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5 Cleantech Wishes for 2011

Five things I’d like to see in cleantech 2011.

  1. A fuel cell in one of my blogger’s houses.  This one’s actually in progress, so hopefully it’s a gimme.  So come on Marc, we’re waiting for the pictures and the blog!
  2. More cleantech IPOs.  Come on guys, the market’s been rolling, we ought to be able to deliver ONE good IPO or two?  We did see RigNet (NASDAQ:RNET) get out in a $60 mm IPO.  RigNet’s a telecommunications for remote and offshore oil and gas markets but maybe no one outside of Texas counts it.  Of course, a nine year old c. $80 mm in revenues/$25 mm in EBITDA company backed by long time cleantech investor Altira, ought to to make the list.  And Chinese LED maker SemiLEDS (NASDAQ:LEDS) made it out in an $89 mm IPO.  So maybe the IPO market isn’t dead to cleantech, and after market performance is guaranteed to go badly, at least for profitable companies.
  3. And speaking of LEDs, I’d like to see lots more of them next year – in houses, on street lights, hanging from Christmas trees.  And I’d like to see them brighter and cheaper.  And I probably will!
  4. A major cleantech conference in Houston.  Perhaps someday rivaling the OTC – Offshore Technology Conference.  When that happens, perhaps we’ll know cleantech has arrived as a real sector.
  5. Lots of EVs!  I admit it, I don’t think much of venture backed EV startups, but I’m really excited to see some EVs.  I imagine them like the herd of tractors in the tractor tipping scene from the movie Cars (don’t ask why, that’s just the mental image I have).  And since I’m testing driving an Nissan Leaf Electric Vehicle a couple of weeks, this wish is bound to come true.  I will definitely be blogging it.

Here’s thanking all our Cleantech Blog and readers and Cleantech.org members for your support. Happy holidays, and good luck in a new year!

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.

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 Huddler.com, which focuses on electric cars, organic personal care, and other green products.

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.

Broad markets rise, sustainable energy mixed (week ending 9/19)

Author: Mark Henwood

Capping a crazy week, broad markets end up, while commodities retreated slightly.

Camino’s indices ended the week mixed amid highly volitile trading.

In Biofuels, we again saw the potential for huge losses driven by poor risk management practices applied to hedging strategies. Read more here. Veresun (VSE) dragged the Biofuels strategy down for the week with a 67 % decline. This is after a a 50% bounce the stock received following it’s announcement it was reviewing “strategic alternatives” in the wake of its hedging loss.

On the up side LED-Lighting’s Cree (CREE) capped its strong week with an upgrade. Oppenheimer’s analyst apparently thinks light-emitting diodes are being adopted as a mainstream lighting product. This is a continuing demonstation of the influence of analysts.

I like LEDs. They last a long time (5x a CFL), they have a cool form factor, they don’t use mercury, they are rugged, they are dimmable, and they produce very nice light. Unfortunately, commercial LED products are no more efficient then CFLs and currently cost 20 times as much. Their long life doesn’t yet offset this high cost. Given time I expect them to penetrate more lighting applications but we are not there just yet for mainstream use. I’ll get excited when their cost start to fall significantly and approach no more the 5x the cost of a CFL.

Mark is the founder of Camino Energy, an information provider specializing in globally traded sustainable energy stocks.

Key sustainable energy indices rise, LED-Lighting suffers (week ending 8/1)

Author: Mark Henwood

EAFA fell 2.2%; Emerging Markets, S&P500, and commodities (DJP) treaded water.


The two key strategies, Renewable Electricity and Solar, posted gains for the week.

Solar’s 4.1% gain reduced the index’s loss for the year to 31.7%. This highly volatile strategy saw some big gains with Day4Energy (DFE.TO) leading the way with a 24.6% rise. Most of the increase occurred after the company reported on July 30 that they had achieved a 19% efficiency with multi-crystalline cells in the lab and they expect this development to drive costs down by up to 25% in 2009.

Renewable Electricity also saw a 1.1% advance with Canadian Hydro Developers (KHD.TO) leading the way with a 23.7% gain, the best performance for the week in the TSX Composite Index. The company had an analyst upgrade during the week which apparently triggered the gain. Another notable gain was notched by Suzlon (SUZLON.NS) which reported strong earnings growth in their last quarter.

LED-Lighting had a dismal week with the group falling 9.4%. Rubicon (RBCN) led the way down despite reporting in their Wednesday morning call that they beat guidance. The sell-off started on Thursday after Oppenheimer downgraded the stock and continued through Friday declining 23.5% for the week. Management reported continued enthusiasm for the LED segment but expressed some uncertainty regarding their SoS segment which accounts for about 30% of their business. Investors apparently have almost written off the SoS business line.

