The biofuel market is turning into a diverse romp of venture-backed companies auditioning different microbes, catalysts and feedstocks, all with the same goal: to quickly, efficiently and cheaply transform renewable, non-food products (ranging from sugar cane to switch grass to carbon dioxide) into viable forms of fuel that can work in today’s gas tanks.

The problem is, almost all of these players hit the same ceiling: they can’t figure out a way to inexpensively scale with the technology they have. But biofuel startup LS9 may have just changed that.

The company’s scientists have published a paper, academically titled “Microbial Biosynthesis of Alkanes,” claiming that they can now implant genes into E. coli that allow the bacteria to directly churn out alkanes — otherwise known as the hydrocarbons in car and jet fuel — in one step. This is a major breakthrough for the field, one that has been chased for years.

The discovery could eliminate the need for other, pricier methods to derive alkanes. It could also jumpstart the green sector’s focus on biofuels as a viable business. Before now, many of the companies in the industry, including Codexis, Synthetic Genomics and others, were focusing on creating more lucrative, renewable chemicals to replace petroleum in plastics, pharmaceutical development and other processes.

LS9 itself has been pursuing the low-volume chemical market for a while, teaming with Proctor and Gamble last spring to jointly develop chemicals to be used in consumer goods.

Because the new LS9 process consists of only one step, it also requires less feedstock to begin with, lowering costs and increasing efficiencies across the board. Prior conversion technique entailed dangerous inorganic catalysts, hydrogen, high pressures and temperatures, and a lot of intermediate steps.

In addition to being renewable, biofuels also burn cleaner than traditional fossil-fuel sources. Because they can be used in standard, internal-combustion engines, biofuels seem to have a bigger market ahead of them than electric vehicles — the other strategy to achieve cleaner, greener transportation. It’s going to take a while for plug-in cars to catch on, and very little roadside infrastructure exists today to support them. If biofuel companies can successfully scale, they have the potential to slash emissions more significantly.

These advantages have attracted the attention of venture capitalists interested in incremental clean energy innovations, rather than radical changes. For example, Khosla Ventures, one of LS9’s backers that also invests in biofuel makers Coskata and Amyris Biotechnologies, is major proponent of this category of startups.

Based in South San Francisco, LS9’s investors include CTTV Investments, Flagship Ventures, and Lightspeed Venture Partners in addition to Khosla.

Tags: biofuels

Companies: Ls9

Now we know: The first two plug-in cars from major manufacturers will go head-to-head on warranties and lease prices: $350 a month for the 2011 Chevrolet Volt, $349 for the 2011 Nissan Leaf.

Now the choice shifts to other measures, including electric and overall range, as well as the plug-in perks that states like California offer to early adopters to encourage them to opt for electric cars.

This is where it gets interesting. While California loves the Nissan Leaf, current regulations deny Chevy Volt buyers two significant perks: a $5,000 rebate, and permission to drive solo in HOV Lanes.

Federal credits yes, CA rebate no

Both the 2011 Leaf and the 2011 Volt are eligible for the maximum $7,500 federal tax credit that goes to buyers of plug-in cars with battery packs of 16 kilowatt-hours or more.

Some states add their own incentives as well. Georgia and Oregon, for example, offer state tax credits ($5,000 and $1,500 respectively).

California offers a tax rebate instead, a measure considered more powerful than tax credits because the rebate check that comes in the mail effectively cuts the car’s purchase price within weeks, rather than making buyers wait until they file their taxes.

Are you an AT-PZEV, little car?

The highest California rebate of $5,000 goes only to zero-emission vehicles, those cars with no tailpipes. The all-electric Nissan Leaf qualifies, but the Volt–whose range-extending gasoline engine switches on to provide electricity when the battery is depleted–does not.

California’s EV buyers had expected the Volt to qualify instead for a reduced rebate of roughly $3,000, says EV advocate Chelsea Sexton.

But that hope was quashed when the Volt didn’t qualify as an Advanced Technology Partial Zero-Emissions Vehicle (AT-PZEV), a specific category of clean vehicle in the California’s complicated taxonomy of emissions classes.

