{"id":3971,"date":"2016-06-06T16:56:08","date_gmt":"2016-06-06T16:56:08","guid":{"rendered":"http:\/\/minutes.machine.market\/?p=3971"},"modified":"2016-06-06T16:56:08","modified_gmt":"2016-06-06T16:56:08","slug":"birkenstocks-in-peoria-why-caterpillar-is-making-a-solar-power-push","status":"publish","type":"post","link":"https:\/\/machine.market\/blog\/birkenstocks-in-peoria-why-caterpillar-is-making-a-solar-power-push\/","title":{"rendered":"Birkenstocks in Peoria?! Why Caterpillar is making a solar-power push"},"content":{"rendered":"

Crain’s Chicago Business<\/a> reports when you think of Caterpillar<\/a>, you might picture rumbling trucks, excavators<\/strong> and bulldozers\u2014huge yellow machines that move tons of dirt and metal. You probably don’t picture small solar platforms that provide power to rural villages or to miners digging in isolated hills.<\/p>\n

Caterpillar is hoping to change that with a push into what’s called the microgrid electricity market. This spring, the company rolled out a power system equipped to run on solar energy or diesel fuel that acts as a sort of mini-ComEd, providing energy in remote places where people and companies can’t tap into a traditional grid because no such thing exists.<\/p>\n

For the Peoria manufacturer, microgrids represent a desperately needed avenue for new growth. Falling commodity prices and slowing developing world economies have been\u00a0pummeling the company<\/strong>, resulting in dropping sales for the past three years, to $47.01 billion last year, as well as job cuts and facility closures. More of the same is expected for 2016.<\/p>\n

\u201cWe perceive it as a big, big market opportunity,\u201d says Rick Rathe, general manager of new ventures at Caterpillar’s electric power division.<\/p>\n

How much Caterpillar might gain in the segment isn’t certain, and in an interview, Rathe declines to make a prediction. Kwame Webb, an analyst at Morningstar in Chicago, isn’t sure either. \u201cAt this juncture, the economic and competitive advantages in the market (for Caterpillar) are unclear,\u201d Webb says.<\/p>\n

Yet demand for microgrids with renewable energy systems is expected to balloon. A Navigant Research report late last year estimated that remote power platforms represent a $10.9 billion market, but revenue related to developing and servicing the systems will soar almost twentyfold over the next decade to $196.50 billion. Other heavy equipment manufacturers, such as Cummins, are angling for the business, as are big players in the solar industry, including SolarCity.<\/p>\n

The convergence of relatively high expenses surrounding diesel with declining prices for increasingly sophisticated renewable technologies is driving the market expansion, says Peter Asmus, associate director at Navigant in San Francisco. \u201cWhen you add renewables, you save money,\u201d he says. \u201cIt’s more about hedging your bets and reducing your costs.\u201d<\/p>\n

DOWN WITH DIESEL<\/b><\/p>\n

Caterpillar has long supplied power systems to customers across the world in diesel-fueled generator sets. But as prices for photovoltaic panels have fallen, asking customers to invest in an all-diesel system has become tricky. About a year ago, Caterpillar formed an alliance with Tempe, Ariz.-based First Solar<\/strong> to develop its hybrid microgrid product, a move that came on the heels of an undisclosed investment in energy storage firm Fludic Energy. In January, Caterpillar invested in microgrid developer Powerhive, without disclosing the amount.<\/p>\n

Such deals reinforce the idea that \u201crenewables are moving beyond just policy, this niche that’s only driven by incentives or mandates,\u201d says Andrew Lubershane, an associate director at Englewood, Colo.-based research provider IHS who focuses on power. \u201cNone of Caterpillar’s customers are doing this for green reasons. They’d only be doing it if it’s a cost-effective solution.\u201d<\/p>\n

Caterpillar’s microgrid is a customizable plug-and-play system that can provide as little as 10 kilowatts or as much as 100 megawatts of energy, the latter enough to power 16,400 homes. In April, the company installed 500 kilowatts<\/strong> of photovoltaic panels, as well as related power storage systems, at its Tucson (Ariz.) Proving Grounds; and it connected the components to three of its diesel generators. By combining the two types of power, Caterpillar estimates it can cut diesel consumption<\/strong> by about one-third.<\/p>\n

Now the goal is to identify customers and start selling the devices. Rathe says that the company thinks its far-flung dealer network gives it an on-the-ground advantage around the globe. Caterpillar’s salesforce will hunt for clients among governments looking to electrify rural communities\u2014about 1.1 billion people<\/strong> don’t have power today, according to the World Bank\u2014as well as industrial and commercial outfits in distant terrains.<\/p>\n

\u201cOur focus is, as fast as we possibly can, to bring dealers up to speed,\u201d Rathe says. \u201cWe think we’ve identified the best of the best for technology that makes up our microgrids.\u201d<\/p>\n

Interestingly, Caterpillar’s dive into solar-equipped microgrids gives the company more exposure to emerging technologies in photovoltaic panels and energy storage. That might be a good place to be in the coming years, as global leaders try to cut down on carbon emissions in an effort to slow climate change. \u201cThey may also see some of the carbon writing on the wall,\u201d says C. Baird Brown, an attorney in Philadelphia who serves as counsel for a microgrid advocacy group. For a company like Caterpillar, he says, just selling things that operate on diesel, or natural gas or propane, isn’t much of a future.<\/p>\n

By MICAH MAIDENBERG<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Crain’s Chicago Business reports when you think of Caterpillar, you might picture rumbling trucks, excavators and bulldozers\u2014huge yellow machines that move tons of dirt and metal. You probably don’t picture small solar platforms that provide power to rural villages or to miners digging in isolated hills. Caterpillar is hoping to change that with a push […]<\/p>\n","protected":false},"author":1,"featured_media":3973,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":""},"categories":[8],"tags":[266],"yoast_head":"\nBirkenstocks in Peoria?! 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