New York 1 of 3 "Naturals" for Solar Power Generation:

Verizon’s $100M Fuel Cell and Solar Power Play

PV from SunPower and fuel cells from ClearEdge’s UTC, with reliability, ROI as key metrics

JEFF ST. JOHN: APRIL 30, 2013

Verizon has just pledged $100 million to the premise that solar power and fuel cells can pay for themselves over time. On Tuesday, the telecommunications giant said it would invest $100 million in a combination of solar PV projects from Total’s SunPower, and natural gas-fueled fuel cells from ClearEdge’s UTC, at nineteen sites in seven states.

The deployment puts Verizon in the company of corporate giants such as Apple, Google,Microsoft, AT&T and others that are adding renewable power and on-site generation assets to their mix of energy resources. In Verizon’s case, the investment is also a test bed for proving that clean energy investments make business sense across a range of environments, from corporate offices to data centers and network switching hubs.

“We look at this as a ten-year ROI, with a net present value that had to be positive,” James Gowen, Verizon’s chief sustainability officer, said in a Tuesday interview. Verizon and its partners chose their nineteen locations from a starting list of hundreds, and actually inspected 60 finalists all the way down to permitting and right-of-way issues, he said.

Gowen also stressed that Verizon owns the systems it’s installing here, rather than setting up power purchase agreements (PPAs) to buy green power from someone else. “We’ve been evaluating SRECs, all the other ways you can get into renewables, and made a conscious decision not to do any of those,” he said. Both ClearEdge and SunPower are providing ongoing device operations and maintenance, and Verizon, true to its core business, is helping to network all the disparate units to feed back to the vendors’ network operations centers for monitoring and control, he said.

As for payback, it’s expected to come via reduced utility bills, improved reliability and carbon reductions. The new projects are part of Verizon’s commitment to reduce its carbon intensity metrics by 50 percent by 2020, Gowen said. But they’re also designed to provide Verizon’s always-on IT infrastructure the power it needs, both to reduce its daily reliance on utility power and to keep the network running during emergencies.

“Onsite generation of energy, no matter what kind it is, is key,” he said. For example, during Hurricane Sandy, Verizon was able to keep its network up and running, in part through its UTC fuel cell unit at its Garden City, N.Y. center in Long Island (PDF). At the same time, the $15.7 million, 1.4-megawatt project pays for itself on its own rights, boosting the building’s cogeneration system efficiency from 30 percent to 70 percent, and saving about $500,000 a year in the ten years it’s been operating.

All told, Verizon is planning to deploy fuel cells in California, New Jersey and New York, which will generate more than 60 million kilowatt-hours of electricity and reduce carbon emissions by about 60,000 tons per year. While UTC’s fuel cells still run on natural gas and still convert it to carbon dioxide, they emit less CO2 than the grid-scale, gas-fired power they replace, and also cut down on all other pollutants that come from burning the stuff.

While Verizon hasn’t released financial details on its fuel cell order, it’s by far the biggest one yet for ClearEdge Power, the Hillsboro, Ore.-based startup that bought fuel cell industry veteran UTC late last year. Right now, Verizon is just buying UTC’s large-scale phosphoric acid fuel cells (PAFCs), which match the units that have proven themselves in Verizon’s Long Island center.

In 2014, Verizon intends to test out ClearEdge’s smaller, proton exchange membrane (PEM)-based fuel cell units, Gowen said. ClearEdge recently laid off roughly one-third of its workforce, and raised a $36 million venture capital round in January. No doubt the Verizon deal is good news for the company, both on the strength of its commitment to UTC’s technology and the potential for ClearEdge’s PEM units, which generate power and heat, to get into deployment.

On the solar power front, Verizon and SunPower are planning projects in California, Maryland, Massachusetts, New Jersey, Arizona and North Carolina, with a combined annual output of 8 million kilowatt-hours once they’re up and running by year’s end. Some of those are being deployed in combination with fuel cells, while others are solar-only, he said.

