According to a new report out this week from technology and consultancy giant Accenture, one or more — but almost certainly not all — of a dozen low-carbon transportation fuels now under development could transform that market (which accounts for about half of global primary oil consumption and up to 30 percent of global carbon emissions) within a decade.

What will make a fuel technology disruptive? According to Accenture, it will have to: reduce hydrocarbon fuel demand by more than 20 percent (in other words, scale up) by 2030 and result in at least 30 percent fewer greenhouse gas emissions compared to the conventional fossil fuel it’s replacing. It will also have to be within reach from a business standpoint, meaning it will be commercially available within five years and be competitive with oil priced at $45-90 per barrel.

These 12 technologies are “in play,” although government policies will have a significant effect on which ones emerge as winners in coming years.

• Next-generation internal combustion engine
• Next-generation agriculture
• Waste-to-fuel
• Marine scrubbers
• Synthetic biology (sugar-cane-to-diesel)
• Butanol
• Bio-crude
• Algae
• Airline drop-ins
• PHEV/EV/electrification engines
• Charging
• Vehicle-to-grid (V2G)

The shift that Accenture expects to arrive as a result of these technologies is not just from one fuel to another, but also from a market that relies primarily on fuels derived from hydrocarbons to one with more variation from country to country. The firm explains:

“Although most technologies will be widely available, local conditions will determine different weightings, with Brazil focusing on sugar cane-based fuels, South Korea and Japan on electrification, and China and the United States on all fuel options.”

For companies developing new transportation fuels, Accenture has four recommendations. Scientists and engineers should hold leadership positions, the firm advises — and not just for the sake of tech development. They can also help influence regulations and government policy.

Companies also need to have strong connections and improved cooperation, says Accenture, across multiple sectors — as auto companies, battery developers and utilities are starting to do for plug-in vehicle technology and infrastructure.

And of course the firm, which provides project management, supply chain optimization and risk management services, advises fuel developers to focus on these three management areas to get an edge.

Gas pump photo courtesy of Flickr user Mingo.nl; charts courtesy of Accenture

People Power

The startup isn’t revealing much about the products themselves at this point, saying only that they’ll connect home fixtures and appliances like refrigerators to a “simple-to-install system that automatically cuts power consumption” and transmits data to a web-based portal, according to a release from the company. We saw Wang present his startup at the West Coast Green conference in San Francisco, where we learned that People Power is developing a suite of devices that can easily be connected to the major power hogs in a home and then wirelessly transmit energy use over the company’s open-source platform.

“GreenVent” would attach to a home’s heating and cooling system, “GreenHeat” to the water heater, “GreenDog” to the dryer, and “GreenSentry” to the electric meter if there’s no smart meter. There will also be a power strip to track the energy use of computers, TVs and other devices plugged into the wall, and the system would “learn” from past behavior so it could advise consumers, for example, to turn off an appliance at certain times of the day.

Wang has previously led four startups, including Bitfone which he sold to Hewlett-Packard and Computer Motion which he took public in 1997. (The company later merged with rival Intuitive Surgical after drawn-out patent disputes.) He said the products will start shipping next year, and People Power is targeting three distribution channels — utilities, consumer electronics companies, and direct sales to consumers. Wang and his team have been “talking to a number of utilities and been getting great feedback,” though he declined to name any of them.

Besides ease of use, People Power is banking that its adoption of an open-source home area network (HAN) will help it gain traction in the market. The startup is partnering with researchers at the University of California at Berkeley and Stanford University to develop a long-range, wireless communication system they’re calling Open Source Home Area Network, or OSHAN (pronounced “ocean”), which will be free to download and use. Wang said it will be the first open-source HAN. “We hope to spur a wave of innovation by creating this free platform with free software and low-cost hardware widely available,” he said. “It will help lower our cost of development because we’ll have a community that is working on the technology for free.”

Wang said the startup’s open-source platform will be more reliable and compatible with other systems and devices, and it will be cheaper for third-party vendors to build applications than the communications platforms based on open standards currently being used by other players in the home energy management space. Those standards, such as wireless ZigBee, were designed for shorter ranges of 30-40 feet while OSHAN was designed for longer distances typical in a home, such as between the electric meter and the back of a house, Wang said.

If People Power can deliver on its promise of plug-and-play devices, it will still face the challenge of being a young firm in a home energy management industry that has dozens of players, from nimble startups like Tendril and Control4 to deep-pocketed behemoths like General Electric and Google. (We named 10 home energy monitoring entrants here.)

