Clean Coal Technology Is Making Venture Investors Money

One of my friends, John Moore. the CEO of Acorn Energy (NASDAQ:ACFN), recently sold off their rapidly growing CoaLogix investment for a quick return. I caught up with John to get the story.

So John, who the hell is Acorn Energy anyways?

Acorn Energy (NASDAQ:ACFN) is the Sun Studios of the energy sector. We have created companies and categories like Demand Response (Comverge-(NASDAQ:COMV)) and the less well known SCR catalyst regeneration market through CoaLogix which we just sold to Energy Capital Partners for $101 million yesterday.

Why did you invest in this deal in the first place?

We look for companies that have created a new category in energy technology but have yet to be recognized. We look for specialty businesses that help the energy industry “get more out of what it’s already got”. Given that coal provides 48% of our electricity in the USA and 75% of China’s output we felt it was an area where we could make an impact. At ACFN we believe in the Power Law which states a small change in a big number is still a big number. In CoaLogix we found a proven technology where the regulations were in place, a great management team and a market near an inflection point. Acorn provided the capital and management really executed. We created the world’s largest catalyst regeneration business with 75% US share and 40% of the SCR capacity under long term contracts. We exited with a 43% IRR after three years and ten months.

Who does Coalogix compete with for these products, and what made you comfortable originally that they could take market share?

CoaLogix competes with new catalyst producers like Hitachi. The company’s value proposition was that we regenerate the catalyst at half the cost of new catalyst. The competition with the new catalyst producers was driven by the new functionality that they were adding to the new generations of catalyst. The key risk factor in the investment was whether we could keep up the net value proposition to the end users versus the new catalyst offering. Management changed the industry by forming an alliance with the largest US catalyst producer, Cormatech- a joint venture between Corning and Mitsubishi and we both prospered.

I thought “clean coal” was dead as an investment category?

There have been some notable flops in the clean coal business like coal benefication and coal gasification deals. What these failed investments have in common is unproven technology and business models that require massive investment to achieve commodity margins at scale. I would refer readers to your insightful blog post on Jane Capital’s rules on energy technology investing.

How did this exit come together?

China passed NOx regulations as part of their new five year plan. We visited China in September 2010 and discovered the new NOx regulations were going to require $6 Billion of catalyst to be installed and there was going to be a really big market for regeneration. We decided that CoaLogix’s epic opportunity was China and management needed a sponsor with a lot of resources and contacts to repeat the company’s success in China. We hired UBS to lead the process and they found the perfect partner, Energy Capital Partners which manages $7 Billion in capital. They did such thorough due diligence on the company that in the end I think they knew the company and the management team better than we did.

So this is Acorn’s second big hit after Comverge?

Yes. We exited most of our stake in Comverge after the Goldman Sachs led secondary at a $600 million valuation or $29 per share. The CoaLogix ransaction was our second successful transaction with EnerTech Capital. They have incredible domain knowledge and initially sourced the CoaLogix opportunity but were between funds. We invited them in after we acquired the company and they added a lot of value. I get by with a little help from my friends.

What are the metrics on this deal? How much was Acorn in it for and when? How much did the business grow during that time? And what was the exit multiple for Acorn?

Acorn bought CoaLogix for $9.6 million in November 2007. We invested an additional $8.6 million to build a new plant and our gross sale proceeds were $61.9 million for a 43% IRR or 3.4 times our investment.

So you guys do both minority and controlling investments?

We have done both but we only make minority investments with an eye to buying a majority stake if we like management. One of the lessons I have learned is management must have a really large economic opportunity and that means ACFN owning 85% and management around 15%. We provide a balance sheet, some big picture guidance and contacts and stay out of the way and let management execute.

You’re essentially an evergreen fund, so what are you going to do with the proceeds?

We plan to reinvest in our three operating businesses; DSIT the leading underwater security company, GridSense a very promising smart grid distribution optimization provider and US Seismic a pioneer in the emerging field of 4D seismic for the oil and gas industry. We feel that each of these three businesses have huge potential and are capital light so we can stick with them longer than CoaLogix or Comverge. Of course, we always have our eyes open for new opportunities that benefit from “economies of connection” amd solve a major energy industry pain point.

One more thing John, your comment “We look for specialty businesses that help the energy industry “get more out of what it’s already got”. This is very articulate thesis that certainly isn’t typical for venture investors, can you expound a bit on what you mean by that?

Great entrepreneurs look for a fulcrum from which to leverage their ideas to market. The number one use of energy is the extraction, refining and distribution of energy. The existing energy systems waste and scale is the fulcrum. The entrepreneur’s new technology or system is the lever. I have been astonished by how many cleantech entrepreneurs want to try to reinvent our huge scaled energy systems from scratch missing the opportunity to use the fulcrum. Even the biggest venture funds don’t have the activation energy necessary to radically change our energy supply. The smartest play available is to make the existing infrastructure smarter. Last year I wrote a short book “The Hidden Cleantech Revolution” to investigate the really important changes that were happening to the “other 97%” of our energy supply that nobody was talking about. I would invite your readers to e-mail my assistant at for a free copy.

IPOs and Bankruptcies and Cleantech “Hot or Not”

Last night while watching Office reruns, I realized I’d been remiss, and a lot’s had been happening in the public equities end of the cleantech sector.  Not to mention yesterday’s billion dollar BK broiler announcement by the one-time Next Greatest Thing, Solyndra.

So, with my usual aplomb, I thought I’d simply peanut gallery what’s “Hot or Not” in cleantech.


Bled Out on the Operating Table

Solyndra – BK (and not the burger kind). Well, we wrote about it a lot, and nobody believes us.  But bad product is bad product, and high cost is high cost, regardless of how much money you throw at it.  So who’s going to calculate the impact on the DOE loan guarantee program’s projected loan losses? Not.

Evergreen Solar (NASDAQ:ESLR)  – :(  And it was such cool technology, too.  I’m very sorry to see this one go.  At one point some years back it was the savior deal of the sector.  But we are in a race to cost down or die. Not.


Filed, Not Yet Hell for Leather

Enphase – I’m very very interested in seeing these guys make it.   Lots of growth.  Very thin margins so far.  Product costs looks miserably high.  Need to cost down like a banshee running from the Bill Murray.  But you’ve got to love the category killer potential and how fast they’ve executed.  First microinverter guy to manufacturing maturity eats the others like oatmeal (sloppy but eaten nonetheless). Hot.

Silver Spring – Hmmmmmmmmh.  Home run potential, but what’s the term?  Very high beta?  These contracts are massive, far strung, very very tight margin.  They’ve shown they can get the growth.  But with long lead time sticky contracts, it’s about managing costs during slippage and change-orders well, and it’s a very competitive business.  One blown contract gives back all the profits on the last 8.  But, give kudos for getting this far and making it to be a real player.  Now we’ll see if you can execute. Hot.

Luca Technologies – Hello?  Are you serious?  I read this S-1 cover to cover.  I had my technologist read it and go find their patents.  We love this area.  The concept of microbes for in situ is old as can be, but very very interesting..  The challenge is always cost and performance (not really a new nutrient mix?).  How do you get the bugs, nutrients, whatever you’re doing, down the hole and into the formation far enough and cheap and effectively enough to make a difference.  But in the entire S-1 and website, there is not a single technology description, fact, proof point or ANYTHING that suggests they’ve actually cracked the real nut.  The few numbers they do mention are not even to the ho-hum level.  Did a real investment banker really sign up to this?  Who wrote this?  Their PR guy with a liberal arts studies degree?  Really?  This smacks of a “trust us I’m Jesus and daddy needs an exit” deal.  In reality, probably interesting, but still very very very very very very very early science project.   Not.


We have a whole collection of biofuels stocks to discuss now.

Solazyme (NASDAQ:SZYM) – half of its 52 week, less than a buck over its low. Not.

Kior (NASDAQ:KIOR) – Somebody correct me, but did the filings really indicate Khosla put money IN to this IPO?  And it got off at low end of the range even after that? From one of their filings: “In conjunction with the Issuer’s IPO, an entity affiliated with the Reporting Persons purchased 1,250,000 shares of Class A common stock, resulting in an increase in beneficial ownership by the Reporting Persons by that amount. The
purchase was made at the initial public offering price of $15.00 per share, for an aggregate purchase price of $18,750,000. The source of funds used to purchase the shares of Class A common stock was Khosla’s personal assets.” At least it’s money where it’s mouth is.  Not.

Amyris (NASDAQ:AMRS) – 58% of its 52 week high, 20% over it’s low. Not.

Gevo (NASDAQ:GEVO) – 40% of its 52 week high, c. 20% off it’s low. Not.

Codexis (NASDAQ:CDXS) – 55% of its 52 week high, c. 20% off it’s lows. Not.

