It's been a good month for Energy Recovery. The company, which makes energy efficient systems for desalinating seawater, pulled off an IPO in the beginning of July in the middle of a swoon on the stock market. The stock is trading in the $11 range, or 40 percent plus the initial price. Ironically, the IPO took place a day after there was much hand-wringing about the lack of IPOs. And since then, it's announced two big deals. The company will supply equipment to the Hadera Sea Water Reverse Osmosis Desalination Plant going up near Haifa, Israel. The plant, being built by IDE Technologies, will open in 2009. Initially it will be capable of converting 100 million cubic meters of sea water into drinking water a year. Eventually, it could be expanded to 130 million cubic meter. ERI will also participate with IDE on the expansion of a desalination plant on Cyprus. Today, meanwhille, Singapore's Hyflux said it will adopt the company's PX Pressure Exchanger for a desalination plant in China. Desalination is a great idea, but it remains an expensive way to produce water. It takes quite a bit of pressure to get the water through the membrane, and over time the membrane can foul up and clog. ERI helps lower the energy costs by converting the pressure in the wastewater into electricity. Other companies like NanH2O are working with better membranes. Todd Kimmel, of Advanced Technology Ventures, is among the many in Silicon Valley scouting for water deals. He's particularly hot on desalination, he told me in a meeting yesterday. 98 desalination projects have been launched in the last three years. The tough part of the market, however, is that utilities are some of the main buyers. They aren't known for being speedy. "The value of water goes up when you don't have it," he said.

Fremont, California-based Solyndra is a secretive solar company.  As secretive as you can be when you have 400+ employees, are looking for a valuation of greater than a billon dollars, and occupy a 183,000 square foot building on the side of a major highway.  (I’ve verified those valuation claims from a number of Silicon Valley Venture Capitalists who passed on the funding deal.) But today we get two big Solyndra contract announcements from: Solar Power, an OTC-traded, Shenzen-based module manufacturer and “vertically integrated, turnkey solar power solutions provider,� with an agreement to purchase approximately $325M worth of Solyndra solar panels over the next five years. As well as a supply agreement with Phoenix Solar, a Germany-based solar integrator, worth approximately $700 million.  They claim that Solyndra’s solar panels are “highly innovative and distinguish themselves significantly from conventional solar modules.� I’ve tried to contact the firm a number of times but they’ve been less than communicative.  We’ll keep trying.  I have spoken to some former Solyndra employees.  In fact, oddly for a start-up with a brilliant trajectory, they’ve had a number of senior executive shake-ups.  The first was an “exodus� of their CTO, CFO, and President and the next was a loss of the senior staff that replaced the original team. One of their original technologists, in fact the gentleman who has some of the core CIGS IP, is polite but says they have very little chance of scaling to volume at the right cost due to enormous packaging and encapsulation challenges. However, there has been some progress in CIGS solar packaging materials of late. According to Martin Roscheisen, the CEO of Nanosolar, in a comment he posted to one of my blogs, “If anything, CIGS is easier to package than CdTe: Because unlike with CdTe, at least the thin-film device stack is fundamentally stable with CIGS. (The CdTe thin-film stack is not intrinsically stable; its backelectrode is known to be instable.) So the packaging solutions that work for CIGS are a superset of what works for CdTe.� We’ll get you some more info on these contracts and Solyndra in the coming weeks. BTW, Solyndra is hiring. But, some CIGS execs say they are seeing an increased flow of Solyndra resumes too. The same thing happened in 2007 before Miasole announced it was having problems. But this was before these two big contracts.

I was shopping in Whole Foods, Palo Alto the other day (Don’t get the wrong idea – I do not drive a Prius like our CEO, I drive a 1971 Datsun 240Z) and while buying cheese (Jarslberg, not Brie), I ran into a notable VC with an investment in an algae development company. This investor, who asked to remain nameless, lamented the difficulty of even finding the right species of algae, let alone scaling up to the volumes required. Then, buying chocolate, I ran into the CEO of another algae firm, also requesting anonymity (seems like a trend). He said that achieving real volume in algae to biodiesel production is four to seven years away. Which seems realistic but also seems to fall outside the time horizon of most VC fund expectations. Which seems problematic for impatient VC investors and their LPs. According to Ken Epstein at NewCap Partners, an investment banker with some knowledge in this field, algae would be better used in aviation fuel applications, where the volumes are less and the prices are better. I then slowly backed out of the store in order to avoid any more algae entrepreneurs. For some reason I bought this beverage. In other energy news, Steve Eglash, CEO of Cyrium, a fabless developer of advanced 3/5 PV solar cells, let me know that they will soon announce their $15M round B. Cyrium uses quantum dots to improve the efficiency of solar cells for use in concentrated photovoltaic (CPV) systems, currently a zero billion dollar market.  Potential end-customers are system vendors like Solfocus and Greenvolts. Competitors include incumbents Emcore and Spectrolab and other startups like Solar Junction and Quantasol. CPV system start-up Solfocus is also closing in on a (large) funding round, which we've blogged about previously. Cyrium has their sights set on achieving efficiencies of 40 percent to 45 percent, a figure that will has the potential to alter the economics of CPV.