Some analysts question if enough interest exists among consumers to warrant all the activity in this nascent industry. At the end of the day, the purpose of these technologies is to help users reduce their electricity bills. “Unless electricity prices spike, I don’t think homeowners in most areas of the country will save enough from these systems to provide meaningful economic relief,” Jacob Grose, smart grid analyst with Lux Research, told me. People Power is hoping many consumers disagree.

Energy efficiency will be key to Facebook’s expansion plans, allowing it to stuff more computing capacity into tighter confines and maximize available power, thereby reducing cost. Fortune’s data center makes use of hot/cold air containment, water-side economizers and environmental monitoring, features that analyst Katherine Austin identifies as hallmarks of efficient, money-saving computing centers in her Green Data Center Design Strategies report on GigaOM Pro (subscription required).

Beyond energy efficiency, all four of the leases that Facebook has signed this year are at facilities that Miller reports are on track to achieve LEED Gold status. But LEED certification doesn’t necessarily translate into an energy-efficient data center, since the point system includes more rewards for green design elements that affect workers (widespread recycling, ample lighting), than affect energy use for data centers’ power distribution and cooling equipment.

Green credentials are nice and all, but cost is a key consideration for Facebook. Data center “landlords” like Fortune allow firms to have their new server racks populated and fully operational in months versus the year or two it takes to complete new construction — a strategy that helps Facebook keep pace with the growing demands on its IT resources, as Miller notes. For Fortune Data Centers, landing a high profile tenant like Facebook is a feather in its cap and a way to help lure similar, eco-minded businesses.

That’s because Advent took a big hit at a bad time as a result of the credit crunch. “It was effectively acknowledged that Advent was a failed company,” said Sullivan. Right when the startup was ready to start manufacturing its cells for solar panels, the crunch hit. “They had to lay everyone off, shut down the fab, and switch to a quote-unquote licensing model,” Sullivan explained, which meant, “We’re essentially out of cash, let us recoup some of the cash and we’ll package up an IP portfolio for you.”

“What Advent has is emitter wrap-through technology,” said Sullivan, which is a “big lever to pull in terms of making solar grid-competitive” in residential roof-deck installations, helping boost the efficiency of solar panels. He expects Applied to integrate with the Baccini cell line, and Mark Pinto, chief technology officer and general manager of Applied’s Energy and Environmental Solutions Group, said in today’s release that Applied believes the technology will help drive down the cost per watt of solar electricity.

In that sense, today’s deal represents part of a larger trend in the solar market. “Players are looking for a custom recipe for high efficiency,” said Sullivan. “Given how much capacity is out there, there is no reason to build you own [cells] to prove new technologies.” So acquisitions of companies like Advent are part of the shift to a fabless market, he said.

Today, “VCs will fund a semiconductor company knowing there’s no reason to build production capacity,” said Sullivan. Now, with “so much idle production capacity sitting around in East Asia,” Sullivan expects to see increasingly similar willingness to support solar startups with no means or intention of producing their own cells. Eventually solutions for higher efficiency will be less reliant on home-brewed “custom recipes,” and more available as turnkey systems.

Most of the venture-backed players with incremental advances for crystal and silicon cell efficiency will likely be bought up by incumbents as they come up against the hurdle of fabrication, said Sullivan. He pointed to 1366 Technologies, which “recently rejiggered and is now pursuing equipment development,” hoping to ride the wave of this manufacturing revolution for solar power. A crucial difference between 1366 and Advent, said Sullivan, is that 1366 “was able to pull it off before they ran out of cash. They could foreseeably be picked up by someone like Applied Materials that also makes cells.”

That’s the picture being portrayed in solar earnings reports, and the conference calls to discuss them this week. Real Goods Solar said on Thursday that its revenue in the third quarter rose 122 percent compared with the same period last year, including the addition of companies it’s acquired in the past year. Excluding those acquisitions, revenue still grew 41 percent. John Schaeffer, Real Goods Solar’s president, said a lot of the increase came from homeowners. In a statement, he noted that the company saw “the return of strong demand for residential solar” during the third quarter.

Real Goods, whose stock rose 12 percent Thursday, is a relatively small company in the solar industry, with $60 million in revenue expected this year. But it’s one of the bigger players in the highly fragmented market for selling and installing solar systems, which offers it a good perspective on overall demand, supply and pricing.

In Real Goods’ earnings call Thursday, executives said that manufacturer prices had plunged 35-40 percent in the past year. Smaller solar installers bent on increasing volume have added fuel to the price drop. Real Goods maintains that it kept its margins higher than competitors, helping it to snap up other solar installers who priced themselves into losses.

