But the economy, of course did play a factor, in the overall money flowing. A total of $4.85 billion was poured into greentech in 2009, GTM reported this week. That’s significantly less capital than the sector saw in 2008 — a record-breaking year with $7.6 billion in investment.

Still, according to cleantech VC Ira Ehrenpreis, a general partner at Technology Partners, in GTM’s release, 2009 marks “one of the strongest years ever in the history of the cleantech sector.”

Key trends this year include growing investment from outside the U.S. (mainly from the UK and France), “plentiful government funding” for renewable energy,” and “a return to early stage deals with more than 110 Series A and seed rounds this year.” And the research firm predicts the recent IPO registrations by Solyndra and Codexis will be followed by a “wave” of greentech IPOs in 2010. In addition, the industry (in particular the solar sector) is poised for consolidation next year.

Solar power grabbed the most investment in 2009, as it has for the last four years. This week’s report says the solar segment pulled in more than $1.4 billion in 84 deals. Biofuels came in at number two, with $976 million in 44 rounds. Several other segments are “gaining momentum,” including the smart grid, energy storage, automotive, wind, water and lighting. GTM notes, “Water has finally made it onto venture capital radar screens,” picking up more than $130 million in 33 deals. For the full rundown, you can download GTM’s report here.

Amonix also snagged a trio of Sunworks executives along with the purchase. Sunworks co-founder Brian Robertson — who also co-founded SunEdison – is now taking on the role of chief executive at Amonix as part of the deal announced Monday night, while Sunworks co-founder Guy Blanchard and managing director Matthew Meares will lead Amonix’s corporate development and project finance, respectively.

Amonix, which is based in Torrance, Calif., and backed by venture firms Kleiner Perkins and MissionPoint Capital Partners, has not disclosed the financial terms of the Sunworks acquisition. The deal closed last month, just ahead of Amonix raising $40 million as part of a $98.23 million funding effort reportedly meant to help the company finance the addition of 300 MW of production capacity at two manufacturing facilities.

This latest deal comes as part of a larger trend of consolidation in the solar industry. Robertson’s previous solar brainchild, solar installer and power provider SunEdison, also got acquired last month — in a $200 million deal with silicon wafer maker MEMC Electronic Materials that MEMC hopes will help drive demand for MEMC’s wafer business as well as provide a recurring revenue stream from SunEdison’s solar-generated electricity.

While Sunworks and Amonix have focused on manufacturing, the Sunworks acquisition comes amid what Lux Research analyst Ted Sullivan described to us last month as a shift toward a more fabless market. “Given how much capacity is out there, there is no reason to build you own [cells] to prove new technologies.” The availability of “so much idle production capacity sitting around in East Asia,” may be opening opportunities for solar startups with no means or intention of producing their own cells.

Here’s the issue: The U.S. solar market (both as a supplier and as a consumer) has the potential to be one of the largest in the world, and has a wealth of startups, many born out of the labs of U.S. universities and pumped full of venture capital dollars, that are trying to scale new technologies to bring down the price of solar to grid parity (so it’s equal to the cost of fossil fuels). But until more recently, the U.S. solar industry hasn’t had the types of incentives that have encouraged other international solar markets to grow (Germany, Spain). But with the passage of the stimulus package, the extension of the clean energy tax credits, and the climate bill that’s winding its way through the Senate, the U.S. is starting to offer important government support. At the same time, the U.S. industry has to face the international economic slump that has delivered less demand for solar projects, in addition to dropping silicon prices (the key ingredient in solar panels), and, of course, international competition. It’s a difficult landscape to navigate, but here are seven trends to look for:

1. How to Maneuver U.S. Federal Policy: On the top of everyone’s discussion list is how to tap into the new funds and opportunities from the U.S. federal government. First, as part of last year’s bailout, the renewable energy tax credits (which provide a 30 percent tax credit for investing in clean power projects) were extended significantly, and allocated $18 billion, including an eight-year extension for the tax credits for solar. At the time that the extensions passed, Roger Efird, Solar Energy Industries Association chairman, said that the incentives would deliver “policy certainty that will attract investment, expand manufacturing, and lower the cost of solar energy to consumers.”

