Nanosolar is a poster child for Silicon Valley solar innovation.

What does it have?

• Half a billion in venture and strategic investment? Check.
• Top shelf VC investors? Check.
• Secretive and allegedly disruptive technology? Check.
• Ornery technology? Check.
• Ornery and driven CEO? Check.
• Billions in alleged order backlog? Check.
• Periodic rumors of them being the next monster IPO in greentech? Check.

It's been hard to separate fact from fiction with this company. And that's been its prerogative. It's a privately held firm and doesn't have to disclose a thing if it doesn't want to. Which is one reason why Nanosolar CEO Martin Roscheisen's short speech filled the 327 person capacity auditorium at the Palo Alto Research Center on Wednesday's night meeting at the SVPVS.

Nanosolar has spent a lot of money. "If I don't get a request to sign-off on a $70K P.O. every day, then our metrology guys must be out sick," joked Roscheisen. The company has 350 employees, 350 patents and has focused on reinventing CIGS with regard to capital efficiency and cost. It's been at work on this mammoth project since 2002.

I'd like to tell you that Roscheisen dropped several bombshells and gave all us the scoop on their next milestone and conquest, but it was not to be. You can probably learn more about Nanosolar's recent activities in this article from Ucilia Wang, in this blog on Nanosolar patents from Eric Lane and in the sleuthing of Ed Guenther than you could learn from Martin's slide show.

Roscheisen is adept at controlling the information flow from his company and tonight was no exception. He side-stepped or flat-out ignored questions he didn't want to address concerning yield and production targets.

Here are a few things he did say:

• "We're producing about a Megawatt a month right now."
• "We've gone beyond the standard industry testing to make sure we're beyond reliability issues."
• "We expect to be profitable at a price point of $1/W."
• "We expect to be three times as capital efficient as First Solar."

He added that, "Capital efficiency is going to be a huge driver" for new solar companies and that he expected Nanosolar's factory cost to be a third of First Solar's dollar per watt, adding that the Applied Materials line cost $3 per Watt.

He returned to the First Solar theme quite a lot in his presentation. Clearly Nanosolar has ambitions of being on price parity and at the scale of the extraordinarily successful Cadmium Telluride PV leader First Solar. Roschesen spoke of the balance of system cost advantage that Nanosolar had over First Solar because of the larger panel size, of the higher power per panel, of the lower mounting labor costs, and the stability of CIGS vs CdTe.

Despite the hundreds of megawatt capacity claim, Nanosolar is producing just 1 megawatt per month.  

Nanosolar has accomplished a lot in its seven years. It seems to have tamed the difficult CIGS materials system, it has worked through hundreds of hurdles with regards to substrate materials, encapsulation, packaging, production and reliability. Perhaps most importantly, the company has moved the PV manufacturing model from one that looks like semiconductor wafer production to one that looks like printing. And it deserves immense credit for this.

In a recent email exchange with a Nanosolar board member whom I respect, the exchange ended with the investor saying that slow and steady will win the CIGS game. And Nanosolar seems to be slowly and steadily making headway into commercialization. There are still plenty of challenges ahead.

There is a good book to be written here about innovation and risk in the Nanosolar story.

Whether that book has a happy ending remains to be seen.

If a recruiter calls and asks you to interview for the CEO position of a Concentrating Photovoltaic (CPV) firm – beware, brother, beware – it's a dangerous role. You might want to consider auditioning for the drummer's chair with Spinal Tap before accepting the position. 

There was an announcement today that Kevin Arthur is leaving the CEO position at QuantaSol to be replaced by Chris Shannon. QuantaSol is looking to supply high efficiency chips to the suppliers of CPV systems like Concentrix and SolFocus.

Speaking of SolFocus, the firm's original CEO, Gary Conley (now Chairman) was replaced by Mark Crowley in 2008. SolFocus just announced an agreement with Portuguese utility Águas de Portugal for the installation of 8.5 megawatts of CPV systems at the utility's facilities.  SolFocus is one of the leaders in actually deploying CPV.

Steve Eglash, former CEO of Cyrium, a triple junction photovoltaic cell vendor like QuantaSol, was replaced by Harry Rozakis, after Barry Turner, a board member, warmed the seat as interim CEO.

GreenVolts' original CEO, Bob Cart, stepped upstairs to Chairman to allow Gary Beasley to assume the CEO hotseat of the low-profile CPV system vendor.

Soliant's brand new CEO, Terry Bailey, an Evergreen alum, just replaced interim CEO Marco DeMiroz who had replaced Art Buckland who had replaced founding CEO, Brad Hines. DeMiroz was one of the firm's venture investors at Trinity Ventures. It's rarely a good sign when the VC steps in as CEO.

