A 48-percent uptick in new company formations, a funding deal, and two acquisitions made for an encouraging week in San Diego’s innovation economy. This is our roundup of tech sector news.

—The California Public Utilities Commission approved five power purchase agreements that Soitec, the photovoltaic chip maker based Bernin, France, negotiated with San Diego Gas and Electric. The five deals represent a total capacity of 155 megawatts of new solar power for San Diego, according to Soitec. As we explained in April, Soitec says its innovation, which combines concentrating Fresnel lenses and high-performance PV chips, operates twice as efficiently as conventional solar cells. Soitec plans to manufacture its solar modules in the San Diego area, creating about 450 new jobs. Building the solar facility will cost an estimated $500 million.

—Qualcomm (NASDAQ: QCOM) acquired HaloIPT, a UK-based startup developing wireless charging technology for electric vehicles. Financial terms were not disclosed. The technology uses inductive power transfer to charge an electric vehicle (EV). The car parks over an electromagnet, which generates an electric field that transfers energy to the EV power system. A couple days after announcing the deal, Qualcomm said it’s planning to carry out a field trial in London that calls for establishing the wireless EV charging systems for 50 vehicles.

—Cubic (NYSE: CUB), the San Diego defense contractor, conducted a series of local exercises to demonstrate new “combat ID” technology, which is intended to reduce friendly fire casualties among U.S. troops in combat. The technology integrates laser targeting with radio frequency identification tags (RFIDs) and a GPS-based system in a rifle-mounted targeting scope, according to Cubic. The RFID tag, mounted on each soldier’s helmet, transits a coded radio signal that enables users to distinguish between friend and foe combatants.

—The San Diego-based Active Network (NYSE: ACTV) paid $21.5 million to acquire RTP (also known as Resort Technology Partners), a specialized IT company in Colorado that provides online reservation and registration services for Vail and other ski resorts. The Active Network already provides Web-based registration services for … Next Page »

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An August 5 regulatory filing shows that Milpitas, CA-based NuvoSun, a maker of thin-film photovoltaic arrays, has added $8.6 million to a $3 million round first reported in January 2011. Past backers included Dow Chemical.

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One of the many tasks confronting the energy industry, if we’re to have any hope of sidestepping a climate catastrophe, is to dramatically increase the efficiency of photovoltaic cells, so that more of the sun’s energy can be converted into electricity. Sunnyvale, CA-based Innovalight has developed a material it calls “silicon ink” that’s helping in that regard—and solar panel manufacturers in China have been slurping it up. It’s such an attractive market that chemical giant DuPont (NYSE: DD) wants to get in. So it bought the company.

DuPont released the news this morning. The Wilmington, DE-based company’s materials are already used in about 70 percent of all photovoltaic panels manufactured around the world; for example, under the brand name Solamet, it makes the metal contact fingers that manufacturers place atop a photovoltaic panel’s crystalline silicon layer to collect the free electrons knocked loose by sunlight.

Innovalight’s silicon ink, which consists of tiny, extremely pure nanocrystals of silicon suspended in a solvent, is designed to be applied beneath those metal fingers; it gets into the crystalline silicon and acts as a doping agent, decreasing electrical resistance and allowing more electrons to make their way to the fingers. Which meant DuPont was already very familiar with the startup.

“DuPont has been working with Innovalight for four or five years from a supplier perspective, and in the last couple of years we’ve been growing closer together through product impact and business synergies,” says Rob Cockerill, the DuPont executive who has been named business manager of the new DuPont Innovalight division. “We’ve always been extremely impressed with Innovalight’s technology, so they were a natural fit for us in the photovoltaic space.”

DuPont didn’t disclose the terms of the acquisition, but it said that all 58 current Innovalight employees, including former CEO Conrad Burke (pictured above), will stay on, and that the division will remain headquartered in Sunnyvale. Burke has been named general manager of the division.

Innovalight was founded in 2002 but long struggled to find a viable market for its silicon nanocrystal technology. Its first foray, into the lighting industry, fizzled. Burke, a former Sevin Rosen partner, restarted the company in 2005 (as we explained in an October 2010 profile of Innovalight). At first he intended to remake the firm as a photovoltaic manufacturer, but after low-cost solar plants in in China gained a huge lead in solar manufacturing, Innovalight reinvented itself as a materials supplier. The company announced the first two customers for its technology, Baoding-based Yingli Solar and Shanghai-based JA Solar, in 2010. It has collected just over $60 million in venture funding over the years from a large group of investors including Apax Partners, Arch Venture Partners, Convexa Capital, EDB Investments, Harris & Harris Group, Leader Ventures, Sevin Rosen Funds, Silicon Valley Bank, Triton Ventures, and Vertex Venture Holdings.

