Silicon Valley Investors Shifting to Power Grid After Solar Sours

Companies including VantagePoint Capital Partners and Khosla Ventures are stepping up funding for systems to manage electricity, which are typically less capital intensive than solar-panel factories. Venture capital and private-equity financing for renewables dropped to its lowest in at least six years in 2012, according to data compiled by Bloomberg.

Competition for the best investments from Blackstone Group LP to Warren Buffett along with a plunge in profit from the solar and wind industries prompted the shift. It pushed Silicon Valley into taking smaller stakes in emerging technologies that help squeeze efficiency and flexibility from power supplies.

"We are going through a repositioning of cleantech," said Wal van Lierop, founder of Chrysalix Energy Venture Capital, which is based in Vancouver. "The big sectors -- solar, wind and LEDs -- are in the process of being consolidated. They're maturing, so they fall out of the cleantech opportunity basket. We now are trying to find the next hot spots."

Investment flowing from private equity and venture capital firms into renewable energy fell 34 percent to $5.75 billion last year, according to Bloomberg New Energy Finance, the lowest since at least 2006. That accounted for 2.2 percent of the $268.7 billion invested in the clean energy industry, down from as much as 6.5 percent in 2008.

Grid Technology

Chrysalix invested in the energy-management providers Enbala Power Networks and AlertMe Ltd. Khosla funded LightSail Energy Inc., which is developing energy storage devices.

"Our specialty is with large technology risk, where if the technology works there's a big economic breakthrough," Vinod Khosla, the billionaire founder of Khosla Ventures in Menlo Park, California, said in an interview. "That's what we keep looking for in all areas."

Alan Salzman, chief executive officer of VantagePoint Capital Partners, said systems that allow energy to be used more efficiently and help the grid cope with variable supplies from wind and solar plants represent the richest new areas.

Energy storage is "an essential component" for renewable energy to thrive, Salzman said. "That's an area that has been hugely underserved historically that we think remains hugely interesting," he said.

Energy Efficiency

VantagePoint, based in San Bruno, California, backed Next Step Living Inc. and Tendril Networks Inc., which developed energy-efficiency software to reduce power consumption.

"One of the disappointments in the U.S. is that our utility smart-grid deployments have really slowed," Salzman said. Deployments have "shifted overseas right now, away from the U.S., because of our regulatory environment," he said. "It doesn't mean that our archaic system -- see Hurricane Sandy -- isn't ripe for updating."

So-called energy smart technologies including efficiency products and equipment for the electricity grid amounted to $2.2 billion of the clean energy investment from venture capital and private equity tracked last year by New Energy Finance. The category accounted for 38 percent of VC/PE funding for clean energy last year, up from 15 percent in 2008.

Renewables Dwindling

Profits have drained away from renewable energy in the past three years as manufacturing capacity surged quicker than demand. Solar cell prices plunged 74 percent since the end of 2010 to 40 cents from $1.46 for each watt of capacity. The cost of installing wind turbines on land fell 15 percent to $81.44 per megawatt of capacity since mid-2009, according to Bloomberg New Energy Finance estimates.

That reduced the industry's attractiveness for venture capital companies. With solar, now that the technology is proven, the industry's biggest challenge is driving down costs, said Raj Prabhu, managing partner at Mercom Capital Group in Austin, Texas.

Solyndra LLC got more than $1.2 billion in venture capital funding. Then it liquidated after competition from Chinese manufacturers priced its tubular solar modules out of the market. Panel maker MiaSole Inc. was sold in January to Hanergy Holding Group Ltd. for about $30 million. That's a fraction of the $494.4 million poured into it by Kleiner, Vantage Point and Firelake Capital, according to Mercom Capital Group.

VC Misfires

Another misfire for the VC investors was A123 Systems Inc., a provider of batteries for electric cars. It filed for bankruptcy in October as sales of the vehicles failed to meet expectations. It got at least $278 million from VC firms including North Bridge Venture Partners LP and CMEA Ventures.

