R.E.preneur

SolarCity makes electric cars an even smarter investment | Grist

“It’s our feeling that if we really want to make a difference, we have to start changing our infrastructure,” says Lyndon Rive, SolarCity’s chief executive. “Combine EV with PV, and we can really lead a clean lifestyle.”

via www.grist.org

I knew SolarCity was a great company that is growing very fast. And I knew that they had convinced smart people to invest in their company, such as Elon Musk and the executives at First Solar (and kudos to both companies for leading the charge of thin film glass on glass solar in residential applications).

But until I read this article, I had no idea just how visionary the Rive brothers, co-founders of SolarCity truly are.

Their vision of combining EVs and PV and growing their business through residential and commercial charging stations that are solar-powered, is a remarkable step forward in the progress of the EV industry.

EVs have historically been discredited for their limited range and fueling ability. But its not hard to see how adding a small fleet of well-placed electric charging stations (which isn't rocket-science unlike that hydrogen highway BS) could really open California up to be the market that launches EVs!

I look forward to the day I can drive my PV-powered EV!

The Abuse of Optimism & Hope: ZAP

A few weeks ago, my brother Kevin blogged about business card cartoons that depicted his closest friends and family.  This was mine:

At first I thought "that's really great, I want to sell things that people can believe in, and the market for these is infinite, so I am going to do quite well".  More on this later.

If you've read the REpreneur blog at all, you've no doubt read that I'm a big fan of electric vehicles and plug-in electric vehicles. 

So how could I not love the cars "soon to go into production concepts" from EV manufacturer ZAP!

It has happened before, and it will probably happen again.  I've been duped!

Sometimes my youthful optimism blinds me from doing as much due diligence as I should.  I read through their website and loved the concepts, the promises, and the hope of electric vehicles. 

Unfortunately, I was being duped, and I wasn't the first.  WIRED magazine released an in-depth article chronicling the FULL history behind Steve Schneider and Gary Starr who had been collectively running the company into the ground and ruining the lives of anyone they could convince to invest and/or open dealerships or join the company since the middle of 1994.

Everyone loves green vehicles.  We hate filling up at the pump, we hate knowing we are dependent on oil from the middle east, Venezuela, and the dirty tar sands of Canada. 

So its sad to read all the stories of people who have put their faith and fortunes in the promises made by ZAP executives. 

I applaud WIRED magazine for their thorough investigative reporting.  I would recommend anyone thinking about doing any business with ZAP to please read the WIRED article first.  I personally would not touch that company with a 10 foot extension cord.

On a brighter note, the EV industry is not all bad and I still believe in the long term prospects of companies who have worked hard to execute on their promises such as Tesla, Aptera, and Project Better Place. 

As for my brother's business card cartoon about me.  Teamed with this article, it is a strong reminder that it takes a lifetime to build a good reputation, and only a few poor decisions to ruin it.  That if you make promises, you better be able to execute.  Excuses don't matter, execution is king.

Cartoon Photo Credit: www.ecadamy.streetcards.com

Hype Machine Photo Credit: Jason Lee and WIRED Magazine

I'm Falling In Love

With Car Sharing! 

I'm sure many of you have heard about companies that offer car sharing to urban dwellers who only need a car a few times a week or even a month.  I had examined this business last year and was intrigued.  Today I've been reading more about it after hearing that the nation's largest car sharing competitors Flexcar and Zipcar agreed on a merger last year. 

Lately I've been thinking a lot about what I want my standard of living to be after I graduate from the University of Arizona this spring.  I will be married, living somewhere in the southwest, hopefully in an urban setting in which I can choose to live a short distance from work so that I can walk, ride a bike, or hop on mass transit to get to work each day. 

As a married couple, I would love to own just one car and join a car sharing service in order to provide the flexibility provided with owning a second car.  Flexibility is maximized by the fact that we can reserve a sedan, wagon, truck, hybrid, or sports car to do whatever we need.  Plus we will be saving substantial amounts of moolah while we do it. 

