Archive for the ‘Hewlett-Packard’ Category

With billions of dollars of solar and wind power projects and thousands of green-collar jobs hanging in the balance, the U.S. Senate on Wednesday again failed to extend a key investment tax credit for renewable energy.

Republicans blocked the legislation from coming to the floor, marking the eighth attempt to extend the 30 percent tax credit beyond it’s Jan. 1, 2009, expiration date. The extension is backed by all the state governors save Georgia, a coalition of Fortune 500 companies, Wall Street banks, renewable energy startups, and tech giants like Google (GOOG), Hewlett-Packard (HPQ) and Applied Materials (AMAT).

Utilities like PG&E (PCG) and Edison International (EIX) as well as financiers such as Morgan Stanley (MS) and GE Energy Financial Services (GE), are pushing for an eight-year extension of the investment tax credit to give Big Solar projects enough time to get off the ground and start to achieve economies of scale.

Senate Republicans opposed the legislation, contending it would raise taxes. A list of senators and their votes on the legislation can be found here.

Without the 30 percent tax credit, the viability of several large solar power plant projects remains in doubt. Spanish solar company Abengoa Solar has said it probably will pull out of plans to build a 280-megawatt power plant in Arizona if Congress doesn’t renew the tax credit. Green Wombat happened to have breakfast this morning with a PG&E executive who said that the large solar projects that California utilities are counting on to meet renewable energy mandates would have a hard time securing financing absent the investment tax credit.

First Solar (FSLR) CEO Michael Ahearn said on an earnings call Wednesday afternoon that if the investment tax credit is not extended the thin-film solar module maker would focus its efforts on the European market. “We don’t have massive volumes of solar planned for the U.S. in the short term,” said Ahearn.

Said Rhone Resch, president of the trade group Solar Energy Industries Association, in a statement: “Already companies are putting projects on hold and preparing to send thousands of jobs overseas – real jobs that would otherwise be filled by American workers.”

While Senators Barack Obama and John McCain have have expressed support for increasing the U.S.’s investment in green energy, neither presidential candidate showed up to vote Wednesday on the extension of the tax credit.

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When Intel announced this week that it was spinning off a stealth in-house startup called SpectraWatt to develop solar cells, it appeared the chip giant was just the latest old-line Silicon Valley tech firm bitten by the green bug.

After all, crosstown chipmaker Cypress Semiconductor jumped into the solar game back in 2004 when it acquired SunPower (SPWR), now a leading manufacturer of solar cells and panels and an installer of large-scale solar arrays. Then the world’s biggest chip-equipment maker, Applied Materials (AMAT), retooled machines that make flat-screen video displays to produce thin-film solar panels. And just this month, Hewlett-Packard (HPQ) unveiled a deal to license solar technology to a solar cell startup while IBM (IBM) announced it would develop thin-film solar.

But it’s not just now jumping on the enviro-biz bandwagon – Intel’s solar efforts have been quietly under development since 2004. That’s when Andrew Wilson, an 11-year Intel (INTC) veteran, was chatting with a colleague while waiting for a conference call to begin. “We were shooting the breeze and I mentioned that I had replaced all the light bulbs in my house with compact fluorescent lights and my utility bill had come down by a third,” says Wilson, SpectraWatt’s CEO. “And he said, `Hey, did you know that solar cells are made of silicon?’ ”

“We started talking about what a business plan would look like, because if something is made out of silicon then Intel should be taking advantage of that market,” Wilson told Fortune. A year later, Wilson and his colleagues had developed a marketing plan and secured funding from Intel’s new-business incubator to develop a business strategy and hone its technology. (It’s no coincidence that the nascent solar industry is populated by computer industry veterans from companies that put the silicon in Silicon Valley.)

When it comes to cutting-edge solar technology, silicon-based cells are considered a bit old-school. Silicon is currently in short supply and the resulting high prices have led venture capitalists to invest hundreds of millions of dollars in thin-film solar startups that promise to dramatically lower the cost of solar by printing or otherwise applying non-silicon solar cells to glass or flexible materials that can be integrated into walls, windows and other building materials. While thin-film solar is less efficient at converting sunlight into electricity, the expectation is that it can be produced much more cheaply than conventional cells.

But thin-film solar is still largely an early-stage technology and silicon-based cells will continue to be the big market for the near-future. So the question is, how does Intel compete with established players like SunPower, China’s Suntech (STP) and Germany’s Q-Cells as solar cells become a commodity? Intel controls some 80 to 90 percent of the worldwide chip market but it’s unlikely that it – or any other player – will replicate that experience in solar cells.

Wilson’s view is that it’s early days for the solar market and that SpectraWatt’s ace in the hole is Intel’s global manufacturing experience and history of technological innovation. “The solar industry today looks like the microelectronics industry in the late ‘70s – there’s very few standards and no one is manufacturing at scale,” says Wilson. “It’s all about manufacturing processes and material sciences that will lead to fundamental breakthroughs. The product is vastly simpler than a microprocessor but the fundamental nature of a solar cell isn’t all that different. When you think of what it takes to manufacture globally and manage supply chains, that’s Intel’s core competence.”

