Duke Energy might abandon a project to experiment with distributed solar energy unless North Carolina state regulators change their minds about how the utility can recover the project’s cost.

Duke petitioned the North Carolina Utilities Commission Thursday to remove the limits the commission set last December. Back then, the commission said Duke could only pass on part of the $50 million project cost onto ratepayers under the state’s 2007 renewable energy law. The utility might be able to recover the rest of the cost in a separate process.

Duke now says those restrictions could force it to violate federal accounting rules governing how the utility can take advantage of up to $250 million in investment tax credits.

The solar project has run into problems since Duke announced it last summer. The company initially set out to get permits for installing 20 megawatts worth of solar panels at residential, commercial and even school properties. The idea is to invest $100 million in a project that would enable it to meet the state’s renewable energy mandate while exploring the concept of distributed power generation.

Distributed power generation means producing electricity close to where it’d be used. That’s a different approach than the traditional, centralized power generation (i.e., coal-fired power plants).

Duke cut the project in half last October after critics said the project was too expensive and that the utility should’ve allowed other power producers to participate.

Could manure become cost-competitive as a source of energy?

U.S. Sen. Ben Nelson thinks so — with a little federal stimulation.

The Nebraska Democrat has introduced legislation to give tax credits for producing methane — i.e., natural gas — from manure, according to the New York Times’ Green Inc. blog.

That could help out manure-to-biogas producers like Environmental Power subsidiary Microgy or BioEnergy Solutions in California’s Central Valley (see Sixteen Ancient Technologies Reborn). They’re among about 120 projects around the nation now generating enough gas for about 256,000 million kilowatt-hours of power, according to the U.S. Environmental Protection Agency’s AgSTAR program.

Capturing and scrubbing the methane that makes up about two-thirds of the gas emitted from manure could be a big business. The University of Texas estimates there’s enough manure in the country to generate up to 108 million megawatt hours of electricity if its gases are captured, according to a University of Texas study (see Measuring Manure: It Could Provide Nearly 3 Percent of Our Power.

Of course, capturing every last bit of manure’s power potential may not be feasible. But AgSTAR estimates the country could get up to 6 million megawatt-hours of energy out of feasible projects.

The bill would offer a tax credit of $4.27 per million British thermal units (BTUs) of natural gas produced from manure. Natural gas prices have run from as low as $4 per million BTU to as high as $12 per million BTU over the past several years.

It’s the third try for legislation to assist the hundred or more manure-to-gas projects out there — similar proposals failed in 2007 and 2008. But given the billions now directed toward renewable energy, smart grid deployments and energy efficiency in the current version of the stimulus bill working its way through Congress, manure-to-energy backers might have hopes that this year will be different.

We broke the story yesterday about layoffs at SunPower, and reported that the company’s chief marketing officer, Brad Davis, was one of the casualties. But the company got back to us later to say that wasn’t true. We apologize for the mistake.

While SunPower wouldn’t confirm names of those who have been let go, its director of communications, Stephen Wright, pointed out in an email that all the executives listed on the company’s Website are still gainfully employed. That means Davis is still with the company.

SunPower, like many other solar companies, are cutting staff and costs to weather the economic downturn. The San Jose, Calif.-based company said yesterday it had let go about 60 out of 1,000 employees in the non-manufacturing operations. Or about 60 out of its global workforce of more than 5,000, Wright said.

The company has seen changes in its executive management. Daniel Shugar, president of SunPower’s installation business, announced last October that he would take a personal leave of absence for nine to 12 months starting in March this year, according to a filing with the Securities and Exchange Commission.

The company has a new chief financial officer, Dennis Arriola, who joined the company last November. It also announced last December the hiring of Jorg Heinemann as its chief information officer.

San Jose Mayor chuck Reed isn't giving up on Tesla Motors. Speaking to an audience at the "State of the Clean Green Industry" held by the SD Forum at Sun's headquarters, Reed said that he is working with Tesla to put some operations within the city limits. In fact, he was touring real estate sites with Tesla execs. Tesla might put in R&D or powertrain assembly in the city. But what could be called a complete assembly facility? Probably not. "One site on Zanker road? That is probably not feasible." Last year, Tesla announced plans to build a massive facility here with the blessing and support of the city and state. Since then, however, the economy has gone south and CEOs from a wide variety of industries are spending an inordinate time scrambling for cash in Washington. Tesla is trying to get some of that too. It's amazing how times change. Just two years ago, Tesla was playing California off New Mexico and those two off Michigan when it was trying to figure out where to put an assembly plant.