Then there’s the stimulus package, which President Obama signed into law at the solar-powered Denver Museum of Nature & Science back in February. It allocates around $43 billion in various funding forms to clean energy and energy efficiency. That includes billions in clean energy grants for solar projects — the guidelines for which are just starting to be detailed — as well as funds for renewable energy manufacturing tax credits, and building out transmission lines, which will make way for plugging in more solar projects.

Finally, there’s the the climate bill, which won’t be looked at in the Senate until September, but if passed would create two important federal policies for solar. It would create a cap and trade system that would deliver a decidedly friendlier solar climate, using market mechanisms to level the cost of clean power generation. In addition, the House-passed climate bill includes a national renewable portfolio standard, which says utilities must deliver a certain percentage of their electricity from clean power by a certain year. How the solar industry will access recently released funds and how it will help get the climate bill passed, will be a big topic at the show.

2. Oversupply Up; Silicon Prices Down: There can be a big problem with subsidies, however, if when combined with a poor economy, they help create a market with more supply than there is demand. Researchers say that solar module capacity will reach 10.4 GW this year, outpacing demand nearly twofold, and the overall solar market will shrink to $29 billion and 5.3 GW, down from $36 billion and 5.5 GW in 2008. In addition, some reports suggest that the price for silicon, the key ingredient in solar panels, will drop this year, which on one hand is good for the industry as a whole to make it more competitive with fossil fuel power, but means solar panel makers have to sell their products for less.

All of this creates a difficult market for solar companies. Expect a lot of the talk at the show to be centered around how to overcome tough margins for solar manufacturers (cut production costs) and how to deal with potential consolidation in the industry. Already this year, we’ve seen renewable energy project financier Recurrent Energy buy up the solar project assets of Chicago-based UPC Solar; Spanish solar power developer Fotowatio is looking to purchase some of the assets of San Francisco’s MMA Renewable Ventures; and rooftop solar installer Borrego Solar Systems is selling off its residential solar power installation business to groSolar.

3. Will China Achieve its Solar Potential Soon?: China is the awakening giant for many industries, and as the world’s largest solar panel producer for the last two years, the country already is a major solar player. But now, some industry experts say, it’s expanding from being mainly a solar panel supplier to also becoming a substantial customer. That’s thanks to aggressive government policies like a subsidy for building-mounted photovoltaic systems which could pay up to 20 Chinese yuan (about $2.93) per watt for systems larger than 50 kilowatts, and one of the most aggressive renewable portfolio standards in the world. The country’s emergence as a solar consumer will effect the international solar industry, creating a massive market for solar products, as well as help China, which is soon expected to overtake the U.S. as the largest energy consumer in the world, find a cleaner solution for energy growth.

4. Next-Gen Thin Film Makers Still Ramping Up: While all eyes are on how U.S. thin film solar leader First Solar will fare under the current difficult market conditions, many are also closely watching how companies using next-generation thin film solar technologies are doing after many have been trying to move into or scale up production for the last year. Unusually quiet Nanosolar says it will have some news out in September (we’re hoping its production metrics), HelioVolt has yet again delayed commercial scale production, and SoloPower recently lost its CEO and won’t start high volume production until next year. A few panels at the show will be focused on thin film technologies, and we’ll be looking for some good — as well as more negative — news coming from the industries players.

5. Chip Companies Making Solar Friends: Will the chip companies have a strong showing at the show? No doubt Applied Materials will have a lot to say about its thin film solar production machines, but what about some of the newer entrants that are looking to tackle the emergence of the market for chips to optimize solar systems? The barrier for chip companies to enter the solar arena has recently started dropping as optimization has become a hot topic, and according to some reports, could be a $6 billion market this year.