Press releases and parting CEOs will spout marketing drivel about how "it was time to step aside to let a more seasoned exec take the reins" and the like. Might as well say "wanted to spend more time with his family." The fact is the CPV market is taking a lot longer to develop than expected.  And VCs have a limited number of tools in their toolkit.  They can stop giving funds, give more funds, or make C-level personnel changes. 

So while the startups wait for the CPV market to kick in, CEO heads roll, and we end us with new CPV drummers. 

Some studies have shown that the more successful startups, the ones that make it to the finish line of IPO or acquisition, are the ones that keep their founding CEO. It's not a hard, fast rule but it's worth noting. Plenty of factors contribute to a start-up's success, not all of them under the startup's control. 

Fortunately, the management structure at Sunrgi remains stable.

Remember to turn it up to 11.

VC in Storage

With A123's recent and relatively successful IPO fresh in investor and entrepreneurial memories – it looks like batteries and energy storage are going to continue to be a hot sector. 

VCs invested more than $114 million in the third quarter in 11 energy storage in their ongoing quest for the energy storage grail. Investments were in technologies ranging from fuel cells to lithium-ion batteries to compressed air to flywheels to EEStor's supercapacitors. 

Speedbumps for Energy Storage

Energy storage applications vary widely in their requirements. Portable, electric vehicles and utility-scale storage all have their own needs for power density, energy density, and cycling characteristics and no single technology or materials system is going to meet all needs.



Energy Storage VC and entrepreneurs still have a few speedbumps in their path to the grail:

Capital intensive operations like A123 which have taken hundreds of millions of funding over many years, even after a decent IPO, do not seem to have the traditional home-run multiples that VCs have bench marked in the past.  The days of 10X returns, at least for massive factory-driven companies like A123, or Solyndra, or Nanosolar, or Tesla for that matter, might be over. 

Energy storage is fundamentally a materials play and the laws of physics tend to be stubborn.  It's difficult to wring 2X or 3X performance out of existing and mature materials systems. EEStor is making bold claims of this nature and it will be disruptive if they prove out - but for now we wait and see.  Raj Atluru, a partner at DFJ, has long claimed that in batteries – a 1.3X improvement in performance is worth investigating.  None of the expectations of 10X performance at a tenth the price that are de rigueur in IT deals.

And utilities and energy regulators like the California Public Utilities Commission (CPUC) still haven't gotten their collective minds around how storage fits into the grid.  Ed Cazalet of Megawatt Storage Farms, a start-up that aspires to be an Independent Storage Operator, knows this all too well. Merchant storage – owned by the customer or independent parties is a "substantial regulatory challenge," according to Cazalet. Is it transmission? Generation? Distribution?

Like transmission, storage moves energy from one place to another with some losses. Is energy storage a transmission asset?  Storage competes with generation. Is is a generation asset?  Is it a distribution asset?  Or is it a fourth category?

The problem is, according to Cazalet, "If a utility doesn't  know whether to call it transmission, distribution, or generation – they're not going to use it." And that debate is going on right now in the California PUC and at the FERC.

Those are some of the challenges faced by storage – market, technological and regulatory.

Storage and The Grid

Most explorations of the smart grid look at smart meters or home area networks.  But the smart grid extends into better utilization of renewables and that means both intelligence and energy storage – as well as incorporating Electric Vehicles into the intelligent grid.  Our Networked Grid event in San Francisco on November 4 will cover AMI, HANs and the potential of energy storage in integrating renewables into the smart grid. 

GTM Research has a new report on Grid Scale Energy Storage available here.     

And download our free report on the Smart Grid here.

Is it Green? 

Is nuclear power green energy?

That's a question I've been asking nuclear industry folks and enviros for the last few years. 

But I've come to realize it's the wrong question. It doesn't matter if it's green – nuclear is here to stay as a global energy source.  In fact the Electrical Power Research Institute's prism study shows the U.S. obtaining 29 percent of its energy from nuclear sources in 2030, up from 21 percent today.

I guess the better questions are:

• How can we minimize the nuclear waste issue? 
• How can we minimize the amount of water used for cooling?
• How can the US return to a leadership role in nuclear plant technology?

John Polcyn, the VP and Chief Nuclear Officer at Invensys knows nuclear. He has built and operated nuclear power plants while working at Bechtel – actually building nuclear plants on time and on budget (in China). And as you'd imagine – he's a supporter of the technology. "It is the lowest cost generation in the U.S., save for hydro," said Polcyn.

