The Powerful Capabilities of AEP’s Dolan Labs

Thanks to the efforts of Chris Mather, co-head of the Tech Belt Energy Innovation Center, I was able to gain a tour of the Dolan Laboratories, located just outside Columbus, owned and operated by American Electric Power (NYSE:  AEP).

This facility is now highly unusual for the electric utility industry.  Back in the day, a few other utilities had their own laboratories to test the basic equipment upon which the power grid is based.  Alas, most of those laboratories have since been shut down or spun-out to private operators.  Indeed, now even the Electric Power Research Institute – the industry’s collective non-profit R&D organization – sometimes uses Dolan for their work.

The labs at Dolan include chemical and water testing facilities and civil engineering (especially related to concrete) capabilities that are mostly relevant for powerplants.  However, our tour was mainly focused on the Dolan Technology Center:  the set of facilities and equipment employed for testing assets downstream of generation, particularly transmission and distribution.

Electric power transmission and distribution lines look pretty benign, given the lack of moving parts.  However, the forces in (and around, and caused by) these cables are, well, shocking.

At Dolan, AEP has the ability to discharge 1.2 megavolts, which creates something not far removed from a lightning bolt.  In addition to electrical energy, the labs have physical equipment inside containment rooms that can impart extreme mechanical forces to push supporting items like conductors and mounts to their breaking points.  The resulting explosions unleash shrapnel much like a hand grenade.

Trust me:  do not try this at home.  I won’t get into any specifics, but the stories associated with working on grid infrastructure – usually when something is not right, often in difficult environmental conditions (night, rain, snow, wind, cold, heat) – are sobering.

A key function of Dolan is to quality check the supplies that AEP receives from its vendors before deploying to its grid, where failures harm service reliability, pose safety risks and are expensive to repair.

To illustrate, our host Bob Burns (Manager of the Dolan Technology Center) showed us how Dolan has been working to improve underground distribution cables.  Twenty years ago, due to the novelty of the technology, AEP rejected upon receipt about 5% of its underground cable purchases owing to unknown defects.   Dolan was able to identify the root causes of cable failure and work with manufacturers to dramatically reduce those failures by changing designs and production processes – with economic, reliability and safety benefits that redound not only to AEP but to the power industry at large.

In addition to its grid focus, the Dolan Technology Center also includes a number of end-use application testing facilities.  For instance, the main facility includes a dummy household kitchen containing a number of appliances (stoves, refrigerators, dishwashers, water heaters) and control systems, a spectrum of electric vehicle recharging stations, and various installations of advanced lighting and metering technologies.

Although we spent most of the tour indoors, outside were some other uncommon capabilities.  Down the road a half-mile was a former site of a small peaker powerplant, at which Dolan staff experiments with novel technologies relevant for microgrids, including grid-scale energy storage and small-scale distributed generation.  It was here that Dolan has been helping Echogen with their innovative waste heat recovery technology, and it is here that the Dolan is testing community energy storage approaches for AEP’s GridSmartOhio pilot program to be rolled out in suburban Columbus.

It should be noted that AEP contracts out Dolan’s equipment and staff to perform services on behalf of third-parties, and that they have ample spare capacity.  Facilities like this are not found in very many places.  It’s an asset that the cleantech community should capitalize upon more fully.  If you need some specialized technical help related to the power industry – especially in on high-voltage issues – and you’re not able to find a place to get work done, I’m sure the good folks at AEP’s Dolan Laboratories would be happy to take your call to see if they can fit the bill.

An Illuminating Article

As most of you readers know, the lighting industry is undergoing a revolution, stemming from the phase-out of inefficient incandescent bulbs as directed by the Energy Independence and Security Act (EISA) of 2007.

A recent article in Distributed Energy by David Engle entitled “Quest for Light” provides a succinct overview of the domino effect on technological advancement to develop good substitutes for the old incandescents.

It’s well-known that compact fluorescent lighting (CFL) for household use has been somewhat of a bust, between the perceived inferiority of the light quality and disposal concerns due to mercury in the devices.

It’s also generally believed that LED lighting technologies will be the big wave to unroll in the lighting sector in the coming decade:  super-efficient, with tailorable light quality.  The big issue is cost:  current LED bulbs for residential application are generally over $20, but according to this presentation by Fred Welsh of Radcliffe Advisors at a 2011 U.S. Department of Energy symposium, the costs of LED lighting is projected to fall by an order of magnitude in the next decade.

