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1. Applied Materials Gaining Traction in Solar Sector
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2. DOE Funds Carbon Capture With $340M & Solar $24M, Sigh
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3. Lotus Builds "Omnivore" Engine For Biofuels Research
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4. ThermaSource Drills Into $41.5M for Geothermal
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5. Hyperion Signs First Customer for Nuclear Pods
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6. RoofRay Launches Online Solar Clearinghouse
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7. Eka Scores Smart Meter Partner Landis+Gyr
Applied Materials Gaining Traction in Solar Sector
Kevin Kelleher - Big Green
The results so far have been mixed but encouraging. This afternoon, Applied Materials reported its earnings for the quarter ended July 27, 2008. Overall revenue dropped 14 percent in the quarter from the previous one, thanks to a 40 percent slide in revenue for its silicon segment, the company’s largest business division. Slack demand for memory and flash chips caused the decline.
Solar revenue, however, was up 105 percent, helped by Applied’s recent acquisitions, including solar equipment maker Baccini. But solar only made up 9 percent of total sales, and the $30 million in M&A charges related to Baccini and other deals led to an operating loss of $85 million in the solar division and erased two cents a share from the company’s overall per-share net profit of 91 cents.
On a conference call, the company said that without the M&A charges, the solar division would have posted a slight profit in the quarter. Asked when the unit would be expected to turn fully profitable, executives would only reiterate a previous forecast of operating margins for solar equipment coming in between 25 percent and 30 percent in 2010.
The chart above, taken from a slide prepared from Applied’s earnings call, shows the company’s revenue and operating loss from its solar business over the past three quarters. Both are growing, but revenue is accelerating a lot faster.
All told, investors liked the news. AMAT’s stock was up 4.7 percent to $19.33 in after-hours trading Tuesday; this also after the CEO said the dismal quarter represented a “trough” in the semiconductor business and that solar equipment remains an ace up the company’s sleeve.
Solar equipment may one day rival semiconductors as a contributor to the company’s profits, although by then the boom-and-bust semiconductor cycle may be heading into another boom period.
DOE Funds Carbon Capture With $340M & Solar $24M, Sigh
Craig Rubens - Policy
In the last two days, the Department of Energy has announced $24 million worth of new investments in solar energy while also revealing it’s putting a whopping $340 million into yet more clean coal research. In conjunction with the funding announcements, the DOE says it’s “committed to…developing the technologies that will ensure coal can be used,” but at the same time describes solar as “an important component of our comprehensive strategy to commercialize and deploy advanced, clean, alternative technologies.”
Parsing the language indicates this administration’s bias toward clean coal, but the numbers speak even louder. Since 2001 the DOE has put more than $2.5 billion into clean coal, including millions sunk into the scuttled FutureGen project. This week’s $340 million is part of President Bush’s $2 billion, 10-Year Clean Coal Initiative, but is separate from the $1.3 billion announced with the “restructuring” of the FutureGen project.
The DOE was not able to immediately provide us with the total amount of federal funding that solar projects have received, but we do know that the agency announced $60 million earlier this year and $168 million last year for solar projects. We’re sure that’s not the entire amount, but seems to come in significantly under its clean coal budget.
Still, some solar investment is better than none at all. Of the potential $24 million for solar, $2.9 million has been approved for the 2008 fiscal year and will be divvied up among a dozen projects with industry partners, including startups Enphase Energy, developer of web-based solar analytics and inverter management networks, and SmartSpark, a solar inverter maker. The remaining funds are subject to Congressional approval but the DOE says the total federal funds could leverage $16 million in additional private investment.
Lotus Builds "Omnivore" Engine For Biofuels Research
Tony Borroz - Energy
There's a whole bunch of fiddling and futzing that has to go on when it comes to working through the details of using alcohol-based fuels. My understanding (usually from watching engines blow up at drag strips and road courses) is that the more alcohol in the fuel, the more compression and displacement you want. That means the possibility of better performance — better higher compression and more torque lower in the rev range.