There certainly is room for more players, given that solar was a $30 billion market in 2007 and is expected to continue to grow at a clip of 30 to 40 percent in the coming years.

Wilson says SpectraWatt has secured silicon supplies and is developing technology that will give it a competitive edge. He’s keeping mum about the details of that technology for now. “We do believe we will have a technological advantage when we get what we’re doing in the lab to manufacturing,” Wilson says.

The company is set to begin building its manufacturing facility in Oregon later this year, with production to begin in mid-2009.

SpectraWatt launches with a $50 million investment lead by Intel Capital, the company’s investing arm. Other investors include Goldman Sachs (GS), PCG Clean Energy and Technology Fund, and German solar giant Solon. (As Green Wombat has written, Solon has invested in an array of solar startups in the United States, including Sungevity and thin-film solar company Global Solar.)

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In another sign that technological innovation will drive solutions to global warming and the United States’ energy dependence, technology born of Hewlett-Packard’s imaging and printing research will be used to make more efficient and cheaper solar panels. HP is licensing its transparent transistor technology, which will eliminate the need for mechanical trackers to follow the sun, to a Livermore, Calif., startup called Xtreme Energetics

Here’s how it’s supposed to work: XE’s solar panels concentrate sunlight onto highly efficient solar cells that use a fraction of the expensive silicon found in standard solar modules. A layer of HP’s clear transistors will funnel light to the solar cell as the sun moves across the sky.

“Basically, we don’t have any mechanical gears or cogs,” says XE chief executive Colin Williams, a veteran of JPL/Caltech and a former Stanford University professor. “From an outward appearance the panel appears to be fixed, but internally light is being steered to the solar cell through the electronics.”

Doing away with bulky mechanical trackers means that more panels can be packed onto commercial rooftops, allowing energy-hungry facilities like data centers to draw more of their power from the sun. The panels will be transparent and can be colorized to blend in with building facades. Williams says XE will also produce panels for large-scale solar power plants.

That’s the goal, at least. XE, which is currently funded by its founders, is two years away from producing solar panels with HP’s (HPQ) technology and its claim that they will be twice as efficient at half the cost of conventional solar systems has yet to be proven.

For HP, the solar licensing deal is an unanticipated benefit of collaborative research by HP Labs, engineers at its imaging and printing operation in Oregon and researchers at Oregon State University. “They were looking for future ways to display images,” say Joe Beyers, HP’s vice president of intellectual property licensing. “It just turned out that Colin and his team became aware of the work we were doing with Oregon State and started the dialog.”

Beyers says other potential applications for the technology – developed as part of HP’s new approach to commercializing R&D that my colleague Jon Fortt wrote about recently – include video displays for car windshields.

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hp-enviro-1.pngOvershadowed by Google’s jump into the renewable energy business on Tuesday was Hewlett-Packard’s more modest move to go green by installing a 1-megawatt solar array at its San Diego facility, buying wind power for its Ireland operations and subsidizing employees’ home solar systems.

In Silicon Valley these days putting a whopping solar array up on your roof is akin to having the coolest corporate jet or your CEO back-ordered for a Tesla Roadster. Google (GOOG), of course, has the biggest, a 1.6-megawatt monster that covers buildings and carports at the Googleplex in Mountain View. Not to be outdone, Applied Materials (AMAT) is planning an even larger solar system for its headquarters in neighboring Santa Clara.

But there’s more at stake here than green bragging rights. Companies like HP (HPQ) are realizing that tapping renewable energy can also be good for the bottom line. Take HP’s solar array in San Diego, for instance. The 5,000-panel system carries no capital costs for HP as the array will be financed and operated by a third-party affiliated with solar cell maker SunPower (SPWR). The Silicon Valley company will install the array and perform maintenance for 15 years while HP purchases the electricity produced by the solar system at a guaranteed below-market rate. That gives the company a hedge against rising energy costs. (HP thinks it’ll save $750,000 over 15 years.) HP also retains ownership of any potentially marketable renewable energy credits associated with the array while the financier can take advantage of California’s solar subsidies.

SunPower wasn’t disclosing the identity of that financier when Green Wombat inquired on Tuesday, but this morning the company announced a $200 million deal with Morgan Stanley (MS) to provide financing for solar installations and power purchase agreements like the one HP signed. SunPower and Morgan Stanley have formed a jointly owned holding company to finance SunPower’s solar systems for customers, with the Wall Street firm kicking in up to $190 million and SunPower putting up as much as $10 million.

In Ireland, HP will buy a year’s worth of clean electricity generated by Airtricity’s European wind farms, saving the company an estimated $40,000 in 2008. Electricity generated by Airtricity’s wind farms is fed into Ireland’s national power grid rather than directly to HP facilities. But the additional power generated by the wind farms, as well as the solar electricity eventually produced by the San Diego array, will eliminate tons of greenhouse gas emissions from the atmosphere.

Last, SunPower will give HP employees a $2,000 rebate if they install the company’s residential solar systems, with HP providing another $2,000. That’s on top of state rebates under the California Solar Initiative program.

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