A big issue for LED lighting advancement is heat management:  current LEDs produce a lot of heat, so many innovators are working on novel ways to either reduce the heat output associated with LEDs, or to dissipate the heat produced by LEDs more effectively/cheaply.

What’s less well-known is that, as Engle reports, “practical elimination of incandescents was envisioned [by EISA], but it is not happening.”  Why?  At least one reason is that a class of more efficient incandescent bulbs called “2x” – meaning twice as efficient as old incandescents – has been released, and these comply with the requirements of EISA. 

All these factors suggest a fatal blow for the CFL:  a technology whose time apparently never came.  (I’ve got several in my drawer at home – I hate ‘em.)  However, notwithstanding the failure of CFLs for household use, fluorescent lights probably still have a viable market in commercial applications, given their combination of low costs and high efficiencies. 

As Engle also points out, it’s not just illumination technology that’s advancing:   lighting controls is also a hotbed of innovation.  In some ways, improved lighting control is to compensate for consumer indifference, ambivalence, or unawareness of modulating illumination to meet frequently-varying lighting needs.  Perhaps 20% energy savings or more can be achieved with better lighting controls.  Since lighting represents about 13% of U.S. electricity demand, that’s a lot of kwh – and associated dollars and emissions – that can be saved with more advanced lighting controls.

If he could see us now, Thomas Edison would probably be discouraged to observe that most homes still use basically the same technology he invented in 1879, over 130 years ago.  At least he might feel a little better knowing that we’re finally getting around to making his creation obsolete.

Predictions For Cleantech In 2012

It’s December again (how did that happen!?) and our annual time for reflection here at Kachan & Co. So as we close out 2011, let’s look towards what the new year may have in store for cleantech.

There are eggshells across the sector for 2012. Global economic uncertainty in particular is leaving some skeptical about the chances for emerging clean technologies. And those who watch quarterly investment data, or who look only in a single geography (e.g. North America) may have seen troubling trends brewing this past year. But the true story, and the global outlook for the year ahead, is—as it always is—more complicated.

As you’ll read below, we predict a decline in worldwide cleantech venture capital investing in 2012. But as you’ll also read below, we believe the gap will be more than made up by infusions of corporate capital. And the exit environment, depending on who you are and where you list, still looks robust in 2012 for cleantech (it may not have felt so, but it was actually surprisingly robust in 2011, according to the data. See below.) All in all, if you’re a cleantech entrepreneur seeking capital, our advice is brush up that PowerPoint and work the system now… while there’s still a system to work.

Because, as we detail below, the largest risk, to cleantech and every sector in 2012 we believe, is the specter of precipitous global economic decline and the systemic changes it might bring. Details below.

Here are our predictions for cleantech in 2012:

Cleantech venture investment to decline
In the face of naysayers then forecasting a cleantech collapse, in our predictions this time last year, we called an increase in global cleantech venture investment in 2011. We were right. At this writing, total investment for the first three quarters of 2011 is already $6.876 billion, with the fourth quarter to report early in 2012. Given historical patterns (fourth quarters are almost always down from third quarters), we expect 2011 to close out at a total of ~$8.8 billion in venture capital invested into cleantech globally. That’d be the highest total in three years, and second only to the highest year on record: 2008.

cleantech 2012 predictions venture investment
Total 2011 investment is expected to show growth from 2009’s figures once the fourth quarter (dashed lines, estimated) is added. However Kachan predicts total venture investment in 2012 to decline from 2011’s total. Data: Cleantech Group

Yet in 2012, we expect global venture and investment into cleantech to fall. Not dramatically. But we expect cleantech venture in 2012 as measured by the data providers (i.e. companies like Dow Jones VentureSourceBloomberg New Energy Finance,PwC/NVCA MoneyTree, and Cleantech Group) to show its first decline in 2012 following the recovery from the financial crash of 2008. Our reasoning? There are factors we expect will continue to contribute to the health of the cleantech sector, but they feel outweighed by factors that concern us. Both sets below:

On one hand: What we expect to contribute to growth in cleantech investment in 2012

