CleanStart Predictions for 2019: The Update

CleanStart Predictions for 2019: The Update

Dec 27, 2019

At the Begining of 2019, we made ten fearless predictions here for the coming year.  Now it is the end of the year and it is time to revisit them to see how we did.  If you have some insights or questions, let us know at Info@cleanstart.org and we will include those in a future newsletter.

Electric Vehicle registrations in Sacramento County will exceed 7,000 in total.   Through August 2018, the cumulative number for the county was 5,303, with 1,109 added to date in 2018.  In the ten-county CleanStart region, the cumulative number was 13,791 with 2,714 added in 2018 through August.  For that region, the total may exceed 18,000 by the end of 2019. For all of California, the cumulative number to date is 270,459. Of those, 4,569 were fuel cell vehicles, by the way.    Through August, 43,207 electric vehicles were added statewide in 2018, about 5,000 per month. For perspective, the total number of cars registered in California is about 14.5 million.

RESULT:  This we were half right, but the data set we used had a flaw.  In fact, the cumulative number of EV registrations in the ten-county region by the end of 2018 was 28,182, not 13,791.  In effect, we predicted a 30% growth in this number in a year. Using the new data and extrapolating to year-end 2019, the cumulative registrations were about 34,000, a 20.6% growth.  We were too optimistic about the growth rate. However, the rate may have picked up in the fourth quarter more than we estimated. For Sacramento County alone, registrations reached 10,910 by the end of 2018, and we estimate will be over 13,500 by the end of 2019.  Statewide the totals for battery-electric and plug-in hybrid vehicles were 112,961 just for 2019 through 9/30. Total vehicle sales were 1,427,578 for the same period, so the BEVs plus PHEVs represented 7.9% of all new vehicle registrations. That’s up from a 3% share in 2015.  Wow!  

Predictions Score: 0.5/1

Tesla will barely reach annual cash flow breakeven; production will exceed 300,000 vehicles for the year.  Tesla produced over 180,000 vehicles in the 12 months ending 9/30.  Over the same period, it was still negative $600 million on cash flow and lost $2 billion in net income.  The third-quarter positive net income is encouraging, but may not be a trend. With 300,000 vehicles delivered, Tesla should be able to climb out of the hole it is in.  It still has $2.5 billion in cash reserves. For perspective, globally Porsche produced 246,000 cars in 2017 and Volvo 571,000. Worldwide car production is a whopping 73.5 million.

RESULT: We were half right.  In the twelve months ending 9/30, Tesla delivered 345,700 vehicles, better than we expected but clearly more than 300,000.  In terms of annual revenue, that was $24 Billion for Tesla, compared to Ford with $160 Billion. However, the company did not reach cash flow breakeven for the same period.  At the end of the third quarter, the company had a negative $11 million in free cash flow. Free cash flow is net operating cash flow minus capital expenditures. Cash reserves were $5.3 billion, which seems like a lot, but with $24 billion in sales, little hiccups can quickly lose billions.  Free cash flow in the third quarter of 2019 was better, which allowed Tesla to build that small cash cushion. Still, Tesla is not out of the woods, with $11 billion in debt hanging over its head. Nevertheless, its stock reached an all-time high of 422, likely propelled by the announcement of a factory in Shanghai. 

Predictions Score: 1/2

High Speed Rail funding will be dramatically reduced, freeing money for other carbon reduction projects.  State law requires 25% of the proceeds from the auction of carbon allowances go to the High Speed Rail project.  The last quarterly auction in November 2018 raised $813 million, sending $203 million to High Speed Rail. The project likely will be less popular with Gov. Newsom given its escalating price tag and waning public support.  The legislature could quickly eliminate or reduce the 25% allocation.

RESULT:  It’s not dead yet, but funding definitely was dramatically reduced.  Governor Newsom has said we should take another look at it. The Federal Railroad Administration wants its money back and says it will award no more.  The HSR Authority is trying to let a $119 million contract to finish a Bakersfield-Merced section, and the Legislature is trying to figure out whether to keep funding it.  Nothing has been done to change the 25% earmark on the cap and trade proceeds. Were we right? Partially.

Predictions Score: 1.5/3

Prices for a ton of carbon emission reduction will rise, but not break $20.  The price in the cap-and-trade auctions had been steady at $12-13 for 2015 and 2016, but has now risen above $15.  The increased demand for carbon-free electricity as a result of SB 100 and the extension of the cap and trade program for an additional ten years to 2030 has been adding pressure on prices.  However, progress in finding greater supplies of emission reduction projects will moderate any upward price pressure.

