The U.S. Army and LEED architects. Not exactly two groups you expect to be hanging out at cocktail parties together.

But in an effort to reduce energy consumption, the Army has commissioned the construction of two net zero energy duplexes at Fort Cambell that will likely achieve LEED platinum status. The buildings will consume 54 percent less power than similar, conventional homes and draw power from solar panels and geothermal systems. More interesting technologies: the buildings will sport an airtight building shell and thermal windows. Buildings consume 40 percent of the energy in the U.S. and lot of that power is wasted by old equipment, not-so-hot insulation and designs not tailored for energy efficiency.

If it works, expect more, both at Army bases and elsewhere. To date, net zero energy homes have largely been the status symbol for the rich and famous. Success with these prototypes could convince more to jump into the market for product and services to build relatively inexpensive net zero homes. (That's a goal of Zeta Communities which has a net zero beta in Oakland.) The Department of Defense already has ambitious plans to move toward electric and biodiesel cars. It has also been experimenting with bridges and structures made from recycled plastic.

This isn't part of the Fort Campbell project, but SG Blocks in South Carolina has been promoting modular homes out of old shipping containers for housing around military bases. Check out the video on the link. They don't look as nearly as utilitarian as you might think.

LEDs are coming, and iWatt says it can make them a little cheaper.

The company has devised a driver for LEDs that effectively lets a manufacturer eliminate another component called an opto-coupler. Reducing components reduces prices. Bridgelux, a larger and better known LED company, is already marching down the that path. Bridgelux came out with a packaging system earlier this year that ultimately lead to LED bulbs that cost $26 dollars in the not too distant future. It is not clear if iWatt can have the same level of impact. It's part costs 98 cents in quantities of 1,000. Another open question: will iWatt be able to survive the notoriously difficult market for semiconductors or will they get out-competed by established companies hawking the same thing? Far fewer chip start-ups make it out of the early stages than they used to.

Still, any price cut in LEDs helps.

Both companies, interestingly, have received investments from VantagePoint Venture Partners, which tends to pair investments. The firm also has investments in Tendril (home energy  management) and Adura Technologies (commercial building energy management.) Shotgun wedding anyone? Just a thought.

Although LEDs only represent a fraction of the market, they will likely come on strong in the next decade. Australia, Canada, the EU, the U.S. and others are phasing out incandescent bulbs. LEDs are also improving in quality and the price is declining.

The component, by the way, operates in quasi-resonant mode and employs adaptive gate drive control, in case you were wondering. 

Johnson Controls will informally refer to itself as the IBM of green building and in many ways the analogy is apt. Both companies have extensive histories. The Milwaukee-based company just announced another quarterly dividend, the latest in a streak that stretches back to 1887.

And, like IBM, the company is pervasive in its field. Johnson is one of the principal contractors behind the retrofit of the Empire State Building. It also employs 800 LEED-accredited employees. Thus, what the company does will have some impact on the market. (It also received a $299 million grant to develop transportation batteries earlier this year.)

We recently spoke to Don Albinger, vice president of renewable energy solutions. Here's what's on his mind:

• Performance-based contracts continue to gain popularity, particularly with public sector companies like schools or government agencies. In these agreements, a contractor performs a retrofit and then guarantees certain reductions in energy consumption, etc. If they miss, the owner gets a refund. The contracts are similar to energy services contracts, in which the contractor gets paid through a portion of the energy saved, but there are differences.

• Industrial solar steam is taking off. In these systems, heat from the sun is exploited to run industrial boilers. "It is about a 40 percent efficient process. Solar thermal has advantages we need to capitalize on," he said.

• Although biomass has been gathering interest in some parts of the country, it is being challenged by the relatively low price of natural gas.

• One of the next waves in the industry will involve around tying building energy management systems to other enterprise applications. HVAC will be linked to building security applications and both will be integrated into financial and other applications. This will make energy savings and efficiency more dynamic and easier to measure. The company worked on a project like this with the state of Missouri, which has helped cut millions out of operating budgets.

• And of course, customers looking at ways to cut power bills should always think about reducing consumption before putting up solar panels.

"You've got to stop the building from losing energy before you start putting in new capital equipment," he said.

Sustainable Spaces is now Recurve and it's going national.

The company, which retrofits homes and small businesses, has largely worked in Northern California (one client had utility bills that came to $6,500 a month before a retrofit) but now it will expand to new geographies. Getting a made-up name from branding consultants is just one of those things you do to celebrate.

How does a residential contractor that's only five years old go national? The company is actually a software vendor in disguise. It has been studying home retrofits and writing applications that, ideally, will take the guesswork out of a home retrofit. Right now, contracting and retrofitting thrive on tribal knowledge: contractors each have their own tricks of the trade and live by them. Under Recurve's paradigm, it will enlist contractor/partners who will then plug variables into a computer – number and size of windows, number of individuals with respiratory problems in house, number of bedrooms, etc. – that will spit out good, better, best retrofit plans using Recurve's software.

The company employs a lot of ex-Googlers. The applications are why we picked Sustainable, whoops, Recurve, as one of the top ten companies in green software.

Behind the scenes, the company has something of a national profile already. Founder Matt Golden spends quite a bit of time lobbying for energy efficiency bills in D.C. and various state capitols.

"Over the past 5 years, the company has enjoyed phenomenal growth in revenue, doubling the business every year on average, mostly by referrals from satisfied clients. In 2009, one of the most challenging in history for the construction industry, Recurve grew revenues by 70% and employed nearly 70 people out of the San Francisco office. Recurve is the only home energy company in Northern California to be accredited by the Building Performance Institute, which sets national quality standards for the industry," the company stated.