  • China gets a hold on its economic turbulence – For five years now in our annual predictions, both here at Kachan and when I was a managing director of the Cleantech Group, we foretold the rise of China as cleantech juggernaut. Yet, now with China having become the largest market for and leading vendor of cleantech products and services by all metrics that matter, and now receiving a larger percentage of global cleantech venture capital than at any point in history, there have been recent warning signs. New data just in (for instance, falling Chinese property prices and sluggish export growth because of faltering first world economies, not to mention the first decline in clean energy project financing in China since 2010 as wind project financing declined 14% in the third quarter of 2011 on fears of over-expansion) suggests the Chinese economic engine is slowing. On the face of it, that might look bad for cleantech. But we put a lot of faith in China’s central government and the seriousness with which it views this sector as strategic. Even now, the country has just gone on the record forecasting creating 9 million new green jobs in the next 5 years. Nine million! And China has a good track record in executing its 5-year plans.
  • Rise in oil prices – Cleantech is a much wider category than energy. But for many, renewable energy is its cornerstone. And while there’s no question about the long-term markets for renewables, the biggest factor affecting their short-term commercial viability is the price of fossil-based energy. The good news: indications are that oil prices are headed upwards in 2012, which should be expected to help make renewables more economic. Naysayers maintain that a poor global economy will destroy demand for energy, keeping the price of oil artificially low. For much of 2011, the price of oil was relatively low. But we argue the price per barrel will continue its inexorable rise in 2012 given continued growth in the size of the global market for oil, driven by market expansion in the developing world. Further adding to the expected oil price increase is a little-known fact: there’s been a decline in the quality of oil the world is seeing on average. And the poorer the quality of the oil, the more it costs to refine it into the products we require. Oil prices are headed up.
  • Corporations’ even stronger leadership role – Corporate venturing was up in 2011, possibly setting new record highs, according to the data providers (4Q data not in yet.) Cleantech corporate mergers and acquisitions globally were up in 2011, again possibly setting new record highs, according to the data. The world’s largest companies assumed the leadership we and others predicted they would last year at this time—and indications are they will continue to do so in 2012, with balance sheets still strong.
  • Solar innovation as a perennial driver – Investment into good old solar innovation and projects is still strong, and has remained so for years, while other clean technologies have risen and fallen in and out of investment fashion. And that’s despitemost solar companies being in the red and having billions of dollars in market capitalization disappear over the last year. As some solar companies will continue to close up shop in 2012, look for investment into solar innovation to remain strong in 2012 as the quest for lower costs and higher efficiencies continues.
  • Persistence of the fundamental drivers of cleantech – The sheer sizes of the addressable markets many cleantech companies target, and the possibilities for massive associated returns, will continue to draw investors to the sector. Why? The world is still running out of the raw materials it needs. Some countries value their energy independence. More than ever, economies need to do more with less. Oh, and there’s that climate thing.

On the other hand: What worries us about the prospects for growth in cleantech investment in 2012

  • Investor fundraising climate tightening – Today, limited partners (i.e. “LPs” – the organizations and/or wealthy individuals that fund venture capital companies) are still bankrolling cleantech worldwide; in its 3Q 2011 Investment Monitor for clients, the Cleantech Group details 34 dedicated cleantech and sustainability-focused funds receiving billions in capital commitments internationally in the third quarter of 2011 alone. But we expect a slowdown in venture fundraising in 2012. Blame Solyndra for negative American LP sentiment. Or blame the lack of rock star returns in cleantech of late. But there are more indications than ever that some LPs are becoming increasingly reluctant to fund cleantech. They’ve been grousing about cleantech for years. But the politicizing of the Solyndra bankruptcy has amped the rhetoric higher than ever, and will foster a self-fulfilling prophesy in 2012, particularly in America, we believe.
  • Waning policy support in the developed world – Expected conflicting government policy signals to continue in 2012. Don’t expect cleantech-friendly U.S. policy leadership in 2012, an election year. We wouldn’t be surprised if the ghost of Solyndra and other U.S. Department of Energy stimulus grants and loan guarantees continued to haunt American cleantech through the whole of 2012, making any overt U.S. government support of clean or green industry unlikely. While cleantech is far from solely an American phenomenon, there’s no mistaking that the (now expired) American national loan guarantee program helped loosen private cleantech capital in an immediately post-2008 shell-shocked economy. However, continued uncertainty over the future of the U.S. Treasury grants program and production tax credits is holding the U.S. back. Policy support suffers elsewhere in the developed world. For instance, in the UK, investor confidence was recently dealt a blow by a dramatic drop in solar feed-in-tariff (FIT) rates, and the erosion of renewable policy support in Germany and Spain is well known.
  • Lag time of negative sentiment – Even if the sky indeed started falling in cleantech (and we don’t believe it yet has), it would take a few quarters to show in venture or project investment numbers. Remember, deals can take quarters to consummate. Transactions being counted now may have been initiated a year ago. Fear takes several quarters to manifest. Which is why we believe today’s uncertainty will start to show in 2012’s performance.
  • VCs still circling their wagons – In 2007, before the financial crash, the percentage of early stage venture investments into new cleantech companies was roughly the same as later-stage venture investments into established companies. Since the crash of 2008, deals have remained skewed—both by number and size of deals—towards later stage companies, illustrating investors’ preference to keep existing investments alive than take risks on new companies. While the exact ratio varies quarter to quarter, and from data provider to data provider, there have been generally fewer early stage companies getting funded. That’s hampering cleantech innovation. We expect the trend to continue into 2012.
  • Perennial concern about exits and IRR – Despite the size of its massive addressable markets and near-record amounts of capital entering the space today, on the whole, cleantech investors are still seeking the returns that many of their web and social media tech brethren enjoy. Even now, 10 years into this theme that we started calling cleantech in 2002. That’s not for lack of exits; 2010 saw the largest number of cleantech IPOs on record (93 companies raised a combined $16.3 billion) and 2011 has already had 35 without the last quarter reporting. And cleantech M&A activity in 2011 was strong and significantly higher than last year. No, the concern is for lack of multiples. For instance, 8 of the 14 IPOs of the third quarter of 2011 were trading below their offering price as of the publication of the Cleantech Group’s 3Q 2011 Investment Monitor. Don’t let anyone tell you exits aren’t happening in cleantech. They’re just underwhelming. And/or they’re happening in China.
  • Macro-economic turbulence, collapse, or at least, reform – They’re the elephants in the room: The Occupy movement. Arab Spring. Peak Oil. The continued and growing mismatch between overall global energy supply and demand and food supply and demand. Ever-increasing debt and trade deficits. Currency revaluation or political/military developments. Any or all of these could spur another massive global economic “stair-step” downwards of the scale we saw in 2008, or worse. Concern about all of these points and the impact they’d have on the cleantech sector weighs heavy on us here.