RESULT:  The most recent price is $17, down from a peak of $17.45 reached in May

Predictions Score: 2.5/4

The installed cost of solar PV will rise modestly, slowing the trend of the last five years.  The tariffs on imported PV panels from China are affecting the market price here, even while panel prices in China continue to fall.  Installed costs for systems under 10 kW fell from $5.46/kW in 2015 to $4.58/kW in 2018 so far, according to www.californiadgstats.ca.gov. Panel prices are now only a minor part of the total installed cost, so downward trends in other costs may continue.  But increased inflation and interest costs may be a factor. The net result will be a 2019 cost of $4.60-4.70/kW.

RESULT:  The current price is reported as $4.51 per watt, lower than we predicted, even in the face of the tariff on imported panels from China.

Predictions Score: 2.5/5 

A major investment in incubator space will be made in the region.  It will include equipment for making and testing prototypes.  Momentum has been gathering for some time.

RESULT:  While several groups in the area announced they were pursuing such space, none actually happened.  Maybe they will in 2020. The biggest fanfare was the announcement that powerhouse WeWork was coming to Sacramento, but that quickly fizzled along with the We Work IPO. SMUD has funded a feasibility study for a California Mobility Center and has promised matching funds.  So we are optimistic but are still waiting.

Predictions Score: 2.5/6

A new cleantech company will move here.  The shift of companies from the Bay Area to here to take advantage of lower costs and an easier lifestyle has been happening slowly.  In 2018, Highlands Power, a manufacturer of high-efficiency electric motors for EVs, moved its HQ here from the Bay Area. Propel Fuels did the same in 2015, returning after leaving this region for the Bay Area earlier.  We expect the trend to continue.

RESULT:  None actually moved here.  Several are still considering it, though, and some have had team members move here for the reasons we described.

Predictions Score: 2.5/7

Expanding number of startup storage companies.  This is a hot area globally and there a number of creative geniuses in the region we expect will launch new companies in this sector.

RESULT:  Right on the money.  Triphammer (grid-scale storage) and Off the Wall Energy (mini-scale modules for the home) came on the scene. Along with the growth of others such as Repurpose and Spin, look for this trend to continue.

Predictions Score: 3.5/8

Two local cleantech companies will receive over $25 million each in new investments.  Investment proposals are floating around now and there are good indications of imminent success.

RESULT:  There were two significant investments. In July Sierra Energy received a $33 million investment led by Breakthrough Energy Ventures, but there was no other comparable to this.  Greyrock Energy received investment from AP Ventures and the Grantham Environmental Trust. The amount was not disclosed, but we believe it was substantial.

Predictions Score: 4.5/9

Three companies will be sold or merged.  The exit process has been slow in the region.  Our expectations are modest.

RESULT:  Not a one happened.

Predictions Score: 4.5/10

Well, this was fun and predictions are difficult. Even with this hindsight, we feel these were still pretty good predictions and could all be truer over the near future.  There is a lot of momentum in the Sacramento Region around Cleantech and we are excited about 2020.  Make sure you stay tuned to ding out!

Follow us on Social Media to keep upto date!

Thomas Hall

ABOUT THE AUTHOR

Gary Simon is the Chair of CleanStarts Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.

CleanStart Sponsors

Weintraub | Tobin, EY, Stoel Rives, Greenberg Traurig LLP

BlueTech Valley, Buchalter, Moss Adams, PowerSoft.biz

College of Engineering & Computer Science at Sacramento State

Another Advance in Fast Charging, But Only Half the Story

Another Advance in Fast Charging, But Only Half the Story

Dec 11, 2019

A team in Ottawa recently had some success in using micro-pulsing to recharge Li-ion batteries much faster, like a full EV recharge in 5 minutes.  See this article.  That’s a big deal.  But it switches the problem from “how fast can a battery accept a charge” to “how fast can a charging station deliver power”.  There is a gold mine awaiting someone who has a good solution to that problem.  

Here’s what’s going on:  Lithium-ion batteries, at least the ones we have now, develop high resistance to incoming current during recharging.  High resistance creates heat and heat slows the charging process even more. The trick has been to pulse-charge the batteries and actively cool them to get more power in faster, using a battery management system.   The resistance recedes in the off phase, then when charging is switched back on the resistance is once again low. The Ottawa team has found a way to put in such small pulses at high power that the batteries never get into much of the high-resistance mode.  That should also mitigate the need to cool the batteries. They claim a car could get a full charge in 5-10 minutes, putting it right in the range that it takes to refuel a conventional car.  

