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Evergreen Solar Shuts Pilot Factory, Takes $25M Write Off

Ucilia Wang: January 5, 2009, 3:23 PM

Evergreen Solar, which makes solar panels, has shuttered its pilot factory and plans to take a $25 million write off as a result, the company said Monday.

The move should help the Marlboro, Mass.-based company save money, a much-needed move as it tries to weather the recession. It’s one of a growing list of solar companies that have vowed to cut costs as they face a lowering demand for their products. LDK Solar, a Chinese silicon wafer maker, on Monday cut its sales and shipment forecast for 2009.

Evergreen (NSDQ: ESLR) also hasn’t fared well since Lehman Brothers filed for bankruptcy in September. The solar company enlisted Lehman to raise money and had loaned 30.9 million of it shares in the process. Evergreen haven't been able to get those shares back, however, prompting the company to sue Lehman and Lehman’s new owner, Barclays.

The solar company closed the pilot plant in Marlboro last week. It is transferring most of the employees from its pilot plant to its commercial factory in Devens. It expects to spend about $350,000 for severance costs through March.

Evergreen has been building the Devens factory in phases. It recently completed the second phase of the factory, which should reach a production capacity of 40 megawatts per quarter in the second half of 2009, the company said.

The company shipped 8.5 megawatts worth of solar panels from the Devens factory and 3.7 megawatts from the Marlboro pilot plant during the fourth quarter of 2008.

Aside from taking a non-cash charge of $25 million in the fourth quarter as a result of the pilot plant closing, Evergreen said it might spend $3 million to $5 million in the next 12 months for related site restoration and moving costs.

The company's shares fell nearly 4 percent to reach $3.46 per share in after-market trading.

Powering LEDs With Candles

Michael Kanellos: January 5, 2009, 1:15 PM
Here's a novel lab experiment, courtesy of Tetsuo Nozawa at Nikkei Electronics: it's an LED powered by candle flame. Check out the photo at the above link. The heat from the candle goes through a thermoelectric material and is converted to electricity, which powers the LED. Nozawa saw it at Nextreme Thermal Solutions. The LED actually shines brighter than the candle flame because most of the energy in the candle is dissipated as heat. In LEDs, most of the energy gets consumed in producing light. Thermoelectric materials like bismuth telluride have been studied for decades. Researchers, however, have begun to experiment with different types of materials (such as germanium) that they say can convert heat to light and vice versa much more efficiently. Companies trolling in thermoelectrics include GMZ Energy, Promethean Power, and Cypress Semiconductor. UC Berkeley is concocting some startups too. Although thermoelectric materials technically exploit waste heat, most of the waste heat companies that have been in the market for years use very different underlying technologies. These companies typically capture heat, compress it, and then use the resulting pressure to run a turbine and create electricity. Alternatively, they pipe the heat back into the factory to warm water or offices.