Venture dip made up for by rise in corporate involvement
The world’s largest corporations woke up to opportunities in cleantech in 2011, making for record levels of M&A, corporate venturing and strategic investments. General Electric bought lighting and smart grid companies. Schneider Electric bought some 10 companies across the cleantech spectrum. Corporate venturing activity was high, as were minority-stake investments. In just the third quarter alone, ZF Friedrichshafen invested $187 million in wind turbine gearbox and component maker Hansen Transmissions of Belgium, Stemcor invested $137 million into waste company CMA in Australia, and BP invested $71 million into biofuel company Tropical BioEnergia in Brazil. And there were dozens more minority stake transactions like these throughout the year.

Look for even more cash-laden companies to continue to buy their way into clean technology markets in 2012, supplementing the role of traditional private equity and evidencing a maturation of the cleantech sector.

Storage investment to retreat
Significant capital has gone into energy storage in recent quarters. In 3Q11, storage received $514 million in 19 venture deals worldwide, more than any other cleantech category. Will storage remain a leading cleantech investment theme in 2012? We’re betting no. Here’s why.

Storage recently made headlines as the subsector that received the most global cleantech venture investment in the third quarter of 2011, the last quarter for which numbers are available. An analysis of the numbers, however, shows the quarter was artificially inflated by large investments into stationary fuel cell makers Bloom Energy and ClearEdge Power. Do we at Kachan expect more investments of that magnitude into competing companies? No. Why? Even if you believe analysts that assert that stationary fuel cells for combined heat and power are actually ramping up to serious volumes (oldtimers have seen this market perpetually five years away for 15 years, now), just look how crowded the space currently is. Bloom and ClearEdge are competing with UTC Power, FuelCell Energy, Altergy, Relion, Idatech, Panasonic, Ceramic Fuel Cells and Ceres Power … just some of the better-known 60 or so companies vying for this tiny market today. And many are still selling at zero or negative gross margins.

But the main reason we’re not bullish on storage: Smoothing the intermittency of renewable solar and wind power might turn out to be less important soon. Sure, nary a week goes by without announcements of promising new storage tech breakthroughs or new public support for grid storage (e.g. see these three latest grid storage projects just announced in the U.S., detailed halfway down the page.) But we believe that utility-scale renewable power storage might be obviated if utilities embrace other ways to generate clean baseload power.

In 2012 or soon thereafter, we expect those clean baseload options will start to include new safer forms of nuclear power (don’t believe us? Read Kachan’s report Emerging Nuclear Innovations—U.S. readers, don’t worry: nuclear innovation won’t apply to you.) Or NCSS/IGCC turbines powered by renewable natural gas delivered through today’s gas distribution pipelines (see The Bio Natural Gas Opportunity). Or even geothermal (gasp!) or marine power (see below). All of these promise to be less expensive than solar and wind when you factor in the expense of storage systems required—incl. electrochemical, compressed air, hydrogen, flywheel, pumped water, thermal, vehicle-to-grid or other—if solar and wind are to be relied on 24/7.

