As a result, the tide of water infotech is rising fast, and just as the smart grid buildout could be one of the largest creators of wealth in the decade, there are billions to be made in smarter water systems. Lux finds the market for water IT is set to grow to a $16.3 billion in 2020, up from just $530 million today.

Water distribution often relies on sprawling, complex systems, and water managers today often work with spotty knowledge about what is happening in their systems on a real-time basis. Water information technologies in the five segments identified by Lux — water mapping, infrastructure, quality monitoring, smart meters and smart irrigation — could change that. Benefits would extend not only to utilities, but also to industries, consumers and governments in several ways, says Lux: minimizing unaccounted-for water, reducing consumption, limiting pollution and cutting energy use (water and energy use are closely linked, since it takes energy to treat and deliver water, and most of the time it takes water to create energy).

A number of startups are active in this market and have attracted venture capital investment. But they face high barriers to entry as a result of entrenched companies and utilities preferring to work with known players. The startups that succeed in this space, predicts Lux, will be those providing highly innovative solutions. The research firm notes TraceDetect, which offers a web-based display of real-time arsenic concentrations in drinking water, as an example.

For startups and larger firms alike, Lux sees “the real winners” being companies that provide tech that addresses several or all of the five market segments in an integrated way. The bulk of the profit, meanwhile, will go to systems integrators such as IBM, which splashed into water management this year with a new sensor-based system that automatically collects important data (water quality, pump rates, water use at meters), analyzes the data and then packages it into easy-to-consume formats for water mangers to evaluate.

As Eliot Metzger, co-author of a report from the World Resources Institute on the relationship between water and energy use, told us earlier this year, water utilities (like electric utilities) typically plan about 5-10 years in advance, taking into account variables such as population growth, supply and demand — but it’s time to pick up the pace. “Climate change will affect those supplies,” Metzger said, “and I think a lot of the water utilities at least are going to be hit with some surprises.” Integrating water management and IT sooner, rather than later, could help lessen the challenge.

Photo courtesy of Flickr

NanOasis beat out nearly 99 percent of the applicants vying for a piece of the Department of Energy’s $400 million ARPA-E program, to snag a more than $2 million grant in the first round of awards last week. Over the next two years, the DOE grant will support development of next-gen reverse-osmosis membranes that use carbon nanotubes. Put simply, this could deliver a much more energy-efficient and lower-cost technology for harvesting freshwater from oceans and brackish water.

If NanOasis’ ARPA-E project is successful, it could potentially disrupt the water industry that, according to Christopher Gasson, editor in chief of Global Water Intelligence magazine, can be best described as a dysfunctional train wreck.

Recent advances in nanotech and growing urgency in the push for energy-efficiency improvements and solutions for water scarcity have produced fertile ground for startups. In addition to NanOasis, other companies, including NanoH2O and Oasys, are working on nano-engineered reverse osmosis membranes (update: Oasys is working on forward osmosis tech). And tens of millions of dollars in venture capital have begun flowing into efforts (largely early stage) to reinvent desalination — a technology that Lux Research forecasts will produce three times as much freshwater in 2020 as it did in 2008.

But while a growing number of companies are experimenting with carbon nanotubes (illustrated at left) for water desalination, NanOasis has as its CTO one of the scientists from the Lawrence Livermore National Lab who first developed the technology, Jason Holt. As he explained to Technology Review back in 2006, when his team’s research was first published in the journal Science, “The challenge is to scale up so we can produce usable amounts of these membrane materials for desalination, or gas separation, the other high-impact application for these membranes.” Using the ARPA-E funds, Holt said, NanOasis will be continuing work on the membrane itself, and working out challenges with manufacturing and engineering.

One of the main problems with reverse osmosis desalination tech to date has been that the basic process of pumping water and forcing it through a membrane to separate out the salt is highly energy-intensive — which means high cost. The energy, in the form of electricity, is used mostly to pump the water around and force it, under very high pressure, through the membrane. In fact, the Pacific Institute has estimated that electricity accounts for 44 percent of the cost of reverse osmosis desalination, by far the single largest expense. Carbon nanotubes could drastically reduce that because water can flow through the tiny pores just as fast, with less pressure, than through conventional membranes with larger openings.

NanOasis has a long climb ahead as it looks beyond a pilot project (a portable system with NanOasis tech processing 10,000 to 100,000 gallons of water per day), which Kennedy said is targeted for 2012 or 2013. At commercial scale, challenges can arise from more than the tech itself. Kennedy noted that desalination projects are “particularly capital intensive” and called California “a difficult environment for desalination,” noting that many of the 20 or so desalination projects now at some stage of development in the state have encountered political opposition. (Much of that has come from groups concerned about damage to aquatic life, coastal wetlands and other environmental impacts, in addition to the energy demands and cost.)