"VCs are really good at finding new technologies but not so good at manufacturing," Prabhu said. "They've learned that they need to stick to picking technology winners, not building factories. The new money is going downstream to help build markets. The industry is now mainstream."

As venture capital moves away from traditional renewables, mainstream investors are starting to move in. Buffett's MidAmerican Energy Holdings Co. decided in January to spend as much as $2.5 billion on two large solar farms, after forming a unit dedicated to wind and solar holdings last year.

The private equity company Blackstone Group LP in September bought Vivint Inc. for $2 billion, giving it access to a home-security and energy-management provider with more than 670,000 North American customers. Vivint says the networks that manage these services complement its growing residential solar systems by smoothing the flow of solar power onto the electricity grid and into homes.

Solar's Gleam

A few parts of the solar industry remain attractive for investors, even after the slump in the costs of panels. Elon Musk's SolarCity Corp. has more than doubled since its initial public offering on Dec. 12. It develops rooftop solar systems, which are more economical to install since the price of cells plunged.

Technology to store and conserve energy also is gaining attention among VC investors. Utilities are taking more of their power from renewables. Wind turbines produce power when there's a breeze, and solar only when the sun is up. Integrating those power flows into distribution grids used to coping with steady supplies from coal and nuclear plants requires new systems that give engineers more flexibility.

Black Coral

In December, Next Step Living, a residential energy-efficiency company, raised $18.2 million from VantagePoint, Black Coral Capital and the Massachusetts Green Energy Fund LP.

The month before, billionaire Peter Thiel led a $37.3 million fundraising for LightSail Energy Inc. It's developing storage systems that compress air in tanks and generate power when the air is released, backed by Khosla and Microsoft Inc. founder Bill Gates.

Gates and Khosla also joined French oil company Total SA in May for a $15 million second round for Liquid Metal Battery Corp., now called Ambri Inc., which is building batteries for the power grid that were developed by Massachusetts Institute of Technology Professor Donal Sadoway.

"We continue to push energy efficiency, which is less capital intensive and allows a company to get into a very big market by improving existing infrastructure rather than having to build a new way of delivering power," said Neil Suslak, a managing partner at Braemar Energy Ventures. "Efficiency and capital-light deals are the flavor of the month."

Copyright 2013 Bloomberg

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Mountain Valley throws switch on photovoltaic system

Two switches flipped GLENWOOD SPRINGS, Colorado - Heather Johnson Friday morning and officially the activates new solar electric system on the roof at Mountain Valley developmental services.

"Cool!" said Johnson, a mountain valley client and Glenwood Springs-based, be carried out after the ceremony.

In fact produces clean electricity electric solar system for about a week, according to Bruce Christensen, Managing Director of the non-profit agency. He has checked the system of inverter on the day to see, how much energy that it produces and how much carbon dioxide it keeps out of the atmosphere.

"Until the end of the year, we will save 100 tons of carbon dioxide,", said Christensen.

"With a system like this you really carbon reduction can take into your own hands", said Isaac Ellis, small Sunsense system project manager solar from Carbondale, the installation program of the system.

Mountain Valley is solar system rated to 10 kilowatts under maximum solar conditions produce electricity. In the first week it had produced electricity, the amount of electricity to be used for the settlement already 362.

In the course of a year the system is expected to generate at least one third of the electrical requirements at Mountain Valley offices, classrooms and greenhouse in South Glenwood, and store the not-for profit $1,300 on their electricity bill.

While a "toast and tour" celebration Friday on the new concentrated solar system, the project involved also a new roof and lighting upgrades for the 90-year-old building.

"We do not think that it makes sense to put that had a 30-year life, panels on a 32-year-old roof" Christensen said.

-A light tomato red metal roof, which replaced the old, little leaking, faded red roof - cost $49,884 the new roof. A $25,000 scholarship of the Aspen Community Foundation for half of the cost of that paid for the upgrade.

Mountain Valley worked also to its overall electrical requirements to reduce, so that the solar system could compensate for its electrical use more. With the help of the Garfield clean energy challenge replaced Valley its older Office and greenhouse lighting with a more efficient ballasts and lamps. The investment cost $8,735 and a Garfield clean energy rebate for $5000, the cost paid.