Marine energy to begin coming of age
I’m a closet fan of marine energy, despite today’s extraordinarily high cost per kilowatt hour. We started covering wave, tidal and ocean thermal energy conversion equipment makers in 2006. Anyone who’s heard me talk publicly on the subject has had to suffer through hearing how I’d much prefer invisible kit beneath the waves than have to gaze upon solar and wind farms taking land out of commission.

In 2006, the lifetime of equipment from then-noteworthy companies like Verdant Power and Finavera (which since exited marine power after a failed test with California’s PG&E) in the harsh marine environment could sometimes be measured in days. The designs just didn’t hold up. Even Ocean Power Delivery, now Pelamis Wave Power, with its huge, snakelike Pelamis device, had hiccups in early onshore grid testing. Back then, the industry clearly had a long way to go.

Today, six years later, we think it’s time to start taking marine energy seriously. A high profile tidal project is now underway in Eastern Canada’s Bay of Fundy. Several weeks ago, Siemens raised its stake in UK-based tidal energy developer Marine Current Turbines from less than 10% to 45%, because it liked the predictability of ocean energy, and Voith Hydro Wavegen handed over its first commercial wave project to Spain. And last week, Dutch company Bluewater Energy became the latest vendor to secure a demo berth at the European Marine Energy Centre at Orkney, Scotland—the most important global R&D center for marine energy. Things are going on in marine power. Still, its major hurdle is the large variation in designs and absence of consensus on what prevailing technologies will look like.

2012 won’t be the year marine power becomes cost-competitive with coal, or even nearly. But you’ll hear more about marine power in 2012, and see more private and corporate funding, we predict.

Increased water and agricultural sector activity
Look for increased venture investment, M&A and public exits in water and agriculture in 2012.

At one point, only cleantech industry insiders championed water tech as an investment category (and, frankly, at only a few hundred million dollars per year on average, it still remains only a small percentage of the overall average $7B annual cleantech venture investment.) Industrial wastewater is driving growth in today’s water investment, with two of the top three VC deals of the last quarter for which data is available promoting solutions for produced water from the oil and gas industry, and the largest M&A deal also focused on an oil and gas water solution. Regulations aimed at making hydraulic fracturing less environmentally disruptive to will spur continued innovation and related water investments in 2012.

Where water was a few years ago, agriculture investment appears to be today. There was more chatter on agricultural investment than ever before at cleantech conferences I attended around the world this past year. Expect it to reach a higher pitch in 2012, because of:

Investing in farmland is even resurfacing, in these uncertain times, as a private equity theme.

Remember the food crisis three years ago, when sharply rising food prices in 2006 and 2007, because of rising oil prices, led to panics and stockpiling in early 2008? Brazil and India stopped exporting rice. Riots broke out from Burkina Faso to Somalia. U.S. President George W. Bush asked the American Congress to approve $770 million for international food aid. Those days could return, and they represent opportunity for micro-irrigation, sustainable fertilizer and other water and agriculture innovation.

And so concludes our predictions for 2012. What do you agree with? What do you disagree with? Leave a comment on the original post of these predictions on our site.

This article was originally published here. Reposted by permission.

Efficiency, Meet Elasticity

by Richard T. Stuebi

I sometimes receive criticism for not sufficiently promoting energy efficiency as a means of reducing our reliance on fossil fuels. I don’t think that the criticism is justified – I do strongly support the pursuit of energy efficiency – but I am willing to admit that I spend more time and attention focusing on energy supply technologies.

This is for two reasons. One is that we can’t realistically shrink our way to zero energy requirements – or even close. Yes, we must stop wastage, but for continued human progress over the centuries to come, we will always need a substantial supply of energy, from more benign and everlasting sources than the fossil fuels we depend upon today.

Second, and more subtly, the adoption of energy efficient technologies often begets a perverse reaction from the market – increased energy consumption — due to the effect of the economic concept of income elasticity.

This concept is illustrated by a paper entitled “Solid-State Lighting: An Energy-Economics Perspective” by Dr. Jeff Tsao and colleagues at Sandia National Laboratories in the Journal of Physics D: Applied Physics, assessing the long-run implications of the adoption of more efficient lighting technologies. Their study indicates that, by 2030, LED lighting will be three times more efficient than fluorescent lights – but that customer demand for lighting (as measured in lumens) will increase by a factor of ten, meaning that electricity requirements to supply lighting demand would have to double, even with elimination of incandescents and replacement with LEDs.

