Green Tech at a Crossroads: In Search of the Green Tech Google

A year ago, solar-technology start-up Ausra was ready for the big time. There were plans on the table to raise hundreds of millions of dollars to build giant power plants and to conduct an initial public offering of Ausra shares by 2010.

Then the recession hit. Ausra executives refocused on more modest goals, such as building small solar units, and selling equipment for industrial operations like desalination and food processing. It also is trying to sell to utilities, rather than build massive solar plants itself.

“Utilities are really in a great position to build large-scale projects,” said Katherine Potter, communications vice president at Ausra. “You need to walk before you can run, but the technology is there.”

That IPO goal, it’s fair to say, is off the table for the foreseeable future. And as executives came to accept that Ausra had to change its business, the Palo Alto, Calif., company cut about 10 percent of its 108 employees.

Ausra isn’t the only green-tech company dealing with reduced expectations. Despite high hopes, $14.5 billion in worldwide venture funding over the last two years, and cheerleading from the Obama White House, 2009 could be a make-or-break year for many green-tech outfits. And the stakes may be greater than the fortunes of a few entrepreneurs and their investors.

Save The World, Make Money

Can the United States simultaneously lean on green-tech investment to help fix its broken economy, wean itself off dependence on foreign fuel sources, and address climate change concerns? President Obama, for one, appears to be a believer in one of the fundamental underpinnings of green business: you can make money while helping save the world.

“One of the key points that…I will repeat again and again during the course of my presidency is there is not a contradiction between economic growth and sound environmental practices,” Obama said when he named his energy and environment team in December. “I think that the future of innovation and technology is going to be what drives our economy into the future. And the energy economy is going to be part of what creates the millions of jobs we need.”

Green-tech entrepreneurs and investors are well aware of these lofty goals. But these days, they’re more focused on other issues, such as finding the money to stay in business and landing customers.

“We had closed a round of funding in October for the next stage of vehicle development–then all of that went off the table in about six days,” said John Waters, the CEO of stealthy electric-car start-up Bright Automotive, which restructured two months later and managed to find alternative funding.

The question isn’t whether the green-tech movement will whither away. Already, there is a growing consumer niche for green technologies, from rooftop solar panels to low-power consumer electronics made from recycled materials.

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Industrial Nanotech Enters Solar Energy Market after Completing Successful Field Trials

Industrial Nanotech, Inc., an emerging global leader in nanotechnology, announced today that the Company’s “Nansulate Solar” is currently being specified on both solar panels and the pipes and tanks of solar hot water systems to increase efficiency and lower operating costs.

“Field trials of Nansulate Solar began a year ago in March of 2008 by Universal Energy Group, Inc., located in Stockton, California,” stated Francesca Crolley, VP of Operations and Marketing for Industrial Nanotech. “After twelve months of data collection, the product proved to successfully increase the efficiency and lower the operating cost of solar systems when used on the solar panels of solar energy systems and on numerous components of solar hot water systems. Universal Energy Group is now including Nansulate Solar as the standard in their solar installations and selling to other solar energy companies. Additional information about this product can be found at Nansulate.”

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Sunsei GreenMeter Approved for Rebates in California

ICP Solar Technologies Inc., a developer, manufacturer and marketer of proprietary solar panels and products, today announced that the Company’s Sunsei® GreenMeter^TM has been approved for certain solar-based incentives in the State of California. Specifically, the GreenMeter^TM has been added to the list of approved products under California’s PMRS subsidy program, such that residents installing this unique ICP Solar application will qualify to receive rebates, tax credits, and other incentives under the “Go Solar California” initiative - a $2.2 billion program. The Sunsei® GreenMeter^TM is now listed as an eligible Meter and the associated web service is listed as an eligible Performance Monitoring and Reporting Service provider.

“California installers can now offer their clients an advanced, accurate metering and monitoring product with an even more attractive value proposition - making it easier to spur adoption of this innovative, solar-powered solution,” said Sass Peress, CEO. “Expanding into the California solar market - the largest in North America - is critical to our successful rollout out of the Sunsei® GreenMeter^TM and establishing it as the leading application of its kind.”