6. Utilities Owning Solar: Northern California utility PG&E had talked about owning its own solar distribution a great deal over 2008, and this year finally got around to launching a project to make it happen. We’ll be listening to see if this is an emerging trend that many utilities at the show plan to follow.

7. Solar Thermal’s Permitting and NIMBY Woes: Massive solar thermal plants that need large areas of dedicated land — and permits and approval from state and federal regulatory bodies — have long been frustrated over the long time tables and opposition from environmentalists to building the projects. But recently, the Bureau of Land Management decided to fast track studies for 24 areas of BLM land for solar projects, which could help speed up the approval process. Solar thermal companies will be looking to discuss how to overcome hurdles in the permitting process, how to access these lands, and how to work with the BLM in a more productive way.

But at a luncheon Wednesday to discuss solar trends in advance of the Intersolar North America conference next month, some California solar insiders voiced skepticism about whether a German-style feed-in tariff would be the end-all policy for the state.

In fact, California already has a feed-in tariff, but it’s ineffective because the price is low, based on prices for natural gas. The state also has a net-metering program in which solar customers use the electricity they generate for their own use, then feed excess electricity into the grid, running their meters backward. In addition, California has a solar incentive program, which offers declining rebates for solar projects, and a renewable portfolio standard, which requires utilities to get 20 percent of their electricity from renewable sources by 2010.

So how about it: Why hasn’t California copied Germany for its much-lauded feed-in tariff? Here are some of the reasons California solar insiders have put forth:

1). A feed-in tariff doesn’t factor in where and when the electricity is generated: Because a feed-in tariff pays the same price for any kilowatt-hour of solar electricity, it doesn’t encourage generation when and where the electricity is most needed, said Sheldon Kimber, vice president of development for Recurrent Energy, which installs and finances solar projects. “One thing the feed-in tariff doesn’t do is expose everybody to different market signals on the grid, such as time-of-use and location,” he said, and these are important factors for a sustainable policy.

2) Germany’s feed-in tariff led to higher panel prices: Because the tariff offered such a high price for solar electricity, it created a shortage of panels that led to much higher prices. “On the one hand, Germany absolutely built the global manufacturing base, but on the other hand, it built the manufacturing base around the $4-a-watt panel,” Adam Browning, executive director of solar advocacy group Vote Solar, told me last month. “We will always have the German program to thank for what it did – it saved the world, as far as I’m concerned – but it also had some policy ramifications that haven’t been entirely positive.”

3) California’s many utilities, each with their own unique conditions, make it more difficult to create a feed-in tariff: Getting a German-style tariff in California would be more difficult than it might seem, Sue Kateley, executive director of the California Solar Energy Industry Association, told me in an interview last month. For one thing, the state has more than 30 vastly different utilities. Some are legally prohibited from increasing some of their rates, for example, and others have very low prices for conventional electricity. Los Angeles’ utility, for example, has rates of about 5 cents per kilowatt-hour. “If solar’s going to cost 20 cents a kilowatt-hour and customers pay 5 cents, will customers tolerate that kind of rate increase?” Kateley asked. Meanwhile, prices — and peak demand — in Germany don’t vary as widely.

4) The feed-in tariff only addresses wholesale electricity sold to utilities, and doesn’t encourage energy efficiency: California’s mix of policies encourages a wider range of solar projects than Germany’s feed-in tariff, which is focused mainly on wholesale electricity, Adam Browning, executive director of solar advocacy group Vote Solar, said in an interview last month. Overall, the policy mix “gives California a unique robustness, a lot of different ways to capture the value of solar,” he added Wednesday. Kateley put it another way: “We need it all,” she said, including both a retail-electricity program to help consumers reduce on-site demand, a utility-scale program, and a wholesale-electricity program like a feed-in tariff.