I’d comment on the fundamentals of each one, but I don’t want you to think I’m depressed.  Oh, by the way.  Did I ever tell you the story about the cleantech sector’s magically changing cellulosic biofuels business plans to “cellulosic bio-anything-but-fuels” plans as people finally woke up and realized how tough using lousy feedstocks and high cost processes in a commodities market actually is.  Of course, careful you don’t change from targeting fuels to making feedstock for dirt cheap who would want to be in that business commodity chemicals or specialty chemicals with a global aggregate gross margin market less than your cash on balance sheet.

And a Few Tidbits

Advanced Energy (NASDAQ: AEIS) – I still really like this company.  Somebody’s going to own inverters.  And the numbers look very interesting.  Very. Need to dig deeper. Hot.

American Superconductor (NASDAQ:AMSC) – Ummm.  Do you believe their wind business ever recovers?  One customer.  Buying a competitor with one customer.  Both in China.  Customer doesn’t like single supplier risk where the supplier makes high margins?  What did you think was going to happen?  Ugly ugly story.  Very real possibility that they trade on a log curve to straight zero.  Some chance of sunshine, but I’d cancel the picnic. Not.

A123 (NASDAQ:AONE) – I really really really want this to work.  But what’s the path to profits?  Not feeling it. Not.

Tesla (NASDAQ:TSLA) –  “Don’t worry, the NEXT car will fix my company’s fundamental problems” – quote attributed to the Tesla CEO who replaces the next Tesla CEO. Not.

Active Power (NASDAQ: ACPW) – Hey, did anyone notice these guys are growing revenues AND margins?  A long haul, but keep it up!  Need careful consideration before I’d jump into flywheels, but someone deserves a ton of credit as coach of the year.  Hot.

Satcon (NASDAQ:SATC) – Hammered, but still a market leader.  Got to think about this one – it’s historically traded for more than it’s fundamentals justified, but with PV Powered and Xantrex snapped up, hard to imagine they stay independent for long. Hot.

SunPower (NASDAQ:SPWR)  – Wow.  Total. No guts no glory.  Highest cost producer, shall we call it the “performance queen”.  I do like this bet by Total, but it takes guts.  But when a market leader’s stock’s been hammered that far down somebody’s got to move and Total did . . .  Whether an individual investor can play is another story. Hot.

Ascent Solar (NASDAQ:ASTI) – Holy star solar batman!  These guys can sell ice to eskimos are have always been great R&D guys.  Still maybe the highest cost CIGS process known to astronauts.  I like these guys, but I’m not sure more cash fixes anything. Not.

Solon – What does “New US operational strategy” mean?  It means solar is a game of scale and execution.  Not.


The Two Names in Cleantech You Have to Know

Cleantech has a very short history, and an even shorter memory.  I’ve written over and over again about how it’s all about policy, and that there is no disruptive technology in cleantech.  Now I’m telling you that’s not quite true, the exception proves the rule.

I’d like to ask you to do some reading on two men from very different worlds.  One recently passed away, the second in his 90s.  Both passionate about the earth and people in it.  Both lightening rods for criticism.  And for the record, one taught at Texas A&M, the other graduated from there.

Both drove the development of technology that changed the world in profound ways.  Doing so in part with deep connections to both technology and policy.  They are household names in the worlds they lived in.  They are largely unknown in the cleantech world.

If we are to survive and thrive in a world with a lot more population and a lot more demand on our natural resources that it had when Norman Borlaug and George Mitchell started, we’re going to need to mint more of these guys like water.  It’s good to know it can be done.

Norman Borlaug

Father of the green revolution.  Nobel peace prize winner, credited with saving 1 billion people through better food production.  American agscientist, working all over the world from Latin America to Asia, responsible for the development and proliferation of high yield, resistant wheat.

“More than any other single person of this age, he has helped provide bread for a hungry world,” the Nobel committee said in presenting him with the Peace Prize.

His obituaries tell it all.  He taught and researched at Texas A&M from 1984 on.

The green revolution has often been slammed for causing severe environmental damage.  But tell that to the masses of people around world who are alive today because of it.

“Gary H. Toenniessen, director of agricultural programs for the Rockefeller Foundation, said in an interview that Dr. Borlaug’s great achievement was to prove that intensive, modern agriculture could be made to work in the fast-growing developing countries where it was needed most, even on the small farms predominating there.

By Mr. Toenniessen’s calculation, about half the world’s population goes to bed every night after consuming grain descended from one of the high-yield varieties developed by Dr. Borlaug and his colleagues of the Green Revolution.” – Italics from the NYT obituary.

George P Mitchell

Texas oil man and sustainability?  George Mitchell can lay claim to doing both, in a big way.

He developed the fabulously successful Texas community The Woodlands, the only successful development of the original HUD funded communities of the 1970s.  Now The Woodlands is a thriving energy, biotech and technology economy founded on sustainable and environmental best practices, showing the world what can be done.  

But his big contribution to cleantech was way beyond one town. It was in pioneering the shale gas revolution through combining horizontal drillling and fracking at Mitchell Energy.  But don’t believe me.  Ask the Times Online and Forbes who the father of shale gas is.

And for those of you who missed the shale gas buzz, try this Wall Street Journal Article called Shale Gas Will Rock the World.

Like Dr. Borlaug and the Green Revoluation, shale gas and fracking have been ripped apart in the press for their environmental impact.  And like in the Green Revolution, I’d suggest you ask those whose houses are heated, and whose bills manageable because of shale gas.  Or ask just where you think we’d be without gas post nuclear accidents in Japan and food strikes in the Middle East forcing us to rethink our fuel supply chain?  Gas:  that compromise fuel of the future that everyone loves to hate, but makes up a critical part of every low carbon energy plan.

And then remember who these innovations helped the most, and who will benefit the greatest from cheap abundant food and fuel?  Not the rich in Manhattan or London.  The poorest of the poor in every corner of the world.

As I said before, if we are going to continue growing our economy and not destroying the world while we do it, we’re going to need to mint a lot of guys like these, and realize that every decision big enough to matter in food and energy involves real trade-offs taht we’ll have to face.

PS One final note:  notice that neither of these guys ever took a lick of venture capital 😉

Brightsource, Fisker and Solyndra – Soul Crushingly Bad Numbers Make up 17% of Near Record 1Q11 Venture Investment

GreentechMedia and Cleantech Group this quarter reported near record levels of cleantech venture capital investment. Nearly $2.6 Billion in deals.  No, quantitative easing hasn’t made the dollar slide that much yet, the numbers are real – mainly as the solar and transport  deals vintage 2004-07 are getting deep into their capital intensive cycles.  But a near record $2.6 billion, so everybody’s happy, right?

Personally, a quick scan of Greentech Media’s summary of the top deals sent cold shivers up my spine. The deals may be getting done, but are we sure investors are making money?  Let’s take three of the big ones and the only ones where Greentech Media quoted valuation numbers:  BrightSource, Fisker, and Solyndra.  Between the three of them that’s 17% of the announced Q1 deal total by dollars.

BrightSource Energy (Oakland, Calif.) raised a $201 million Round E for its concentrated solar power (CSP) technology and deployment, bringing its total funding to more than $530 million in private equity. That funding is in addition to a federal loan guarantee of $1.3 billion. The investors include Alstom, a French power plant player, as well as the usual suspects — Vantage Point Venture Partners, Alstom, CalSTRS, DFJ, DBL Investors, Chevron Technology Ventures, and BP Technology Ventures, together with new investors with assistance from Advanced Equities.  VentureWire reports that the latest round values the company in excess of $700 million.

Brightsource has been a darling for a long, long time.  It is easily the farthest along, most experienced and most ambitious of the solar thermal developers.  So what about the numbers?   Well it’s announced 2.6 GigaWatts of PPAs with SoCal Edison and PG&E.  And they’ve started construction on the first phases of the 392 MW Ivanpah development in the Mojave desert.  That’s the good news.

Here’s the bad news: $700 mm pre-money valuation + $201 mm in round 5 means only a 1.7x TOTAL valuation for investors on the $530 mm that has gone in.  Or the previous round investors are now in aggregate up 2.1x on their money for a 7 year old company after the 5th equity round is in.  Not sure who, but a few of those rounds got rocked, and not in a good way, or else we just did four wonderfully exciting 15% uptick rounds in a row.  But it gets worse.