Plus check out the green car sharing benefits validated in a recent study:

• Each shared car replaces up to 20 privately-owned vehicles

• Over 40% of car sharing members decide not to purchase a car or sell a car they currently own
• Car sharing members save more than $400 per month over owning, insuring, and maintaining their own car, that money can be spent locally
• Government agencies, University officials and real estate developers have told Zipcar that each
  new parking spot can cost from $35,000-$50,000 to develop. M.I.T. provides students and faculty
  access to more than 20 Zipcar vehicles; because of Zipcar and other transportation demand
  management initiatives the school reports savings of more than $9 million, adding over one million
  square feet of new office space without a single new parking space.   

Car sharing works great on University campuses where students rarely need to travel much past walking distance around the campus, plus all of their classmates have cars to share anyways.  I know here at the U of Arizona, parking is a major issue.  A garage pass costs upwards of $500 a year.  Each year the university acquires more land in order to develop four story parking garages to meet the high-demand for parking passes which often sell out before the school year begins. 

My hope is that America will become increasingly urban in order to realize the advantages of shared spaces and possessions.  As car sharing firms focus their growth on college campuses, a entire generation will enter the marketplace familiar with car sharing.

For more info visit:
Zipcar
Flexcar
This article from Eco-Worldy: Are you willing to car share?

The Case for the Electric Car: Project Better Place Video

If you haven't heard of Project Better Place, here is your chance.  In this video, Founder and CEO Shai Agassi presents his case for a new model for personal transportation based around the electric vehicle.  Through this combination video and slideshow, its easy to see how the world could quickly transition from internal combustion engines to clean, efficient electric vehicles in a single generation. 

Here's some info from their website that details the company's innovative adaptation of an existing, proven business model. 

What is Project Better Place’s business model?
The business model for the electric cars will be similar to that used by mobile phone operators.  In the same
way that wireless operators deploy a network of cell towers to provide an area of mobile phone coverage,
Project Better Place will establish a network of charging spots and battery exchange stations to provide
ubiquitous access to electricity to power electric vehicles. 

The company has raised $200 million from investors and has a goal of deploying 100,000 EV's in its subscription service in ten test markets by 2010.  I love people who dream big, and then act on it.

Go here for a full size video, and to check out the rest of the company's website.

COW - Nanosolar

On Tuesday, the CEO of San Jose-based Nanosolar made an entry on the corporate blog announcing that Nanosolar had shipped its first product to a 1 MW solar power plant in Eastern Germany.  This represents a major accomplishment by the California start-up who for over a year now has been claiming that they will change the economics of solar by manufacturing by printing their semiconductor material directly onto a piece of foil.  Below is a list of accomplishments listed by Nanosolar.

• world’s first printed thin-film solar cell in a commercial panel product;
• world’s first thin-film solar cell with a low-cost back-contact capability;
• world’s lowest-cost solar panel – which we believe will make us the first solar manufacturer capable of profitably selling solar panels at as little as $.99/Watt;
• world’s highest-current thin-film solar panel – delivering five times the current of any other thin-film panel on the market today and thus simplifying system deployment;
• an intensely systems-optimized product with the lowest balance-of-system cost of any thin-film panel – due to innovations in design we have included.

Now don't get me wrong, I applaud Nanosolar using nanotechnology to attempt to leapfrog traditional solar technologies in order to lower cost and gain market share.  My frustration is that Nanosolar doesn't state their actual costs, they state what the technology is capable of "$.99/Watt".  With new technology comes higher costs generally. 

I have great respect for companies who provide great visibility to the public about their current status in terms of cost, average selling price, revenues, contracts, etc.  My former employer First Solar is great at this.  I have a growing amount of skepticism for companies that make great claims but provide very little details about where they are and where they will be, and how they will get there.

I also think that it is interesting that Nanosolar chose to sell into the 1 MW+ market initially.  With an early commercial product and a still early stage venture, this strategy will allow them to focus their efforts and work with a limited number of trusted partners to help optimize their technology for the growing utility-scale solar market. 