Verizon isn’t planning to combine fuel cells and solar panels in its first wave of projects -- “our first deployments will be blocking and tackling,” Gowen said. At the same time, at least for now, all the projects are “grid parallel to everything -- we’re not taking any of our facilities 100 percent off the grid,” he said.

Still, in the future, Verizon is interested in seeing how fuel cells could help balance out the intermittent nature of on-site solar PV, or allow for grid-balancing operations inside buildings, he said. Verizon is also networking and managing building energy use in several of its own facilities, though it hasn’t yet looked at integrating those in-house and partner-provided software platforms into what it’s doing with fuel cells and solar panels, he said.

As for what’s next on Verizon’s green energy plans, Gowen said that it’s far too early to say how many other of its facilities could pay themselves off on equivalent types of deployments. Much depends on the state-by-state incentive structures for green power and onsite energy, as well as the site-by-site needs for constant backup power, he said. While markets like California, New Jersey and New York are naturals for solar power in particular, states with low power prices and few green energy or efficiency incentives are not likely targets.

www.GreenTechMedia.com

Nuclear Plants Next to Go in the Northeast:

Will plant closures leave the Northeast too reliant on a single fuel?

BREAKING ENERGY, CONWAY IRWIN: APRIL 30, 2013

Low gas prices and impending environmental regulations both played a role in a wave of announced coal plant retirements last year. And retirements are expected to continue as new Environmental Protection Agency rules kick in in 2015.

"The Northeast is the next major market to see material capacity retirements in this country," said UBS analyst Julien Dumoulin-Smith at the Platts Northeast Energy Markets conference in New York on Wednesday. "We're talking about a big purge," he said. UBS is estimating that the region will lose about 6 gigawatts of capacity.

Dumoulin-Smith predicted that nuclear plants would be next in line for closure. "If coal retirements and MATS [Mercury and Air Toxics Standards] was the story of 2012, this year and next year, nuclear will be the focal point," he said, highlighting Dominion's 556-megawatt Kewaunee plant in Wisconsin, scheduled for closure this quarter.

And he warned of the potential consequences of a series of plant closures that could leave the Northeast too reliant on a single fuel. "In a low-gas-price environment, the question is, do you want to have a policy that will uphold fuel diversity?" he said.

Most new builds in the Northeast are combined-cycle plants, said Craig Hart, Chief Financial Officer of USPowerGen, which owns three power generation facilities in New York City. Combined-cycle plants most commonly run on natural gas.

But the Northeast will also need additional solar and wind plants to meet requirements under renewable portfolio standards (RPS), according to Jonathan Stark, Managing Director of GE Financial Services.

"If you look at Pennsylvania, Massachusetts, New York and Connecticut, if they were to fulfill their renewable portfolio standards with wind and solar, which are the only two in-state renewables that could be done on a large scale, they need 8 gigawatts to 10 gigawatts to be built," Stark said. "Actually, these [states] are not the ones that need the most renewables to meet the RPS," he said.

New York Green Tech 50 Financing Success Stories:

In mid-October 2012, we’d unveiled the NY Green Tech 50 at the Green Tech Monster conference.  The NYGT50 recognized the 50 most promising privately-held clean tech companies based in New York.  Since being named to the list, eight of those companies have already gone on to raise financing from notable venture capital firms, angel investors and government grant providers in less than 6 months.

Congratulations to American Aerogel, EnergyHub, Gotham Greens, Sweetwater Energy, NOHMS Technologies, Urban Electric Power, Vnomics and WATT Fuel Cell all who raised financing in the ensuing months since being named to the NY Green Tech 50. Below is a summary of each company and the financing details.

One of things you’ll notice about the companies is the diversity of the areas they are tackling.  It includes everything from insulation and energy efficiency software to urban greenhouses to rechargeable zinc anode batteries to bio-energy.  Based on investor interest in these companies, we expect that many more will will raise financing in the coming months. If you are interested in seeing the entire list of NY’s most promising clean tech companies, go here.