Since the launch of the agreement in 2005, some 500 more cities have signed on (and counting). And while some cities just signed the document and moved on, others have used the initiative to draft further innovative strategies that deliver meaningful reductions. The most effective strategies, by far, have been those that bring sustainability initiatives into the office of economic development and turn the city into an early adopter of “green” products and services. It’s exactly this sort of strategy that makes the following cities the best in the country to be a cleantech start-up. In a report, Living Cities Foundation interviewed sustainability directors and gathered data from city sustainability departments throughout the country. We’ve landed on the following seven as the best spots to start and grow a cleantech company (more interviews from the report here).

• San Jose
• Boston
• Austin
• San Francisco
• Seattle
• Portland
• Denver

First up: San Jose »

Image credit: arimoore.

The partnership makes a lot of sense in a tight economy. The venture will use solar wafers from LDK and solar cells from Q-Cells, and the companies said it won’t require any additional working capital or other funding. Because this team-up encompasses the supply of both solar wafers and solar cells, it could give the pair a financial advantage in the large-scale solar market, and the companies said they can cut costs on the projects by taking advantage of their complementary business models and regional expertise.

The move follows a wave of consolidation in the solar industry, with other players in the industry also pairing up their solar supplies.

The exact site and the cost of the new plant weren’t disclosed, but the companies said the venture is already in talks with potential buyers of the plant, and that the venture is in the planning stages for future projects in China. The companies didn’t say how big the future projects will be, and although 40 MW is on the high end of currently operating solar power plants, it’s nowhere near as big as some plants that are in the works.

The new venture won’t be exclusive (which means the companies can still go off and do other projects with other partners), but both companies also said the venture will help speed up the move to grid parity for the solar industry. This is the first project from the joint venture, but LDK already has two major supply deals with Q-Cells. Last September, Q-Cells signed a deal to buy up to 5 gigawatts of solar wafers from LDK between 2009 and 2018. That’s in addition to a deal back in 2007 for more than 6 GW worth of solar wafers.

Photo of Q-Cells’ headquarters courtesy of Q-Cells.

Sensor Switch’s products, which Acuity said can substantially cut energy consumption, include motion and light sensors, and distributed lighting control devices. Acuity said the deal will give it a boost in the building construction market, as well as in building control systems.

The acquisition, which is subject to regulatory approval, comes on the heels of Acuity’s recent deal for Gendale, Calif.’s Lighting Control and Design. Acuity grabbed Lighting Control and Design in January, but did not disclose the financial terms of the deal. Lighting Control and Design’s products include dimming controls, building interfaces and digital thermostats for commercial and institutional lighting systems.

Sensor Switch will likely continue to operate under its own brand — Acuity Brands, true to its name, has a number of brands under its umbrella — but it’s unclear if its operations will be rolled up into a joint energy management division. There’s likely more than a little crossover in the operations of Sensor Switch and Lighting Control and Design.

The lighting industry could be a bright spot for cleantech in a down market. Earlier this year, Cree, an LED lighting company, posted a positive second quarter report, with revenue up 5 percent from the same quarter last year. In November, the similarly-named Oree raised $4 million in funding for its tiny LEDs.

UPC Solar has a solar project pipeline of 350 MW and Recurrent now plans to finance, build and operate them, looking to put 100 MW of solar projects online by 2012. Recurrent has the capital to buy up its competition, because last July it raised a whopping $75 million from Hudson Clean Energy Partners. Harris says Recurrent could raise additional capital from Hudson if need be, but they haven’t disclosed a new round at this point. Beyond funding for operations and acquisitions Recurrent raises project financing for its solar projects, which it will continue to do throughout the year.

Consolidation is the name of the game right now in the solar industry. Spanish solar power developer Fotowatio plans to buy up some of the assets of San Francisco’s MMA Renewable Ventures in a $19.7 million deal. And rooftop solar installer Borrego Solar Systems decided to sell off its residential solar power installation business to groSolar and stick with commercial and government projects.

