FountainBlue

February 2012: What's New with FountainBlue: Advisory Boards

We are serving on the advisory boards of for select members of our community, supporting their marketing, business development and recruitment efforts. Currently, we are providing advisory and business development support Speck Design and their product innovation services http://www.speckdesign.com, and advisory and investment strategy support for Bell Biosystems and their research on heritable magnetic signature in therapeutic cells, with huge implications for diagnostics, cancer, regenerative medicine and cell therapies. http://www.bellbiosystems.com. For more information about any of these organizations and the services they provide, and more information about the organizations where we serve, visit http://www.fountainblue.biz/consulting/advisory.html.

January 16, What's New with FountainBlue: Members as Referral Partners

At the request of our members, we will be sending out our job reqs to our members, inviting everyone to strategically forward them on to their networks of contacts. Thank you in advance to everyone who elects to forward our reqs. Please tell your contacts to mention that you connected him/her to us, so that we can track the origin of our candidate leads. We are happy to pay a referral fee to members who recruit candidates who get hired and stay for a ninety-day period. You may also elect to donate your referral fee to a FountainBlue-approved nonprofit or a nonprofit of your choice. For more information about our job leads, visit http://www.fountainblue.biz/openreqs.html.

January 9, What's New with FountainBlue: Giving Back

Since our launch in January 2006, FountainBlue has been committed to giving back to the community through active participation and financial support. As we shift into recruiting and consulting, we are pleased to contribute financially to nonprofit causes providing executive education, educational benefit, and women-in-leadership. Currently we are supporting the following types of organizations:

Executive Development Organizations:

   Career Actions

Educational Organizations:

   A Schmahl Science Workshop, as a member of the advisory committee.

Women-In-Leadership organizations:

   Global Fund for Women

   Global Women Leadership Network

   Women's Initiative

Please e-mail us with the following information at info@whenshespeaks.com or complete the form above if you would like to considered an approved, adopted FountainBlue cause.

   Your name

   Recommended Nonprofit

   Your involvement with Nonprofit

   Why you would recommend this Nonprofit

   Why FountainBlue's membership of clean energy, high tech, and life science entrepreneurs would find this nonprofit beneficial to the community overall

We are happy to profile a nonprofit each month, and recommend any of these nonprofits as worthy causes.

If you’re interested in catching up over the phone or in person, please visit http://meetwith.me/lindaholroyd and suggest a good time to connect. Please also let us know if we can support you with your recruiting, consulting and coaching needs as you grow your business.

January 2 Update: A New Year, A New Newsletter Format!

We are looking forward to an exciting new year, and an exciting new time for the valley and the global community! It is our hope that our weekly newsletter will provide you with relevant, useful information about business and market trends and their implications for your business. We invite your inquiries, suggestions, feedback and interest as we continue with our consulting, coaching and recruiting efforts! If you’re interested in catching up over the phone or in person, please visit http://meetwith.me/lindaholroyd and suggest a good time to connect. Please also let us know if we can support you with your recruiting, consulting and coaching needs as you grow your business.

This Month's Hot Clean Energy Trend and Profiles in Innovation

May 2012

Dorsey & Whitney Survey Shows Robust Startup Funding Climate; Pendulum Swings Back To Institutional VCs, Who Make Strong Comeback

Palo Alto, CA (PRWEB) April 26, 2012 http://renewableenergyfast.com/dorsey-pendulum-swings-back-to-institutional-vcs-who-make-strong-comeback/

The Palo Alto office of international law firm Dorsey & Whitney LLP today released findings from its second survey of startup company CEOs regarding fundraising. The “Calling all CEOs: 2011/2012 Fundraising Survey” received a total of 336 respondents over a 3-month period. The survey explores what matters most to entrepreneurs in their selection of investors, and it highlights changes that have taken place since Dorsey conducted its first survey in 2010. The survey also sheds light on the direction that startup CEOs are headed when they raise their first or second round of funding. The survey results identify respondents in two primary categories: startups located within the San Francisco Bay Area/Silicon Valley and other specified major metro areas (“Metros”), and startups located in other US locations or abroad (“Non-Metros”). All survey respondents were either CEOs or founders/co-founders.