Apple Choosing ZPower for Batteries? Good Chance of It

Michael Kanellos: January 5, 2009, 11:53 AM
On the eve of Macworld, the rumors are buzzing that Apple will release a new notebook that features batteries from ZPower, which makes a silver zinc battery. Ross Dueber, CEO of ZPower, declined to comment. ZPower has a deal with a notebook manufacturer, but it's up to the unknown manufacturer to make any comments, he said. (Ross is speaking at CES in Las Vegas on Thursday so we might get more there.) However, looking at all of the circumstances, I believe that the odds are pretty good, around 50 percent. Here's why: 1. ZPower has already said that they have landed a notebook win with a major manufacturers and that the deal will be announced in early 2009. Macworld is this week. 2. Selecting ZPower would allow Apple to claim a first. Right now, notebook makers virtually rely exclusively on lithium ion batteries. ZPower's batteries are based on a silver zinc chemistry. It's been tough to make rechargeable zinc batteries that can last -- Thomas Edison himself worked on the problem -- but both ZPower and competitor PowerGenix, which makes a nickel zinc battery, say they've solved that problem. Zinc batteries are less prone to "thermal runaway reactions." Zinc batteries will also be able to store far more energy than lithium ion cells as time goes on, say advocates. Lithium cells, they argue, have peaked. Zinc potentially could become a really large business for a lot of applications. These wouldn't be the first zinc batteries on the market. PowerGenix started selling some last month. But these would be the first in a notebook. Thus, Apple could hold itself out as an innovator by being the first to come out with a zinc notebook. You can just imagine the obligatory gushing at Macworld now. 3. Love or hate it, Apple is good at harvesting components. The touch pad from Synaptics and the 1.8-inch Toshiba hard drives effectively allowed the company to make the first iPods. No one else really wanted the 1.8-inch drive. With some careful component shopping and good design, Apple was able break into a new category. 4. ZPower (formerly Zinc Matrix Power) has a long history. It got started back in the '90s. Thus, the company can provide a lot of testing materials to notebook makers. 5. ZPower is also heavily associated with Intel. Intel even invested in it. Despite some friction, Apple and the Big I still collaborate. 6. The other new age battery companies I've contacted don't have announcements coming up. I haven't called them all, but some. 7. Some other large notebook makers have already selected their new age battery supplier. Hewlett-Packard, for instance, has said it will offer a lithium-ion battery from Boston Power as an option in some notebooks. Sony and Toshiba, which both make lithium ion batteries, are a little less hot on the new battery category. 8. The zinc batteries will likely come at a premium and Apple has had a knack for getting its fan base to look beyond price points. 9. Tom Krazit, an former colleague at CNET, says it makes sense for Apple to do a new notebook this week. But, again, nothing is guaranteed. Here's a list of other notebook makers that could be interested in zinc batteries: Dell, Acer, Lenovo. And the Macworld coincidence may be getting overplayed. Last April, Dueber said that ZPower's batteries were slated to come out in a thin laptop in August 2008. Didn't happen.

A Record Year in Greentech Investing—$7.7B in 2008

Eric Wesoff: January 5, 2009, 12:06 AM

We began tracking venture capital investment in Greentech in 2004 when the sector really didn’t have a name and represented only 1 percent of VC investment totals.

Companies like Nanosolar and Miasolé were just getting started and most VC investors were simply trying to get their heads around this relatively underinvested trillion dollar market.

A few years later, Greentech VC investment represents about 20 percent of the VC asset class -- 2008 finished with a total VC investment of more than $7.7 billion in more than 350 funding rounds, roughly one investment a day, with time off for Christmas and New Years.

Greentech Media just released the most recent quarterly data showing that venture capital investment in green technologies exceeded $2.5 billion in the fourth quarter of 2008, a modest decrease from the previous quarter’s total of $2.9 billion.

We asked Erik Straser, a partner at leading cleantech investor Mohr Davidow Ventures and an insightful analyst of these markets to weigh in on these numbers and here are his comments:

“2008 marks the 'end of the beginning,' an end to the first few years of investment enthusiasm.  In the next period, we’ll see investors focus on strong investor syndicates, management teams that have proven they can execute, and value propositions that can truly deliver differentiated economics to the world’s largest markets.???

Rob Day of @Ventures weighed in on his blog last month with his take on the state of greentech investing. His presentation on the subject is here.

Rob sees cause for worry in the way the VC model tracks greentech startup timelines. No argument there -- it takes a long time and a lot of money to scale a new solar or biofuel technology to meaningful volumes. But he also saw a shortage of early stage investors and I’m not sure the numbers bears that out.

My preliminary data shows that investors continue to fund early-stage deals as well as later-stage deals. At least 30 of the 115 greentech deals this quarter were seed stage or A rounds.

Rob also saw the need for VCs to enlarge their scope and stop focusing on solar and biofuels. And VCs seem to be doing just that -- they are digging deep in the greentech sector and looking outside traditional technologies at previously underinvested areas like energy storage, energy efficiency, recycling, water, cleaner coal and green IT.

Still, the IPO door is closed for now and probably for the next four to six quarters. And although consolidation in this market has already begun -- meaningful, profitable VC-scale acquisitions will also be scarce for the foreseeable future.

“We will continue to see investors allocate capital, albeit more cautiously, to cleantech as the underlying macro forces driving cleantech remain unchanged and cleantech looks well positioned to be a significant part of the new administration,??? Straser added.

Startups will need to work harder and smarter and VCs will need to be patient. Look for 2009 to be the year of smart grid, energy storage and energy efficiency.