Ten Eco-Friendly Companies

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Seattle Biodiesel: It makes an alternative fuel derived from vegetable oil that burns clean

John Plaza experienced his alternative-energy epiphany 37,000 feet above the Pacific Ocean. The commercial pilot, flying freight from Anchorage, Alaska, to Tokyo several years ago, had time for some back-of-the-envelope calculations about his 747's fuel consumption. He figured his jet was burning enough fuel to power an average car for 42 years. The revelation disturbed him. "I came to the conclusion that I needed to do something different with my life," he says.

So two years ago Plaza started Seattle Biodiesel, which makes an alternative automobile fuel that many experts think could finally ease the nation's addiction to oil. Derived from vegetable oil, biodiesel can be blended with regular diesel or poured by itself into any conventional diesel car or truck. It produces relatively clean, almost sweet-smelling emissions. Biodiesel's obstacles have been its high price and the absence of a nationwide infrastructure to crush and refine oil-rich crops into usable fuel. Biofanatics usually have to drive to the back of a restaurant and beg for free waste oil to fill up their green machines. But Plaza and his partner, multimillionaire dot-com veteran Martin Tobias, plan to turn biodiesel into a viable national alternative. "Our mission is to make a gas that is so cheap and plentiful that consumers don't even have to know it's not made from fossil fuels," says Tobias, who invested his own money and has recruited investors such as Microsoft cofounder Paul Allen.

They're now trying to create a local agricultural economy around biodiesel, using their new refinery to convince Washington farmers there's demand for feedstock such as canola and mustard seed. Plaza and Tobias expect to begin crushing and refining local crops next year, which means they can cut down on the expense of importing soybean oil from the Midwest.

The company has scored some minor victories. Sen. Maria Cantwell used the plant in April as a backdrop to introduce legislation to boost the nation's biofuel production. And a few weeks after Hurricane Katrina struck, Tobias drove his diesel VW Beetle to a gas station and noticed that, for the first time in the region, pure biodiesel was cheaper than regular diesel. He hadn't expected the price inversion for two more years, and the company's phones started lighting up. Although the inversion was temporary (indeed, it lasted a month and a half), the company celebrated with six-packs of beer. A few more victories like that, and they'll be upgrading to champagne.

Miasole: Developing new ways, besides silicon, to capture the sun's rays and create energy

Dave Pearce and Dennis Hollars, of Silicon Valley start-up Miasole, can be called many things. They're Southerners, from Texas and Tennessee, respectively. They're serial entrepreneurs who learned "to squeeze every nickel until the buffalo roars," says Pearce. Just don't call them environmentalists. "Heck no," Hollars says. "Environmentalists are insane. We believe you ought to do what is sane.'' Their mission: make solar work without government subsidies.

Pearce and Hollars see a rich opportunity for a technology breakthrough. Here's why: more than 90 percent of panels use crystalline photovoltaic cells derived from silicon. It's a 50-year-old technology, but demand from many industries has created a worldwide shortage. Miasole (in Italian, "My Sun") is building solar cells without silicon. Instead, superthin layers of a semiconducting copper alloy, deposited on stainless-steel foil, convert the sun's rays into electricity. Pearce and Hollars are making prototype solar cells today, and plan to move into commercial production next year. "In a few years we can match the cost of conventionally generated electricity," says Pearce.

Their path to the solar-power business took some surprising turns. The duo was developing telecom equipment when the industry collapsed in 2001. They liquidated the company, but Pearce spent $1.5 million of his own money to buy some of the company's assets at auction. They included a machine that put magnetic memory strips onto credit cards. Hollars, a physicist, converted it to make thin-film solar cells.

The copper-alloy technology, called CIGS, has been tested in corporate and government labs for years. But Miasole's quick mastery made the company a hot property. Earlier this year the venture-capital firm that backed Google, Kleiner, Perkins, Caufield & Byers, led a $16 million investment round. Miasole's panels will be less than 50-microns thin--four times thinner than a photovoltaic. Conventional cells are slightly more efficient, but Pearce counsels patience. "They have a 50-year head start," he says.

Hydrogenics: Building markets for fuel-cell tech. A big bonus: byproducts can quench a thirst.

Pierre Rivard compares critics of hydrogen power to those who could never fathom color television, portable phones or the Internet. "They just lack vision," says Rivard, cofounder of Hydrogenics, an Ontario-based company. "People couldn't have imagined the advances we have made years ago."