As a part of DuPont, Innovalight will have much greater reach as it attempts to convince more panel makers to incorporate silicon ink into their manufacturing process, Burke says. “They are located, in terms of sales, marketing, and tech support, in all the key regions where our customers are,” Burke says. “The very large footprint that DuPont brings to the table is something we could only dream of building ourselves over a long period of time. Also, the unspoken message here is that this brings a lot of comfort to our customers—knowing we’ve got the backing of one of the giants in the industry.”

Cockerill says DuPont won’t immediately attempt to integrate the silicon ink technology into any of its own products. But he says there will be opportunities in the near future to tweak Innovalight’s material and the Solamet metallization technology in concert drive up panel efficiency. “One of the most interesting opportunities is that if you look at Innovalight’s roadmap for the next five, six, or seven generations, it’s an exact match to Solamet; they want to do the same things we do,” Cockerill says. “Together we believe we can make a huge impact with our customers.”

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San Mateo, CA-based SolarCity and Mountain View, CA-based Google announced today that Google has invested $280 million in a new project financing fund that will help SolarCity extend solar panel installation leases to more homeowners. Google joins six other SolarCity financing partners who have created $1.28 billion in overall project funds overall. In a blog post, Google also said it has created a discount program for Google employees who want to install rooftop solar arrays through SolarCity’s power purchase agreements.

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The French semiconductor manufacturer Soitec generated headlines in San Diego last month when it said it has been working with Tenaska Solar Ventures to develop a 150-megawatt solar plant in the desert east of San Diego—at an estimated cost of $500 million.

To support the project Soitec also revealed plans to build a factory somewhere in San Diego County to manufacture the proprietary solar panels that will be used to generate enough electricity for an estimated 55,000 households in the San Diego area.

Yesterday, Soitec Chairman and CEO André-Jacques Auberton-Hervé returned to San Diego with what he calls “a California story, but from the other side of the Atlantic Ocean.” He briefed local reporters about the project, which needs a federal loan guarantee to secure financing, and later met with local officials to garner their support.

Soitec says its Concentrix Solar CPV (concentrating photovoltatic) technology converts sunlight into electric power at better than 37 percent efficiency for direct current, or at roughly 25 percent for alternating current. With some additional advances, Auberton-Hervé says the company’s technology should enable Soitec to increase the energy output of its solar modules to an unprecedented 50 percent DC efficiency in coming years.

As part of Soitec’s broader corporate strategy, Auberton-Hervé says the company’s Concentrix Solar division has worked with Chevron to complete construction of a 1-megawatt solar facility north of Taos, in Questa, NM. Auberton-Hervé says the facility, which has 173 Concentrix Solar panels that track the sun to maximize energy production, represents Soitec’s first “utility scale” project in the United States—and the first in a series of solar ventures the company aspires to develop. At least 30 states have established minimum requirements for renewable energy (California recently enacted a requirement for 33 percent renewable energy by 2020), making the U.S. an attractive market, especially in the sunbelt states, according to Auberton-Hervé.

André-Jacques Auberton-Hervé

Auberton-Hervé co-founded Soitec in 1992 with Jean-Michel Lamure to commercialize so-called “atomic scalpel” technology that is used to create multiple, ultra-thin layers in the silicon wafers used to make semiconductors. The technology led them to develop Silicon-On-Insulator (the “SOI” in Soitec) material, which has helped semiconductor makers create faster and more powerful processors by shrinking the distance between microcircuit patterns from 180 nanometers to less than 45 nanometers.

Soitec has grown from four employees in 1992 into a public company and global player in the semiconductor industry, with about 1,200 employees and a market valuation equivalent to roughly $1.4 billion, Auberton-Hervé says.

The CEO says Soitec’s solar strategy began to emerge in 2003, when … Next Page »

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When the sun shines, free electrons pour out of rooftop solar panels in the form of direct current (DC). But every light bulb, fan, and appliance in a house needs alternating current (AC), which reverses direction 60 times per second. And therein lies a huge headache for installers and owners of photovoltaic systems. The central “inverters” that turn solar DC into grid-compatible AC are among the most finicky and failure-prone parts of any solar installation. When they burn out, they put entire solar installations out of commission until they can be replaced, usually at a cost of several thousand dollars. Yet while solar panel manufacturers continue to invest in R&D to make photovoltaic cells more efficient, the old inverter box hasn’t changed much in decades.

Until recently, that is. Befitting the Silicon Valley spirit, there’s a Bay Area startup that’s out to replace the big, dumb inverters attached to most solar energy systems with small, sleek, smart “microinverters.” It’s called Enphase Energy, and under its approach, each panel or module gets its own inverter. It’s sort of like putting out lots of small bowls to catch the water from a leaky ceiling rather than running around with a single big pail.

