Do you want to own a solar panel in a farm far away?

Business model innovations have been crucial for the solar industry in recent years. Community solar — where people can buy into community and neighborhood solar panel projects — has emerged, as has crowdfunding, where people can buy into solar projects and make back money (or a return) on them.

Now a young startup from Boston called CloudSolar is taking a spin on these two concepts with a plan to build a solar panel farm and enable people to buy individual panels (or even parts of panels) of the farm through crowdfunding, no matter where they live. The group launched an Indiegogo campaign on Wednesday morning to test out the idea and raise money (a $300,000 goal) to build their first solar farm.

As the name suggests, the team is making the analogy with cloud computing and the practice of remotely accessing data and computing over a network. In that way, anyone who buys panels in CloudSolar’s farm can remotely view how much power the farm and their panel(s) are producing and how many carbon emissions are being offset, via a cell phone.

However, that basic analogy with cloud computing starts to break down beyond the name and the mobile monitoring. Owners of panels don’t actually tap into their solar energy (the way you would with a cloud-stored song or AWS computing), and the electricity from the farm is planned to be sold locally to power companies in the region.

In the solar world this remote practice isn’t all that unusual, and some large companies, like Apple, are taking this approach for some of their solar farms. In North Carolina, Apple sells the energy from its solar farms (two of which are miles from its data center there) to Duke Energy to put back onto the grid; Apple counts its data center in North Carolina (legitimately) as solar-powered.

The Topaz solar farm.

The Topaz solar farm.

The CloudSolar team says its first farm is planned for “the Northeast,” and if everything works as planned, other sites could be built in California, too. If they can raise their funds, the group says they’ll build the first solar farm next year.

Now that solar panels are at their cheapest time in history, business models — not necessarily technology — are crucial for the industry. The solar-as-a-service business model — which emerged in recent years pioneered by SunEdison and expanded by SolarCity — now dominates the residential solar industry in the U.S., enabling customers to pay for solar power in monthly increments over decades, instead of paying for the expensive upfront fee of installing the panels. This innovation has opened the door for solar for tens of thousands of home owners in the U.S.

Crowdfunding for solar, while still a very (very) small part of solar project financing, has inspired a wave of new democratized funding models from startups for solar. Because solar systems steadily generate energy over 30 or so years and that power is sold to someone (a homeowner or a power company), investors (and regular people) can invest money into installing a solar project and then can make back a small return on the energy sales each month. Startup Solar Mosaic has gotten a lot of attention for its solar crowdfunding platform.

Solar Farm in Tucson, Arizona. Image courtesy of IBM Research, Flickr Creative Commons.

Solar Farm in Tucson, Arizona. Image courtesy of IBM Research, Flickr Creative Commons.

Then there’s the more charitable-oriented solar project startups like SunFunder, which crowdfunds solar projects in developing off-grid communities where solar power can change lives like Tanzania and Uganda. Like with Solar Mosaic, someone who invests in SunFunder can earn back their money, but making money probably isn’t your main motivation for participating in SunFunder’s campaigns.

CloudSolar’s idea is an interesting tweak on all of these models: community, solar-as-a-service and crowdfunding. But beyond the early adopter market who likes trying out new things on Indiegogo and Kickstarter, I’m not exactly sure what the motivation will be for people to buy into a remote solar farm.

Since the solar farm is probably no where near the panel owner, the motivation of helping your direct neighborhood or community probably won’t be there (though, perhaps CloudSolar could create more of a virtual community). Because the solar panel(s) will be owned by you, there’s not really much of a charitable aspect involved.

The Topaz solar panel farm, that uses First Solar panels in CA.

The Topaz solar panel farm, that uses First Solar panels in CA.

And the money making capabilities at a small scale are pretty basic. For $250, you can buy a quarter of a 250 watt panel (about 62.5 watts), and over 25 years you’ll make back $562, in payments every three months; a half panel is $450 (125 watts) and you’ll make $1,125 over 25 years; an entire panel is being offered for $650 to $750 and over 25 years you’ll make $2,250.