With the recent extension of the investment tax credit, smaller players in the commercial and residential solar market are reacting quickly. Standard Solar tells us that even on the day that the ITC was passed, they noticed an uptick in calls about solar installations. The “land grab” for residential and commercial customers is back in effect.

This sort of geographic expansion is capital-intensive. Mill Valley, Calif-based commercial solar installer Solar Power Partners recently piled on $160 million in funding to fuel national expansion, especially in the Northeast.

Standard Solar uses a power-purchase agreement model for its commercial customers, just like Solar Power Partners, MMA Renewables, Tioga Energy and Recurrent Energy. Standard, however, says it isn’t yet thinking of trying that model on its residential customers and will stick to a straight-up transaction model for home solar systems. Startups like Solar City, Sun Run and Akeena have been trying to innovate on the business side of residential solar to get rid of the high up-front cost.

This round of funding was led by Truecast Capital. Standard Solar, founded in 2006, had previously raised $3 million and has 42 employees.

Founded in 2006, the company has moved quickly; CEO and President Alexander von Welczeck tells us the company has already completed 19 projects. SPP currently has another 22 projects in development that it plans to complete by the end of November, by which time the company expects to have nearly 15 megawatts of installed capacity operating in California, Hawaii, New Jersey and Connecticut. While SPP will be looking to expand nationally, von Welczeck says the Northeast is an area that holds particular promise for SPP. Check out the company’s own solar map to see the layout of it’s projects. (We do love a good solar map!)

MMA Renewables, Tioga Energy and Recurrent Energy are all similar businesses, in that they all sign power purchase agreements with commercial customers. SPP develops solar projects, secures financing and subcontracts system installation to one of its 14 regional system integrators. SPP operates solely through power purchase agreements, signing customers to a 15+ year contract under which SPP sells power to the customer and retains ownership of and maintenance responsibilities for the solar system, a model that has quickly become the industry standard. SPP offers online monitoring through its partner Energy Recommerce.

This latest financing comes from a long list of investors and lenders including United Commercial Bank, Globespan Capital Partners, The Enlightened World Foundation, Carrelton Asset Management, Dry Creek Ventures, Silicon Valley Technology Group, and Energy Investors Funds. This financing is in addition to a Series A round of $6 million in venture funding the startup raised a year ago from Globespan Capital Partners.

• News From 5 Solar Startups, including Wakonda, Fat Spaniel, Recurrent Energy, Sopogy, and Ausra.
• Germany’s 40MW Solar PV Project More Than Halfway Done
• SunPower to Cut Solar Power Costs In Half by 2012
• 5 Thoughts on U.S. Solar Thermal from Abengoa Solar’s Fred Morse
• Credit Crunch Hitting Residential Solar
• Chip Industry Will Drive Down Solar Costs
• Big Solar Conference Kicks Off in San Francisco
• A Funny Use for Solar-Powered Steam: Oil Recovery
• Solar Startup GreenVolts to Raise Sizable Funding This Year

Wakonda Raises $9.5M Series A: A Boston-based maker of solar photovoltaic technology, Wakonda Technologies, says it has raised $9.5 million in a Series A round from Advanced Technology Ventures, General Catalyst Partners, Polaris Venture Partners, Applied Ventures (Applied Materials VC arm) and the Massachusetts Green Energy Fund. Wakonda explains its technology as a wafer surface treatment that enables low cost metal materials to mimic the high efficiency of more expensive semiconductor material. Wakonda says this tech is “a revolutionary method” that will reduce material costs for the solar industry.

Fat Spaniel Taps Open Platform: Solar monitoring startup Fat Spaniel is taking a cue from all those Internet and mobile startups that have learned to open their platforms to invite savvy developers to make interesting applications. Wednesday morning Fat Spaniel is launching its “Insight Platform,” or what it calls “the world’s first open intelligence platform for building, sharing and running energy data applications.” If this is indeed the first open platform of its kind for energy, it’s taken a seriously long time to get here. The energy industry needs to start incorporating the lessons of infotech a lot faster.