Intel makes its third solar investment in the last month. Intel Capital continued its surge in the solar market with this morning’s announcement of a $12.5 million investment in precursor chemical company, Voltaix.  Founded in 1986, Voltaix makes electronic chemicals and gases used in semiconductor manufacturing and CVD precursors such as germane, used in the production of advanced PV cells. Voltaix’ materials are intended for in thin film PV cells using amorphous silicon, CdTe and CIGS (as opposed to wafered silicon).  The market share for thin film solar is only about 10% today but that share is expected to grow significantly over the next few years.   XsunX is one of Voltaix’ customers. Intel just spun out SpectraWatt with a $50 million investment, joined by Cogentrix Energy, PCG Clean Energy and Technology Fund, and Solon AG.  SpectraWatt manufacturers and supplies PV cells to solar module manufacturers. Intel’s third recent solar play was a $38 million investment in German company Sulfurcell as part of an enormous $134 million infusion to build a plant to make solar cells using thin film CIS or CIGS. Other investors included Climate Change Capital Private Equity, AIG, Demeter Partners, Zouk Ventures and BankInvest. On one hand, it’s nice to see a major global player like Intel jump into the solar fray.  On the other hand, they’re more than a bit late in their sudden discovery of the $20B photovoltaic market. Intel once made a similar discovery of an overheating optical networking market in the late 90s.  They made some big acquisitions and many VC investments but few if any of those bets paid off and they ended up closing, selling, or abandoning those units.  Let’s hope that this is not a repeat of that late entry.

Following up on my previous post, here are a few more things from the California Clean Tech Open presented at Google's headquarters in Mountain View, Calif. Here’s a list of the 44 finalists vying for the “$100,000 Startup in a Box" prize package. It’s worth taking a scan of these firms to get a flavor of the range of clean-tech technology and entrepreneurs – everything from desalination to diapers, from solar concentrators to plug-in hybrid chargers. Some quotes from the hallways:

• Power Assure’s Donnie Foster said that his firm’s pending software “can cut Data Center electricity bills by 50 per cent. According to Gartner, Data Centers need to go from “always-on to always-available.â€? Power Assure’s uses load shifting and load shedding to correlate IT load with energy consumption.

• Green Plug’s VP of Business Development, Seth Socolow said that his company’s “goal is to rid the world of external power supplies. The model of every device coming with a dedicated power is a broken model.â€? He went on to claim that 3.2 billion external power supplies will be manufactured and shipped in 2008 and 2 billion will go into landfills.

• Kevin Surace, CEO of Serious Materials, is a developer of eco-friendly building materials. The startup recently acquired Alpen Windows, an energy-conscious window manufacturer. Mr. Surace enthusiastically rattled off some statistics:
  • 9 percent of global energy goes to passenger cars, but 52 percent is tied to buildings, and 12 percent of global energy usage goes to inefficient building materials.
  • “After you’ve taken care of walls, insulation and ducts – you’re left with windows, which is why we acquired Alpen Windows,â€? said Surface. “The R value of most windows is terrible, the best is R3. The DOE has been trying to raise the R value of windows for years but the only people who talk about R value is us and Alpen Windows.That’s why we bought them.â€?

• Gigagreen plans on building a dirigible that extracts energy from the jet stream and transmits it wirelessly to earth. The company’s “high altitude wind energyâ€? platform “beams powerâ€? to earth – using what? Alex Flemming, the founder, would not reveal the precise method. He denied it was microwaves, which I think leaves a long extension cord or lasers or magic as the only other technology alternatives. The company is looking for funding.