Other teams are working on solid state batteries that don’t have this troublesome feature of resisting the incoming charge.  They are hoping to get to similar recharge times.

But that just transfers the problem to another part of the system.  We have written on this before. How must a recharge station be powered to deliver such massive amounts of power in such a short time as 5 minutes?  It’s just math. If a full charge gets you 480 miles of driving, and your EV gets 3-4 miles per kilowatt-hour of charge, you will need 120-160 kWh for a recharge.  To get that in five minutes, you would need to be able to provide power at the rate of 12 five minute intervals per hour times (120 to 160 kWh per 5 minutes) = 1.44 to 1.92 Megawatts per hour.  To keep the thickness of the wire within reason, the current would likely need to be limited to 50 amps (the more amps, the more copper in the wire would be needed). So how many volts would be needed to deliver up to 2 MW per hour at a rate of 50 amps?  Watts = Volts times Amps, ideally. So 2 million watts/50 amps = 40,000 volts. Yikes! Lots of safety systems required to prevent the average knucklehead from getting electrocuted.

More importantly, these kinds of MW-level power capacities are not found on a typical electrical distribution system and certainly not something one could put in a home.  It would require tapping into the power grid closer to a substation level where 69 kV and 115 kV lines are available to prevent the instantaneous draw from recharging putting too much of a strain on the system.  Or putting recharging stations near big solar farms. And there likely would need to be some serious capacitor banks to store up power for the bursts needed to deliver to the chargers. In other words, now a fast charging station is a serious piece of electrical gear that can have serious consequences for safety and for the grid that need to be dealt with.

Anyone out there got a better idea how to do this delivery part of the recharger system?  If so, it could be a goldmine for you because ultrafast chargers are likely to be much in demand as the charging technology continues to improve.

Thomas Hall

ABOUT THE AUTHOR

Gary Simon is the Chair of CleanStarts Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.

CleanStart Sponsors

Weintraub | Tobin, EY, Stoel Rives, Greenberg Traurig LLP

BlueTech Valley, Buchalter, Moss Adams, PowerSoft.biz

College of Engineering & Computer Science at Sacramento State

Packed Crowd Hears about Rising Stars of Solar

Packed Crowd Hears about Rising Stars of Solar

Dec 10, 2019

It was standing room only on December 5 at our last MeetUp of the year.  The theme centered on some new products in solar—our regional “Rising Stars”.   First was Erica Lindstrom of Sustainable Technologies with their Facet product, a clever anchoring system to put PV racks on flat roofs on commercial buildings without causing leaks. Since over 80% of the cost of rooftop solar is in the racking, labor and power electronics, Facet is cutting costs where it counts the most.  It may not be obvious, but putting PV panels on a commercial building roof is not so easy. Usually the racks are just laid on the roof and ballasted with concrete blocks to prevent them from moving, or a system must be engineered to anchor where there are beams underneath one can bolt into. Using Facet reduces this part of the installation cost by 40-50% and provides more assurance that the roof remains leakproof.  Erica Lindstrom said the Facet anchors are catching on rapidly, and being approved by more and more building departments, leading to rapid growth. Facet was a runner up in the recent regional Sustainability Innovation Awards. We have profiled them in another blog. 

Sustainable Technologies Facet

Facet Design

Second up was Kevin Logue with Spotlight Solar.  His product is a “solar tree”. It is a mounting system for putting panels on “branches” off a central “trunk”.   The result provides shade, a placed to sit and USB outlets for charging as well as 115 V AC outlets. A typical installation provides 3.6 kW of power.  It is not as economical as a ground mount or roof top solar, but that is not the point. The idea is to make people more aware of solar PV and use it in parks and plazas.  It is as much a piece of art as a power generator. Kevin is based in Fair Oaks as the West Coast salesman for Spotlight based in North Carolina. He already has several projects underway in the area, some funded in part by SMUD.  As a part of their approach, they train local workers to install these systems. They are looking for more sites.

Alliant Energy built a solar testing and education center with Spotlight Solar trees to engage customers and the public.