Enphase’s microinverters are full of custom microelectronics, so they cost more than traditional inverters. But the five-year-old startup in Petaluma, CA, which has raised about $100 million in venture capital, says the devices are more reliable than central inverters and can help harvest more energy from solar installations. Plus, they’re easier for installers to work with, and they emit a constant stream of data that lets owners track performance down to the level of an individual panel. That gives the company an advantage that can be likened to Apple’s emerging lead in the mobile computing market. And, as in the Apple case, Enphase’s systems thinking and marketing savvy could end up helping it grab a huge share of a market that nobody else thought was ripe for disruption.

Enphase Energy CEO Paul Nahi, with a rack of microinverters undergoing testing.

Traditionally, says Enphase CEO Paul Nahi, the larger the inverter, the less power is lost during conversion from DC to AC, which long pushed solar installers toward wiring panels in series and converting all the power at once—an average of 4.5 kilowatts per residential installation. “When you’re dealing with that much wattage, you stress components,” Nahi told me when I visited the company’s headquarters a few weeks ago. “You generate a lot of heat in the central inverter, and heat is the single biggest enemy of reliability. But it had been drilled into [solar installers] that this is the way solar works. It never occurred to anybody that you didn’t have to have that problem. And the technological leap required to solve that problem was so dramatic that it was never even discussed.”

Enphase’s achievement has been figuring out how to use sophisticated electronics to efficiently convert as little as 200 watts at a time—-the output of a single panel. That might mean using 20 or more microinverters in the place of a single central inverter, but the payoff comes in the form of productivity. If you wire panels the old-fashioned way—in series, like Christmas tree lights—it means that an entire array’s output can only be as high as the lowest-performing panel. If one panel is dirty or shaded by trees, the whole array’s output is lowered to the level of that panel. With microinverters, by contrast, each panel feeds power into the system independently, at maximum efficiency for its light conditions. “Greater energy harvest is the essential benefit,” Nahi says.

But even more importantly, from a practical perspective, any general contractor can wire up a 200-watt microinverter, whereas a central inverter can only be installed by specialist electricians trained to work with high power and high voltages. “Now a handyman can put panels on the roof,” Nahi says.

And many of them are: Enphase has already sold half a million units in North America, where it controls 20 percent of the residential and light-commercial inverter market.

“Microinverters are simply a better way of doing residential solar, and small commercial, and in the future, likely large commercial and utility-scale solar,” says Ben Kortlang, a partner at venture firm Kleiner Perkins Caufield & Byers, which invested in Enphase last year. “What I like about Enphase is that … Next Page »

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A March 11 regulatory filing shows that San Jose, CA-based flexible photovoltaic maker Solopower has collected an additional $13.5 million in an apparent extension of its $51.6 million January Series E financing round. Solopower’s past backers include Hudson Clean Energy Partners. In February the company received a conditional $197 million loan guarantee from the Department of Energy to build a photovoltaics manufacturing plant in Wilsonville, OR.

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A couple of startup companies set a world aviation record last night.

But they were pretty low-key about it. As I walked into the Future of Flight Aviation Center in Mukilteo, WA, a half hour north of Seattle, I saw little activity. It was after hours, and the hangar-like building was nearly deserted except for the futuristic planes suspended from the ceiling—Burt Rutan’s “Quickie” and a Beechcraft Starship—and part of a Boeing 787 Dreamliner fuselage on the display floor. It was a bit like “Star Wars” meets “Night at the Museum.”

Tom Nugent, the co-founder and president of Kent, WA-based LaserMotive, greeted me and said they were almost ready for showtime. A small team of engineers divided its attention between the back of a command truck and the adjacent trailer that held the laser optics equipment that would make the show possible. Two German guys who hadn’t slept in days (and were still on Munich time) were sprawled out on deck chairs in front of computer monitors like they were playing a video game. One held a remote controller that he used to guide a “quadrocopter”—a small, 1-kilogram, square-shaped flying contraption with blinking lights and four spinning rotors—made by their company, Ascending Technologies.

Jan Stumpf and Michael Achtelik, the co-CEOs of Ascending Technologies, partnered with LaserMotive to perform this feat last night. The goal: to use a laser to power an aircraft in continuous flight for about 12 hours (far longer than its battery would last without recharging, which is only about five minutes). That would be a world record, by a long shot, for the longest free flight of an electric vehicle.

Indeed, this demonstration is a big deal for the future of electric planes, said Barry Smith, the executive director of the Future of Flight facility. Imagine putting a laser on top of every cellular tower, he said, so that certain types of unmanned aerial vehicles (UAVs) would never need to land to recharge or refuel. That could potentially revolutionize communications, surveillance, and security and defense applications. Longer term, it could even impact the long-held dream of powering manned aircraft with electricity instead of jet fuel—though that is very far off.

