The 540-foot structure stands in Tonopah, Nevada at the Crescent Dunes Solar Energy Power Plant. Construction began in September 2011 and the process has been operating 24/7 in the last few months in order to get the tower completed before winter. I spoke with CEO Kevin Smith this morning.

The project will eventually use 10,000 "billboard-size" mirrors, called heliostats, to focus sunlight at a boiler, which will work in conjunction with a molten salt energy storage system that provides something that photovoltaic solar systems don't: power when the sun goes down. The mirrors will start to go in the ground in summer 2012. The molten salt receiver target will be added later this year and add 100 feet to the height of the tower.
 
SolarReserve of Santa Monica, California closed a $140 million venture round in 2008 and has a $737 million loan guarantee from the DOE for the 110-megawatt molten salt storage power tower with 10 hours of thermal energy storage. This will be the tallest molten salt tower in the world, according to the DOE website. The firm licenses the molten salt power tower solar technology from Rocketdyne, a division of Hamilton Sundstrand. Investors in SolarReserve include U.S. Renewables Group, Citi Alternative Investments, Sustainable Development Investments, Good Energies, and Credit Suisse. The project is owned by SolarReserve, ACS Cobra (a power plant engineering and construction firm), and Santander, a financial services and banking firm.

SolarReserve has a power purchase agreement (PPA) with NV Energy for this project, which is built on BLM land and is slated to be operational and generating power in 2013.

Molten salt energy storage allows the solar system to behave a bit more like a natural gas power plant and a bit less like a field of heliostats or PV solar panels. In a press release, Kevin Smith, CEO of Solar Reserve, said, "We can deliver electricity ‘on demand’ the same way a coal, natural gas or nuclear fueled plant does, but without emitting any harmful pollution or hazardous materials, providing a genuine alternative to conventional power generation."

Once working, the power plant will generate more than $10 million per year in salaries and operating costs, along with generating millions in tax revenues, according to the company. 
 
The massive scale and scope of the project can be better appreciated from the construction videos found here.

GTM Research has looked at the LCOE of various solar technologies, with and without storage, and SolarReserve fares rather well in those comparisons. (See chart below.) The CEO confirmed that they expect an LCOE in the $0.116 range, which puts the CSP firm in striking distance of a combined-cycle natural gas power plant -- but without the emissions.

Here's CEO Kevin Smith pleading his case on Fox News:

A site with a rich renewable resource offers a developer the prospect of doing well by doing good, of opening up a front in the fight against climate change and the traditional polluting sources of electricity generation. But there is a cost to the communities into which such a project intrudes.

Reactions vary widely. Wind Capital Group’s Tom Carnahan built the 150-megawatt Lost Creek project by demonstrating to rural Missouri residents the local revenues, jobs and landowner leases they would gain from supporting development.

Carnahan said it is vital to form good partnerships with key stakeholders early on, adding, “If there are concerns, address them in a transparent way.”

Engagement with landowners, he found, must be personal. “You call them up. You knock on their door,” he said. “You’ve got to spend some time sitting at the kitchen table, drinking some coffee and talking to folks.” He smiled. “People in rural America, and farmers in particular, have very well-honed BS detectors. You only get one chance to be shooting straight with them and you’ve got to do that.”

Solar power plant developers in Southern California now face those folks.

A bit of history: To encourage homeowners to install rooftop solar systems in the 1980s, California’s leaders decided to exempt them from property tax assessments, according to Center for Energy Efficiency and Renewable Technologies (CEERT) Executive Director V. John White.

The exemption also applies, through 2016, to solar power plant builders. That significantly subtracts from the revenues a project can offer to a locality. And, unlike Carnahan’s wind projects, which leased sites from multiple landowners, solar power plants are often built on land purchased from one or a few owners.

First Solar is looking to recover from missteps made because the company did not fully engage with residents in the small desert communities of Antelope Valley, California when it bought the 230-megawatt Antelope Valley Solar Ranch One (AVSR1) project from NextLight.

AVSR1 is the first of some 30 proposed Antelope Valley renewables projects. In the area, the sun shines 300+ days per year, the wind blows during peak demand periods, and Southern California Edison has already built transmission to deliver thousands of new renewable megawatts to nearby Los Angeles.

First Solar obtained the necessary county approvals before the locals could organize, and construction is proceeding. But there is ongoing enmity and a stream of complaints against the project. First Solar has been making genuine efforts to address the complaints.

A January 9 First Solar offer to donate as much as $280,000 for an Antelope Valley Community College perpetual scholarship fund has not yet been accepted. One local deemed it “blood money” and suggested the community “put it in a barrel and burn it.”

Developers in one of California’s ripest renewable energy zones have been slowed and/or turned away by Antelope Valley’s now-organized resistance.

A couple of hundred miles across the Mojave Desert in Riverside County, more than 20 proposed solar power plants are moving toward development under the intense sun that also comes with existing transmission and the nearby L.A. market.

That is why last November the Board of Supervisors unanimously passed Policy B-29, setting the cost of development at $450 per acre. The assessment is “to compensate the county for the use of its property and for committing vast tracts of land exclusively to solar development.”

It was imposed after four months of not always entirely friendly negotiations between solar developers like BrightSource, enXco, and NextEra and the county.

“I’m convinced that this is the right thing to do, not for us, not for the Board of Supervisors, but for our grandchildren and the future of Riverside County,” said Supervisor John J. Benoit, whose district will see most of the development.

County credits and incentives would return half the assessment to developers if they hire local construction workers and create permanent local jobs. And, according to CEERT’s White, the assessment is only half what the developers will have to pay if the property tax is reinstituted in 2016.

Solar developers are pushing back. The Large-Scale Solar Association and the Independent Energy Producers Association jointly filed a suit against the county, claiming the assessment is a violation of the state constitution.

California’s Proposition 26 prevents taxation in the form of a fee or charge. Because the county’s assessment is not a specific fee for impacts on surrounding communities or for services and infrastructure provided locally, developers say, it is a veiled tax and therefore unconstitutional.

CEERT’s White said he is hopeful the controversy and legal struggle will lead to a compromise. The developers, he said, need more flexibility for “projects in late-stage development that don’t have the chance to factor this into their costs and their pro-formas.” And CSP developers, he added, need consideration because economics currently favor PV, while CSP generates more “value-added and local content.” But with these projects, White explained, “there are a lot of people being put to work that don’t have work” in a California region with double-digit unemployment.

The developers have a lot to offer and the counties have a lot to gain. But this is a question for GTM readers: How much does a developer owe a community?

But for the New York-based company, the Modlet might be just the first act. The company is currently selling the Modlet at Best Buy and directly to customers in its own online storefront and has done a pilot with Consolidated Edison to control window AC units during summer peak.

ThinkEco will continue to work with Con Edison and other utilities, but it is also going to start working with original equipment manufacturers and then release a software-as-a-service product in the first half of 2012.  

“The idea is for us to find partners that need a plug-load solution,” said Jun Shimada, president and CTO of ThinkEco.

For companies, built-in solutions for large office equipment could save significant amounts of money. More than 25 percent of electricity that companies use goes to plug loads, a figure that is growing. Many companies have instituted behavior programs to increase energy efficiency, but what if you could take the workers out of part of the equation?

ThinkEco is targeting computers, printers, copiers and water coolers to do just that. The company’s research with more than 125 companies found that they could turn appliances off about 50 percent of the time, said Shimada.

The move to work with OEMs and to offer software as a service is a trend growing among residential energy management companies. Other companies like People Power are also looking to offer an embedded solution, while EnergyHub also launched a software-as-a-service offering last year and Tendril is building partnerships with OEMs, such as Whirlpool. 