In the eyes of California regulators, the plug-in 2011 Chevrolet Volt is no cleaner than the 2011 Chevrolet Cruze compact–despite its ability to run solely on grid power for up to 40 miles, including at freeway speeds.

The 2012 Toyota Prius Plug-In Hybrid, on the other hand, does qualify as an AT-PZEV and will get a partial rebate, even though it must run its gasoline engine at freeway speeds.

No HOV perks either?

The other major plug-in perk is single-driver access to California’s high-occupancy vehicle lanes, greatly prized in congested San Francisco and Los Angeles traffic. But current legislation won’t extend that to the Volt either.

A bill before the California Senate, SB-535, is intended to let plug-in cars with a sole occupant into the HOV lanes. It’s similar to a law that expires at the end of 2010 giving 85,000 lucky drivers of three specific hybrid models that privilege.

Come January, just a few thousand all-electric, natural-gas, and hydrogen vehicles will qualify for that access unless SB 535 passes.

That bill has taken “lots of twists and turns,” says Jay Friedland of Plug-In America, an advocacy group that works to support and encourage plug-in vehicles. See, for instance, the strike-throughs in the amended version of SB 535.

Twists and turns

The California Air Resources Board has proposed amendments to the latest revision that enhance AT-PZEV eligibility for HOV lane access.  The original bill had required a threshold of 65 miles per gallon for eligibility, which Plug-In America supports.

The problem is that the EPA still hasn’t decided how to rate the fuel economy of plug-in vehicles that have gasoline engines too, since their effective gas mileage depends entirely on how they’re used.

Gas on freeways good, electricity bad ???

Even worse, Sexton notes, is a bizarre paradox created by the AT-PZEV requirement: A car that must use its engine on the freeway will get HOV-Lane access, while the Volt–which can run on battery power at highway speeds–will not.

So a Chevrolet Volt that does less than 40 miles a day may never burn a drop of gas, for instance, but will still be banned from the HOV lanes.

Whereas the 2012 Toyota Prius Plug-In Hybrid that’s being flogged down the freeway at 85 mph will consistently burn gasoline at its highest rate, and yet it will be able to do so from the HOV lane.

No word yet on whether various other electric-car perks–like free parking in the closest lots at Los Angeles International Airport, worth at least $30 a day–will be extended to the Volt.

Cold starts a problem

Part of the challenge lies in a clause of California’s Enhanced AT-PZEV definition, says Friedland. It requires zero evaporative emissions, which is hard to design into a vehicle whose gasoline engine may not be run regularly.

Friedland says he understands that the Prius Plug-In Hybrid uses a coolant thermos bottle to keep its catalytic converter warm. (Catalysts must warm up before they clean exhaust emissions effectively.)

Future Volts might have to use battery power to keep their catalytic converters heated to several hundred degrees, which would likely reduce their electric range–even if the engine attached to the converter never switched on.

It’s “an area CARB has to consider in the future,” says Friedland, “especially when the benefits” of providing the same incentives for plug-in Volts “are so large.”

CARB may yet tweak its definition of what qualifies as an AT-PZEV to reflect the variations in vehicle technology represented by vehicles like the Volt. Unless that happens, the 2011 Chevrolet Volt won’t get the love from California that the 2011 Nissan Leaf does.

Written by John Voelcker, this article originally appeared on GreenCarReports, one of VentureBeat’s editorial partners.

Tags: advanced transportation, electric vehicles

Companies: General Motors

The U.S. Department of Energy announced today that it has finally closed its $117 million low-interest loan guarantee to Kahuku Wind Power, developer of a 30-megawatt wind power project slated to keep the lights on in 7,700 homes in Kahuku, Hawaii, and to create 200 jobs on the island of Oahu.

Renewable sources of energy are of particular interest in Hawaii, where gasoline prices are inflated by the need to import oil supplies. Funding wind and solar projects could wean the islands off this dependency, dramatically slashing their carbon footprints.

The Kahuku project, a subsidiary of independent developer First Wind Holdings, broke ground halfway through July. It will help the state meet its goal of generating 70 percent of its energy for electricity and ground transportation from renewable sources by 2030 — one of the tenets of the Hawaiian Clean Energy Initiative.

