The long list of VC-funded solar startups is starting to shrink.  We crossed Optisolar off the list, a victim of hubris (see Inside OptiSolar's Grand Ambitions) and it looks like SV Solar is soon to be history -- a victim of a poorly hatched business plan by neophyte staff and investors who should have known better.

SV Solar received $10.2 million in funding two years ago from partners at Bessemer with scant solar experience. The company funded a low-concentration PV firm (strike one), with a staff that had very little solar experience (strike two), based on some amazing cutting edge technology that they called -- a prism (strike 3).

Tough getting IP protection on a prism, I imagine.

The company’s value proposition was based on the high price of silicon at the time by investors who didn’t fully get the concept of supply and demand -- how the price of the silicon commodity was bound to drop as capacity was added.

Even when the price of silicon was high, you could see the flop sweat come over company spokespeople when they presented.  It was clear that even they didn’t buy their own story.

I’ve emailed Justin Label of Bessemer, the VC investor in the firm, but have not heard back from him.  Steve White, the CEO, responded via email with the following:

“SV Solar is actively seeking additional funding or other strategic alternatives. NDAs preclude further comment.”

According to Linked-In:

Tim Fischer, the VP of Business Development, still listed on the SV website, is now at 3M.

Lenny Sharp, the VP of Marketing, still listed on the SV website and phone directory, is now at Hitachi.

And according to a good source, the VP of Engineering at SV is looking for a job.

The last press release they issued was in August of 2008.

All of this adds up to SV Solar being in the startup death spiral.

2009 will be a year of attrition for weak startups in solar power and greentech.  It will be a gut-wrenching experience but it will leave the industry leaner and stronger in the 20-year solar boom to come.

Here are a few interesting tidbits and links from the last few days.

gCaptain.com provides a list of top ten most interesting wind turbine designs.  And also a list of the top ten green ship designs with some great photos and illustrations.

gCaptain is not exactly a green products guide -- but if you have an interest in things nautical, this is a great site.

Biofuels Digest has compiled a list of their top 50 bioenergy companies -- an interesting mix of VC funded firms like Sapphire and Coskata and massive public corn ethanol firms like Poet.  Here are their top five:

1. Coskata
2. Sapphire Energy
3. Virent Energy Systems
4. Poet
5. Range Fuels

Billion Dollar Dreams

There's a shard of an article in CPV Today in which SolFocus’ CEO Mark Crowley is quoted as saying his firm will be a $1 billion business by 2011.  Does he mean $1 billion in revenue?  That would be what? 50 to 100X revenue growth in two years? That borders on fantasy, I think.  Does he mean $1 billion in market cap as a public company?

Is this really the growth expectations that SolFocus has?  I’m tracking this down and trying to get a clarification from the company.

Gridpocalypse Now

“Smart Grid” vies for leading buzzword of the year along with “bailout,” “stimulus” and “teabagging.”  Hundreds of millions in the form of spending and tax cuts are being directed towards smart buildings, demand response and transmission network upgrades.

Unfortunately, the great solar space storm of 2012 is going to render all of that hardware into slag metal and vault us back to the fifties.  The 1450s.

In a report report funded by NASA and issued by the US National Academy of Sciences (NAS) in January this year, there are scenarios that show millions of Americans dead, water shortages, food shortages, cats marrying dogs, and a general collapse of government and society.  Read about that cheery report right here.  And have a good day.

Algae cultivation for biofuel applications is full of promise and hype.  Until one of the many companies working on the puzzle solves the cost issue -- algal biofuels remain a well-funded science project.  But now, OriginOil might have solved a few pieces of the cost puzzle with new lighting and new extraction technologies.

Harvesting oil from algae is an expensive and difficult challenge.  Algae must be separated from its growth medium -- water -- and the lipids in each algae cell must be extracted.  Companies are researching a variety of ways to filter the algae from water and to liberate the lipids from the algae -- ranging from chemical catalysts to bioconversion.

OriginOil (OTCBB:OOIL) is a small cap early-stage algae farmer looking to use their Helix BioReactor to evenly illuminate algae and create large amounts of biomass.  They recently signed a CRADA with the DOE's Idaho National Laboratory and hope to use ultrasonics and microwaves to crack algal cell membranes.

The firm's process combines electromagnetism and pH modification (using CO2)  to break down cell walls, and release the oil within the cells. Algae oil rises to the top for skimming and refining, while the remaining biomass settles to the bottom for processing as fuel and other co-products.