The survey findings have been published in a report titled, “The Pendulum Swings in Funding: New Generation of VCs Leads Startup CEOs Back to the Fold.” A link to the survey report is available for viewing, reprint, and redistribution at: http://www.dorsey.com.

“The data from this survey present a snapshot of the startup funding environment immediately prior to the JOBS Act, which authorizes crowdfunding and removes the general solicitation prohibition for accredited investor financing rounds — the biggest regulatory changes affecting startup companies since the adoption of the Securities Act,” noted Ted Hollifield, Corporate Partner in Dorsey & Whitney’s venture capital practice. “Survey data suggesting the emergence of angels, accelerators/incubators and super-angels in metropolitan areas as an escalator to institutional VCs and larger funding rounds is an early positive sign for this new era of startup investing.”

Entrepreneurs Return to Traditional VCs

Survey data indicates the renewed prominence in metro tech hubs of traditional VC firms, whose influence had declined in the last few years due in part to the rise of incubators, angels, and super angels. Findings supporting the renewed prominence of traditional VC firms include:

    The percentage of Metros that previously secured funding from traditional VC firms increased sharply to 27.5% from 17.1% in 2010.

    Forty-two percent of Metros expect to raise a future round from traditional VC firms, a huge increase over the 22.1% in 2010.

Survey results indicate, however, that Non-Metros are not tapping traditional VC firms at the same rates as their Metro counterparts. The percentage of Non-Metros who secured funding in the last 12 months from traditional VC firms dropped from 17.1% in 2010 to only 7.5%. Likewise only 18.5% of Non-Metros expect to raise a future round of funding from traditional VC firms, down from 22.1% in 2010.

This latest survey also asked CEOs to write in their top three investor choices. Although startup CEOs could have selected any type of investor, they conclusively identified traditional VC firms as their funding preference, with Andreessen Horowitz coming in first place for the metro group, Sequoia Capital voted second place, and Kleiner Perkins Caufield Byers ranking third. For the Non-Metros, Sequoia Capital received the most write-ins for first place, with Andreessen Horowitz ranking second, and Google Ventures placing third.

More Capital Available to Startups

The survey data suggests that funds are more available to Metro startups now than in 2010. For example, 36.3% of the Metros and 33.9% of the Non-Metros completed a round of funding in the past 12 months as compared to 28.8% in 2010.

Additionally, the data reflects a trend since 2010 towards fewer small rounds and the increased prevalence of large rounds:

    The percentage of CEOs who raised less than $ 500,000 in total funding dropped to 62.8% overall from 75.8% in 2010.

    CEOs expecting to raise $ 150,000 – $ 250,000 in their next round dropped from 12.5% in 2010 to 2.9% for the Metros and 10.2% for the Non-Metros.

    CEOs who raised between $ 1-5M in total funding rose from 10.2% in 2010 to 15.8% overall.

    Startups expecting to raise future rounds between $ 1-5M increased from 23.2% in 2010 to approximately 30% for both Metros and Non-Metros.

    In 2010, only 1% of startups reported raising $ 15 million or more in the prior 12 months, whereas 7.5% of today’s Metros and 2.5% of Non-Metros completed a round in this larger range.

Non-Metros again yielded somewhat different survey results than Metros. Whereas the trend towards fewer small rounds and more large rounds was generally the case for Non-Metros expecting to raise a future round, there were exceptions. For example, the percentage expecting to raise less than $ 150,000 increased to 15.7% from 11.3% in 2010. In addition, it was difficult to identify any clear-cut trends in funding amounts for Non-Metros who had raised a previous round.

Regional Differences Reflect Mixed Outlook Among Incubators, Angels and Super Angels

Along with the increased clout of traditional VC firms, the data shows a mixed picture on a regional basis for incubators, angels and super angels. Metros tend to access incubators for early rounds, but not subsequent ones, while the opposite is true of Non-Metros. For example, the use of incubators in previous rounds rose to 15% in Metros and dropped to 5% in Non-Metros, compared to 8.6% in 2010. However, of CEOs seeking a future round, the expected use of incubators decreased to 7.8% in the Metros from 11.6% in 2010 yet spiked for the Non-Metros (24.1%).