Granted, we're still a long way from a hydrogen-powered car in every driveway, but Hydrogenics is working on other applications to build a market for the technology. (Hydrogenics produces fuel cells that fit together like LEGOs and extract electricity from the chemical reaction of hydrogen and water.) Last December, it installed a hydrogen re-fueler inside a General Motors car-assembly plant in Canada to power two forklifts. And this summer, Hydrogenics technology started fueling a Purolator truck in Toronto and a transit bus in Winnipeg. GM, which holds a 20 percent stake in Hydrogenics, deems its trial a success.

Hydrogen fuel cells aren't just clean--they're also silent, and they produce water as a byproduct. That's also creating defense applications that can capitalize on a stealth approach. Another upside: in desert settings like Iraq, the technology produces drinking water for soldiers. The U.S. Army recently started a yearlong trial using Hydrogenics to power a few of its Stryker light armored utility vehicles.

When this technology will move into mass markets is unclear. GM says it may happen in the auto industry over the next decade. (Hydrogenics helped develop a "neighborhood car" prototype that looks like a street-legal golf cart.) Hydrogenics' sales fell by 37 percent last year, but it has a big backlog of orders. David Smith, an analyst at Smith Barney, remains bullish on the company, and ABI Research estimates the fuel-cell market could reach $2 billion by 2012. For now, Rivard is content to focus on smaller projects. "It is important for us to go after these low-hanging fruits," he says.

Panda Development: Burning bovine 'biomass' to fuel plants that convert corn to ethanol

Todd Carter has a plan to alleviate the world's environmental woes. He just needs several hundred million dollars, a lot of corn and 1 billion pounds of cow manure. Carter, president of Panda Development, expects the laughs. --"After I get past the chuckles, I have to tell people, 'No, we're really serious about this'," he says. Panda, a subsidiary of Dallas-based Panda Energy International, is about to break ground on a $120 million plant that could lead to greater use of ethanol (the cleaner but less efficient gas now used sparingly in U.S. automobiles, in part because it takes too much energy to produce).

Panda thinks it's found a solution. The company plans to collect truckloads of cow manure from feedlots. Gasses produced by burning the bovine "biomass" will fuel Panda's plants, which in turn will convert corn to ethanol. Each plant will churn out 100 million gallons of ethanol a year, Carter says.

To be sure, it's unlikely that every car will eventually run on ethanol. But many are equipped to use fuel with at least some ethanol (mileage is slightly worse, but the fuel costs about 20 cents to 30 cents less per gallon than regular unleaded gas). Feedlots love it, too. Bob Josserand, mayor of Hereford, Texas, and owner of one of the country's biggest feedlots, calls Panda's plans "the sexiest project I know of."

STM Power: A modern twist on the Stirling engine, including a "Fumes to Fuel'' idea for Ford

Candy lovers know that M&M's don't stick to your hands. The reason: palm oil, which is used in the candy's coating. One company that makes the palm oil used in M&M's, Aarhus of Port Newark, N.J., pays hundreds of dollars to send some of the 900 gallons of palm-oil waste that it generates daily to a landfill. But starting next month, the company won't be paying any disposal costs. Instead, it will turn that palm oil into energy, using a new technology developed by an Ann Arbor, Mich., company, STM Power.

STM's technology, which generates electricity on-site, is based on the Stirling cycle engine, which was invented in 1816 as a cooler alternative to the hot-burning steam engine. The process can harness the power of a variety of fuel sources, including methane gas and environmental pollutants to run an external combustion engine. The burning takes place outside the engine, and the heat is then transferred to a small amount of hydrogen stored in tiny, semicircular tubes inside the Stirling engine. The heated hydrogen drives the pistons, to create new energy, and is then cooled and transferred back to be reheated, where the cycle repeats itself.

STM's units are expensive at $65,000 apiece, but each of its 4,000-pound power plants generates 55 kilowatts of electricity, enough to power 11 homes. Over the past year, STM has shipped 31 of its units to a wide variety of customers, including EcoMEET Solutions in Tokyo, which is using gas from chicken manure as a fuel source for STM's technology. In August, Ford Motor Co. started running one of STM's units for its truck plant in Wayne, Mich. It's converting paint emissions containing volatile organic compounds into an electricity source, in a project it's calling "Fumes to Fuel." "It's a great thing," says Mark Wherrett, Ford's principal environmental engineer. "We turn an environmental issue on its head and now use those environmental emissions to make electricity.''

Ion America: Developing solid oxide fuel cells that could put a power plant in your basement

Imagine, for a moment, a future where electricity is generated not in big power plants but behind your home or in the basement of your office building. High-efficiency, low-polluting fuel cells the size of minivans provide all your power needs. They take hydrogen-rich natural gas or propane and then chemically strip the fuel of its electrons to produce electricity. One byproduct is hydrogen, which can then be funneled into your new, clean-running hydrogen car. While the fuel cells run hotter than anything else in your home, perhaps as high as 1,000 degrees Celsius, that's OK, too--the extra heat is captured and warms the water tank.