This first plant, the one they’re headed IPO on, still hasn’t come on line let alone finished phase I.  DOE has committed $1.37 Billion in debt to it, and NRG $300 mm in equity, with more equity capital needed.  So once completed, the venture investors after their meager 2.1x uptick in the first 7 years, are between 3-8 years in on their venture investments and now own part of a heavily leveraged state of the art $2 Bil+ highest cost in the market power plant throwing off revenues of say $125 mm/year.  Perhaps $140-$150 mm at the high end (estimates have varied on capacity factor and price).  Right sounds almost passable.  But now let’s build the cashflow statement.  Add in Brightsource’s estimated direct labor at $10-$15 mm/year ($400 mm over 30 years from their website), plus maintenance/repairs at 0.5% of assets per year of another $10 mm (and hope to God it can stay that low – that would be a tremendous success in and of itself), then add on debt service on $1.37 billion assuming an only available by government guarantee 30 year amortization at 5%, and we eat another $80-$90 mm per year.  So we’re at $100 to $120 mm in annual costs, and $125 to $140 mm in annual revenues.  And we haven’t included gas, water, or any contribution to overhead, which are all non trivial. And don’t forget we’re building this out in 3 phases over several years.

So after all that, if it works, and if it works well, those investors MAY see a net of $20 mm-$40 mm /year in cashflow from that plant by 2014/2015 or so that they can use to cover plant overhead, fuel bills, the remainder which is then split between them and NRG to cover corporate overhead and then pay taxes on; or they may be losing money every month.  But we’ll make it up in volume, right?


But there is hope:

#1  pray for lots and lots of ITC (30% on the $600 mm in non subsidized capital would shave almost a whole 10% off the total cost!)

#2 pray for an IPO (and think VeraSun, sell fast).

#3 pray for a utility who overpays for the development pipeline

Two good articles with some more history from Greentech Media here and here.


Fisker Automotive (Irvine, California), an electric vehicle maker, raised $150 million at a $600 million pre-money valuation (according to VentureWire), from New Enterprise Associates and Kleiner Perkins Caufield & Byers. The firm previously raised $350 million in VC, as well as a $528 million loan from the DOE.

Terrific, another high flyer.  Same analysis, this one’s younger, only 4 years old, and only on investment round 4, which is good, since they’ve now apparently got a total valuation of only 1.5x investors money, or 1.7x total uptick for the prior 3 rounds of  investors.  But since they’re only in so far for 1-4 years not 3-8 like in Brightsource, they’re ahead of the game ;).  But once they take down their $528 mm in DOE debt (which this last tranche was supposed to be the matching funds for), they’ll be at a soul crushing 110% Debt/Equity.  Oh, and did I mention that the real way to calculate Debt/Equity assumes equity is net book value?  And since with these startups we’re using contributed capital, once should think of our debt to equity ratios as very very very very artificially low – but I didn’t want to scare you too much.

But look on the bright side:

#1 If they really hit their 15,000 car per year at $95K/car and typical 5%-10% automotive operating margins, they could be at solidly into junk bond land at 4-7x debt to EBIT!  (Assuming of course you believe they build a $1.5 billion/year automotive company with no more cash).  Of course, they apparently have a whole 3,000 orders placed for the c. $95K car, and are currently planning closer to 1,000 shipments for year 1.  Compare that to the Nissan Leaf and Chevy Volt, which cost closer to $30K each.  Chevy has been planning on shipping 10,000 Volts in 2011, and 45,000 in 2012.  Nissan has targeted first year Leaf production at c. 20,000, and apparently had more than that many orders before they started shipping.

#2 pray for an IPO

#3 Buy Nissan stock


Solyndra (Fremont, California), a manufacturer of cylindrical solar PV systems for industrial and commercial rooftops, closed $75 million of a secured credit facility underwritten by existing investors. Solyndra had annual revenues exceeding $140 million in 2010 and has shipped almost 100 megawatts of panels for more than 1,000 installations in 20 countries, according to the CEO.

I’m certainly not the first or only one to cry over Solyndra.  And I’m pretty certain I won’t be the last.

Founded in 2005, with a cool billion in equity venture capital into it now, I believe they were on F series before the IPO was canceled last year? With this $75 mm Q1 deal (in secured debt, of course, their investors are learning) they’ve announced another $250 mm in shareholder loans since the IPO cancellation, and the early round investors have been already been pounded into crumbly little bits.  But it’s worse.

If I followed correctly, the original IPO was to have raised $300 mm, plus pulling down the $535 mm in DOE debt.  Here less than 9 months after that process canceled (could that be right?), they’ve now raised 80% of the cash the IPO was planning, except all in debt, and grown revenues nearly double since starting that process.  My only response to this was OMG.  So they’re at a 26% Debt/Equity Ratio for a money losing company, where debt exceeds revenues by a factor.  Pro Forma for the DOE loan fully drawn they’re at 44%, and something like 6x debt to revenue.  These are crushing numbers for healthy profitable companies.  It gets worse.

Go read their IPO prospectus.  Teasing out who invested how much in each round from each fund, and the size of those investors’ announced funds, plus the number of funds that “crossed-over” and did their follow-ons from a newer fund, and you quickly realize there are several venture funds that literally tapped out on Solyndra, likely either hitting house or contractual maximum commitments to a single deal.  The concentration risk in Solyndra is possibly enough to severely pound multiple fund managers, not just Solyndra.


Please somebody please tell me I’ve got the numbers all wrong.


Report from Grid Integration of Renewables Conference at Stanford

By Andrew Longenecker, guest contributor 

 The TomKat Center for Sustainable Energy’s “Grid Integration of Renewables” conference, which took place at Stanford University’s Jen-Hsun Engineering Center on January 13, 2011, brought together professionals and students to discuss various aspects of the integration of intermittent sources of power to the grid. The conference facilitated the discussion on technological, political, and international perspectives, bringing together a variety of views to create a comprehensive perspective on a very important problem.

Jeff Bingaman, US Senator from New Mexico, where he is Chairman of the Senate Energy and Natural Resources Committee and Chairman of the Subcommittee on Energy, Natural Resources and Infrastructure, opened the conference with his keynote speech. He first noted the importance of taxes for support for renewable energy (estimating that 80% of renewable energy support comes in the form of taxes) and indicated concern that these were not permanent features of the industry, as the Production Tax Credit (PTC) expires in 2012 and the Investment Tax Credit (ITC) expires in 2016. In discussing what to expect for the next two years, Bingaman was cautious, noting three separate “things to keep in mind”: there is a politically polarized environment (and upcoming election in 2012), there is strong ideological resistance to active government role in the transition of our economy to a clean economy, and there is an adverse budget situation, causing difficulties in finding the money to maintain spending on tax programs. He noted that there is an opportunity for a “clean energy standard” instead of a “renewable energy standard,” but cautioned against supporting “clean energy standards” that are simply veiled proposals designed to cut the current renewable energy programs.

Jeffrey Byron, appointed to the California Energy Commission by Governor Arnold Schwarzenegger in June 2006 who served as Presiding Member of the Energy Commission’s Research, Development, and Demonstration Committee and is a member of numerous other energy-related committees, gave the second keynote speech of the conference. He had an optimistic perspective of California’s accomplishments to date, particularly in regards to the prospect of reaching the target of 33% renewables by 2020. However, he acknowledged that there are challenges: lack of legally established renewable portfolio standards, no real-time pricing, lagging on renewables goals (e.g., California did not make its 20% renewables goal), and a lack of sophisticated thought about procurement of electricity in California. Further, he viewed the energy structure in California to be overly complicated, with too many stakeholders with overlapping jurisdictions and coordination issues. He emphasized the need to seek greater collaboration among constituents (e.g., electricity imports from neighbors), continue cost improvements, revise interconnection standards to pass costs accurately among stakeholders; create a path toward putting all generation on equal footing, and to improve the measurement of the grid. He closed his speech by emphasizing that people and policies really do matter and encouraging everyone to demand more from their government representatives. His view is that the United States and the world are looking to California’s leadership to develop the clean technologies and policies that the world will use.

The rest of the conference included speakers and panel discussions covering a broad range of topics. There sessions represented a wide variety of backgrounds, ranging from utilities (e.g., PG&E), academia (e.g., Stanford University, University of Delaware), government and non-profit institutions (e.g., NREL, Center for Energy Efficiency and Renewable Technologies), international perspectives (including professors from Germany, the United Kingdom, and Denmark), and startups like SunPower. One frequently mentioned topic was the need for flexibility in the grid in order for renewables to prosper. Speakers mentioned numerous potential sources for grid flexibility, such as automated demand response programs, dynamic pricing (which may come to California as early as 2013 for residential customers), renewable imports from neighboring areas (as well as intra-hour scheduling of renewable imports), smart charging of electric vehicles, and of course, storage. Debbie Lew from NREL shared two interesting examples of areas with large renewable shares (around ~30% renewables) that experienced significant difficulties in managing loads. Drastically increased volatility from wind intermittency, as well as significantly lowered minimum loads, caused massive problems for the system (e.g., cycling and ramping schedules for conventional plants, increased complication in load management). However, speakers were generally optimistic on the significant opportunities in solving these problems, particularly in California’s leadership on the issue.