Even so, margins dropped at Real Goods to 21.8 percent from 27.2 percent for the same quarter a year ago, partly because it acquired lower-margin companies. But as module manufacturers clear out their inventories, CEO Erik Zech said:

“It’s beginning to stabilize, and we are beginning to slow down [the dropping of] our prices as well. We’re not trying to race to the bottom as some smaller companies out there are doing. We’re trying to keep [average selling prices] up higher to benefit from margin expansion. But we are beginning to get to pricing bottom for the next three to six months, and what happens after that is anyone’s guess.”

In fact, Real Goods has shifted from a just-in-time strategy with suppliers such as Sharp and SunPower — which has cut its inventory in half in the past nine months — to rebuilding enough of a backlog that its installers can draw from it. “Supply and demand in the market has radically changed,” Zech said.

That should come as somewhat good news for solar module manufacturers, but not all are feeling so good. Evergreen Solar saw its stock rise 9 percent as it beat analyst expectations. But the company had to reassure investors that it had “significant cash to meet our operating needs” — which is like reminding someone you have enough blood to keep your heart going.

Evergreen also said it cut manufacturing costs by 17 percent to $2.24 per watt in the quarter. And it plans to do so further by outsourcing more of its work to Chinese manufacturers. But some analysts worried whether it could cut costs as fast as prices were falling.

Photo courtesy of Real Goods Solar

Ausra secured a power purchasing agreement with California utility PG&E two years ago to sell 177MW of solar power from the planned Carrizo plant (it was expected to come online at partial capacity in 2010), but according to a release from Ausra, that deal is now “withdrawn.” Today’s announcement comes just over seven months after First Solar acquired the crown jewels — the whole project pipeline, including the massive 550MW Topaz Solar Farms planned for agricultural land in San Luis Obispo — of OptiSolar, another startup with a PG&E deal.

For First Solar, the Carrizo project could help smooth the way for Topaz to move forward. Kathryn Arbeit, development director for the Topaz project, said Carrizo will allow First Solar to present a revised layout to San Luis Obispo County for the Topaz development that may appease concerns about farmland conservation and wildlife in the area.

Ausra’s deal with First Solar also reinforces part of why the utility wants to take ownership of solar power plants. At the beginning of this year, more than 1.5GW of the solar power PG&E had agreed to buy ahead of a state deadline to clean up its portfolio lay in the hands of three startups, all getting hammered by the economic downturn. Now two of those startups have sold off projects to First Solar, and one power purchasing agreement has been withdrawn.

A spokesperson for Ausra told us today that while the deal is off between Ausra and PG&E, the power purchasing arrangement is not necessarily over for Carrizo. Since the project is now owned by First Solar, Ausra declined to comment on whether the contract would have to be renegotiated (see update below), or what stage of development the project has reached. We’ve contacted First Solar and will update when we have more details.

Update: Ausra tells us, “With this sale of Carrizo, the 177MW PPA Ausra had with PG&E was withdrawn. So, there’s no renegotiation to be had.”

Update: According to First Solar spokesperson Alan Bernheimer, the company plans to “go forward with the 550MW Topaz project that has its own PPA with PG&E,” using the land options acquired in the Ausra deal to offer an alternative layout to San Luis Obispo County’s permitting agency. “We can offer an alternative, for instance, that minimizes use of Williamson Act land (conserved farmland) and provides for wildlife movement corridors through the project,” Bernheimer told us in an email. “It enables us to respond to concerns we’ve heard, and allows the county to manage a unified plan for large-scale solar development in the region.”

Carrizo project photo courtesy of the California Energy Commission

Based in Lexington, Mass., 1366 spun out of MIT in 2007 and raised $12.4 million from Polaris Venture Partners and North Bridge Venture Partners the following year. It now has the distinction of being the sole photovoltaic company selected for the first round of grants under the Department of Energy’s high-risk energy tech fund, the highly competitive ARPA-E (Advanced Research Projects Agency-Energy) program.

“Basically what ARPA-E has done is fund a very exciting idea,” explained van Mierlo in an interview. The idea, still a long way from commercialization, is to form silicon wafers directly from molten silicon. If successful, the technique could cut the cost of photovoltaic installations by half.

Developing a prototype and eventually scaling up the so-called direct wafer technology will be “really, really really hard,” and has been attempted, without success, for decades, he said. What makes 1366 different? The team, mostly, said van Mierlo. Referring to Co-founder and CTO Emanual Sachs, known for developing the string ribbon solar manufacturing technology that has been the key to Evergreen Solar’s success, as well as 3-D printing. “Not too many have been founders of two industries while still in the middle of their career.” Even so, he said, “Without ARPA-E, we would not be trying something this risky, and now this will be a big priority for us.”