Recurrent Energy Raises Biggie Funds: Solar financing startup Recurrent Energy said Wednesday morning that it has raised a whopping $75 million from Hudson Clean Energy Partners. And the startup says that’s just the initial commitment from Hudson. Several solar execs have noted to me recently that if the investment tax credit, which supplies 30 percent of the cost of a solar system, is not renewed soon it could be particularly detrimental to the new startups that have built a business around solar financing. Did Recurrent need a deep-pocketed investor to reassure its customers in the face of a delayed ITC?

Hawaii’s Sopogy’s Got New Gear: Hawaiian solar thermal startup Sopogy has a new product to talk about — SopoNova 4 — which the company says is its most efficient and lowest cost micro solar thermal product available. Earlier this month Sopogy said it had started construction of one of its solar power farms on Hawaii’s Big Island at the Natural Energy Laboratory of Hawaii.

Ausra Going (Back) Down Under: Solar thermal company Ausra officially announced the opening of Ausra Australia, which will sell the company’s solar thermal technology to the Australian market. Ausra founder David Mills first developed and deployed the company’s technology in Australia.

The panels will provide a quarter of the center’s daily electrical needs. With 500,000 contiguous square feet of space, its annual electricity bills total some $1.4 million; the agreement is expected to save a total of $4.4 million. Work is scheduled to start soon and finish before the end of the year, when the federal tax credits for solar are set to expire.

Power purchase agreements are increasingly popular in both commercial and residential solar markets. Recurrent Energy recently sold 5 megawatts of power to the city of San Francisco in a PPA, and SunRun and Akeena have teamed up to offer PPAs to homeowners. These agreements can help consumers avoid the high upfront cost of purchasing a system, while for the installer, they lock in customers and cash flow. Switching solar to a service-based model puts the pressure on making the electrons coming off the panel cheaper, which is all that matters.

The city hoped that the $3 million in public funding would leverage some $1.5 million in private investment to boost the city’s solar capacity to 55 megawatts on some 15,000 rooftops over the next 10 years. The proposal has had representatives from the local solar installers including Akeena, SolarCity and Sun Run, as well as numerous venture capitalists, come out to support it at board meetings. Several of the installers had spent money on marketing in preparation for these incentives.

However, some city supervisors are against public funds going directly to private residents or businesses. Supervisor Jake McGoldrick has put forward a proposal to block the intended funds from putting solar up on anything except public buildings. Meanwhile, Supervisor Ross Mirkarimi has proposed a compromise of sorts that cuts the funding to $1.5 million, of which half is specifically limited to non-profit organizations and low-income households.

Unfortunately, however, many in the solar community don’t think that’s a market that will capitalize on the solar opportunity. “You can wish it another way,” Adam Browning, executive director of Vote Solar, told Earth2Tech. “We all want to help that market segment, but it’s not going to happen. It’s focused on market segments where we don’t see much potential for market uptake.”

The Mirkarimi proposal would leave only $750,000 for wider use by more affluent homeowners, who are far more likely to take advantage of the program and put solar on their roofs. Most unfortunate about the situation is the fact that ostensibly all parties on all sides agree that the goal is to get the most solar up on San Francisco roofs as possible. There are currently some 650 solar roofs in the city, a far cry from the mayor’s goal of 10,000 by 2010.

The three proposals — the original $3 million proposal, McGoldrick’s public-building-only proposal and Mirkarimi’s compromise proposal — are now moving forward and will be voted in committees and by the entire board in early June.

This is a huge boost for the city’s solar generation, which is currently only at 2 megawatts. However, it is the details of the deal that are notable. The San Francisco Public Utilities Commission (SFPUC) has authorized the deal under Recurrent’s “solar-as-a-service” plan through a power purchase agreement (PPA). This means San Francisco-based Recurrent will finance, design, build and operate the solar energy projects and provide all the energy generated to the SFPUC for a period of 25 years.