According to the company, in less than an hour, the oil, water and biomass separate by gravity alone and unlike conventional systems, no chemicals or heavy equipment are used in the one-step process.  No initial dewatering is required.

If OriginOil’s claims are true -- it might be on its way to bringing algae fuel pricing to “pump parity,” the only metric that really matters in bringing this technology to commercial reality.

The April issue of the Greentech Innovations Report dives deep into the algae pond.  You can subscribe to it here.

Another day, another greentech event in Silicon Valley.

This event comes to you from high above San Jose at what appears to be the last bastion of the world of wood-paneled gentlemens’ clubs at The Silicon Valley Capital Club.  No denim allowed according to the invite from the Environmental Business Cluster.

Each of the investors on Tuesday’s panel highlighted one of their greentech portfolio’s pet investments and in some cases said something interesting.  Here’s the rundown:

Susan Preston / General Partner at CalCEF
CalCEF is a small angel fund we covered here in CalCEF Angels.

Preston highlighted her firm’s investment in HID Labs, an innovator in high intensity discharge lighting for high bay lighting.  Until now, according to Preston, the technology has been fairly antiquated but HID has a new take on the application and offers a 35 percent to 62 percent reduction in the power bill with better color and lighting than existing solutions.  Michaels Kanellos wrote about HID here in The Modern Dimmer Switch.

Neal Dikeman / One of the founding partners of Jane Capital Partners
Neal “Eats, breathes and sleeps energy.”  He is currently running a company in the carbon space and revised his previous statement: “I eat, breath and sleep carbon.”  (Neal needs to vary his diet because he’s looking a bit sallow, maybe invest in drinking water and vegetables.)

Neal chanted variations of his policy mantra:

• “There is no disruptive technology, just disruptive policy.”

• “Without policy frameworks, these sectors don’t work.”

• “The only thing that matters is how well you understand the policy constructs.”

He highlighted his investment in superconductor firm, Zenergy Power.

Its device, a fault current limiter, is getting some real customer traction after, according to Dikeman, a typically long gestation period for energy products aimed at utilities. “If you can build FCLs there is a massive market,” he added.

Dan Rubin / Partner at Alloy Ventures
Dan started his career at semiconductor equipment companies and a semiconductor IP company in various operational roles and has been at Alloy for nine years. Alloy is now investing out of its current $370 million fund as it “continues to look at new opportunities.”

He is a linear algebra savant as evidenced by the following math: “We do 50 percent IT, 50 percent biotech, and 20 percent cleantech,” adding, “Clearly there’s an overlap in the IT, biotech and cleantech space.

“On the life sciences side we take mostly technical risk.  On the IT side we  take mostly market risk. There are a few places where you might take technical and market risk.  The problem with some cleantech deals is that there is technical risk, market risk, pricing risk regulatory risk, subsidy risk, etc.”

“We’ll take some of those risks but we like to see deals where some of those are removed.  More importantly, we like deals where there are fundable milestones that remove more of these risks.”

He highlighted a recent $1.5 million investment in a spin-out of an existing portfolio firm with some novel Si deposition tools for photovoltaics.

Cynthia Ringo /  Managing Partner at DBL (formerly with VantagePoint Venture Partners)
DBL is “currently raising their second fund, the first close looks imminent” with a heavy emphasis on cleantech.  DBL is a woman-owned firm

Their investments include Tesla Motors, Brightsource Energy, eMeter, and Powerlight (acquired by SunPower).

She highlighted Tesla Motors which she helped invest in while at VantagePoint.

Todd Kimmel / Mayfield Fund
Mayfield’s current funds total $400 million in the U.S.,  $150 million in India  and $400 million in China, Kimmel, previously with ATV, founded Coskata with Khosla Ventures and helmed that syngas ethanol firm until recently.

Some quotes:

• “The downturn is helping new technologies enter the market.”

• “We’re seeing a return to core technology focus.”

• “I think we’re going to see a wave of innovation in chemicals and materials”

• “I actually think the down turn will be good for entrepreneurs and start-up companies in the long term.”

Kimmel spoke of a recent term sheet for an unnamed firm using microbes that convert methane into a bio-plastic.  Their technology is in the form of microbes and bioreactors to create the PHB plastic.  He sees these types of deals with a very long-term horizon -- eight to ten years.

Alex Kinnier / Khosla Ventures
Khosla Ventures is an early stage investor with 50 portfolio companies in the greentech space.  Alex remarked that, “We do not disclose the size of our fund due to our sources”  (What does that mean? The sources are Russian oligarchs? Vinod’s mattress?) Choice quotes from Kinnier include:

• “There is an overall slowdown in the pace of investment but there is a pickup in efficiency applications."

• “Things that are cost-cutting are a pretty good place to be”

• “The large scale projects that require financing are getting hit pretty hard.”

• “I’ll tell you about a term sheet we put out this week. A professor at a notable university has a new way of storing energy.  This professor has some novel modeling that shows there is some promise in this new technology. Why did we invest?  The professor’s track record speaks for itself -- he has innovated multiple times before. If it works -- and that’s a big if -- market risk goes away. If this experiment works, there is still a long road until this becomes something that will affect our everyday lives.”

Six VCs and six pretty optimistic viewpoints.

Blogging from a Stanford University Event--

I attend lots of greentech-themed events -- several each week, sometimes several each day. In my more soulful moments, I pray that the event actually resembles its' write-up.  I also pray that someday a week will go by where I do not have to hear the story of how the Chinese word for crisis can be written as “Danger” as well as “Opportunity”.

That’s how Congresswoman Anna Eshoo (D-CA) started her speech off on Monday evening at a Stanford University event hosted by Battery Ventures.  (Can any native Chinese speakers let me know if that hackneyed saw is even true?)  According to this link, it's dead wrong.

Eshoo is a relatively high-powered Congressperson -- she’s on the House Committee on Energy and Commerce.  She’s also on the Intelligence Committee.  (And this weekend she unveiled the very first congressional office in the nation to go maximum green.)

In her soporific speech, she illustrated how things have changed in Congress in regards to energy:  Early in her congressional career, she was involved in a vote for automotive CAFE standards.  She figured it was, “Hands down one of the simplest things congress could do to make a down payment on the [energy] future."  To her surprise the most stringent standard received 7 of 50 votes and the watered down standard got 11 of 50.

In contrast, she suggested that the new disruptive energy legislation could be on the floor of the house by Memorial Day. She remarked, “How the world has changed, cleantech is no longer out on the fringe," and, “This is the moment, this is the year, this is the time.”

Some quotes and tidbits from the attendees and speakers:

The brawn portion of a husband and wife algae team commented that he was concerned about overly aggressive announcements coming from other algae firms.  He worried that irresponsible claims and GMO fears could ruin things for others in the industry.

CEO Mehrdad Moslehi, and CFO Bob Komin of Solexel, a secretive solar startup funded by Technology Partners and KPCB, attended the event.  They remained obstinately secretive.  Moslehi claims that the company has created a disruptive materials-agnostic platform technology that will produce high solar conversion efficiencies at thin film prices.  We'll hear more from them in 2010.  We reported on Solexel a while back.

Bill Frey, the CEO of Qtreros, announced that his firm received a $2.6 million earmark for their advanced cellulosic biofuels.  In partnering with bigger companies, Frey remarked, “It’s a matter of finding those energy companies who find that their business model is no longer viable."

And on the topic of the evening...

“We are seeing an entirely new definition of the government’s relation to the private sector.  The government is going to be interventionist.  It is going to include a number of value judgments as it is dispensing largesse.  The government is going to be in your face, get used to it,” said John Bohn, Commissioner, California Public Utilities Commission.

Regarding utilities, Bohn said: “We’re beginning to see the utilities wake up and stretch and look for innovation. Utilities have money and lots of power.  One of the issues we struggle with is in keeping the utilities from filling up the space themselves.  We are trying to leave room for innovation and entrepreneurs.”

On small businesses: "What we do not see is the voice of the small business owner.  We don’t see anywhere near enough of what [small businesses] are doing.  Make your voices heard,” he said.

The evenings sponsor, Battery Ventures, informed the 270 person-strong crowd that it was still investing in cleantech and wanted to hear from entrepreneurs.

Algae farmer Sapphire Energy has raised more than $100 million from Bill Gates' Cascade Investments and ARCH Venture Partners.  The company claims its organisms have already secreted small amounts of the equivalent of 91 octane gas.

Last week, Sapphire announced an updated timeline on commercial deployment of its green “drop-in” replacement transportation fuel.