BusinessWire

Los Angeles Solar Measure Falls Behind in Votes

A controversial ballot measure in Los Angeles to increase solar power installations in the city has fallen behind, and will be rejected unless thousands of late or provisional ballots swing the outcome.

Measure B, as the issue was known, would require the local utility - the Los Angeles Department of Water and Power - to ramp up solar power production dramatically by installing 400 megawatts’ worth of panels by 2014. (That is a substantial amount - nearly one-third of the size of a record solar deal recently signed by Southern California Edison.)

The controversy centered on how - not whether - Los Angeles should move forward with solar power.

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Acme Group Invests $30mn in California eSolar to Build India Solar Thermal Plants

Acme Group will have exclusive rights to eSolar’s design to set up thermal solar power plants in India.

Gurgaon-based telecom power solutions firm Acme Group has made an investment of $30 million for a 5% stake in California-based eSolar. The US-based company is involved in developing, constructing and deploying modular, scalable solar thermal power plants. Acme has also entered into an exclusive licensing agreement with the company. The deal involves Acme Group having exclusive rights to eSolar’s design to set up thermal solar power plants in India.

Acme can also work with other companies to build solar thermal power plants in India using eSolar technology. ACME is targeting 1,000 MW of solar power within India over the next 10 years. The company has already signed power purchase MOUs for 250 MW.

Though this is eSolar’s first international licensing agreement, it had entered into a similar agreement with US-based NRG Energy.

It raised $130 million in funding from Google.org (Google’s philanthropic arm), Idealab and Oak Investment Partners in April 2008.

eSolar was founded in 2007 by Idealab Inc founder Bill Gross and Asif Ansari. Idealab is an incubator based in Pasadena, California and its companies include Picasa, which was acquired by Google.

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First Solar Agrees to Acquire Multi Gigawatt Utility Scale Photovoltaic Pipeline

First Solar, Inc. today announced it has entered into an agreement to significantly expand its penetration within the U.S. utility solar power market with the acquisition of OptiSolar’s solar project pipeline. The acquisition includes:

• A 550 megawatt (MW) AC solar development project under a power purchase agreement with PG&E
• A project pipeline of additional 1,300MW AC which are in negotiation with Western region utilities for solar development projects
• Strategic land rights of approximately 136,000 acres (approximately 210 square miles) with the potential to deploy up to 19 gigawatts (GW) AC of utility-scale solar power projects

In addition, the core development team responsible for assembling and executing on the solar project pipeline will join the First Solar development team.

First Solar expects to construct solar power plants developed under the acquired solar power project pipeline over the next several years and sell them to a combination of regulated utilities, diversified energy companies and other independent power producers.

First Solar’s investment in the development pipeline and planned projects ensures that at least 400 new green collar jobs will be created in California. First Solar is committed to supporting the planned projects and will use its resources to bring these projects on-line on time. Project development is planned to begin as early as 2010.

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California Solar Startups Might Get Help in Unlikely Places

SAN FRANCISCO — California’s solar power market and its startups stand to gain from utilities making a direct play into renewable energy development, a prominent industry representative said in an interview yesterday.

Sue Kateley, executive director of the California Solar Energy Industries Association, said she welcomes Pacific Gas & Electric Co.’s decision this week to launch a five-year effort to build and own solar-run power plants totaling 250 megawatts. The deal, she said, is a sign that the state’s installers, distributors and manufacturers could find enough work to weather the economic downturn.

“It’s a win-win on either side,” said Kateley, who represents solar companies all along the supply chain.

San Francisco-based PG&E has backed its ownership plans with a second track under which the utility intends to help finance another 250 MW of development. PG&E CEO Peter Darbee said the company expects to spend $1.4 billion to see the entire 500 MW online by 2015.

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Cost of Solar Installation has Fallen in the Past Decade

The cost of installing solar panels on homes and businesses plunged 27.6 percent from 1998 through 2007, according to a new study that questions some of the conventional wisdom about solar power’s price.

Researchers at Lawrence Berkeley National Laboratory examined the costs of 37,000 photovoltaic systems across the country and found the average price fell from $10.50 per watt in 1998 to $7.60 per watt in 2007. Those averages include residential systems as well as larger arrays installed on businesses and do not take into account financial incentives from the federal or state governments.