Although ThinkEco is gunning to work with commercial markets, it is actually still proving the value of its Modlet in utility studies. In the Con Edison pilot, there was an average 26 percent energy savings across some 500 window air conditioners during peak events last summer, although further data will not be released until this summer.

While ThinkEco finalizes its entry into the commercial market, just proving its Modlets for window ACs could be a successful business model in utility channels. Central AC is still king in most areas of the country, but window or wall units make up 58 percent of air conditioning in the U.S., according to the U.S. Energy Information Administration.

The figures in other regions of the U.S. are far lower, with the Midwest and West having about a quarter of their air conditioning served by window or wall units. The figure is only about 16 percent for the south. 

New York City is unique in its penetration of window AC units. In many other areas of the country, the prevalence of these units is clearly related to income. About a third of households below the poverty line have room AC, rather than central, compared to about 15 percent of those that have an income above $100,000, according to EIA. For utilities looking to provide demand response programs that cut across the socioeconomic strata of their territory, a solution like Modlet could help them achieve that. “One thing that’s good for us from retail is it forces us to make it very easy to use,” said Shimada. “The non-tech-savvy still need to be served.”

From a commercial standpoint, the product could also be a low-cost option for small and medium-sized businesses that can't afford to upgrade large pieces of equipment but want some visibility into large plug loads. ThinkEco is currently doing a pilot with NYSERDA to examine that opportunity.

In 2012, ThinkEco sees the utility and enterprise markets, rather than individual consumers, as the primary forces that will be driving the firm's business. “There’s a little bit of wait-and-see with retail,” said Shimada. “But our intention is to keep all three going.”

We’re talking about “building shell” improvements like insulation and windows, as well as the systems that heat and cool the building. Before that happens, somebody -- a utility worker, an energy auditor, a contractor, or the like -- will have to spend a significant amount of time talking the homeowners through the process.

It would be nice if those door-to-door work crews could have access to real-time data from home smart meters, utility back-office systems and other sources to help make the most of those visits. It would be even better if those one-time retrofit projects could open the door to an ongoing relationship between utilities and their customers.

That’s the gist of the “Home Energy Plan” partnership announced Tuesday between energy and sustainability management company Ecova and smart meter and consumer engagement vendor Aclara. In essence, the two are promising to combine mobile workforce technology with smart grid consumer engagement to make each home efficiency retrofit project faster, smarter and longer-lasting.

It’s an interesting idea, and it already has a showcase project in Detroit, where Ecova set up a joint venture that worked with utility DTE Energy to improve home efficiency projects. That JV is now seeking to expand the program to include about 30,000 utility customers per year.

Beyond that, Ecova and Aclara are “working together to see where the next place is to joint-market the programs together,” Ted Schultz, Ecova’s senior vice president of strategy and innovation, told me in a Monday interview.

“We took this concept of, how do you reduce the cost of the audit, and increase the action,” is how Schultz described the Home Energy Plan process. It starts before the first home visit, with software that creates a home energy report based on utility data and “proprietary algorithms” the two companies have put together.

That’s a useful concept for how to turn customer energy data into projected efficiency project lists and homeowner behavior tips -- but it’s hardly unique to Ecova and Aclara. Analyzing data for efficiency insights is part of the claims of companies like Opower, Tendril, EnergyHub, EcoFactor and many others in the home energy management space.

But Ecova has something those companies don’t: employees who head out into neighborhoods armed with mobile devices that can put home energy data and comparative information at their fingertips. Representatives can show homeowners their home energy profile, pull up the list of efficiency projects at their disposal, and then display real utility price and rebate program data to show customers just how much specific efficiency projects can save them, all in the first visit, Schultz said.

Crews carry efficient light bulbs and other housewares in their trucks for same-day installation, Schultz said. If a deeper retrofit project like a shell improvement is called for, the work crews can use their mobile devices to connect to local home improvement retailers and contractors and order up projects in real time, he added -- an important benefit for utilities that sometimes struggle to close the deal with customers.

Mobile workforce management is a growing field for utilities, with industry specialist providers like Powel being joined by big IT newcomers like Cisco and IBM. Most of that effort has been focused on utility operations like outage repair crews crews, field maintenance workers and the like, however.

Likewise, big commercial and industrial buildings require on-the-ground efficiency experts to come in and properly analyze the building, as well as workers to actually install efficiency projects. New software and sensors can automate much of the analysis side of those projects. Giving on-the-ground workers the mobile connectivity to access those software platforms while they’re in buildings doing retrofits could help them do their jobs.

It’s harder to justify sending lots of workers out to visit individual homes, since the potential energy savings per “house call” are much smaller. But meeting customers face-to-face also allows representatives to gather email addresses, phone numbers and other contact information, Schultz noted. Ecova can also feed that customer data back to the utility’s customer engagement platforms, which can range from old-fashioned mailers to home energy web portals. 

In the case of the Home Energy Plan partnership, that platform is Aclara’s. The subsidiary of Esco Technologies has about 500 utility customers for its smart meter technology, most of them smaller municipal or cooperative utilities. But it also runs customer websites for about 20 utilities that include some of the largest in the country, such as Duke Energy, Pacific Gas & Electric, San Diego Gas & Electric, Pepco, and, notably, Eastern Washington state utility Avista, which owns Ecova.

Aclara has about 8 million utility customers receiving its online energy reports today, but only about 1 million of them actively engage with their web portals right now. Getting more customers to log in and learn about their energy usage patterns and costs is the first step to getting them to commit to behavior changes or efficiency investments. Whether or not Ecova’s house-call approach significantly increases customer participation as compared to the cheaper, lighter-touch methods of startups like Opower, Efficiency 2.0, Simple Energy and others remains an open question.

There are other ways to ease the financial pain of signing up for efficiency retrofits, Schultz noted. In South Carolina, Ecova has launched on-bill financing programs with several electric cooperatives to fold the retrofit costs into monthly utility bills. States including California are working on on-bill financing schemes that allow customers to measure their costs against the bill reductions that come from a more power-efficient home, while giving the utility a more steady payment stream for their share of the costs.

Ecova has also been building up its commercial and industrial utility customer lines of business, which include energy procurement and utility expense management, Schultz said. The company processes about $20 billion in utility bills for customers each year, and wants to expand those relationships to broader energy management, he said. To add to its portfolio of C&I services, Ecova bought Atlanta-based energy management company Prenova in November and Dallas-based LPB Energy Management in January.

As for competition in utility energy auditing, companies like Honeywell, Ameresco, Eaton and many others are in the business, as are energy services branches of utilities including ConEdison and Florida Power & Light. Presumably, they may be working on smart grid-utility technology partnerships of their own to tackle the big but hard-to-reach residential market.

Author and director of the the New America Foundation’s Energy Policy Initiative Lisa Margonelli opened the Zocalo Public Square discussion by describing the dimensions of the gold rush. “We have about 2.5 gigawatts of solar approved,” she said. “We had about 225 megawatts in 2005-2006. We’ve scaled up by ten.” And, she added, “A gigawatt is essentially what a nuclear power plant produces.” Capacity factors differ, she noted, but “it’s clear we’re advancing toward some kind of tipping point” and “we’re about to find out what solar means.”

A show of hands requested by Director of U.C. Berkeley’s Renewable and Appropriate Energy Laboratory Dan Kammen demonstrated that the state’s many incentives and programs have not yet produced a high proportion of homeowners with rooftop solar, suggesting both obstacles and opportunities continue to persist.