The use of angels and super angels was also mixed. Fewer startups across the board (52.5%) received prior funding from angels compared to 2010 (59%), and angel funding anticipated for a future round also dropped overall. In turn, super angel funding appears less prevalent for the Non-Metros. Whereas metro CEOs receiving super angel funding for a prior round stayed the same as 2010 levels (approximately 12%), it dropped to 7.5% for Non-Metros. Super angel funding expected for a future round increased to 41.2% for Metros, up from 37.4% in 2010, but fell to 30.6% for the Non-Metros.

Entrepreneurs Still Weigh Other Criteria

As in 2010, the overwhelming majority of respondents consider valuation, dilution, liquidation preferences, and Board control to be important in completing a deal. The speed at which the deal can get done is also extremely important. In addition, the percentage of CEOs rating an investor’s industry focus/expertise as important increased overall since 2010, possibly signifying that easier access to capital leads CEOs to also seek greater non-monetary value from investors.

On the other hand, the following factors were found to be relatively unimportant:

    Approximately 88% of startup CEOs felt that selecting an investor based on having raised funds with them before was “somewhat important” to “not important”.

    The importance of existing relationships with investors decreased overall since 2010 as a factor in selecting an investor. Approximately 81% of today’s Metros ranked an existing relationship as “somewhat important” to “not important” compared to 75.4% of 2010 respondents. One possible explanation is that relationships become less important in a stronger investment climate where investors more actively court startups.

The survey also solicited open-ended feedback from CEOs. Anecdotal responses indicate the importance of investors who have the patience and mindset to grow the company over time. Many respondents also cite the importance of strong personal rapport between the startup team and investor. Lastly, CEOs seem to value investors who can provide assistance but still let the core team “drive the bus.”

CEO Survey Profile

Of survey respondents who disclosed their location, 27.3% were based in the San Francisco Bay Area/Silicon Valley region and 21.8% in other major metro areas, with 18.3% distributed throughout other parts of the U.S., and the remaining 32.6% located abroad. The Metro survey results aggregated responses from the San Francisco Bay Area/Silicon Valley, New York, Boston, Los Angeles, Seattle, Chicago, and San Diego. All other responses were aggregated in the Non-Metro results. All respondents were planning to raise funds within the next 12 months or had completed a funding round in the past 12 months.

The 336 survey respondents were either CEOs or founders from a range of technology sectors, spanning IT infrastructure, software, gaming, life sciences/biotech, and green tech/energy. However the majority of startups participating in the survey were in the consumer Internet space, mobile or cloud computing/SaaS, 30.8%, 18.6% and 16%, respectively. While the number of mobile startups increased overall from 12.9% in the 2010 survey, this increase was especially striking in the Metro group, where 22.1% had mobile startups. The number of consumer Internet companies fell from 34.1% in 2010 to 25% for Non-Metros while increasing to 37.2% for Metros.

April 2012:

2020 Visions: California’s Clean Energy Future, Right Now, Posted by Arthur O'Donnell on February 6, 2012

http://ecocloud-sv.com/profiles/blogs/2020-visions-california-s-clean-energy-future-right-now?xg_source=activity

With each passing day, I can see California’s energy future a little bit more clearly.  Not because I have 20/20 vision, but because a series of new reports from state regulatory agencies is providing a wealth of information about the status of and progress toward California’s goal of creating a cleaner, more sustainable energy economy by 2020.

It would be more accurate to say “goals” as policymakers at all levels have enunciated or imposed scores of policies, mandates and initiatives that all come together under the heading of California’s Clean Energy Future. This Future project is being pursued jointly by the major energy market and regulatory agencies, with full support of the Office of the Governor.

Most recently released is a set of graphic representations that chart historic and projected trends in 16 functional areas that range from renewable energy installations and carbon emission reductions, to the expectations for jobs creation that result from all of these clean energy policies.   These Progress reports are now available for viewing on the California Clean Energy Future website: http://www.cacleanenergyfuture.org/ 

These 16 charts and graphs are Dashboard metrics, with each linking to a more detailed narrative with related charts and graphs that explore the data in detail. A 70-page compilation document puts all of the pieces together so that citizens can see where we’ve been, where we hope to go in the coming decade, and where we’d be if not for the policy efforts.