Obviously, the more money you put in, the greater your return. There’s an option to own 15 solar panels for $9,000, and two out of the nine spots for that have already been taken. I could see investors that are clean energy fans opting for these options, but probably not the average person. CloudSolar makes money by taking 20 percent of the money generated from the solar power.

One of the more clear motivating factors for someone to participate in this is, frankly, guilt — or put in a nicer way, someone who is looking to offset their own grid energy or gasoline usage. Offsets are a little controversial because they’re always so complicated.

If you buy one solar panel it would offset the use of your iPhone for forever, or your laptop for over a decade, or driving thousands of miles in a Tesla car. But when it comes to offsetting the energy used by an average house? One panel only offsets the energy used by an average home by about seven months. So, unlike if you had solar panels on your roof or you bought into a community solar program through your utility, one panel isn’t gonna cover you.

Big growth, but also losses, for solar company SolarCity

By the end of 2014, solar installer and financier (and soon to be solar panel manufacturer) SolarCity had installed about 1 GW worth of solar panels cumulatively on the rooftops of commercial and residential buildings. For comparison’s sake, that’s like the total of a really large coal or natural gas plant, but scattered across tens of thousands of rooftops. But SolarCity confirmed in its fourth quarter and year-long earnings Wednesday that it will install another gigawatt of solar panels in 2015 — basically doubling its entire amount this year.

The dramatic growth can be seen not only in SolarCity’s growing revenues, but also in its losses. For 2014, SolarCity generated revenue of $255.03 million, up substantially from its 2013 revenue of $163.84 million. But losses also widened significantly as well, and SolarCity posted a loss of $375.23 million in 2014, which was much larger than its loss in 2013 of $151.76 million.

SolarCity panels, image courtesy of SolarCity.

SolarCity panels, image courtesy of SolarCity.

From Wall Street’s perspective, SolarCity posted a wider-than-expected loss in the fourth quarter of this year of $141.14 million, from a Q4 2013 loss of $64.54 million. SolarCity’s stock dropped more than five percent on the earnings news.

To sustain its growth in this highly competitive market, the company is investing heavily in sales and marketing (close to $80 million in the fourth quarter of 2014 and $239 million for the year). The company is also investing in lowering its costs down the road, through its recent acquisition of Silevo and R&D into lowering the costs of its solar systems.

The good news is that SolarCity’s growth strategy is working to grab market share. The company, which is only eight years old, said it has the largest amount of solar customers among its competitors (190,000 by the end of 2014). It has a goal to have 1 million customers by 2018. SolarCity has long been strong on selling solar panels to residential customers, and the company grew its residential solar panel deployments by 110 percent from the previous year.

SolarCity factory in upstate New York.

SolarCity factory in upstate New York.

The bad news last year, beyond the continuing losses, was that SolarCity had some delays in projects with its commercial customers, leading to less commercial projects deployed. Also, naturally, SolarCity and its solar energy generation don’t perform as well in the darker winter months.

One of the interesting newer initiatives from SolarCity is its acquisition of Silevo and its plan to build its own solar panels in a factory in upstate New York. Being a vertically integrated solar company can help SolarCity cut costs and control its supply chain.

The company said on the earnings call that its factory in New York will be ready by the first quarter of 2016. “The foundation has been poured and erection of the steel structure is expected to begin over the next few weeks,” the company wrote in its shareholder letter.

This Berkeley startup & its energy machines are about to take off

A decade ago the sprawling artist compound just off of Ashby Avenue in an industrial part of West Berkeley, Calif, was filled with flame-throwing robots, stacks of shipping containers and towering Burning Man-inspired sculptures. During my college years at the University of California, Berkeley, and for several years afterwards, the place — then called The Shipyard — was the stuff of legend, hosting shows where huge metal art machines battled each other, and organizing events titled things like How to Destroy the Universe Festival.

