El Paso Solar Energy Association - EPSEA

I walked along the mud-caked fringe of farmland and tried in vain to make out the profiles of a quarter of a million baby tomato plants. It was hard to believe that in just a few months this perfect rectangle of endless muck would burst into three million pounds of ripe red fruit, and even stranger to think that this vast monoculture just might be leading the world toward agricultural sustainability -- particularly considering that not one of the plants before me was organic, heirloom, or pesticide free.

"When I see my fields, I see a canvas," said Frank Muller, the sunburned avatar of agri-technology who sold 60,000 tons of last year's tomato harvest to transnational food giant Unilever, which subsequently processed the lot into bottles of Cheesy, Chunky, and Robusto-style Ragú spaghetti sauce.

Muller and his two brothers farm 219 mammoth tracts of land in the Sacramento Valley. They are the sons of Swiss immigrants who settled in California less than half a century ago, and while the brothers do cultivate a few organic fruits and vegetables here and there, when it comes to the health and well-being of their cash crop, the Mullers rely on conventional farming methods.

Recent estimates blame agriculture for as much as 30 percent of global greenhouse gas emissions, and nitrogen fertilizers account for more miasma than all those methane-belching cows and sheep combined. But even as the power of the American food movement waxes, organic farms still make up less than 1 percent of this country's cropland. The unignorable presence of that other 99 percent has forced many environmentalists to a singularly pragmatic conclusion: If there is going to be a significant attempt to slash the use of water, fossil fuels, fertilizers, herbicides, insecticides, and fungicides -- the resource-sucking carbon and chemical footprint that has come to define the modern agro-industrial complex -- the bulk of that effort will have to emerge from the operations of large-scale, conventional farms. The assault on business as usual will come from the everyday operations of Frank Muller's farm.

"If you're not organic, it doesn't mean you're bad," Muller says. Still, the notion of the world's megafarms leading the way to global sustainability may chill the hearts of Wendell Berry, Michael Pollan, and Alice Waters, not to mention their legions of followers. The very idea opposes the philosophy and politics of the Slow Food movement, the grass-fed movement, the organic movement, and the local food movement.

But in the past few years, some of the world's mightiest and most profitable tomato syndicates -- including Del Monte, Heinz, and Unilever -- have allied themselves with a small, relatively unknown, and extraordinarily ambitious consortium called the Stewardship Index for Specialty Crops. In 2008 the Stewardship Index began the business of gathering together many of those who share a stake in industrial agriculture, be they farmers, transnational packagers and retailers, or environmentalists. The goal is to get them to agree on what, exactly, one ought to measure to understand and gauge the environmental impact of the seed-to-shelf life cycle of any produce-based product, from frozen french fries to canned almonds to bottled pasta sauce. Working committees include representatives from Bayer CropScience, General Mills, PepsiCo, and Walmart; trade groups such as the Western Growers Association and the National Potato Council; and nongovernmental organizations such as the Natural Resources Defense Council (NRDC), the Organic Center, and the World Wildlife Fund. And then there are the academics -- from Berkeley, Stanford, Yale, and the University of Arkansas' Sam M. Walton College of Business -- all of whom have taken an interest in how sustainability can permeate megafarm and megastore alike.

The Stewardship Index calls its proposed yardsticks "sustainability metrics," and the hope is that once everyone in the industry can quantify environmental sustainability, they will be able to compare and contrast their levels with those of their industry peers and eliminate their own excesses. The logic is fairly straightforward: sustainability aligns with efficiency, and the elimination of any size, shape, or form of wasted resource will save the world's largest companies untold dollars, euros, and yuan. Thus will stewardship of the earth come to align with the profit motive, and sustainability metrics will become the lingua franca of staunch capitalist, radical environmentalist, and everyone in between. At least that's the idea.

Here on the Mullers' fields in Yolo County, the translation of agricultural custom into sustainability metric had already begun. I had come to California to see tomatoes and found a revolution in measurement, so I followed the fruit from family farm to the world's largest retailer in order to catch a glimpse of the future of food.

Continued...

 

 

***

Editor's note: This is an online preview of a story appearing in the Natural Resource Defense Council's Fall 2010 issue of OnEarth Magazine.

Alan Salzman of VantagePoint Venture Partners has remarked that solid-state lighting is causing "a $100 billion industry to flip," and in his view, the mammoth lighting incumbents like Philips, GE and Osram "might catch up -- or might not."

We're in the midst of the great lighting transformation -- with solid-state LEDs on the cusp of transforming the lighting industry.  The Edison bulb will soon be a relic and CFLs an interim step.

This transformation comes as a result of greatly improved LED (light emitting diode) chip efficiency and light output.  But it also comes from technological improvements in phosphors from firms like Intematix, advances in device packaging, and in the case of Nuventix, innovations in dealing with the heat that comes from LEDs (excess heat that can reduce efficiency and lifetime of the lights).

Nuventix has received more than $32.5 million in funding from Braemar Energy Ventures, Uniquest of Korea, Advanced Technology Ventures, RHO Ventures, InterWest Partners and CenterPoint Ventures for its active thermal management technology.

I spoke with Tom Dalton, SVP of Sales & Marketing at the firm.

The Austin, Texas-based 25-employee company provides active thermal management for electronics but its main thrust is in LED lighting.  With technology spawned from Georgia Tech, Nuventix essentially replaces unreliable and noisy fans with an absolutely unique cooling method.  The firm uses turbulent pulses of air to cool LEDs and other electronic components.  Their SynJet technology moves air across the heat sink and lowers the junction temperature of the LEDs.

Dalton explained the technology in these terms: "Picture a loudspeaker with a flexible membrane instead of a paper cone.  As that membrane is moved at 50 cycles per second inside an enclosure, you push air."  But it's done with "no frictional parts" for "very high-reliability cooling."  More notes on the Nuventix technology can be found here.

It's a "unique niche without too much competition" according to Dalton, as major LED manufacturers open their eyes to a non-passive cooling technology in LED lighting.  The SynJet device allows manufacturers of LED luminaires to reduce the size and weight of metal heat sinks, but still provide the promise of 100,000-hour lifetimes.  It's those LED lifetimes that make or break the solid-state lighting value proposition with regards to cost, maintenance and relamping.

Mike Dauber, a partner at Battery Ventures and investor in LED fixture and control firm Redwood Systems, recently said, "The lighting value chain is very complicated and highly controlled; a startup must show incentives to everyone in the value chain."

That's why Nuventix has had to sell up and down the value chain -- not just to the luminaire companies who will actually buy their sub-$10 cooling device but to the LED chip manufacturers like Philips, Osram and Bridgelux who might recommend their component, as well as to the retail lighting end-users like Starbucks or Louis Vuitton.

"The major lighting companies have engaged with us because fans are not feasible from a reliability standpoint," said Dalton, adding, "We have a position with most of the major leaders in lighting."  Nuventix' first big customer win was in the Philips Fortimo LED downlight module.  In the luminaire market, a 3,000 to 5,000 unit order is significant.  In the LED lamp market, the potential is for quantities an order of magnitude or two larger than that.

As Michael Kanellos reported, the next stage in LED bulbs' transition to the mass market will be figuring out which ones work well.  Although LEDs consume nearly one-tenth the power of incandescent bulbs and half the power of compact fluorescents, they often have other issues regarding lighting quality -- and it's lighting quality that really determines whether an LED light will be used.

Emerging and incumbent LED engine and bulb suppliers include Lemnis Lighting, Illumitex, Bridgelux, Philips, Osram and General Electric.

In the words of VC Alan Salzman, "When these transformations occur, some incumbents 'get it' and thrive, some stick their heads in the sand and go away. Some new guys come on the scene, some of the big guys adapt, some go the way of the dinosaur."