Then Al Rich of ACR Solar presenting his innovation the MegaMat.   Al has been in the solar business for 45+ years. He got his start in selling solar thermal systems when PV was too expensive.  Now he does both kinds of installations since PV became economic. But his real passion is for collecting the heat from the PV panel so that two products are harvested from the same area of sunshine.  His MegaMat is attached to the back of a PV panel and circulates water. The water gets hot and the panel gets cooled so that it actually puts out more electricity. Heat is the enemy of PV efficiency. On a hot summer day, the PV panel may reach 150° F.  The MegaMat could lower that temp by 40°. As a rule of thumb, PV panel output decreases by about 0.25% for every degree F above 77°F, so dropping the temp by 40°F would add 10% to the output. The MegaMat is composed of an extruded high-density polymer with a lifetime of 50 years in direct sun.  Since it installs under the PV panel, lifetime should be better. Al has the MegaMat on a test home now to confirm the concept.  

 

Al Rich shares his ACR Solar experience and MegaMat 

These were really unique presentations, and demonstrated how diverse our solar clean tech companies are in the region.  Our next MeetUp is planned for the third week in January. Keep a watch for the announcement.

Thomas Hall

ABOUT THE AUTHOR

Gary Simon is the Chair of CleanStarts Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.

CleanStart Sponsors

Weintraub | Tobin, EY, Stoel Rives, Greenberg Traurig LLP

BlueTech Valley, Buchalter, Moss Adams, PowerSoft.biz

College of Engineering & Computer Science at Sacramento State

Follow us on Social Media to keep upto date!

Four Outstanding Companies Pitch at First CONNEX Sacramento Event

Four Outstanding Companies Pitch at First CONNEX Sacramento Event

Dec 9, 2019

This event on Dec. 4 was the culmination of a decade’s effort to put the spotlight on investable clean tech companies in our region.  Four outstanding companies delivered clear, compelling, and high-quality presentations on their companies to a packed crowd of investors and supporters at our first CONNEX event, in collaboration with New Energy Nexus (formerly the California Clean Energy Fund or CalCEF).  It went so well, we are planning a second one in March, with three companies already wanting to participate.  

The pace of investment in new clean tech companies is not so much determined by the amount of money available.  We have often said that there is plenty of money available for good clean tech investments. Over $5 billion per year was invested at the peak and even now over $2 billion in investments are still being made each year.  But there have been two missing ingredients for capitalizing a larger number of startups in this region. First, is having a number of companies that are “investable”, that have a well-formed idea of their customers, their product, their paths to market, their profitability, and their competitors to be able to make a convincing case to investors.  Startups need a lot of coaching, training, cajoling, feedback, research, testing, and rethinking to get to an investable stage. There are many sources for this kind of help. CleanStart not only provides some of it but also serves as a portal to help offered by many other organizations.  

Second, startups need a source of funding to cover the costs of proving their concepts and getting some hard data from early prototypes and demos.  This has been the hardest money to find. It is usually more than one bank account can cover, even a few friends’ bank accounts. Clean tech startups in California are lucky to have a source for this funding available from a surcharge on electric bills and managed by the California Energy Commission.  The CalSEED (California Sustainable Energy Entrepreneur Development) Fund provides initial $150,000 grants to applicants for proof of concept work and then another $450,000 to those proving their worth.  Typically each year 25 small grants are made out of 100+ applicants, and 4-6 are advanced to the second stage from prior years’ awards. To date $15 million has been awarded to 70 startups. The program is managed by New Energy Nexus. Part of that program is to give awardees experience in making presentations through the CONNEX events.  New Energy Nexus asked CleanStart to put on such a session in Sacramento for a crop of “investable” companies.

There was a broad view that these were some of the best presentations ever made by clean tech companies in the region and maybe even statewide.  Here’s the best news: You can watch these presentations as though you were there. We recorded everything and have them available soon, so make sure you follow CleanStart.  We will also have highlights from the event if you don’t have the 90 minutes to watch all the videos, and the slide decks from each are available here.  

Here’s a quick take on each of them:

Eric Cummings of MaxOut Renewables has a way to lower the cost of the combined inverter and power management system for home solar systems by 50-65% and add a small amount of storage to get the maximum output.  In addition, they indicated they could isolate the home system from the grid in time of outage  in order to keep the home powered for a time. Almost all homes now just cutoff the power from the PV panels during an outage, leaving the home powerless even though a power source is right there.  Ironic that homeowners have been buying small generators to keep their refrigerators running while the PV array is useless.