For now, Nugent says, “The significance is we’re going to show this quadrocopter, and any aerial vehicle [of this size], will be able to fly effectively forever. It’s no longer limited by battery capacity.”

LaserMotive has done smaller flight tests before, but not on a free-flying vehicle like this. The company is best known for winning the $900,000 NASA Power Beaming Challenge last year, in one of the levels of the “Space Elevator Games.” That involved using a laser to power a climbing robot up a cable to a certain height (1 kilometer) at a certain speed (about 9 mph). But lately the company has been targeting UAVs as a big commercial application of its wireless power technology. (The next level of the NASA challenge, which was supposed to happen later this year, is still up in the air, so to speak.)

“Goggles on!” someone shouted, and we all complied. That meant the infrared laser, which puts out about 200 watts of light power, was switching on. The beam was directed using a series of mirrors and optics and shot out the top of the trailer. You couldn’t see it with the naked eye except for a reddish halo on the 50-foot ceiling. At the same time, the quadrocopter lifted off (under its own battery power), guided by Stumpf, and floated up to meet the beam, about 30 feet off the ground (see left).

“Not centered,” Nugent said. Then the computer vision system of LaserMotive’s setup kicked in. Software and cameras aligned with the path of the laser beam tracked the vehicle’s position, and positioned the beam so it hit the photovoltaic cells on the underside of the craft; those solar cells transformed the laser’s energy into electricity to continuously charge the quadrocopter’s battery.

With that, all human corrections fell away, and it was just a drone hovering eerily in space, rotors humming quietly. It swayed a few feet from side to side, and the laser tracked it. It was about 7:40 pm.

This is the boring part, Nugent said. And boring is good. Exciting is bad. For the next 12 hours, if all went well, nothing more would happen. The craft would stay up all night (as would the crew), … Next Page »

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1366 Technologies has the cash to advance toward production of technology that could reduce the cost of solar energy. The Lexington, MA-based firm said today it has brought in $20 million in Series B funding, including investments from Korea-based Hanwha Chemical and the European cleantech investor Ventizz Capital Fund.

Those new investors joined previous backers North Bridge Venture Partners and Polaris Venture Partners in funding 1366, which has now raised a total of $37.6 million. In addition to investing in 1366, Hanwha is planning to become a buyer of the Massachusetts-based firm’s silicon wafers. 1366, an MIT spinout founded in 2007, has been rapidly developing an efficient process of making silicon wafers that’s more cost-efficient and wastes less silicon than standard techniques, according to the company.

“Now, with this investment, we’re moving towards manufacturing,” Frank van Mierlo, the CEO of 1366, said in a press release. “Our goal is to bring our transformative Direct Wafer technology into production and deliver the manufacturing innovations that will make solar electricity cheaper than coal.”

Indeed, the firm has made significant strides in proving that its production method could be done on a commercial scale. In December 2009, the Department of Energy awarded the firm a $4 million grant to advance development of the technology, which produces silicon wafers that can be used in the existing supply chain for manufacturing photovoltaic cells.

1366 also received DOE funding to develop a new solar-cell architecture that it has been selling for the last year under the name “Self-Aligned Cell.” 1366 co-founder and chief technology officer Emanuel “Ely” Sachs, who is a professor of mechanical engineering at MIT, told Wade last year about how the architecture uses unique texturing and a new metallization pattern to allow solar cells to trap more light and convert it to electricity.

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Silicon Valley is a place defined by big numbers and rapid change. Since the 1960s, the number of transistors that can be placed on an integrated circuit for the same cost has doubled every two years or so. The capacity of Flash memory chips has been increasing even faster of late, doubling every year. So when a company comes along promising to make solar panels that are a measly one percent more efficient than today’s standard technology, you might be tempted to shrug.

Don’t. That’s actually a lot, and it’s exactly the kind of incremental improvement that could soon raise solar energy to what’s known as “grid parity”—the point at which it’s equal to the cost of grid electricity, which, in the U.S., comes mostly from plants burning inexpensive but climate-destroying coal.

Today’s photovoltaic panels, which are made of crystalline silicon and capitalize on the photoelectric effect first explained by Albert Einstein, convert about 18 percent of the energy in sunlight into electricity, on average. Panels treated with “silicon ink,” a liquid material developed by Sunnyvale, CA-based Innovalight, can hit 19 percent or more. If you’re a solar panel manufacturer like China’s Suntech Power, which produced a gigawatt’s worth of solar products last year, “going from 18 to 19 is a big deal, because it has an enormous impact on the output of your manufacturing infrastructure,” explains Conrad Burke, Innovalight’s CEO. “A gigawatt factory in China will have 40 individual 25-megawatt lines, each a football field in size. If you can find a way for them to add one step to their existing equipment and help to get a 25 megawatt factory line up to 30 megawatts, suddenly you have a 1.2 gigawatt factory for no more cost in capital, and that has a huge impact on the bottom line.”

