Solar of Woburn, which installed nearly 800 residential systems in Massachusetts last year. Most were purchased by homeowners.

“It’d be nice if people had some idea of what they’re giving up” with power purchase agreements, Mailloux said.

As panel prices slide, analysts expect the market share of power purchase agreements to shrink and more homeowners buy systems outright. SolarCity, which has relied almost exclusively on these agreements, recently added a loan program, called MyPower, to finance residential purchases.

Whether homeowners buy panels or enter a power purchase agreement, residential solar could face a challenge in 2017, when the 30 percent federal investment tax credit is set to expire for homeowners and fall to 10 percent for solar companies. Analysts expect residential solar installations to accelerate over the next two years as homeowners and solar companies seek to take advantage of the program before it expires.

Congress could extend the tax credits. But if lawmakers don’t, the pace of solar installations will slow, analysts said. For the time being, said Honeyman, power purchase agreements still offer a good deal for many low- and middle-income homeowners who can’t afford the upfront costs or don’t want the maintenance and other hassles of ownership.

“The case for [power purchase agreements] is still viable,” he said. “In the end, there are meaningful savings opportunities.”