The expectation is that these Dashboards will be updated on a regular basis, which is absolutely necessary.  There is always a lag between reported data and our current situation. As of this moment, we don’t really know if or how well we are meeting most of the Future goals, but this Dashboard site is a great starting point so we can continuously track progress toward the future.

Another recently issued document will be useful for anyone trying to make sense of California’s markets for renewable energy projects.  I say “markets” because this new 50-page report from the California Public Utilities Commission’s Division of Ratepayer Advocates, called “The Renewable Jungle”, documents a dozen California incentive programs and market-based systems to encourage development of renewable energy. 

They range from the state’s implementation of the now-historic federal Public Utilities Regulatory Policy Act of 1979 for qualifying facilities (QFs) to the more recent Renewable Auction Mechanism (RAM), plus many others, with a particular eye to whether they contribute to the Renewables Portfolio Standard (RPS) mandate that 33 percent of energy deliveries come from green power sources by 2020.

And this past week, the CPUC also released the latest in its quarterly reports to the Legislature about the RPS market. What is different about the 4th Quarter 2011 update is that, for the first time, regulators provide more information about the costs of contracts signed between utilities and renewable power developers.  The report confirms that while renewable energy has been more expensive than the benchmark price for natural gas combustion technologies over the past decade, those costs are rapidly coming down.

According to the CPUC, the weighted average time-of-delivery adjusted cost of all RPS contracts approved from 2003-2011 was approximately 11.9 cents per kWh, with a range of 5.4 cents/kWh in 2003 to 13.3 cents/kWh in 2011.   The latest set of contracts approved in 2011 are not yet included in the analysis, but the CPUC reports “significantly lower costs” that will be reflected in future prices.

The report also provides trend analysis for bids into the RPS auctions, indicating the steep rise in wind and solar photovoltaic projects winning contracts in the past two years.  Over 830 MW of new renewable capacity came online in 2011, and the regulated utilities have submitted for approval 68 contracts in 2011, representing 4,525 MW of renewable capacity. Last year, the CPUC approved 44 contracts representing 2,461 MW of renewables – nearly as much as all the renewable capacity brought online since 2003.

Although the regulated utilities are still lagging in their clean energy deliveries (Pacific Gas & Electric is at 15.9 percent; Southern California Edison at 19.3 percent; and San Diego Gas & Electric just 11.9 percent in 2011), they are expected to reach the required 20 percent average for 2011-2013 in time.

Overall, the agency concludes, “the renewable market is robust, competitive, and has matured since the start of the RPS program.” 

Since renewable power is such a basic component of our clean energy future, this bodes well for California being able to reach its 2020 clean energy goals.

For February, we are featuring a Monday, December 5, 2011 article in International Business Times entitled China Leads Global Investments in Renewable Energy By Esther Tanquintic-Misa http://au.ibtimes.com/art/services/print.php?articleid=261083

The world's largest consumer of energy, China, is poised to spend $473.1 billion on clean energy investments in the next five years. The investment, according to Wang Yuqing, deputy director of the National Commission on Population, Resources and Environment, is part of government efforts to develop a green economy and promote environmentally friendly industries amid its growing population and rapid urbanization. The planned investment is part of China's 12th Five-Year Plan for Economic and Social Development (2011-2015) which aims for an installed solar energy capacity of 10 gigawatts by the end of the period. China also wants 20 per cent of its total energy demand to be met by wind and solar by 2021. In 2010, the world's second-largest economy invested over $47.31 billion in various renewable energy sources projects. Renewable energy is poised to grow faster than other electric generating alternatives, accounting for nearly one-third of the world's electric generating capacity by the end of 2035, with China and India projected to consume one-half of that energy growth.

Earlier, according to BP's Statistical Review of World Energy 2011, China had been ranked as the world's largest consumer of energy surpassing, the U.S. and EU. The report showed that in 2010, China used up 20.3 per cent of the world's energy, overtaking the U.S. at 19.0 per cent and the EU at 14.4 per cent. The International Energy Agency echoed the findings and said China will consume more energy than India, Brazil, even more than the European Union and the U.S. combined.

China will exchange positions with the United States as it becomes the world's largest consumer in 2035, IEA said. The agency predicts China will consume nearly 70 per cent more energy than the U.S. In the next 25 years, 90 per cent of the projected growth in global energy demand will come from non-core economies. China alone will account for more than 30 per cent.