Which could also help Innovalight’s own bottom line. And none too soon: the company’s investors, who’ve put about $60 million behind its silicon nanocrystal technology, have been waiting a long time for some good news.

Innovalight was founded in St. Paul, MN, back in 2002, and originally intended to go into the lighting industry—hence its name, which isn’t a reference to sunlight. “It turned out that didn’t work, and we were faced with the dilemma of whether we should shut this down or do something else with it,” Burke says.

Burke, a native of Ireland, was first introduced to Innovalight when he was a venture partner at Sevin Rosen Funds, one of the company’s original investors. Eventually, he decided he needed to take a more hands-on role himself.

“In essence, I restarted the company,” Burke says. “I took two of the original team, moved them here, hired a chief technology officer, raised a little more money, and sold the investors on the premise that there was an application here for solar.” That was five years ago. Now the company has 60 people, almost a quarter of whom have PhDs in material science and related fields.

At the core of Innovalight’s technology is a method for turning silicon into a gas, and then collecting the gaseous atoms into pure silicon nanocrystals, each 5 to 10 nanometers in size and completely free of oxygen. Silicon atoms love oxygen, and left to their own devices, they will … Next Page »

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Yesterday we told you all about Recurve, a San Francisco home energy auditing and retrofitting startup whose founder argues that before energy-conscious homeowners put solar panels on the roof, they should focus on fixing what’s under it—poor insulation, leaky ducts and windows, inefficient HVAC systems, and the like. But let’s assume you’ve done all that. What’s next? Here in California, there’s an array of companies working to make it far easier and more affordable to install electricity-generating solar panels on your home.

One of the most innovative and fast-growing startups in this industry is Oakland, CA-based Sungevity, which is probably unlike any cleantech company you’ve heard of. The company doesn’t have its own installation workforce, and unlike competing firms such as SunRun, it doesn’t have “power purchase agreements” under which homeowners buy electricity from the company. What it does have is software. It’s got applications that allow technicians to peer down from the sky (via Google Earth-style satellite photos) and figure out exactly how many solar panels will fit on your roof, then generate a project estimate. It’s got applications to automate the sales process, and it’s got applications to cut through the red tape around permitting for solar installations.

In effect, Sungevity is a new low-overhead, high-efficiency middleman in a business that’s long been a cottage industry, dominated by small solar installers who have to roll a truck every time a potential customer requests an estimate. (In many of these respects, Sungevity is similar to Recurve, which, as I explained yesterday, is also using software to systematize and scale up a cottage industry—in its case, home energy retrofitting.)

Danny Kennedy, Sungevity’s founder, argues that simplifying and automating the solar installation process is the only way to bring this form of renewable power to the mass market. Together with co-founders Andrew Birch and Alec Guettel and chief financial officer Charles Ferer, he’s built a business that’s collected $9 million in venture backing and is set to grow from $3 million in revenue in 2009 to nearly $30 million this year, with no end in sight. The core of the business model is the 10-year “solar lease,” an idea Ferer brought with him from former employer Solar City. In return for assigning solar tax credits and rebates to the lender—Sungevity and its financial partner US Bank, in this case—homeowners get to install solar panels for only about half of the actual cost of equipment and labor, and they can pay for the project over the course of 120 months.

Sitting down with Kennedy to talk leases and rebates and software is an unusual experience, given that his background isn’t in the energy business at all, but in environmental activism. A native of Australia, Kennedy is a 12-year veteran of Greenpeace, where he started out in the 1990s working to block oil projects in Africa and went on to run the organization’s California Clean Energy campaign. That campaign helped to bring about Governor Schwarzenegger’s $2.8 billion California Solar Initiative, under which the state is providing cash rebates of $1 to $2 per watt for solar photovoltaic installations. (A typical home installation might amount to 3 to 10 kilowatts.)

Those rebates are a big part of what’s making programs like Sungevity’s solar leases affordable, and are one of the reasons Kennedy and co-founders decided to build their business in the Bay Area. Another is the population’s openness to new ways of doing business: “If there is anywhere that’s going to be comfortable adapting to Internet commerce models [for solar installation], it’s California,” Kennedy says.