Back in March 2008, NextEra Energy filed the original application for certification with the California Energy Commission (CEC) for a 250 MW plant.

Twenty-nine months later, the full commission finally approved the project.

This is the first pure concentrating solar power (CSP) plant approved by the CEC since SEGS X in 1990 (although it should be noted that the CEC did approve a 50 MW solar hybrid plant in Victorville in 2008).

Summary of the NextEra Beacon Solar Project

Output: 250 MW gross

Land: 2,012 acres of former farmland (alfalfa)

Technology: Parabolic Trough

Storage: None

Cost: ~$1B (which works out to $4.00/W)

Expected online date: Originally 2012 (now 2013-14)

Water usage: 456 million gallons/yr of groundwater

 

Why did it take so long to approve? There are a couple reasons.

1. Lost knowledge

From 1990-2007, there weren't any CSP project proposals in front of the CEC, so the staff familiar with the projects have likely retired, requiring the new folks to get up to speed on the technology.

2.  Water

This project is wet-cooled, and is projected to require 456 million gallons of water per year.  That might be a relatively minor concern in the rainy Pacific Northwest, but this plant is in the Mojave Desert, which receives about five inches of rainfall per year.

Part of the solution proposed is that Beacon will use recycled water pumped in from a nearby town.

This is a big hurdle to clear, but several more remain for Beacon Solar.

PPA: this project needs to sign a PPA with a major utility (PG&E, SCE, or SDG&E) - and then get the PPA approved by the CPUC

Financing: this project will likely need the subsidized debt that comes with a Federal Loan Guarantee, in order to make the economics work for the equity investor (see our previous article on "Why a PPA is Not Enough"). 

Nevertheless, this is a promising sign, as the CEC was able to move from a proposed decision to a final decision in ~2 months, which means that Brightsource, Abengoa, and STA should have final decisions on their projects by early October.

See the table below for more details on the U.S. CSP projects in the pipeline, along with the regulatory milestones cleared (and outstanding).

The transmission networks spanning nations to provide light, heat and electricity will soon undergo a radical transformation. Most of the world's developed countries have invested in or plan to invest huge sums to implement smart energy infrastructures within the next two decades. The smart grid will revolutionize the way utilities and consumers measure and monitor electricity usage. This effort is expected to save money and aid energy conservation. But the grid will also result in the creation of massive amounts of new data, data that can reveal intimate details about households and the people who live in them. The risk of exposure or misuse of such data creates a new set of concerns for consumers and privacy professionals.

The smart grid will rely on smart meters, which will record household energy consumption and communicate it back to power providers. These new smart meters will replace the electromechanical meters that are attached to most households across the world today.

Smart appliances, which are being developed and sold by some of the world's largest manufacturers, will enhance the intelligent grid, feeding smart meters with real-time information about electrical use down to the appliance level -- smoothie at seven, treadmill at eight, for example. (According to a recent Zpryme report, the global market for household smart appliances is projected to reach $15.12 billion in 2015.)

This precision will allow utility companies to analyze peak power usage times and set electric rates accordingly. In turn, households will gain a tool for more efficient management of their energy consumption, which they could use to lower costs and conserve energy. For example, customers will have the ability to time their laundry chores for off-peak energy hours.

When the grid, the meter, and the appliances are implemented and integrated, consumers will be able to fine-tune their energy consumption to get the best rates and utilities will be able to more effectively manage power distribution and identify and resolve problems remotely.

The savings potential is expected to be massive. The grid is also expected to help power suppliers prevent blackouts and brownouts by allowing for power distribution to be delivered more evenly and on a need-based schedule.

Nations and utilities are investing in the development of the smart grid, and many companies have already deployed smart meters. But while those involved throw millions, even billions, toward the grid, cautioning voices are calling for privacy protections.

"We are talking about implementing a very new type of network...a network that people are always attached to," says Rebecca Herold, CIPP, founder of Rebecca Herold and Associates, LLC. Herold has led the U.S. National Institute for Standards and Technology (NIST) Smart Grid privacy subgroup since June 2009 and co-authored the NIST report on smart grid privacy, which is under review by NIST and expected to be published soon.

The information collected on a smart grid will form a library of personal information, the mishandling of which could be highly invasive of consumer privacy," said Christopher Wolf, co-author with Jules Polonetsky of a whitepaper published by the Future of Privacy Forum and the Office of the Information and Privacy Commissioner of Ontario. "There will be major concerns if consumer-focused principles of transparency and control are not treated as essential design principles, from beginning to end."

Utilities are aware of the privacy concerns, according to Rick Thompson, the president of Greentech Media. "It's absolutely on their radar," he says, adding, "That doesn't mean they have a full understanding or solution to solve that problem, but I think it's an area that they are investigating heavily."

It's an area worthy of investigation, according to many. Some say the smart grid will be "bigger than the internet," which will result in an exponential increase of coveted, valuable and potentially identifiable data.

 "You come into new types of privacy issues because you are now revealing personal activities in ways that are not historically, or have not been considered to date as being personally identifiable information," Herold says. 

Beyond knowing how often the refrigerator opens or what time the garage door activates each morning, grid data may be a way of discerning when a household is empty or full, when family members go to bed at night or what time the kids come home from school.  Marketers might want to tap into the data to find out when a household might be due for a new refrigerator or washing machine. Law enforcement might be interested in corroborating a story. An insurance company might want to know if a homeowner's alarm was turned on when a burglary occurred.  A divorce attorney might want to subpoena energy-use records to aid a case.

Who owns the data?

In a recent newspaper article, Simon McKenzie, the chief executive of a New Zealand electricity supplier, said in that country, where hundreds of thousands of smart meters are currently being installed, "We're starting to see the retailers and network companies say: 'Hey, there are a number of different ways that we haven't even considered that we could utilize this data...to provide better service or solutions to customers." The full potential of smart grids has yet to be realized, McKenzie told The New Zealand Herald.

But should retailers and other entities have access to the data? That is a question being examined on a global scale.

In response to the McKenzie's comments, New Zealand Privacy Commissioner Marie Shroff said that companies need to be transparent about what information is being tracked and collected. "People need to be able to make fully informed decisions before agreeing to the new technology," Shroff said.

Others call for limited use of the data gleaned from smart grids.

 "The risk with a rich new data source is the temptation to use the information for more than originally intended," Australian Privacy Commissioner Karen Curtis told those attending a smart infrastructure conference earlier this year.

That's why it will be crucial to answer the question of who owns and has access to consumers' energy usage data, which could reveal existing and emerging types of personally identifiable information, Herold says.

It's a familiar question for privacy pros, who have grappled with it in other areas of practice, but perhaps less familiar for utilities. In a recent study, GTM asked utility companies who owns the granular data collected by smart meters -- the utility company, the consumer, or a third party. The results showed a decided lack of consensus.

"The interesting thing is that it was pretty well split evenly between those three options," said GTM's Rick Thompson. Of the companies surveyed, 39 percent said the data belonged to the consumer, 29 percent said the utility itself owned it, and 32 percent were unsure.

[Chart from Greentech Media's 2010 North American Utility Smart Grid Deployment Survey]

The president of an advocacy group for the smart grid industry is more decided on the topic. "The consumer should always have access to that data," says Kathleen Hamilton, president of the GridWise Alliance, which counts more than 100 companies and organizations as members. "I think the consumer is going to be the owner of that data," Hamilton said. "But I think what consumers don't understand is that when they give their data to others, if there aren't privacy provisions in place, they can use the data in ways that either the consumer may not agree with or think appropriate."