Here are the ambitious claims from their press release:

"By 2011, Sapphire Energy will be producing 1 million gallons of diesel and jet fuel per year, double its initial estimates.  By 2018, the number, increases to more than 100 million gallons annually; and by 2025, the company will be producing up to 1 billion gallons of fuel per year."

In order to make good on these audacious claims -- Sapphire has to do a lot of things right.  It has to get the biology right, it has to be able to scale big and fast, and it has to meet the pricing of the world's most widespread commodity -- liquid transportation fuel.

Sapphire has not revealed the type of algae it uses, but it is likely a genetically modified cyanobacteria, a blue-green algae. The advantage to this form of algae is that the algae actually secretes the biocrude oil, eliminating the need to harvest and dry the algae or extract the algal lipids for processing into fuel.  There is another type of algae, Botryococcus braunii, from the plant kingdom, that is also a producer of hydrocarbons.

“Fuel from algae is not just a laboratory experiment or something to speculate on for years to come.  We’ve worked tirelessly, and the technology is ready now,” said Brian Goodall, Vice President Downstream Technology, at Sapphire Energy.

Sapphire plans to grow the genetically modified organisms in open ponds using non-potable water and non-arable land -- bringing to mind the question of how it will contain the genetically modified organisms.

There are lots of audacious claims in the algae biofuel world these days (see Exaggerated Claims in Algae). The claims range from production volumes per acre to time-to-market.  Startups like Sapphire are often asked to meet the unrealistic expectations of their VC investors who look for accelerated technical results and rapid commercial scaling.

If Sapphire's claims are true -- algae biofuels will soon contribute to meeting the Federal Renewable Fuel Standard and help the U.S. lessen its dependence on foreign oil.  More details on Sapphire soon.

More on algae commercialization:

• Algae Biodiesel, Part 2

• Slimed, Part 1: The Aquatic Species Program

The April issue of the Greentech Innovations Report takes a deep dive into the algae pond.  You can order it here.

More bloggage from Greentech Media's sold-out solar event in Arizona --

The first panel of today was focused on Arizona and what this sun-drenched state is doing to promote solar.

We heard two very different stories.  Solar City loves Arizona -- favorable incentives and lots of sun.  Advent Solar, on the other hand, despite being helmed by an Arizona resident, builds its product in New Mexico.

Lyndon Rive, the CEO of installer, designer, and financier Solar City bemoaned the lack of solar installations in the U.S.: "There have been 60,000 solar systems installed in the US in the last 30 years -- it's nothing!  There's been a lot of money and a lot of entrepreneurs but not much focus on delivery."  He added that, "Our mission is to bring solar to millions of rooftops."

Solar City covers Arizona, California, and Oregon and, not surprisingly, the biggest barrier to adoption is upfront cost, according to Rive.

When confronted with a $20,000 upfront cost most consumers become somewhat less environmentally concerned.  That's why Solar City has adopted a financing model that significantly reduces the upfront cost.  It is partnering with banks that have a tax appetite.  But a 30 percent tax credit is only effective if you are a profitable entity.

The Stimulus Bill changed the tax credit to a grant.  "The only problem is the delay in getting it out." according to Rive who sees it delayed until July and that will result in a slow first half of 2009.

"There is still a tremendous interest in the venture community. But the problem is if you're an entrepreneur -- whatever you think you're worth divide that by two or by three."

He finished by saying, "We need economies of scale.  That makes everything more efficient -- permitting, customer acquisition, etc."

Peter Green is the CEO of Advent Solar, a manufacturer of high-efficiency c-Si solar cells.  It was founded in New Mexico because the technology came from Sandia Labs in 2002.  Green joined in 2007 and he commutes to New Mexico daily.

Green believes that "there aren't many companies in the U.S. breaking new ground like we are."

He is currently in negotiation with a number of states to determine where to locate his manufacturing.  He "looks for infrastructure, talent and research institutions he can lean on.   The fourth thing he looks for are incentives but but he is finding that Arizona "is at the bottom."  because he needs cash and the powers that be in Arizona told him that they don't believe in cash.  He called it a "perishable opportunity" -- Arizona has to seize it now.

He added that he knows of some well-founded rumors indicating that: "You're going to see a lot of large companies buy a number of small companies in the near future."

Arizona looks to have the demand side of the solar equation under control but needs more attention to building its' manufacturing base.