A new solar array that creates both electricity and hot water made its debut at a California winery yesterday, in the presence of investors including venture capitalist Vinod Khosla and former British Prime Minister Tony Blair.

Both Blair and Khosla see a big future for Cogenra, a solar co-generation (producing both power and heat) company formed just 15 months ago with a scant $10 million of funding. With five times more energy production than photovoltaic technologies, Cogenera’s system may help traditional investors discover that the economics of clean energy are quite attractive.

“Climate change will not wait for the world to be ready for it,” even during a financial crisis, Blair said at the Cogenra event. Blair added that he’d told the same thing to disbelieving US officials, who tend to think that eco-efficiency and saving money is an either/or choice.

The generator at the Sonoma Wine Company in Graton not only produces power, but efficiently heats water for agricultural and industrial processing – saving fossil fuel expenses, ensuring supply and reducing price volatility.

Since cogeneration yields both electricity and heat (which combined account for 70 percent of energy needs in the United States), the Cogenra solar solution can drop heating bills as well as electric bills – especially for intensive users like food processors, pharmaceutical firms and the military.

To make it easy for customers to say yes – and avoid upfront capital investments – Cogenra is pioneering a Heat and Power Purchase Agreement. This approach provides a predictable discount to energy and heating expenses, says Sonoma Wine Company owner Derek Benham, who signed up with Cogenra months ago “on a handshake” and expects an accelerated payback versus a nearly decade-long payback on many solar-photovoltaic solutions he had considered.

The new business model, along with new technology, helped Cogenra win a coveted $1.5 million grant from the state Public Utilities Commission. The “Research, Development and Deployment (RDD)” grant is distinctive among government incentives for its systems-thinking approach: It encompasses the technology’s invention and also its implementation.

With potential applications in strong sunshine markets ranging across Texas, Nevada, New Mexico, Colorado and Hawaii, Cogenra CEO Gilad Almogy sees plenty of opportunities to save customers money and dramatically reduce both energy and heat usage. The initial roll-out for Sonoma Valley agriculture is benefiting from Silicon Valley technology. This first installation is serving 30 percent of the winery’s electric needs and about half of its heat (mainly hot water) requirements, but Benham expects to be “fully off the grid” in about three years. He expects to cover 30,000 square feet of roof with Cogenra’s systems. “We want to diversify our energy needs away from natural gas and oil – and make money doing it!” Benham says.

To be this affordable, Cogenra has worked with “off the shelf” standard products and a “low-tech” approach. The parabolic solar thermal design doesn’t require curved glass, but has layered flat glass panels in a parabolic shape – simplicity has conquered complexity. This drops the capital required to launch Cogenra to a manageable $10 million. “This is much more compelling than the $500 million that other solar companies have raised or collected grants and guarantees on,” says Pierre Lamond of Khosla Ventures and board chair of Cogenra. “You need to be super-efficient with capital to be commercially viable.”

Cogenra’s engineers were relieved that they achieved the aggressive timeline scheduled for the release of this first installation. However, the permitting process remains a key “speed limit” to faster implementations. Wildlife, water and environmental assessments and risk mitigation plans are required for many permits. For clean energy solutions to propogate, government and stakeholders need to be engaged early in the process. Thus, Cogenra’s breakthrough technologies also need a human-driven innovation – engaging the citizen groups and regulators early on in the deployment planning.

However, Cogenra CEO Almogy says that on-site commercial energy systems should lead to smoother permitting and potential standardization, like Solar Tech and the solar energy association are advocating, and Germany has adopted.

What have Tony Blair and Vinod Khosla discovered? Dedicated entrepreneurs with breakthrough innovations can land pioneering customers – who benefit with lower energy and heating bills, reduced fossil-related emissions, and create sustainable bottom lines – all while engaging the local citizenry in doing good for the climate.

Are investors and government regulators listening? The silent sound of solar power and heat is beginning to yield financial benefits, cleaner climate, and energy independence.