The Hawaiian Electric Company is the only utility operating on Oahu, and has set lofty alternative energy goals for itself. At the same time, it has been unable to integrate as many solar and wind energy resources as it would like because they remain intermittent and unreliable. The Kahuku project has set out to remedy this problem.

The company is also what the Energy Department is looking for in its loan recipients. Not only will Kahuku create more local jobs close to the wind farm, it is also boosting revenues for other American companies. Each of the 2.5-megawatt wind turbine generators installed at the site was built by Clipper Windpower, based in Carpenteria, Calif.

The development is also unique because it includes a 10-megawatt storage system — ensuring energy consistency — built by Xtreme Power, headquartered in Kyle, Tex. The battery system will allow the utility to serve customers with uninterrupted wind energy regardless of fluctuations in wind speed. Kahuku marks the first time Clipper and Xtreme have paired their technologies.

First Wind Holdings already operates a 30-megawatt wind facility in Kaheawa on Maui, which fulfills 9 percent of the island’s power demand every year.

The corporation struck a power purchase agreement with the Hawaiian Electrical Company in early May, dictating that the company will sell the wind power as it becomes available to the utility at pre-determined prices over the next 20 years. The deal insulates the utility from paying increasingly higher oil costs and hiking rates for its customers accordingly.

Tags: wind

Companies: Clipper Windpower, First Wind Holdings, Kahuku Wind Power, Xtreme Power

The Energy Department followed up its pledge today to invest $122 million in converting sunlight into fuels with another announcement: $106 million in new stimulus funding for six projects working to convert carbon dioxide emissions into plastics, fuel, cement, fertilizer and other products. The idea is not only to eliminate harmful emissions from the atmosphere, but also to put them to good use.

Carbon sequestration is still a huge question mark. While efforts are currently being made to bury emissions from power plants and factories indefinitely, it’s a solution that can’t work everywhere, and may not last as is. Trapping carbon emissions in the form of usable products may increasingly supplement other carbon capture methods.

The recipients of the stimulus money were chosen in October 2009, as part of a $1.4 billion initiative to productively re-purpose the carbon emissions released by the growing number of fossil fuel power plants equipped with capturing technology.

Here’s a look at the six projects that were selected and what they are working on:

Alcoa ($12 million) — Working to convert carbon dioxide contained in flue gas into a soluble bicarbonate and carbonate that can then be turned into construction fill material, non-toxic fertilizer and soil treatments.

Novomer ($18.4 million) — Developing a process that converts waste CO2 into a diversity of plastic products that can be used in the packaging business, like bottles, films, laminates, coatings, cans, and more.

Touchstone Research Laboratory ($6.2 million) — Pilot-testing an algae-based process that absorbs 60 percent of the carbon dioxide in flue gas released from a coal-fired power plant and then turns it into biofuel and other high-value chemicals.

Phycal ($24.2 million) — Developing a conversion system to turn captured carbon dioxide into liquid biocrude fuel that can then be processed into gasoline additives, biodiesel and jet fuel.

Skyonic Corporation ($25 million) — Developing an alternative to scrubbing technology that turns carbon dioxide into carbonate or bicarbonate solids while also eliminating sulfur oxides, nitrogen dioxide, mercury and other toxic chemicals from plant emissions.

Calera Corporation ($19.9 million) — Based in Los Gatos, Calif., this company is transforming carbon dioxide into carbonates that can be recycled as construction materials, like cement.

You can find more information on each of these projects here.

Tags: carbon capture

Companies: Alcoa, Calera, Novomer, Phycal, Skyonic Corporation, Touchstone Research Laboratory, U.S. Department of Energy

The U.S. Department of Energy announced today that it has awarded $122 million to a team of scientists in California to establish an Energy Innovation Hub focused on converting sunlight into different types of liquid fuel.

An interdisciplinary effort spanning the California Institute of Technology and the Lawrence Berkeley National Laboratory, the Hub will work on artificially simulating photosynthetic processes, which can be harnessed to produce innovative sources of energy, the Department says. The ultimate goal is to commercialize resulting technology.

Several other companies have made a name for themselves trying to achieve similar feats. Venture-backed operations like Joule Unlimited are trying to derive fuels from chemical processes that combine sunlight, water and carbon dioxide — usually CO2 emissions from power plants and other sources of greenhouse gases.