That's a worry many can relate to and a debate that must play itself out soon, as 70 percent of North American utility companies polled for the aforementioned GTM survey indicated that smart grid projects were either a "strong" or "highest" business priority between now and 2015. Governments keen to the potential have invested heavily in smart grid infrastructures. In the U.S., President Obama allocated $3.4 billion in national stimulus monies to utility companies last year to encourage development of smart grid technologies. The European Parliament's passage of the 3rd Energy Package last year will outfit 80 percent of EU electricity customers with smart meters by 2020. In Sweden, smart meters are now mandated by the government. The U.K., Canada, Australia, New Zealand, parts of Asia, Denmark, and the Netherlands have all reported plans to build intelligent grids. And the Chinese government has allocated $7.3 billion to grid projects in 2010.

It is clear that the potential privacy pitfalls loom large. Less clear is the best solution to prevent them.

"I think there are still a lot of questions out there about what the correct solution might be," says GTM's Thompson, predicting that solutions will vary based on the regulations of various regions.

Like other areas of data privacy, regulation is a word that could divide the debate in the months and years to come.  

Some predict smart grid privacy issues to be bigger in Europe than other places due to the strength of the bloc's Data Protection Directive.

So far in the U.S., regulation has focused primarily on securing the grid infrastructure from cyber-attack. For example, the Grid Reliability and Infrastructure Defense (GRID) Act, introduced in April, charges the FERC with safeguarding the transmission grid from cyber-threats. The bill also tasks FERC with enforcing privacy measures, stating: "the Commission shall protect from disclosure only the minimum amount of information necessary to protect the reliability of the bulk power system and defense critical electric infrastructure." The House passed the bill in June, but the Senate has yet to vote.

Other bills have focused on ensuring that consumers have access to the data their homes' meters produce.  In March, Rep. Edward Markey (D-MA), chairman of the House Select Committee on Energy Independence and Global Warming, introduced The Electric Consumer Right to Know Act (e-KNOW), legislation to ensure consumers have access to free, timely and secure data about their energy usage. It also calls for the FERC to develop national standards for consumer energy data accessibility, to help utilities and state regulatory agencies formulate their policies, according to Markey's website.

State lawmakers have begun drafting their own legislation. In Colorado, a state where smart meter implementation is already widespread, Senate Bill 10-180 calls for the creation of a task force to recommend measures to "encourage the orderly implementation of smart grid technology" in that state. The bill says that one of the issues the task force must determine is the potential impacts on consumer protection and privacy.

A call for standards

Privacy experts say the lack of legal protection surrounding the smart grid is concerning. They are calling for standards.

"In the absence of clear rules, this potentially beneficial smart grid technology could mean yet another intrusion on private life," Jim Dempsey of the Center for Democracy and Technology (CDT) said in a March filing to the California Public Utilities Commission (CPUC), which held a three-day hearing that month to explore smart grid policies.

"The PUC should act now, before our privacy is eroded," Dempsey wrote.

The CDT teamed with the Electronic Frontier Foundation (EFF) on the filing, urging the CPUC to adopt "comprehensive privacy standards for the collection, retention, use and disclosure of the data" gleaned from the smart grid.

The National Institute of Standards and Technology smart grid privacy subgroup, which Herold leads, has released two drafts of the privacy chapter "Smart Grid Cyber Security Strategy and Requirements." The document includes a privacy impact assessment and addresses possible risks the smart grid presents -- including cyber attacks, data breaches and the vulnerability of interconnected networks' increased exposure to potential hackers.  

The draft says that while most states have laws in place regarding privacy protection, those laws do not necessarily relate to the types of data that will be within the smart grid, and many existing laws are specific to industries other than utilities. The group recommends that provisions be included within privacy laws to protect the consumer data held by utility companies. The final NISTIR 7628 Version 1 is expected soon, after which it will be submitted to the Federal Energy Regulatory Commission (FERC).

Minimize, destroy, build privacy in

As with other privacy debates, those pushing for smart infrastructure privacy protections espouse mantras often heard in data protection circles-data minimization, data destruction and privacy by design.

Utilities should minimize the amount of household data collected and should keep it for the shortest amount of time possible, advocates say, in order to minimize the risk associated with storing such data.

Ontario Privacy Commissioner Ann Cavoukian agrees. In her whitepaper, she also cautions that privacy concerns must be considered early in the planning stages in order to mitigate the risks surrounding the revealing data meters collect.

By designing privacy into the grid, "we can have both privacy and a fully functioning smart grid," Cavoukian wrote in a Toronto Star Op-Ed.

The government of Ontario has committed to the installation of smart meters in every home and business by the end of 2010 and Cavoukian has partnered with major utilities to develop "gold standards" for building privacy into grid projects.

Some privacy advocates point to Ontario's Hydro One as a utility company setting the standard for baking privacy provisions into its policy before deploying smart meters. Rick Stevens, director of distribution development at Hydro One says the protection of consumer's information was built into smart meters' designs based on Ontario's privacy regulations.

"The regulations certainly set the context for the project," Stevens said. "We're just really ensuring that we bake those protections into the product that we put out there. Given that this is new technology, we're going to be very careful to protect consumer interest as we roll these out. I know we, as an industry, take it very seriously."

Hydro One has 1.1 million meters already deployed, and at least 700,000 of them are currently reporting data back to the utility on an hourly basis. Stevens says that, as a rule, the utility does not sell customers' data to third parties and would only share data after obtaining written authorization customers.  

The president of LinkGard Systems, an Armenian software maker, says his company's Energy Management System, which is currently being tested in the U.S., was built with privacy in mind. "It is our strong belief that the utility company has no need to control individual appliances in a residence or a commercial location," said Hovanes Manucharyan. "The same effect can be achieved by using solutions that don't require the customer to expose their private energy usage information....We feel that this model is friendlier towards privacy since the utility doesn't need to acquire, store and manage potentially private data from a customer."

Hovanes said the stronger regulatory framework of the EU could result in slightly different implementations of smart grid technologies in that market.

Beyond PII

We haven't yet heard a debate on whether our garage-door-opening habits qualify as personal data, but it's a question that privacy experts say should be answered.

"People have to realize it's a new type of network," says Herold. "It's 'always on,' passively collecting information about people in their homes. It's more than just PII, it's personal activities," she adds.

This is what concerns a California man who staged a dramatic protest recently when Pacific Gas & Electric attempted to install a smart meter at his home. Calling it an "unconstitutional invasion of his privacy," he locked his existing meter, saying, "PG&E needs to be stopped in their tracks here."

Education needed

But smart meters are being rolled out in many places, and typically without protest. Indeed, though smart grids are certainly on the radar of utilities and governments, most consumers are in the dark. According to a recent Harris Interactive poll, 68 percent have never heard of the smart grid and 63 percent "draw a blank" about smart meters. Experts say that will change.

"You are going to see a lot more awareness over the next 24 months," says Greentech Media's Rick Thompson, "but in terms of becoming a true household name, I'd say that's still three to five years out." Thompson says utility companies are just starting to understand the importance of launching educational campaigns aimed at consumer awareness.

A newly formed coalition of companies and organizations -- the nonprofit Smart Grid Consumer Collaborative -- hopes to increase consumer awareness in the area. "The grid is not really smart unless the consumers are able to be active participants," said Katherine Hamilton of the GridWise Alliance, one of the founding members of SGCC.

Hydro One's Stevens says building consumer awareness by communicating the cost-savings potential and environmental benefits is what helped make his company's transition to smart meters successful in Ontario.

"For the most part, it's been positive," Stevens said. "I think the reason for that is the type of information we've been able to provide to customers."

Stevens said, however, given his company's success with smart meters, that the only reason to have increasing regulations in the future would be if issues arise that require them.

When asked whether utility companies' self-regulatory efforts will be sufficient to stave off regulations, Herold said it's important to consider just how many different players will be involved in the smart grid, including non-energy sector companies creating applications and appliances.

 "Self-regulation is a good goal, but when you start looking realistically, how do you ensure entities consistently provide protections throughout the entire smart grid if you don't establish requirements they must all follow?" Herold asks.

