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Archive for the ‘cleantech’ Category

Article from GigaOm.

Chinese auto tech behemoth Wanxiang has won the bidding process in an auction to buy the assets of bankrupt battery maker A123 Systems. On Sunday the companies announced that Wanxiang plans to acquire most of the assets of A123 for $256.6 million. It’s news that could be a bit controversial, given A123 received a $132 million grant from the U.S. government, and could now be owned by a Chinese company.

The winning bid beat out Johnson Control’s bid to acquire A123′s automotive division. Johnson Controls previously had offered to buy the automotive division and two factories for $125 million.

One of the reasons Wanxiang’s offer to buy up A123 had been controversial was because A123 had some U.S. military contracts, which critics didn’t want to see in the hands of a Chinese company. But A123 decided to sell off its government business, including all its U.S. military contracts, to Illinois-based company Navitas Systems, for $2.25 million. Wanxiang acquired the rest of the assets including the grid storage business.

We’ll see if that move silences politician critics like U.S. Sens. John Thune (R-S.D.) and Charles E. Grassley (R-Iowa). The deal still has to be approved by the bankruptcy court as well as the Committee for Foreign Investment in the United States (CIFIUS).

If approved, the future of A123 System’s lithium ion battery tech will fittingly be owned by a Chinese auto giant, as China is increasingly becoming one of the most important markets for electric vehicles. Money from Chinese investors, conglomerates, cities and the government, continues to drive a significant amount of the future of next-generation electric car technology.

The deal also provides a future for A123′s technology, which had a promising beginning, but had suffered a series of setbacks in 2012. Venture-backed A123 held the largest IPO in 2009, raising some $371 million, and was trading at over $20 per share when it started trading. A123 also raised more than $350 million from private investors when it was still a startup.

Yet in recent months, it suffered from manufacturing problems, and also had only a handful of customers for its premium batteries. The company had been losing boat loads of money for years.

The Wanxiang deal still won’t make back enough to cover its debts. A123 says:

Because the total purchase price for A123’s assets would be less than the total amount owed to creditors, the Company does not anticipate any recoveries for its current shareholders and believes its stock to have no value.

Now that the A123 bankruptcy is moving forward, it will be interesting to see what Fisker Automotive, one of A123′s prime customers, will do. Fisker had told the media that it is waiting for the results of the A123 auction before it starts back up assembling its Karma cars.

This isn’t Wanxiang’s first cleantech and clean energy acquisition — it’s actually its fifth in 2012, says the company in a release. Wanxiang has been aggressively acquiring under valued American cleantech and clean energy companies.

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Article from GigaOm.

Sandy isn’t just wreaking havoc for utilities and conventional power plant companies on the east coast. The hurricane is also delaying some solar power plant project work for First Solar, which on Thursday reduced its 2012 sales forecast and also boosted its earnings projection.

The Arizona-based company said the hurricane is also disrupting the supply of components for its solar products, which include panels and trackers that prop up the panels and tilt them to follow the sun’s movement throughout the day. For 2012, First Solar now expects to generate $3.5 billion to $3.8 billion in sales — previously it was looking at $3.6 billion to $3.9 billion. Non-GAAP earnings should hit $4.40 to $4.70 per share, however, instead of $4.20 to $4.70.

The company issued the forecast along with its third-quarter financial results, which saw its sales decline year-over-year sales to $839.1 million from $957.3 million. First Solar posted a net income of $1 per share for the third quarter, down from $2.25 per share in the same period a year ago, thanks to charges related to its restructuring efforts to reduce costs. But still, a profit in a difficult year.

“The solar market remains challenging, but we are continuing to gain traction in the new sustainable markets we’re targeting and expanding our global presence,” said Jim Hughes, First Solar’s CEO, during a conference call with analysts.

First Solar executives highlighted the progress they have made in opening up new markets. The company has vowed to build its business in places with minimal government subsidies, which so far have been responsible for the rise of the global solar market. Europe has been the largest market, but the pace of its growth will likely slow over time as governments gradually reduce their incentives.

During the third quarter, the company announced it was chosen to build a 13 MW power plant for the Dubai Electricity & Water Authority. First Solar inked deals to sell its cadmium-telluride solar panels for a 25 MW project in the state of Rajasthan in India and for two other projects totaling 50 MW in the same state. The company also signed a memorandum of understanding with a power plant operation and maintenance company in Indonesia to work on 100 MW of projects.