But, Kammen said, there is a new solution. “What many people, including myself, think is the most exciting new policy innovation,” he said, “is the idea of feed-in tariffs championed in Europe. It’s giving a more diverse set of suppliers long-term contracts.”

He also described improved efficiencies and breakthroughs in financing. “It’s a huge new open world, especially in California, because we have great [solar resources],” he said. “We could grow by another factor of ten.” It is only a matter, he said, “of what we enable.”

SolarCity regional operating director Jim Cahill noted that even the Solyndra scandal was the result of “positive things that are happening with solar” like lower panel costs, lower installation prices and easier access to financing. The changes made Solyndra’s unique approach obsolete before it reached the market.

The so-called scandal didn’t impede solar growth, Cahill said. When he first started with SolarCity, the trendsetting company that is pioneering the no-upfront-cost, lease-financing solar system installation, “we had 20 guys working in Southern California. We now have 300.” And, he added, they have to be local jobs, because that’s where the installations have to happen.

Solar, Kammen said, provides four to five times as many jobs as natural gas and three times as many jobs as energy efficiency.

If there is an obstacle to the solar gold rush, Margonelli said, it is “complicated politics.” Inconsistent support at the federal level for the investment tax credit (ITC), the production tax credit (PTC), the cash grant provision and loan guarantees are like “asking for bankruptcies,” she said. Renewables advocates, she pointed out, cheered the fact that a trillion dollars has been invested in the sector since 2004, while forgetting that the U.S. has squandered a trillion dollars over the last 10 years in traffic jam costs.

Politics are challenging, agreed Los Angeles Department of Water and Power (LA DWP) General Manager Ron Nichols. Five to seven percent of the 33 percent of California’s power that will come from renewables by 2020 will come from solar, he said, and that will likely cost ratepayers a bill increase of 50 cents per month. But, he said, the present L.A. City Council won’t accept an increase of just 10 cents a month.

Nevertheless, he said, “We are going to replace 80 percent of our power supply in the next 10 years as the result of thousands and thousands of different individual actions.”

The solar gold rush, Kammen said, “will only fail if we don’t take advantage of the opportunity,” but, he continued, “there is no question we can make the gold rush work” if the frame of reference changes. “We’re still operating really well in the startup mode -- still doing it as a cottage industry.”

Solar on the roof, Kammen said, should not be an after-market retrofit. “If you don't do it, you should have to file a petition and get a permit.” Solar should be assumed. “When it becomes a part of the building process and you have to get a variance not to do it, the price can drop dramatically.” But to reach that point, Kammen added, “the commitment has to be there.”

Nichols, who has wrestled with staunch, tight-fisted politicians to expand the DWP’s renewables programs, made one final point. “We want to build solar so that it is not a gold rush that comes, booms, and fades. Are we doing it fast enough? I hear every day that no, we’re not.” But, he concluded, “We want to do it in a way that grows it and allows it to become a ubiquitous part of our power supply.”

After the panel discussion, Margonelli told a story about two recent blackouts. When the power went out a few years ago, she said, she had no battery-powered capabilities and spent the duration of the outage sitting in the dark with a candle. In a more recent outage, she had a solar-panel-powered, battery-charged lamp, and batteries in her computer and phone with charge remaining. “I pretty much just continued on as usual until the electricity came back on,” Margonelli said.

These leaders seem to agree that California’s solar gold rush is only seen to be failing by those who fail to appreciate the value of incremental change and cannot imagine its cumulative transformative capability.

For one company, Albeo Technologies, the focus on the industrial sector has reaped a 50-percent increase in revenue in 2011 and an increase in LED retrofits of 300 percent. In the LED space, Albeo is not alone. Redwood Systems, for example, saw year-over-year growth in sales of more than 300 percent, and Lighting Science Group produced 4.5 million LEDs in 2011, a 450-percent increase compared to 2010. 

Albeo and others only expect that trend to continue in 2012, as cold storage facilities, data centers and other large retail and industrial sectors embrace LEDs. Jeff Bisberg, CEO of Albeo, said that cold storage and data centers are seeing a 1.5- to 2-year payback for LED lights, which is making them extremely attractive compared to high-bay, high-intensity discharge lamps. The Boulder-based company has lights in more than 7 million square feet of space.

Besides its industrial focus, the Albeo team says the secret to the firm's current success is in the modular solution that can fit any building design. “Light fixtures are the last thing to go into the building,” said Bisberg. “It has to conform to whatever is happening below.”

To offer customers the flexibility they’re looking for, Albeo says its flexible system can fit whatever the needs of the space are.  And while Albeo offers controls as well, it is controls-agnostic, rather than focusing on the controls as the selling point. “The control technology is pretty mature,” argued Bisberg, “while the LED technology is still changing.”

In 2012, Albeo is “cautiously optimistic.” The success is expected to continue to come from retrofits, as well as the industrial sector, including food processing, large distribution warehouses and aircraft hangars. Once any sector starts to see about a 1.5-year payback, that’s when the mass adoption is happening, as it is with cold storage. A 2010 Enterprise LED Lighting report from Groom Energy and GTM Research also found that the market for LEDs in parking garages should start to mature going into 2012.

Outside of commercial and industrial applications, the interest is still nascent. There will be some groundwork laid in 2012, but GTM Research and Groom Energy see the period of 2013 to 2015 as the breakout years for those markets.

“The market is wide,” said Bisberg, “and there’s going to be a lot of winners. We’re pretty excited about the future.”

There are, according to Hydrovolts CEO Burt Hamner, over 26,000 municipal wastewater treatment plants in the United States and over 100,000 industrial treatment plants. The obvious opportunity raised a question for his emerging company.

The Hydrovolts team took a small turbine similar to those the company has used to capture energy flowing through irrigation canals to a wastewater treatment plant in Port Orchard, Washington. “We wanted to see how fast we could get it installed,” he said. They did it in a day. “And it worked. And then we said, ‘Wow, we could do this with a bigger machine.’ And then, all of a sudden, we discovered a lot more places to do this.”

Ready installation is the key, Hamner said. “Because it installs so quickly without needing site modifications,” he explained, “it is inexpensive. It doesn’t have to make lots of power to pay for itself. That’s the breakthrough.”

The turbine they installed in the wastewater stream only produces “around 350 watts.” The company had it running through the recent holidays “with a data transmitter and powering a Christmas tree. It’s the world’s first pee-powered Christmas tree.”

Hydrovolts has completed one round of financing and is about to complete a $5-million-plus second round, Hamner said. “We’ve sold three canal turbines and one waterfall turbine.”

Hydrovolts, he said, has built and tested three turbines of three different sizes. “The Portable turbine is expected to retail for under $2,000. The Canal turbine has two sizes, from 2 to 10 kilowatts output, depending on water speed, for approximately $20,000 and $40,000, [respectively]. The Waterfall turbine is in development and will likely have two sizes and a modular design. Price remains to be determined.”

Hamner has been working in tidal power since 2005 and with what he calls “micro-hydropower” since 2007, but it “has never been cost-effective if you have to pour concrete or do civil engineering. You just can’t make enough power to pay it off,” he explained. “But if you eliminate the need to modify a site, and you can do the installation in a day, and you have new technologies like grid-tied microinverters that didn’t exist 20 years ago, you can now do this -- and we are.”

Hydrovolts used the multiple-Oscar-winning Autodesk design software to develop a larger turbine for the Port Orchard site.