The connections between Idealab and Google continue to grow. RechargeIT, the part of Google.org that concentrates on clean transporation technologies, announced today that it has invested in Aptera, a company making a three-wheeled car. That marks the second time that Google (or one of its charitable subsidiaries) has invested in a company touted by the incubator. Google already invested in eSolar, a solar thermal company. Google also hired Energy Innovations, another Idealab company, to help install its 1.6 megawatt solar array, which at one time was the largest photovoltaic array in the U.S. The two companies are familiar in search. Google bought Picasa, an Idealab company, and pretty much copied the techniques behind Overture (sold to Yahoo) for paid search. So if you want to know who Google might invest in next, check out the Idealab site. Idealab also has an investment in Infinia (Stirling engines). For the record, I'd just like to point out that Idealab historically has done best with Internet companies. Some of their energy investments, like eSolar, seem somewhat me-too. The technology is similar to what is coming out of Brightsource Energy, which is further along and has some of the most experienced executives in solar thermal at the company. To Google.org's credit, they also invested in Brightsource Energy. Likewise, Aptera is crafting a car that's similar to one coming from Venture Vehicles. It's not to say these are bad investments. It's to say that there are other companies out there with similar products and Idealab doesn't have an extensive history here. So there are some risks. And I'd also like to point out that Google, for all the fanfare the company gets for its greentech efforts, also wants to make money on these investments. These aren't research grants given to long-range scientific projects made by philanthropists not really focused on a financial return. You know, like the multimillion dollar grant given to the Bill and Melinda Gates Foundation to Amyris. There's your bile download for the day!

The California Clean Tech Open presented an event at Google last night – with a panel discussing "Renewable Technologies of the Future" and a showcase of Renewable Energy Alumni and current contestants in the CCTO competition. The location was not the Google planetary headquarters but another campus in Mountain View, Calif., which I’m pretty sure was once the satellite parking lot for the Shoreline Amphitheater. This is how I remember the place. Hal La Flash, Director, Emerging Clean Technology Policy at PG&E, who is everywhere these days, introduced the panel where we heard from:

• Dan Adler, President, California Clean Energy Fund

• Jim Shandalov, e-Solar

• Neil Renninger, CTO, Amyris

• Marianne Wu, Partner, Mohr Davidow Ventures

Mr. Adler spoke of the recent big concept moves by Al Gore and T. Boone Pickens. “The six trillion dollar global energy market [needs projects of this scale in order to] internalize the externalities of green house gases,� he said. But let’s face it, in a public forum like this, a new fact or idea presented by a VC or a startup would be conspicuous all by its lonesomeness, so we move on to the real action – the conversations in the hallways. Bob Cart, CEO of Greenvolts, is a past winner of the CCTO and is the real deal – a VC funded startup with a 2-megawatt, 20-year contract to supply power to PG&E via their GV-1 CPV system, soon to installed near Tracy, Calif. The firm expects to close a substantial funding round by the end of the year. Kevin Surace is the CEO of Serious Materials, a developer of eco-friendly building materials.  The start-up recently acquired Alpen Windows, an energy-conscious window manufacturer.  Mr. Surace enthusiastically rattled off some statistics:

• 9 percent of global energy goes to passenger cars but 52 percent is tied to buildings, and 12 percent of global energy usage goes to inefficient building materials.

“After you’ve taken care of walls, insulation, and ducts – you’re left with windows which is why we acquired Alpen Windows,� said Surface. “The R value of most windows is terrible, the best is R3.  The DOE has been trying to raise the R value of windows for years but the only people who talk about R value is us and Alpen Windows. That’s why we bought them.� There were a number of CCTO entrants looking for seed funding in the hallways.  I’ll mention one here and the balance in my next post. Gigagreen plans on building a dirigible that extracts energy from the jet stream and transmits it wirelessly to earth. The company’s “high altitude wind energy� platform “beams power� to earth – using what? Alex Flemming, the founder, would not reveal the precise method. He denied it was microwaves, which I think leaves a long extension cord or lasers or magic as the only other technology alternatives. Gigagreen actually has a few competitors in the field of high altitude wind energy, amongst them Makani Power.  Founded by sail makers, kite boaters, and wind surfers, a group of folks long known for their entrepreneurial energy and work ethic, they were funded by Google in a $10M round A, about two years ago.   Locate the employee with actual utility experience in this team and get back to me. My next post will cover the other CCTO entrants including a number of interesting solar plays, a perpetual motion machine, black light power, cold fusion and more.