Please note that presentations from the conference will be posted at

A Cleantech Energy Funding Adventure

by Jason Barkeloo, CEO of Pilus Energy

My business partners and I discovered an innovative way to unlock energy stored in carbon compounds. After a little back-slapping and “atta-boys,” we sought to raise the capital to launch a pilot. This led to another discovery; the destructive impact the economic crisis is having upon the capital markets. This means innovation, which requires capital, does not have the fast movement opportunity to market that capital provides.

It is a long way from the days when a business plan with a dot com name could attract large amounts of capital. Many funders are accustomed to the software funding model. It is very different from funding a cleantech energy company. Cleantech energy producing firms may have software, but they may also have hardware, which requires manufacturing. Most funders do not like manufacturing. They prefer software. The funding requirements for energy production are substantially different because they require more time and capital. More time means the return on investment (ROI) will take longer. Consequently, their capital will be tied up longer. More time and capital mean more risk. Investors seek to reduce or avoid risk.

Cleantech innovations for distributed production remind me of the evolution from centralized servers and node computing models to the distributed Internet. As personal computer functionality increased, the computing power of the server was distributed to the edge of the network. Similarly, energy production will distribute as new innovative technologies develop. This is an opportunity for investors. If you did not recognize the transition from centralized computing to distributed computing, this is the opportunity to realize the distribution of energy production.

Before we get to a distributed-centric model, we will have a hybrid model. This will be an intermediate position before distributed becomes the norm.

Funding Structure Changes: The Vacuum
Generally speaking, Limited Partners (LPs) are significantly disappointed with the returns their venture capitalist (VC) money managers have provided. As a result, less capital is flowing into VCs. The vacancies along Sand Hill Lane in Menlo Park, CA attest to this. The seeming capital availability growth in China also provides insight into the changing VC landscape in America.

The population of VCs that remain is smaller. As one of my entrepreneurial colleagues told me last week, “It is one thing to kiss a lot of frogs to find a funding prince, but it’s a whole lot harder finding them when they are vanishing.” It struck me that amphibians in the natural world are also becoming extinct. Now, before we try to get VCs on the Endangered Species list, it is important to mention that their industry is evolving. In the interim though, there is a vacuum.

Our firm attracted enough pre-Seed funding to find and protect an important discovery. The amount of pre-Seed funding we needed for our cleantech discovery was significantly more than a friends-and-family round a software firm would raise. However, when our Company scales, our visionary investors will be rewarded handsomely, as well they should be.

The Company’s next milestone is revenues from a pilot. We must do this with our breakthrough technology as a minimum viable product. We will need more funding than most traditional angels will risk. If we could find a VC that would partner with a pre-revenue cleantech energy producing firm, the amount needed would be too low. As we are pre-revenue, going straight to a Series A with a VC is about as probable as getting Republicans and Democrats to [fill in the blank].

The funny thing is, governments are starting to fill the due diligence and risk reduction activities that angels need. No experienced angel is going to make a significant investment if there is no VC to fund the next level of a Company’s growth. Therefore, angels are starting to look to government for the nod and wink as to who are the winners and losers. I do not make a habit of saying things about an endorser’s expertise to conduct endorsement activities. Suffice it for me, if an angel is comfortable, then I am comfortable.

As part of the evolution of the capital landscape, I see an enhanced role for corporate joint ventures (JV). This may require a bit more “corporate” flexibility of the entrepreneur than s/he is accustomed. However, the corporation likely has resources and expertise than can assist the company’s growth. Of course the corporation gets the first right of refusal for licensing, product distribution, marketing, sales, and even liquidity. Since I am presently in such discussions it is best to shut my thoughts (aka, my mouth).

Back to the governmental funding role for a moment. Tax-payer funded programs like the small business innovative research program (SBIR), and similar programs, can be a very slow road to growth. We are fortunate. Our research team is well versed in grant writing. Surviving in academia requires the ability to pursue and manage grants. We were luckier still to get a top-notch writer who can do science, technical writing, and journal authorship. As a grant-writing company we accept, begrudgingly, that our deployment timeline is painfully lengthened by this funding strategy. We estimate an added twelve to eighteen months over angel funding to get a pilot completed. Speed is critical to capture markets. Hopefully, our competitors are experiencing the same slog.

The other downside is that grant requests for proposals (RFPs) serve as the starting point for grants. Those RFPs are usually not issued for breakthrough technologies. It is a breakthrough because no one else thought of it; hence no RFPs are issued in advance. Being ahead with innovation can slow down the startup even further. Securing a grant for an innovation will require political help expanding unsolicited RFP Programs and reducing the timelines.

The danger with this phase of capital market evolution is the vacuum left by vanishing VCs and angels who feed deals to VCs. Filling the vacuum requires time and experience. The time lost filling the vacuum results in less innovation to help grow the economy. Innovation keeps our economy healthy (or regain its health). Innovation begins with education and free markets. Funding innovation should not have government competing against the market. Perhaps government can participate in the innovation market?

As it turns out, the government is already participating in the market. Starting with innovation incubators like the Department of Defense (DoD) Defense Advanced Research Projects Agency (DARPA) and its two year old Department of Energy (DoE) twin, the Advanced Research Projects Agency for Energy (ARPA-E), to development stage programs like SBIR, to its own VCs like In-Q-Tel. What is needed now is to reduce the timelines for awards. Providing ROI mechanisms for tax payers beyond the promise of jobs may help streamline the process.

Additionally, government can encourage large firms sitting on capital to invest in startup innovations. Startup entrepreneurs can also encourage corporations to invest.

The longer it takes to fill the funding vacuum, the further American innovation will lag. Capital does not respect human borders. It will flow where it can grow. Entrepreneurs have a responsibility to their investors to follow the money. Therefore, innovation will follow the money too.

America is at risk of losing its cleantech innovation advantage. While America waits for the void of innovation funders to be filled, other countries are moving forward. American Federal and State governments might consider fast-tracking their cleantech funding programs. The United States Patent Office (USPTO) offers a fast-track cleantech energy patenting process. However, most of us understand the dangers associated with a fast-tracked patent when it comes to defending it, particularly for re-examination. However, the USPTO is commended for taking a leadership role in trying to maintain the innovation pipeline. The thinking is that a company with an issued patent is more fundable than one without.

Lastly, the American governments might also encourage established firms to take risks with innovative startups. If existing corporations can fill the funding vacuum, innovations might come to market more quickly. Such a strategy might also rapidly increase American economic health. How do you think Federal and State governments can incentivize cash-rich corporations to take investment partnership risks with startups?

Valuing the Electron

I am struggling to find a single function in our society that is not impacted by the electron. The electron is a negatively charged particle that fuels digital work. It makes software work on hardware. It powers motors and manufacturing. It lights our bulbs and amplifies our sound. In my opinion, the electron is the unsung hero of the Internet age.

If the generation, distribution, storage, potential work, and informatics of the electron were properly valued by the market beyond just metering it, a new market and industry could erupt.

Thus far, the electron is not valued for its ability to enable our society to function. Because electrons cost money to generate, distribute, and store, a commodity metering model developed at the founding of the industry. That model is due for a change. It is outdated and does not truly reflect the important role the electron now serves as a platform. As a necessary service, regulations overtook the industry. More on this later.

It might seem strange in the digital computer and Internet age that the value of the electron was not measured in it’s ability to do the digital work. Outside the some 150 utility companies in the USA, its genesis and work value was ignored. But what happens if you start valuing the electron for the work it can perform, just like software as a service might be valued?

I am not proposing that utilities be valued like Internet service providers (ISPs). Rather, I suggest the genesis, storage, and/or transmission of the electron be valued relative to the criticality of the digital work the electron performs. A distributed electricity producer or centralized utility are creating a platform. The market has not valued this. Or has it and the Genie just needs to be released?

The electron enables fascinating technologies. Generating and distributing electrons remains archaic, inefficient, and undervalued. Most do not know that nearly fifty percent of centrally generated energy is lost in vampire effects ranging from friction in power lines to voltage step-down to the appliance plug.

When the world is able to value the electron for the real value and future potential technologies, cleantech energy production will generate another Internet-like growth phenomenon. The value of the electron extends far beyond software and web pages. It is the platform that everything else in the modern technological world is built upon. Interject a solar flare, equipment failure, loss of fuel, or nuclear force, and the platform is disrupted and society stops. However, absent such events the electron moves on powering societies critical functions. The nice thing about the benevolent electron is anyone can build and monetize services upon it.