Being able to produce fuel this cleanly would be game changing. So many biofuel startups and even oil and gas giants are chasing the same goal: to produce clean, affordable fuel at scale that could replace gasoline in existing automotive and jet engines. Companies like Coskata, Codexis and LS9 are all engineering microorganisms and catalysts to convert feedstocks ranging from corn to municipal waste into usable fuel. But so far, none of thee businesses have been able to gain serious traction.

There is room in the market for a bold new idea in this arena. Making fuel out of sunlight, CO2 and water would avoid some of the major hurdles — including money, time and scale — that have prevented many of the other ongoing fuel projects and companies from achieving broader adoption.

The newly-funded center, to be called the Sunlight Energy Innovation Hub, is one of three such projects to get funding from the federal government this year. One of the other hubs focuses on simulating nuclear reactor technology.

Companies: Codexis, Coskata, Joule Unlimited, Ls9

Terra-Gen Power, a major developer of wind, solar and geothermal energy projects in the U.S., is $1.2 billion closer to building the country’s largest wind farm. This new capital, announced today, will help the company aggregate 570 megawatts-worth of power at its Alta Wind Energy Center site in Kern County, Calif.

This new capacity, composed of four separate projects, will be added to existing installations at the Center (150 megawatts-worth of turbines built by General Electric), which is expected to reach 3,000 megawatts — the largest amount produced at any one wind facility in the U.S. Terra-Gen will be buying 190 new turbines from Vestas-American Wind Technology.

Terra-Gen already has a power purchase agreement in line for the Alta Wind Energy Center, with Southern California Edison pledging to feed the power generated into its grid. The utility made the deal in 2006 to buy up to 1,550 megawatts of capacity provided. Just 720 megawatts of this power will increase California’s wind generation by more than 25 percent.

The new capital is a hodge-podge, including $580 million in pass-through certificates, a $499 million bridge loan, and $127 million in ancillary credit facilities.

The four new projects are being continuously financed by Citibank as part of a leveraged lease. Basically, the bank has committed to purchasing the products when they begin their commercial operations and leasing them back to Terra-Gen. This sort of deal is the first of its kind in the wind energy industry, according to the company.

Altogether, the five wind farms making up the Alta Center will create 1,500 domestic manufacturing, construction, operation and maintenance jobs and will infuse the local economy with an estimated $600 million. The four new farms are expected to break ground immediately and come online within the first two quarters of 2011.

Based in New York, Terra-Gen has taken funds from ArcLight Capital Partners and Global Infrastructure Partners. It says it already has 21 renewable energy projects — including solar and geothermal developments — currently operating across six states, with 5,000 megawatts-worth of projects still in its pipeline.

Tags: wind

Companies: Southern California Edison, Terra-Gen Power

Control4, maker of dashboards that allow consumers to automate their homes — everything from their media collections to their security systems to their thermostats — has just launched a platform allowing third-party Flash developers to create and contribute their own apps to Control4’s repertoire. At the same time, it’s opened up a contest for developers to win as much as $10,000.

Called the 4Store application marketplace, the Flash-based platform is the first app catalog of its kind not to be tied to mobile phones and to center around devices, appliances and systems in the home. The company says it hopes developers will bring the expertise and ideas they’ve cultivated working on social networking, informational and entertainment apps for phones to the home arena.

The company has provided Control4 software development kits to developers so they can create applications that make homes smarter, and that give consumers more control over their media centers, lighting, heating and air conditioning, security and surveillance, and appliance energy consumption.

For example, Control4 customers could potentially use these apps to schedule when to water their lawns, when their refrigerators should make ice, at what temperature to switch on air conditioning or heating systems, and more. The underpinning idea is to help customers conserve energy without compromising their comfort.

To encourage developers to take a close look at the platform, Control4 is running a contest for the Flash development community, offering $5,000 for the most popular application and $5,000 in Control4 products for the most 4Store applications submitted between July 1 and August 31.

Based in Salt Lake City, Control4 has to date raised more than $78 million from Frazier Technology Ventures, Foundation Capital, vSpring Capital and Thomas Weisel Venture Partners, among others.