R. Paul Herman is CEO and Founder and a registered representative of HIP Investor Inc., (http://www.HIPinvestor.com) an investment adviser (registered in CA, WA and IL) and wealth manager of sustainability-focused portfolios, including the HIP 100 Index portfolio. His new book, The HIP Investor: Make Bigger Profits by Building a Better World (http://bit.ly/HIPinvestorBook), is published by John Wiley & Sons. All information presented is for informational purposes and are not investment recommendations.

Article appearing courtesy Matter Network.

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HCL CleanTech Ltd., a biofuels start-up based in Tel Aviv, announced today a $5.5 million Series A financing led by Khosla Ventures, Burrill & Company, and angel investor Zohar Gilon.

HCL CleanTech has developed a proprietary technology to make an old, industrially proven German process converting lignocellulosic biomass to fermentable sugars economically attractive. According to the company, it is these fermentable sugars which are considered the gateway to advanced biofuels (biobutanols, biodiesel, jet fuel etc) and biochemicals (bioplastics etc).

“Accessing cheap sugar locked in biomass is one of the greatest challenges now faced by those pursuing renewable fuels and chemicals. HCL CleanTech’s technology represents a step change in accessing these sugars, and drops into the pretreatment step of any fermentation-based process or chemical reforming technique which starts with oligosaccharides,” said Burrill & Company Director, Greg Young. “We are eager to see this proven at scale, at which point it becomes immediately relevant to adjacent industries aiming to use biomass as a feedstock.”

HCL CleanTech was founded in 2007 by Prof. Avram Baniel, Prof. Ari Eyal and Eran Baniel.

The Series A funds will be used for R&D in Israel and for construction of a pilot plant in the United States schedule to be completed in 2010.

This article first appeared on Jonathan’s blog CleanTech Israel.

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Happy Earth Day… I hope you rode your bike to work, ate only vegetables, brought your own cup to Starbucks and followed the instructions in the signature line of your boss’ email and didn’t print it unless it was truly necessary.

If you are new around here – I was a Marine officer before running off to Europe for grad school and dedicating my professional life to sustainability. One of my happiest associations is with that group of men and women (the Marine Corps), and I can continue to do so through the Marines’ Memorial Association here in San Francisco. I’m very happy to support bringing relevant discussions to this venue that satisfy both my interests (likely yours if you are on this site) and that organization’s values, so if you have some ideas that need a venue and a good audience, please send me a note and we can chat about putting events together.

That said, next week you might want to mark your calendar for an event there and another fantastic event down the street at the Hotel Nikko.

On Wednesday evening the 29th I welcome you to join me in a discussion with the Former Director of the CIA and current Venture Capitalist Jim Woolsey speak about Energy, Security, and the Long War of the 21st Century. He is a terrific speaker and makes a very compelling argument to invest in local and distributed energy solutions that uphold the scrutiny of both conservatives and progressives alike (I’m not sure that those two words are necessarily always opposites).

Wednesday, April 29, 2009
Energy, Security, and the Long War of the 21st Century
Time: 6:00pm-7:30 pm

Another fabulous event that is personally very interesting (as a half-Colombian and global citizen) and that I would have liked to participate more on is the “Implementation of Renewable Energy in the Emerging Markets of Africa, Latin America and the Caribbean.”  The conference seeks to support what CleanTechies like us are all about – “getting it done” and creating partnerships between parties that bring different skill sets and opportunities to the table.  They will have representatives from Nigeria, Botswana, Mauritius, Tanzania, Mozambique, Colombia, Mauritius, Rwanda…. (shall I continue?) India, Argentina… you get the picture. Visit their site, and I encourage you to go. The organizers have been working on the event for over six months and there is still some room.

