Hybrid PV and hot water is not entirely new -- the twist the Khosla Ventures-funded Cogenra might be the combination of the Heat and Power Purchase Agreement (HPPA). Cogenra offers renewable energy below utility rates while trimming natural gas and grid-sourced electricity usage. This is akin to what Solar City and SunRun offer in residential solar PV and to what a host of firms like Tioga Energy or Borrego Solar offer for commercial solar. Meanwhile, Skyline Innovations and Metrus Energy do hot water and "everthing but PV" PPAs.
The firm just officially unveiled a solar cogeneration project at the Sonoma Wine Company in Graton, California. Former British Prime Minister Tony Blair and Vinod Khosla of Khosla Ventures were on hand as the winery flipped the switch on the 272-kilowatt installation. Although, as Ed Gunther reports -- these units were not operational for long.
The Sonoma Wine Company buys the heat and electricity generated from the installation at a guaranteed rate from Cogenra under the company’s Heat and Power Purchase Agreement (HPPA). Under the HPPA, Cogenra maintains ownership of the solar systems, and the wine company gets a hedge against jumpy power prices throughout a 15-year contract.
In addition to Khosla and Blair backing the firm, Cogenra's staff boasts CEO Gilad Almogy, formerly of Applied Materials, Ratson Morad the COO, a member of Solyndra's founding team and Preston Roper, the CMO and former employee of Tioga Energy. Cogenra's board of directors includes Pierre Lamond and Dan Maydan, both Silicon Valley heavy-hitters. Maydan was a force at Applied Materials for years.
Other early-stage companies looking to generate more than just electricity from the sun include Absolicon, Chromasun, PVT Solar, Sundrum, Turkey's Solimpeks, Thrive Power, and Entech, which counts David Gelbaum as CEO.
Cogenra claims that their system produces five times more energy and three times the greenhouse gas reductions over traditional solar offerings. The solar thermal element heats water to 165 degrees F to fuel some of the wine company’s tank and barrel washing requirements.
Cogenra (formerly known as Skywatch Energy) recently won a $1.5 million California Solar Initiative (CSI) RD&D grant. (RD&D, oddly, stands for Research, Development, Deployment and Demonstration.) The startup has received $10.5 million from Khosla Ventures.
About 190 gigawatts of solar water heating is installed globally, according to Almogy, the CEO of the firm. Compare that to the 25 gigawatts of solar photovoltaics installed on the ground (about 15 gigawatts of which will be installed this year).
But you tend to hear a lot more about photovoltaics (PV) in the press and, admittedly, in this publication. PV is a bit sexier -- there's a semiconductor aspect and a magical conversion of sun to electricity. Hot water is kind of dull. More importantly, as Michael Kanellos points out, tax credits for PV systems are more pervasive. See Brett Prior's article for more details on solar thermal.
"But solar water heating is five times more efficient than PV," according to the CEO, and therefore has a much faster payback. It's also an accepted way of doing things in China, the Mideast, Germany, and in Austria, of all places, according to Almogy. The math shows that solar heat is cheaper than solar electricity, so the much higher efficiency of solar water heating by itself translates to a only a minor commercial advantage over PV. Cogeneration, however, takes the best of both worlds by generating as much electricity as standard PV and adding four times as much heat -- the extra four units of solar heat is monetarily equivalent to the solar-produced electricity. It essentially doubles the value of a PV system.
"Payback times for hybrid solutions are dramatically shorter than for PV alone," according to the CEO.
In addition to having higher rates of return than other PV-only or heat-only solar solutions, Cogenra's system also delivers three times more of a reduction in greenhouse gas emissions. Scrubbing some heat away from the PV cells can also improve performance and lengthen the lifetime of the cells.
Cogenra is focused on medium-sized applications -- not single-family homes, nor hundred-megawatt solar farms. In Almogy's view, "PV has paved the way." The same PPA-type financial tools and renewable energy incentives once used to get the photovoltaic market off the ground are now primed for hot water applications. Metrus Energy and Skyline Innovations have begun to market solar thermal water heaters and other non-PV equipment as a service.
Applications for hot water are ubiquitous; some are obvious and others maybe not-so-obvious. They include food processing, hotels, restaurants, schools, corporate offices, laundries, boiler pre-heat for power generation, and jails.
Policy usually trumps technology, and in this case, policy seems to be on the side of solar hot water. California Assembly Bill AB 1470 is The California Hot Water Heating and Efficiency Act authored by California Assemblyman Jared Huffman -- a $250 million incentive program for solar hot water heating.
Venture capitalists that I've spoken with understand the value of hot water production and the PPA model. They have, however, expressed some distaste for the plumbing aspect of hot water generation, challenging me to name a plumbing startup that went public or garnered VC returns through an acquisition.