Since 2004, Heller Manus International, a San Francisco-based architecture and urban design firm, with offices in San Francisco and Shanghai, has experienced dynamic growth throughout China fostered by strong professional relationships with clients, decision makers, community organizations and local design firms. Their practice area includes major sustainable architecture and urban design projects throughout China including Shanghai, Guangzhou, Inner Mongolia, and the greater Beijing area. Heller Manus has worked on over 950 square kilometers of urban design projects and 8 million square meters of sustainable architecture in China. The guiding principles of these sustainable urban design and mixed-use projects include core elements of sustainability, an emphasis on using green space as both a connection to nature and as an organizing element of the overall plan, and a fundamental need to get people out of their cars, onto public transit, and encouraging pedestrian circulation. For more information, visit http://www.hellermanus.com.

1. Natural Gas

Natural gas prices should begin to benefit from liquefied natural gas exports and increasing sources of domestic demand. Croft believes that exploration and production companies with large natural gas exposures will be prime beneficiaries of higher natural gas prices going forward.

2. Fresh Water

The supply and demand function for fresh water is a compelling theme with far-reaching consequences. As water demand grows via emerging markets while supply is reduced via pollution and other forces, providers of water infrastructure and pump and sanitation systems should see market growth and pricing power.

3. Agriculture

Croft remains bullish on the overall theme of agriculture and rising crop prices via ever-increasing world food demand. Emerging market growth has driven up consumption patterns for higher-protein food sources which have led to higher prices of grain, corn, soy, etc. The major beneficiaries are producers of fertilizer, irrigation systems, and farm equipment.

4. Broadband Internet (see high tech trends newsletter for full article)

5. Timber

Despite a continued weak domestic housing backdrop, timber remains an attractive investment opportunity. This is largely due strong foreign demand prospects and an eventual bottom in the U.S. with stocks in the group trading at a discount to net asset values with solid dividend yields.

6. Electric Grid

A lack of investment in the electric grid by developed countries over the past decade and longer has created pent-up demand for new infrastructure as population growth and increasing consumption trends drive higher overall demand.

http://www.ibtimes.com/articles/272070/20111223/invest-2012-managers-energy-water-gas-agri.htm

Gridata is a January profiled company on smart grid innovations.

Gridata's SiteAlert saves grocery chains and restaurants on their energy and maintenance costs through diagnostic analytics on data coming from onsite sensors.

Gridata’s innovation is “Cloud Analytics for Sensor Telemetry,” which serves as an online decision support system for small and medium businesses in cold-chain sectors like grocery, restaurant, pharmacy, and food processing. We use real-time sensors to detect emergencies, energy hogs, poor maintenance conditions, and improper equipment use. Our flagship SiteAlert product then delivers the right diagnostic information to the right user at the right time.

Gridata also continues to make its Energy Intelligence platform available to OEMs. This embedded energy management integration solution is designed for consumer and commercial electronics manufacturers who are adding energy management to their product lines. For more information, visit www.gridata.com.

Zuvo Water is a profile in water innovation, supporting our January trend.

Zuvo Water LLC is a global innovator of chemical-free water products. Zuvo Water’s product portfolio is based on a patented technology platform that reproduces the photo-oxidation process that naturally occurs in the environment. The Zuvo® Water Filtration System goes beyond simple carbon filtration. By combining ultraviolet light, ozone and carbon filtration, the Zuvo system recreates nature’s way of cleansing water. It is a sophisticated yet simple under-counter, drinking-water-treatment appliance that reduces chemical, particulate, and microbiological contaminants.

Zuvo Water practices sustainable design to keep products in use longer, thereby reducing its impact on the environment and keeping them out of an already crowded waste stream. The company’s goal is to innovate with the environment in mind, using materials and methods that minimize the use of energy, optimize recycling, and reduce the cost of transportation. Zuvo Water is working towards a day when everyone has access to safe water.

Subscribe to the Zuvo Water Blog and join the company in its mission.