“We expect it will make 2 to 2.5 kilowatts of power. And this is a small water plant,” Hamner said. “The plant’s flow is only 1.5 million gallons a day from a population of around 10,000 people. That’s the smallest turbine we think it’s reasonable to make, because you have to make a certain amount of power for it to be economic.”

Wastewater treatment plants for large cities in the U.S. and around the world will require bigger turbines. “We are just starting to understand the possibilities, Hamner said. “We are quoting plants that have flows of 25 million to 40 million gallons a day. Bigger cities have bigger plants. A whole river runs through a bigger city’s plant.” Such plants, Hamner said, require “more and bigger turbines.”

There is a limit. “The maximum we think you can get with this technology from any one facility,” Hamner said, “is maybe 40 to 50 kilowatts with a number of modular machines.” But that is because of the way wastewater is presently managed, he added.

“We expect the world’s water engineering community is going to get very excited about this new paradigm in water engineering,” Hamner said. “Now you need to engineer the water flow to take advantage of it.” An example is overflows where the stream is wide and thin, he explained. “They could be made narrow so the water is more focused and the energy could then be captured better.”

The Autodesk design software, Hamner said, was essential to helping potential customers “instantly understand what this thing is going to look like and how it will fit into their system.” The Autodesk record keeping system has been “critical for intellectual property protection because it documents everything,” he added. And in Hydrovolts’ newest design, Hamner said, Autodesk’s materials software minimized “the environmental impacts of materials choices. That’s very important to us because we’re committed to sustainability, not just in the product we make but in the way we make the product.”

Having chosen Hydrovolts to be part of its Innovation Accelerator program, Hamner said, Veolia is “now starting to estimate how many turbines could be used throughout their global operations, which number in the thousands of facilities.”

In addition to the Veolia partnership, Hydrovolts has won multiple awards for greentech innovation from organizations like Launch and ImagineH2O and has, Hamner said, reached out to other partners.

“We’ve signed a letter of intent to do a turbine project with the Butte Irrigation District in California. We have become a member of the Fresno Water-Energy Technology Center. We are negotiating sales and demonstrations with two other water organizations in California. And we are in sales and technology partnerships with organizations in Massachusetts.”

Hamner said Hydrovolts’ newest breakthrough opens up “a new renewable energy sector” -- and he foresees “micro-hydropower bubbling up all over.”

But the Republican presidential primary race remains fluid, and Rick Santorum had a strong night with a sweep of Minnesota, Colorado and Missouri.

Barring a brokered convention, one of these gentlemen will likely be the GOP candidate with a chance of becoming the next U.S. president.

What follows is a distillation of each candidate's most recent energy policy statement. 

Santorum's Energy Plan

According to Santorum's website, his energy policy is about "Unleashing America's Domestic Energy." Like most Americans, Santorum wants to limit dependence on foreign sources of oil. He wants to do that with domestic oil and gas drilling and more easily obtainable nuclear permits. Here are some of his bullet points:

In an interview with Rush Limbaugh from June of last year, Santorum said, "I believe the earth gets warmer, and I also believe the earth gets cooler, and I think history points out that it does that and that the idea that man, through the production of CO2, which is a trace gas in the atmosphere, and the manmade part of that trace gas is itself a trace gas, is somehow responsible for climate change is, I think, just patently absurd when you consider all of the other factors, El Nino, La Nina, sunspots, you know, moisture in the air. There's a variety of factors that contribute to the earth warming and cooling, and to me this is an opportunity for the left to create -- it's a beautifully concocted scheme because they know that the earth is gonna cool and warm. It's been on a warming trend so they said, "Oh, let's take advantage of that and say that we need the government to come in and regulate your life some more because it's getting warmer," just like they did in the '70s when it was getting cool, they needed the government to come in and regulate your life because it's getting cooler. It's just an excuse for more government control of your life, and I've never been for any scheme or even accepted the junk science behind the whole narrative."

It's important to underscore that the "junk science" he refers to here is the mainstream scientific opinion on climate change. Santorum also embraces common threads of the global warming conspiracy theory, believing that global warming is a "beautifully concocted scheme" by the political left and "an excuse for more government control of your life."
 

Romney's Energy Plan

The Romney platform is called "Believe in America: Mitt Romney’s Plan for Jobs and Economic Growth"; it also contains the candidate's energy policy.

But before Romney details his plan, he takes some swipes at the Obama administration's energy plan:

As the Obama administration wages war against oil and coal, it has been spending billions of dollars on alternative energy forms and touting its creation of “green” jobs. But it seems to be operating more on faith than on fact-based economic calculation. To begin with, wind and solar power, two of the most ballyhooed forms of alternative fuel, remain sharply uncompetitive on their own with conventional resources such as oil and natural gas in most applications. Indeed, at current prices, these technologies make little sense for the consuming public but great sense only for the companies reaping profits from taxpayer subsidies.

Romney's document accuses the Obama administration of having an "unhealthy obsession with green jobs" and cites studies which show that green jobs might actually hurt employment rather than help it. Obama's delay of the construction of the Keystone XL pipeline is also labeled a job killer; the document cites an arguable figure of 100,000 jobs lost in not constructing the pipeline that would originate at the Alberta Tar Sands.

Here is Romney's energy outline.

Regulatory reform.

• Streamline permitting
• Overhaul the Clean Air Act, Clean Water Act, and other environmental laws.
• Reform nuclear regulation: As president, Mitt Romney will seek to streamline NRC procedures so that licensing decisions for any reactors to be built with an approved design on or adjacent to an existing site are completed within two years. And he will expand NRC capabilities so that the agency is able to review and approve several types of certified reactor designs in a way that ensures safety and reliability.

Explore and develop domestic oil reserves. This includes the Gulf of Mexico, both the Atlantic and Pacific Outer Continental Shelves, Western lands, the Arctic National Wildlife Refuge, and off the Alaska coast; it includes not only conventional reserves, but more recently discovered shale oil deposits as well.

Partner with Canada and Mexico.

Extract shale gas and "prevent overregulation of shale gas development and extraction."

Research and development. Redirect clean energy spending towards basic research instead of loan guarantees, cash grants, and tax incentives. The federal government should move funding "through programs such as ARPA-E that seek to replicate DARPA's success in energy-related fields." 

Romney does not support cap-and-trade or the Kyoto Treaty. Romney's viewpoint on global warming, according to a spokesperson: "He believes it’s occurring, and that human activity contributes to it, but he doesn’t know to what extent."

Newt Gingrich's American Energy Plan

Gingrich's energy plan also focuses on domestic supplies of oil and gas as well as shale oil, with the added element of replacing the EPA with "an Environmental Solutions Agency."

• Remove bureaucratic and legal obstacles to responsible oil and natural gas development in the United States, offshore and on-land.
• End the ban on oil shale development in the American West, where we have three times the amount of oil as Saudi Arabia.
• Give coastal states federal royalty revenue sharing to give them an incentive to allow offshore development.
• Reduce frivolous lawsuits that hold up energy production by enacting loser pays laws to force the losers in an environmental lawsuit to pay all legal costs for the other side.
• Finance cleaner energy research and projects with new oil and gas royalties.
• Replace the Environmental Protection Agency, which has become a job-killing regulatory engine of higher energy prices, with an Environmental Solutions Agency that would use incentives and work cooperatively with local government and industry to achieve better environmental outcomes while considering the impact of federal environmental policies on job creation and the cost of energy.

Gingrich's current take on global warming is that it is uncertain if anthropogenic global warming is real. He told Fox News' Sean Hannity in an interview last month, "I believe we don't know."

If there is a change in the Republican rankings in the weeks ahead, we'll get you the Ron Paul and Sarah Palin energy plans.