• American Aerogel raised $4.7 million in February 2013 (SEC filing here).  Its investors include VIMAC Ventures, Mount Royal Ventures and Wave Equity Partners. American Aerogeldevelops and manufactures aerogel-based insulation products currently used in thermal packaging systems for the transportation of valuable biomedical, pharmaceutical, medical device and clinical trial and diagnostic industries. The company’s products enable customers to ship temperature-sensitive items at lower cost, using smaller packaging and with greater assurance.

• EnergyHub raised $0.5 million in December 2012 (SEC filing here).  Investors in the company include .406 Ventures, Physic Ventures, Acadia Woods Partners and The Partnership for New York City Fund.  EnergyHub develops software and hardware solutions that help consumers and utilities reduce energy consumption and save money. EnergyHub solutions allow homeowners to understand and control energy use in real time and encourage people to take actionable steps to reduce consumption. Utilities also benefit from EnergyHub technology as it enables them to identify and manage peak loads, implement effective demand response programs, and improve operating efficiency. An EnergyHub system creates a Home Area Network (HAN) by connecting a touchscreen Home Base, a Wireless Thermostat, and Sockets and Strips to monitor and control individual appliances. From the Home Base display users can track energy use by dollars and kilowatt-hours down to the individual lamp or game console.

• Gotham Greens closed a $5.87 million round of financing in Feb 2013 (SEC filinghere).  Gotham Greens is a NYC based agribusiness that builds and operates commercial scale greenhouse facilities for fresh vegetable production. Since commencing production in May 2011, Gotham Greens has quickly become one of NYS’ leading producers of premium-quality greenhouse-grown vegetables and herbs which are grown using hydroponic methods in technologically-sophisticated, climate-controlled rooftop greenhouses in Brooklyn, NY.

• Sweetwater Energy raked in $3.1 million in March 2013 (SEC filing here).  Investors in the firm include the Rochester Angels, Tom Merkel, and other angels.  The company received support initially as well from NYSERDA and The RIT Business Incubator.  Sweetwater Energy uses a unique technology for producing low-cost, concentrated sugars from multiple non-food plant materials to help meet the modern world’s increasing bioenergy and biochemical demand. With several patents pending for the company’s process that utilizes a broad range of agricultural and woody raw materials, Sweetwater has the flexibility to economically harvest sugars in regions that are non-starters for other technologies.

• NOHMS Technologies closed a $60k round of financing in April 2013 (SEC filinghere).  Prior support for NOHMS has come via grants from the National Science Foundation and the Defense Advanced Research Projects Agency (DARPA).  NOHMs Technologies aims to commercialize lithium-sulfur battery technology for the vehicle markets – from spacecraft to electric automobiles. NOHMs lithium-sulfur batteries have overcome the twin technology hurdles that have prevented mass commercialization of electric vehicles and can deliver 3x higher energy density at a 3x lower cost.

• Urban Electric Power raised $2.17M in March 2013 (SEC filing here).  Urban Electric Power (UEP) is commercializing advanced rechargeable zinc anode battery technology, which provides higher performance at a lower cost, using inherently safe and environmentally sustainable materials. Within 5 years, UEP will capture significant fractions of the electrical energy storage market: UPS and storage segments now serviced by NiCd and NiMH technologies (~$1B) and developing segments for grid storage and renewables (est. ~$10B+).

• Vnomics raised $2.5M in financing in April 2013 (SEC filing here).  Investors in the firm include the Rochester Angels and High Peaks Venture Partners.  The firm also has received support from NYSERDA and The RIT Business Incubator.  Vnomics aims to help trucking fleet owners, executives, and managers operate fleets more economically and environmentally conscious. The company’s technology platform is known as FleetKnowSys and is an Intelligent Telematics Software specifically designed for the needs of the commercial trucking industry.