If you are interested in nominating a company for an upcoming newsletter, please visit or e-mail your profile to info@svcleanenergy.com with the following information:

Name and Company

100-word description of why it is innovative

Link for more information

URL with picture of innovation

Company Contact Details

Clean Energy Predictions for 2012

The Antenna Top 10 Clean Tech Trends To Watch in 2012 http://antennagroup.com/transmissions/2012/01/

Antenna Group is the nation’s largest clean technology public relations firm, representing companies in sectors including renewable energy, energy efficiency, alternative fuels, energy storage, finance, waste management and water. Here, drawn from input provided by our client-partners, is Antenna’s list of the top 10 clean tech trends to watch in 2012. Judging from the changes that are in the offing, 2012 is shaping up to be a critical year in the transition to a cleaner, more energy-efficient world.

1. Energy efficiency goes retro – New construction has taken a massive hit over the last few years, resulting in fewer new green builds, but that hasn’t slowed retrofit demand for energy efficient devices. According to a report by McGraw-Hill Construction in 2011, 78 percent of building owners plan to retrofit existing properties with energy efficient improvements. Driven by the increased awareness in Property Assessed Clean Energy or PACE states (in which property owners can finance solar systems or energy efficiency retrofits through city loans that are paid back through property taxes over terms of 15 or 20 years), Obama’s Better Buildings Challenge and new financing models that make it simple for cities and property owners to do upgrades, expect to see energy efficiency finally claim its moment in the spotlight.
2. Cellulosic biomass comes online; drives U.S. manufacturing jobs – Imagine being able to turn a wide variety of biomass inputs including wood, agricultural waste and non-food crops into fuels, plastics, nutraceuticals (food products that reportedly provide health and medical benefits) and pharmaceuticals. That’s the promise of bio-based materials, which are expected to replace first-generation biofuels such as bioethanol and biodiesel, as well as a wide variety of synthetic chemicals. As strategics such as BASF Corp., DuPont and Dow Chemical Co. enter the cellulosic biomass game, watch for the number of U.S.-based biorefineries to dramatically increase.
3. Recycling finds its true potential – Many of us still remember the awareness campaigns that drove what are now highly successful changes in consumer behaviors with regard to recycling. As went paper, glass and plastics, so go consumer electronics and tires. A number of states already have legislation around recycling what consumers have deemed “waste” and are supporting efforts to renew those materials and give them second — and perhaps even third — lives. Watch for the big box, telecom, tire and asphalt sectors to pick up the sustainability baton for Recycling 2.0.
4. The EV market picks up speed, while Tesla, Fisker get some competition – While we’ve heard a lot about electric vehicles such as the all-electric Nissan Leaf and the gas-electric hybrid Chevy Volt, in fact there are precious few of these cars on the roads. But that’s expected to change in 2012 when a much wider selection of cars that require little or no gasoline will hit the market. Almost every major automaker — and some minor ones — plans to have at least one plug-in model on the market by the end of 2012. These include three models from the world’s leading seller of hybrids, Toyota — a plug-in hybrid version of the popular Prius, the all-electric Scion iQ EV and the 2012 RAV4 EV, an all-electric compact SUV. Also hitting the market in 2012 is the all-electric Ford Focus Electric, which will compete with the Nissan Leaf. Other EV models planned for 2012 include the four-passenger Mitsubishi i-MiEVc, and — for the luxury loving — the Rolls Royce 102EX, the Tesla Model S luxury sedan and the Fisker Karma luxury sports plug-in hybrid. Accompanying the EV rollout will be a dramatic expansion of the national car-charging infrastructure, with Pike Research, a clean tech market research firm, predicting more than 1.5 locations by 2017.
5. Smart meters reach critical mass – For decades, utilities have been forced to rely on customer reports to discover a power outage. This decidedly low-tech approach to reliability is now changing with the national deployment of smart meters that record the consumption of electric energy in intervals of an hour or less, communicate data back to the utility and allow consumers to better manage their electricity usage. And, the national deployment of smart meters is forging ahead: according to federal sources, the current penetration rate is 13 to 18 percent, with a penetration rate of more than 50 percent predicted by 2016.