The highly regulated utility industry does not have the same unbridled freedom to monetize the platform it facilitates. Politically, it is realized the electron is critical to do work that maintains modern human life. It enables necessary functions from 911 telephone calls to heaters and air conditioners; from traffic lights to water purification. As a result, the production and distribution of the electron is classified as an essential service. This classification results in regulation. Highly regulated markets do not attract innovation because they can not attract capital. Capital investments are not made because the regulation prevents the proper monetization (such as valuing the electron as a platform). And so the circle continues. Meanwhile the infrastructure ages and begs for innovation.

Nordhaus and Shellenberger have it right. In their article, “How to Change the Global Energy Conversation” they argue that stimulating innovation in the energy production market is more effective than regulations such as emission caps (The Wall Street Journal, 29 Nov 2010). I add the following caveat. Allowing business model innovation is as equally important as technological innovation. For example, you might imagine getting your electricity for free in exchange for providing usage data the producer can monetize.

The lack of competition gives the impetus to a highly regulated environment. One can envision policy-makers grappling with the idea that an unregulated market would result in an extra abundance of overhead power lines. But what would happen if competition and market forces were unshackled electron generation and distribution? Perhaps distributed energy production would push forward and make overhead power cables obsolete?

Policy is often a preemptive action, or reaction, to the absence of a solution. That is, instead of entrepreneurial innovation being the response brought against the problem, a policy is crafted instead. In the case of the overhead power lines, historically there was little incentive for entrepreneurs to develop distributed power generation to get rid of those unsightly and expensive power lines. Getting into the power generating business is haunted by the shadow of regulation – and that keeps capital from enabling innovation. Everybody loses when such a closed environment surrounds such an open platform.

If the generation and distribution of electricity were opened it would incentivize the growth of the industry. This explosive growth would create multiple new industries and millions of new jobs.

For cleantech energy production to realize its market potential, the value of generating the electron must reflect its ability to foster technological progress. It is time to open the generated of electrons (electricity) so as to match the openness the electron itself enables. It is time to let markets and entrepreneurs solve energy production and distribution problems. The resulting industry will be an open platform. It will enable new industries and explosive job growth. This may include creating jobs to remove and recycle those nasty overhead power lines.

Guest blog bu Jason Barkeloo of Pilus Energy.

Landfills and Buggy Whips

Progress is never without a price. What we gain on one hand we lose on another. The hope is that when the dust has settled the gains outweigh the losses. The manufacturers of buggy whips didn’t want to go out of business when the automobile arrived on the market. They fought to maintain their market share, and dismissed the automobile as a fad that would pass. It did not pass however, and transportation was revolutionized. The same holds true for manufacturers of vacuum tubes, 8-tracks, VHS tapes, floppy discs, and the list goes on and on. With each leap forward we leave the old way of doing something behind so that we may move onto the better way that technological advance allows us to enjoy.

Since humans have been walking the earth we have been digging holes and burying our trash in them. The basic technique has not changed for thousands of years. You would be challenged to find an industry that has been around longer than the landfill industry. The way we bury has changed a bit since ancient time. We use liners, we mine methane, and we try to mitigate ground water contamination. But the basics are still the same. Dig a hole, fill it with garbage, then cover the hole.

There are more than 3,000 landfills operating in the United States. These landfills are operating under current EPA standards that try to minimize ground water contamination. There are over 50,000 closed landfills that meet no such requirements and have been potentially contaminating ground water for decades. The California State Department of Health estimated that 67% of these old landfills are emitting toxic solvents and gases. The California State Water Resources Control Board found that 83% of these old landfills contaminate ground water supplies.

So, with all the nasty things that go along with landfills, why do we still continue to bury our trash? The answer is two-fold. Just as the buggy whip manufacturers didn’t want to go out of business, neither do the owners and operators of landfills. Cities and towns used to operate their own landfills. From the ‘law of unintended consequences’ bag came the result of the EPA constantly upgrading the requirements governing landfills. Towns and cities began to sell or contract their landfills to private companies. These companies are to quote a landfill manager I spoke with a few months ago, “In the business of burying trash. We’re not interested in anything that will divert that tonnage out of our landfill.” This is where technology meets the buggy whip. Recycling is diverting more tonnage from landfills each year. As a result landfills are fighting back to maintain their tonnage needs. The ability to divert over 90% of the current MSW and C&D going into a landfill into useful products exists today, yet the will is not there because, by and large, communities no longer control the operating landfills. They do control the closed landfills that have long been out of operation. Many of these are off the radar and local officials have no desire to put them ‘on’ the radar and be subject to current EPA standards. A city government official I spoke with a few months ago said, “The EPA doesn’t know about our old landfill so we wouldn’t be interested in emptying it. If they found out about it, it would cost us a fortune.”

We have the ability to not only stop using landfills, but to empty the landfills that dot this country. What we need is the will to do it. With approximately 50,000 closed, old landfills and assuming a typical landfill life span of 40 years, taking in a conservative 65,000 tons per year, valued on the low side at $90 per ton once processed, we have buried treasure of 11.7 trillion dollars beneath our feet. This does not include the trash located and being buried daily in operational landfills today. To process this trash in a 50 year time span would require 4,000 recycling plants employing 900,000 people operating 24 hours a day, 7 days a week. Additionally the health benefits gained by the people living near these old landfills once the landfills are emptied cannot be calculated. It’s time we moved forward. It’s time to lay down the buggy whip that is our antiquated landfill system. It’s time we put people to work. It’s time we really started to recycle our waste, instead of just enough to say we’re doing it.

Guest blog by Don Willis of

Ontario FIT Program Draws Unwarranted Criticism

I have seen, with growing frustration, an increasing number of comments on blogs and news sites deriding Ontario’s feed-in tariff (FIT) program and similar government incentives that encourage the use of renewable energy and create green jobs in the province. Comments like this anonymous post continue to stand out in my mind, “…‘greens’ only want one thing – the “green” in our wallet. And, thanks to the average gullible/stupid environmentally-oriented Ontarian, it is happening at an alarming rate.”

Perhaps more subtly, but with equal acrimony, an opinion piece in the Financial Post uses loaded words to indicate to the reader that there is no value in Ontario’s efforts to protect the environment – “Witness the initiatives of recent years: the messianic closing of cost-effective coal plants and implementing of higher-cost wind and solar energy initiatives in the name of the environment….”

It took me only five minutes to find these two examples, but you can easily find more of the same in the comments section following just about any online news article covering green incentives, financial or otherwise. Some of the authors’ concerns are valid. It is true that electricity prices are on the rise, partially as a result of the high prices the FIT pays to producers of solar, wind, and biofuel energy projects. It is also true that photovoltaic and wind technologies generate fewer kilowatts per dollar than traditional coal, oil, and gas. Yes, change is scary. For that very reason, it took a lot of guts for the Ontario Liberals to commit to such a sweeping, costly, and potentially career-damaging program. But this is the face of progress. Someone has to do the job. Someone has to get his hands dirty, and hard work brings rewards.

Solar, Wind Energy Incentives Create Jobs, Training Programs, and Clean Air.  Even a cursory look at the foreseeable future shows that we are getting off lightly if our only worries regarding energy are increasing prices. Prices would go up, with or without the FIT – financial costs as well as other lifestyle costs. It is not uncommon to see global warming denials used as grounds for criticism, but this is a bit of a red herring.

Global warming is not required in order for Ontario’s progressive efforts to be of value. How many oil spills can the ocean sustain before they destroy our fisheries altogether, either directly or by fatally interrupting the balance of sea life? How many airborne toxins can our bodies, and those of our children and unborn future generations, inhale or soak into our skins before we, ourselves, shut down? How many rivers and estuaries can be polluted by oil sands run-off before our declining water supply becomes undrinkable? All of these eventualities carry far greater costs to us and our pocketbooks than the higher prices that emerge with the FIT.

To me and my family, the above-mentioned issues alone justify radical policies such as the Liberals’ FIT. However, the program carries with it its own financial benefits. In Ontario, where a rapid decline in the auto and other manufacturing sectors has left many without work, the program has created solar energy jobs and photovoltaic training programs. And the FIT’s requirements for Ontario-sourced content have inspired the creation of manufacturing plants and other new business ventures in the province.

Change can be tough, but given Canada’s growing and collective commitment to a greener tomorrow, change is inevitable. In the future, we will laugh (or perhaps cry) at the way we used to fuel our lives. In the meantime, those truly concerned about their rising electricity bills would be wise to invest in solar technology or photovoltaic training, as these are quickly becoming the surest ways of putting some “green” in your wallet.