Our look at Sungevity comes in the form of an extended Q&A. In Part 1, below, Kennedy talks about Sungevity’s business model and technology, and describes how the installation process works. In Part 2, coming tomorrow, he talks about how he made the leap from Greenpeace to energy entrepreneurship, how Sungevity plans to scale up, and how the company’s work fits into global efforts to reduce carbon emissions and blunt the effects of climate change.

Xconomy: What is the mission of Sungevity?

Danny Kennedy: The big picture mission is to take solar to scale. Which I’m sure every solar entrepreneur says they want to do, but our vision is to do it in the residential market, which is ultimately the highest value market for solar electricity. Finding a scalable way to deliver solar electricity to residential customers in middle America is the best chance to make large profitable ventures, which will in turn scale the production and consumption of solar itself.

If you can capture developed-country, grid-connected markets, such as the wealthy German, Japanese, or California markets, it will drive solar production in … Next Page »

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A little less than two years ago I made the decision to enroll at MIT Sloan for an MBA. Shortly after getting to the campus, I made the decision to look at careers in the energy sector. Despite being armed with a technical degree and spending some time in the energy sector prior to enrolling at Sloan, I was green—no pun intended. A sequence of lucky associations and learning experiences exposed me to different aspects of the energy sector.

After 16 months and an MBA degree, I can safely say that it was a great learning experience trying to understand the business side of innovation in the energy sector. While it is unfair to characterize a sector into generic “boxes” to better understand it, I have attempted to do so regardless. I’ve read multiple documents and have heard investors and entrepreneurs talk about the risks involved in new ventures. I am not going to repeat them here. Instead I want to write about three crucial factors that one needs to appreciate when starting or investing in a new venture in energy: policy, people, and scale.

Policy

Everyone in the energy sector knows this: regulation and policy drive the adoption of a majority of energy technologies/services in the world today. Feed-in tariffs in Germany and the rest of Western Europe were (and are) responsible for the rise of solar and wind energy. Product and investment tax credits drove wind and solar manufacturing and installation, biomass, as well as geothermal project development in the U.S. in the last three years. Numerous states in the U.S. have extended multiple tax credits for energy-efficient appliances, homes, and offices.

China, India, and Japan have also joined the party and have aggressively included regulations to favor the adoption of new energy technologies. A day does not go by these days without a politician/activist/industrialist calling for the adoption of a renewable energy standard (RES) in the U.S.—some of the European nations have already either approved an RES or are in the process of approving one.

So what does this mean for you and me? Well, if you are thinking of starting a new venture or want a job in investing, you should keep in mind that success to a large extent currently depends on policy and regulations helping you out. Or if you don’t want to depend on regulations, try to work or invest in a business that does not use them as a crutch—there are a few of these if you look hard.

People

Quite a few intelligent people have already written about how the energy “renaissance” of the 21st century is very different from that of the Internet/high-tech boom of the 1990s. I will spare you the side-by-side comparisons here, but it is safe to say they are indeed sufficiently different. One important distinction is the background of the founders. You did not need an advanced degree, or to spend hours in a research lab, to come up with the business idea for Facebook, PayPal, eBay, or Amazon.com (Google is an exception). A majority of innovation in energy that will be successfully commercialized will originate … Next Page »

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Hercules Technology Growth Capital, (NASDAQ: HTGC), the Palo Alto, CA-based provider of venture debt and equity financing to technology, cleantech, and life sciences companies, says it closed on $52 million in new loan commitments in July—including $17 million for San Diego-based Althea Technologies. In a statement today, Hercules says it provided $15 million in financing to Calera, a Los Gatos, CA-based cleantech developing technologies to capture carbon dioxide. Althea, a contract research organization, (CRO) provides services for plasmids, protein biologics and sterile products. Hercules did not identify the PV solar technology company that received $20 million.

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[Updated 4:00 pm, 3/25/10. See below.] Bend, OR-based PV Powered, a maker of solar energy components, announced yesterday it is being acquired by Advanced Energy Industries of Fort Collins, CO. The deal will be worth as much as $90 million—$50 million upfront ($35 million in cash and $15 million in Advanced Energy’s common stock), and up to $40 million in earn-out pay based on PV Powered’s 2010 sales.

The acquisition shows how solving a relatively small but crucial piece of the solar energy puzzle can pay off in spades, even in a difficult economy. PV Powered makes solar power inverters, which are electronic components that help convert the DC electricity output of solar cells into AC current that homes and businesses can use.

At least one cleantech industry observer thinks the acquisition—and more specifically, its size—signifies a resurgence of the mergers and acquisitions market in alternative energy. Michael Butler, the CEO and co-founder of Seattle-based Cascadia Capital, calls the Oregon company’s sale a “big deal” at a “huge price.”