First Solar also hired Bruce Yung as its China manager during the third quarter. The company tried to crack the Chinese market before but hasn’t seen much success. Although China presents lots of opportunities, its government also is keen on boosting the domestic market for Chinese solar manufacturers.

In recent years, First Solar has been building its power plant development expertise and amassed an impressive pipeline of projects under development. That business is more lucrative – the company can make money from developing, building and operating solar power plants (for owners it sells the power plants to) that use its own solar panels. The company is building the largest solar power plant project in the U.S. – the 550MW Topaz Solar Farms in central California. The vast majority of the 3 GW of projects under development that it’s inked power sales agreement contracts for are in North America.  Now the company’s hope is to develop solar power plants in other parts of the world.

First Solar has no intention of conquering the rooftop segment – its panels are less expensive but also less efficient at converting sunlight into electricity as other major brands. That means an array with First Solar’s panels will take up more space than the one with more efficient solar panels. Hughes also told analysts that the rooftop market has less brand loyalty and cares less about how well the solar panels will perform over decades.

Photos of Topaz Solar Farms by Ucilia Wang.
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Article from GigaOm.

SolarCity, which started as a residential solar installer and is planning a $201 million IPO, has now jumped into building solar panel farms for utilities. The company announced on Thursday a deal to build a 12 MW(ac) project for Hawaiian utility Kaua’i Island Utility Cooperative.

The $40 million project is unusual because SolarCity, founded in 2006, has spent most of its resources building up an installation and financing business for residential and business customers (including schools and public agencies). This business has positioned the company as an electric retail service provider who competes with utilities. The Kauai project is the first announced project by SolarCity to build a solar farm for a utility, said Jonathan Bass, SolarCity’s spokesman. (The company previously also lined up a fund from Pacific Gas & Electric‘s investment arm to market solar panels and leasing products to home and business owners).

The engineering and construction contract on Kauai will give SolarCity the experience of working with a new class of customers. More utilities across the country are interested in building their own solar energy projects in order to meet regulatory mandates or because they see it as a good investment opportunities to bet on renewable energy. We have noted in previous posts that SolarCity was going after larger and larger projects, and that placed the company in direct competition with more established players in that segment, such as SunEdison, SunPower and First Solar.

The utility solar market is growing faster than the residential and commercial segments primarily because the projects involved tend to be larger, in tens or hundreds of megawatts, and potentially more lucrative. And many utilities in large states, such as California, need to serve an increasing amount of renewable energy to their customers. Some of the overhead costs also could be lower when it comes to utility-scale projects: you don’t need to send out an army of marketing and sales people to sell consumers systems that are kilowatts in size.

If SolarCity has any ambition to expand beyond the U.S. market, it would do well to gain an expertise in developing and installing utility projects. In many markets overseas, the biggest opportunities lie with working with utilities to boost the amount of renewable energy they serve and taking advantage of government subsidies for that type of projects.

SolarCity is among the first to offer homeowners leases so that they don’t have to pay a high upfront cost of installing solar panels. Instead, homeowners pay a monthly fee via long-term contracts for the electricity from the panels, which are owned by the investors, typically banks, that have set up funds for SolarCity to install and manage the equipment. Solar leases have become popular and are offered by many more companies now, and they accounted for over half of the residential installations in California, the country’s largest solar market. Part of the sales pitch for the leases is a promise  – or at least a strong suggestion – that consumers will end up paying lower electric rates over time than they would with their local utilities.

The California company also has lined up some big-name business customers, including Walmart, eBay and Intel. Nearly a year ago, SolarCity said it had secured a loan to install 300 MW of solar panels in military housing communities across the country.

In recent years, SolarCity entered other types of energy service businesses. It began to offer energy audits and home-improvement services to help homeowners save electricity use and cost. It also now offer energy storage using lithium-ion battery packs from Tesla Motors and install solar powered charging stations for electric cars (such as Tesla’s cars).