Again, I support the transition to LEDs. It should be noted that LEDs have much less of a thermal footprint, so even if the paradoxical results suggested by Dr. Tsao et al come to pass, there may still be a substantial reduction in energy requirements associated with air conditioning as LEDs come to replace incandescent lights.

The moral of this story is that energy efficiency is not a panacea for our environmental challenges. It is easy for advocates of energy efficiency to overlook consumer behavior when considering the aggregate impacts of a new technology – and thereby may overstate the potential environmental benefits associated with energy efficiency innovations. As a result, the search for new and better energy supply approaches remains an imperative – even while more aggressively promoting more efficient energy consumption technologies.

Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.

Getting the LEDs Out

by Richard T. Stuebi

Keith Scott, VP of Business Development at Bridgelux, recently posted on GreenTech Media an interesting take on the state of LED lighting markets. Mr. Scott claims that “we are in the middle of the LED lighting revolution”, and sees big expansion ahead in for the sector.

In some ways, the picture he paints parallels the recent trends in the photovoltaics sector. The prices for LED lighting system are high in large part because of booming demand for LEDs from other applications (e.g., high-def TVs). This is triggering expansion of LED manufacturing capacity, which should alleviate supply constraints and drive down prices. Regulatory drivers — Energy Star, California’s Title 24 and other code tightenings — will spur demand to absorb the increased supply. Product designers are working to integrate LED into holistic systems that better satisfy customer needs on a variety of attributes — not just light quality, but also temperature.

Solar energy has consistently been one of the sexiest segments of the cleantech arena. If LED technology is following a somewhat similar trajectory, then shouldn’t it start garnering more attention?

Richard T. Stuebi is a founding principal of the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.

LED There Be Light

by Richard T. Stuebi

As some of my long-time readers may know, I have never been a truly ardent fan of compact fluorescent lighting (CFL). Why?

1. Probably most importantly to me, in my experience with CFLs, I haven’t been satisfied with their start-up characteristics. They take a little while to “warm up” to full luminescence, and until then, the light seems very sickly to me. It actually makes me a bit nauseous. I know that better quality (i.e., more costly) CFLs perform better than cheaper generics, but even CFLs from General Electric (NYSE: GE) that I’ve bought still don’t turn on as well as I have come to expect from four decades of living with incandescents.

2. Except for some new (and considerably more expensive) products, CFLs generally don’t work with dimmers. I once found this out the hard way — snap, crackle, pop. I don’t know about you, but a lot of the light circuits in my house are on dimmers, and as a result I continue to run incandescents on them.

3. It is becoming more well-known that CFLs contain mercury, and hence their disposal is a real issue. Even worse, if one were to break, the release of mercury represents a significant risk — at best a big clean-up nuisance.

4. CFLs aren’t cheap. True, CFL prices are coming down to become closer to the levels of old/inefficient incandescents, but they are still substantially more costly. For lights that are rarely used, the extra investment doesn’t make much sense to me, as the energy actually saved is small.

So, I’ve been eagerly awaiting the emergence of LED (light-emitting-diode) products for consumer application. I like the quality of LED light, and LEDs don’t have the mercury issue, so it seems like the superior long-term lighting solution.

I’ve been told that household LED lighting is still many years away, but at least some products are trickling into the marketplace. For instance, see EarthLED Lightbulbs, which are available at Think Geek. Clearly, they are still a niche item for the early adopters, as they cost $60-100 per unit, but at least their emergence into the market now puts consumer LED lighting on the gameboard, hopefully on a quicker path of cost reduction as learning curve and scale production effects are achieved.

Since LEDs have virtually infinite lifetimes, in the future, there will no longer be a need to make lamps with removable bulbs in sockets. Savvy marketers out there should begin working to overturn the old paradigm of reusable lamp/disposable bulb, making way for LED lamp fixtures that are inherently designed to capitalize on the unique and compelling advantages offered by LED lighting.

Richard T. Stuebi is the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc.

Go Toward The (LED) Light

by Cristina Foung

My favorite green product of the week: the EarthLED EvoLux S LED light bulb

What is it?
A while back, I wrote about the EarthLED CL-3, but that was before I knew about the EvoLux S. Let me tell you…this is quite a bulb. Here are the basics: it’s a 13-watt LED light bulb that puts out 900 lumens. It uses an advanced CREE 13 watt light engine and has a standard base, so it can fit pretty much anywhere a standard incandescent (or CFL) can.