Ion America is a quiet Silicon Valley firm pursuing this coveted power paradigm, using solid oxide fuel cells. The three-year old start-up, based at NASA's Ames Research Center in Mountain View, Calif., is still developing its technology.

But the company's first fuel cells are now being tested and the prospects are exciting some energy experts. The U.S. Navy gave Ion America a $2.7 million contract to test its fuel cells in submarines, where another byproduct, oxygen, can be used as breathable air. A Chattanooga, Tenn., university will install a five-kilowatt prototype early next year, and the city is asking for a more powerful, 100- to 200-kilowatt version to use downtown by 2008.

Ion's founder, Indian-born KR Sridhar, started his fuel-cell crusade while heading the Space Technologies Lab at the University of Arizona in the 1990s. He worked for NASA on ways to make breathable air from the carbon dioxide in the Mars atmosphere. When NASA terminated the lab's contract in a late '90s purge, Sridhar looked at the technology from a different angle, wondering if he could make electricity from hydrogen efficiently, which drew him to fuel-cell research.

Sridhar has said he hopes to begin selling products next year. That will help answer questions raised by skeptics. The fuel cells run at such high temperatures, for example, that reliability and stability could pose problems. But if Ion can answer them, old power sources will look like the dinosaurs whose remains they consume.

Vestas Wind Systems: Leading the market in installing wind turbines, a business that could grow tenfold to $80 billion by 2010

Vestas Wind Systems CEO Ditlev Engel loves to talk about the weather. His company is the world's leading maker of those sleek, whirring steel windmills dotting landscapes in Europe and increasingly in the United States. Breezes come and go, Engel likes to explain, but from one year to the next, the volume of wind in a place is highly predictable. And in Vestas' native Denmark, those winds create 20 percent of its electricity, compared with 0.5 percent in the United States. "If only the rest of the world could be like Denmark," he says.

His wish could pay off. Corin Millais, CEO of the European Wind Energy Associa--tion, forecasts that the global market will surge tenfold to $80 billion by 2010. Wind currently enjoys tax credits and subsidies that make its price competitive with natural-gas-generated electricity. As wind power evolves and the price falls, it soon may not even need government help.

Vestas boasts a 34 percent share of the market, with revenues this year that should reach $4 billion, twice what they were in 2003. Engel is building a factory in China, which will eventually supply the United States. It will open a new tech center in Denmark in 2007, followed by another R&D center in Asia.

Wind farms in the United States are rushing to secure supplies of mills before the most recent federal tax credit expires in 2008. Last month, in the first big order for 2006, Vestas won a contract to supply Horizon Wind with 127 mills for the Wild Horse project in Washington state. The U.S. Department of Energy wants 6 percent of electricity to come from wind by 2020. The European Union plans to get 33 percent of its electricity from renewable energy, up from 12.9 percent.

New rivals like GE and Siemens are getting into the wind turbine business. Engel welcomes them, saying these "big and powerful corporations are spreading the word about the potential for wind." He adds: "The industry is taking on a new dimension." And becoming a bit more like Denmark.

PowerLight: Making solar systems pay off for homeowners, businesses and governments

Some men root for their local sports teams, others for individual athletes. Dan Shugar's allegiances belong to the two solar-powered Mars rovers, Spirit and Opportunity. The rambling robots, designed to last just 90 days, continue to thrive in their 20th month of exploration on the Red Planet. Shugar, president of the solar-installation firm PowerLight, roots for the rovers because they're symbols of the reliability and durability of harnessing energy from the sun. He checks NASA Web sites to follow their progress and cheers when they overcome adversity. "There were predictions that the rovers wouldn't make it through the first winter, but they are still going strong. I think that is just fabulous," he says.

A recent report by the renewable-energy group Worldwatch found that grid-connected solar, the world's fastest-growing energy technology, expanded by 60 percent annually from 2000 to 2004. Few companies are better positioned to drive and benefit from that growth than PowerLight. The 120-employee firm, which occupies two floors in an old Heinz ketchup plant in Berkeley, Calif., doesn't make the photovoltaic panels that capture the sun's energy, but it buys them from manufacturers like Japan's Sharp and Sanyo, and America's Evergreen Solar and SunPower. Then it integrates them into its electrical rooftop systems and takes the financial case for solar to the marketplace. "They have had an aggressive approach to getting solar projects built. It is much less of a technology play, but it's important if we are ever going to realize the benefits of solar power," says Dan Reicher, a former assistant secretary of energy at the Department of Energy.