So far, 1366 has been working on “minor tweaks that have a big impact,” as business development director Craig Lund told us this summer. The startup received its first order for a prototype machine in July using a technology that can give solar panels a rougher texture, which adds surface area, increases internal light refraction and boosts panel efficiency. Other technologies in the company’s pipeline include a grooved busbar (the metal strips that conduct electricity on a panel), which enables a panel to capture more light, and a sawing technology to cut the amount of silicon wasted in turning ingots into wafers.

While other solar startups are focusing on developing new solar materials to replace silicon, such as thin films, 1366 Technologies is betting silicon will be the predominant choice for solar tech for years to come.

“The really nice thing of working with silicon is that lots of people are working with it,” van Mierlo said. “Thousands of people are trying to make it more effective.” He likened the web of companies in this space to the development and rise of technology for personal computing, pointing to Intel in particular: “They did not invent the PC or the Internet. They needed Dell, Microsoft, all those other companies in order to be successful,” he said. Similarly, he said at 1366, “We hope to do our bit.”

This article also appeared on BusinessWeek.com.

Waste Management

The plant is a joint venture between Houston-based Waste Management and Linde North America, a Murray Hill, N.J.-based subsidiary of The Linde Group, a global gas and engineering company. Linde built and will operate the plant, which has produced 200,000 gallons of LNG since the commissioning process began in September. Landfill gas, which is generated from the natural decomposition of organic waste, is about 50 percent methane, one of the most potent greenhouse gases. Refining that gas for use as a transportation fuel or to generate electricity reuses what otherwise would have been a wasted resource and reduces its greenhouse gas contribution.

Four California agencies, including the state’s Integrated Waste Management Board, Air Resources Board and Energy Commission, and the South Coast Air Quality Management District, contributed a $2.3 million grant for the project.

Waste Management, which owns 277 landfills in the U.S., previously announced a goal of developing 60 landfill gas-to-energy projects by 2012. The company (which last week reported an 11 drop in profit for the third quarter of this year) said it aims to produce 700 MW of electricity from about 170 projects in four years. The Environmental Protection Agency said that as of December last year there were about 480 operational landfill gas projects in the U.S. and 520 landfills are good candidates for projects (here’s a map by the agency).

But landfill owners might soon be able to tap a second revenue stream besides the sale of fuel or power produced at these sites. Landfill projects could become a major business opportunity if a nationwide cap-and-trade system is established.  In 2007, landfills accounted for about 22 percent of all methane released in the U.S., according to the EPA. Landfill owners could sell GHG offsets into the cap-and-trade system by capturing the methane at their sites. But that depends both on Congress actually passing a nationwide cap-and-trade bill and on that bill including language that would allow this practice, neither of which is certain.

The company has turned a 1.5 MW wind converter into a new, 600 kW solar inverter for utility projects, Rick Robertson, an inverter program manager at GE, told us at this week’s Solar Power International. The inverter, pictured above, is targeted at multimegawatt solar projects with multiple installations on a single site, he said. GE is now taking orders for the inverter, which was introduced at the conference, and plans to ship its first units by the end of this year, he added.

The inverter is another sign that GE sees solar as “the next wind.” It said last month that it plans to grow its solar production next year, and has also invested in technologies that could make solar cheaper.

To modify the inverter for solar, GE changed the way it connects to power projects, because solar panels generate direct current, which must be turned into the alternating current used by most appliances, whereas wind turbines generate alternating current, said Minesh Shah, a product line leader for renewables systems. GE also modified the software to enable utilities to monitor and control the solar power plants, he added. And the inverter had to be packaged with a new skin suitable for outdoor installations, as wind inverters are usually kept inside the towers, while solar inverters need to be able to survive the elements, said Tony Galbraith, an inverter program manager for GE.

When it comes to the hardware, however, GE says it hasn’t changed much, with the idea being to leverage its experience — and volume — in wind converter manufacturing. The conglomerate already makes 4,000 wind converters annually, and keeping the hardware similar will allow it to simply add new solar volumes on top of that, according to Robertson. GE also believes its reputation and track record with the wind converters will give investors confidence in its solar inverters, as it has 12,000 wind turbines in the field with 175 million operating hours at this point, Robertson said.