She points to the health care and financial industries as evidence that regulations are often necessary.

"It's always important, in dealing with privacy, to not only take what we know from past experiences, but also have our minds open to possible impacts going forward."

Some say that having the right people on board will help companies avoid issues. "One of the key things utilities should be doing today is training and hiring privacy professionals," says Future of Privacy Forum Director Jules Polonetsky, CIPP. "Data enables the grid, but could also be its Achilles' heel, if companies don't have the experts in place to help shape decisions as the grid is being built."

Stevens agrees, saying that it's in the utility industry's best interest to maintain consumer privacy protections moving forward.

"It's a necessity," he says. "Otherwise, it'll backfire on us."

***

This article was originally published in the July 2010 edition of the International Association of Privacy Professionals’ member newsletter, The Privacy Advisor, and is reprinted here with permission.

It turns out that people really are the same everywhere.

OPower, which has created a software service that encourages consumers to reduce power consumption, managed to reduce power consumption by around 2.1 percent for customers participating in an energy efficiency program in Minnesota sponsored by Connexus Energy. The cumulative savings from the project came to almost $1 million.

The results are similar to what OPower has seen in tests with utilities in Sacramento and Washington state, according to OPower CEO Alex Laskey -- and that's a big deal. Skeptics have questioned whether OPower's system would work outside of eco-belts and urban areas. The software is rooted in behavioral psychology. OPower compares your power usage with your neighbors and similar households and then nudges you, partly through guilt and partly though handy energy efficiency tips, to keep up with the Joneses. Meanwhile, efficient homes earn the equivalent of gold stars.

The greater percentage of savings come from the more lax households, "but the gap isn't as big as you'd expect," he said. Thus, it works on both Goofus and Gallant. In general, the company curbs between 1.5 to 3.5 percent off a power bill with the average falling toward 2 percent.

Sacramento -- the seat of government in a state with de-coupled energy prices, a green governor and where air conditioning is a major contributor to peak power problems -- is arguably tailor-made for OPower's sort of system. Washington state, on the other hand, is a stronghold of the environmental movement.

Connexus's territory in Minnesota is almost the polar opposite, said Laskey. It is represented in the U.S. Congress by a conservative Republican. Many of the customers live in rural communities or in distant exurbs. And it's Minnesota where household heating is an absolute necessity several months of the year. Yet the results in all three areas are similar.

Laskey also noted that customers become more engaged, not less, as time goes on, the opposite of what some companies with smart thermostats have experienced. The average monthly savings in Minnesota started below 2.1 percent. Now the savings rate is around 2.5 percent. (Connexus has 40,000 homes engaged in the OPower program and the data from those homes is compared with 40,000 control households. The homes in both groups were selected randomly and are scattered randomly through the service territories to ameliorate any socioeconomic or geographic aberrations.)

There is an added potential bonus, too. OPower manages to get a fairly large number of consumers to engage with its programs. A utility, conceivably, could get a 2 percent reduction in power consumption by getting 20 percent of its customers to become 10 percent more efficient.

"We are getting the overwhelming majority of customers to make small changes," he said.

As a result, OPower can potentially become a channel for information on time-of-use pricing and other future programs. "They [utilities] need channels to engage them," Laskey said.

Minnesota is not a de-coupled state where utilities are encouraged to get consumers to conserve power. Nonetheless, the state has passed regulations requiring utilities to reduce power consumption. It also gives bonuses to utilities that hit efficiency milestones. Thus, the utility is making money by curbing power. On average, every dollar spent on OPower can result in $3 to $5 in efficiency savings, he argued.

The results will likely further buoy OPower's rolling success. The company has inked deals with 37 utilities and garnered $30 million in cumulative revenue, a veritable fortune for a greentech startups.

What happens next for the company? There are, surprisingly, few other companies touting similar programs. OPower thus has become the de facto incumbent for the behavioral efficiency programs and pilots. It has also been beefing up its ranks. It has over 100 employees and has been plucking target marketing experts from places like Amazon, eBay and Capital One to develop ways to better pinpoint motivational levers for different customer segments.

The company's biggest competitors, according to Laskey, are Google and Microsoft. Google's PowerMeter and Microsoft's Hohm, however, offer fundamentally different services. Google and Microsoft want to get consumer consumption data and provide recommendations to consumers themselves. Other IT giants have also talked about automating homes to save power.

The software giants are saying that "utilities aren't good at engaging customers and we want to get them out of the way," said Laskey. OPower works with utilities.

That will be a tough sell, he argues. Utilities sell electricity. It is a commodity. Google electrons aren't going to be any more suave or artisan than those from SMUD.

But as OPower racks up contracts, one can imagine others trying to tap into the power of peer pressure.

Four-day visit includes visits with students, residents and community organizations Dallas – U.S. Environmental Protection Agency Administrator Lisa P

TODAY: EPA Administrator Travels to New Orleans to Commemorate Hurricane Katrina Anniversary Four-day visit will include visits with students, residents and community organizations DALLAS – U.S. Environmental Protection Agency Administrator Lisa P

Taiwan Semiconductor Manufacturing Co., the big, relentless and hugely successful semiconductor manufacturer, committed $318 million for LED and solar manufacturing facilities today.

Roughly $100 million will go into LEDs and another $218 million will go into solar. Groundbreaking on the solar facility is slated for later this year.

We've followed the TSMC saga for a while. Last year, the company said it would move into solar and LEDs and allocated millions to a venture group to plunk money into startups. Soon after it began to recruit execs and meet with VC firms on Sand Hill Road.

Then it bought a 20 percent stake in Motech, which makes solar cells. This year, it put $50 million into -- and signed a joint venture with -- Stion, the maker of copper indium gallium selenide solar cells.

Like Samsung, Panasonic, Sharp and Toshiba, TSMC is a large Asian conglomerate with a global sales team and, more importantly, extensive knowledge about logistics, factory management and supply lines, the kind of things the U.S. needs to relearn if it wants to bring greentech manufacturing back. The company is also more amenable to buying startups and working with them than some other Asian conglomerates -- it goes with the territory when you are a factory-for-hire -- so TSMC's push into green could ultimately work to the advantage of many U.S. companies. But make no mistake: TSMC is known for its relentless execution and speed. Traditional solar companies and LED makers will need to watch out for them.

And in other factory news:

--James Stoppert, the relatively new CEO of green chemistry specialist Rivertop Renewables, told us this week that the company will ideally start to produce its eco-friendly version of glucaric acid in the second quarter. Glucaric acid? It can be substituted for phosphates in detergent, which new regulations are sending into the sunset. Rivertop's catalytic process, the brainchild of a chemistry professor from the University of Montana, costs about one-third the price of making the material the traditional way.

It is about the same price as citric acid, but cleans dishes and clothes more effectively. (Citric acid isn't eco-friendly, either. Detergent makers don't squeeze oranges to get it -- they produce it in factories.)

"We will produce a better product at an equal or better price," he said.

As an added bonus, Rivertop could have a relatively simple path to FDA approval. The material has to be tested, but because it will be an ingredient in a larger product, most of the regulatory burden falls on the maker of the final product. The company came out of stealth at the Cleantech Open last year.

--In other solar news, AQT Technologies will show off its Sunnyvale, Calif. factory tomorrow. Governor Arnold is expected to attend. I am going to miss him dearly. Meg "Did you bring enough gum for the whole class?" Whitman and Jerry Brown just don't compare.

--Finally, Toyota said it has sold more than 2.68 million hybrids and will sell at least a million per year for the next few years. By the 2020s, hybrid drive trains could be an available option in all models.

Do you know how many Priuses Toyota sold in 1997? 323. It only sold 19,000 in 2000. I got those stats from a Toyota exec while touring the Toyota City factory in 2006. It was a remarkable place, where robots would sing and parts would fly around on conveyor belts. Read more about it here.