“It tells me that M&A premiums are coming back,” Butler says in an e-mail. “Traditionally, balance of systems companies such as inverter companies trade at 1x revenue. This is more than 1x revenue. We are seeing M&A coming back big time in the alt energy /clean tech markets. This is another data point… and a good one.”

Gregg Semler, co-founder and managing director of Portland, OR-based Pivotal Investments, seems to agree. “Corporates have cash and a growing need to differentiate themselves with proprietary technology that can build their leadership in renewable energy,” he says. “This acquisition by Advanced Energy shows the increasing demand for growing companies that have innovative technologies focused on solar energy. I think we will see lots more this year.” [This paragraph was added for further analysis---Eds.]

PV Powered, founded in 2003, said it will operate under its current management team as a wholly-owned subsidiary of Advanced Energy Industries, and will continue to sell its inverters out of Bend. The company has about 90 employees and made $21 million in revenue in 2009.

In a statement, PV Powered CEO Gregg Patterson said his employees are “excited” to join Advanced Energy Industries, and implied the cultural fit is a good one. “Both organizations share a common mission to deliver the innovations our customers are asking for in efficiency, reliability and uptime that will maximize the 20+ year financial returns of solar projects,” he said.

Advanced Energy Industries (NASDAQ GM: AEIS) says it expects PV Powered to contribute $40 to $50 million in revenues this year, the majority of which will come from businesses, not residences. Advanced Energy makes a wide range of solar components, including inverters, but also other power systems and thin-film semiconductor technologies for large solar power plants.

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Konarka Technologies, a Lowell, MA, developer of flexible, nanotechnology-based “Power Plastic” that converts light to energy, will receive $20 million from Konica Minolta in an R&D and investment agreement announced today. The companies will jointly develop and distribute organic thin-film photovoltaics.

Konarka brings to the table its simplified, roll-to-roll manufacturing process, which the firm says can be scaled up with significantly lower labor and capital costs than was possible with previous generations of solar-cell-manufacturing technology. Japan-based Konica Minolta is large, diversified company with its hand in office supplies, imaging, and medical equipment. In the company’s attempt to make inroads in environmental and energy applications, Konica Minolta is developing organic thin-film photovoltaic materials. The firm promises to be Konarka’s lead Asian business partner.

The companies will work together to improve their materials and optical coating technologies to achieve higher conversion efficiency, longer life, and lower manufacturing costs. If the companies are successful, they will establish a joint venture in Japan to produce organic, thin-film photovoltaic panels.

Konarka has revealed at least six new partners or customers over the past year or so who are integrating Power Plasticits photovoltaic material into products such as handbags that store solar energy to recharge electronic devices. Konarka’s other investors include 3i, Chevron, Draper Fisher Jurvetson, Good Energies, Mackenize Investments, the Massachusetts Green Energy Fund, the Massachusetts Technology Collaborative, New Enterprise Associates, Partech International, and Vanguard Ventures.

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While venture investments in cleantech startups declined last year, technology advances in renewable energy remain a hot area of interest for both cleantech innovators and investors. In an effort to gain a better understanding of the solar energy market, especially in the photovoltaic segment of the industry, I sought insights from Mike Hall, the CEO of El Cajon, CA-based Borrego Solar Systems.

Borrego is a fast-growth company that finances, designs, and installs grid-connected photovoltaic solar systems. Much of Borrego Solar’s business is concentrated in New England and California. Before getting to our Q&A, however, a little background is in order.

Borrego Solar Systems was a dormant, 20-year-old business when Aaron Hall, a senior at Northwestern University, developed a venture business plan for the small solar company as part of an undergraduate entrepreneurship class. A Hall family friend, San Diego State University physics professor James Rickard, had started the company in 1980, in part to install a solar system on his off-the-grid home in Borrego Springs, a small desert town east of San Diego. Rickard liked Hall’s business plan so much that he sold half the business to Hall, who took over at Borrego shortly after his 2001 graduation. They each put in $20,000 to restart the company.

Since then, Hall says the company, which is based in the San Diego suburb of El Cajon, CA, has grown into one of the nation’s top five contractors specializing in designing and installing grid-connected photovoltaic solar systems. With more than 165 employees in seven offices nationwide, Borrego Solar says it has installed more than 1,000 photovoltaic systems.

Last year, Inc. magazine named Borrego Solar to its list of “Fastest-Growing Private Companies” for the third year in a row. Inc. ranked Borrego Solar at No. 321 in the magazine’s 2009 list of 500 fastest-growing companies, based … Next Page »

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Solar cell manufacturer SpectraWatt, a spinoff from Intel formerly based in Hillsboro, OR, has raised $12 million in equity, debt, and options (out of a $41.4 million offering), according to a regulatory filing. The investors were not disclosed. Last spring, SpectraWatt announced it was moving its headquarters to upstate New York, citing “green business incentives.” The company has since set up offices and manufacturing facilities in Hopewell Junction, NY. Back in June 2008, Intel Capital led an initial $50 million investment in SpectraWatt, and was joined by Cogentrix Energy, PCG Clean Energy and Technology Fund, and Solon AG.