But the variables in Lotus’ announcement beg numerous questions: What kind of “bioalcohols” will it be optimized for? Mixed with what other base constituents? In what kind of combustion chamber? You could, if you were a lesser company, just do it by guess and by golly, but Lotus ain't that kind of shop. Hence the name OMNIVORE, which will likely be flexible and can be reconfigured to suit the specific needs of specific fuels.
Beyond the unknowns, two things in the release stand out.
The first is: "The OMNIVORE will be a two-stroke engine with direct injection and a variable compression ratio." Direct injection and variable compression ratio is just a given, that's to be expected, but it's going to be a two-stroke? That’s curious, since two strokes offer many potential advantages concerning efficiency but are notoriously dirty in their emissions.
The other is this: “Jaguar Cars Ltd a consultative partner at all stages of development.”
Jaguar? Jaguar, who was recently bought by India's Tata (Tata who just got a lot of press with their Nano ultra-cheap micro car). Hmmm…could Jag be interested in using OMNIVORE-derived tech in their big, heavy luxo-boats, or could the tech just be filtered back to parent company Tata for use in smaller, more eco-friendly cars?
ThermaSource Drills Into $41.5M for Geothermal
Craig Rubens - Energy
The company plans to spend some of that cash doubling its workforce from 210 to 420 employees by the end of the year. It will also use the new capital to acquire more geothermal drilling rigs as it expands its business domestically and internationally. With oil and gas prices still close to record highs, much of the world’s drilling equipment is indefinitely tied up looking for precious hydrocarbons making drills available for geothermal development that much more valuable, or so ThermaSource hopes.
Geothermal is still a largely untapped resource. In the United States, according to the National Renewable Energy Laboratory, geothermal energy is being exploited in all 50 states but only accounts for half a percent of our total energy consumption.
But geothermal is picking up steam, especially in the Western United States, and 103 projects are either under construction or on the drawing board. ThermaSource’s investment follows on the heels of news that Vulcan Power received $145 million from Denham Capital in July on top of $45 million from Merrill Lynch Commodity Partners last year. And AltaRock Energy, a smaller, stealthier Seattle-based geothermal startup, raised $4 million in Series A funding last year from A-list investors including Kleiner Perkins Caulfield & Byers, Khosla Ventures, Aaron Mandell of GreatPoint Energy, and an investment group affiliated with Dundee Securities.
Still, startups certainly don’t dominate the space. Oil giant Chevron claims to be the world’s largest developer of geothermal energy with 1,273 megawatts of energy coming from projects on the Pacific Rim.
Hyperion Signs First Customer for Nuclear Pods
Katie Fehrenbacher - Startups
We’re not familiar with TES’s investments, but the company has supposedly signed a “Letter of Intent” to purchase six Hyperion nuclear modules, which each cost roughly $25 million. Hyperion says the initial purchase could lead the way to a larger purchase of 50 nuclear devices — so that would be a massive purchase of $1.25 billion. The devices won’t be ready until 2013, so everyone has plenty of time to hash out all the inevitable regulatory and safety issues. (Anyone with more info on TES, let us know).
We had a lengthy phone conversation last week with Hyperion CEO John “Grizz” Deal, who said “this is not science fiction.” Deal defended his product and said the devices are very safe and will meet the important needs of developing nations that don’t have connections to a central electric grid. Deal said the nuclear devices are safer than traditional nuclear reactors because they don’t have moving parts and are more like a “nuclear battery.” The device also produces waste, “the size of a softball,” after five to seven years of use, Deal says.
The advantages of the modules are that it is cheaper, easier to deploy, quicker to get built and can reach remote areas where traditional reactors can’t be built. And this tech isn’t just nuclear pie in the sky: Other companies, like Toshiba, are also working on this type of technology, and Hyperion is backed by Altira Group, which has invested in GridPoint and Southwest Wind Power.