Boulder, Colorado wants to consider its options.

The city has petitioned the Colorado Public Service Commission to effectively remove itself from the hearings over SmartGridCity, a bloated, over-budget smart grid/demand response project slated to link 2,000 homes in the area. The city filed an petition to amend its testimony in the hearings and the amendment essentially seeks to eliminate the testimony of the city.

It is another milestone in a saga we've been following for a while, and certainly not a good turn of events for Xcel Energy, the leader of the project.

City representatives cited several reasons for the move. "First, and most importantly, there is not a clear consensus among the members of the Boulder City Council with regard to the value of SmartGridCity in its present state or the prudence of this investment," the city stated.  Some civic leaders and businesspeople believe that the project in its present state has stopped short of what it was promised to be.

Boulder was also told that the entire cost would be covered by the Public Service Commission. Instead, the project, spearheaded by Xcel Energy, ballooned past $100 million, prompting Xcel to seek payments of $5 million or more from participating companies. Xcel has also sought to recover some of the costs through rate increases, a sticking point for the city. The PSC reluctantly granted Xcel the right to recover some costs.

Earlier this month, the franchise agreement between Xcel and Boulder expired. The company is now operating under a revocable permit that expires at the end of the year.

"Over the course of the next year, Boulder will be studying how best to move forward towards increasing its supply of clean energy," the filing said. Many of the options could involve Xcel, but Boulder said it does not at the moment want to close its options.

Now there's a vote of confidence.

Lighting often takes a backseat to HVAC systems when it comes to discussions about energy efficiency. But there is a lot more that can be done in that space than just swapping in more energy-efficient bulbs.

To expand in the burgeoning field of energy-efficient networked lighting systems, Lumenergi announced on Wednesday the close of a $12.7 million series B round of financing.

The round was led by Braemar Energy Ventures, and includes new investor Townsend VC LLC and continuing investors Low Carbon Accelerator Ltd. and Noventi Ventures. Dennis Costello of Braemar Energy Ventures also joined the Lumenergi board of directors.

The funding comes just a week after the Newark, Calif.-based company announced an agreement to retrofit four government buildings in the Northeast and Western regions of the U.S.

Networked lighting can save about 50 percent to 70 percent of total lighting energy, according to Lumenergi Inc. That savings can be huge for commercial spaces, where keeping on the lights can eat up to 40 percent of total annual electricity consumption.

That savings potential is garnering Lumenergi a lot of attention from government entities, and the latest shot of funding is intended to help the company expand into the commercial side, which has been slower to invest in networked lighting, despite a payback of less than three years.

"It's amazing how much the governments are out front on this. I think they're trying to set benchmarks for how efficient lighting can be," said Michael D'Amour, CEO of Lumenergi.

The latest buildings include two federal buildings in Concord, New Hampshire and two government buildings in Nevada. Both installations are scheduled to be complete by the end of 2010. About 80 percent of Lumenergi's business is currently retrofits, but for new buildings, the payback of networked lighting can occur in just a year's time.

The relative lack of interest of commercial building owners -- until recently, that is -- is at least partially due to the lack of coordination between building owners and their tenants, according to D'Amour. Both sides have trouble coming together and seeing why the other would really want to install the technology.

But the advantages are clear for both, he said. Large public companies are often looking for green office spaces, and networked lighting can actually offer greater control, as employees can have individual widgets to control the lighting about their cubicle.

From the perspective of owners and facility managers, the benefits come not just in terms of energy savings, but in more efficient management of assets. "The facilities managers really like us," said D'Amour. "And the owner cares about the value of the building. We can get rid of a very significant portion of their expenses."

Lumenergi not only adjusts lights for the time of day and the task at hand, but also delivers maintenance information so it tracks the lifecycle of the light to use it as efficiently as possible, and lets facility managers know when bulbs have burned out.

Manipulating lights also makes the technology prime for demand response. But it doesn't involve leaving people in the dark, just as HVAC adjustment doesn't mean turning off the AC all together. Instead, D'Amour said they could set adjustments for decorative or secondary lighting and have it scheduled to shut down at certain price signals or for traditional demand-response events.

The control and convenience of networked lighting is starting to grab the attention of some large building developers, D'Amour noted, as well as a large New York bank that has recently signed on with the company.

A huge step has been taken towards building one of the globe's largest photovoltaic installations.

The Environmental Impact Report (EIR) for the 250-megawatt California Valley Solar Ranch has been issued and is now in the public comment phase.  San Luis Obispo County issued their draft EIR, becoming one of the the first counties in the U.S. to prepare such a document for a large-scale solar facility.  In June, Los Angeles County published its DEIR for the 230 megawatt Antelope Valley Solar Ranch originally being developed by NextLight and now in the hands of First Solar.

"The joys of vertical integration"

You'd think that being a solar manufacturer would be mostly about silicon and wafers and cells and modules. But if you're vertically integrated like SunPower and also designing and constructing the photovoltaic power site, then you're building power plants, not just solar panels.  And your areas of expertise have to span not just the physics of PV, but the intricacies of land use, the biology of endangered species, and a suite of other concerns.

As SunPower VP Julie Blunden said, "This is the power industry. We're putting in a power station, which two years ago -- the concept did not exist.  We are behaving like any power plant developer, trying to provide a thoughtful design and be a good neighbor."

The draft EIR entering the public comment phase marks the end of a very intensive two year process for SunPower and the stakeholders in this project -- from site neighbors to utilities to environmentalists.  Blunden added, "The public discussion is after two years of hard work by SunPower, making adjustments to make the project as low impact and as light on the land as possible."

The 250 megawatt project would include solar arrays covering nearly 1,900 acres, an electric substation, operations and maintenance facilities, public viewing areas, and an approximately 2.8‐mile 230-kV generation tie-line.

Endangered Species, Water Use and Human Neighbors

The site of this solar installation in San Luis Obispo county, The Carrizo Plains, is home to 13 different species listed as endangered either by the state or federal government.  The impact of the project on each of those species, from the San Joaquin Kit Fox to the Giant Kangaroo Rat to the California condor, had to be assessed by biologists in separate studies.  Rare plants and grasses were also part of the assessment.  Fencing design had to accomodate animal movement and "small animal penetration."

All together, 60 biologists were involved in 30 biological surveys.

Water usage both in construction and in operation had to be considered and dealt with.  The initial T20 tracker design involved concrete pedestals but the concrete pedestals were replaced with ground penetrating rods and water usage was reduced by 20 percent.  More efficient panel washing was also part of the water reduction. 

The T20 trackers were also changed to T0 trackers to reduce the visual impact of the project.  Eliminating the trackers also reduced the impact on widlife.

There are only about 75 residences in the area, but steps were nonetheless taken to minimize traffic and noise.  SunPower is involved in employee transportation to the site, as well as temporary housing for workers, since the California Valley Hilton has not been completed.  

Note that although there are solar panels covering 1,900 acres, the project site totals about 4,300 acres.  The non-solar areas will remain uncovered as a permanent conservation measure.

The land itself and the importance of panel efficiency

We've seen the uproar from environmentalists and politicians about building solar plants on pristine desert land. 

The California Valley site is defined as "disturbed agricultural land" and according to SunPower's Greg Blue, a variety of agencies including the NRDC and RETI have pointed to disturbed ag land as the premier site for solar.

Blunden said, "This is a fantastic site and one of the best uses of the land...it's flat with low fog, fantastic sun, and has transmission access with just a little upgrading."

"People talk about central station project development as if land was limitless," said Blunden.

And that brings up another under-appreciated value to SunPower's industry-leading solar cell efficiency.  Because the high-efficiency panels maximize megawatts per square meter, a lot less land is used, entailing a lot less permitting, structures, balance of system, cabling, trenching, roads, shipping, fencing, security, foundations, construction management and O&M.

Land is not limitless -- and efficiency matters.

SunPower estimates that 14-percent-efficient panels would produce 186 megawatts, and 11-percent-efficient panels (who would they have in mind there?) would produce 146 megawatts on the same amount of land.

So what happens next?

The issuance of today's draft EIR marks the beginning of a 45-day comment period. Comments will be taken on the draft EIR, followed by another 30 or 40 days for responses to those comments.   Once the responses are provided, there's another 60 days for revisions to the draft which will yield the final EIR.

The final EIR then goes to the SLO planning commission.  It could be approved at that point or could be appealed.  If it gets appealed, it goes to the board of supervisors for the final EIR certification and then it's back to the county for building permits.  That process can take until February of 2011.  If all goes as per plan, trucks could be rolling in June 2011.

Greg Blue, SunPower's Director of Market Development for Utility and Power Plants, said, "We are very happy and very excited to be in the public phase of the process. We've been working at this for over two years.  This is very a big deal for the county.  San Luis Obispo County has been a leader in renewable energy."

It's also a big deal for the U.S. solar industry.

At a time when many other companies are trying to diversify out of biofuels, Chromatin is jumping in.

The company, which designs chromosomes and tools for genetically modifying agricultural crops, has launched an effort to get into biofuels on its own. It has come up with an optimized pathway for sorghum that it will commercialize itself. The company has purchased a sorghum seed company, Sorghum Partners Inc., and Milo Genetics, another sorghum specialist, and will combine all of these technologies into seeds it can sell to biofuel farmers.

Chromatin won't directly sell fuel, but this is one step closer to producing what one might consider a final, tangible product. Right now, Chromatin gets most of its revenue from licensing intellectual property to seed producers.

For biofuel makers, these are the worst of times. Oil prices have come down from their $140-a-barrel levels two years ago and now hover at around $75 a barrel. The surging interest in electric cars has weakened some of their potential opportunity in transportation. Worse, the major oil companies have yet to seriously commit to specific technologies or companies. Chevron, ExxonMobil, BP and Shell all have alliances for biofuel research, but they aren't touting hundreds-of-millions-of-gallons-a-year production deals just yet.

As a result, most biofuel companies have expanded into green chemicals, jet fuel or food additives. Aurora Biofuels, an algae outfit that sprung from UC Berkeley, is in the midst of repackaging itself as a vendor of tasty omega-3s. Food oils and cosmetic oils, by the way, can sell for tens to hundreds of dollars a gallon, and chemical prices do not fluctuate as spasmodically as gas prices, so these are all sound strategies.

Why sorghum? Philosophers have asked the question for centuries, but it's fairly simple, says CEO Daphne Preuss. With sorghum, you get three kinds of carbohydrates: starch (which can be converted into ethanol and other fuels), sugar, and cellulose, which can be converted to fuel or burned in biomass boilers like these big honkers coming soon to Texas.

"We can make the right product for the right customer," she said.

Preuss dodged the usual question -- how many gallons of oil can you get in a year per acre with sorghum? -- but she said it compares well with other crops.

Added bonuses: sorghum, an annual grass, requires less nitrogen fertilizer and water than other seed crops. It can also be grown on semi-marginal land. In the U.S., sorghum mostly gets fed to farm animals.

Shell and Cosan SA Industrio and Comercio, the world's largest sugar producer, finalized a multi-billion dollar joint venture today for biofuels and sugar in Brazil, and in the process gave the world of biofuel startups a reason to get out of bed tomorrow. 

Under the deal, Shell will contribute close to $2 billion dollars, 2,740 service stations, its ongoing activities in jet fuel, and its investments in Codexis (Shell owns 15 percent of that company) and Iogen Energy, another biofuel company. Cosan, for its part, will contribute 23 sugar mills and more than 1,700 service stations. The memorandum of understanding was first signed in Feburary. In all, the new venture has an estimated value of $12 billion.

Shell will also have the right to buy Cosan's half of the venture ten years from now.

On Sand Hill Road, let the high-fiving begin. VCs have plunked billions into biofuels over the last six years with little to show in the way of results. Many biofuel manufacturers such as Range Fuels and Mascoma have had to delay production and everyone has suffered from a swoon in oil prices. To generate revenue in the near term, many have diversified into green chemicals or food. Algae specialist Aurora Biofuels, for instance, is undergoing a transformation from a fuel company to one that will emphasize producing oils for omega-3s. (Story here--official announcement sometime soon.)

One of the big problems, according to Mohr Davidow's Erik Straser and Josh Green, among others, is that the large oil companies have not been willing to commit to biofuels. ExxonMobil will plunk money into futuristic Synthetic Genomics and run all sorts of algae ads. But oil companies have not announced widespread commercialization and production plans.

The Shell-Cosan deal changes that, or at least paves the way toward changes. On the face of it, Shell is serious about biofuels.

"The proposed joint venture is set to pool our complementary businesses, enhance our growth prospects in ethanol production globally and support our growth platform for our retail and commercial fuels businesses in Brazil," said Mark Williams, Shell Downstream Director. "Over the next 20 years, sustainable biofuels are one of the most realistic commercial solutions to reduce CO2 emissions from transport."

Granted, the whole thing could devolve into a oil company accounting game. It could also remain landlocked in Brazil. Still, on the face of it, it looks like there is a new, well-funded biofuel venture in the world with an eye toward commercialization. It got past the MOU stage.

Others may follow. And in turn, these new ventures with their fossil fuel funds could start to cherry pick biofuel startups as partners.

Codexis, which held a skeptically-viewed IPO earlier this year, can't complain.

One of the nation's largest technology companies looks to NREL as it advances products in photovoltaics, concentrating solar power and biofuels.

Researching breakthroughs in energy now is easier thanks to a new Web site that quickly accesses patents for technologies developed by DOE laboratories.

Soon, you will be able to use your remote control to adjust the mood in your living room.

Sharp recently announced six Elm brand LED light fixtures for homes, and three of the new lights have a function that allows consumers to change the color tone -- from a cold bluish light to a warmer yellow -- simply by pushing a button on a remote. In the morning, bluish light can make it easier to get out of bed, according to Sharp.

Color changing can also be automated to save energy. LEDs, being chips, are somewhat easier to attach to a network than conventional bulbs. The products are meant to replace existing, somewhat high intensity ceiling lights, and sport wattages ranging from 46 watts and 2,350 lumens to 86 watts and 5,100 lumens. (A 60-watt incandescent emits around 800 watts.)

Panasonic, Sharp and Toshiba, among other large Japanese vendors, are gearing up plans to sell light bulbs, appliances and other products for the eco-friendly home. Some of these products will be sold only in Japan, while others will be sold worldwide. Last year at CEATEC, Japan's equivalent of CES, the "green home" was a big theme for both Panasonic and Sharp.

For more on the story, please go to TechOn.

 

***

Michael Kanellos contributed to this story.

The office of Vice President Joe Biden just released its report on the impacts of the American Recovery and Reinvestment Act (ARRA).  Here's a link to a PDF of the 50-page report.

Please forgive our immodesty and allow us to guide you to page 20 of the report (page 22 of the PDF) where you will find Greentech Media (GTM) Research's Shyam Mehta and his solar manufacturing data cited (see chart below).

The only non-DOE or non-EIA cited data in the report belongs to Mr. Mehta and his 2009 report: PV Manufacturing in the United States: Market Outlook, Incentives and Supply Chain Opportunities. 

We are proud to be included in the report and proud of Shyam, and we hope that Shyam will remember to be kind to the little people at GTM who made his fame possible.  More of Mehta's work and the work of some of our less famous analysts can be found here in our solar, smart grid and biofuels research library.

We'll try to delve deeper into the report, but for now, here are some of the energy-related highlights:

THE RECOVERY ACT: TRANSFORMING THE AMERICAN ECONOMY THROUGH INNOVATION

• With over $787 billion in funding, the American Recovery and Reinvestment Act is one of the single boldest and largest investments in the U.S. economy in the nation’s history.  The Recovery Act’s design was three-fold:  to rescue a rapidly deteriorating economy; put the country on a path to recovery by putting Americans back to work quickly; and reinvest in the country’s long-term economic future, building a foundation for a new, more robust, and competitive American economy.

• The Recovery Act’s $100 billion investment in innovation is not only transforming the economy and creating new jobs, but helping accelerate significant advances in science and technology that cut costs for consumers, save lives and help keep America competitive in the 21st century economy. 

According to this analysis, the U.S. is now on track to achieve these major energy innovation breakthroughs thanks to Recovery Act investments:

• Cutting the cost of solar power in half by 2015, putting it on par with the cost of retail electricity from the grid. (The report sort of implies that the ARRA will be the cause of solar's 50% cost decline over 5 years, which is a bit of a stretch. What the ARRA has done is helped create an incentive for solar manufacturing and demand in the U.S.)
• Cutting the cost of batteries for electric vehicles by 70 percent between 2009 and 2015, putting the lifetime cost of an electric vehicle on-par with that of its non-electric counterpart.
• Doubling U.S. renewable energy generation capacity and U.S. renewable manufacturing capacity by 2012, a breakthrough that would not be possible without the Recovery Act.

Goal: Double U.S. renewable energy generation capacity and U.S. renewable manufacturing capacity by 2012.

We’re now on track to hit our target to double renewable energy generation by 2012, something that would not have been possible without Recovery Act investments.

• Over $23 billion of Recovery Act investments support renewable energy. Many of these investments are directly contributing to the doubling U.S. renewable energy generation capacity from wind, solar, and geothermal by 2012. This means installing as much renewable energy generating capacity in the next three years as the U.S. had in the previous thirty.
• In addition, President Obama set the goal of doubling renewable manufacturing capacity, so that the U.S. can gain leadership in manufacturing these technologies as well.
• Specifically, these goals mean that we will:
• Double renewable energy capacity from the 28.8 GW of solar, wind, and geothermal generation that has been installed as of 2008, to 57.6 GW by the end of 2011. That’s enough capacity to power 16.7 million home
• Double renewable energy manufacturing capacity from an annual output of 6 GW of renewable equipment (like wind turbines or solar panels) to 12 GW by the end of 2011. This will increase the U.S. share of global manufacturing of solar photovoltaic modules from 8% of all production, to 14% by 2012.

 

 

Goal: Cutting the cost of solar power in half by 2015

• As a result of today’s investments, the cost of solar energy is forecast to drop by half between 2009 and 2015. The cost of power from rooftop solar panels will drop from $0.21 per kWh in 2009 to $0.10 per kWh in 2015, which is equivalent to typical household electricity rates. The cost of power from utility-scale solar projects would drop from $0.13 per kWh today to $0.06 in 2015, which is equivalent to the cost of wholesale utility power.
• Further, the cost of rooftop solar power could drop to as low as $0.06 per kWh by 2030. At that cost, solar power will be significantly cheaper than household electricity rates—and an average household could save more than $400 per year in electricity bills.
• The Recovery Act is not just supporting implementation of the latest solar technologies, but also is scaling up manufacturing and deployment to much greater levels, both of which help to dramatically bring down the costs of new technologies.
• Some companies are reducing cost simply by scaling up manufacturing and deployment of the standard silicon solar panel. For example, the largest photovoltaic power plant in North America, the 25 MW DeSoto Solar Park in Pensacola, Florida, was funded in part by the Recovery Act. The power plant consists of over 90,000 solar panels and provides enough power for 3,000 homes.

Goal: Cut the cost of batteries for electric vehicles by 70 percent between 2009 and 2015

Recovery Act investments have now put us on track to cut the cost of batteries for autos by 70% between 2009 and 2015. This means that the cost of batteries for the typical all-electric vehicle will fall from $33,000 to $10,000, and the cost of typical plug-in hybrid batteries will drop from $13,000 to $4,000.

• Already, electric vehicles are becoming more affordable and accessible. In 2009, the only available electric-drive vehicle cost more than $100,000. Soon, the Nissan Leaf and the Chevy Volt, starting at $25,000 and $33,000 respectively, will be available.
• A $10,000 battery for all-electric vehicles and a $4,000 battery for plug-in hybrid vehicles will mean that electric-drive cars are affordable and cost competitive with similar non-electric vehicles. At those battery costs, electric-drive cars actually will be less expensive over the life of the car than similar non-electric vehicles. What’s more, these investments will make these less-expensive batteries lighter and more durable
• The weight of a typical electric-vehicle battery is forecasted to decrease by 33%, from 333 kilograms to 222 kilograms, by 2015. The lighter battery means a lighter car, which means less energy is needed to power the car.
• A typical battery is expected to last 14 years in 2015—more than three times as long as the current 4-year lifetime.

Feel free to weigh-in with your thoughts on whether this is the way to jump-start an economy and if it's governments role to fund innovation. Or if you think the free-market would have done this more efficienctly.

 

Vice President Joe Biden (right) and GTM Research Senior Solar Analyst Shyam Mehta (left)

 

Last week I wrote an article looking at the ways the semiconductor industry and solar industry are similar and where they diverge.

At the heart of the issue is a debate over whether solar companies primarily compete by outdoing each other with distinctively designed products or whether success lay in developing a superior manufacturing process. In other words, do you win through product or process?

It's more than an academic debate. If solar truly becomes a "process" industry, then winners and losers will be determined by who has a better factory. Solar vendors would be required to continually place multibillion dollar bets in cyclical markets with fluctuating prices. Clash of the Titanic Fabricators: it could be a worse gambling habit than trying to produce computer memory.

If solar vendors specialize in "products," many would be able to free themselves of owning factories: they could invest their energy and resources in design and enhancements. A company could live longer before being swallowed up in the race to the bottom.

Process is King

One of the main arguments for the process side is that a substantial portion of the intellectual property in solar revolves around the factory machinery and manufacturing processes. Good luck telling the difference between a BP module and one from Sharp. They perform the same task, often at the same efficiency, look somewhat the same, and will sit for 30 years out of site on a roof or in a rack on an empty lot near a landfill. The difference in price mostly reflects what the companies invisibly accomplished on the back end.

Miasole, Global Solar, Solopower and others will all make similar copper indium gallium selenide (CIGS) solar cells. The difference will lie in processing: Miasole employs sputtering, Global evaporates and Solopower employs electroplating.

Compare that to semiconductors. Intel and AMD processors run the same software and fit in the same PCs, but each excels on different benchmarks and tasks. Some are power-optimized, while others do best in servers. At one point, AMD had the upper hand in the rivalry by integrating a memory controller (something Intel didn't want to do) and cutting back the clock speed to gain performance. One chip designer analogized it to aircraft: AMD had come up with a DC3, the classic plane from McDonnell Douglas. Intel had made a cargo plane.

"This is not the chip industry. The rate of change is completely different," said Miasole CEO Joseph Laia. "Between your design and the variety of equipment makers, Intel can differentiate its process from Samsung and TSMC. Their factories can sing and dance at different levels."

Efforts to standardize solar manufacturing -- from Applied Materials' SunFab to the SVTC -- have fallen flat.

The product side may counter: solar manufacturers do differentiate by design. Look at SunPower. The company leads the efficiency pack with internal layers that better capture light. Suntech is boosting efficiency and lowering cost by substituting copper for silver in the internal wiring for its Pluto panels. Solaria has integrated a concentrator into a panel. In the future, companies like Alta Devices will drive the cost out of high-efficiency solar cells made from group IV elements like germanium.

And festooning factories with off-the-shelf machines is far less risky. AQT has built a 15MW CIGS facility for under $15 million in about two years, well below the drunken-sailor standard of CIGS.  

The process crowd responds: other than SunPower, all of those efforts are in their infancy or in the lab. Solyndra tried to revolutionize solar cells with its tubular device; although it has landed contracts with companies like Coke and Anheuser-Busch, the panels cost twice as much to make as ordinary solar panels.

Meanwhile, First Solar has continued to rack up utility contracts by being able to crank out modules for under $1 per watt, a result made possible through relentless execution and precision in manufacturing. At First Solar, prices drop quicker than efficiency improves.

Back to product: a module is more than cells and glass. Integrating electronics like microinverters and controllers can enhance a module's performance. Different size modules for utilities and homes will lead to a multifaceted ecosystem. On top of that, there are the installation innovators with prefab, easy-to-install solar panels (Armageddon), modular racking (Zep Solar and Canadian Solar) and trackers. (SunPower's PowerLight.). Dow, Linde, Innovalight and DuPont have begun to promote integrated materials and coatings that can enhance performance characteristics.

BIPV, flexible CIGS and crystalline: differentiation will flower.

Process counter: Racking? Just a bunch of aluminum benders. How will that avoid commodity pricing?

Product: How does Apple get people to gush and camp overnight for the privilege of buying overpriced phones? Branding, features and channel can mean more than technology.

And on it goes. What do you think? Please respond. We will total up the results later.

We're in the midst of the great lighting transformation, with solid-state LEDs on the cusp of transforming the lighting industry. The Edison bulb will soon be a relic and CFLs an interim step.

The industrial lighting industry is worth $5 billion in the U.S. alone and Digital Lumens, a light-emitting diode (LED) lighting and control startup just announced a big design-win in what is one of the opening salvos of the industrial LED lighting revolution.

Digital Lumens' customer, Maines Paper & Food Service, deployed the company’s Intelligent Lighting System in their 9-football-field-sized, 460,000-square-foot headquarters in Conklin, New York. Here are the expected results:

• Lighting-related energy use reduced by 87 percent. 
• Saving 1,726,108 kWh per year (enough electricity to power 200 homes for a year).
• A reduction of 1,240 metric tons of CO2 per year.
• Improved light levels and safety facility-wide.

Maines is one of the country’s largest independent foodservice distributors, with revenues approaching $3 billion and facilities serving 33 states. This facility could be the first of many Maines warehouses going the LED route.
 
Working with their energy efficiency partner, Groom Energy Solutions, Maines saw lighting as an opportunity for savings and conducted an evaluation of the alternatives, including fluorescents and LEDs.  Maines selected the Digital Lumens system, which combines LED-based fixtures, ZigBee-based mesh networking, and software, as a one-for-one retrofit of high bay warehouse lights, and The New York State Energy Research and Development Authority (NYSERDA) provided the project incentive.
 
Lighting represents about 20 percent of Maines' warehouse electricity costs. On average, lighting consumes 25 percent of the energy in commercial buildings and 12 percent in homes, according to the DOE's Buildings Energy Data Book for 2008.  Seven percent of all the energy consumed in America is used to light our homes and businesses.  Here's a link to a DOE report on the potential of energy savings with solid state lighting (SSL).  

Digital Lumens is using the directionality and controllability of LEDs to save big money for industrial lighting applications.  The Boston-based firm has raised over $11 million from Boston-based VCs Black Coral Capital, Flybridge Capital Partners and Stata Venture Partners, with a staff that includes members of recent SSL success and Philips acquisition, Color Kinetics.

Maines can track energy usage and occupancy on a fixture-by-fixture basis, enabling them to tune the light program to maximize efficiency. The system also creates a lighting network inside the facility, which creates opportunities for future capabilities and/or measuring and monitoring other aspects of the facility.

I spoke with the CEO, Tom Pincince, and he said, "We deliver 100 percent or more light for 10 percent of the energy."   Pincince said that their intelligent lighting systems can achieve "radical new levels of efficiency" and that for the first time, "customers can have real control of their lighting" to achieve that 90 percent reduction in energy.

It's not a new idea. Variants on lighting networks have already been introduced by Lumenergi, Adura Technologies, HID Labs, Juice Technology and Redwood Systems.  But it's still an emerging sector -- only around 1 percent of lights in California commercial buildings are networked.  Albeo Technologies also makes high bay lighting, but minus the networking piece.
 
According to Digital Lumens, lighting typically costs $1 per square foot per year, and they can reduce that to ten cents with the extra element of control and intelligence.  There is room for on-board sensors, on-board computing and the ability to assimilate knowledge of human behaviors and occupancy levels.

The startup gets to market through energy-aware lighting retrofit specialists. With its emphasis on LEDs, Digital Lumens will likely concentrate on new construction and "heavy" retrofits.  HID Labs, Lumerengi and Adura all focus on traditional lights and are moving into LEDs -- their solution can swap straight into existing buildings and light fixtures. Redwood and Juice are LED-only, but provide novel functionality because they get rid of wires and connect lights through low-voltage computer cable.  Digital Lumens offers a solution from fixture to controls to software.

Although the Digital Lumens system is twice as expensive out of the box as a fluorescent, it's twice as efficient and the energy savings result in a two-year payback.  High upfront cost is an immense barrier in residential applications but if the payback is less than two years, industrial lighting customers seem willing to pay, according to the CEO.

In a particular case study, Digital Lumens dropped a customer's cold storage facility lighting bill 95 percent, from $225,000 to $10,000. The site was 268,000 square feet, and is used 24 hours a day, 7 days a week, 365 days a year with a 10 percent occupancy. 

Digital Lumens' carefully designed fixture channels light in a highly precise fashion.  The CEO said, "It's all about footcandles going exactly where they're needed" by "punching light into an aisle when and where it's needed."

 

Other VC-funded startups going after the solid-state lighting illumination market include bulb-makers Bridgelux, Lemnis , Luminus, and Luxim.  Intematix makes phosphors for LEDs and Nuventix builds active cooling technology for LED lighting.

Rob Day of Black Coral Capital, an investor in the firm, is enthusiastic about Digital Lumens.  He raved about his portfolio firm in an email to me back in June:

"We hear a lot about LEDs being the wave of the future, but it's tough to find cost-effective LED fixtures today -- it's all about promises for the future. Digital Lumens is accomplishing 90 percent energy savings today, with customer payback periods that are no-brainers.  Not projected savings -- actual proven savings. They've taken a systems-based perspective, using not only the LED chips but more importantly, intelligence in the fixture that allows them to use today's chips to accomplish tomorrow's economics."

Day continued, "chip-level improvements are important and valuable.  But as an investor, rather than looking for manufacturers of the (temporarily) brightest chips, I'd been looking for the Dell of LED lighting.  Combining the right components into a cost-effective and compelling family of fixtures.  At the end of the day, customers don't care about the technology their lights are based on.  They care about getting the right amount and highest quality of light where they need it, at the lowest cost.  And that's the genius of the team at Digital Lumens."

According to CEO Pincince, "The industrial world is quickly going to LEDs -- the laggards and are going to be residential and class A buildings. The industrial lighting market is big with big facilities and with a big impact.  In Maines case and in many high-bay applications, the incumbent technology is high-pressure sodium.

Pincince said that the enormous reduction in energy at the massive Maines site which is occupied 24/7 actually moves the needle on energy usage for the entire town of Conklin, in which it's situated.

The CEO finished with "This is no compromise, energy-efficient lighting with improved lighting quality from what the customer previously had."

 

 

Before and after the Digital Lumens lighting experience....

***

Michael Kanellos contributed to this story.

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