Monday through Wednesday, April 27-29, 2009:
Implementation of Renewable Energy in the Emerging Markets of Africa, Latin America and the Caribbean
All Day Conference

Check out our events calendar for additional events (and please add more that aren’t in there). Here are two other events we are very proud to promote and support.  The MIT Club of Northern California and the HBS Association of Northern California are co-hosting two events that are open to the public as part of their Business Careers in Clean Tech and Entrepreneurial Networking Series.

Monday, May 11, 2009:
How to apply your skill set and identify pathways into clean tech careers
Time: 6:00pm-8:30 pm

Panelists:
Anne Feldhausen, Hewlett Packard Marketing Manager for Green Business Technology Initiative
Mamoon Hamid, Principal at U.S. Venture Partners specializing in Clean Tech
Samir Kaul, Partner at Khosla Ventures and leader in the Clean Tech space
Mark Ostrau, Partner, Fenwick and West, member of  Technology Transactions Group

And, for the more entrepreneurial a month later:

Monday, June 8th:
Starting a Clean Tech Business
Time: 6:00pm-8:30 pm

Panelists:
Matt Goldman, Co-founder and President Sustainable Spaces
Alex Kinnier, Partner at Khosla Ventures
Deborah Magid, Director, Software Strategy, IBM Venture Capital Group
Scott Newcomb, CEO Virgance

Both events are going to be held in the San Francisco “South” Bay at:

Fenwick and West
801 California St
First Floor
Mountain View, CA 94041

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It already has to some extent.  I hate to be overly pessimistic, but sometimes you can’t just “make do.”  With the exception of high expectations from the Obama administration, things don’t look particularly great between the news of job cuts from Ausra, SunTech, OptiSolar and the abysmal rate at which new companies (and projects) are getting financed. Since the valley-jarring Sequoia deck slowed down bandwidth throughout the bay area in a display of viral marketing that rivaled anything put together by web 2.0 gurus, valuations have gone down, budgets have gotten stretched, and start-ups with great teams and traction have been told to jog in place.

To be clear – the current state of affairs is certainly not Sequoia’s fault – all they did was send a clear warning to their VC brethren. Without a clear horizon for when more funds will become available, many companies that are developing technologies and meeting agreed-upon milestones are struggling to find the cash for follow on rounds. While they scramble for dollars their values plummet as they let employees go.  Having made big bets early with the expectation that 1) valuations would rise if targets were met and 2) syndicating further investment rounds would be a straight forward process, early stage investors like Khosla Ventures and Kleiner Perkins (KPCB) are particularly at risk. Now that valuations are plummeting, their investments – should they find further funding – will be diluted heavily.

On Tuesday I wrote that MMA’s success won’t be measured by its past performance deploying capital but rather on how quickly it can raise its next fund. The problem is equally pressing on the Venture Capital side; KPBC is seeking funds to extend the life of some of its investments, allegedly opening the door to new LP’s (limited partner investors).

The frivolous use of equity financing by venture capitalists in 2007 and 2008 has reared its ugly head.  Like the picture, there are some things you take for granted in good times.  Going forward, debt financing will have to be used more cleverly to fund the less risky portions of capital investments, specifically in expensive plant outlays that have value in other applications.  Naturally, the problem is that this fact is becoming patently clear just when there isn’t debt out there for the taking.

Why did investors and CFOs use equity to finance the projects and these companies?  Well, debt takes longer to justify, and during the heady times of CleanTech time was of the essence. Installing plants was critical for keeping a company’s name in the green energy tabloids.  Those that will suffer are the equity investors and the entrepreneurs and scientists that were focused on their projects that failed to realize until too late that venture capital should be used to fund salaries and the tech-risky and proprietary portions of a company.

As for finding a job in clean energy, if you are a generalist, you’ll likely have to wait; right now you just can’t add value to the bottom line because there is nothing to market or sell, however experienced scientists and engineers are still going to be needed to prove their founders’ claims. Once they do, and legislation stimulates debt financing, the market will pick up but career changers will need to network and make relationships to beat out those that were just released from service at companies around the globe because they have the rolodex to find the deals.

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