One of GE’s main advantages in this space is the company’s understanding of what utilities and power plant operators are looking for, so that it can make solar projects look similar to other power plant interconnections, Shah said. “We know how to turn a 30 MW system from just a collection of panels and modules into a power plant.” The software that comes with the inverter presents information about solar projects in the same way that utilities and power-plant operators are already familiar with viewing power plant data, he said, and it also enables the same level of control to manage the voltage of the electricity output so that it can be smoothly interconnected with the grid.

GE’s move into utility solar is a sign that big companies are starting to see solar as a potentially significant part of the energy mix. But in order to make that happen, the industry needs to start preparing to integrate solar into the grid now, Shah said. “In the solar industry today, people are not thinking about these types of issues,” he said. While other companies are working on smoothing the load from variable renewables, it’s true that the work at the utility level is just beginning.

Jenny Chase, head of solar research for London-based New Energy Finance, said she’s seeing a growing number of companies working on integration. With the world’s largest solar projects underway, “it’s probably quite a good thing that people are thinking about this now,” she said. You can expect to hear more about it soon. Hundreds of megawatts of utility projects are already underway in the U.S., with more announcements expected as utilities work to meet state renewable energy standards.

Graphics courtesy of GE

The 4-by-10-foot collector, called the Chromasun Micro-Concentrator, is intended for commercial roofs. It includes strips of shiny aluminum, made by Alanod Solar, that look like window blinds and use sensors to automatically track the sun. These strips concentrate light 25 times and reflect it upon two pipes to generate temperatures of up to 428 degrees Fahrenheit.

Companies like Chromasun say that concentrating rooftop solar power systems will cut costs compared to conventional photovoltaic solar panels and also take up less room, so that they can generate higher electricity savings in confined spaces. Chromasun’s panels will be 20-50 percent cheaper than PV systems’ current prices, claims CEO Peter Le Lievre.

In Chromasun’s case, the heat created will be used to run an air conditioner, as it takes heat – in this case, hot oil – to chill air. Combined with absorption chillers, the collector can deliver twice as much air conditioning per foot as a PV system, Lievre said. (See a diagram of how this works here.)

It’s an appealing idea because air conditioners play a large part in creating peak electricity, the times when electricity is in greatest demand, in many areas. In the United States, air conditioners consume more electricity than any other household appliance, according to the Energy Information Administration. In California, air conditioning can cause electricity demand to nearly double on hot summer days, the California Energy Commission said last year.

Large concentrating solar-thermal projects in the deserts generate the most electricity on hot days, when the grid already suffers the worst congestion, and that electricity has to be transported into the cities, further straining the grid, said Le Lievre, who was previously the chief executive of concentrating solar-thermal startup Ausra. Shrinking these systems to rooftop size solves that transmission problem and reduces the demand for electricity during hot days, he added.

Chromasun is targeting buildings with big air-conditioning-related electricity bills, such as data centers, hospitals, universities and office centers, Le Lievre said. The idea is to replace the most expensive electricity, the electricity used at times of peak demand, with solar. In a six-month pilot test, a data center in Sunnyvale, Calif., consistently reduced 1.5 MW of its 6-MW electricity demand, he said. The systems also keep air conditioners running during blackouts.

Still, price could be an issue in the recession, as a Chromasun-powered air conditioner costs about twice the amount of conventional systems. The energy savings pay off the difference in 5-20 years — then provide free air conditioning after that, Le Lievre said.

Chromasun has also tried to make its product more building-integrated and user-friendly. The concentrator is enclosed in aluminum and glass, with no moving parts outside of the panel, making it easier to install and clean, and the panel lets natural light through, so that it can double as a skylight, said Andrew Tanner, a senior product development engineer. “This is the first truly building-integrated rooftop concentrator solution able to efficiently generate high temperatures,” he said.

Founded last year, Chromasun plans to start taking orders and installing pilot projects next year, including projects with Santa Clara University and Sempra Energy, Tanner said. The company expects to start pilot production for those projects in the first quarter and also is raising its first round of venture funding, he added. In addition, it’s developing a concentrating PV panel, which will reflect light onto solar cells and collect heat in pipes behind those cells, generating both electricity and air conditioning at the same time, Tanner said.

Other startups also are working to bring concentrating solar thermal to commercial roofs, including HelioDynamics and Sopogy, which announced a new micro concentrating solar power system, called SopoFlare, for rooftops this month. The system produces steam, which can be converted into electricity with a steam turbine, as well as solar thermal air conditioning, drying, dehumidification, desalination and hot water.

This morning Skyline announced its first commercial manufacturing deal with auto supplier Cosma International (part of Magna International), which will make Skyline’s reflective racking and structural components at a factory in Michigan with machines used to stamp out auto frames, bodies and chassis. As the company told us last summer, it is looking to produce equipment for “multiple megawatts” on automobile lines.