Kill Bill Volume 2 and the Cancun COP

Quentin Tarantino’s Kill Bill, Volume 2 is one of my favorite movies.   It penultimate scene – a final confrontation of vengeance  from the wronged Beatrice Kiddo (aka, The Bride, aka, Black Mamba, aka Uma Thurman) and the evil, yet oddly amiable and ambiguous, title character (aka, the great David Carradine) is perhaps the finest in the film.  For those of you unfamiliar, shame on you.  In a nutshell, at the outset of a fight that will certainly require a major furniture allowance, the Bride suddenly executes the most exquisite sequence of strikes on the all of Kung Fu – the Five Point Palm Exploding Heart maneuver.  Bill – to his utmost surprise – finds his greatest disciple has surpassed him (their thousand year old kung fu master played by Hong Kong action master, Gordon Liu, had not deigned to pass this knowledge to him) and bows to her grace and superiority.

Why am I, sitting here on the beaches of Cancun, reminiscing about Tarantino’s oevre?  Well, it’s because of the way the Five Point Palm actually operates, explained via foreshadow earlier one by Bill himself.  It is not instant death – far from it.  The victim feels perfectly normal – except in his fifth step after the strike, his heart explodes and he drops dead.  It creates – literally – a perfect example of the walking dead.  Which is what brings us to the Cancun COP – climate’s first full gathering after the Copenhagen Five Point Palm Exploding Heart debacle.

Cancun is Bill getting up from the couch and taking that first proud step to his inevitable demise.  Everything here looks normal, feels normal – the mass ant colony of climate has done is annual migration to another odd corner of the world and set up shop. It’s lower energy than Copenhagen, Bali, the Hague or Kyoto, but that’s to be expected – off year COPs always go through these cycles

But make no mistake, COP/MOP process in its original form is most certainly the walking dead.  The fundamental political dynamics around past and future carbon responsibility in a world transitioning to new global multipolar balance (a dizzy prospect in its own right) have not been remotely resolved.  The chasm we saw in Copenhagen is not close to being bridged and there appears no way it ever will be bridged in this particular UN process.

To quickly review the dynamics of this particular Mexican standoff, developing countries continue to insist on an extension of Kyoto emission caps on industrial countries as the fundamental policy to engage mitigation.  Simultaneously, more and more industrial countries refuse to continue down that path.  While there are many other issues – macro and micro – this alone is a pretty binary choice and neither side is ever remotely likely to move.  Since the UN process is intrinsically based on 100% consensus, well – it ain’t gonna happen folks.  This  is my ninth COP/MOP total, my fifth in a row and these tensions are not getting better, they are getting worse.

Therefore – for all intents and purposes – the CMP process dead in its current configuration and the question is how many steps we will take before we too collapse in a heap.  For the record, cinema buffs debate  whether Bill died on his fifth or sixth step off the couch.  If each COP were a step, Tarantino’s model means we have another five years to go before we final collapse. Somewhat sickeningly, that feels about right.  Unlike David Carradine – who had total awareness of his fate – my guess is that substantial parts of the COP ant colony continue to delude themselves that this process represents the only relevant forum for climate management.

The COP process has become is own raison de etre and its existence seems increasingly  isolated  from the real innovation that countries, companies and other aggregations are attempting to address small fragments of the problem.  Basically, what goes on for two weeks inside these halls of official dialogue is a shadow game with little relevance to actual decision making around carbon policy, innovation and investment in the world that 6.5 billion people inhabit.  And vice versa.  And when when institutions exist simply for the reason that they exist under their own life force, a serious rethink is in order.

If we solely focus another half decade to supporting this particular paradigm, we may indeed be accused by our grandchildren of fiddling while Rome (and many other places) burned.  The efforts that thousands of negotiators and tens of thousands of other participants undertake to address the climate challenge through the COP process are undoubtedly real and important.  They are, however, driving toward an inevitable dead end.

The UN process as a intermediary of economic and environmental value between countries no longer holders up to scrutiny.  Being honest, we must recognize that the UN and CMP texts of the last decade do represent some agreement to abrogate  sovereignty – and for countries who are finding their way in a new global political  dynamic, this is likely a bridge too far.   Given the other forces at work, that simply is not a realistic assumption to make during such a fundamental power transition such as we find ourselves

This is not to say the UN does not have a role going forward – far from it.  My very good friend Christiana Figueres is now the ringmaster of the circus and if there is a human being on the planet who can recast the intergovernmental role positively for  our species and our fellow  earthlings, she’s the one I’d put my money on.  In my next installment in the next couple days, I’ll lay out some ideas for reinvigorating this UN processes relevance, making it so real climate mitigation work and UN support can walk hand in hand, as opposed to in parallel paths around the climate policy maze.

The Triple Crown in Solar

Like it or not, solar is still the crown jewel in cleantech.  Whither goes solar, there goes cleantech.  So I got to thinking about the next decade in solar, and what will determine which companies achieve primacy.  I think there are three races in solar technology to watch these days.  Call it the Solar Triple Crown.  The three races that matter.

Yield! Yield! Yield! – The race to yield performance at volume in thin film.  In thin film, getting the best performing device has never been the issue.  Getting a repeatable process, at scale, on the second and third plant, with solid performance, but most importantly yield, yield, and yield has always been the issue.  We’ll call this our Kentucky Derby of solar, and First Solar has just about won it.   Whether anyone else ever catches them may even be considered irrevelant to the solar industry as a whole now, the race has been run.

Thin X Marks the Spot – The crystalline race to thin.  I was quoted a while back saying that the future of solar in the US was all about thin film, since we’d missed the boat on building a solar manufacturing base in the first wave, and everything else was about fighting low cost manufacturing in China, where we were unlikely to win.  I’ve got a caveat to that now.  A friend of mine in the solar test equipment business told me about a year ago that he knew of a large number of crystalline companies whose research programs were targeting taking two-thirds to an order of magnitude out of the thickness of their technology, in an effort to stay relevant in an increasingly thin film ruled world.  Then at the Cleantech Open Gala I emceed last week, the people’s choice winner was announcing the same thing, a path to higher performance at one quarter thickness.  In crystalline, thickness generally equals cost.  And the materials cost difference between the devices was the core value propostion thin film always pitched over crystalline.  So I’ll caveat my earlier comments that the US solar future is all about thin film.  Maybe it’s about the race to thin in crystalline.  If they can, the thin film (or First Solar if you prefer) Triple Crown coronation might not be cake walk, Kentucky Derby win or not.  We’ll call this the Solar Preakness.  It’s a little longer, a little tougher, and it’s still being run.

Tracker, tracker burning bright – The race to the perfect moving part.  But thin film versus crystalline is no longer the only game in town.  Now it’s about trackers, too.  I never liked trackers.  I always felt one big advantage of solar as a long lived, low operating cost technology was its lack of moving parts.  Using trackers of course, would eliminate that.  But I’ve started changing my thinking.  As the winners of the first two races emerge, trackers become the next big thing.  The technology that makes all others better.  The next largest area of potential performance and $/kwh performance improvement. Serious power for serious people.  The long race, that’s less flashy, and more a grind than the first two.  The Belmont of Solar.  And in trackers, it’s going to be about simplicity, yes, cost, yes, but just like the Belmont, mainly about longevity.  11 horses have won the Kentucky Derby and the Preakness since Affirmed last won the Triple Crown in 1978.  All fell short to the grind of the Belmont.

According to Wikipedia, as of 2008 3,889 horses had entered one of the three races.  274 horses have won a race.  50 have won two legs.  Only 11 have won the Triple Crown.  I think in the Solar Triple Crown the Kentucky Derby’s been run and won.  Maybe still a fight, but the we’re largely on to the next race now. The Preakness is just beginning, and no clear winner has yet emerged.  And Belmont hasn’t really started.  But it will.

And that’s good news for all of us in the industry.

SPG Solar CEO vs Bill O’Reilly on Solar

Bill O, the Art of Journalism and Me.
By Tom Rooney, CEO of SPG Solar

Journalism, says the wag, is the art of speaking with absolute authority about something you know nothing about.

Earlier this week, America’s most dominant cable TV news host, Bill O’Reilly, of course, took that definition to a new level when he went on a jag about solar power.

Solar power is just too expensive and too complicated for Bill O.

“I’d like to put solar panels on my house,” said Bill O . “And heat my house through the sun. I would like to do that for a reasonable amount of money. I don’t want to buy the oil every month. They can’t do it for a reasonable amount of money, number one.

“And its so complicated … I can’t do it. … So don’t tell me about my grandchildren. If they can figure out the solar panels, they can have them. But its all bunk. It’s all bull at this point for a guy like me. …I want a clean planet. But I’d like the stuff to work.”

But in meeting the definition of journalism, Bill O also broke its first rule: If your mother says she loves you, check it out.

Bill O did not.

His curiously uninformed comments came just hours after the Irvine Unified School District selected my company, SPG Solar, to install solar panels on each of its 21 solar panels on 21 of its schools — the most comprehensive school solar project of its kind.

