Where’s the next boom? Maybe in `cleantech’

Energy breakthroughs could be the next big thing, but how many jobs can they generate?

By Jordan Robertson, AP Technology Writer
9:33 pm EDT, Tuesday October 6, 2009

SAN FRANCISCO (AP) — Our economy sure could use the Next Big Thing. Something on the scale of railroads, automobiles or the Internet — the kind of breakthrough that emerges every so often and builds industries, generates jobs and mints fortunes.

Silicon Valley investors are pointing to something called cleantech — alternative energy, more efficient power distribution and new ways to store electricity, all with minimal impact to the environment — as a candidate for the next boom.

And while no two booms are exactly alike, some hallmarks are already showing up.

Despite last fall’s financial meltdown, public and private investments are pouring in, fueling startups and reinvigorating established companies. The political and social climates are favorable. If it takes off, cleantech could seep into every part of the economy and our lives.

Some of the biggest booms first blossomed during recessions. The telephone and phonograph were developed during the depression of the 1870s. The integrated circuit, a milestone in electronics, was invented in the recessionary year of 1958. Personal computers went mainstream, spawning a huge industry, in the slumping early 1980s.

A year into the Great Recession, innovation isn’t slowing. This time, it’s better batteries, more efficient solar cells, smarter appliances and electric cars, not to mention all the infrastructure needed to support the new ways energy will be generated and the new ways we’ll be using it.

Yet for all the benefits that might be spawned by cleantech breakthroughs, no one knows how many jobs might be created — or how many old jobs might be cannibalized. It also remains to be seen whether Americans will clamor for any of its products.

Still, big bets are being placed. The Obama administration is pledging to invest $150 billion over the next decade on energy technology and says that could create 5 million jobs. This recession has wiped out 7.2 million.

And cleantech is on track to be the dominant force in venture capital investments over the next few years, supplanting biotechnology and software. Venture capitalists have poured $8.7 billion into energy-related startups in the U.S. since 2006.

That pales in comparison with the dot-com boom, when venture cash sometimes topped $10 billion in a single quarter. But the momentum surrounding clean energy is reminiscent of the Internet’s early days. Among the similarities: Although big projects are still dominated by large companies, the scale of the challenges requires innovation by smaller firms that hope to be tomorrow’s giants.

Texas Kills Solar Bill on Last-Minute Motion

By Russell Gold

The sun isn’t shining in Texas this morning.

A bill in the Texas legislature to create a $500 million rebate program for utility-scale and small-scale solar installations – and jumpstart a Texas solar industry – died late on Friday night on a procedural maneuver. Several people who followed the bill closely said it wasn’t voted down on the merits. It was derailed on a picayune legislative point about whether two bills should be melded together. The point, raised by Houston Democrat Sylvester Turner, was turned away, but by then it was too late. The clock had run out. In all likelihood, this means the Lone Star State won’t be able to create any solar incentives until 2011.

Solar boosters are worried about the message this will send. “We will lose out on talent and manufacturing because the industry will either not locate in Texas or relocate to other states that have legislative support,” says Raymond Walker, general counsel of Standard Renewable Energy, a Houston company that installs solar panels for homes and businesses.

The death of the bill was unexpected because it had strong support on both sides of the aisle – from rural Republicans such as bill sponsor Sen. Troy Fraser who saw the economic uplift created by wind farms in West Texas to urban Democrats would were in favor the idea of boosting solar-installation jobs. The fate of the bill is also surprising because Texas’ effort several years ago to create a wind industry has been so successful.

Still, despite the darkness that has descended on solar’s Texas backers, some say there is reason to be positive. “What is interesting and what matters to us is that the chair of the Texas Business & Commerce Committee (Sen. Fraser) was the first person to introduce a solar bill,” says Kari Smith, public affairs director for solar manufacturer SunPower Corp. (SPWRA, SPWRB)

“It is not business as usual in Texas anymore. We’ve gone beyond this is environmental versus big business issue,” says Ms. Smith, pointing out that the bill had support from an ad-hoc coalition called Texas High-Tech for Solar and included Advanced Micro Devices Inc. (AMD), Texas Instruments Inc. (TXN), Hewlett-Packard Co. (HPQ) and General Electric Co. (GE)

Proving her point, Jim Marston, head the state chapter of Environmental Defense, bemoaned the death of the solar bill thusly: “We are going to lose a bunch of jobs to other states. We are going to lose all those installation jobs, the kind of jobs that cannot be exported to China and India. And we’re not going to get the clean-air benefit.”