Congratulations to Nanosolar on shipping your first modules to a major solar power plant.  As a private company, you have the right to keep confidential info private.  But, in order to gain true respect and admiration in solar, execution is king.  Nanosolar's unique manufacturing process makes the solar market increasingly competitive, as Jigar Shah has said: "The Solar Decade is approaching".

COW - My Summer At First Solar Inc.

Ten weeks came and went very quickly.  Looking back to January when I cold emailed fifteen wind and solar companies seeking a position in “any sales, business development, or marketing internship position” its fairly remarkable that First Solar, the world’s largest thin film solar module manufacturer called me back and asked if they could interview me.  My cover letter has been called gutsy, and my resume has been called impressive for my age, but I caught some luck when my father told me about a solar company in Phoenix that IPO’d just one month earlier.  It is the type of luck that Ben Casnocha writes about.  Its role in success is strong, but it is given graciously to those who are prepared and well positioned. 

For anyone who doesn’t know the history or recent activities of First Solar, let me give you a brief update.  Formed in 1999, First Solar bought a company called Solar Cells in order to commercialize their thin film Cadmium Telluride (CdTe) technology. 

After a longer than expected ramp up of their first 25 MW production line they implemented a Copy Smart process in order to replicate the exact production line twice over at their initial manufacturing plant in Perrysburg, Ohio.  Fortunately, for First Solar they were able to ramp up their production of CdTe solar power right when the silicon shortage hit traditional solar manufacturers hard and drove a wedge between First Solar’s average selling price and the rest of the industry. 

Somewhat coincidentally it was about this time in 2003-04 that Germany began to hit critical mass and gain momentum with their EEG legislation, which is a Feed-In-Tariff that pays a premium for solar power generation and made solar an attractive investment within the country.  Two factors drove First Solar to be extremely selective about whom their initial batch of customers included.  The first was their significant and widening cost advantage over the majority of manufacturers.  The second involved the only caveat of their technology, that because thin films (TF) convert a smaller percentage of the sun’s rays into electricity, TF panels require more space to generate the same amount of power as polysilicon derived solar. 

With this in mind First Solar became focused on the market segment of utility-scale power generation primarily through fixed field solar power plants, but also engaging in large industrial rooftops.  With their expertise as a manufacturer they chose not to become a project developer (PD) but instead to become a long-term supplier to the most experienced PD’s in the European marketplace.  Shortly thereafter they signed multiple long-term supply agreements with PD’s such as Juwi, Blitzstrom, Conergy, R & P Sun Energy, and Gehrlicher.

These long-term (5-7) year supply agreements created the demand that enabled them to obtain low cost financing in order to expand their young company announcing the construction of a new four line (now 30 MW/line/yr thanks to efficiency improvements) manufacturing facility in Frankfurt (Oder), Germany.  Later, in 2006 they completed a successful IPO, raising $400 mm to fund their voracious appetite for growth and development. 

The investment industry has acknowledged the company’s outstanding performance since going public driving the stock price from an IPO introduction of $20 to a close on Monday of $120.28 (An astounding 601% in just 8 ½ months!). 

So here we are, it’s the start of August, my internship is over, how did it go, what did I do?  Read on in Part 2 coming soon!

Full Disclosure: I do own First Solar stock, which I purchased at retail price.  I am not a financial advisor and am not offering investment advice of any kind.  I am no longer an employee of First Solar and do not claim to speak for First Solar and their interests.

COW - Altair Nanotechnologies

This summer, much of my research has been focused on green building.  Many companies are tackling this and I believe that the financial case is already being widely adopted and mass market adoption of green building technologies is right around the corner.  (That said, only 12% of U.S. new homes were eligible for relatively low Energy Star standards certification).

My problem is I like to be on the leading edge, I mean way out on the edge.  So currently, I've lost a bit of my passion about green building due to its high level of coverage and education.  I'll still spout off about how green building is an important part of cleaning up our act and taking personal action, but for now I'm shifting my focus. 