• WATT Fuel Cell raised $1.8M in March 2013 (SEC filing here).  WATT Fuel Cell Corporation is a developer of Solid Oxide Fuel Cell (SOFC) systems that will operate on many readily available hydrocarbon fuels such as natural gas, propane, JP-8, diesel, and various renewable fuels. WATT’s product platforms will provide quiet, light, efficient, affordable, and environmentally responsible energy solutions for a range of applications in the portable power and distributed-generation energy markets.
  
  
  www.GreenCapitalEmpire.com

Learn About Fuel Cell Programs, New York Has Aggressive State Incentives:

Fuel Cells 2013: Bloom Energy’s Reality Distortion Field

Bloom Energy is threatening profitability and an IPO in 2013. And then there’s every other fuel cell company.

ERIC WESOFF: APRIL 29, 2013

First, here's an updated list of the top three profitable, publicly held fuel cell firms:

How do you assess the health of an industry? Is it whether it's growing? Profitable? Innovating? Winning market share from competing technologies?

And where does that leave the fuel cell industry?

If you look at the financials of the publicly traded fuel cell firms, the story is stark. This is a lackluster, loss-filled business. It's been like that for decades. 

Pure-Play Public Fuel Cell Firms: 2012 Revenue and Market Cap
 

Firm	Market Cap	2012 Revenue	2012 Profit / (Loss)
Ballard Power (BLDP)	$76.3M	$59.2M	($18.5M)
Fuel Cell Energy (FCEL)	$193.2M	$120.6M	($38.7M)
Hydrogenics (HYGS)	$65.4M	$31.8M	($12.6M)
Plug Power (PLUG)	$6.0M	$26.1M	($31.9M)

A few other fuel cell firms, such as Ceres and Ceramic Fuel Cells, are listed on lesser bourses such as the AIM or ASX. They, too, are perennial money losers.

However, the fuel cell industry is beginning to look like two markets: there's everyone else, and then there's the Bloom Energy reality distortion field.

The four public firms listed in the table above collectively earned $238 million in fuel cell revenue and lost $100 million.

On the other hand, Bloom Energy had $101 million in pro forma Q3 2012 revenue alone. And Bloom suggests it will turn a profit, according to Dan Primack of Fortune. Bloom's valuation dwarfs the collective market cap of the public fuel cell firms and its revenue is greater than the collective revenue of those firms. A Bloom board member has spoken of an IPO this year or next. (More on Bloom in a bit.)

Consolidation hit the fuel cell industry in 2012. Clear Edge acquired United Technology's fuel cell business and soon reduced its national workforce by 39 percent. Ballard Power acquired assets from IdaTech. SiGNa Chemistry acquired the hydrogen storage cartridge assets of Jadoo Power. France's McPhy Energy acquired Italian electrolysis firm PIEL. MTIfired CEO Peng Lim and withdrew from the portable fuel cell field, after investing tens of millions.

Fuel cells employ an assortment of membranes, catalysts and temperatures, but in almost all cases, the membranes are difficult and expensive to fabricate, the catalysts are rare and expensive (typically platinum or palladium), and the temperatures required in the processes are relatively high. Fuels range from natural gas to methanol to butane to hydrogen. There are ongoing efforts to reduce the need for expensive metals and to improve the reliability and lifetime of the fuel cell stack.

Leading technologies include PEM (proton exchange membrane), SOFC (solid oxide), and MCFC (molten carbonate). There are a number of other technologies, all equally adept at oxidizing investor capital. GM, Hyundai, Honda, Johnson Matthey, Panasonic, Siemens, Samsung, Sharp, Toshiba and Toyota have invested in fuel cell technology.

Here's an incomplete list of fuel cell companies.

Large Stationary Fuel Cells:

Bloom Energy is suggesting that it will turn a profit in 2013. And likely go public, according to a board member.

After raising almost $1 billion in venture capital over a decade from investors including GSV Capital, Apex Venture Partners, DAG Ventures, Kleiner Perkins Caufield & Byers, Mobius Venture Capital, Madrone Capital, New Enterprise Associates, SunBridge Partners,Advanced Equities, and Goldman Sachs, this could be the year.

According to an investor letter cited by Dan Primack of Fortune, Bloom had $101 million in pro forma Q3 2012 revenue, while cost of goods was $106 million, along with $26 million in operating expenses. That's a loss of $42 million on a GAAP basis, along with a net cash loss of $80 million in the quarter. However, those Q3 numbers are hobbled by an inventory and timing issue, and cash burn dropped 56 percent between Q2 and Q3, according to Primack. The firm had a 26 percent quarter-over-quarter revenue increase. 

Bloom CFO Bill Kurtz told Fortune in an official statement: "Bloom Energy is pleased with the substantial progress we have made in 2012. On a pro-forma basis, Bloom has become gross-margin-positive in 2012 and is on track with our goal to be profitable in 2013." The claim from Bloom's CFO suggests that Bloom is finally making money on every fuel cell it ships. 

Bloom builds fuel cells of the solid-oxide variety with natural gas as the fuel. There is no heat resource in the Bloom Box as in other CHP fuel cells.The 200-kilowatt units are intended for commercial and industrial applications, and the firm boasts an all-star list of customers, including Adobe, FedEx, Staples, Google, Coca-Cola, and Wal-Mart.

In 2012, Bloom raised $100 million of a potential $150 million from Apex Venture Partners and an undisclosed firm. (Jeff St. John of GTM reports on Bloom's valuation and stock sales in the secondary market.)

SiliconBeat reports that Santa Clara Valley's Transportation Authority will get $750,000 in federal funds to help finance a 400-kilowatt Bloom Energy fuel cell facility at a total cost of $4 million. Using the numbers supplied, that works out to $10,000 per kilowatt, which sounds about right for a Bloom Box, although a bit high for a competitive power source.

Bloom's fuel -- natural gas -- is a commodity and subject to price increases. Bloom's business has relied on state subsidies for distributed energy, but subsidies expire. The long-term reliability of the fuel cell stack remains a risk, and some have doubted Bloom's green claims and employment practices.

But in today's difficult cleantech business climate, those profit noises from the CFO are cause for cautious optimism. If Bloom is actually profitable in 2013, the company would be a testament to the viability of capital-intensive, VC-funded cleaner energy breakthroughs and the virtue of distributed power generation.

Scott Sandell, a partner at NEA and Bloom board member, was quoted by Reuters as saying that Bloom will likely attempt an IPO late this year or early next.

Plug Power, despite having sold hundreds of fuel cell systems for forklifts, is currently trading at $0.16 and is out of compliance with Nasdaq's minimum bid price rule and faces delisting. It is also.

FuelCell Energy, revenue and deployment leader in the public company division, builds molten carbonate stationary fuel cell power plants located at wastewater treatment facilities, universities, pump stations and sites that need low-emission baseload distributed generation. POSCO, an investor in FuelCell, is also its largest customer. The company continues to lose money.

Ballard Power is a pioneering fuel cell firm developing PEM-based fuel cells and losing money since 1983. Ballard recently acquired assets from IdaTech. Here are the figures onBallard's most recent losing quarter.

Small Stationary and Traction Market Fuel Cells

ClearEdge Power of Hillsboro, Oregon builds a PEM fuel cell that converts natural gas into heat and electricity for small businesses and residences. In December of last year,ClearEdge acquired fuel cell industry veteran UTC Power. UTC Power is a maker of large-scale phosphoric acid fuel cells (PAFCs), although the firm also has experience with PEM, alkaline fuel cells (AFCs), SOFCs, and MCFCs. 

ClearEdge has raised more than $136 million in VC funding since its inception in 2006 with investment from Kohlberg Ventures, Applied Ventures (the investment arm of Applied Materials), Big Basin Partners, and Southern California Gas Company. According toSustainable Business Oregon, ClearEdge employs 70 people, down from a high of 150.

ClearEdge's core product is a modular PEM going after combined heat and power (CHP) applications at hotels, multi-tenant buildings and schools, with power ranging from 5 kilowatts to 200 kilowatts. The UTC product extends the ClearEdge portfolio to larger size units.