Today it’s the headquarters of All Power Labs, an energy startup that emerged out of the ashes of the collective as a way for engineer artist, and all-around-noncomformist Jim Mason to provide power for the compound after the city of Berkeley repeatedly turned off their electricity. “The city was not excited about our interpretation of the building code,” Mason recalled of the group’s offgrid beginnings last week during an interview in All Power Lab’s offices, which sit just above their open machining and fabrication workshops.

Co-founder and CEO Jim Mason, and Director of Infrastructure, Nick Bindbeutel, [L,R] stand in front of the Power Pallet, in the headquarters of All Power Labs, Berkeley, Calif. Dog and mascot Dulie in the foreground.

Co-founder and CEO Jim Mason, and Director of Infrastructure, Nick Bindbeutel, [L,R] stand in front of the Power Pallet, at the headquarters of All Power Labs, in Berkeley, Calif. Dog and mascot Dulie in the foreground.

Instead of art machines, the place now produces machines that make distributed clean energy and are mostly shipped to the developing world. Over the past seven years, the group has been building devices called gasifiers that take plant waste (like walnut shells and wood chips) and turn it into electricity with a byproduct of biochar. It’s decades old technology — which was popular during World War II and is still used on a large industrial scale today — but Mason’s vision was to shrink down the tech to a personal scale, not just to run The Shipyard off the grid, but also to make it available to anyone who wanted to make it or buy it.

Now after years of refining the systems, All Power Labs has shipped 500 products and employs 40 workers. The team — a combination of junkyard fabricators, university-trained engineers and solar industry execs — has been gaining momentum, transitioning from their early DIY days into what they hope is a stable and predictable product-oriented energy company.

The group reportedly generates upwards of five million dollars in revenue a year, has been awarded several recent patents around core technology, and last month won a $2 million grant from the California Energy Commission to build out a large gasifier in a shipping container that can turn the waste from fire-prevention forest thinning in the Sierra Nevada mountains into usable, on-demand, local electricity. The award still needs to be officially voted on and approved by the CEC.

This week the team officially brought on Cal-Berkeley energy expert Dan Kammen as a founding board member. Kamen described All Power Labs’ products to me as “very exciting as a technology and a systems solution.” While All Power Labs has long operated off of sales to support its growth, the company is now looking to take advantage of this recent momentum to raise funding to scale up and keeping refining its products.

All Power Labs' latest gasifier is large enough to fit in a shipping container, and the company is using a grant from the CEC to finish work on it.

All Power Labs’ latest large gasifier fits in a shipping container, and provides over 100 kW of power from plant waste. The company is using a grant from the CEC to finish development work on it.

A backwards evolution

It’s taken a good seven years for the team to get to where they are today. “This wasn’t the plan,” explains Mason, who has a degree in anthropology from Stanford, the mind of a mechanical engineer, a background working in open source online communities and the spirit of a Berkeley radical. All Power Lab’s Director of Strategic Intiatives, Tom Price — who has been an environmental manager at Burning Man and spent years working on community solar projects — describes the company’s evolution as “completely backwards.”

In the traditional Silicon Valley tech startup world, co-founders might build a prototype or a basic app and then start raising money from investors to build out and launch the product. In contrast All Power Labs has been entirely bootstrapped, and slowly meandered around to their current commercialization strategy. Their development has been as organic as the produce being sold across the street at the health food coop Berkeley Bowl.

Originally, Mason’s idea was to take the open source, participatory, and collaborative culture that they’d fostered in the art collective and at Burning Man, and bring it to energy. Mason looked to the personalized, layered, and meaning-filled relationships that humans have developed around resources like food and transportation¬†in modern times (picture all the foodie movements and hot rod culture) and wondered if the same type of relationship could be fostered around energy generation and use.

An All Power Labs' gasifier being run in Liberia.

An All Power Labs’ gasifier being run in Liberia.

Soon after the city shut off their power, Mason started reading about gasifiers via an old Swedish gasifier manual; Sweden has long been a world leader when it comes to converting waste into energy. Gasifiers use heat to transform plant waste into a gas similar to natural gas that can be used to run an engine and produce electricity. A basic gasifier is about as complex as a traditional wooden stove and can be assembled with simple tools like a hammer and wrench.