Having raised venture capital in June 2008 (investors include X/Seed Capital Management), and also received some research grants (including a nearly $15,000 $150,000 award from the National Science Foundation), Kennedy said the company will be looking to “raise money several more times” before becoming profitable. “We’ll attempt to grow the company as if we were the next big thing,” said Kennedy, “building a great stand-alone company or a great acquisition.”

Graphics courtesy of the NanOasis, Lawrence Livermore National Laboratory and the Pacific Institute.

This article also appeared on BusinessWeek.com.

Stedman didn’t give more details about what those new growth objectives might be, but the company is clear about the value proposition of its wastewater treatment technology. The company says its system operates on 80 percent less power, has as little as half the capital costs and is physically smaller (important for space-constrained real estate developers) than competing technologies. The filtration system is also modular, with individual systems treating between 250,000 and 1 million gallons per day, offering flexibility and the ability for clients to scale up as demand changes.MicroMedia’s technology is a combination of physical and chemical processes that are managed by a computer-control system. Wastewater passes through a screening process to remove solids and is then filtered, where a coagulant captures contaminants before they are removed through washing. The treated water can then be discharged into nearby water bodies, such as by a municipal water treatment center, or used for irrigation by a real estate development, for example. The latter could become increasingly popular since the U.S. Green Building Council’s LEED rating system encourages reuse of water on-site.

There has been growing recognition among the investment community that the treatment and delivery of clean water offers plenty of opportunities, but so far venture capitalists have been hesitant to make bets in the space. Venture heavyweight Kleiner Perkins, for example, hadn’t made a single water investment until July this year when it backed Applied Process Technology. And U.S. water tech companies raised only $62 million, about 1.2 percent of all cleantech investing, in 2008, according to Dow Jones VentureSource figures.

This latest announcement marks SAIL Venture Partner’s second funding of a water tech company, the first being Irvine, Calif.-based WaterHealth International, which develops decentralized water purification systems largely targeted for the developing world. Interestingly, both MicroMedia and WaterHealth are fairly mature firms, with the latter having reorganized in 2004 (though originally founded in 1995). SAIL appears to be placing its water bets in companies with proven technologies.

Photo courtesy of MicroMedia Filtration

Last week, the World Resources Institute issued a report examining the relationship between the two resources in greater detail, with a focus on the southeastern United States. WRI’s Eliot Metzger, a co-author of the study, told us that the stats they found in the southeast (two out of every three gallons of fresh water are used to produce energy, for example) can’t be extrapolated elsewhere, but provide a foundation for thinking about the role of water in all of the energy efficiency and smart grid talk going on right now.

“A really big part of it is education — people just don’t know that when they turn the faucet on, they’re using energy as well, not just water,” Metzger told us. Could that information be applied to the smart meter dashboards coming our way soon? “Absolutely, and it could really make a difference,” Metzger said. “I don’t know that water utilities are really ready yet for their own version of the smart grid, but if the smart electric grid provides a way for people to realize the connection between the two, that could be something.”

Bottom line? The water-energy equation is going to create a market for technologies that increase efficiency on both counts. “There are energy-water tradeoffs everywhere and if planners aren’t thinking of both then you’re running out of one or the other,” Metzger said.

Metzger also said that water scarcity may help drive adoption of renewable energy sources since such sources (namely solar and wind) require less water than natural gas or coal. This will be particularly important for land-locked areas like Denver, where desalination is not an option. Metzger also noted that, as is the case in many mountain regions, the Denver water utility relies on snow pack, and if, due to global warming, it melts earlier or faster than it traditionally has, the utility won’t be able to rely on the same steady supply it has used as the basis of all of its planning. “What does that mean for scheduling and water supply for a growing population? It’s a tough problem and since they don’t have the desalination option, they’ll have to explore water efficiency,” he said.

But while utilities need to act now, few are prepared to do so. “Water and electric utilities have planning templates that they’ve been using for a long time,” Metzger said. “Typically they look ahead and plan for the next 5-10 years, considering population growth, supply, demand, that sort of thing. But climate change will affect those supplies and I think a lot of the water utilities at least are going to be hit with some surprises.”

We have a choice. Invest in safe, renewable forms of ocean energy — including wind, wave, tidal and current power — that will help secure our future prosperity, create thousands of new jobs and reduce our dependence on foreign oil. Alternatively, we can continue to give tax breaks to oil companies that pollute our oceans and keep us locked in a carbon age.

The stakes are high. Oil companies are lining up to cash in on a Bush Administration proposal to offer petroleum development in 1.7 billion acres of formerly protected coastlines, including 136 million acres off the coast of California. This proposal represents a huge step backward. Our country has finally woken up to the need for a green energy future. Now we need to invest in the technology to make America the world leader in renewable energy.

