March 2008

How Best to Put Out the Fire? Solar in SF, Zero-Emission Cars

The public will for change exists. The research supports it. The economics are getting there. So what's the problem? Some of the same problems that have stifled green adoption for the past several decades. In the specific cases below? Politics and Detroit.

Word from both Chris Morrison of VentureBeat and Craig Rubens of Earth2Tech that the City Supervisor in San Francisco has stalled a plan that would have provided $6 million in consumer solar rebates to residents that implement solar electric systems. His concern? That only the wealthy will be able to take advantage.

I know housing prices in the city have come down a bit, but aren't most property owners in San Francisco considered wealthy anyway? Aren't there also programs and special financing in place for solar installations for affordable housing projects? I know that solar on affordable housing is one of the areas where Schwartz client Borrego Solar specializes, so I suspect the answer is "yes." I think it is time that politicians get creative and invest more in green rebates and tax credits, rather than focusing solely on which is the best approach, taking credit and further delaying something that is sorely needed.

Which brings us to Detroit and a post from Katie Fehrenbacher of Earth2Tech. Apparently Big Auto has successfully muddled the adoption of zero-emission cars in California by focusing the debate on which type of car should qualify, battery, plug-ins or fuel cell automobiles.

I really think the best analogy for some of the inane debates taking place in the cleantech and renewable energy world are analagous to firemen watching a house burn down while they argue over whether it is most effective to use foam, water or sand, and which qualifies as a truly efficient fire-fighting tool. I hate to disagree with the great Billy Joel, but we did start the fire and we are continuing to feed it.

Posted by Jason Morris on March 28, 2008 at 10:45 AM
| TrackBack (0)

Green Jobs

Yesterday's New York Times features a piece by Steven Greenhouse called "Millions of Jobs of a Different Color." He writes:

"Presidential candidates talk about the promise of 'green collar' jobs — an economy with millions of workers installing solar panels, weatherizing homes, brewing biofuels, building hybrid cars and erecting giant wind turbines. Labor unions view these new jobs as replacements for positions lost to overseas manufacturing and outsourcing. Urban groups view training in green jobs as a route out of poverty. And environmentalists say they are crucial to combating climate change."

Positive economic impact of new green technologies is an important topic, but I was so pleased to see Mr. Greenhouse go on to say that "many advocates of green employment say the jobs should be good for the workers as well as the environment."

Mark Richey Woodworking and Design, a high-end architectural millworking firm we've been working with, is the first company of its type to use a biomass furnace to burn all wood waste and eliminate use of natural gas for heating the shop. They're also working on installing a wind turbine that should provide enough electricity to take Mark Richey Woodworking off the electric grid.

If you speak with Mr. Richey--a world-class climber who's seen first-hand environmental damage that's not apparent to most Americans--you'll quickly feel his dedication to doing his part to help the environment. What's striking is how deeply he believes that being good to the environment isn't at odds with running a profitable business; on the contrary, the two go hand in hand.

Mr. Richey's company employs nearly 100 people in Massachusetts and is able to be competitive in an industry that's been losing ground to Canada and China partially because the company has eliminated its once substantial natural gas bill.

Certainly, keeping jobs in the U.S. is very "good for the workers," as Mr. Greenhouse says. Mr. Richey's gone beyond that by installing a sophisticated ventilation system that cleans dust from the air to improve the comfort of his employees. The shop, working at full tilt, is cleaner than many offices.

Green employment, indeed.

Posted by Laura Kempke on March 27, 2008 at 12:35 PM
| TrackBack (0)

Solar speedbump: Mountain or Mole Hill?

Last week saw the release of a report predicting that solar would see a serious speedbump in 2010, as the current shortage of polysilicon eases and solar cells flood the market. The report predicts difficulty for both thin-film players and the chrystalline silicon makers that depend on polysilicon as a key ingredient in their products. For green marketers in solar, this could mean that the window of opportunity is much smaller than previously thought.

This report looks at the supply side of the equation and sees doom for manufacture profits and gloom for their investors. I wonder, however, how much the report thoroughly investigated the demand side of the equation. There are a number of things that should increase solar demand in the coming years and may partially or substantially offset any increase in supply:

• Improved storage capacity--one of the biggest technology bottlenecks to the adoption of all renewals has been battery and storage efficiency. That said, millions are being invested in battery companies right now, including A123, Lion Cells and Seeo, which will help in terms of power storage in applications like electric cars, solar and wind. If the storage gets better, then the demand and ROI will go up significantly.
• Speaking of electric cars--one of the biggest contradictions in my mind is the use of an electric car charged on coal-generated electricity. What's the answer? Charging it with renewables. The use of solar combined with good battery technology and electric cars just makes too much sense. It also doesn't require substantial infrastructure overhauls like changing the types and locations of fueling stations. A solar implementation on a house, office building or even carports, would be a huge advantage.
• Government support--next January will definitely see a change in the political climate for solar and other renewables. All three major presidential candidates have stated that they believe in renewable sources of energy and will commit more investment in areas like solar. This includes direct investment in R&D and other areas, but also better federal tax incentives and rebates. These rebates will allow solar companies to protect some of their margins as the supply of solar increases.

There is no doubt that solar is riding high right now because of the perfect storm of high demand, low supply and large sums of investment. It also makes sense that the market wil mature eventually and it will be a bit more commoditized. But to predict it is going to get there in two years is a bit silly IMHO, since we have just begun to scratch the surface of building integrated photovoltaics and other solar applications beyond the panels you see today.

Posted by Jason Morris on March 25, 2008 at 10:43 AM
| TrackBack (0)

Green + Green = Growth

According to AlwaysON, green funding in Q4 2007 dipped a bit from the previous quarter.

