Influent | Technology in Motion

The 44th US President, Barak Obama, brings with him a very ambitious energy plan. The President’s legislation will benefit cleantech companies across the board from energy efficiency to wind and solar.

The plan entails three bills that aim to accomplish one goal—$150 billion to building clean energy.

The first is the $825 billion stimulus package that is expected to be signed into law in February. The bill includes $20 billion in tax cuts for alternative energy and research and development concentrated on energy conservation and efficiency, $32 billion to modernize the power transmission grid, $16 billion to retrofit public housing to use less energy, and $2.4 billion for developing technology to lower emissions at coal-fired power plants.

The second is a new energy bill that will call for a renewable mandate: 10 percent of the country’s electricity from renewable sources by 2012, and 25 percent by 2025. According to an interview conducted by Red Herring, Michael Eckhart, president of the American Council on Renewable Energy (ACORE), confirmed this mandate, stating the energy bill should contain a nationwide renewable electricity standard, also called a renewable portfolio standard, which requires an increasing amount of the country’s electricity to be generated from renewable sources like wind and solar.

Last, Mr. Obama also has his sights on creating a climate bill to reduce overall greenhouse gas emissions. The energy plan calls for a cap-and-trade system. Carbon-emitting companies trade emissions credits, or allowances, in an open market under a cap, or limit, on those emissions. The climate bill could mandate reducing greenhouse gas emissions by 80 percent by 2050.

There is a lot of excitement and anticipation around Obama’s energy bills in the cleantech community. According to the Center for Responsive Politics, the cleantech investment community voted Obama 6-1 over McCain in the election.

Administrative backing coupled with a real need for alternative energies sets the stage for the development and growth of today’s cleantech companies. Let’s hope the current economic situation does not detain the president from fulfilling his clean energy promises.

Like many start-ups, Influent is in the process of raising its next round of funding. The current economic crisis has created one of the toughest environments ever for start-up companies to obtain the funding critical to enable growth. According to Rebecca Buckman of Forbes.com, a prominent Silicon Valley investor stated that VCs “have been living off fumes for a long time now”. Returns and morale are low.

To compensate, VCs are demanding higher standards of diligence and taking advantage of market conditions to drive better terms, creating much lower pre-money valuations for start-ups. This ‘tightening of the belt’ only works to a certain degree. It’s once again time for VCs to embody their prospecting name, to make high risk/high reward investments. ‘Safe’ investments won’t always transform the marketplace or offer the high returns that are necessary to build VC funds. The current state of the economy might be abysmal, but this environment has the potential to drive VCs to invest in unlikely start-ups. Perhaps the next Google or Cisco will emerge.

Despite the economic downturn, there are VCs across the country participating in forums to find the next it company. Take Early Stage East for example, a conference held in Baltimore, MD to match start-ups with VC investors. The video conference coverage by Forbes.com, details the useful connections and feedback that entrepreneurs receive as conference attendees.

Some tips from VCs for pitching a company – branding is key, make outside references and resist that overwhelming temptation to overcrowd your slides.

What is it?

According to Neal Dikeman, creator of Cleantech Blog, “cleantech, also referred to as clean technology, and often used interchangeably with the term greentech, began in the venture capital community and has emerged as an umbrella term encompassing the invest asset class, technology, and business sectors which include clean energy, environmental, and sustainable or green, products and services”.

Nick Parker and Keith Raab, founders of the Cleantech Venture Network (now Cleantech Group), coined the term cleantech in 2002. The term has described “green and clean” technologies, particularly solar, biofuels, fuel cells, water remediation, and renewable power generation.

Where’s it headed?

I would like to suggest that a new trend is immerging in cleantech; a renewed focus on energy efficiency via hardware components for electronic devices and historical cleantech applications. These are the unsung heros of cleantech; the innovative garages that keep the big guys running. These hardware technologies are altering the landscape of cleantech, widening and redefining the definition to include all members of the supply chain.

This new momentum is being created by needs that are not being met by current solutions. According to Lee Bruno, a contributor to Venturebeat, computing density is driving server farms and other electronics to look for fan alternatives. New chips are expected to increase ten-fold in heat output over the next few years. Smaller hardware is required to do more work. A possible answer to this problem comes from a group of Purdue engineers that are designing miniature compressors and evaporators, which are critical for refrigeration systems. Their elastic membranes are made of ultra-thin sheets of a plastic called polyimide. And the plastic film is coated with a metallic layer that conducts electricity. When electricity is sent through the metal layer, the diaphragm can move back and forth to produce a pumping action researchers call “electrostatic diaphragm compression.” Development continues with this effort, but one can see that the heat problem is causing people to seek new solutions. A new standard thermal management system is needed that will create higher computing density, resulting in a greater level of efficiency from server farms to personal laptops.

Another example of a new hardware stems from the power consumption of data centers. According to Spansion CEO Bertrand Cambou, the data centers in the U.S. consume twice as much power as the collective solar footprint produces in the country. The only way to alter this statistic is to heighten the importance of energy efficiency at a product level. According to Greentech Media, Spansion wants to replace DRAM, the memory inside most servers, with a type of flash called EcoRAM. Spansion says that a data center based around the company’s flash costs 1/4th as much to operate, takes up 1/4th of the floor space and costs less than half of a traditional one because the chips use far less power and there is less need for air conditioning.

Just think if EcoRAM’s power saving product was paired with Purdue’s cooling solution. Now there’s some serious cleantech integration!