This comes as just the latest example of a solar firm marching into the Big Three’s old turf. Xtreme Power, Clairvoyant Energy and Oerlikon Solar announced plans last month to convert an idle Ford plant in Wixom, Mich. into a renewable energy park, churning out energy storage and power management systems for large wind and solar projects, as well as equipment for thin-film solar. And in the last few weeks Arizona-based Stirling Energy Systems has signed up two auto part makers to supply components of its solar thermal power equipment.

Skyline is calling its agreement with Cosma “the first step in its effort to help retool American manufacturing,” and it plans to begin shipping its small, modular concentrating-solar systems by year’s end. The systems use conventional monocrystalline-silicon panels mounted on a reflective rack in the shape of a W. That rack captures sunlight and reflects it onto the panels, which are positioned so heat can escape easily. Air flowing through the system provides passive cooling, helping to boost its conversion efficiency because when solar panels get too hot, their efficiencies drop.

Skyline CEO Bob MacDonald has told us he has the ambitious goal of reaching grid parity — competitive pricing with conventional energy sources — at California electricity rates by the end of 2010. That won’t be easy for a 2-year-old startup, but the Skyline team, which has raised $24.6 million in venture capital and signed a $3 million development contract with the Department of Energy, says it is less concerned about potential technological, mechanical and financial hurdles than it is about policy. VP of Marketing Tim Keating told us earlier this year, “We worry most about the big bad coal lobby and inflation,” which can make the upfront cost of a large-scale solar installation more daunting.

At this point, Cosma has begun producing Skyline’s equipment at low volume at a facility in Troy, Mich. But Michigan — whose Gov. Jennifer Granholm has been fighting hard for greentech manufacturing jobs to help revive the state economy — does not have a lock on Skyline’s business long term. The company is still working with Cosma to narrow down the list of facilities for high volume production from Cosma’s plants in Alabama, Iowa, Kentucky, Maryland, Ohio, South Carolina and Tennessee.

Photos courtesy of Skyline Solar

The study, summarized in a 50-page document titled “Tracking the Sun II,” found that that the average installed cost in the U.S. has declined in the last decade (no surprise there), but the pace of that decline and other findings, such as the impact of economies of scale, might be surprising to some readers. Average U.S. installed system costs declined to $7.50 per watt in 2008 from $10.80 per watt in 1998, a 30 percent drop over the 10-year period, according to the report. That translates into a 3.6 percent, or 30 cents per watt, per year decline, on average, during that time.

Importantly, the average cost dropped to $7.50 per watt in 2008 from $7.80 per watt in 2007 after three years (2005-2007) of little decline as the supplies for PV systems struggled to keep pace with expanding demand. Preliminary evidence suggests that prices will continue to fall this year, the report said. That drop in price from 2007 to 2008 is attributed largely to a reduction in panel costs, the report found, while the decline in installed costs from 1998 to 2005 was mostly because of savings from other system components like inverters, hardware, labor and overhead.

The study found that PV installed costs exhibit “significant economies of scale,” with systems less than 2 kilowatts in size averaging $9.20 per watt last year compared with systems between 500 kW and 750 kW averaging $6.50 per watt, a 30 percent difference. Economies of scale also have some effect on the varying installed costs across states. Systems less than 10 kW completed in 2008 ranged from a low of $7.30 per watt in Arizona (followed by California at $8.20 per watt) to a high of $9.90 per watt in Pennsylvania and Ohio. States with the largest PV markets tend to have lower average costs, the report found, suggesting that state and utility PV deployment policies can affect prices.

The study, a second in a series by the lab focused on describing trends in the installed cost of grid-connected PV systems in the U.S., also found:

• Although there were few thin-film systems within the sample, PV systems with thin-film modules generally had lower average installed costs in 2008 than comparably sized crystalline systems ($1.50 per watt less among 10-100 kW systems and 60 cents per watt less among systems larger than 100 kW).

• In 2008, the average net installed cost (that is after tax incentives) faced by PV system owners was $5.40 per watt for residential PV and $4.20 per watt for commercial PV. For both residential and commercial PV, average net installed costs rose slightly in 2007 and 2008, by 1 percent and 5 percent, respectively, as the annual decline in incentives outpaced the drop in installed costs.

• Among 10-100 kW systems installed in 2008, systems with tracking had average installed costs 50 cents per watt, or 6 percent, higher than fixed-axis systems.