6. Offshore wind takes root in the Northeast – While small wind continues to grow, the greatest potential for the significant generation of energy from wind lies with offshore wind. Much of the eastern seaboard is ideal for offshore wind as a result of the fact that the relatively shallow waters of the continental shelf make it easier to locate wind turbines far offshore where the winds are the strongest. A 25-megawatt wind farm off the coast of Atlantic City, N.J., which is expected to be the nation’s first, is now moving ahead, and the Garden State can look forward to the construction of larger offshore wind farms with the implementation of the nation’s first OREC, or Offshore Renewable Energy Certificate, a wind incentive similar to New Jersey’s innovative Solar Renewable Energy Certificate, or SREC, which propelled the state to second place nationally after California in solar capacity and inspired similar incentives in many other states.
7. Dropping balance-of-system costs nudge solar closer to grid parity – As a result of a dramatic decline in module prices (prices dropped approximately 40 percent in 2011 — a decline that is expected to continue through 2012), attention has shifted to solar balance-of-system (BOS) costs, a term that refers to costs other than those of the modules. While BOS costs include physical components such as inverters and racking, the largest share of BOS costs is for non-physical costs such as labor and permitting. These costs are also expected to decline in 2012 as a result of industry consolidation resulting from the expiration of the Section 1603 Treasury Grant Program. The solar boom stimulated by the grant attracted many small installers (the “two Chucks and a truck” phenomenon) who will be replaced in a maturing market by larger players who will bring improved operating efficiencies to the industry, nudging solar closer to grid parity.
8. Distributed solar continues to thrive – While debate continues on the role of utility-scale photovoltaic systems in the nation’s energy mix, the small- to mid-sized commercial solar segment has witnessed explosive growth, particularly on flat-roofed commercial buildings that are ideally suited to the deployment of solar. New Jersey, for instance, where strong solar incentives and high energy prices have contributed to a robust local solar industry, has now outpaced California as the nation’s top commercial solar market, thanks to a high concentration of such buildings. In addition to reducing electricity costs and providing a hedge against future rate increases, distributed — or “behind-the-meter” — solar also has the advantage of generating power at the site where it is used, thus increasing energy security and diminishing demand for utility infrastructure. The U.S. growth pattern in commercial solar is mimicking what has occurred in Europe, most notably in Germany, the world’s solar leader, where the German Solar Energy Industry Association estimated in 2009 that 80 percent of capacity was roof-based.
9. Grant-to-tax credit shift means more third-party ownership of solar systems – The introduction of the federal Section 1603 Treasury Grant Program as a substitute for a federal Investment Tax Credit in 2009 created a change in the form of ownership for most commercial solar systems. Prior to the implementation of the treasury grant, which covers 30 percent of the cost of solar, most commercial systems were owned, operated and maintained by third-party investors with the tax appetites to monetize the tax credit. These investors typically sold the power back to the host entities at reduced rates under a long-term contract called a Power Purchase Agreement, or PPA. In addition to requiring no capital outlay, the benefits for the host entities included a fixed rate, a smaller carbon footprint and a visible renewable asset. After the implementation of the Treasury Grant Program, the form of ownership shifted, with the majority of commercial building owners taking advantage of the immediate payback offered by the grant to install and operate the systems themselves. With the grant reverting to a tax credit in 2012, however, we can expect a shift back to third-party ownership.
10. Gas-to-liquids technologies go mainstream – Gas-to-liquids (GTL) technologies, which transform natural gas into liquid transportation fuels, went mainstream with the recent completion of Shell’s $19 billion Pearl GTL plant in Qatar, an Arab emirate. The world’s largest GTL plant will process about three billion barrels of diesel, jet fuel and synthetic oil over the course of its lifetime from the world’s largest gas field. The project, which will reach full production in 2012, will add almost 8 percent to Shell’s worldwide production, making it the company’s primary growth engine for 2012. The completion of the Pearl facility is a harbinger of things to come: GTL technology is expected to play an increasingly significant role in meeting energy demand in the United States, which has some of the world’s largest natural gas reserves. South Africa-based Sasol, which also has a GTL plant in Qatar, has announced plans to build a $10 billion GTL plant Louisiana. If it moves ahead, it would be the United States’ first GTL facility. Once viewed as not economically feasible, GTL technologies are gaining traction in the face of declining oil reserves, high oil prices and increased concern about energy security.

For more information on Antenna Group, please visit www.antennagroup.com.

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