EnergyBiz - September/October 2007 - (Page 20) » Financial Front 2005, and hit $43.125 in July, up about 106 percent, while SunPower opened at $27 in November 2005 and hit just over $68 in July, up just over 150 percent. And IPOs in the energy management sector have done just as well. EnerNOC, Inc. went public at about $26 in May and traded as high as $38 in July, and Comverge, Inc. opened at $21 in April and closed above $35 in July. According to Ehrenpreis, “for people who were wondering how you could make money in this space historically, there’s been some visible successes to show just how much money one can make.” Another powerful driver is the fact that solar has suddenly moved front and center for a number of major corporations, including Wal-Mart, Google and GE. Interest among such corporate giants is fueled in part by shareholder concern for the environment, but the chairmen of both Wal-Mart and GE have gone on record cally viable zone as the price comes infinitesimally lower over time.” And a company like Google, which gobbles energy to feed its ever-increasing number of servers, has to think ahead. “These aren’t things you can go down to Best Buy, purchase and use the same afternoon. You need to familiarize yourself with the technology and then roll it out over years if not decades,” says Straser. Most of the interest in solar has been on the technology side, where advances in materials and thin-film technologies are particularly exciting, But there are areas that haven’t yet been touched. On the residential side, for instance, solar is still a luxury, one that only those with a high green blood-cell count will undertake, because the payback period is typically longer than the seven years the average American owns his home. That’s why for the residential and smaller commercial market, Atluru, of Draper Fisher Jurvetson, sees solar financing as having enormous potential. He envisions designing new financial structures that involve power-purchase agreements that could enable smaller users to put solar systems on their roofs without having to meet the capital costs up front. Atluru sees the main challenge in solar right now as one of scale. Cell and modular manufacturing is ramping up, but installation and management, dominated by lots of mom-and-pop operations, is hugely fragmented, a situation he thinks is ripe for change. Also receiving intense venture interest is energy management, a broad category that includes demand response, smart-grid technologies, storage, and energy efficiency programs. Deeya Energy, for instance, is a startup in which Atluru’s Draper Fisher Jurvetson, among other VC companies, has an interest. They’re developing a new battery technology that, they claim, will for the first time commercialize load shifting and that will better enable storage of renewable sources, such as wind and solar. A primary initial market is India, where power availability and quality problems plague virtually every major city and threaten to constrain the country’s surging economic development. Nanotechnology, which Straser calls “the twenty-first century toolbox,” is as hot a sector in the energy field as it is in that other venture darling, biotech. Jeff Sterba, president of the Edison Electric Institute and chairman and CEO of PNM Resources, sees it as central to new developments in the critical area of energy storage. “The one thing that would revolutionize our industry is the development of a cost-effective mass storage device or set of devices or system. One of the applications we’re seeing now is the application of nanotechnology for batteries, where nanotubes increase the area of lithium ion batteries that are actually utilized by an order of ten thousand times. That would unlock the potential for solar, ‘‘ 20 E n E rgyB i z You need To familiarize Yourself WiTh The TechnologY and Then roll iT ouT over Years if noT decades. to say they’re not investing in solar for altruistic reasons; the real motivation is the bottom line. For a company like Wal-Mart, energy costs are second only to personnel costs, and financial fiduciary responsibility demands those costs be addressed. This kind of corporate commitment breeds an ecosystem that’s very hospitable to venture capitalists. The recent announcement of major projects by Google and Wal-Mart gives the lie to the idea that solar has to reach grid-parity before achieving major market penetration. As energy demand and costs rise, CFOs are increasingly factoring electricity rates into their calculation of overall risk, something they didn’t do five years ago. Straser believes that “with every tenth of a cent you come down, the market’s going to get bigger, because more and more people move into the economi- ’’ September/October 2007
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.