Why is it better?
Well, for the amount of light it puts out, it uses far less electricity than incandescent or CFL bulbs use (EarthLED says that the EvoLux S is comparable to a 100-watt incandescent). So clearly in terms of energy efficiency, it wins hands down.

Based on a formula to calculate the lifetime cost of a light bulb, a 100-watt incandescent light bulb which puts out 950 lumens and runs for 1,500 hours will cost you about $11.04 per megalumen-hour. Although the upfront cost of LED light bulbs is much higher, turns out for the EarthLED EvoLux S, you’ll spend only $3.22 per megalumen-hour (assuming $0.10/kWh). EarthLED reports that it only costs $5.70 to run an EvoLux S for a year.

And finally, it’s just a good light bulb. I’ve had mine for about a week – the light is not as diffuse as an incandescent or CFL but it’s amazingly bright. Doing the touch test, an incandescent got hot within 5 minutes of having the lamp on. The CFL warmed within about 7 minutes. The LED? Even after having it on for an hour, I could put my hand on it and it was cool.

The only drawbacks of note that I’ve experienced (and that others have confirmed) are a) light diffusion (I think the bulb would be a little better suited in an overhead downlight rather than in a bedside table lamp); and b) you can hear the fan. It’s pretty quiet. But if you’re reading by it, you can hear it hum. Overall, it’s a great option for a bright LED light bulb that’s available now.

Where can you find it?
You can get your very own EvoLux S in warm or cool white for a bargain price of $79.99 (ouch, I know, but think of the lifetime savings) from the EarthLED online store.

Besides her green products column on Cleantech Blog, Cristina is a passionate advocate for green living at the Green Home Huddle at, which focuses on electric cars, energy efficient appliances, and other green products.

Green Ratings

Food prices have rocketed 83% in the past three years. The World Bank just released the figures. If you are trying to raise a family in much of the world, you are already painfully aware of the crisis. There are a number of causes that are likely to be linked to a climate crisis caused by increased greenhouse gases: draught, groundwater scarcity, eroded soil, disease, and food being used to make biofuel.

People ask if I could provide guidelines on green ratings. There are a number of wonderful organizations with helpful guides to reduce our emissions, often saving money in the process. The following are excellent:

Carbon Calculator & Going Carbon Neutral

Green Guides

Energy Efficient Homes, Appliances, Lights

Buildings and Communities

Fuel Efficient Cars and Transportation

Consumer Products

Food and Water


U.S. Cities

Enjoy Earth Day,

John Addison

LED Your Light Shine

by Cristina Foung

My favorite green product of the week: EarthLED CL-3 LED light bulb

What is it?
How many Cleantechbloggers does it take to change a light bulb? If it’s changing an incandescent to an LED, only one – because we all know LEDs are the way of the future. The EarthLED CL-3 is a 3-watt LED replacement bulb, which is equivalent to a 45-watt incandescent bulb. It can be used anywhere you use a traditional bulb – even under lampshades (but then you can’t quite as easily make them conversation pieces).

Why is it better?
The CL-3 is not only energy efficient, it also has a life span of more than 50,000 hours. According to EarthLED, that means you’ll have an 11 year relationship with your LED (while in that same time frame, you’d have meaningless flings with at least 50 incandescent bulbs).

Of course, the initial cost of an LED is much higher than for a compact fluorescent light bulb or an incandescent. But have no fear. Over the LED’s entire life, it will only cost you $35, including the cost of the bulb itself and operational expenses. EarthLED compares that to “a traditional fixture using an incandescent bulb [that] will cost nearly $230.” And those costs don’t even take the positive environmental externalities into account like the carbon dioxide saved from all that unused electricity!

These LEDs are also RoHS (Restriction of Hazardous Substances Directive) compliant, so they don’t have any hazardous materials you need to worry about. And because they last so long, you send far less waste to the landfill.

Where can you find it?
You can buy CL-3 bulbs and a variety of other LEDs from the EarthLED store. They are available in warm white and cool white. One CL-3 costs $29.99.

But here’s a little shameless self-promotion. The Green Home Huddle just launched a contest running through Earth Day in which you could win a CL-3 (plus a bunch of other cool stuff) just for writing some green product reviews or wiki articles.

Besides her green products column on Cleantech Blog, Cristina is a passionate advocate for green living at the Green Home Huddle at, which focuses on electric cars, energy efficient appliances, and other green products.