As well as a matter of who.

Will it be a startup like Switch Lighting or Lemnis, a bigger firm like Lighting Science, or an incumbent like Philips or GE?

Or will it be a firm like the just-unstealthed Soraa? (Their website just came online.)

Soraa of Fremont, California closed an $88.6 million funding round from Khosla Ventures, NEA, and NGEN late last year for its light-emitting diode (LED) and blue laser technology. Dr. Shuji Nakamura, the inventor of the indium-gallium-nitride (InGaN) blue LED is a Soraa founder. Nakamura accomplished something in the early '90s that many considered impossible at the time: a white-light LED. The invention transformed Nichia from a small Japanese manufacturer to a global industrialist. Nakamura also later became a folk hero among salarymen in Japan after suing Nichia for a fair share of the financial rewards.

The Soraa management team is led by Eric Kim, a former Intel and Samsung executive, along with Nakamura, Steven DenBaars, a co-founder of the first company to develop gallium nitride LEDs, Nitres (acquired by Cree); and James Speck.

In 2008, the UCSB professors founded Soraa with the belief that if they could crack the gallium nitride code, they could produce LEDs with market-leading performance. And now the firm is commercializing lamps using gallium nitride as their substrate (rather than the sapphire used in conventional LEDs).

“Soraa has developed the world's highest-performance LED lighting product, which is 80 percent more energy efficient versus incandescents,” said Andrew Chung of Khosla Ventures. “[Soraa’s LED] has a payback of less than a year -- and the potential to shake up the lighting market in 2012 and beyond, as recently reported by GTM's Yoni Cohen.

Soraa is actually two companies in one. Originally, Soraa focused on lasers, while Kaai, another company, focused on lights. The two recently merged. The combined company will produce green lasers for projectors and LED light bulbs that use 75 percent less energy than conventional bulbs.

Lindsay Riddell was able to gather some information about Fremont-based Soraa from investor Vinod Khosla last week as reported in the San Francisco Business Journal. Khosla said that Soraa's standard MR16 light can plug into any outlet and be more than 80 percent more efficient with a payback period of “a few months” (if the bulb is used 15 hours a day, as in a typical commercial application). Khosla said the company revamped the production process for semiconductor chips that produce light. "We decided to redo the ... production process to produce 10 times more of the amount of light per square millimeter than any other substrate," he said.

Note that Soraa is going after the traditional halogen MR16 lamps commonly used in commercial and home applications. According to the press release, the Soraa LED MR16 lamp is priced to achieve less than one-year payback and is meant to replace the 50-watt halogen bulb.  

While some firms go after the incandescent with LEDs, others like Luxim are going after high-intensity discharge lamps.

Add halogen to the list of incumbent lighting technologies that will soon be yielding to more efficient technology.

That means that when the solar sector makes it through these lean times, it will possess increasingly higher efficiencies and even lower price-per-watt metrics than today's already surprisingly low numbers.

These performance records are occurring across the board in every photovoltaic materials system, from CdTe (Abound) to CIGS (MiaSolé) to GaAs (Alta Devices) to triple-junction CPV cells (Solar Junction and Semprius) to crystalline silicon (SunPower).

Here are some recent announcements of record-setting results:


Alta Devices' most recent gallium arsenide (GaAs)-based solar panel boasts a 23.5-percent efficiency, as verified by the National Renewable Energy Laboratory (NREL). The firm claims that "This is the highest solar panel efficiency yet achieved." The press release did not discuss the size of the panel and the company has not yet responded to our inquiry.

Alta Devices has won more than $120 million in venture funding from August Capital, Kleiner Perkins Caufield and Byers, Crosslink Capital, DAG Ventures, NEA, Presidio Ventures, Technology Partners, Dow Chemical, AIMCo, Good Energies, Energy Technology Ventures, and Constellation Energy. The firm is still in the pilot manufacturing phase. Chris Norris, the CEO of Alta, has said that the company's goal is to "compete with fossil fuels without government subsidies" and get to a levelized cost of energy of $0.06 to $0.07 per kilowatt-hour. The epitaxial lift-off technique pioneered by Alta founder Eli Yablonovitch allows the firm to produce layers of GaAs that are flexible and measure only one micron in thickness.
 

SunPower has been the heavyweight champion of the world when it comes to commercialized cell and module efficiencies for the last half-decade -- and by a significant measure. The company's back-contact crystalline silicon cell design, in commercial production since 2005, moves the metal contacts to the back of the wafer, maximizes the working cell area, and eliminates redundant wires. SunPower has been able to achieve consistent improvements in efficiency with each successive generation of commercialized cells, and this has translated to gains in the module arena, as well. The firm's Gen 3 cells have efficiencies in excess of 23 percent.

MiaSolé, a CIGS thin film PV manufacturing startup, placed third in CIGS panel production in 2011 behind Solar Frontier (at 577 megawatts) and Solibro (at 95 megawatts), according to GTM Research. The firm just announced a 17.3-percent-efficient champion device, while the "manufacturing process for 14 percent efficiency is now in production," according to the firm. The firm is making a rare presentation on Wednesday night in Palo Alto, California to the Silicon Valley IEEE PV Chapter.

Solar Junction, a developer of multi-junction cells for high-concentration photovoltaic (HCPV) applications, is working with Semprius and has inked an agreement to deliver multi-megawatts of cells epitaxial wafers. Semprius claims to have set the world-record CPV solar module efficiency using Solar Junction's III-V multi-junction solar cells based on lattice-matched dilute nitrides. The firm recorded a module efficiency of 33.9 percent.

Abound Solar, a manufacturer of cadmium telluride PV modules, announced the production of 82.8-watt modules at its Longmont, Colorado factory, representing a 12.2 percent aperture efficiency that is now being verified by NREL. The units were produced on "existing production equipment," according to the firm's press release. The startup looks to begin mass production of 82-watt modules in the second half of 2012. Abound claims to have produced its one-millionth module in December 2011.

It’s bad news for Fisker on top of bad news that’s been filtering out for months. The Anaheim, Calif.-based startup has continually delayed the sale of its Fisker Karma plug-in hybrid sports car. That’s hurt lithium-ion battery maker and partner A123 Systems, which laid off about 125 employees in November and lowered its annual revenue forecast, a move blamed largely on Fisker’s delays.

At the same time, Fisker has been renovating an old General Motors plant to build its next-generation “Project Nina” lower-cost plug-in hybrid sedans. That’s the reason it won a $529 million AVTM loan in 2010, and the project it has now halted as it seeks to renegotiate its loan. 

So far, Fisker has drawn on about $193 million of that loan, which leaves $336 million yet to tap. The loan actually laid out that Fisker could spend about $169 million on Karma engineering and $359 million on its Project Nina plans.

Fisker spokesman Roger Ormisher told reporters that access to the loan has been blocked since May. Neither party would talk about the renegotiation underway. But DOE spokesman Damien LaVera told Bloomberg that the agency has “strict conditions in place to protect taxpayers. The department only allows the loan to be disbursed as the company meets certain milestones and demonstrates results.”

The DOE’s greentech loan program has come under intense scrutiny since Solyndra declared bankruptcy in October. The thin-film solar module startup landed a $535 million DOE loan in 2009, but looks to be unlikely to be able to pay much of it back. Closer to the automotive industry, lithium-ion battery maker Ener1 filed for bankruptcy protection last month, after receiving a $198 million DOE grant.

Fisker has raised about $850 million in private capital from investors including Kleiner Perkins and A123. That includes $260 million in 2011, most recently with a $150 million round launched in November.