Gasifiers are also interesting from an environmental, and emissions perspective, because they can produce “carbon negative” energy. Plants and trees harvest carbon from the atmosphere, and when they are later put into a gasifier as waste, the remaining energy is extracted and the leftover byproduct is the carbon-based biochar, which can go back into the soil. As Price said, “Solar is great, but we need to harvest gigatons of carbon from the sky.”

The by-product of the gasifiers is that they produce biochar, which can be added to soil as a fertilizer.

The by-product of the gasifiers is that they produce biochar, which can be added to soil as a fertilizer.

In the early days, and partly to cultivate the personal energy experience, All Power Labs made kits called Gasifier Experimenter Kits (GEKs), which were free CAD files that walked users through the steps of making the gasifiers from off the shelf parts. While the kits received a lot of attention from enthusiasts (many in the U.S.), even the early adopters sometimes found the notoriously tempermental tech difficult to get up and running and operating for substantial periods of time.

[pullquote person=”Tom Price” attribution=”Tom Price, All Power Labs” id=”912301″]”Solar is great, but we need to harvest gigatons of carbon from the sky.”[/pullquote]

Over the course of several years, the team slowly decided they wanted to provide a product that was much easier for their customers to use, instead of just providing them the means to create the technology. All Power Labs also started to get an increasing amount of interest from local entrepreneurs in developing areas in Africa and Asia that needed low cost, off-grid power to run their businesses, had access to abundant biomass (many operated in agriculture regions) and wanted to replace their expensive and dirty diesel generators with something else.

Tom Price, Director of Strategic Initiatives at All Power Labs, stands next to the Power Cube, a mobile gasifier.

Tom Price, Director of Strategic Initiatives at All Power Labs, stands next to the Power Cube, a mobile gasifier.

All Power Labs no longer sells these kits and the tech has evolved into the company’s three current gasifier products. The first is the company’s staple, the Power Pallet, which produces 15 kW to 18 kW of power, fits in the bed of a truck, costs $30,000 or $1.50 per watt, and represents the bulk of the shipments.

All Power Labs now has Power Pallets operating in 40 countries, including in Liberia using old rubber trees, the Philippines using coconut shells, and in Haiti, gasifying corn cobs. They had to temporarily halt their on-the-ground work in Liberia when Ebola hit.

At that $1.50 per watt price point, a customer that buys a Power Pallet to replace a generator and diesel fuel can recover their costs in 15 months, Price said. That price also significantly beats the cost to install solar panels, which can cost $2.27 a watt for large rooftop solar systems for companies and organizations, and $3.60 a watt for residential systems, according to GTM Research. And unlike a solar panel, the Power Pallet can run around the clock, whenever it’s got plant waste to gasify.

All Power Labs works out of a 11,000 square foot former artist collective space, in Berkeley, Calif., filled with shipping containers. Dog Dulie wanders around the space.

All Power Labs works out of a 11,000 square foot former artist collective space, in Berkeley, Calif., filled with shipping containers. Dog Dulie wanders around the space.

All Power Systems has two other products in the works. There’s the Power Cube, a regulation compliant version of the Power Pallet for the European market that is just starting to go into production. And there’s the Powertainer, which is the larger, 100 kW unit that the company is working on with the CEC grant, and which isn’t yet on sale publicly (they’re shooting for 2016).

Despite the fact that the tech is centuries old, All Power Labs is still able to claim at least three patents for new gasifier innovations. Price said that they’re also using state of the art materials like cast in place ceramics in the reactor, and the electronic brain of the systems — which use Arduino sensors — are utilizing the latest in electronics, helping the gasifiers bypass many of the messy problems that plague older systems.

Gasifiers, in general, are messy systems, and produce tar, a dirty pollutant. They also can be very temperamental, which is one of the reasons why the technology hasn’t taken off on a broader scale. In addition to those two hurdles, the lifetime of the systems are dependent on how often the owner runs them; the basic four cylinder engine in the Power Pallet might need to be replaced after two years.