For the Kauai project, SolarCity intends to install solar panel on 67 acres that are part of a former sugar plantation. The utility and SolarCity still need to secure local and state permits, but the plan is to start construction in July 2013 and switch on the solar farm in 2014. Electricity from the solar farm will be enough to serve about 6 percent of Kauai’s daily energy demand, the companies said.

Kauai is one of the Hawaiian islands and is home to nearly 68,000 residents. It’s set a goal of generating renewable energy to meet 50 percent of its needs by2023. The project announced Thursday is one of the three solar farms, totaling 30 MW(ac), that are being developed by the Kauai utility.

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  • October 2, 2012, 5:29 PM

New York’s Cleanweb Hackathon Sparks Green Ideas Where Clean-Tech and IT Intersect

By Yuliya Chernova

Republicans driving electric cars? That’s one thing you might discover through your social networks, according to Bill Weihl, recently hired by Facebook to lead the company’s sustainability efforts.

Getty Images

Weihl was speaking on Friday night at the New York CleanWeb Hackathon, for which he flew in from Silicon Valley. It was the second such event held in New York, and one of several around the country, that’s meant to connect developers and people with business ideas to form teams and create applications that use the Web in pursuit of environmental sustainability.

On Friday night mingling in the recently opened collaborative space for start-ups AlleyNYC were people from different walks of life, each with an interest in the area or an idea. There was a psychiatrist who wanted to create crowd-funded solar projects, and someone who works in an IT department of a consumer magazine who’s interested in developing apps that would help increase the fuel economy of cars. Over the weekend, some 200 people participated in the hackathon.

By Sunday, judges picked three winners: Green Building Banner, a Google Chrome plug-in that brings energy data to consumers; Lean Green Stormwater, an online tool, which allows facility owners to calculate stormwater charges and savings under various stormwater mitigation investments; and Parkifi, a mobile app that helps users find a New York park with a Wi-Fi hotspot.

This sub-sector, alternatively called cleanweb, clean IT, energy IT, and digital cleantech, depending on who you ask, is attracting more venture investing. The web “has the potential to change our relationship with resources,” said Nicholas Eisenberger, managing partner at venture accelerator Pure Energy Partners.

Eisenberger said that he is working on a report with Cleantech Group that will show that investments in cleanweb, businesses at the intersection of IT and energy, have been growing as a percentage of all clean-tech dollars spent by venture capitalists.

Examples of such companies are Sungevity, a solar financing company that evaluates rooftop solar potential by using satellite data and allowing consumers to get accurate quotes for their projects online. With a bit of a stretch, even Airbnb, a property-rental-by-owner service online, could be considered cleanweb, said Eisenberger, because renting available empty space is more energy efficient and sustainable than building new hotels to accommodate visitors, and apartments are more energy-efficient than hotels, he said.

For Facebook FB -1.04%, the cleanweb is already a reality via a recent collaboration with OPower, a venture-backed company. OPower’s Facebook plug-in allows users to compare energy use and compete against friends and family on energy-saving practices.

“I think a lot of people would probably be surprised by how many people in their social network, actually do things that they [may have considered] fringe,” said Weihl.

Write to Yuliya Chernova at yuliya.chernova@dowjones.com. Follow her on Twitter @ychernova

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Wind and Solar No Longer Shine for Clean-Tech Investors in China

by Sonja Cheung

It isn’t always the natural order to go from big to small, but that’s what some venture and private equity investors are doing in the clean-technology space in China–moving away from investing in large solar and wind power deals, and instead seeing better value in downstream businesses offering services, software and solutions, say industry experts.

The amount invested into Chinese solar and wind venture-backed deals has traditionally surpassed other segments in the clean-technology space, including energy storage and recycling. For example, in 2006, solar and wind deals together totalled $176 million, far outpacing other sub sectors including energy efficiency at $8.6 million, and waste-focused transactions at $11 million, according to data provided by VentureSource, an industry tracker owned by VentureWire publisher Dow Jones & Co .

However, in the last couple of years that has U-turned. Last year, $78 million was invested into energy efficiency product venture-backed companies, compared with $26 million into solar-focused deals, and $67 million into wind-based transactions. Likewise in 2010, energy efficiency venture-backed companies saw $220 million, far outshining the $58 million that went into solar deals, while wind transactions saw no funding at all, data show.