Walmart, the mega-retailer that helped put energy consumption on the agenda for corporate executives, said it will use light emitting diode lights from Cree in new stores and retrofitted ones. In the first year, that will come to 650 stores alone.

The stores will replace ceramic metal halide lights, those honkers you see in the ceiling of big box retailers. The Cree bulbs will emit the same amount of light as a 70-watt bulb but use 82 percent less power.

LEDs have been talked about for years, but are finally going to start appearing in large numbers. Commercial establishments will install them first. The bulbs cut power, and commercial establishments typically have more bulbs, but the bulbs also cut maintenance. LED bulbs last 50,000 hours, far longer  than vacuum-tube bulbs. That leads to fewer hours the maintenance people have to climb ladders to replace bulbs, order new bulbs, figure out places to stock the ones that just came in the mail, etc.

LEDs will come to the consumer market, but more slowly. Most people, after all, just change their own bulbs so the cost associated with swapping them is minimal.

The quality of light has also improved with LED bulbs – that "alien autopsy" tone of white is vanishing – and the price is coming down. Need more on lighting? Here's a comprehensive report on the subject that, just by coincidence, I wrote.

In the middle of the decade Walmart started looking at its energy bills and determined that it could whack a lot of operating costs through efficiency. Lighting was an early target. By taking out the light bulbs in the coke machines on the premises, the company saved $1 million a year.

LEDs represent the biggest opportunity in lighting. The second biggest (or first, according to some) will be equipment to network lights so they can be automatically dimmed or turned off.

PACE. It's gone from an obscure acronym in the green building market to a popular policy initiative championed by several states and Vice President Joe Biden in less than a year.

And now there's a VC-funded PACE startup.

NGEN Partners, Draper, Fisher Jurvetson and NewCycle Capital have invested in$12.2 million Renewable Funding, a startup founded by Cisco DeVries, who co-invented the PACE financing concept while the chief of staff for the mayor of Berkeley. UC Professor Dan Kammen is the other inventor. The company essentially helps a government establish a PACE program and administers them. DeVries acts as president.

PACE – or property assessed clean energy – loans for retrofitting homes and commercial buildings for energy efficiency differ from conventional loans in that the money gets paid back through supplemental property tax assessments. That small twist brings a host of benefits. The owner doesn't have to worry about losing the value of any retrofit if the home gets sold because the new owner assumes the payments. The payments, ideally, can also be lower than the amount saved on energy bills, making the retrofits free. Local communities also see job activity in the area. And moribund banks get to write loans.

Fourteen states including Florida, Texas and Maryland as well as 30 municipalities have already passed PACE programs. Berkeley, Calif. became the first governmental body to issue PACE bonds in January. The House and Senate included provisions inside their versions of Waxman-Markey that would permit the federal government to guarantee the bonds, which would enhance their marketability. Interest on PACE bonds right now aren't tax free.

Last week, Joe Biden made PACE loans a central part of his Recovery through Retrofit program unfurled last week.

There are major questions swirling around the company. Typically, consulting/services companies have trouble scaling. The universe of potential customers is likely also limited and closing a sale or engagement could take time. Still, if the federal government passes pending proposals to guarantee PACE bonds, the market could cause consumer demand to explode.

"With a federal guarantee it grow from a hundreds of millions to a $400 to $500 billion program," said Jack Hidary, one of the principals of PaceNow, a nonprofit geared to drumming up national support, earlier this month. (Hidary was also behind Cash for Clunkers.) "It can also help the 1.5 million people out of work in the construction industry."

Install an ice maker; get a tax break.

Congressional representatives Mike Thompson (D-CA), Wally Herger (R-CA) and Earl Pomeroy (D-S.D.) have introduced the Thermal Energy Cooling and Heating Act of 2009 (HR 3918) that would give a 30 percent tax credit and accelerated depreciation to individuals or businesses that install thermal energy systems that reduce peak demand.

The primary thermal energy system on the market today that fits this description is the ice cooler marketed by both Ice Energy and Calmac. In these systems, ice is made at night when power is cheaper (or generated but not consumed). It then melts during the day: Heat exchangers allow the chilly vapors to circulate through the building and cool them.

The definition also seems to include solar air conditioners, which use heat collectors and evaporating refrigerants to cool buildings. Chromasun is working on those.

There are a couple of trends wrapped into this bill:

1. Energy efficiency is getting more attention. Right now, businesses that install solar receive a 30 percent tax credit. You can get an 30 percent tax credit for energy efficiency retrofits, but only for the first $1,500 of work. The Thermal Act provides what seem to be comparable incentives. Secretary of Energy Steve Chu has long been a supporter of improving building energy efficiency.

2. Waxman-Markey may get piecemeal'ed. The bill hasn't passed yet, of course. And if it doesn't, expect to see a flurry of bills that concentrate on very specific parts of the overall bill. Efficiency enjoys bipartisan support. It cuts power consumption and generally can help create jobs because much of the revenue is generated from installation.

3. Air conditioning is cool and lots of new companies have come into the market (see the cavalcade here). In all, air conditioners gobble up around 5.2 percent of the total energy in the U.S. and about 10 percent of the electricity. (Building operations account for around 39 percent of U.S. power according to the Department of Energy and 13 percent of that power in residential and commercial buildings goes to air conditioners.) Not only are air conditioners themselves inefficient, the sensors and other mechanisms often aren't networked property for dynamic control. Walk around your building and count the female co-workers who are wrapped up in Snuggies sometime.

4. Air conditioning is going to get even cheaper. Utilities are currently contemplating programs under which they would pay for new AC units. A rebate and a tax credit? What CFO could say no?