Despite economy, 3 companies stay on alternative-energy path

— -- President-elect Barack Obama has made renewable energy a centerpiece of his plan to resuscitate the U.S. economy and fight global warming.

Yet the credit crunch and nose-diving energy prices are prompting companies to scale back or cancel alternative-energy projects. In 2008, total spending on clean-energy projects is expected to fall 4% to $142 billion from 2007, research firm New Energy Finance says. But venture capital and private-equity firms are still investing in emerging technologies, it says. This year, such investments will increase to $14.2 billion from $9.8 billion in 2007.

Here are three companies that are forging ahead:

SOLAR SYSTEMS

Making solar affordable

Here's a way to bring down the cost of that $35,000 solar system you're thinking of putting on the roof of your house: Turn the solar system into your roof.

Installation fees now make up about 30% of the price of solar panels. Panels, after all, must be individually mounted with racks and frames. Letting them double as roof tiles or building facades can eliminate those fees.

For 10 years, about a dozen companies have been laminating or gluing panels directly onto the roofs of homes or businesses as they're built. Sometimes solar cells are embedded within glass facades of office buildings.

Yet this segment of the solar business — known as building-integrated photovoltaics (BIPV) — makes up less than 5% of the industry, partly because systems are pricey, says consultant Paul Maycock of Photovoltaic Energy Systems.

A start-up called HelioVolt aims to jump-start the market with a less costly BIPV system for homes that it says is also more aesthetically appealing. It plans to start churning out panels for roofs and facades at its Austin factory by the end of 2009.

"My vision is to change solar from being a retrofit to being an electronic component embedded in the building construction material," Helio CEO B.J. Stanbery says.

BIPV providers that target the home market typically use wafers made of expensive silicon as a semiconductor. Individual solar cells must be electronically linked to form modules as large as 36 square feet. The links create grid-like lines on solar panels.

When a manufacturer builds a smaller module that doubles as a roof tile, it reduces efficiency and increases cost.

HelioVolt, by contrast, is a thin-film solar maker that uses a fraction of the semiconductor found in silicon wafers, slicing costs.

Also, Stanbery says the company creates electronic connections within each solar cell, eliminating the need to combine cells into large modules. As a result, he says, it can build smaller panels that naturally function as roof tiles and are 40% cheaper than current BIPV models.

And since the electronic links are deeply ingrained within the panels, the lines are virtually invisible, lending the panels a more natural solid gray look.

"You have no idea how many people I've talked to where the guy wants to put … panels on the roof, and the wife says, 'You've got to be kidding. You know how ugly those things are?' " Stanbery says.

WIND ENERGY

Design maximizes gusts

More wind, more electricity. Right?

Wrong.

A big drawback of wind energy is that generators operate at a steady speed regardless of how hard the wind blows. That means energy is wasted when gusts are too weak or too strong.

A Vancouver, British Columbia-based start-up called ExRo says it has a solution. It has invented a variable-speed generator that fluctuates with the wind. ExRo CEO John McDonald says the new generator can boost power output 20% to 50%, slashing electric rates.

"Alternative energy is still far too expensive," McDonald says. "What we're attempting to do is materially reduce the cost per kilowatt hour."

Wind makes up about 1% of U.S. power generation and has been growing about 45% a year.

Here's how a wind turbine works: Wind turns the blades, which spin a shaft. The shaft rotates copper coils that generate electric current when they pass by magnets. But the coils and magnets run at a set speed. So if wind speeds are too low, a gearbox must use power from the turbine to spin the shaft faster, wasting electricity. Similarly, the generator can't handle strong winds that would make the shaft spin too rapidly. So blades are positioned to let much of those gusts pass by.

ExRo Chief Technology Officer Jonathan Ritchey has devised a generator with 54 coils and magnets that work independently. If the wind is weak, only a couple of coils rotate. If it's strong, they all kick in.

The company has raised $1.5 million in seed money and is seeking $10 million next year for field trials. McDonald expects to team with manufacturers and start turning out generators in 2010. "No matter what the wind does, we have the right size generator at peak efficiency," he says.

GEOTHERMAL POWER

Raser Technologies' hot idea

Geothermal power, which generates electricity by tapping a virtually limitless reserve of the Earth's natural heat, is perhaps the most promising renewable energy. But the richest and most accessible resources are dwindling, and it typically takes five to 10 years to build a plant.

Start-up Raser Technologies aims to solve both problems.

Its modular design makes building a geothermal plant as simple and quick as putting up a house. And it can use cooler, more widely available water, which increases the number of potential sites.

The company recently completed a 10-megawatt geothermal plant — enough to power about 9,000 homes — in six months. By year's end, it plans to start selling electricity from the Thermo, Utah, facility to the city of Anaheim, Calif.

Raser and its supplier, UTC Power, want to build another seven generators in the western United States by the end of 2009. It says they can churn out a jaw-dropping eight to 10 plants a year for at least the next decade.

"I call it Lego … building-block style," says Raser CEO Brent Cook.

Geothermal makes up 3% of the nation's renewable energy, according to the Geothermal Energy Association. Geothermal, unlike wind and solar, makes power around the clock.

Developers typically drill for water that's at least 350 degrees Fahrenheit; most is in the West. As it's pumped from the ground, the hot water turns to steam, which cranks a turbine.

A relatively new binary process uses cooler water — 250 to 300 degrees — to heat a refrigerant that vaporizes at lower temperatures. UTC Power says it can tap water as tepid as 165 degrees. "There are a lot more low- and moderate-temperature resources than higher-temperature resources," says Joseph Moore of the Energy & Geoscience Institute at the University of Utah.

Raser and UTC executives realized they could streamline the process by simply using air conditioners. For the Utah plant, UTC combined off-the-shelf air conditioners from its Carrier division, the nation's top air conditioning supplier, with generators and turbines to mass produce 50 units. In the meantime, Raser drilled wells, laid the foundation and installed wiring at the Utah site.

Then UTC delivered 50 systems in just 10 days.

"I've seen projects studied to death," Cook says. "This gave us the business courage to say, 'Let's go ahead and do this project.' "