"The U.S. brought commercial nuclear power to the world. Now the world is bringing commercial nuclear power back to the U.S.," Polcyn said, adding, "If we don't build nuclear plants in the U.S. – we'll become a third-world country."

His company Invensys, has provided control and process systems to the nuclear industry for 50 years and he spoke at a renewable energy event this weekend sponsored and organized by law firm, Pillsbury.

Nuclear Past

The first commercial nuclear plant came on-line in the 1950s at Shippingport, Pa.– just outside of Pittsburgh. The U.S. has licensed several nuclear power plants since TMI – the last "new" one licensed was TVA's Watts Bar Unit 1 in 1996.

Nuclear Present

There are 104 operating nuclear reactors in the U.S. Many of those units are powered with nuclear fuel blended from Russian warheads.  There are 439 commercial nuclear power units operating in 30 countries around the world. They generate 372 gigawatts – about 17 percent of global energy. 

Nuclear Future

More than 40 new plants are being built in 13 countries.  What's more, an additional 100 nuclear power units are planned with another 250 new units proposed.

There is increasing demand for nuclear in emerging countries with nuclear plants planned for desalination in the UAE. China is targeting a five-fold increase in nuclear capacity by 2020, India is targeting 20 to 30 new reactors by 2020 and the U.K. is building nine nuclear plants – the country wants to lessen its dependence on Russia for natural gas.

According to Polcyn, the U.S. is already building nuclear plants with one coming on-line in 2017. Civil work has begun at Southern Nuclear's Plant Vogtle site.  He predicts that we'll be building and commissioning another eight plants in the next ten years.

Workforce Issues and an Aging U.S. Nuclear Fleet

For the rapidly aging U.S. fleet, obsolescence is starting to become an issue on operating nuclear power units.  Most nuclear plants in the U.S. are more than 30 years old.


 
I hear from a lot of folks looking for work in the solar industry. I've yet to hear anybody ask me about a future in the nuclear industry. And that's a big problem for the field – the loss of intellectual capital through a graying workforce and the need to capture that "tribal knowledge."

Regarding the workforce "Mexico graduates more engineers than the U.S., I hope we catch up to Mexico," Polcyn said adding, "It's a global competition for resources. We've got to get into that game and win that battle."



Environmental Concerns

"What we're talking about putting in Yucca Mountian has 95 percent of its energy left in it. We need to start reprocessing and closing that fuel cycle," said Polcyn.

Polcyn remarked that the size of Yucca Mountain was half the size of the hotel we were meeting in and that Yucca Mountain and nuclear waste disposal is "not a technology issue – its a political issue."

As for water, yes nuclear plants use lots of water – up to a million gallons a day.  So do most energy generation technologies.  And in some cases it's possible to use waste water. 

Nuclear provides cheap baseload power.  Yes, it has a high up-front cost (in the neighborhood of $3,000 per kilowatt) and, yes, it goes over budget and yes it takes too long to permit and build.

New technologies are emerging and "small nuclear" is being discussed very seriously (see Michael Kanellos' Guide to New Nuclear).  VCs are seeking out opportunities in this new twist on nuclear power production.  Here's a recent VC investment in new nuclear (in this case, fusion, not fission):

I still have a knee-jerk negative response to nuclear. But I don't see us having an alternative – domestically or globally.

If a recruiter calls and asks you to interview for the CEO position of a Concentrating Photovoltaic (CPV) firm – beware, brother, beware – it's a dangerous role. You might want to consider auditioning for the drummer's chair with Spinal Tap before accepting the position. 

There was an announcement today that Kevin Arthur is leaving the CEO position at QuantaSol to be replaced by Chris Shannon. QuantaSol is looking to supply high efficiency chips to the suppliers of CPV systems like Concentrix and SolFocus.

Speaking of SolFocus, the firm's original CEO, Gary Conley (now Chairman) was replaced by Mark Crowley in 2008. SolFocus just announced an agreement with Portuguese utility Águas de Portugal for the installation of 8.5 megawatts of CPV systems at the utility's facilities.  SolFocus is one of the leaders in actually deploying CPV.

Steve Eglash, former CEO of Cyrium, a triple junction photovoltaic cell vendor like QuantaSol, was replaced by Harry Rozakis, after Barry Turner, a board member, warmed the seat as interim CEO.

GreenVolts' original CEO, Bob Cart, stepped upstairs to Chairman to allow Gary Beasley to assume the CEO hotseat of the low-profile CPV system vendor. 