The company was founded in 1991, but for the first 10 years, early adopters bought solar cells mostly for the environmental benefit and an opportunity to jump on the green bandwagon. Today PowerLight sells to businesses, governments and homeowners who want a consistently priced source of energy to hedge against the uncertain future of electricity prices and nonrenewable fuel sources. Customers usually borrow to pay for the upfront installation costs, which are defrayed by state and federal subsidies aimed at reducing carbon emissions. Then they pay back the loan at a fixed rate. So while the price of electricity trends upward, PowerLight customers share a sublime certainty about what they'll be paying for their plugs. Over the last two years, big corporations like FedEx, Johnson & Johnson and Lowe's Corp. have installed PowerLight's systems.

Proponents of other sources of energy have trouble making the same consistency claims. Nuclear, gas and coal-fired plants all have moving parts that need regular, and sometimes unscheduled, maintenance. As Shugar says, "We have a pretty good feeling the sun will be shining with the same intensity two decades from now." Exact electricity output can even be predicted using satellite data that track solar radiation. Photovoltaic technology is so reliable now that PowerLight guarantees its panels for 25 years. In an uncertain energy market, that degree of certainty is as welcome as sunshine.

SunPower Corp.: Its solar-panel tech is highly efficient, and its esthetics are better for homes.

In 2001, the unmanned, $15 million Helios Prototype solar electric plane built by NASA set a world record for flight altitude. During a later flight, it crashed into the Pacific Ocean, but the project was still considered an engineering breakthrough, thanks in part to its ultra-lightweight solar panels created by SunPower Corp.

The Silicon Valley company's panels can produce up to 50 percent more power than most others on the market. They're also solid black, a big selling point with homeowners who want them to blend into their roofs. Esthetics alone could give SunPower an advantage in the fast-growing residential solar market. SunPower, a subsidiary of Cypress Semiconductor, hopes to raise $100 million in an upcoming stock offering. (Because of the pending offering, SunPower could not comment.)

The company faces plenty of hurdles. By all accounts, growth in the industry is likely to be slow and steady, and analysts say that profit margins are slim--supplies of polysilicon, a key ingredient in panels, are limited and expensive. SunPower's hope is that more consumers will follow the lead of people like Titus Brenninkmeijer. As the founder of an international alliance to help entrepreneurs in developing countries promote solar power, he's presold on the technology. In July, he spent about $80,000 to outfit his Pasadena, Calif., home with SunPower panels. "They make the most efficient modules," he says, adding that he expects to recoup his investment in 10 to 12 years. He also gets to make his neighbors jealous. In the blistering California summer months, Brenninkmeijer's panels actually generate more power than the family of five uses. "Our neighbors think it's neat because our meter spins backward and we actually make money," he says.

Comverge, Inc.: Its technology cuts power usage, and saves money, for utility customers.

Don Emert and his utility make a perfect power couple. Gulf Power watches how much wattage Emert's Pace, Fla., home is grabbing from the grid. Emert's tricked-out thermostat tracks which of Gulf's next 8,700 hours of electricity will cost the most. Sensors tell appliances to adjust accordingly. And--because friends take care of friends--Emert pays up to 25 percent less for power.

He can thank Comverge, Inc., for the extra cash. Backed by $35.4 million in venture capital, the East Hanover, N.J., company has already sold "energy intelligence" products--which use wireless tech to help utilities control consumption--to 500 power providers in 15 countries. But the $50 million, 10,000-customer Gulf deal is the one to watch. "It's the only mass-deployed system of its kind in the world," says CEO Bob Chiste. "This is the future."

Here's why: Comverge tech lets residents choose what (and when) they're willing to pay for electricity--and then lets them sit back and relax. Picture this: Gulf warns Emert's thermostat (by pager) that the price of power will rise tomorrow at 2 p.m.; Emert's AC responds (per his preset orders) by jumping from 68 to 70 degrees. "We avoid the spikes--and we don't have to build that next pow-er plant," says Margaret Neyman, Gulf's marketing general manager. Apply the Comverge model to the entire grid and, according to a 2004 RAND Corporation study, the potential benefits could reach $132 billion over 20 years.

Cautious utilities and strict state regulations make for a slow rollout. But programs will debut soon in New Jersey and Alabama, and Comverge expects to double its revenue next year to $40 million. "This has to go to the masses," says Chiste. With the cost of home heating set to soar this winter, the masses might not mind when Comverge comes calling.