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Portland, OR-based Solar Nation, a developer of solar energy technologies for government agencies, businesses, and nonprofits, has raised $2 million in equity financing, according to an SEC filing. The financing appears to be part of a $5 million commitment from Luxembourg-based Lynx Industries to help expand Solar Nation’s North American operations, as the company announced yesterday. The strategic partnership means Lynx Industries will also provide a $3 million credit facility, and will become Solar Nation’s preferred supplier. Solar Nation was founded in 2008 and is led by founders Paul Anthony Hodge, Paul Hodge, Jr., Dan Drummond, and Ryan Lambert.

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Konarka Technologies, the Lowell, MA-based developer of flexible materials that convert light into electricity, is showing how everyday items like handbags and umbrellas can be turned into power generators. But the eight-year-old firm will need to collect a lot more juice before it can become a commercial success.

The company—which has raised $150 million from private investors—has revealed at least five new partners or customers over the past year who are integrating the firm’s so-called “Power Plastic” into such products as handbags that store solar energy to recharge electronic devices and patio umbrellas that provide electricity for laptops and the like. The latest deal was an agreement revealed last week in which Enviromena Power Solutions, of the United Arab Emirates, is evaluating the materials for use in shade structures used in deserts. And last month the firm hit the one-year anniversary of the opening of its 250,000-square-foot manufacturing facility in New Bedford, MA. Yet many of the products into which its solar materials are being integrated remain in development, and actual production activities haven’t gone into full swing in New Bedford.

Konarka makes photovoltaic modules from organic polymers rather than silicon or other traditional semiconductors, putting it on the cutting edge of solar cell development. Its materials are unusual in the solar business because they’re not marketed for use in standard solar panels on roofs, which typically are made from cheaper, more efficient substances, such as polycrystalline silicon. The firm’s products, however, are lightweight and flexible enough to be used on the outer surfaces of products such as bags and canopies and umbrellas.

Still, the jury is out about whether the appeal of such products will be powerful enough to convert privately held Konarka into a profitable business. There’s a continuous effort at the company to make its organic photovoltaics more efficient at converting light into electricity and to make them last longer than the current shelf life of three to five years. Meantime, the company’s West Coast rival, El Monte, CA-based startup Solarmer Energy, says that it has developed the most efficient organic solar cells in the world. And industry reports indicate that multi-national corporations with deeper pockets than Konarka and Solarmer have entered the fray in developing organic photovoltaics.

“Long-shot is a very good word for” companies like Konarka and Solarmer, said Johanna Schmidtke, an analyst for Lux Research, which recently completed a report that described all the leading developers of organic photovoltaics (sometimes called OPVs) as long-shots for success. “Whether or not they succeed in the long term is still … Next Page »

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Steve Ihnen knows to the minute when the clouds will arrive. From the Redmond, WA, office of his company, SolarCasters, he keeps an eye on weather conditions around the world with satellite data. Then, using complex mathematical modeling software, he collates cloud-cover, humidity, and other factors to calculate how much sunlight will reach the ground in a given spot in the next day, hour, or even minute.

SolarCasters is a “weatherman for the solar power industry,” among other roles, says Ihnen, the chief technology officer and only full-time employee of SolarCasters. Besides forecasting when the sun will come out, the company provides information and consulting to solar power companies about where best to build their plants, what kind of solar panels they should use, and how much electricity they can expect to produce. Based on criteria like how much the sun shines in a given area and what the relevant weather is like there, Ihnen can recommend the best options in placement and design to his clients.

Knowing how much solar energy is available minute-to-minute is vitally important because unlike nuclear, coal, or other types of power generators, solar power cannot be as easily controlled and managed. “The supply of electricity must precisely meet demand at every instant,” Ihnen said. Generally, large-scale power suppliers, whether public or private utilities or independent system operators like the California ISO (a power grid operator), share and move power about, buying and selling electricity as needed to keep supply and demand levels equalized. Solar power plants thus need to know in advance how much power they will generate in order to replace or buy power from another power plant as necessary. Ideally, Ihnen said, power systems together “operate almost as if they were one organism.”

Although not heavily used in America yet, solar power is a rapidly growing industry in places like Europe and Australia. SolarCaster’s clients are located all over the world, but non-disclosure agreements prevent Ihnen from revealing who his clients are, or even how many he has, since he began taking on clients last fall.

Ihnen founded the company in January 2008 after spending two years developing … Next Page »

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