The district will soon be getting about 45 percent of its energy from solar, as well as a 10 percent reduction in its energy bills.

And all for no money.

People in the business know this works because the cost of buying and installing panels has gone down so much, and the incentives are so strong, that the energy savings from Irvine basically financed the deal.

That’s it, Bill O. Nothing expensive or complicated about it.

You want complicated? Go to one of our solar installations at the Far Niente winery in Napa Valley, one of the finest in the world, where we built a solar energy array on top of a pond of water. The panels actually float. The first such project ever built in the world.

Maybe it was a bit challenging to build. But that is what we do.

But as far as running it, all the winery has to do is watch the sun shine and enjoy paying less for energy.

That’s it, Bill O.

You want complicated? How about building five acres of solar panels in one of the most desolate — and beautiful places on earth: Furnace Creek Hotel and Resort in the middle of Death Valley.

Same in Livermore, California, where we installed the largest solar array ever on a movie theater. The movie patrons never even knew we were there.

Whether you are in Death Valley or Napa Valley or anywhere in between, all you have to do is pretty much the same: Just sit back and watch the sun shine.

If the sun doesn’t shine, your other power takes over and you don’t do anything. You would not even notice, Bill O.

All Bill O has to do with his solar energy system is ask his accountant how much money he would save every month.

Then sit back and smile.

Bill O is fond of telling us that bloviating is his job. So is being informed about how more and more Americans tare taking charge of their energy future with easy, and inexpensive, and simple solar energy systems.

See the O’Reilly video here, about 3:23 into this six minute clip.

Tom Rooney is the President and CEO of SPG Solar, one of the largest solar integrators in the US. You can find SPG at Tom Rooney is a guest blogger on, and the opinions stated here are his own, and do not necessarily reflect the opinions of the team at Cleantech Blog.

Cleantech 2010 Top 10 Predictions

My good friends over at Cleantech Group put out their 10 for 2010 cleantech predictions after Thanskgiving, and after our usual “webside” chats on the future of the sector, chastened me into responding with a set of counter predictions. What’s in store for cleantech 2010?

1. Private capital recovers. Nick Parker predicts that private capital will recover and we’ll see global cleantech fundraising set records. I like this prediction, and hopefully for more than just projecting the results I’d like to see. But it does feel like a lot of cash on the sidelines, a lot of policy beginning to bite and drive demand, and few other exciting places to put cash. And according to the Cleantech Group who has more data on it than anyone else, the fundraisings are gearing up.

2. Carbon Rules – One of the Cleantech Group’s longtime theses has been on the increasing interaction between different commodities (like water and energy and carbon), and they predict 2010 is the year the “non carbon” commodities come to the forefront and the commodity tradeoff debate intensifies. I call this one a bust. It’s all about carbon. 2010-2013 is the start of 4 years of carbon mashup. We’ll spend it dealing with fallout from Copenhagen, wringing the last drops from Kyoto, beginning in the US to commence planning to handle the EPA reporting rules and the to be finalized in 2010 CARB rules in California, and new EPA regulations and maybe, just maybe, our own private cap and trade scheme. Water still won’t yet matter. But we may finally get a picture on how much the carbon overlay on energy will end up biting. And part of the reason I’m calling this a bust is we’ll still be in a viciously flat to weak economy in 2010, which means definitely energy, along with most commodity prices, are more likely to be deflationary not inflationary. And when commodity demand is weak, the interactions bite less.

3. Energy efficiency eclipses solar. This is a fascinating prediction on Nick’s part, and made me stop and think for a moment. I’m going to cry cautious bust on this one. Solar has carried cleantech almost by itself so far. And I don’t think the run is over. And if my prediction above on weak demand growth for energy holds, it feels like it’s a bit early to start passing the mantle to energy efficiency, which is traditionally late to the party.

4. I will, however, make a call on solar. I will call solar’s emergence into real scale power (RSP) starts in 2010. Real plants, 5MW-100 MW, big enough to produce more than a thimbleful of power. We’ll start to get enough of them globally to get real data on costs and issues at scale. And while RSP for solar is still lilliputianland in real energy, 2010 will be the first year solar starts to run with the big dogs. With the massive demand void left by Spain to fill, and the industry learning how to take costs out like a real manufacturing sector does, now we find out if solar’s got game. And I think we’ll find it will, but it’s going to end the year feeling a little battered and bruised on 2010 playground.

5. And I’ll make another call on smart grid. Real business, M&A, and maybe even an IPO or two by 3Q or 4Q. Ignore energy efficiency, smart grid will matter in 2010.

6. Biofuels bust. The last petal of the last bloom off the biofuel rose falls by the anniversary of Pearl Harbor in 2010. The cleantech investment community will finally figure out that small scale experiments in pretty labs do not a business make, and that they don’t have the horsepower, expertise, or balance sheet to play this big boy game.

In short, I believe that 2010 does mark a watershed year in cleantech. The blue norther of the GFC, as the Australians all refer to the global financial crisis, has slammed straight into a rising warm air mass of cleantech and renewable energy policy, and forced cleantech to grow up. So maybe, just maybe to quote Winston Churchill, for cleantech it’s not the end, and not even the beginning of the end, but it is perhaps, the end of the beginning.

Neal Dikeman is a partner at merchant bank Jane Capital Partners, and is Chairman of Carbonflow and

Boone Pickens Mega Texas Wind Farm on Ice

Short and sweet.

Boone Pickens announced this week that his mega wind farm was icing an eventual 4,000 MW windfarm this week. Apparently he’s looking for buyers for $2 Bill in turbines. A far cry from a year ago when your credibility as a wind developer hung in part on whether or not you had turbine supply.

As difficulty constructing the transmission lines was the stated reason for the the about face, I guess even Texas can’t always throw up a transmission line wherever it wants. California utilities have been struggling with this issue for years.

T&D remains the seminal issue, second only to how big are the subsidies and RPS requirements, in building renewables into true scale.

And for those of you who haven’t read the Pickens Plan to switch a chunk of our power sector from gas to wind, and a chunk of our transport sector from oil to gas, details here.

Neal Dikeman is a partner at Jane Capital Partners, and has cofounded, run, invested in, or served as a director of multiple startups in cleantech and technology. He is Chairman of Carbonflow and, and Texas Aggie.

Cleantech’s Solar Conundrum

The solar market is still going strong, despite the financial crisis, and turmoil in some of its key markets. But that doesn’t mean all is well on the venture financing end.

As a number of longtime Silicon Valley solar darlings start to demand even more serious money to build plants for commercialization, the financing picture gets clouded. Conventional wisdom has been suggesting it’s market issues. Maybe so, and then again, maybe not.

Greentech Media has been reporting on the funding efforts of Solyndra, including a recent discussion of struggles by Goldman Sachs to raise structured finance for the startup, which claims it is shipping some of its very weird looking CIGS product, though little evidence let alone field data exists.

It’s not the only one. Recently CPV darling SolFocus was reportedly struggling to raise capital arranged by Advanced Equities. The cash was to fund the buildout of a commercial manufacturing plant, and at least twice the company drastically cut its pre money valuation ask.

The conventional wisdom is that the finance crunch is hurting solar. I have another thought. Perhaps its just the riskiest solar technologies and businesses coming home to roost. Both of these companies have been pitched to investors as late stage, helping to justify massive capital needs and valuations. I’d argue they are actually very, very early stage, with all the risk still in front of them.

Maybe it’s not the market? Maybe its the ludicrous suggestion that the first plant should be 420 MW in size. How about two new ideas: 1) Stage gate, or 2) Walk before you run.

Take Solyndra, which has raised hundreds of millions to coat CIGS on a glass cylinder. Perhaps the question shouldn’t be is solar getting hurt by the credit crunch, but should be who exactly thinks its a good idea to invest hundreds of millions to build a plant to coat CIGS in a circle, at “pre IPO style prices”? The question everyone I know has been asking is, if they really can coat CIGS with good yields, why didn’t they just do it? That’s world beating on flat plate glass, if it works as advertised. Why wrap the same amount of solar material around a long glass paper towel roll?

With SolFocus, maybe its just that CPV isn’t as good an idea as applying manufacturing process improvement to CdTe and tandem cell thin film?

Who knows, but let’s look a bit closer at the particular technologies before we just blame it on the the financial crisis.

Neal Dikeman is a partner at cleantech merchant bank Jane Capital Partners LLC, and Chairman and CEO of Carbonflow, Inc. He edits the Cleantech Blog and chairs

EarthLED releases a new consumer LED light bulb

by Cristina Foung

My favorite green product of the week: the EarthLED ZetaLux 7 Watt LED

What is it?
The EarthLED ZetaLux is a 7 watt LED light bulb. With a standard medium base, the bulb is a replacement for any incandescent light bulb. EarthLED estimates that it will cost as little as $2.00 to run the bulb for 8 hours every day for a year.