The more I research the energy and transportation marketplaces, the more I believe that Plug-in Hybrid Electric Vehicles (PHEVs),  Hybrid Electric Vehicles (HEVs), and Electric Vehicles (EVs) are the future of transportation.  Summarily, I will refer to them as EVs.  The most important piece of technology in an EV is the battery.  Battery technology has stayed mostly dormant for the better part of the last century.  In order for EVs to take over the marketplace, battery technology combined with advanced automotive design and construction techniques must advance rapidly.  Let me rephrase that, CURRENT advancements in battery technology and automotive design and construction must be widely adopted.  The solutions are not ten years of development away.  They just need to be tested, proven reliable and compliant, and designed for economy and maximum consumer comfort. 

I just finished reading a great article from Green Car Congress about Toyota testing the first PHEV in Japan.  This is an important first step that is helping to catalyze a race amongst car companies to bring environmentally friendly autos to the marketplace at prices that are economical.  The technology  they are using is not revolutionary.  Essentially, they double the NiMH battery in the Prius and retrofit it to be plug in capable.  The EV range is only 8 miles but remember this would eliminate thousands of miles per year of gasoline only driving. 

COW - Company Of the Week - SunEdison

On Monday, I posted the POW – Project Of the Week about the recent wave of U.S. retailers investing in solar power on their commercial retail buildings.  As promised, I told you guys I would follow up with a post about one of the companies operating in this medium scale solar niche and specializing in PPAs (Power Purchase Agreements). 

So today, I present a new post to the REpreneur blog, the COW – Company Of the Week

Spotlight on: SunEdison

Pop Quiz Hot Shot:
    What’s the difference between a product and a service?

When you buy a product, you take over ownership of the product and you pay the full value up front (unless you finance it).  By doing this you reap all the benefits that ownership provides. 

When you pay for a service, what you receive is intangible.  A service may include a car wash, a mechanic’s time, or customer support.

This fundamental difference is how SunEdison is breaking all the rules of the solar industry.  Breaking the rules is the only way to elevate the industry to the next level. 

PPAs are brilliant because they address all the deepest fears of a solar power system prospect:
•    What if the panels I purchase stop or significantly slow down producing power 2, 5, 12, or 17 years from now? 
•    So I have to pay an expensive technician every time I have a service issue? 
•    What if one of the panels breaks? 
•    How can I be sure I am making a sound investment? 

When you eliminate the prospect’s fears, you’ve got a sale waiting to be closed. 

SunEdison offers solar power as a service, not a product.  They retain the ownership of the solar system (or sometimes sell it off to institutional investors who want the cash flow).  SunEdison is then motivated to keep these systems in good operating condition because they are only paid for the electricity that the panels produce.  Or in the cases where they have sold the systems to investors, SunEdison combines the solar system sale with a service contract to maintain the system for the investor. 

In this way, SunEdison becomes a distributed power plant.  Imagine, owning 40 projects across the country ranging from 50 kW-5 MW.  Every month, you receive a check.  The consumer of the energy pays you a rate equal to or near their current price of electricity from their local utility.  This agreement is locked under contract often for 25 years, talk about a cash cow.

Plus, because SunEdison (or the investors they partner with) retain ownership of the solar power system that is replacing or feeding the grid, they retain all the tax rebates, investment incentives, and renewable energy credits (where law allows).  That's great added value for all parties.

Check out: Download wri_slide.pdf from the World Resources Institute (WRI) illustrating PPA business model that SunEdison pioneered with Staples in 2004.

CEO of SunEdison, Jigar Shah (LinkedIn Bio) was one of the earliest pioneers of this business model, he pretty much single handedly proved it could work, time in and time out.  Since 2004, the PPA has been taking the commercial solar market by storm, being adopted by nearly every major project developer and systems integrator.  There is even movement to PPAs in the residential market primarily by speculative startup CitizenRE.  You can probably bet on hearing more about them in the future.

Notable SunEdison Projects:

Kohl's Readies California Rooftops for Solar Power

SunEdison Delivers Solar Power System to Costco

SunEdison Delivers Affordable Solar Power to a California University

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