What’s next?

While All Power Labs has been commercially operating for years, it hasn’t fully transitioned into a streamlined business with automated manufacturing or some of the typical operating metrics that guide larger production companies. In the energy generation world, technology needs to be predictable and repeatable. Variation in products should be minute. And the more reliable the products are out of the gate, the less time the All Power Labs engineers need to spend in the field fixing them.

That’s one reason the company is looking to raise a Series A round of $10 million, so it can continue to “productize” the technology. It has also brought in some more experienced management in recent years: COO Alejandro Abalos joined the company two and a half years ago after spending a combined decade at solar companies GreenVolts, SunPower and PowerLight. Price also joined close to two years ago, too. Clearly they’re excited about the potential, even after having worked in the newly booming industry of solar.

A Power Pallet operating in Uganda.

A Power Pallet operating in Uganda.

It could be difficult for All Power Labs to raise funds from traditional venture capitalists in Silicon Valley. Many of the larger firms that were once aggressive on cleantech have now moved away from new investments. The firms that are continuing to invest in energy now tend to take a lighter approach, opting to support digital energy focused startups that might require less capital to scale.

But there’s a growing amount of money being invested in clean energy in general in the world (much of it in solar projects and offshore wind), and there’s still some money for equity in early stage technology, though much of it is coming from outside the Valley. Corporations, like Shell, Siemens and GE, are looking to make energy investments as part of their corporate R&D strategy. And more family offices are willing to support energy startups that have a triple bottom line.

The Altaeros, high altitude wind turbine.

Altaeros’ high altitude wind turbine, which Softbank invested in.

Some of the deeper investor pockets can be found in Asia. For example, telecom giant Softbank has a new fund to invest in early energy generation and storage technologies that can be implemented in Japan and Asia. Japan is struggling to remake its energy generation mix after the nuclear disaster.

Hong Kong billionaire Li Ka-shing has backed some of the harder to fund startups out there. Some startups have been able to scale dramatically with funding in China, like Boston Power, LanzaTech and EcoMotors.

And there’s still some funding in the Valley for big energy ideas. Cleantech heavyweights Nancy Pfund and Ira Ehrenpreis have teamed up at DBL Investors for a new fund. Groups like Other Lab and M37 are testing out new models around developing energy innovation that are part government lab, part corporate lab and part Valley incubator. And perhaps the few VC-backed energy companies that have done well, like Tesla and SolarCity, will help produce the next-generation of entrepreneurial energy investors willing to make bigger, and smarter, risks in new energy startups.

I do wonder how the team at All Power Labs would feel at the end of the day about joining up with the sometimes slick, and always-optimizing, investors of Silicon Valley, or even investors outside the Valley. It would help them reach another of level of efficiency and growth, but it could also mean giving up some of their core tenets and lifestyle.

But whatever happens to the group going forward, they have the enthusiasm, momentum, and innovative thinking rarely seen in such an organically-emerging startup. And if their gasifiers are ever able to reach any substantial scale, they could have a profound effect on the emergence of off-grid power in the places that need it most.

An increasingly rare type of solar farm goes online in California

When the huge solar farm just outside of Las Vegas called Ivanpah opened up in early 2014, many lamented that this type of solar plant, called solar thermal, could soon become a dinosaur. Late last week another of these large solar thermal farms was officially turned on, and it truly could be one of the last of this size built in the U.S., thanks to a one-two punch of changing incentives and economics.

Large utility-scale solar panel farms use rows and rows of solar panels to directly convert the sun’s energy into electricity. Solar thermal farms, on the other hand, uses mirrors to concentrate sunlight to heat liquid that produces steam and makes electricity from a turbine. These sites are essentially using the heat of the sun to produce electricity.

Abengoa's solar thermal farm Mojave Solar

Abengoa’s solar thermal farm Mojave Solar

Spanish power giant Abengoa celebrated the opening last Friday of a huge 280 MW solar thermal farm called Mojave Solar, built just outside of Barstow, California. The project can provide enough solar power for 90,000 homes in California, and was built across 2 square miles.