Short-tem skeptic view: Yikes, a 50% dip from $1b to $500m shows that the market is stalling.

Long-term realist view: Get real. Look at year over year growth, this market is just starting to grow. Plus, check out the quality of these deals, like A123 Systems raising $30m.

I'm with the realists.

Posted by Mike Farber on at 10:15 AM
| TrackBack (0)

Quick hits: Thin Film market overview, Green gadgets, Geothermal

Some musings as we head into the last weekend of winter darkness:

-The AP did a great overview of the thin-film market and some of the benefits of non-silicon based solar cells yesterday.

-Global Solar Energy opened a new plant yesterday that will eventually make it one of the largest CIGS thin-film production facilities in the world. One blog discusses how First Solar has to date, gotten off almost scott free in terms of competition and how the new plant could change that. As I've said in the past, the more successful the industry is as a whole, the better, as the marketing and lobbying power of the industry needs to grow rapidly. *Disclosure: GSE is a Schwartz client.

-Word is that geothermal is getting investor attention and beginning to take off. This is very interesting because the government is also boosting its investment in geothermal in the FY 2009 budget. Others getting a boost? Solar PV, Wind and Biomass. The news is not quite as good for tidal energy.

Finally, a cool round-up of money-saving, green gadgets on CNET.

Enjoy your 47-hour weekend!

Posted by Jason Morris on March 7, 2008 at 9:56 AM
| TrackBack (0)

The Word from WIREC: Day 2

So I am going to have to report back on how WIREC day two went in a future post as our meetings today took us to locations off site, but still some interesting tidbits I didn't get to yesterday:

-One business development executive at a solar concentrator company said that he got in "very early" on sponsoring and exhibiting at WIREC, giving him a large booth size and prime location alongside the big boys (BP, Chevron, etc). If you are a green marketer with a gambler's mentality, there is definite risk and reward to taking this approach. He saw enormous reward as they were front and center to anyone entering the expo. A solid relationship with ACORE also helps.

-On which shows should you gamble if any? The best shows are obviously ones in which there are other local key audiences that can be leveraged in case the event is a bust. If you can schedule some local meetings/drop-bys off site, you can still end up with qualified prospects from the travel associated with an event. DC is a great location since there are a lot of companies with headquarters in the area, as well as a media and government-rich audience with whom you can network. The San Francisco Bay Area, Boston and New York are also good locations. Anything beyond those markets can be tough depending on your vertical focus.

-From a speaking perspective, it can be tough to justify the time and expense to present at an unproven event. Nothing is worse than having your executive speaking to a room of six unqualified attendees who don't ask questions. Therefore, while taking a chance on exhibiting costs can be prohibitive, so is the credit capital cost of sending your executive to an unknown conference.

-I met with an investment company (hybrid of an investment fund and a venture firm) that actually sees the renewable energy world very similarly to the way that green marketers and marketing/PR firms see the industry. Solar and wind are the most mature, with biofuels, hydro power and others a bit further off. That is not to say that companies in those markets cannot benefit from government relations, public affairs and PR, but those campaigns would be built around early mindshare, driving investment and and educating the market. Solar and wind tend to be the companies in a position to commpete on a product basis.

-WIREC was not very well attended from a media standpoint, but there was a young analyst firm exhibiting, Emerging Energy Research. It is interesting to see some of the boutique firms beginning to pop up offering advisory services to vendors of renewables and consulting services to commercial and government organizations. Who will be the Green Gartner?

-The most interesting item to come out of the WIREC show? How much government money there is that can be invested in renewable companies, but how few companies understand how to tap it. Government relations seems to be the great untapped market opportunity for a lot of renewable companies. It is money that requires no diluting of equity, no forfeiting of intellectual property rights and no decision as to whom you sell the product. If I were a VC concerned about becoming over invested in one of my portfolio clients, this would seem a like a great option since my equity stake and value would only be positively impacted by bringing on the government as an investor. With $152 million going into solar and $53 million (approximately) going into wind, GR seems like a great place to get a significant ROI.

Here endeth my WIREC visit. Off to Dulles to complain about the lack of midday direct options to the West Coast.

Posted by Jason Morris on March 5, 2008 at 2:50 PM
| TrackBack (0)

The Word from WIREC: Day 1

Tuesday marked the first day of WIREC and it was an interesting start. Some observations:

-Kudos to the WIREC folks for doing a much better job than some other conferences at having an efficient registration system. At Solar Power 2007 in Long Beach, a colleague and I stood in line for more than 90 minutes for badge pick up (we pre-registered) and ended up missing a meeting as a result. WIREC knew the event would be well attended and they prepared accordingly. It took about four minutes to get our badge.

-While photovoltaic (PV) solar was the rage at Solar Power 2007, solar concentrators seem to be the most prevelant technology at WIREC. Sopogy, SkyFuel and Abengoa were a few of the concentrator companies exhibiting, albeit with slightly different strategies and target markets. Global Solar Energy was one of the major PV manufacturers present (*disclosure: GSE is a Schwartz client).

-Wind and solar are again the most dominant technologies on display in terms of commercially available products. Also well represented are biofuels, biomass and firms looking to service those companies (legal firms, government relations, etc.).

-Big kudos to ACORE for sponsoring a free lunch and again to the WIREC folks for having enough seating.

It'll be interesting to see if the traffic picks up a bit more tomorrow and to see what companies are saying regarding the ROI of exhibiting. There are obviously a lot of these events popping up around the country and abroad, and finite green marketing budgets need to know which events are worth the growing costs.

Posted by Jason Morris on March 4, 2008 at 11:40 PM
| TrackBack (0)