The Top Ten Green Incumbents:
1. Silver Spring Networks. Earlier this year, sales and marketing employees at the company received shirts with targets on them. It was an appropriate gesture. The company has gone from being the rising star in smart grid to the company that nearly all of the other competitors complain about. And they complain for good reason: Silver Spring has won multimillion dollar contracts in California, Texas, Australia and elsewhere.
The company produces mesh networking systems to connect meters to utilities. Competitors argue that Silver Spring's equipment won't handle as much traffic as broadband equipment or that it is more expensive than relying on existing networks. Some of its success has been attributed, again by competitors, to the fact that it got to market earlier. The complaints, exaggerated or not, about PG&E's smart grid rollout in Bakersfield, which relies on Silver Spring equipment, don't help either. Nonetheless, it is tough to argue with success.
2. LG Chem. Last week, Ford announced that Compact Power, a battery pack maker largely owned by South Korea's LG Chem with factories in Michigan, will supply the battery packs for the all-electric Ford Focus coming in 2011. Last year, LG Chem won the contract to supply General Motors with battery cells for the Volt. Compact/LG also received a $151.4 million grant from the Department of Energy. Considering the sometimes friendly relationships between South Korean companies, it wouldn't be a surprise to see LG cells or Compact battery packs, which of course rely on LG cells, wind up in Korean-made vehicles either. Unlike startups, Compact/LG can promise continual improvement, steady declines in prices, massive volume commitments, and a big bank account to cover the cost of any errors.
Panasonic gets a mention here, as well. The company supplies nickel batteries to Toyota for the Prius and lithium batteries to Tesla. Thus, Panasonic is probably on the short list for Toyota's lithium battery cars. Nissan relies on its own batteries to be developed in a joint venture with NEC.
Startups and other companies have won contracts in this niche, too. EnerDel supplies batteries to Think and Mazda, Boston-Power is working with Saab, and A123 Systems has deals with Fiat and Fisker Automotive. But these deals tend to be smaller in scale. Major manufacturers -- Volkswagen, BMW, Honda -- remain, but the track record of Compact/LG will be tough to contend with.
3. OPower. Behavioral change programs -- i.e., programs to encourage consumers to reduce power consumption through persuasion, social pressure or data -- are gaining ground with power providers. Earlier this year, the California Public Utilities Commission also ruled that utilities can add gains from behavior change programs to their energy efficiency goals.
Right now, the only game in town seems to be OPower, which uses notes inside of utility bills and other means to shame customers into reducing power consumption or gives them a pat on the back for being a good citizen. Last month, the company won a deal with AEP Ohio to provide 70,000 homes with in-home energy data and advice. OPower says that about 85 percent of customers will cut their power consumption by around 3.5 percent.
4. Trough. BrightSource Energy, Stirling Energy Systems, eSolar and others have touted new designs for solar thermal power plants that they claim could generate more power more efficiently and/or less expensively than traditional parabolic trough solar plants, which rely on curved mirrors and fluid-filled pipes. And many of these companies have won significant deals. Still, trough rules. 94 percent of the solar thermal power plants operating today rely on troughs, as do 95 percent of those under construction, according to GTM Research analyst Brett Prior.
Trough technology may also get cheaper with new types of reflectors that cost less than parabolic mirrors and technologies that let power plant owners take greater advantage of molten salt.
The new technologies are far from dead. Some believe that Stirling engine systems could do well in power plants geared for producing 20 megawatts or less -- these projects are easier to get off the ground and Stirlings are the only extant technology that makes sense here. But it is clear that trough is not rolling over.
5. First Solar. The thin film giant bids on the vast majority of utility-scale PV projects and wins a large number of them, in part because of the fact that it can produce solar modules for less than 85 cents a watt. The company has also racked up an impressive number of deals. My personal favorite: it bought the option on a piece of property for a 177 megawatt deal from Ausra and converted it from a solar thermal project to a PV project.
"They (First Solar) are in the pole position for sure," said Shayle Kann of GTM Research.
Honorable mention: SunPower, which wins a large number of the utility deals calling for crystalline silicon solar in both the U.S. and Europe.
6. Solazyme. The company's standing as an incumbent isn't as strong as most of the others on this list, but Solazyme does have a major factor in its favor in the algae oil market: it has actually made fuel. The company is currently in the midst of ramping up to supply jet fuel to the Department of Defense. It started selling oil to the food industry last year. Considering the billions that have been sunk into biofuels, we had to put someone on the list.
7. Renewable Funding. Put an asterisk next to this one. The company exists to advise states and municipalities on PACE (property assessed clean energy) programs and then help implement them. Founded by PACE co-creator Cisco DeVries, Renewable signed contracts with a large number of government agencies very early on, which in turn caused grumbling among would-be competitors. Unfortunately, Freddie Mac and Fannie Mae have barred lenders from issuing mortgages on PACE homes and other agencies have begun to question PACE despite a concerted push from the White House to get PACE implemented. If PACE succeeds, Renewable could become a huge company and a favorite of governments, contractors and big-box DIY stores. But if the regulatory choke-hold persists, this could turn out to be akin to winning the Presidential nomination for the Peace and Freedom Party.
8. EnerNoc. It's not the oldest demand response company, but it remains the biggest. Whenever someone lists demand response players, this is the name that comes out first. At the end of 2009, the Boston-based company claimed to have 3,550 MW, and deals with TVA, the PJM Interconnection and various utilities bring its current load management closer to about 5 GW.
9. Cree. The LED lighting market remains a relatively wide-open frontier. Still, Cree has a habit of sneaking into a number of deals. It will produce the LEDs for GE's LED bulbs. The company has also a wide-ranging intellectual property portfolio that others license.
10. ARM. England's ARM microprocessors already dominate the cell phone market and the same trick is being pulled in smart meters. Ember, Landis + Gyr, On-Ramp Wireless and others rely on ARM processors. (ARM does not make chips. Instead, it licenses the designs of its chips to others and charges them a royalty fee.) Other longtime ARM fans include Freescale, which makes a plethora of networking silicon for the grid; Samsung, which wants to be one of the leading companies in renewable energy; Cypress Semiconductor, which is moving into building management and waste heat recovery; and National Semiconductor. The list goes on.
Intel -- which has produced ARM chips under its own name at various times -- has made a concerted push into the low-power chip market with its Atom processor. Expect to see Atoms in home energy displays and turbines. But for now, ARM and its alliances have tentacles that reach farther.
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