But it’s also struggled to deliver on its $102,000 luxury plug-in Karma, with only 225 vehicles sent to dealers and another 1,200 in the pipeline, CEO Henrik Fisker said in December. At the same time, its DOE loan was made conditional on the company delivering a cheaper mass-market model built in the United States, not by Finnish contract manufacturer Valmet, as today’s Karma models are.

Fisker’s Project Nina plant is also backed by $21 million in Delaware state loans. Fisker bought the site in late 2009, started hiring workers in July and had hired about 100 people as of late 2011. Monday’s layoffs included about 26 Delaware employees and about 40 at its headquarters.

Making cars is expensive, and Fisker must prove it can control those costs as it moves from contract manufacturing collectors' items to building mass-market cars on its own. In that sense, its rival is Tesla Motors and that company's Model S sedan -- but it’s also fighting against auto giants like Nissan, GM and all the rest. Having its first U.S. factory put on hold can’t be reassuring to would-be investors in its hoped-for IPO.

Private equity firm Rockland Capital will buy Beacon’s assets for $30.5 million in cash and a promissory note, along with “additional guarantees and funding obligations to DOE of $6.6 million,” according to a Monday press release (PDF).

The sale must still be approved by the bankruptcy court and by federal regulators. But under the deal, the Department of Energy stands to recover 70 percent of the $43 million it loaned to Beacon, a DOE spokesman told reporters on Monday.

That’s a better result than the DOE is expecting from its other big, bankrupt loan recipient, Solyndra. The thin-film solar module maker landed the department’s first clean energy loan guarantee for $535 million in 2009, only to declare bankruptcy last year. Despite attempts to find buyers for its technology and equipment, Energy Secretary Steven Chu has said it’s unlikely the government will recover much of its loan.

Beacon’s situation also differs from Solyndra’s in that its buyer intends to keep its business running -- at least that part of the business that’s already been built. Under Monday’s agreement, Rockland will form a new private company called Beacon Power LLC that will maintain ongoing operations of Beacon’s 20-megawatt grid frequency regulation facility in Stephentown, N.Y., which has been delivering frequency regulation services since early 2011.

Rockland also said it intends to develop a second 20-megawatt flywheel regulation plant in Pennsylvania. Beacon had a $5 million state grant to back the project. The agreement also gives it ownership of Beacon’s Tyngsboro, Mass. headquarters, as well as “many of the contracts associated with operations of the business,” though the companies didn’t specify which contracts were included.

All in all, it sounds as if the Houston-based firm is banking on a recent ruling from the Federal Energy Regulatory Commission (FERC) to substantially increase the value that Beacon’s flywheel plants can earn for their services. That ruling calls for the country’s interstate grid operators to institute market systems that pay more for “fast” responding sources like flywheels and batteries than for slow, fossil-fueled power.

Beacon CEO Bill Capp said last year that the new FERC rule could double the revenues per megawatt-hour that Beacon earned on its services. We’ve seen other startups tackle the market in anticipation of those greater rewards, as well: in November, startups Viridity Energy and Enbala launched smaller-scale projects aimed at responding in seconds to play into frequency regulation markets for Mid-Atlantic grid operator PJM.

It does appear that Rockland has secured a pretty good price for Beacon’s assets. The company’s Stephentown plant cost about $69 million to build but had seen its book value fall from $41.9 million to about $12.6 million in the month before Beacon’s October bankruptcy filing.

Tucson Electric Power (TEP) is working with Areva Solar on a concentrated solar power (CSP) "booster" to the 156-megawatt Unit 4 at TEP’s H. Wilson Sundt Generating Station in Tucson. The Sundt plant is a dual-fueled unit capable of using coal or natural gas.

The Solar Boost Project will use Areva Solar’s Compact Linear Fresnel Reflector (CLFR) solar steam generators to produce up to 5 megawatts of power during peak power demand. Areva acquired the CLFR technology from KPCB-funded Ausra back in February 2010.

If and when fossil fuel prices rise or emission allowances are mandated, solar-augmented steam cycles might be a pragmatic option for energy companies.

A typical system would use steam generated by a solar field coupled to a conventional coal or natural gas-powered steam cycle, offsetting some of the fossil fuel required to generate power. Many energy companies are interested in adding solar power to their generating mix, but most solar technologies are not yet cost-competitive with fossil-fuel power generation.  

Why build a hybrid plant instead of a fossil-fueled plant or a stand alone PV or solar thermal plant?

• It reduces the amount of fossil fuel being burned
• A hybrid produces less emissions
• It potentially "greens" existing assets
• Hybrids can address regulatory pressures and potentially help meet Renewable Portfolio Standards   
• The transmission and Balance of Plant (like the power block) are already in place, as well as existing plant staff, along with permits and a water supply

Hybrid solar thermal is gaining popularity. There are more than a dozen projects in development with a total solar component of about 450 megawatts. The largest is the FPL project with 75 megawatts of solar in Florida.

The Sundt Solar Boost Project is part of TEP’s plan to expand its solar generating capacity to more than 200 megawatts by the end of 2014 in an effort to meet the Arizona RPS 15 percent by 2025.

Construction of the Sundt Solar Boost is due to begin in the spring of 2012, and it is expected to be operational by early 2013. 

Areva just broke ground on a 44-megawatt solar booster project for an Australian coal-fired power plant and currently has more than 540 megawatts of CSP projects in operation, under construction, or in development.

Other hybrid CSP-fossil fuel projects expected to start up in 2014 include:

• NV Energy at the Chuck Lenzie Station in Nevada, an 1100-megawatt natural gas plant with 95 megawatts of proposed solar
• Tri State G&T in Escalante, New Mexico, a 245-megawatt coal plant with 36 megawatts of proposed solar

Areva's Compact Linear Fresnel Reflector (CLFR) solar steam generators

Correction: This article originally mentioned the Cameo coal-steam hybrid plant in Colorado which has since been retired. Here is a link to a performance report on that project. The report concluded that "[o]verall the performance related to coal and emissions savings were not as good as Abengoa predicted or what Public Service expected."
 

 

Learning curve theory, said LBNL researcher Mark Bolinger, predicts that wind price should have dropped 20 percent to 30 percent as installed capacity doubled twice between 2002 and 2008. But turbine cost, which is 50 percent to 60 percent of LCOE and 60 percent to 70 percent of project cost, doubled.

To understand, Bolinger and fellow LBNL researcher Ryan Wiser studied the four endogenous factors (labor costs, warranty provisions, profitability, turbine design/scaling) and three exogenous factors (raw materials prices, energy prices, foreign exchange rates) that determine turbine price.

It is a detailed study. A turbine’s main raw materials, it reports, are steel (66 percent to 81 percent), iron/cast iron (9 percent to 13 percent), copper (1 percent to 2 percent), and aluminum (0 percent to 1 percent).

The reason for the learning curve theory contradiction, they found, is that “the largest single impact -- from scaling -- brings LCOE benefits.” Large-scale turbines allow wind projects to perform better. Bigger, better wind turbines have significantly better capacity factors. The standard for turbines has moved up from 1.0 megawatts to between 1.6 and 3.5 megawatts, and taller towers and longer blades allow them to produce electricity from slower winds.

Wiser’s analysis also showed wind capital costs were lowest from 2002 to 2003, rose slowly to a peak in the 2009-to-2010 period, and have fallen since, promising lower project costs in the 2012-2013 period.

Due to the capacity factor/capital cost interdependency, and to falling turbine costs, falling operations and maintenance (O&M) costs, an increased turbine supply, and lower cost financing, Wiser said, “the delivered levelized cost of wind energy has declined substantially in recent years [... and] is now at an all-time low across all wind speeds.”

