Fleet managers are finding they have an increasing array of tools to help lower the environmental impact of their fleet (a.k.a. “Green” their fleet). These include the implementation of “no idle” rules, replacing older trucks with hybrid trucks or battery electric trucks, or improving equipment utilization (basically reducing the size of trucks that are used for particular jobs). Some of the fleet managers I’ve spoken to in the last year have even acknowledged that they have reduced their fleet’s environmental impact by simply reducing the number of vehicles (in most cases this seems to be more based on the economic realities of the last two years, rather than environmental stewardship). One other tool that has emerged in the last few years in significantly higher numbers is using telematics to reduce vehicle emissions.

Telematics offer the fleet manager data about their fleet while providing the driver with information about the route. These data could include everything from engine diagnostics, idle time, fuel economy, tracking emissions data, and cargo information (temperature and trailer location), to detailed routing information, GPS, erratic driving, and real time traffic details for drivers.

In order to effectively reduce emissions from the fleet, telematics are being used by fleet managers to help them reduce the time that vehicles are idling either through rerouting to reduce traffic stops or reducing idling while drivers do their job (such as shutting off an engine during package delivery, etc.). In some telematics systems, the fleet managers can keep the vehicles’ engines operating efficiently by being notified when vehicles are in need of service, and reduce risk by monitoring driver behavior.

According to analysts, C.J. Driscoll & Associates, at the end of 2009, there were about 3.6 million telematics devices in use by fleets, including wireless handheld units. Whether these implementations are done specifically for environmental reasons is a bit murky, because most fleet managers recognize the multiple benefits of telematics for their fleet. Pike Research has found that many fleet managers look to this as a tool for reducing fuel usage, which has a direct impact on their budget. As a result the concept of green telematics is not something that is seen in a vacuum. In real-world situations, fleet managers are more likely to subscribe to telematics for multiple benefits.

That said, in 2009, an estimated 10% of fleets could be described as “Green Telematics Installations” because their main purpose is reducing emissions, in addition to reducing costs. This subset of telematics installations are looking to telematics to help with their emissions targets, but still recognize the other benefits such as lower costs, routing and reduced risks. The combination of continued pressure to meet emissions regulations and tight budgets will send many fleet managers to seek ways to reduce emissions without replacing or eliminating older trucks. As a result green telematics installations are expected to grow at a faster rate than telematics users in general, reaching 1.4 million green telematics installations by 2014, almost a quarter of all telematics installations.

China is likely to become the largest market for plug-in electric vehicles thanks to a larger relative government investment, but will trail the U.S. in hybrid sales.
The Chinese government announced it will spend $14.7 billion through 2020 on alternative drivetrain vehicles, with the bulk of the money going towards all-electric vehicles, according to news reports quoted by Edmunds.com’s Green Car Advisor.

That’s a greater outlay in consumer subsidies, industry incentives and spending on charging infrastructure than in the U.S. which (for now) boasts a much larger economy. The Chinese government would like 5 million alternative-fuel vehicles to be on the roads by 2020.

The U.S. government has committed more than $2.5 billion in incentives for battery makers, consumer purchases, and for charging infrastructure, but won’t come close to the Chinese commitment in future years. Not all of that money is bearing fruit. The DOE gave A123 Systems a $249 million grant last year to manufacture lithium ion batteries in Michigan, ostensibly for electric vehicles under contract to Chrysler. Last week A123 Systems ended its work with Chrysler and is now focusing more on batteries that provide energy storage for the grid.

Pike Research projects that between 2010 and 2015 China will have 1.85 million hybrids and EVs sold , with slightly more EVs (1 million) on the road. In the U.S. more than 2.3 million hybrids will be sold during that time, and 840,000 plug-in and all-electric vehicles.

China has a greater ability to direct its domestic market than the more open U.S. market, and with larger incentives and many first time car buyers coming into the market, it’s understandable that China will pass the U.S. in EV sales. The governments have similar motivations – a desire to reduce carbon emissions, increase domestic production, and enhancing energy security by reducing oil imports. While we’ve heard those arguments here for many years, China imported 52% of its oil in 2008, and if the country didn’t push EVs during the rapid expansion of the auto industry, that dependency would only increase. China also has the advantage of building out the grid with EVs in mind as they are adding generation and transmission capacity while the U.S. will seek to accommodate EV demand through gains in efficiency and stressing off-peak charging.

Pike Research doesn’t expect the EV market to substantially cannibalize hybrid sales. The U.S. hybrid market has been strong for years and will remain so, while hybrid sales in China are starting from a small base.