• The new construction market offers cost advantages for residential PV. Among 1-3 kW residential systems funded through three California programs and installed in 2008, PV systems installed in residential new construction cost 80 cents per watt less than comparably sized residential retrofit systems (or $1.20 per watt less if focused exclusively on rack-mounted systems).

Image courtesy Wikimedia Commons.

In a time when the merger and acquisition market for cleantech startups is about as dry as the Mojave, today’s deal is a head turner. And with Siemens angling to expand its role in solar thermal, the raft of startups now leading this space — companies like BrightSource, eSolar, Ausra and SkyFuel — could find themselves with a tough, deep-pocketed new competitor.

Being big has advantages in the solar thermal market, as Fred Morse, a senior U.S. adviser for the solar arm of Spanish renewable energy giant Abengoa, told us in an interview last year. Decades of project financing experience and an R&D budget on the scale of of tens of millions of dollars can give companies like Abengoa — and Siemens — an edge in the race to build massive solar systems that can require investment of hundreds of millions to billions of dollars.

Headquartered in Beit Shemesh, Israel, with a subsidiary on the U.S. West Coast, Solel has built a work force of more than 500 people over the last 14 years and snagged a deal back in 2007 to sell power generated at its Mojave project to California utility PG&E. The company has been on the hunt for a buyer for the last six months as part of an effort to gain a higher profile internationally and raise funds for more big-budget projects.

According to Siemens’ release this morning, Solel posted a revenue of nearly $90 million for the first half of this year, thanks to a solar receiver supply business (a key component for parabolic trough projects like the one pictured above) and its work engineering, planning and building solar fields. “In the future,” Siemens Renewable Energy Division CEO Rene Umlauft said in the release, “we’ll be able to offer the key components for the construction of parabolic trough power plants from a single source,” (Siemens already supplies steam turbines for solar thermal plants), and also boost solar thermal plant efficiency.

Siemens expects the market for solar thermal power plants to see “annual double-digit growth rates and attain a volume of over €20 billion ($29.9 billion)” by 2020. As early as June, Siemens was reported to have entered talks with Solel for an acquisition deal, and Germany’s Handelsblatt newspaper (h/t Dow Jones) reports this morning that Siemens beat out French bidders Alstom and Areva by upping its initial offer of $250 million — interest that bodes well for solar thermal startups.

For more background on Solel, check out our Q&A with CEO Avi Brenmiller.

The investment in Boulder, Colo.-based Tendril comes on top of a $30 million round that the 5-year-old company announced back in June. GE and Tendril said in July they would partner to develop software that would connect GE’s smart appliances to the grid, sending energy information between the appliances and the utility. This latest investment expands the partnership, according to the release, which didn’t disclose the size of the deal.

GE also didn’t release the amount of its funding in Grid Net. San Francisco-based Grid Net is developing network-management software around WiMAX-based meters, which are made by GE. The startup previously scored funding from GE (as well as Intel Capital and Catamount Ventures) in 2006, the year it was founded.

GE’s SolarEdge investment was part of a $23 million round that the 3-year-old Herzliya, Israel-based startup plans to use to grow its business in residential and large-scale projects. Other investors, who hail from the United States, Israel and Singapore, include Opus Capital, Walden International, Genesis Partners, Vertex Venture Capital and JP Capital Asia. SolarEdge had raised $34.8 million in venture capital before this latest round.

SolarEdge has developed chipsets that are embedded in solar panels, as well as an inverter and web-based monitoring software. Altogether, the company claims its systems boost solar power output by up to 25 percent. In May, the startup announced a deal with BP Solar, which plans to embed SolarEdge electronics in its panels.

The SolarEdge backing is the latest indication that GE sees solar as “the next wind.” The company entered the solar industry in 2004 and already sells silicon-based solar panels, but its annual solar sales amount to less than $200 million. That compares with an expected $6.5-$7 billion in wind turbine sales this year, according to a Financial Times report. Granted, the global solar industry is smaller than the wind industry, but GE has its sights on a larger market share than it has now: John Krenicki, chief executive of GE Energy Infrastructure, the department that includes the company’s renewable-energy division, last month told the Financial Times that GE plans to ramp up its solar production early next year.

Aside from expanding production of solar panels available today, GE is investing in new technologies aimed at making solar cheaper. The company last year became the majority shareholder in PrimeStar Solar, which makes thin-film solar cells out of cadmium-telluride, and it’s conducting its own thin-film research. GE also last year invested in Soliant, which makes concentrated solar panels for commercial and industrial rooftops. The tech that GE is supporting today through its investment in SolarEdge could help increase the electricity generation and reliability of those technologies, as well as the conventional silicon-based panels that GE sells today — thereby potentially reducing the cost per watt and the cost per kilowatt-hour.