The opening up of low-wind-speed areas (alleviating some transmission and siting barriers), according to Wiser, produces a 5 percent to 26 percent LCOE reduction.

“Assumed improvements in O&M costs, financing rates, and availability lead to substantial additional estimated LCOE reductions,” Wiser found, "of 24 percent to 39 percent.”

“Two countervailing factors may intervene to raise LCOE,” Wiser concluded -- more “lower wind speed sites as a result of severe transmission/siting limitations” or the “loss of federal PTC/ITC/Treasury Grant” incentives.

Innovations in rooftop solar system financing may be driving the growth of solar more than anything except, possibly, Chinese government subsidies. But China’s subsidies are unsustainable, if not illegal, while financing advances like the just-announced Clean Power Finance (CPF) partnership with Vivint Solar are transforming the industry.

The basic idea behind CPF, explained CEO Nat Kreamer, is “to connect the capital market with the solar market.”

Backed by a group of the biggest names in greentech venture capital, including Kleiner Perkins and Google, CPF is a business-to-business service in the form of a software tool that allows solar installers to make financing available to system buyers.

“We started selling financing for solar systems in April 2011,” Kreamer said, "and by August 2011, we were financing more than a million dollars a day of residential power purchase agreements and leases.”

By adding Vivint Solar as a partner, CPF took another step forward. “It shows how this market is advancing very quickly that you’re having players like Vivint come into it,” Kreamer said. “This is a trend of companies that have been very successful in other markets that are bringing that success to the solar market.”

Vivint began as APX Alarm Security Solutions Inc. in 1999 and expanded into home energy management automation, and then, six months ago, into solar installations.

“Vivint has built a tremendous base of something like 600,000 customers,” Kreamer said. CPF’s part of the deal, he added, "is to provide them with a variety of finance products that they can use to sell more solar.”

In the short time that Vivint has been in the solar installation business, it has won $75 million in financing from U.S. Bancorp and made itself, Kreamer said, “one of the largest U.S. providers of solar.”

In Vivint’s first six months, “our run rate is ramping toward 3,000 to 5,000 installations per year,” said Vivint Solar President Tanguy Serra. Based on its current annual 150,000 home system installations, Serra said, Vivint’s goal is 150,000 yearly solar installations. “But that level of financing for solar doesn’t yet exist,” he explained. “That’s why we’re partnering with CPF.”

“To them, 150,000 customers doesn’t sound like a lot,” Kreamer said. “To the rest of the solar industry, it does. But it shouldn’t. That’s what Clean Power Finance is all about.”

Because of the specific federal, state and local incentives that apply to solar financing, the CPF backing will not be used in Vivint’s other businesses. Although such a convergence will likely come eventually, Kreamer said, “You can’t blend the two products right now.”

But in building the kind of customer base Vivint has, Kreamer said, “you learn something about how to do high-quality installations fast. Vivint has taken all of that knowledge, those same systems and technology, and applied it to solar.”

Vivint Solar uses Enphase Energy microinverters and Zep Solar mounting systems, but it is not rapid construction at which Vivint excels. “One of the holy grails when you think about consumers,” said Kreamer “is instant gratification. They figured out that instant gratification is getting to that install as quickly as possible.”

Because CPF’s software tool was built to be flexible, Kreamer said, Vivint will be able to use the CPF white label software for the solar part of its business while maintaining its own IT systems for security and energy management.

Serra echoed Kreamer. “We have invested $40 million in the last 10 years in IT systems,” he said. “The relationship is around integrating our work flow into their financing process.”

Estimating an install at roughly $35,000, Kreamer said, the lowest projected Vivint volume of 3,000 installs per year would require $105 million per year. That would be in addition to the $1 million per day, or $300 million per year, of its funders’ money CPF is already putting into solar.

“We have enough capital to meet our customers’ present demand and their future demand for some time,” Kreamer said. Investors “want to put their money to work and this is a great asset class so we have a lot of capital interested in working with us,” he explained. “People who own homes pay their electricity bills,” Kreamer said, which means “there is low likelihood of default, and investors like that.” Default rates, he said, are lower than default rates on AAA bonds.

Rooftop solar, Kreamer said, is a low-risk, high-reward investment in what is essentially a long-term asset. In addition, with the federal Investment Tax Credit (ITC) available through 2016, as much as 45 percent of an investor’s capital outlay comes back as a tax benefit in the first year of the loan. And the overall return on investment in residential solar is “anywhere from the high single digits to the mid-teens.”

CPF, Kreamer said, has ample capital, and adding a customer like Vivint means there is “deal flow” for the capital. Then, alluding to “good news coming” that he could not yet talk about that will expand CPF’s resources, Kreamer simply said, “we’re not throttling back on our deal flow,” adding that Vivint is ”ramping its business at the same time we’re ramping our capital.”

“We’re seeing hundreds of millions and billions of dollars come at this sector,” Kreaemer said, “and a partnership like this one just makes it more attractive.”

The idea was to differentiate the company by offering an integrated news and analysis site in the alternative energy and greentech sector. Instead of simply reporting the news, the integrated site also offered vast data resources from a team of industry thought-leading analysts in solar like Shyam Mehta, Shayle Kann, Brett Prior, and MJ Shiao and smart grid analysts David Leeds, Emma Ritch and Ben Kellison. Backing up the analysis and news team was a business development group led by Vice President John Keough that found innovative ways to give vendors in the greentech market access to customers.

Our birthday corresponds with a site redesign and a fresh new face for GTM, our first since January 2010.

There have been challenges as well as victories at GTM over the last five years, as at any startup. But in the face of those struggles, the company has grown from a good idea into an independent, thriving voice and leading media outlet in greentech. Through the years -- and I say this as employee number one -- the uniting theme has been hard work and big fun. Lots of firms' marketing materials say that, but I will shout from the rooftops that this is the most gratifying job I've ever had in my life.

Of course, the real heroes are our readers -- hundreds of thousands of smart energy experts who keep us on our toes and let us know in no uncertain terms when we do wrong and right. We appreciate your readership, your comments, and the work you do every day to further the cause of a more rational and efficient energy industry. As always, we welcome your comments and feedback. Send tips to editors@greentechmedia.com.

We also have a great graphics department which does stuff like this fifth anniversary celebration of Greentech Media statistics. Thanks for reading.

Given that Honeywell just filed its complaint in U.S. District Court in Minnesota on Monday morning, it may be a bit early to ask how the legal challenge will affect Nest and its current and future plans. The startup, founded by Apple design alums with the promise of bringing an iPod-like sophistication to the staid home thermostat market, had declined to comment on the lawsuit as of Monday afternoon, and Honeywell also declined to comment Monday.

But Honeywell’s complaint also raises a host of questions for the home energy management industry as a whole. That’s because the list of patents it accuses Nest of infringing on include a set of functions and features that appear to be in fairly widespread use by other companies and partnerships in the industry.

Those include controlling thermostats with information stored in a remote location -- i.e., the internet -- which could potentially implicate anyone using “the cloud” to manage thermostats. Honeywell also accuses the Palo Alto, Calif.-based startup of infringing on its “time to temperature” function that tells customers how long it will take for the house to reach a newly set temperature.

Other features, like Honeywell’s (and Nest’s) so-called “natural language” capabilities -- that is, having the thermostat display questions that customers can answer to set up the device -- seem to mirror the way other companies are planning to interact with homeowners. And its patent on “power stealing,” or sipping power from the home wiring to charge the thermostat battery, seems like a function most low-power devices would like to include as well.