Reflections on Illumination

by Richard T. Stuebi

While grocery shopping yesterday, I found that our local store has finally started stocking GE (NYSE: GE) compact flourescent lightbulbs (CFLs).

Candidly, my experience to date with CFLs has not been positive. Last year, I went to Home Depot (NYSE: HD), where I tend to buy household gadgets, thinking they would have the best selection of CFLs. At least back then, Home Depot didn’t carry GE CFLs (some say this was because of ex-CEO Bob Nardelli’s lingering resentment of having been passed over for Jeff Immelt when Jack Welch stepped down as CEO of GE), so I bought what Home Depot had in stock: a carton of private-label CFLs, for about $10 for a 5-pack.

I wish I could say that I was blown away by the CFLs, but regrettably, I wasn’t. In my assessment, the light quality provided by the CFLs was too pale, and it took far too long (10-20 seconds) to reach even a minimally acceptable “warm” color. Furthermore, the CFLs were not usable in many of the applications in my home: they don’t fit into lamps with tight covers/shades, and when installed to a fixture with dimmers, they emit an annoying loud buzzing sound — and an awful Snap-Crackle-Pop (and I don’t mean Rice Krispies) when the dimmer is turned down.

My initial foray into CFLs thus resulted in considerable disappointment. Although I don’t feel good about it at all, so far I’ve generally stuck with the old horribly inefficient incandescents — they at least produce a quality of light that I’ve come to expect.

I’ve been told that CFL quality varies, and that GE’s CFL products are quite a bit better — albeit more expensive — than the generic brands of the kind I had bought. I didn’t search all over town for GE CFLs, but I never saw them anywhere I happened to be shopping. Until this weekend.

Now, here in front of me finally were individually-packaged GE CFLs, the 15 watt (60 watt incandescent equivalent) priced at $4.49. Two shelves below were the standard GE incandescent 60 watt soft white lightbulbs, priced at $1.59 for a 4-pack, or about $0.40 per bulb. The CFL is thus 11 times more expensive, on a first-cost basis, than the incandescent. For the average customer, who is typically very conscious of the initial cost and pretty clueless about life-cycle economics, this is a really big spread.

In small print on the CFL packaging, GE claims that the 15 watt CFL bulb will save over its 3000-hour lifetime $13 worth of electricity (at $0.10/kwh) relative to 60 watt incandescents offering the same lumination.

$13 worth of electricity savings for an extra $4 up-front sounds like a pretty good deal. However, of course, it all depends on how many years it will take the user to generate the $13 of electricity savings — which in turn depends on how much the user uses the lightbulb.

A year is comprised of 8760 hours, so if the CFL operates 24/7, it will only take a few months to generate $13 in savings. Perhaps more importantly, it will only take a few weeks to pay back the extra $4 for the CFL instead of the incandescent. But, few of us use any lights anywhere near that much.

For a lamp used an hour a day, or about 300 hours a year, it will take 10 years to achieve the $13 in savings — or about 3 years to recover the $4 extra premium for buying the CFL instead of incandescents. A 3-year payback represents a good internal rate of return, on the order of 20%, which is far better than the long-term returns historically offered by the stock market.

So why don’t I pursue a 20% financial return? On further consideration, I am put off for two reasons.

First, I can see for sure the $4 extra leaving my hands today to buy the CFL — but I don’t have anywhere near the same degree of confidence that I’ll actually generate the economic savings at the desired pace. Will I really use the CFL about an hour a day? It might be more like 15 minutes a day, leading instead to a 12 year payback period — an outright unattractive financial return.

Second, I am strongly influenced my past negative experience with CFLs. If I buy this expensive lightbulb today, will I like its light? Will I be annoyed every time I turn it on and wait for it to have a color I can barely tolerate? Will I swap it out for a regular incandescent after a few weeks?

When I reflect upon it further, it’s the second set of considerations that put me off from buying that GE CFL. I bought CFLs in the past that I disliked, and don’t use. They were a bad investment. Even though it’s relatively small dollars involved, I don’t like making mistakes — and I really hate making the same mistake twice.

I speculate that I might not be alone in having a poor first impression of CFLs. Such a bias will probably need to be overcome by a no-cost favorable experience with a good CFL. If they really want to build the market, players like GE might consider an investment in a mass-scale public free trial — a mailbox stuffer? — of CFLs. I know that if I got a GE CFL for free, I’d give it a go — and assuming I liked the product, maybe then I’d consider buying some at $4.49 per.

Richard T. Stuebi is the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc.