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Archive for the ‘energy efficiency’ Category

In my latest Green State column on Grist, I explore new strategies to pay for commercial energy efficiency retrofits:

On the heels of San Francisco’s announcement last week that it plans to spend $150 million greening up homes, comes a new report that studies a slew of other innovative ways to finance energy efficiency improvements for all types of buildings.

It’s no big surprise that the key to ramping up the energy efficiency industry and fostering technological advances is no-money-down financing so building owners can avoid the capital costs of retrofits.  And that’s exactly what the California Clean Energy Fund (CalCEF) is working toward.

Energy efficiency “immediately saves money for end-users, improves the bottom line for companies, reduces local exposure to electricity grid outages and offsets the need for new power plants,” wrote the authors of the report from the CalCEF, a non-profit venture capital outfit based in San Francisco. “Yet, efficiency upgrades and their respective financing options are often out of reach for most end-users, as the initial capital cost exceeds near-term savings.”

Yes, you read that right—CalCEF is a non-profit VC, a product of the California energy crisis of 2000-2001—remember Enron?—that resulted in the bankruptcy of Pacific Gas and Electric, Northern California’s dominant utility. As part of the bankruptcy settlement, CalCEF was created to accelerate energy innovation and was seeded with $30 million from PG&E.

The best known such program is Property Assessed Clean Energy, or PACE, in which cities float bonds to finance retrofits and homeowners pay back the cost through a surcharge on their property tax bills over 20 years.

While that can work well for middle and upper-middle class homeowners in environmentally conscious communities, PACE is not as useful for commercial buildings, office towers, and industrial sites, whose owners may be solely motivated by the bottom line, according to the CalCEF report.

“High upfront costs are preventing large entities from addressing energy inefficiencies,” says Paul Frankel, the managing director of CalCEF Innovations, the organization’s initiative that focuses on developing green energy financing and policy.

That led CalCEF to investigate possible solutions to the dollar dilemma, some of which are currently being implemented.

One workaround is something called on-bill financing. For instance, San Diego Gas & Electric will finance up to $100,000 in energy efficiency retrofits for commercial customers (and up to $250,000 for school and government buildings). Recipients then pay back the loans through a surcharge on their monthly utility bill.

Best of all, the loans carry zero percent interest, though business customers have to repay them in five years. In the first two years of the program, San Diego Gas & Electric financed 180 retrofits and has another 100 in the queue. Over the next two years, the utility will make $41.5 million available for on-bill retrofits.

You can read the rest of the column here.

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image: SolFocus

In The New York Times on Wednesday, I write about the year-end green tech investing numbers for 2009:

In a flurry of dealmaking bolstered by government subsidies for renewable energy, venture capitalists invested $5.6 billion in green technology companies worldwide in 2009, according to a preliminary report released Wednesday by the Cleantech Group and Deloitte.

That represents a 33 percent drop over the $8.5 billion invested in 2008 — a reflection, the report said, of the global economic downturn. But the overall amount of venture capital fared much worse, retreating to 2003 levels, according to the report, whereas clean technology investments were on track to match 2007 levels.

“In 2009, clean-tech went from a niche category to become the dominant category in venture capital investing,” said Dallas Kachan, managing director of the Cleantech Group, a San Francisco market research and consulting firm. “Clean-tech continued to outpace software and biotech.”

The report’s preliminary survey showed that there were 557 deals in the clean technology space in 2009, compared to 567 deals in 2008 and 488 in 2007.

Solar companies secured $1.2 billion in 2009 — 21 percent of the total and the largest share of venture funding. The biggest deal of the year also went to a solar company, Silicon Valley’s Solyndra, which raised $198 million at the same time it secured a $535 million federal loan guarantee to build a solar module factory.

You can read the rest of the story here.

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In my latest Green State column for Grist, I take a look at AlertMe, a British startup that’s making a play to become a consumer brand for managing home energy use:

I’m sitting in a conference room at a PR agency on the San Francisco waterfront when the chief executive of AlertMe, a British energy management startup, pulls out his iPhone to check on a colleague’s kilowatt consumption back in the U.K.

The executive, who has the Vonnegutian name of Pilgrim Beart, taps the “history” icon on the screen. “I can see that his wife has arrived home,” he says before touching the energy button.

“They’re watching TV right now,” Beart notes, staring at the iPhone screen. “I could turn the TV off if I wanted to wind them up. I won’t do that. But I will turn off the microwave as no one is using it right now.”

He touches the screen and, voila, 5,300 miles away, the microwave blinks off, saving its owners a few pence and reducing the load on the grid by a watt.

All very cool. And a bit creepy.

Beart has a window into his colleague’s home life because the house is outfitted with AlertMe smart plugs that monitor appliances’ electricity use. Other gadgets track the home’s temperature. Key fobs carried by the homeowners keep tabs on their comings and goings so AlertMe’s software can adjust heating and cooling and turn appliances on and off to maximize energy efficiency.

Of course, Beart’s use of the iPhone as Big Brother was purely for demo purposes. In real life, AlertMe customers’ data remains anonymous. However, homeowners can monitor and control their electricity use on their smartphones.

AlertMe is one of a growing number of startups competing to help consumers cut their electricity use by providing real-time data and services to manage energy consumption. The company is backed by Silicon Valley and European venture capital firms, including VantagePoint Venture Partners, Good Energies, and Index Ventures.

What caught my attention is AlertMe’s strategy. Beart is attempting to build a consumer brand and he’s doing it without relying on digital smart meters, which utilities are slowly rolling out to provide real-time data on electricity use.