“Clean technology is truly shifting from large, money-bleeding projects…to smaller, but profitable and scalable technological innovations applicable in clean-tech,” said Tony Luh, general partner and greater China president at Westly Group, a clean-tech venture capital firm that also has offices in Menlo Park, Calif.

Recent overcapacity and over-investment into solar and wind projects in China have prompted investors to shun these sectors, said Mr. Luh, adding that U.S.-based solar systems manufacturer Solyndra ‘s bankruptcy filing last year has also muddied the waters. Solyndra had received backing from the likes of Redpoint Ventures , RockPort Capital Partners and Argonaut Private Equity.

In fact, Chinese clean-tech companies that provide services, solutions and software have been under-invested in, deemed too small an investment for larger international private equity players, while not in a suitable sector for many local Chinese firms, said Niklas Ponnert, chief financial officer at Origo Partners PLC , a London-listed investment company that targets clean-tech and natural resources-based companies in China.

Most domestic general partners are focused on investing in consumer-related companies that are “easier to understand” and are generally expected to complete an initial public offering within a couple of years, he said. While, clean-tech investment involves a “bit more risk, is a bit more early stage, and companies take longer to exit.” Origo is targeting an internal rate of return of 20% to 25% on its investments, Mr. Ponnert said.

He cited Origo’s portfolio company, Unipower Battery Ltd ., as an example of a clean-technology company providing a “solution,” as the Beijing-based business plans to supply material and batteries to electric vehicles, which the Chinese government is promoting the use of. He added that Origo had deemed solar “past the top of its cycle” when considering investments in the mainland.

Overall, investment into the whole clean-technology sector took a hit last year, almost halving compared with 2010, VentureSource data show, with $368 million worth of venture capital backing going into clean-tech in 2011, compared with $634 million a year earlier. This year, second quarter clean-tech investment totalled $39 million, outpaced by the first quarter’s $53 million.

Westley’s Mr. Luh attributes the year-on-year fall to generally poor investor sentiment on the back of concerns about the ongoing debt crisis in Europe, which has reduced other governments’ ability to support clean tech initiatives. The Chinese government earlier this year said it aimed to pour 10 trillion yuan into developing the industry as the country battles increasing pollution.

In addition, Christiaan Kaptein, head of private equity Asia at SAM and Robeco, which focuses on sustainable investment, said the domestic Shanghai stock exchange fell sharply in 2011, but private company valuations failed to follow suit, so “investors may have been on the sidelines in the expectation that prices would adjust.”

Looking forward, Mr. Kaptein said that his firm likes sectors including energy efficiency and sustainable agriculture, while sweet spots for Mr.Luh include energy storage and light-emitting diodes.

Write to SonjaCheung at Sonja.Cheung@dowjones.com. Follow her on Twitter at @SonjaCheung

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Article from GigaOm.

The Department of Energy’s program that gives grants to early-stage energy projects — called ARPA-E — has allocated another $43 million for 19 battery projects, including grants for futuristic batteries made of new chemical mixes, using brand new architectures and utilizing nanotechnology. The ARPA-E program has been aggressively funding next-generation battery technologies over the years, and though these are small grants, the amount of innovation happening is substantial.

The funds go to projects that are very early stage, and are supposed to help bring disruptive R&D closer to commercialization. While Japanese and Korean conglomerates dominate the industry of producing small format lithium ion batteries for laptops and cell phones, these next-gen batteries are mostly targeted for electric cars and the power grid. Some of these projects also aren’t strictly traditional batteries, and a couple are flow batteries, which are large tanks of chemicals that flow into a containerized system and provide energy storage for the power grid (see Primus Power’s flow battery pictured).

Notable winners of the funds include big companies like Ford, GE, and Eaton, small startups like Khosla Ventures-backed Pellion, and projects out of the labs of Oak Ridge National Laboratory, Battelle Memorial Institute, and Washington University in St. Louis.