In Schwarzenegger’s view, those limits made the proposed laws overly “protectionist” and lacking in pragmatism, since development of renewable energy projects and transmission infrastructure within California has been relatively slow going. The governor’s veto last night, and the controversy over his executive order last month to have the California Air Resources Board (rather than the legislature) determine how utilities can meet the renewable portfolio standard, highlight a major choke point in the effort to clean up the national power supply: the approval process for transmission lines.

Policymakers, utilities and renewable energy developers at this point largely agree that the U.S., with its aging transmission infrastructure, is overdue for a grid upgrade. As we noted in a recent GigaOM Pro article (our subscription-only research service), to accommodate new renewable energy projects coming online the U.S. needs many more transmission lines, and California’s utilities commission estimates that no fewer than seven new transmission lines are needed to reach the 33 percent by 2020 goal.

Yet despite this support for investment in transmission, power lines are in many cases being built at a slower pace than renewable energy generation projects are being developed. Getting financing and a green light from government authorities to build a solar plant in the desert is one thing — winning approval for the entire length of a transmission line, which often runs through multiple cities, counties and states, including areas near people’s homes and businesses, is another animal entirely.

Building out new transmission lines requires coordination of multiple authorities, as Bob Anderson, managing director of the Western Grid Group, told us recently: “Landmass agencies, environmental regulators, energy regulators -– it’s just kind of a brawl.” And it touches the nerves of eminent domain and NIMBY-ism: Transmission lines may offer benefits to the country as a whole, but for the municipalities and landowners that have power lines running through them (without necessarily delivering energy along the way), they’re not too appealing.

These hurdles will continue to arise for the electricity that California utilities will continue to bring in from out of state (since they’ll inherently deal with interstate transmission lines). Now that Schwarzenegger has left the door wide open for energy imports, utilities can continue to purchase power from whoever makes it available at the most competitive rates. That’s the plan, at least, until Schwarzenegger leaves office at the end of next year — critics have said his executive order may not hold after that.

Photo credit NREL

Dan Reicher, director of Google’s climate change and energy initiative, said that in the midst of unprecedented government support, “we’re staring at the biggest cliff we’ve ever faced in renewables when the stimulus runs out in 18 months.” John Geesman, a former California energy commissioner and writer of the Green Energy War blog, also warned that the stimulus might have been “the high-water mark” for government support. After that, “the fiscal cabinet is bare,” he said.

The heated race for billions of dollars of stimulus money – along with all the indirect effects of sparking matching investment and local and state policies – mean the industry could be in for a major shock when it abruptly ends. More than half of the total recovery funds have already been announced and a good portion has already been allocated. According to the Recovery Act site, which doesn’t break down the spending specifically on greentech, $85.9 billion in stimulus funds has already been paid out, $239.4 billion in stimulus funds has been announced, and a little over $200 billion in stimulus funds is still available. Matt Rogers, senior advisor to U.S. energy secretary Steven Chu for the Recovery Act, said the Department of Energy has succeeded in spending the money even more quickly than it had set out to do so far, doling out $16.7 billion compared to a goal of $16.3 billion by the end of September.

That quick timeline has been good for companies that got hold of some of the money, but not so awesome if your company was late getting in line. And the quickly depleting pot of money means it’s important for companies not to rely on it. Companies still need to have strong business plans and should avoid making changes that don’t fit into their business plans in order to appeal to government agencies, Josh Green, a general partner at Mohr Davidow Ventures, pointed out at a Thomas Reuters conference back in June. “We encourage our portfolio companies to look for low-hanging fruit, but not to make fundamental changes … to the core business.”

In fact, the impacts of the stimulus haven’t been all positive, pointed out Tim Newell, senior advisor to private-equity firm US Renewables Group, at the Renewable Energy Finance Forum. Overall, government policies have had a surprising “neutral to negative” impact on the capital markets so far this year, he said, as funding in the space actually slowed down while people waited for the rules to get pinned down and to find out how they might impact potential investments. Executives in the smart grid industry have expressed similar concerns about the stimulus funds for that sector.

But Newell expects the neutral to negative effect to change to a “highly positive” one next year as more stimulus awards come out and other policies take effect. Some of those awards will come from applications with deadlines that have already passed, like the smart grid stimulus funds; some could come from funding opportunities that become available over the next few months. But keep an eye out — there are a dwindling number of stimulus opportunities left, and when the window closes, companies need to be able to stand on their own two feet.

Image courtesy of Flickr creative commons.