Tags: energy efficiency, Smart Grid

Companies: Control4

As the upper echelon of the world’s carmakers proceed merrily with plans for all-electric supercars, and the econo-car market begins to get crowded with announced EV entries as well, it seems like the sports car enthusiast is being left out. But that may be fixed sooner than you’d think if rumors of an all-electric LEAF-based Nissan sports car prove true.

At this point we endow the idea with little more than wishful speculation, but since it’s an attractive fantasy, we’ll indulge ourselves a bit.

Inside Line reports than an unnamed source at Nissan has tipped them on an upcoming EV sports car with LEAF technology to follow the Infiniti-badged luxury variant of the standard LEAF. They even go so far as to christen the car, somewhat awkwardly, as potentially the “370Z-E.” Let’s hope that name doesn’t stick.

Another possibility is a version of the Essence Concept (pictured above) from the 2009 Geneva Motor Show, though saddling that car’s fantastic design and muscular yet svelte proportions with LEAF-type power would be a travesty, to say the least. As shown in concept form, the Essence is a 592-horsepower gasoline-electric hybrid. The LEAF, on the other hand, is powered by a battery pack and electric motors good for about 107 horsepower. That’s a difference of about 550 percent, meaning even using significantly up-rated LEAF technology isn’t likely to deliver the goods we’d expect from the Essence.

If Nissan does build an electric sports car, we’d expect it to show up with its own badge, as it will be something unlike any version of their current lineup, and they’ll want it to stand out instead of getting lost in the crowd. But that’s a big if.

Written by Nelson Ireson, this post originally appeared on MotorAuthority, one of VentureBeat’s editorial partners.

Companies: Nissan

Google announced today that it will be buying wind-generated power from a company called NextEra Energy Resources to sell back to the local grid operator in exchange for Renewable Energy Certificates (basically, credits to offset its carbon emissions).

The company made the purchase via its relatively new Google Energy unit — an entity that won the rights to buy and sell energy just like a utility from the Federal Energy Regulatory Commission in February.

This isn’t the first time Google has worked with NextEra. The search giant has already invested $38.8 million in two wind farms — pumping out 169.5 megawatts total — developed by NextEra in North Dakota. But starting on July 30, Google will be buying 114-megawatts of power from NextEra’s farm in Iowa at a flat, undisclosed rate.

Reuters initially reported that Google was buying the power to run several of its data centers, but this doesn’t appear to be the case. That’s not to say that renewable energy, derived either from wind or solar, won’t eventually be used to power up data centers, or even some of its campuses, just not right now.

When Google Energy was first formed in December, speculation swirled that the company planned to launch its own utility to compete with the likes of Pacific Gas & Electric and Southern California Edison. But the company fended off these guesses, saying only that it wanted the ability to buy and sell a greater amount of renewable energy on the wholesale market — a key pillar in its plan to achieve carbon neutrality.

The deal with NextEra is consistent with this mission, and there have been no signs of Google Energy expanding its purview beyond this type of transaction. In addition to expanding its green portfolio, the deal will also allow Google to purchase energy over 20 years at the same rate — insulating itself from inevitable price hikes.

Google has several other energy-related projects ongoing. Google PowerMeter, its consumer-facing system for tracking energy use and costs, just lost its leader, Ed Lu, but may be switching course when a replacement takes the helm. Google Ventures and philanthropic arm Google.org have also funneled millions into companies developing new solar, wind, geothermal and smart grid technologies.

Several of the company’s higher-profile green investments include grid communications firm Silver Spring Networks, solar thermal developers BrightSource Energy and eSolar, and innovative electric vehicle company V-Vehicle.

Tags: wind

Companies: Google, NextEra Energy Resources

Two months after announcing their informal intention to build an electric vehicle together, Tesla Motors and Toyota have made their relationship official, inking a deal to co-produce an all-electric edition of Toyota’s RAV4 SUV.

According to the companies, two prototypes already exist, and the car could be ready for mass production as soon as 2012 — tying Tesla’s all-electric sedan, the Model S, to market. The new RAV4 will be distributed and sold by Toyota, but Tesla will be providing the secret sauce: its electric powertrain, including the battery pack.