This is a big vote of confidence for the startup, similar to Morgan Stanley agreeing to underwrite $100 million of its solar projects. And it could pave the way for more public-private solar partnerships. But the deal could also be seen as a slightly risky move for a municipality, given that the startup was just founded in 2006 and has been backed by venture capital firms Mohr Davidow Ventures and JEN Partners.

PPAs are on the up and up. Last week Akeena Solar, a residential solar installer, partnered with Sun Run, a solar financier, to make PPAs available to its customers. Using PPAs to sell solar is far more popular in commercial business — Tioga Energy, MMA Renewables and Sun Edison all use a PPA model.

Mayor Newsom lauded the innovative development strategy this week and expressed hopes that it would accelerate solar adoption and free up funds “for residential and commercial solar energy systems through our proposed Solar Energy Incentive Program.” — Look for more from us on some of the hurdles for the Mayor’s plant tomorrow morning.

What is net metering? Net metering is a regulatory policy that allows people to sell electricity back to the grid from their own renewable energy facilities, such as a solar array or a wind turbine, incentivizing renewable distributed energy generation projects. The Energy Policy Act of 2005 pushed utilities to adopt net metering as a policy but enforcement and program design has fallen mostly to the patchwork of state utility regulators.

How does net metering work? In selling electricity back to the grid, one method involves simply rolling the existing power meter backwards as excess energy is pushed back onto the grid. Another method involves installing a separate meter to measure just outgoing energy. As the grid smartens up, the market for smarter meters, like those from SmartSynch will grow as consumers and utilities demand more and information control of their meters.

Why is net metering important? Hailed as “providing the most significant boost of any policy tool at any level of government…to decentralize and ‘green’ American energy sources,” net metering makes every customer of electricity a customer for cleantech products. Allowing consumers to generate their own electricity through grid-connected renewable facilities could give the grid a new degree of stability via “distributed generation.” Net metering allows consumers to participate in greening the grid, helping states achieve their renewable portfolio standards and freeing the utilities to invest more in transmission and distribution.

Who is leading with net metering policy? As of September 2007, 39 states had adopted programs to compensate consumers with grid-connected renewable energy systems. According to the Network for New Energy Choices’ report “Freeing the Grid,” New Jersey, Colorado and Pennsylvania are leading the way by allowing customers to sell as much power back as they want from a variety of eligible renewable energy sources.

Being a “leader” in net metering means tackling not only the specifics of compensation but also ensuring that interconnection is easy. States regulate the process by which power generating systems can connect to the grid and in some states the fees and bureaucracy of interconnection effectively block net metering.

Who in cleantech benefits from net metering? The growing sector of residential and commercial renewable energy hinges on the efficacy of net metering. Having clear and accessible net metering policy in place is critical for these installers to quote customers a reliable return on investment.

Solar commercial installers like Recurrent Energy, Akeena Solar, SolarCity and groSolar as well as residential solar installers like Citizenrē and Freener-g are at the forefront of relying on net metering for their business model as more and more customers want more than just a clear conscious for installing expensive solar arrays.

Residential wind could be up next as a number of startups are trying to cash in on wee wind by selling small turbines to landowners.

Battery companies are also taking note as adding battery storage to residential renewable energy projects could allow customers to maximize the amount of power they sell during peak hours while sorting energy at cheaper times throughout the day. Altairnano told us last month this is exactly what they are doing as part of a test with AES Corp. Altairnano has built a $1 million, 2 megawatt battery that is just sitting on the grid, charging off of the grid at night and then selling power back during peak hours.

A distributed network of grid-connected renewable energy systems with battery backup could drastically change the limitations and stability of the grid by allowing utilities to outsource to their customers peak demand response. This requires state-by-state policy review of net metering and interconnection regulation. Ensuring net metering on a national scale would boost residential renewable energy projects and allow cleantech to power America on the utility and user scales.