Mark is the founder of Camino Energy, an information provider specializing in globally traded sustainable energy stocks. He also is an investor in sustainable energy stocks and has positions in Renewable Electricity, including KHD.TO.

Sustainable energy indices mixed, broad markets gain while commodities retreat (week ending 7/18)

Author: Mark Henwood

Emerging Markets, EAFA, and S&P500 all rose this week partially on reduced pressure on commodities (DJP) which fell 7.8% for the week.

Biofuels shares responded mid-week to news that Verasun (VSE) was keeping 330 MGY per year of new capacity idle. As I wrote in my post for the week ending June 13th with tight margins it comes as no surprise that producers are reducing production plans . With ethanol consuming somewhere around 30% of corn supplies the cost of corn should respond to a reduction in ethanol production. Reduced ethanol supplies should be supportive of stronger ethanol prices. At some point an equilibrium will be reached.

Later in the week UBS upgraded the ethanol sector to a buy on “improving margins”. VSE’s price (and others) responded strongly gaining 21% on Friday and ending the week up a huge 49% at USD 6.12/share. With this big change I thought the margin on producing ethanol would have materially improved. True, corn has been dropping significantly since the start of July with the December contract closing Friday on the CBOT at USD 6.28/bushel. But ethanol has been falling also in July, with the December contract closing Friday at USD 2.36/gallon leaving the “corn crush” margin at the same slim USD 0.2/gallon it was in the middle of June when Verasun’s stock price was below USD 5.0/share. I’m not sure I understand the improving margin argument.
The LED-Lighting strategy continued to disappoint falling an additional 9.9% for the week with a cumulative decline of 35% since we started tracking the sector at the end of March. Orion Energy Systems Inc. (OESX) lost 38.7% of its value for the week after it reduced its guidance for 2009 to a 25-28% growth rate, down from its previous 50% expectation. With its long term potential, I’m looking for signs this strategy may be fairly priced after this year’s big correction.
Mark is the founder of Camino Energy, an information provider specializing in globally traded sustainable energy stocks. He also is an investor in sustainable energy stocks and has positions in Renewable Electricity.

Biofuel Rises 6.6%, other indices mixed (week ending 5/23)

Author: Mark Henwood

Broad market indices (Emerging Markets, EAFA, S&P500) all fell significantly this week. Camino’s PurePlay™ indices were mixed but with Biofuels up sharply. Commodities (DJP) advance 1.6%, up 19.6% for the year.

Biofuel was the story of the week with our 15 member index increasing 6.6%. Four constituents rose more than 20% with Pacific Ethanol (PEIX) increasing 30.6%. Pacific rose dramatically after its 5 AM Monday call where it reported an operating profit. Later in the week the stock dropped after the company reported it announced a preferred stock offering.
Part of the operating profit was USD 2.2 million in derivative gains which I feel should be treated cautiously. After all, a year earlier the company had a derivatives loss. Also, with current assets of USD 121 million and current liabilities of USD 168 million, operating earnings don’t look like they will be sufficient to close the gap so I’m not surprised by the financing. The market reaction seems to indicate a question whether this will be the last round.

Of all the sustainable energy strategies, Biofuel is one of the few, and the largest by far, to offer an alternative to petroleum fuels for transportation. So there seems to be some logic that rising oil prices might lift the stocks of Biofuel producers. As I mentioned I would last week, I ran a quick correlation of Biofuel to a readily investable crude oil proxy (Ipath’s OIL ETN) and found over the last year Biofuel and OIL were correlated a relatively low .17. This is even lower than Solar’s correlation to oil which came in at .26 over the last year. With oil and natural gas being used to produce relatively small amounts of electricity in key solar markets, the only logic I can see for the oil/Solar correlation is high oil prices sustain governmental and consumer support for “alternatives” even thought the alternatives are only loosely related to oil.

One good week hasn’t erased Biofuel’s losses this year and the index is still down 27.5% since Jan 1.

LED & Lighting is a new strategy being tracked at Camino. It consists of 9 companies that pass our screens and are producers of energy efficient lighting using LED, flourescent, or other technologies. I expect to discuss lumens next week.

Mark is the founder of Camino Energy, an information provider specializing in globally traded sustainable energy stocks. He also is an investor in sustainable energy stocks.

Solar Rises 10.8%, Renewable Elec and Biofuels increase also (week ending 5/16)

Author: Mark Henwood

Broad market indices (Emerging Markets, EAFA, S&P500) all rose significantly this week. Camino’s PurePlay™ indices, with the exception of Fuel Cells, were up. Commodities (DJP) retreated slightly.