In addition to the tandem-produced car, the formal deal between the two companies includes the joint development of automotive components, manufacturing processes and engineering systems. Most of this will be played out at the 379-acre former-NUMMI automotive plant in Fremont, Calif., which Tesla bought for $42 million at the same time it announced its partnership with Toyota.

For a while, there was doubt that a Toyota-Tesla car was even on the horizon. Shortly after the agreement was announced in May, it became clear that there was no official deal between the two companies to jointly produce a vehicle. Toyota said it would pump $50 million into Tesla upon its IPO (acquiring a 3 percent stake), but that was it. Now, after Tesla’s lucrative public sale, the partnership is forging ahead.

The original RAV4 (pictured above) is an older Toyota model that launched in 2003 and saw lackluster sales. It is one of two electric prototypes Tesla says it will be co-developing with Toyota — the other will be based on Toyota’s Lexus RX, according to an inside source. The plan is to first develop a fleet of the cars within the next year for testing before taking them to market. That said, there’s no guarantee they will actually make it into showrooms, at least yet.

The same source says that Toyota may be working independently on an all-electric version of its Corolla, which isn’t as well suited to Tesla’s powertrain systems, particularly the weight of the battery packs involved.

[Update: Referring back to the official press release, a Tesla spokesperson said that the two companies' current plans are limited to the RAV4.]

The cars Toyota and Tesla are partnering on are expected to have a driving range of at least 150 miles on a single charge, and cost around $40,000 — competitive with Tesla’s forthcoming Model S, but not so competitive with the cheaper Chevrolet Volt and Nissan Leaf, both of which are coming out later this year and slated to cost around $30,000 before rebates.

If both cars do become a reality, Tesla won’t have to worry about taking advantage of the Fremont factory’s capacity. Before the official deal to build cars together, analysts wondered whether the electric car maker would be able to afford the facility — capable of churning out 500,000 cars a year — especially with its plans to make only 20,000 Model S sedans there a year. Now this future is starting to look more certain.

The development seems to have had an impact on both companies’ stock prices. Tesla (TSLA) jumped 6.15 percent today to close at $21.91 a share, rising above its initial public offering price of $19, and coming almost level with its impressive $23.89 first-day close. The recent news clearly improved investor confidence.

Toyota’s (TM) share price eked up 0.66 percent to $71.22 today.

Also today, Tesla announced that it has expanded its Roadster’s footprint, delivering units to Japan, Hong Kong, Poland, Turkey and Canada. About 1,200 of the cars have been sold in 28 countries to date.

Tags: advanced transportation, electric vehicles

Companies: General Motors, Nissan, Tesla Motors, Toyota

General Motors announced today that it would offer an 8-year, 100,000-mile warranty on the battery pack, the charger, and the Voltec electric drive components of its upcoming 2011 Chevrolet Volt electric car.

The announcement sets to rest potential worries that Volt owners might be stuck having to replace an expensive, high-voltage battery pack costing thousands of dollars just a few years down the road.

The warranty matches the length of time that all components affecting the car’s emissions must be free of owner maintenance, as per NHTSA regulations. It rises to 10 years or 150,000 miles in the several states that have adopted California’s stricter emissions limits.

While GM has not announced the replacement cost of the 2011 Volt’s 16-kilowatt-hour lithium-ion battery pack, the 300-pound, T-shaped pack is widely expected to cost GM several thousand dollars to build.

Replacement parts costs are usually twice the manufacturer’s cost, or more. The rest of the 2011 Volt carries GM’s usual warranties of 5 years/100,000 miles on other powertrain elements (essentially the engine) and 3 years/36,000 miles on the rest of the vehicle.

The announcement came during a media event at the Brownstown Township plant where GM assembles the battery packs, using cells manufactured in South Korea by LG Chem.  Manufacturing of pre-production Volts in Detroit’s Hamtramck plant began on March 31.

The plug-in 2011 Chevrolet Volt, as GM hopes you know by now, travels up to 40 miles on battery power alone. After that, its 1.4-liter gasoline engine switches on to run a generator that provides electric power to the motor that drives the front wheels.