After months of debate, the Italian Ministry of Economic Development proposed a new schedule of feed-in-tariffs (FITs) that will likely lead to continued growth in the Italian solar market for the foreseeable future but with a small dip in 2013. The FITs vary by size of installation, whether the installation is on rooftops or not, and installation completion time. This new FIT schedule is shown below.

The FIT decline for small (mainly residential) installations amounts to 5.5-10.3% in 2010 and 2011. Similarly, commercial installations will decline by 9.8-15.3%, and large utility-scale installations will see a fall in FIT support of 14.0-15.5% in these two years. The Ministry also proposed an additional FIT reduction of 6% per year in 2012 and 2013.

Moreover, Italian FITs are currently capped at 3.0 GW of cumulative installations. According to Pike Research analysis, we expect new installations in Italy to exceed 1.3 GW in 2010 alone and that cumulative installations will be exceed the FIT cap in about mid-2011.

Not surprisingly, the effect of the FIT reductions combined with the looming FIT cap has caused concern with respect to the financial viability of solar installations in Italy in the next three years.

Despite the reductions in Italian FITs and the 3.0 GW cap, we believe that Italian installations will continue to show strong growth, through 2012. Italy is dependent on imported energy sources, and, as a result, its power costs are high. Because of this and excellent solation in the southern regions, IRRs of installations in Italy, including utility-scale installations, will continue to attract investment through 2012 as module ASPs continue to shrink to $1/W or less in 2012. Additionally, even when the 3.0 GW cap is reached in 2011, Italian FIT rules permit a 14-month grace period for new installations.
Consequently, Pike Research forecasts solar growth by segment (residential, commercial, utility) as depicted below.

Note that the dip that we currently project in 2013 could reasonably be avoided if the 3.0 GW cap on solar cumulative installations is lifted or increased in late 2011 or 2012. As many regions of Italy approach grid parity in 2013, an increase in the FIT cap is, in our opinion, realistic.

Customer push back on smart meters in regions of the country such as California, Colorado and Texas will likely be a short-term phenomenon. Unless utilities don’t learn from their mistakes and start thinking more about how smart meter technology can serve their customers, and not just themselves.

In the San Francisco Bay Area, several communities – the most recent being Fairfax in Marin County – have successfully stopped Pacific Gas & Electric (PG&E) from installing smart meters pending further evaluations about accuracy, security and public health.

Some market participants estimated that roll-outs of “virtual power plants” based on demand response (DR) programs could likely be delayed by one year until these consumer resistance issues are worked out. Without smart meters, one cannot build a VPP, whether tapping generation or DR resources.

The majority of consumer opposition to smart meters is based on complaints of higher electricity prices. A social concern is “Big Brother” monitoring individual customer’s energy use patterns and habits – and even controlling devices in one’s own home. A “wild card” issue stems from emerging science. Just as cell phone technology and other wireless devices are coming under attack from public health advocates worried about links to cancer from exposure to electromagnetic fields (EMF) and radio frequencies (RF), these potential health risks may also pop up with any business model dependent upon wireless communications, including smart grids.

DC-based electric systems are less susceptible to these issues, so DC-based microgrids may have an advantage over VPPs in this regard. Any VPP or microgrid dependent upon wireless signals may fall prey to this criticism. Inverters used to convert solar and wind from DC to AC may also suspect.

There are filters to address these concerns about this kind of “dirty electricity,” and the military has been relying upon these filters for years. Forward-looking component manufacturers selling into the smart grid market could incorporate these filters at a price premium. Another approach, which is being deployed in Japan and much of Europe, is relying on fiber optic networks instead of wireless signals. Google has reportedly purchased large swaths of “dark fiber” – unused fiber optic networks – and could ultimately become a purveyor of ultra-premium smart grid technology, infrastructure for VPPs that would then be immune from the perceived health threats possible with the current explosion of EMF and RF permeating society.

Yet another advantage of fiber optics is this: the potential security threats associated with a large-scale reliance upon wireless networks, an issue currently being examined by state regulators in Colorado and California.

In the long run, the push to empower consumers with more real-time information so they can reduce electricity consumption when prices are high is inevitable, and a logical evolution of technology trends.

Still unanswered is consumer acceptance of the idea of taking more responsibility for on-site energy management. A few VPP advocates offer a contrary view. The current consumer push back is good for this market since utilities will not be able to get away with saying they installed the smart meters, and they are now done. “We need to hold the feet of the utilities to the fire, to really open up the market and create a level playing field and leverage the current CDE base to provide a variety of grid services,” said one representative from one leading developer of VPPs.