Here’s some of the winners (for the full list of 19 go here):

  • Ford: $3.13 million for a very precise battery testing device that can improve forecasting of battery-life.
  • GE Global Research: $3.13 million for sensors thin-film sensors that can detect and monitor temperature and surface pressure for each cell within a battery pack.
  • Eaton: $2.50 million for a system that optimizes the power and operation of hybrid electric vehicles.
  • Pellion Technologies: $2.50 million for the startup’s long range battery for electric vehicles.
  • Sila Nanotechnologies: $1.73 million for the startup’s lithium ion electric car battery that it says has double the capacity of current lithium ion batteries.
  • Xilectric: $1.73 million to “reinvent Thomas Edison’s battery chemistries for today’s electric vehicles.”
  • Energy Storage Systems: $1.73 million for a flow battery for the grid, with an electrolyte made of low cost iron, and using a next-gen cell design.
  • Battelle Memorial Institute: $600K for a sensor to monitor the internal environment of a lithium-ion battery in real-time.

Read more here.

 

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Article from SFGate.

Two weeks ago, solar power plant company BrightSource Energy abruptly canceled plans for an initial public stock offering, convinced that investors currently have little appetite for new solar shares.

Now SolarCity Corp. will test that theory.

SolarCity on Monday reported plans for its own IPO. The San Mateo company, best known for leasing rooftop solar systems to homeowners and businesses, filed a confidential draft registration statement with the U.S. Securities and Exchange Commission last week.

SolarCity’s brief statement announcing its IPO did not specify a price range for the stock or say when trading might commence.

The company was founded in 2006 by brothers Lyndon and Peter Rive. Their cousin – Tesla Motors CEO Elon Musk – chairs the company’s board.

SolarCity had been widely expected to go public this year. The popularity of residential solar leases, which allow homeowners to install solar panels without paying the up-front cost, has grown quickly. SolarCity and San Francisco’s SunRun Inc. have emerged as the field’s dominant players.

Ugly year for stocks

But SolarCity could face headwinds on Wall Street.

Solar stocks have endured an ugly year, falling even before the highly public bankruptcy of Fremont’s Solyndra. All have been hammered by a worldwide plunge in solar cell prices, the result of new factories in China flooding the market. A Bloomberg index of major solar stocks – including First Solar Inc. and SunPower Corp. – lost 67 percent of its value in the last 12 months.

So burned have investors been that they may look askance at solar companies that have nothing to do with making cells.

BrightSource, based in Oakland, called off its IPO on April 11, just hours before trading was scheduled to start. The company’s large solar power plants don’t use photovoltaic cells. Instead, they use fields of mirrors to concentrate sunlight and generate heat.

And yet, as BrightSource executives spoke with potential investors in the weeks before the planned IPO, the investors were skittish. It didn’t help that solar stocks, which had shown some improvement in January and February, tanked during the road show, said BrightSource CEO John Woolard.

“The feedback we were getting from investors was, ‘In the solar space in particular, it’s been a bad place for us to be, recently,’ ” Woolard said last week.

He felt fortunate that BrightSource didn’t absolutely need to move forward with its stock sale. The company’s board unanimously voted to cancel the IPO rather than postpone it.

“You can always get a deal done,” Woolard said. “The questions are: at what price? Is there after-market support? Is it going to be a good outcome or not? Is it a deal you want?”

The fall in solar cell prices that has gutted so many solar stocks has, in fact, helped SolarCity.

Although they receive less public attention than struggling solar manufacturers, the companies that develop or install photovoltaic solar systems have benefited from tumbling prices, which make their systems more affordable. That could work in SolarCity’s favor when the company’s shares start trading.

Deal with military

“It’s not a good time for solar manufacturing, but it’s a great time for other parts of the solar industry,” said Ron Pernick, managing director of the Clean Edge Inc. market research firm. “This is one of the areas where we’re seeing a lot of deployment and growth, and it’s quite robust.”

Some large, institutional investors are already quite familiar with SolarCity.

Both Bank of America Merrill Lynch and U.S. Bankcorp. are financing a $1 billion SolarCity project to place solar panels on military housing across the country. The U.S. Department of Energy had initially agreed to back the effort with a loan guarantee of $275 million, under the same federal program that gave Solyndra $528 million to build a factory in Fremont. But the loan program expired before the department and SolarCity could agree on terms.

Those banks understand SolarCity’s business and know that the company doesn’t share the problems plaguing manufacturers, Pernick said.

“I think savvy investors will understand the difference,” he said. “Whether the general public does, we’ll have to see.”

Read more here.

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