That “range-extending” engine differentiates the Chevy Volt from the other electric vehicle launching for 2011, the Nissan Leaf. The pure battery electric Leaf has an electric range of up to 100 miles, but no gasoline range extender.

To highlight the Volt’s unlimited travel and lack of range anxiety, GM drove a 2011 Volt from Austin, Texas, to New York City over the Fourth of July weekend. The so-called “Freedom Drive” covered 1,776 miles on a mix of grid power and engine-generated electricity.

GM has not yet priced the 2011 Volt, though now-retired GM executive Bob Lutz said two years ago that he expected the price to be around $40,000. Early Volt buyers are eligible for a $7,500 Federal tax credit and various state incentives as well.

Written by John Voelcker, this post originally appeared on GreenCarReports, one of VentureBeat’s editorial partners.

Tags: electric vehicles

Companies: General Motors

Trilliant, one of several companies piecing together a cleaner, more efficient smart grid, just got a big shot in the arm. The Redwood City, Calif. company has raised $106 million in venture funding to expand globally and continue developing its products.

Trilliant provides mesh networking equipment that allows smart meters to communicate wirelessly with utilities and, increasingly, consumer-facing energy monitors. Its technology can beam this data over long distances and within local and even home-area networks, making it more versatile than what many of its competitors are offering.

The recent funding stands out for two reasons. First, it’s a massive amount for a company that has been relatively capital efficient so far. It already has a solid client base in the U.S., including Duke Energy, San Diego Gas & Electric and Union Gas. So $106 million should go a long way toward establishing footholds in other parts of the world — particularly Europe, Asia, the Middle East and Africa, according to CEO Andy White.

Second, the capital came from a flock of prestigious investors, including General Electric and ABB, VantagePoint Venture Partners and Investor Growth Capital, among others. The new alliances with GE and utility equipment maker ABB will no doubt grease the wheels for further expansion.

Coinciding with the funding, Trilliant has also brought a new customer into its fold: Central Maine Power. The utility, distinguished by the rough and rural region it serves, will be using Trilliant’s SecureMesh communications network. If its offerings can work there, they can work anywhere, says Eric Miller, senior vice president of solutions. The Maine deal should help further prove out its technology.

The money, combined with powerful partners, may be enough to see Trilliant through to an IPO, according to Miller, who made it sound like such a move could happen in the next two or so years. But the company is far from alone in this ambition.

Trilliant has some tough competition to face — most formidably from Silver Spring Networks, which uses a radio network protocol very similar to Trilliant’s. That company, armed with more than $200 million in capital, partnerships with the likes of Pacific Gas & Electric, and clear intentions to IPO (it retained underwriters for a filing earlier this year), has positioned itself as the market leader. It’s unclear whether there will be demand for both companies on the public markets.

And Silver Spring isn’t the only play Trilliant needs to worry about. There are several other companies pursuing different protocols that accomplish the same thing. SmartSynch, for example, is relying on cellular and public networks for data transmission, while Grid Net is trumping up WiMax as the ultimate solution for long-distance data exchanges. If these ideas start to gain traction, then interest might migrate away from proprietary radio networks.

Still, Miller and CEO Andrew White are confident that Trilliant’s products are different enough to win over the market. Perhaps most convincing, they are lower-cost than many rivals’ products, which has helped the company win contracts with big utilities like British Gas, E.ON U.S. and Hydro One, as well as smaller municipal utilities.

Its multi-tiered solution is also special. Its SecureMesh networks can alternate between radio frequencies to adjust to different transmission distances, while keeping data secure. This was made possible by Trilliant’s acquisition last year of SkyPilot, which added in long-distance capabilities. Now its networks can serve major regions, as well as neighborhoods and extremely local areas.

“We are going to be expanding into each one of these areas,” says White. “Expanding our offerings for the wide-area and in-home area is underway, and that marketplace is just getting started.”

Going global should also help Trilliant maintain an edge over some of its competitors who have been bound to the domestic market, or only experimenting in one or two other countries. And now it has the cash reserves to make this happen.

It previously raised $40 million from MissionPoint Capital and Zouk Ventures in 2008. Both of those firms also joined the recent round.