Though, Deal readily admits there are hurdles, from public perception to logistics, ahead for the technology: “This is idealistic, we’re the first to admit that.”
RoofRay Launches Online Solar Clearinghouse
Katie Fehrenbacher - Startups
The biggest complaint we hear from homeowners who are considering rooftop solar systems is the lack of information: How much will it cost; how long until it pays off; who’s the best local installer? A new site that launched this morning, is looking to help answer all of those queries using satellite data and a hands-on web site — RoofRay.com.
The creator of RoofRay, former dotcom entrepreneur Chris Bura, says his site is like Zillow meets Lending Tree for residential solar. Basically it’s a solar clearinghouse that uses Google satellite data and info from the National Renewable Energy Labs to help users make good decisions about what sort of system to buy.
Here’s how it works: enter an address, pull up the satellite image of the chosen building’s rooftop and then using the RoofRay tool based on Google maps, draw your solar arrays (see image below and YouTube video below the jump). Data on square footage of the system, slope of the roof, power per square foot and total peak power all show up in a chart, and the info displayed depends on how big you’ve drawn your system.
After drawing the panels you can dive into metrics based on the size and location of your solar system, including projected performance, financial analysis, average monthly utility bill after solar is added, total cost summary and, our favorite, time until the system pays for itself. (Update: Currently the site only has California utility rates, but Bura says he is adding in other states soon). When Bura walked us through the site, we made our roof top solar system quite massive and discovered it would be a good decade until it would break even.
Overall the system gives users as much detailed info as they’d ever want about a system. (Solar geeks, you’ll be in heaven.) Though, all that information could also be a drawback; a simpler option for users that don’t want to spend so much hands-on drawing time could make it a lot more user-friendly. We’re also not sure how close the projections are to how the solar system will actually work in real life, but users with existing solar systems, test it out and let us know.
The biggest potential of the site for the user could be the ability to test out how good a home’s solar potential is before buying it. (That’s where the Zillow comparison really comes into play.) There’s also a search function to be able to find solar systems on buildings in your area, so you can see which installers your neighbors have been signing up with.
Bura spent under $50,000 over the last 6 months building out the site with the help of just one engineer. He plans to raise funding, incorporate the company, and hire a co-founder and 2 developers to build out the site even more. The site is free to use and Bura says his business model is a combo of AdSense ads and potential partnerships with solar installers — we could see the site as a potentially good lead generator. Check out the system and give Bura some feedback; he’s currently working on validation testing.
Eka Scores Smart Meter Partner Landis+Gyr
Katie Fehrenbacher - Startups
It’s a sizable win for the 8-year-old Eka; Landis+Gyr is a huge, century-old company that has 5,000 employees and is a forerunner in the advanced meter infrastructure market. Eka is no slouch, either. Based out of Germantown, Md., the startup has reportedly raised around $40 million in funding to date. Its most recent round, for $18.5 million, which the company announced in July, was led by Flybridge Capital Partners and including the Angeleno Group, RockPort Capital Partners, The Westly Group and Metropolitan Investment.
Smart meters should run over wireless mesh networks, explained Eka’s director of products, Chris Irwin, because mesh can provide one of the cheapest available wireless communications for in-home technologies that utilities would support. Utilities could run connected smart meter services over wireless mesh for just a portion of the price, compared with using, say, a phone company’s cellular networks, Irwin says.
While the U.S. has been slow to implement smart meter technology, Irwin has seen utilities installing the technology a lot faster over the past year. That’s promising, because as Irwin notes, the industry has only really scratched the surface; of the nation’s hundreds of millions of homes and buildings, only a fraction have smart meter tech installed. And in order to build a truly smart grid, numerous additional steps still need to be taken on the hardware, software and networking sides before we can truly build out our ailing electrical systems. In a sign of better things to come, however, California utility PG&E said last month that it has partnered with smart grid networking company Silver Springs to deliver smart grid tech to 5 million customers.
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