When last we checked, a 5-kilowatt ClearEdge unit had a $56,000 list price and an installation cost ranging from $10,000 to $20,000. There is a $15,000 investment tax credit. California has a Self Generation Incentive Program (SGIP) that can return $12,500, more if biogas is employed. There is the potential to exploit the SGIP for another 20 percent if the vendor is a California supplier (the approved list is currently limited to Bloom, FlexEnergy, Calgen, and Stem). New York, New Jersey, and Connecticut also have aggressive state incentive programs.

ACAL Energy, a U.K.-based fuel-cell developer, builds platinum-free or low-platinum-content catalysts and PEM fuel cells for applications requiring more than 1 kilowatt of power. The firm has raised more than $10 million from CT Investment Partners, Rising Stars Growth Fund, NorthStar Equity Investors, Porton Capital, and Synergis Technologies. According to the firm's website, ACAL replaces "the fixed platinum catalysts on the cathode with a liquid regenerating catalyst system."

Australian firm Ceramic Fuel Cells builds SOFC-based small-scale on-site micro combined heat and power (CHP) and distributed generation units.  The AIM- and ASX-listed firm lost about $12 million in the last six months of 2012 on sales of $2.6 million. Recentannouncements include talk of "exploring a number of financing options," which is rarely a good sign. 

CellEra, based in Israel, is developing a stationary PEM fuel cell with a design that looks to eliminate the costly platinum catalyst and replace it with transition metals. The firm targets units in the 1-kilowatt to 20-kilowatt range and received $9.2 million in equity funding from Israel's Carmel Ventures and communications giant Vodafone in late 2011. Israel Cleantech Ventures and BrainsToVentures were earlier investors. Vodafone as an investor makes sense -- CellEra looks to swap fuel cells for diesel generators in cellular tower power back-up.

AIM-listed Ceres Power of England sells a 1-kilowatt household SOFC fuel cell that will provide methane-based combined heat and power (CHP) and will take advantage of the U.K.'s micro-CHP feed-in tariff. The firm lost $7.6 million on sales of $502,000 for the last six months of 2012 and lost $23 million for the entire 2012 sales year.

Intelligent Energy of London builds PEM fuel cells for automotive, consumer, and stationary applications. The firm has raised more than $130 million from investors including Meditor European Master Fund. Losses for 2011 were $18.2 million on sales of $23.5 million.

Oorja Protonics targets the traction market with methanol fuel cells and funding from Sequoia Capital. Oorja has a customer in HySA/Catalysis of South Africa in material handling applications.

Technology Management builds a small SOFC fuel cell and has partnered with Lockheed Martin.

Other firms in this size range include Trulite (portable fuel cell generators) and PowerCell (1- to 5-kilowatt APUs).

Fuel Cells for Consumer Product Charging

A recent $25 million investment by RUSNANO in Wilmington, Mass.-based fuel cell firmLilliputian Systems brings the firm's VC investment total to more than $150 million. Previous investors include Intel Capital, Kleiner Perkins, Atlas Venture, Fairhaven Capital, Rockport Capital, Stata Venture Partners, and Altira Group. The firm was spun out of MIT in 2001 with technology that involves a silicon "chip-based" power generator and recyclable fuel cartridges, aiming to replace batteries in smartphones, tablets, and cameras. Lilliputian has a sales channel deal with retailer Brookstone for its micro SOFC and micro-reformer on a silicon chip.

Point Source Power, a startup spun out of research conducted at Lawrence Berkeley National Labs and funded by Khosla Ventures, has devised a fuel cell for emerging markets. Potentially, consumers will be able to insert biomass into a small case, close it up and put it into a cooking pit or fire. As it heats, the biomass generates gas, which is converted into electrical power via a ceramic membrane inside the device. 

Neah Power, originally venture-funded by Intel, Novellus, et al., became a public firm traded on the OTCBB via a reverse merger in 2006. The company lost $1.6 million in 2011 on sales of $0 million for its licensing model with its silicon-based fuel cell.

***

Without a doubt, there are some applications for which fuel cells make perfect sense, such as premium power for the military, remote sites, construction industry, travel, etc.  