Tags: Smart Grid

Companies: ABB, General Electric, Investor Growth Capital, MissionPoint Capital, Trilliant, VantagePoint Venture Partners, Zouk Ventures

Mayfield Fund is one of several well-known Silicon Valley venture capital firms dancing around the green sector. Its M.O. so far has been to invest in relatively capital-efficient plays in lighting and energy efficiency.

Today, it finally staked a claim in solar — the fastest growing segment for green investment — by leading a $21.5 million fifth round of funding for solar panel financing firm SolarCity.

Essentially, the company is the solar industry’s middleman, making rooftop solar systems more affordable for both residential and commercial consumers. It doesn’t make the solar panels, but it installs them, maintains them and retains ownership of them, selling the power generated back to its customers.

This allows the company to offer generous financing deals: no upfront costs for installation, and only monthly lease and electricity payments over the course of the panels’ lives. This brings the total cost of installing a solar system down from as high as $25,000 to the low four figures.

This business model isn’t too much of a departure for Mayfield. It may be new to solar, but SolarCity still falls neatly into the capital-efficient category, and it’s already profitable, making a quick, lucrative exit all the more likely.

“The way Mayfield sees the solar ecosystem, too much money has gone into early-stage companies developing the next best solar cell,” says Navin Chaddha, managing director at Mayfield. “We decided to invest downstream, with a company that already has customers and is science agnostic.”

SolarCity says it will use its new funding (which it didn’t expect to raise), to accelerate its geographical expansion in the U.S. (it’s only operating in five states today) and to fuel its acquisition strategy. Already this year, the company bought up the assets of Building Solutions, maker of software used to evaluate building energy efficiency.

Partnerships are also playing a key role in SolarCity’s expansion. In March, the company started offering its panel installation services through 92 Home Depot locations — a tandem program that may soon go national, raising visibility of the SolarCity brand.

The most important partnership in the company’s arsenal is with Pacific Gas & Electric, which is funneling $60 million in tax equity into the company to install about 1,000 solar systems on roofs in its coverage area.

PG&E is the first utility to turn to tax equity to fund alternative energy projects. Basically, it set up a new entity called Pacific Venture Capital to invest the money, which will produce returns in the form of clean energy tax credits. Last month it used the same tactic to invest $100 million in SolarCity’s prime competitor SunRun for the installation of 3,500 rooftop systems.

SunRun, which provides similar installation and financing services for residential customers, is a year younger than SolarCity, but already claims to have the bulk of the existing market share. Chaddha says that this isn’t the case if you look at actual deployments instead of the companies’ pipelines. On top of that, SolarCity was the first to pioneer a tax equity deal with PG&E, opening up new doors in the market.

But that’s not the biggest difference between the two companies. While SunRun hands out a lot of the installation and maintenance work to local contractors, everyone involved in SolarCity systems actually works for the company — making it a tighter-run, vertically integrated operation, Chaddha says.

“Our feeling is, SolarCity is a one-stop shop for all of our customers’ solar needs,” he says, giving Apple as an example of how vertically integrated companies have better success. “If you look at the other companies, one person does the panels, another does the installation, someone else follows up. We want to do it all. We want there to be one company responsible for providing quality service and controlling the experience.”

Still, even if SolarCity is in the lead (its brand recognition is boosted by listing Tesla Motors’ CEO Elon Musk as its chairman), SunRun is growing big in its review mirror and is not to be discounted. Lately, the company is pouring more resources into developing software to help installers that could give it an edge going forward.

In the meantime, neither company is hurting for cash. SunRun has raised more than $275 million, including $90 million in tax equity from U.S. Bancorp, and counts Foundation Capital, Sequoia Capital and Foundation Capital among its investors.

SolarCity’s recent round of funding included Draper Fisher Jurvetson, DBL Investors and Generation Capital — boosting its total raised to around $169 million. Private share trading marketplace SharesPost pegs its valuation somewhere between $375 million and $443.8 million.

Mayfield’s other green investments include cPower, a company that manages energy demand and supply issues for utilities; LatticePower, which makes materials for LED manufacturing; and Inphi, a maker of high-speed electronic components that aid in energy efficiency.

Tags: Solar

Companies: Dbl Investors, Draper Fisher Jurvetson, Generation Capital, Mayfield Fund, SolarCity, Sunrun