Solar was the story of the week with our 34 member index increasing 10.8%. Six constituents rose more than 20% with the top three, SolarFun Power (SOLF), Renesola (SOL), and China Sunergy (CSUN) increasing more than 40%. Renesola reported strong Q1 results on the 14th. SolarFun and China Sunergy are scheduled to report earnings next week.

Even after its 53.85 % price increase last week, SolarFun’s current year PE is 32.2 (corrected) and its 09 PE is 19.5 (corrected). With continued high growth rates expected, and unless there is a negative surprise next week, I wouldn’t be surprise to see this stock rise further. Renesola’s current year PE is now 22.3 but with expected growth in the 50% range it may support a higher price also. China Sunergy’s 44.9% increase is harder to understand. The company isn’t profitable this year and has a 09 PE of 32. Offsetting this are consensus expectations of revenue growth of over 50% this year and next.

After last weeks big gain at Energy Conversion (ENER) the stock rose an additional 19.2%. Other then hope for an ITC extension in the US I didn’t see any events specifically related to the company that would drive this change. The stock is in both of the solar ETFs so money flowing into them may have lifted the stock last week. At a current period PE of about 80 I can’t justify owning it.

Biofuels bounced up 4.9% last week. Some of the gain was no doubt driven by oil prices but some was driven by the 27.3 % increase in Brasil Ecodiesel (ECOD3.SA). The company reported a significant block transaction of stock during the week. Next week we’ll look at the correlation of this strategy with oil prices.

Fuel Cells continued to suffer with Medis (MDTL) leading the decline. The company reported an increased YoY quarterly loss. This strategy is now down 33% of the year and is still searching for the winning product mix.

LED & Lighting is a new strategy being tracked at Camino. It consists of 9 companies that pass our screens and are producers of energy efficient lighting using LED, flourescent, or other technologies. We expect this sector to grow as technical improvements and rising retail electric prices make advanced lighting more compelling to customers.

In total our five indices, which track just PurePlay™ sustainable energy companies, have aggregate market capitalization of USD 227 billion.

Mark is the founder of Camino Energy, an information provider specializing in globally traded sustainable energy stocks. He also is an investor in sustainable energy stocks.

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 Huddler.com, which focuses on electric cars, energy efficient appliances, and other green products.

Can We Actually Reduce Energy Usage without Hurting GDP?

I was thinking today, in cleantech we often talk a lot about energy efficiency. Californians often cite that this state has grown its economy for the last 20 years without a significant increase in energy usage per capita, compared to the rest of the country, where GDP per capita goes up, and energy usage goes up just as much. But of course, California has lost much of its manufacturing sector over that same 20 year period, too. Perhaps no coincidence?

But if we wanted to actually do it, where could we actually save energy without impacting GDP growth, make a serious difference in our power bill, and do it in a big way – targeting say, 50% of our total power usage on a per capita basis?

  • CFLs & LEDs – We are already moving aggressively towards compact flourescent light bulbs, and the penetration rates are still low. As that trend continues, and LEDs come into the mix for more and more applications, our lighting bills should trend straight downward for the next decade. Now if we can just stop cringing at the thought of a $3 lightbulb!
  • Heating and Air Conditioning – I know whenever my power bill goes higher than I like, I just watch how often I turn the heater on, and adjust the thermoset a bit. The answer here has always been some combination of improved technology, smart metering and more transparency in billing and usage, and energy prices rising high enough for consumers to feel the pinch. Oh, and did I mention insulation, California?
  • Hotwater heaters – Can anybody say, “tankless”?
  • Power generation -If every power plant was upgraded to the latest generation of technology – in the power generation world – newer tends to equal more efficient all else being equal – the impact could be staggering. But bottom line, this means our regulators would have to approve the increase in utility capital expenditures and pass those costs on through to us in the short term. That’s about as likely as George W announcing a plan to tax every SUV Detroit makes and give the money to the poor to buy solar systems.
  • Solar – As for solar – which is typically sold on a “reduce your energy bill” pitch, not a chance. At $0.15 to $1.00/kwh (depending on who’s counting and how they count), if we actually reduced a significant amount of our building load with solar power we’d likely send our GDP plummeting. There are lots of reasons to love solar, but decreasing energy usage per unit of GDP is not one of them. At least, not yet.

These aren’t new ideas. But definitely worth repeating until we learn the lesson.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Editor to Alt Energy Stocks, and a blogger for CNET’s Cleantech blog.