Smaller, home-size systems averaged $8.30 per watt in 2007, which was more than the average at commercial installations. At that price, a typical 3-kilowatt residential solar system would cost $24,900.

The study’s findings, released Thursday, contain one surprise.

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Mergers Underway in Home Solar Installation Market

The home solar installation market will see fewer but larger players as the pace of mergers and acquisitions accelerates, industry insiders forecast.

Wednesday, a New England solar installer announced an aggressive move into sunny California, acquiring the residential-installation portion of Borrego Solar Systems, a San Diego County company with three Northern California offices.

GroSolar, based in White River Junction, Vt., will emerge from the deal as the fourth-largest residential solar installer in the United States, and its chief executive said it hopes to rival industry leaders SolarCity of Foster City, Akeena Solar of Los Gatos and REC Solar of San Luis Obispo.

“California is 70 percent of the solar market,” said Jeff Wolfe, GroSolar’s CEO. “We’ve very consciously grown our business. We wanted to be firmly established before we entered the fray here.”

The move follows the recent merger of two other solar companies, Regrid Power of Campbell and Real Goods Solar of Hopland.

“The market is definitely showing signs of commoditization,” said Tom McCalmont, the Regrid Power executive who is now CEO of Real Goods Solar. “This happens in all markets as they mature.”

Installing rooftop solar systems continues to be a booming business in the state. Twice as many megawatts of solar power went online in 2008 as in 2007, according to a recent report by the California Public Utilities Commission.

In all, 158 megawatts of solar power were installed in 2008, up from 78 megawatts in 2007. Since the California Solar Initiative was launched in early 2007, the state program has received 18,290 applications for solar project rebates.

GroSolar started as an installer in 1998, and began distributing panels to other installers in 2004, Wolfe said. It received venture funding in 2006, and added commercial installations to its residential and distribution business in 2008.

The company now does home solar installations in nine states and has 200 employees. It will absorb 65 workers from Borrego.

Borrego Solar Systems, based in El Cajon, will move away from residential installations to concentrate on commercial and government solar projects, which make up 75 percent of its business, CEO Mike Hall said.

“When we looked forward at how to scale the business, we needed to start thinking about megawatts, not kilowatts,” Hall said.

Borrego will focus on projects generating from 200 kilowatts to 3 megawatts, with a special emphasis on schools and low-income and multiunit housing projects. It will keep a Bay Area presence, opening an office in the East Bay in the near future, Hall said.

GroSolar will keep Borrego’s locations in San Jose, Berkeley and Petaluma, and plans to drop the Borrego name in about four months, Wolfe said.

Financial terms of the deal were not disclosed. Both companies are private.

GroSolar is well-positioned to become a large player in rooftop installations, Hall said. “My prediction is that there will be a couple of large, national residential integrators (installers),” he said, “but probably just a couple. There are economies of scale when you’re the biggest.”

Right now, seven to 10 companies are trying to become large national or multi-region players.

A 2008 study from the state’s community colleges found more than 700 companies were installing solar in California, but the head of the California Solar Energy Industries Association noted that the top 50 companies do the lion’s share of installations.

“It would not be surprising to see more mid- and large-size contractors start to merge,” said Sue Kateley, CalSEIA’s executive director.

Still, new companies continue to enter the solar market - especially in the down economy, when general contractors and roofing companies are adding solar to their portfolios, she said.

“One theory is that 20 years down the road, we might be looking at solar as similar to the heating-air conditioning model with large, franchises like Carrier, Trane and Lennox, and then a number of small, independent companies,” Kateley said.

Matt Nauman
San Jose Mercury News

California’s Renewable Energy Goals Feasible

California’s goal of getting 33 percent of its electricity from the sun, the wind and other renewable sources by 2020 might be more feasible than previously thought, according to a new government report.

If all the renewable power projects proposed in the state last year were built, California would easily surpass that goal, according to a report issued Wednesday by the California Public Utilities Commission. All told, those projects would generate 24,000 megawatts of electricity, enough for 18 million homes.

That’s on top of the renewable power already flowing in California. According to the report, solar plants and wind farms built in California during 2008 can generate 516 megawatts of electricity, roughly as much as a midsize, fossil-fuel power plant. The previous year, the state only added 113 megawatts of renewable power.

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