Here are a few more highlights from Honeywell’s complaint, which is asking the court to enjoin both Nest and Best Buy from selling any more Nest thermostats until further notice. That, of course, would be a big problem for Nest and investors Kleiner Perkins, Google Ventures, Shasta Ventures, Al Gore's Generation Investment Management, Lightspeed Venture Partners, and Intertrust, which have invested an estimated $50 million to $80 million in the startup.

1) Publicly denigrating Honeywell may be a bad idea. Honeywell’s complaint highlights several statements by Nest executives claiming that their thermostat is much more advanced than everyone else’s -- and particularly, Honeywell’s. Those comments seem to have rubbed Honeywell’s lawyers the wrong way.

To wit, the complaint quotes CEO and iPod designer Tony Fadell as saying, “thermostats are made by big companies that don’t have any incentive to innovate,” and that “there’s been no real innovation in decades.” But Honeywell points out that its patents in question have been on file since 2006 or so.

Likewise, the complaint cites former iPhone software manager-turned-Nest VP of engineering Matt Rogers as saying, “Honeywell is not doing enough; we could do much better.” But Honeywell’s complaint states, “Nest Labs knew, or should have known, contrary to its marketing campaign, that Honeywell -- not Nest Labs -- is responsible for many of the ideas that Nest Labs touts as revolutionary.”

In some cases, Honeywell has used Nest executives' quoted comments to specify just which patents it claims the startup is infringing on. For example, it quotes Fadell saying “our competitors can’t make low-power devices,” then cites its own "power stealing" patent as proof that it invented one key method it accused Nest of infringing. 

2) Watch out for the round design. Several of Honeywell’s patents are linked specifically to the round shape that Nest’s thermostat takes. That’s a shape that Honeywell is quite proud of -- in fact, one of its earliest “Honeywell Round” thermostats is on display at the Smithsonian.

Honeywell also holds patents on “an HVAC controller that has a rotatable part” to control it, as well as “apparatus for locating a non-rotating part or parts of a thermostat near or inside of a rotating part, while still allowing the rotating part to set and/or control one or more parameters” -- i.e., twisting a knob or a ring to set the thermostat.

3) Showing other companies’ thermostats at your office may come back to bite you. Honeywell’s complaint includes a photograph it took from an online news source, featuring a table at Nest Labs’ offices covered with thermostats. Honeywell has circled what it claims are 11 Honeywell devices on that table, including digital round thermostats and Prestige thermostats protected by patents, and uses that photo to allege that “Nest Labs examined numerous Honeywell devices” in the course of its R&D.

4) Nest hasn’t been completely singled out. Honeywell’s Monday press release notes that it has also filed patent litigation against Venstar Inc. and ICM Controls “for infringing thermostat and combustion controls patents.” While it doesn’t elaborate on those cases, the Venstar lawsuit in particular covers a host of patents related to “graphical user interface system for a thermal comfort controller,” “programmable controller with saving changes indication,” and a few more related to multiple language user interfaces.

5) Controlling thermostats from the cloud could be a bone of contention. One of Honeywell’s seemingly most broad patent claims concerns its Patent No. 6,975,958, for a "Profile Based Method for Deriving a Temperature Setpoint Using a 'Delta' Based On Cross-Indexing a Received Price-Point Level Signal."

“Controlling a thermostat remotely through the internet is also not a Nest Labs’ innovation,” the complaint states. “Rather, Nest Labs infringes Honeywell’s intellectual property rights protected by at least the ‘958 Patent with the Nest Thermostat used in conjunction with a Nest Account.”

Whether that means that Honeywell is claiming that its patent actually covers internet-based control of thermostats, the cross-referencing of energy prices with home thermostat settings via the internet, or some other combination isn’t clear. But it’s likely that a lot of home energy companies are taking a very close look at Honeywell’s lawsuit to see if its patent claims might apply to them, said Eric Lane, patent expert and GTM contributor.

Lane took a quick scan of Honeywell’s patents, and noted that they seem to include some features that aren’t linked specifically to the thermostats themselves. “We’re not just talking about hardware; we’re talking about software as well,” he said.

That could have a bearing on just about every smart thermostat play out there. Startup EcoFactor makes software to control and analyze thermostat data from the cloud, for example. Tendril, EnergyHub, Energate and other home energy management startups have cloud-based platforms for managing the interaction of home energy devices and utility power-pricing programs.

And then there are cloud-based home energy management platforms like the one Lowe’s launched with startup AlertMe last month that could fall under scrutiny, given the fact that Honeywell has also accused Best Buy of infringing its patents by selling Nest thermostats and putting its Geek Squad to work installing them.

Interestingly enough, Opower, the home energy analysis and customer engagement startup that’s working with Honeywell on a thermostat project, also recently launched a partnership with big-box retailer Home Depot.

Here’s a list of the patents Honeywell is accusing Nest of infringing:

U.S. Patent No. 7,634,504 - "Natural Language Installer Set Up for Controller"

U.S. Patent No. 7,142,948 - "Controller Interface with Dynamic Schedule Display"

U.S. Patent No. 7,584,899 - "HVAC Controller"

U.S. Patent No. 7,159,789 - "Thermostat with Mechanical User Interface"

U.S. Patent No. 7,159,790 - "Thermostat with Offset Drive"

U.S. Patent No. 7,476,988 - "Power Stealing Control Devices"

In fact, we took a slightly contrarian view of the sleek $249 device.

Thermostats need to turn on in the morning and turn off at night and when we go away. They do not command the emotional connection we have with smart phones or tablets. It will be an enormous challenge for Nest to recreate the excitement of an entertainment product in a utilitarian device like a thermostat. And the public will not tolerate beta releases of a thermostat as they would for a piece of software.

Even as Nest Labs continues to confront user concerns and manufacturing ramp issues, it now has a lawsuit on its hands. Honeywell, the inventor of the eponymous "Honeywell Round," has filed a patent infringement lawsuit against Nest and is seeking to prevent sales of the device, according to a press release from Honeywell. According to the release, the lawsuit "alleges infringement of seven Honeywell patents related to its thermostat technology."

"Competition is good and we welcome it, but we will not stand by while competitors, large or small, offer products that infringe on our intellectual property," said Beth Wozniak, president of Honeywell Environmental and Combustion Controls, in the release.

We have asked Nest Labs to provide a comment on the lawsuit and have not yet received a response.

Nest CEO Tony Fadell, an Apple alum, has said that something better could be done in the thermostat space and users could have a better experience than that provided by the "Honeywell Round."

Here are positive reviews of the Nest Labs thermostat from an early adopter and another user.

WiredPrairie has done an eight-part installation and performance review on the Nest thermostat. And although the reviewers like the aesthetics and packaging, there is a bit to be desired in terms of performance, quality control, and customer service at the thermostat startup. Nothing that can't be ironed out over time, but a less than auspicious start for the "sold-out" device. The reviewer and commenters are having trouble with the "learning" feature, which they attest is confused by varying habitation patterns and apparently "can't even adapt to simple schedules." The site says, "I strongly recommend you not buy a Nest thermostat. It’s an undone, expensive piece of hardware that while shiny and new, isn’t ready for the duties it claims to have mastered."

In May 2010, the team raised somewhere in the vicinity of $50 million to $80 million from Kleiner Perkins, Google Ventures, Shasta Ventures, Al Gore's Generation Investment Management, Lightspeed Venture Partners, and Intertrust. Unfortunately for the startup, some of that funding will need to be directed towards this lawsuit.