“This was simply bad luck,” says Steve Taylor, a member of the Solar Alliance and executive with Applied Materials Inc. (AMAT) “Circumstances and procedural motions.” He said solar boosters will meet soon to discuss ways forward, pointing out that the bill passed the state senate on a 26-4 vote.

The $500 million would have been funded by a statewide charge of electricity bills.

SunPower and GE Partner to Power-Up HP in San Diego

Monday October 13, 8:00 am ET

Residential SunPower Systems Available to HP Employees At Preferred Rates

SAN DIEGO, Oct. 13 /PRNewswire-FirstCall/ — SunPower Corporation (SPWRA, SPWRB), a Silicon Valley-based manufacturer of high-efficiency solar cells, solar panels, and solar systems, and GE (GE) announced today the completion of a 1.1-megawatt solar-electric power system on the roof of HP’s (HPQ) printing technology research and development facility in San Diego. The companies are jointly dedicating the system today at the HP site.

At the San Diego facility, SunPower installed a SunPower® T10 Solar Roof Tile commercial roof system, which is a non-penetrating product that tilts at a 10-degree angle to increase energy capture. The system will reduce more than 60 million pounds of carbon dioxide emissions over the next 30 years, which is equivalent to providing electricity to 3800 homes or removing more than 5250 cars from the road.

“We applaud HP’s vision for the future as well as its understanding that solar makes good business sense today,” said Tom Werner, chief executive officer of SunPower. “For leading companies and individual homeowners, clean, reliable solar power will become a core energy investment over the next decade. Solar power can be delivered anywhere, at any scale, when and where we need it.”

As an alternative to purchasing the commercial system itself, HP is buying electricity from GE Energy Financial Services, a unit of GE that owns the system under SunPower Access(TM), a power purchase agreement program. HP owns the renewable energy credits and environmental benefits associated with the system, which it may retire or sell. The solar electricity is competitively priced against retail rates, providing HP with a long-term hedge against rising peak power prices.

“Collaborating with SunPower enables us to provide HP with an efficient and cost-competitive way to realize the financial savings and environmental benefits of solar power,” said Kevin Walsh, managing director and leader of renewable energy at GE Energy Financial Services. “For us, this project diversifies our renewable energy portfolio with more solar assets and supports ecomagination, GE’s program to help its customers meet their environmental challenges while expanding its own portfolio of cleaner energy products.”

SunPower has also collaborated with HP to provide SunPower residential solar electric systems to U.S.-based HP employees at reduced rates. To date, more than 500 HP employees have signed up for the program, and about 60 have completed the installation of SunPower systems at their homes.

“HP has set aggressive goals to reduce the environmental impact of both our operations and that of our customers through product innovation,” said Ron Coughlin, senior vice president and leader of environmental strategy for HP’s Imaging and Printing Group. “By generating clean, affordable solar power with this flagship installation in San Diego, SunPower and GE are helping us achieve those goals with no initial out-of-pocket expenses, offering us long-term savings on electricity costs.”

Can high-tech giants revolutionize solar market?

Commentary: Intel, H-P and IBM are making bets, but payoff likely years away

By Therese Poletti, MarketWatch
Last update: 12:01 a.m. EDT July 3, 2008

SAN FRANCISCO (MarketWatch) — As companies like Intel Corp., IBM Corp. and Hewlett-Packard Co. have made moves in the solar power space, many have wondered if these high-tech heavyweights could use either their manufacturing or intellectual muscle to push down costs and thereby lower the price of solar power.

Perhaps eventually, but not quite so fast.

Because of the vast use of silicon wafers in the solar industry, it is easy to leap to the conclusion that these tech giants, which all have great expertise working with silicon, will have a big effect on the nearly $20 billion estimated market this year for solar cells and modules. Solar cells, encased in panels on the rooftops of homes and businesses, convert solar energy into electricity.

While the three tech giants have made investments in solar, their recent actions are unlikely to add a big new supply of solar cells to the market anytime soon. Even though the once-tight market for polysilicon, a key ingredient for the cells, is loosening up a bit, subsidies by governments and utilities currently play more of a role in the cost of solar power.

Intel’s solar ambitions

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 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.)