You can read the rest of the column here.

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In The New York Times on Friday, I write about environmentalists’ less-than-enthusiastic reaction to the Obama administration’s proposed efficiency standards for water heaters, one of a home’s biggest energy hogs:

Environmentalists have had a lukewarm reaction to the Obama administration’s proposed energy efficiency standards for home water heaters.

The standards, which would take effect in 2015, could save consumers as much as $15.6 billion over 30 years, cut energy consumption and avoid emitting 154 million tons of carbon dioxide, according to the United States Department of Energy.

That’s good but not nearly good enough, said Andrew deLaski, executive director of the Appliance Standards Awareness Project, a Boston-based group backed by energy efficiency advocates and environmental organizations.

“They fall short because they fail to take advantage of the advanced technology where the big savings are,” said Mr. deLaski. “The question is, do you just tweak existing technology or push the market to technologies that get you enormous savings?”

You can read the rest of the story here.

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A Silicon Valley  startup called EcoFactor aims to cut consumers’ electricity bills and help utilities manage peak demand by controlling homes’ heating and air conditioning systems over the Internet. As I write on Tuesday in The New York Times:

As utilities install more smart meters in homes, more companies are offering services that tap the devices’ ability to give consumers information about their electricity use.

But EcoFactor, a startup in the Silicon Valley suburb of Redwood City, aims to take things even further by gathering data about the weather, as well as consumers’ individual climate-control habits, to adjust a home’s air-conditioning and heating systems.

Call it a smart thermostat.

Besides learning when homeowners tend to turn on their heat or air-conditioning, EcoFactor also monitors weather down to the zip code level. Every 60 seconds, its algorithms take that data and calculate how much electricity use can be reduced while keeping the occupants comfortable.

“After three days of energy data collection, we’re able to create a thermodynamic model for a home and use that for running energy efficiency programs,” said Scott Hublou, a co-founder of EcoFactor and its senior vice president for products. “We understand how much outside weather impacts temperatures inside and how a home’s systems have to overcome that outside temperature.”
On Tuesday, EcoFactor announced a three-year agreement to run a program for the Texas utility Oncor to reduce peak electricity demand by three megawatts. That’s a relatively small amount, and the program will initially involve only a handful of households.

You can read the rest of the story here.

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2009 CC Fellow Group Shot

photo: EDF

In my new Green State column on Grist, I catch up with the Climate Corps, a group of green MBA students sponsored by the Environmental Defense Fund. The Climate Corps recently finished 10-week internships with Fortune 500 companies, saving them an estimated $54 million through energy efficiency measures the students identified:

Back in May I wrote about the Environmental Defense Fund’s (EDF) Climate Corps, a cadre of 26 MBA students who were then prepping for summer internships at Fortune 500 companies. Their mission was to green up corporate operations to save money and cut carbon emissions.

With winter on the way and school back in session, I checked in to see how successful the Climate Corps was at combining the students’ financial smarts, technological know-how—half are engineers by training—and environmental ethic.

Pretty successful, it turns out. According to EDF, the interns identified energy efficiency measures that will collectively save an estimated $54 million at 22 companies (and one university), including eBay, Dell and Sony Pictures Entertainment. That translates into 100,000 metric tons of greenhouse gases avoided a year with an annual energy savings of 160 million kilowatt hours.

A couple of caveats are in order. Energy efficiency programs were already under way at many of the companies. And whether the projected $54 million in savings will actually be realized won’t be known until the energy efficiency efforts are completed—actual results may vary.

Still, anything close to $54 million is quite a return on investment, given that the companies altogether spent only $260,000 on intern salaries during the 10-week program.

But the long-term payoff is likely to be the emergence of a new corporate class- – the green financial engineer—and future CEOs—who reflexively view environmental performance as a bottom-line concern.

You can read the rest of the column here.

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esolar_8
photo: eSolar

In Sunday’s Los Angeles Times, I write about how the rise of green technology is changing the way Silicon Valley venture capitalists do business:

Silicon Valley venture capitalists have always been about inventing the future — taking a wild idea, nurturing it with cash and creativity and giving birth to new products, companies and industries we once couldn’t imagine and now can’t conceive of living without: the Web, Google, the iPhone, Twitter.

But as green technology becomes the latest tech wave to break from the nation’s entrepreneurial epicenter, it’s now all about companies reinventing the past. Solar power companies, electric car start-ups and algae biofuel ventures aim to remake century-old trillion-dollar industries on a global scale.

Venture capitalists poured $4 billion into green-tech start-ups in 2008 — nearly 40% of all tech investments in the U.S., according to a survey by PricewaterhouseCoopers. Green-tech investment plunged in the first half of 2009 to $513 million as the recession dragged on, but there are signs of a rebound: Silicon Valley’s Khosla Ventures announced this month that it had raised $1.1 billion — the biggest first-time fund in a decade — that would be largely devoted to investing in green-tech start-ups, many in Southern California.

But green-tech companies face unique challenges, including global markets, tough technological hurdles and a future shaped by government incentives and regulatory policy. Those challenges are changing the game on Sand Hill Road.

“If you’re starting a Web 2.0 company, your basic needs are personnel and servers — there is no physical product, no manufacturing capacity, no inventory, no steel in the ground,” VantagePoint’s Salzman said, referring to software-based companies that provide services over the Internet.

Green-tech start-ups, he said, often need big money and investors steeped in big science and big government.

You can read the rest of the story here.

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