Abengoa said the site will generate $169 million in tax revenue over 25 years, provided a peak of 2,200 construction jobs, and now employs about 70 people. California utility PG&E is buying the power from Mojave Solar, and the facility will help PG&E meet California’s state mandate to generate a third of its electricity from clean power by 2020.

Abengoa finished another 280 MW solar thermal farm in Gila Bend, Arizona at the end of 2013. Years ago, power companies were as bullish on solar thermal farms as they were on solar panel farms, which are increasingly being constructed in the deserts of California, Nevada and Arizona.

The Topaz solar farm.

The Topaz solar farm, built by MidAmerican, outside of San Luis Obispo

But a few years ago the price of solar panels began to drop dramatically, from an average installation cost of $5.79 per watt in 2010, according to the Solar Energy Industries Association, to $2.71 per watt in the third quarter of 2014 (this is the average cost blended across all types of installations). Utility-scale solar panel installations can be as low as $1.68 per watt according to GTM Research.

As a result, some power companies that had solar thermal farms planned converted these sites over to solar panel facilities. Other companies that had developed businesses off of developing solar thermal sites cancelled projects in the U.S. that were no longer deemed economical and focused internationally.

A look at the heliostats and 2 of the 3 towers of Ivanpah. Taken from the 6th floor of the Unit 1 tower.

A look at the heliostats and 2 of the 3 towers of Ivanpah. Taken from the 6th floor of the Unit 1 tower.

But ultra cheap solar panels are only part of the headwinds facing large utility-scale solar thermal farms in the U.S. There’s also a couple of important incentives that have been changed as well.

First off, the federal investment tax credit (ITC), which delivers a 30 percent tax credit to solar project developers, is planned to be cut to 10 percent by the end of 2016. While it could be extended, the uncertainty is threatening the construction of utility scale solar farms, using both solar thermal and solar panels. The New York Times noted in an article this weekend that there are no future large solar thermal projects planned in the U.S.

Then there’s the fact that federal incentives in the form of loan guarantees are also no longer widely available for solar thermal plants. When Ivanpah was built, it used a $1.6 billion loan guarantee from the U.S. government to construct its 347,000 mirrors and three huge 450-foot towers. Likewise, Abengoa’s Mojave Solar used a $1.2 billion loan guarantee to finance construction. These types of large loans are no longer regularly coming out of the Department of Energy.

NRG Energy CEO David Crane and Energy Secretary Ernie Monitz cutting the ribbon at solar farm Ivanpah, just outside of Las Vegas

NRG Energy CEO David Crane and Energy Secretary Ernie Monitz cutting the ribbon at solar farm Ivanpah, just outside of Las Vegas

While large solar panel farms are still low cost enough that they could continue to be constructed, solar thermal farms the size of Ivanpah (392 MW, 5 square miles), Mojave Solar (280 MW, 2 square miles), and Solana (280 MW, 3 square miles) are far less likely to get built in the future. (Though, solar panel projects will also be impacted by the reduction of the ITC.)

Utilities calculate how much clean power they need (most likely to meet a state mandate) and then compare it to the cost of building a new natural gas plant, a wind farm or either type of solar farm. If natural gas plants, or other types of clean power, are cheaper than solar thermal facilities, then it’s an easy decision.

But large solar thermal farms could still find life outside of the U.S. They can uniquely store thermal energy at night, providing electricity far longer than solar panel farms without energy storage can.

BrightSource, which is the startup behind the Ivanpah site, recently announced a joint venture with China’s Shanghai Electric Group to build utility-scale solar thermal plants in China. Their first proposed project is to build two 135 MW solar thermal projects in the Qinghai province of China.

Walmart dominates the list of U.S. companies using solar

One less reason to hate Walmart — the retail behemoth uses the most solar panel systems out of any other company in the U.S. Collectively companies and governments in the U.S. are delivering 2.3 GW of solar power, mostly on the rooftops of their buildings.