But for stationary power, fuel cells compete with the grid and diesel gen sets. And few if any fuel cell vendors, other than perhaps Bloom, have proven that they can go head-to-head with those incumbent technologies on a per-kilowatt-hour basis.

Fuel cells can be distributed and do have less emissions. Natural gas is currently cheap. But for fuel cells dependent on the natural gas grid, there's the downside of volatile prices and the sometimes less-than-green processes used to extract natural gas.

Fuel cells have benefited from state and federal subsidies, or in the case of Bloom, Delaware ratepayer bill subsidies. The justification for renewable energy subsidies is often debated in these pages. But in the case of fuel cells, even after incentives, the fuel cell is expensive compared to the grid or to a diesel gen-set.

But somehow, Bloom, by my back-of-the-envelope calculations, will have shipped around 200 megawatts of fuel cells in 2012 to a dream team of customers -- Adobe, AT&T, FedEx, eBay, Coca-Cola, etc. These folks are not philanthropic organizations -- they are looking to save money, and customers attest to a three-year ROI for the Bloom Box. How is Bloom doing this? Perhaps through a PPA structure that keeps potential O&M costs isolated from the customer. 

In any case, if Bloom is real -- it will have some big lessons to teach the rest of the fuel cell industry. And if Scott Sandell of NEA is right -- we'll read about it in an SEC S-1 IPO registration in the coming quarters.

New York Auto Show:

Subaru Adds Its First-Ever Hybrid, Based On The Subaru XV Crosstrek

2014 Subaru XV Crosstrek Hybrid; company photo

NEW YORK — Subaru at long last unveiled its first gasoline-electric hybrid model at the New York International Auto Show, theSubaru XV Crosstrek Hybrid, expected to go on sale in October 2013 as a 2014 model.

The New York auto show opens to the public today, March 29, through April 7 at the Javits Center on the West Side of Manhattan.

The Subaru hybrid is long-awaited because the Subaru brand and ecology are a logical match. Subaru buyers tend to be an outdoorsy group, and it’s natural they would be interested in cutting down on tailpipe emissions.

However, Subaru hasn’t had a hybrid before now. It’s an understatement to call that “late to the party.”

Toyota Motor Sales U.S.A. Inc. introduced the first Toyota Prius way back in 2000. Toyota is on its third generation of hybrids. Many other companies are on their second.

2014 Subaru XV Crosstrek Hybrid outdoors; company photo

Tomohiko Ikeda, the head of global sales and marketing for Subaru parent company Fuji Heavy Industries in Japan, said in a press conference at the New York auto show that Subaru intends to make up for lost time.

“We have made electrification as a key feature for Subaru. The hybrid we unveil today is a first step in that direction,” he said.

Tom Doll, president of the U.S. sales and marketing subsidiary, Subaru of America, Cherry Hill, N.J., acknowledged Subaru is behind the curve in adding hybrids. “We at Subaru weren’t first to market, but we made sure we did it right,” he said.

Subaru engineered its own hybrid system, using a 2.0-liter Subaru “boxer” engine, an electric motor and a continuously variable transmission.

A boxer engine means instead of up-and-down, the cylinders move horizontally, and in opposing directions from each other – a configuration that Porsche also uses. A continuously variable transmission, usually called a CVT for short, uses belts and pulleys instead of gears. It helps save fuel.

The company didn’t release fuel economy figures. That should happen closer to the launch.

But Doll said the Subaru XV Crosstrek Hybrid is expected to be the most fuel-efficient crossover SUV with full-time all-wheel drive on the market. He said the conventionally powered Subaru XV Crosstrek is No. 1 today. With a CVT, the 2013 Subaru XV Crosstrek has an EPA rating of 33 mpg on the highway.

“If you have to get beat,” Doll said. “It’s nice to get beat by one of your own.”

NYS Green Bank:

Can green tech be competitive with NYS "green bank?"

by Ryan Delaney, in Syracuse, NY

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Late last year, the Cuomo administration laid out its agenda to address New York's future energy requirements. The plan needs to address a range of issues including energy security, pricing and the role of renewables. This week, reporters from the Innovation Trail are putting different parts of that complex energy puzzle under the microscope.