About half the cost of the solar system was also paid by discounts. System costs $51,250 install and mountain valley received a $10,000-discount of Governor's energy Office, a $15,000-Glenwood Springs electric and a $3,000 discount-discount by the community for resource efficiency.

$23250, Left the mountain valley health financing cost of the solar system.

The new system increases a smaller solar electric system in the on the top of mountain valley greenhouse, currently from Aspen Skiing co. Environment Foundation funded. The Agency has also space in the solar-powered third street Center in Carbondale.

Now searching employees in installing solar energy at the Agency in mud, a former Church, which has a large South coated roof.

"We have to rebuild our reserves, and then we look at the sludge plant," Christensen said.

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Valley biomass plants face steep fines

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Valley TV ad's air cleanup claims disputed

Is a television commercial by the local air district recruiters-winter 2009 / 10 as the Valley of the cleanest record-but that true? Yes-with asterisk.

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Feds investigate Texas plant fire, 1 killed

What caused a fire that killed a worker a liquid natural gas facility East of Houston, an institution, owned by a company that since 2004 thousands of dollars in fines for serious injuries, examine Bundes-and national officials, that paid has included at least a different death.

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Feds investigate Texas plant fire, 1 killed

Bundes-and national officials investigate what caused a fire, a worker killed a liquid natural gas facility East of Houston an institution since 2004 thousands of dollars in fines for serious injuries, that paid has included at least a different death.

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Delta standards to be examined by the EPA

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EPA: New pollution limits will apply to some.

More than a dozen industry managed to escape, new federal controls on air pollution and the gases that warming blamed, after a top environmental protection agency officials told a Federal Court a long-delayed California powerhouse would have to follow the rules.

Two biomass plants, should help, San Joaquin Valley have clean air, with air pollution most of the State fines in recent history have been marked.

Global ampersands in Boston was more than $800,000 for ozone-related emissions premium and other injuries of biomass plants in Madera and Merced County, fine, federal authorities announced Tuesday.

Protection Agency say the fine of the largest in the San Joaquin Valley and California is in recent years, environmental officials in the US. Although they had not have concrete numbers, officials said fines of nearly $1 million are unusual in California.

Ampersand agreed, said the EPA fines for infringements which began in 2008 on the ampersand Chowchilla makes biomass in Madera County and Merced close to El Nido. Woody wastes burn biomass plants to build farms and cities to electricity.

Ampersand agreed to reduce ozone-forming nitrogen oxides and carbon monoxide. Company could be unreachable for comment officials.

The large fine reflects the amount of pollution and the duration of injuries. The injuries took place during 2008, 2009 and 2010.

The San Joaquin Valley air pollution control district discovered problems.

Biomass plants are a cleaner way as open field burning agricultural has mostly been banned in the Valley.

Modern biomass plants must however satisfy strict standards to prevent addition to air quality problems, especially in the Valley.

Valley ozone pollution is one of the worst in the nation.

Ozone is a corrosive, warm weather gas, the scars that raises lung and asthma.

"That a victory for human health are today's enforcement actions," said Jared Blumenfeld, EPA Regional Administrator.

Ampersand was fined $328,000 for its plant Chowchilla and $492,000 for operation of Merced County.

The EPA and the district splits the punishment that is considered to be a rarity. EPA and local districts are often work on enforcement measures.

EPA share of money go to the US Treasury. The Valley Air District uses such sanctions programs help residents buy to finance electric lawnmower or cleaner wood stoves.

Ampersand was also an extra $15,000 to the Valley Air District for separate violations of district rules, including requirements for emissions control plans to pay.

Ampersand bought and renovated two biomass plants in 2007 and 2008 federal air officials said.

Operations had to shut down the Valley Air District during the 1990s.

The two plants aside from nitrogen oxides and carbon monoxide injured limit values for sulphur dioxide. The two plants for timely tests to measure emissions, EPA, said.

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