Why is it better?
The ZetaLux uses 1/10th the amount of energy and produces roughly the same amount of light as a 50-60 watt light bulb. It has a direct light path (which in some ways takes a little getting used to) but according to EarthLED, that means the bulb has a 95% luminary efficiency (the bulb does not direct any light toward the light fixture).

I’ve been using the ZetaLux for a week now, and it provides quite a bit of bright light in a table lamp. It’s completely quiet (which was a complaint some folks had with the EarthLED EvoLux) and although the “warm white” bulb produces light that is not as warm as an incandescent, the quality of the light is quite nice.

Where can you find it?
You can order the ZetaLux directly from EarthLED for $49.99 in either warm or cool white.


Boca Raton, FL, November 18, 2008 — Advanced Lumonics, LLC, an early leader in the direct replacement LED light bulb market through its consumer oriented EarthLED brand announces its latest product, the EarthLED ZetaLux.Following on the success of the EvoLux launch earlier this year, the EarthLED ZetaLux LED light bulb offers a price/performance ratio unmatched in the industry. The ZetaLux only consumes 7 watts yet offers performance comparable to a 50-60 watt light bulb. With a price of under $50 USD, the ZetaLux offers an unprecedented payback time of just over 2 years when operated 8 hours per day.

ZetaLux is built upon the latest LED Engine from CREE allowing for amazing efficiency, high output and a new benchmark in Color Rendering Index (CRI) performance. CRI is a a good way to determine the quality of light and its faithfulness to render colors correctly, EvoLux features a a CRI of 75 for cool white and 80 for Warm White making them exceptional for LED Light Bulbs.

The ZetaLux has been designed to the most exacting standards of any LED light bulb currently on the market. From its oversized aluminum heat sink to its flame retardant plastic, to its shatter proof lens, the ZetaLux is built to perform safely and efficiently for over 50,000 hours. The ZetaLux’s rugged design also allows it to perform under the harshest conditions including frigid -50 degree frost all the way up to scorching 180 degree heat with 95% humidity.

Advanced Lumonics is also announcing enhanced versions of their successful EvoLux line. All EvoLux bulbs now feature lumen outputs exceeding 1000 Lumens along with a higher CRI and even greater efficiency. These enhancements further cement the position of EvoLux as the most advanced direct replacement LED light bulb on the market today.

The ZetaLux along with the new enhanced EvoLux will be among the first direct replacement LED light bulbs to achieve UL certification later this year along with compliance with new DOE EnergyStar standards for LED lighting in 2009.

Both ZetaLux and enhanced EvoLux are available today from The EarthLED Store and Advanced Lumonics distribution partners.

The new ZetaLux and enhanced EvoLux join a fresh new lineup of EarthLED LED Lighting products for 2009 including:

TriSpectra 3 – The World’s Most Powerful LED Based MR-16 Solution
DirectLED-HL – The First Direct LED Replacement for G4 Halogen Lamps
DirectLED-PL – The First Direct LED Replacement for PL Fluorescent Lamps
DesignoLux – LEDs Designed Specifically for Decorative Lighting
GrowLED – A Comprehensive Range of Affordable LED Grow Lights

For additional information on ZetaLux, EvoLux or other EarthLED LED Light Bulbs please visit or call 1-877-855-1625.

About Advanced Lumonics, LLC

Boca Raton based Advanced Lumonics, LLC is an early leader in the direct replacement and professional Solid State Lighting (SSL) market. Through their popular EarthLED brand, Advanced Lumonics has rapidly increased awareness of LED lighting as a true alternative to CFL and Incandescents in the consumer marketplace and has become a leader in this space.

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, organic personal care, and other green products.

Want something fast (and clean) between your legs? Try the GPR-S.

by Cristina Foung

My favorite green product of the week: Electric Motorsport GPR-S Electric Motorcycle

What is it?
The GPR-S from Electric Motorsport is an all-electric motorcycle with lithium batteries and a light weight frame (250 pounds or so). The bike has a 14.2 kilowatt electric drive system and has a top speed of 70 miles per hour. The bike has a recharge time of 1.5 hours and gets 35-60 miles per charge.

Why is it better?
Electric motorcycles and scooters have a much higher well-to-wheel efficiency rating than gasoline powered bikes. Additionally, they have no tail-pipe emissions and therefore qualify as zero emissions vehicles. They’re also much quieter than traditional motorcycles, which for me, is a bonus. There’s no reason to add to the noise pollution.

The GPR-S is a great bike as it’s light weight (I was able to right the bike with no problems) and has motorcycle styling, which definitely appeals to a different demographic than the more scooter-like Vectrix. It seats two people quite comfortably, has decent acceleration, and is very easy to ride, given that there’s no gearbox or clutch. It would make a great learner’s bike.

Where can you find it?
You can find the GPR-S for $8000 at Electric Motorsport’s website (or if you’re in the Bay Area, they’re located in Oakland, CA).

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, organic personal care, and other green products.

Election Predictions for Cleantech and Carbon in a Post Obama World

At the risk of sounding like I’m flip flopping, here are the top 5 reasons tonight’s election results mean lots of money for cleantech investors (and, unfortunately, my pocket).

1. An Illinois President and Democratic Congress equals good odds for corn ethanol and a Renewable Fuels Standard.
2. Think massive subsidies, loan guarantees and R&D funding for alternative energy (assuming our government has any money left in it’s pocket book).
3. CAFE standards are going up.
4. We can stop worrying about losing the wind and solar tax credits, and maybe get a federal Renewable Portfolio Standard.
5. And finally, strange bedfellows – Think McCain-Lieberman leading the swing votes in the Senate and an Obama led White House delivering our climate change legislation.
Good luck and God bless us all.
Neal Dikeman is a partner at cleantech merchant bank Jane Capital Partners, CEO of Carbonflow, and the Chairman of

Got a (LED) light?

by Cristina Foung

My favorite green product of the week: the GeoBulb LED Light Bulb from C. Crane

What is it?
The GeoBulb is an LED light bulb that uses less than 8 watts of electricity to produce 14% more light than the average 60 watt incandescent bulb. It’s roughly the same size and shape as an incandescent bulb and serves as a direct replacement for any indoor fixtures.

Why is it better?
First of all, the energy savings of using LED light bulbs over incandescent bulbs or even compact fluorescent bulbs. Not to mention, the bulb has a life span of 30,000 hours (which at continuous use, that would work out to be about 3 years; even using the bulb 8 hours a day, you’d still get 10 years out of it).

The reason the GeoBulb is a great option is because the quality of light and the brightness is in fact similar to an incandescent. I got a chance to check out some bulbs at West Coast Green. I was amazed at how bright they were, how cool to the touch they were, and how they didn’t buzz at all.

Where can you find it?
The GeoBulb does have a steep up-front cost of $119.95. You can order it through the C. Crane website (but it appears to be out of stock until December).

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, organic personal care, and other green products.

Zimride into the sunset

by Cristina Foung

My favorite green product of the week: Zimride’s Carpool Community

What is it?
Zimride is a carpooling community. It lets you find and share rides, figure out whose route is on your way, and intelligently pick who you get in a car with (whether or not you know them before hand). You can even use Zimride either directly through Facebook.

Why is it better?
According to the 2005 American Community Survey, almost nine out of 10 workers prefer to get to work by car. Unfortunately, most people are in those cars alone, 77% in fact. And we all know that driving alone isn’t stellar when it comes to gas prices or carbon dioxide emissions. That’s why carpooling is a great option. But what if you don’t know anyone going your way?

Zimride basically makes carpooling easy, efficient and safe. If you’re looking for a ride, all you have to do is type in where you’re coming from and where you’re going (and when). You can see who has an extra seat in their car or perhaps figure out a regular ride-share with someone. If you’re posting a ride, you specify what your driving style is, if your car is smoke-free or not, even how loudly you listen to music.

The beauty of using Facebook to find a ride (or give a ride) is that there is already some pre-existing trust. Before you get in a car with someone, you can see their picture or if you have any friends in common (and if you don’t like what you see, you’re certainly not committed to an awkward car conversation). Unlike existing ride share boards like Craigslist, your new carpooling friend doesn’t have to be an unknown entity beforehand.

And even if you don’t want to open up your car to a stranger, you can use Zimride to coordinate with folks you already know offline. That way, you don’t have to trade endless strings of emails.

In either case, Zimride makes carpooling so easy that you really have no excuse not to.

Where can you find it?
You can check out all the Zimriding going on at Zimride’s stand-alone site or through their Facebook application. Best of all, it’s entirely free.

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, organic personal care, and other green products.