Part of that agenda is a $1 billion "green energy bank" to leverage public dollars to boost the clean technology economy.

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Ryan Delaney

Reporter, The Innovation Trail

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More energy-efficient technologies, from water heaters to wind turbine, have been coming onto the marketplace for decades.

But the decision on whether to use greener components to choose or replace those hot water heaters in an apartment building will often come down to cost. And the fact that the older technologies are usually cheaper is a constant challenge to the producers of newer energy-efficient products.

One company that faces that challenge is NuClimate, a heating and cooler systems maker based in East Syracuse. The company started as a spin-off of Carrier Corp., the company that invented air conditioning, in 1984.

Business in recent years has been good for NuClimate, according to vice president John DiMillo. They recently won a contract with New York City public schools for a major renovation project the city is undertaking.

Still, DiMillo says it's a constant struggle for NuClimate to convince contractors to go with their product. He says some additional incentives and state-backing could come in handy.

"Contractors are faced today with a more competitive bidding process than ever before and so because of that they’re forced to bid very low on jobs and then figure out how they’re going to make money afterwards," he says of the trade.

That means contractors often pick the older, less efficient option as a way to save costs.

DiMillo says a public fund that could defray some of the costs for contractors if they chose more energy efficient options, could make his company even more competitive.

And that’s essentially the goal of Gov. Andrew Cuomo’s proposed $1 billion "green bank": to increase the use of energy-efficient products. That could include everything from home water heaters to giant wind turbines.

Connecticut

If the idea makes it through the budget process, the state won’t be totally flying blind as it works to set the bank up. Cuomo pointed to Connecticut - the first state in the country to start a green bank - as a model.

The Connecticut Clean Energy Finance and Investment Authority, or CEFIA, was formed in 2011.

David Goldberg, the director of external relations for CEFIA, says the goal of a green bank, put simply, is to invest taxpayer money into a clean energy project in the hope it’ll attract a larger sum of private investment.

Goldberg says the idea of a green bank was met with wide support in his state.

"It’s a nonpartisan at worst and a bipartisan at best matter because the idea of using these monies in a more effective and efficient way to not only attract the private capital, but to use that in a manner that will provide the opportunity to make smart energy choices," he says.

Goldberg points to a smart loan program about to get underway that’ll use $18 million in state and federal money, combined with $80 million in private money.

Exactly how New York’s green bank will be funded is unknown. The governor’s budget says it’ll utilize resources from the New York Power Authority and NYSERDA, the state’s energy research arm.

Goldberg says CEFIA draws money from a combination of grants and tax dollars. The bank also has the ability to pass bonds.

Challenges

Decisions on how New York’s green bank will be run will be up to Richard Kauffman. Cuomo tapped Kauffman early this year to join his cabinet as Energy Czar.

Kauffman is a former advisor at the U.S. Department of Energy. In a speech shortly after taking on the new role, Kauffman laid out some of the obstacles clean tech companies face in New York, notably too much regulation and a limited access to capital.

The chasm

Ed Bogucz says it was a bit of ‘coup’ for Cuomo to snatch Kauffman from Washington.

As the director of Syracuse’s Center of Excellence for sustainability, Bogucz works with companies developing new energy-efficient projects.

"The opportunity of creating a green bank to support investments that are going to have these paybacks to rate payers and to municipalities is really a tremendous thing," he says of the possible green bank.

Bogucz describes the competitive obstacle many clean tech companies face in the marketplace as a chasm.
"If they don’t leap across the chasm, then they wind up not achieving their potential for sales."

He says the green bank will help those new products gain acceptance and compete with their more traditional competition.

No doubt, Kaufman’s experience in the financial markets will also be called on, if the fund is to deliver on its ambitious agenda.

Reporting by the Innovation Trail is supported by the Corporation for Public Broadcasting. Visitinnovationtrail.org.