And Marco DeMiroz, Soliant's CEO, joined the company in April to replace Brad Hines, the founding CEO of the rooftop CPV firm. DeMiroz was one of the firm's venture investors at Trinity Ventures. It's rarely a good sign when the VC steps in as CEO.

Press releases and parting CEOs will spout marketing drivel about how "it was time to step aside to let a more seasoned exec take the reins" and the like. Might as well say "wanted to spend more time with his family." The fact is the CPV market is taking a lot longer to develop than expected.  And VCs have a limited number of tools in their toolkit.  They can stop giving funds, give more funds, or make C-level personnel changes. 

So while the startups wait for the CPV market to kick in, CEO heads roll, and we end us with new CPV drummers. 

Some studies have shown that the more successful startups, the ones that make it to the finish line of IPO or acquisition, are the ones that keep their founding CEO. It's not a hard, fast rule but it's worth noting. Plenty of factors contribute to a start-up's success, not all of them under the startup's control. 

Fortunately, the management structure at Sunrgi remains stable.

Remember to turn it up to 11.

We reported earlier this week on the resurgence of venture capital investment in greentech. We broke it out sector-by-sector in this post. The graph above breaks it down year-by-year and looks at the recovery quarter by quarter

The chart below is another example of some of the work done in the Greentech Innovations Report – where we carefully track every VC deal in greentech as well as report on a different renewable energy topic every issue.

Investors channeled $575 million into 29 solar VC deals in the third quarter.  The investments spanned the solar sector and ranged from the fanciful (solar in space from SolarEn) to the sublime.  Notable in this data is the number of small investments - early stage VC investing is not dead.  Also notable are the 11 European and Asian investments, a larger than typical proportion.  European VC is alive and well.  The largest deal, Solyndra's $198 million, was a requisite piece of funding for Solyndra in order to garner their $535 million federal loan guarantee. 

Does the VC model still work in big solar? Can massively-funded VC startups like Nanosolar ($500M in VC) and Solyndra ($800M+ in VC) provide a reasonable multiple for their investors?  Or are the less capital intensive solar plays like SunRun or Enphase more suitable to the VC investor?  The next few quarters should give us some answers.

They're back.

After a weak first quarter that had everyone grinding their teeth and a modestly improved second quarter, venture capital investment in green technologies roared back with $1.9 billion invested in 112 deals in the third quarter of 2009. That's up from $836 million in 59 deals in the first quarter of 2009 and $1.2 billion in 85 deals in the solid second quarter.

Solar power was once again the leading investment segment at more than $575 million in 29 deals followed closely by biofuels, biomass, and gasification deals at $512 million in 17 deals. As forecast by GTM Research – investment in Smart Grid, Energy Storage and Automotive is gaining momentum.

Q3 VC Investment in Greentech

Driven by the optimism of a recovering economy, plentiful government funding for renewable energy and a recent successful Greentech IPO in battery maker A123 – venture firms have returned to investing in all stages across all greentech sectors. 


Notable and sizeable deals included:

• Solyndra’s $198 million VC investment from Argonaut Private Equity, et al. for its Fremont, Calif.-based thin-film solar firm
• Synthetic Genomic’s $300 million multi-year commitment from Exxon for the development of algae-based biofuels
• eMeter’s $32 million investment from Sequoia Capital and Foundation Capital for smart grid management software
• Tesla Motor’s $82.5 million round from Fjord Capital and Daimler Motors for Tesla’s groundbreaking electric vehicle
• Serious Materials’ $60 million round from Mesirow Capital et al. for green building materials

Some of the most active VC investors in greentech this quarter included NEA, CMEA, Khosla Ventures, Kleiner Perkins and Foundation Capital.  


In addition to the sheer magnitude of investment (this quarter’s $1.9 billion is close to reaching the investment levels of pre-recession 2008) there is a marked trend of a return to early stage deals with more than 35 Series A and seed rounds this quarter.


 Also remarkable was the increasingly global nature of greentech investment this quarter. More than 35 deals came from outside the United States with plentiful deals from the U.K. and France.

Steve Vassallo, Venture Partner at Foundation Capital, sums it up: "It's nice to see that we've hit an inflection point across all segments of cleantech.  With the economic recovery well on its way, combined with imminent carbon legislation and the acceleration of energy efficiency and renewable portfolio standards, I expect we're going to see a surge of cleantech IPOs.  Several of our cleantech portfolio companies – from SunRun to SilverSpring – are about to close their biggest quarters on record.  No doubt, there's good reason to be optimistic."

Details on every deal in the third quarter can be found in the Greentech Innovations Report.