Sergey Vasylyev of Empow Lighting showed how to convert fluorescent fixtures in buildings to LED panels at a cost 80% below the other systems available.  Their CoreGlo product is a thin, flexible acrylic plastic panel lit by LEDs on the side. Their patented IP is the way they print a pattern on the acrylic to make the light from the LEDs spread uniformly over the panel.  They are working now on how to change the color electronically. They are looking for an established partner as their path to market and are getting a lot of interest. However, they expect to be setting up a small manufacturing plant in Sacramento to get the product out to customers and make a bigger impact. 

Angelo Campus of BoxPower reported a similar phenomenon with interest in its “renewable-based microgrid in a box” booming given all the power outages in California.  Inquiries are up 30-fold and search traffic is up 50%. Now the issue is how fast can they gear up to produce 3 times as many boxes per year and get them installed.  Good problem to have.  You can read our profile on them here.

Zach Denning of Hank reported installations of its virtual building engineer energy management system continues to grow rapidly.  They are raising a small investment to be able to gear up to take advantage of all the interest, leading to a much larger investment round in 2020 to put the throttles to the firewall. Check them out from winning the Sustainablity Awards this year, our October Cleantech Meetup and our profile from when they first arrived.

None of these four is an overnight success.   Each has put years into developing a product, testing it in the market, and perfecting a compelling value proposition.  There’s a message in that for all trying to launch a cleantech startup. The key may be in reducing the learning time and in adapting faster to try to shorten this process.  CleanStart will be offering some workshops in 2020 on how to do this in order to cut out some of the pain of growing a startup. Keep an eye out for the announcement of these workshops.

And don’t miss the next CONNEX event in March.  It may be even better than the first.

Follow us on Social Media to keep upto date!

Thomas Hall

ABOUT THE AUTHOR

Gary Simon is the Chair of CleanStarts Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.

CleanStart Sponsors

Weintraub | Tobin, EY, Stoel Rives, Greenberg Traurig LLP

BlueTech Valley, Buchalter, Moss Adams, PowerSoft.biz

College of Engineering & Computer Science at Sacramento State

Necessity Gives Rise to a New Company

Necessity Gives Rise to a New Company

Dec 3, 2019

In 2006, a solar developer had a problem.  It wanted to win the bid to cover the roof of the Staples Center in Los Angeles with PV panels.  But like many arenas, the roof wouldn’t bear much weight and more importantly, the owner wanted to be sure the installation wouldn’t cause any leaks.  Looking at all the conventional ways to secure PV panels to the roofs of commercial buildings, the developer could not find anything suitable. Conventional systems are designed for only flat roofs and the Staples Center roof was gently curved.  More importantly, typical systems used ballasting to hold down the racks of panels to avoid making holes in the roof. But then the racks can move or the ballast (usually concrete blocks) can deteriorate. With no other option, the developer turned to its own engineers to design a new lightweight installation system appropriate for the curved roof.  And it worked. They won the bid. They installed the panels. And after a decade, still no leaks.  

In fact, the system worked so well, they decided to make a business around it.  That was the origin of Sustainable Technologies in North Natomas and its flagship product, the patented Facet Roof Mount.  It looks like a small flying saucer with a threaded center section for a bolt to hold the PV racks. It’s so simple that PV installation times are slashed and costs reduced as well.  It is used in conjunction with various flashing and sealing methods to ensure that it is water-tight. 

  

It works so well, sales are zooming, with over 85,000 likely to be sold this year, up from 30,000 last year.  The units themselves are outsourced to China, with sales done directly or through US distributors. No significant sales have been made outside the US, but a move into European markets is on the horizon.  In our judgment, the big milestone for this company is probably getting unit sales over the 10 million mark. The 120,000+ mounts sold to date support about 10 MW of solar installations. When 1000 MW worth of mounts have been sold, the technology will be on lots of developers’ radar screens and sales should zoom.

According to Erica Lindstrom, Sales and Operations Manager, the key to getting sales is receiving approvals from the roofing manufacturers and most importantly from building standards agencies.  They have certifications from most manufacturers that the use of their system does not void warranties, and are working on getting it for the most popular roofing material—EPDM or polymerized Ethylene Propylene Diene Monomer, commonly called a “rubber roof”.  Building department approvals are a longer game. Every locality and state has its own rules. Erica says they just got approval from the LA city building department to unlock one of the biggest markets in the country. Awesome!

Thomas Hall

ABOUT THE AUTHOR

Gary Simon is the Chair of CleanStarts Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.

CleanStart Sponsors

Weintraub | Tobin, EY, Stoel Rives, Greenberg Traurig LLP

BlueTech Valley, Buchalter, Moss Adams, PowerSoft.biz

College of Engineering & Computer Science at Sacramento State