Offshore wind power is one promising source of energy that is commercially viable today. Researchers at the National Renewable Energy Laboratory estimate that the wind off America’s coast could generate nearly 1,000 gigawatts — a little more than the current U.S. electrical capacity.

Ocean power, while not as developed, is every bit as promising. California has more than 745 miles of coastline, and every mile has daily energy transfers in the form of waves, tides and current. Estimates vary, but experts suggest that more than a quarter of California’s energy demand could be met by technology that harnesses these forms of ocean energy. Economic projections indicate that ocean energy could become cost-competitive over the long term if governmental leadership exists to encourage investment in these technologies.

Over 100 years ago, Adolph Sutro, the 24th mayor of San Francisco, recognized the power of San Francisco’s waves, building a wave catch-basin that he hoped to one day turn into a wave-powered “overtopping” system near Cliff House.

Today in San Francisco, we’re not just talking about ocean power, we are advancing its actual implementation. We have submitted an application to the federal government to develop an underwater wave project off San Francisco’s Ocean Beach that could generate between 30MW and 100MW of power. And we are actively working to develop a tidal power demonstration project in the San Francisco Bay that demonstrates the promise of technologies that capture tides.

Before we move forward with ocean energy projects, there are environmental concerns that must be addressed. We need to avoid impacts on marine habitats, releases from foreign material into the water (such as hydraulic fluids), and visual and noise impacts to coastal residents.

Federal leadership on ocean energy is crucial because virtually every site where ocean power is likely to be tested or deployed is subject to federal jurisdiction. Unlike conventional wind and solar, ocean power cannot be tested or deployed on private land. The industry will only emerge and mature in the U.S. if the federal government uses its position to advance the technology.

Federal government action should include:

1. Federal policies to facilitate ocean power demonstration projects as a first step toward commercial development of ocean power.

2. FERC (Federal Energy Regulatory Commission) and MMS (Minerals Management Service) should resolve their jurisdictional dispute and clarify their respective authorities for regulation of ocean energy. This is already underway.

3. Federal and state regulatory agencies should compile existing information on ocean power (data collected to date, etc.) into a publicly accessible common library.

4. Beginning in 2009, federal and state governments should vastly increase R&D to study, monitor and report on common impacts of ocean energy so that these issues can be efficiently addressed for each project.

5. State and federal regulatory policy should explicitly encourage pilot and demonstration-scale projects under permitting conditions, which assure protection of ocean resources.

6. Federal and state regulatory agencies should prepare a unified environmental document for each application for deployment of demonstration projects, and should otherwise coordinate their permitting procedures.

7. Decisions on individual applications should advance the public interest by increasing renewable generation capacity and effectively protecting the affected ocean resources.

Faced with a choice between a downward spiral of environmental degradation and increased reliance on a finite resource or investing in safe, renewable energy that can power our country and save our planet, the choice should be clear.

Listen to San Francisco Mayor Newsom’s Green 960 radio show online or subscribe to his weekly policy discussions on iTunes. You can also join him on Facebook or follow him on Twitter.

Newsom said his first environmental initiatives were fairly easy. “It didn’t take much more than a piece of paper and a pen and executive orders,” he said, to lower city emissions 6 percent below 1990 levels by last September. Now, things have gotten harder and more ambitious.

Newsom offered an impassioned rundown of San Francisco environmental accomplishments and projects since he took office:

• Third-party review to independently analyze CO2 emissions.
• Reducing tailpipe emissions on the city vehicle fleet
• LEED certification for the new Academy of Sciences last Thursday
• Put together the first mapping system for solar installations — on a web page, you locate your roof, drill down to the square footage available for solar, and print out rebate applications on the same page
• Aggressive recycling initiatives — banning plastic bags (lots of attention), banning styrofoam (no attention), trying to ban bottled water (way too much attention!)
• Started real discussions with Shai Agassi and Better Place, and got 10 counties to agree on standardized electric car-charging stations
• Partnered with Cisco on reducing emissions coming from computers and telecommunication equipment — created cheap prototype bus that gives emissions data
• Plan to charge more for parking during peak times
• First commercial wave power project off the end of Ocean Beach started Feb. 27
• Right below the Golden Gate Bridge looking to implement an underwater wind farm — very dense, consistent energy as Bay flushes itself every day. “We’re very close to getting a small pilot there. We may have overpromised but hope not to underdeliver.”

Designers and builders alike should delight at the news. Green building rating systems are akin to report cards for structures, with higher grades given to those with the most green features, such as insulation, sustainable materials, and energy-efficient appliances. Though the industry is still in its infancy, developers and homeowners increasingly want greener buildings and many existing structures, especially in high-density areas like San Francisco, are considered multifamily dwellings. Industry watchers say buildings certified as green tend to be more valuable than their less-green peers, sell more quickly, and retain tenants longer.

Currently, Build It Green’s GreenPoint system covers only new single-family and multifamily homes and existing single-family homes. The largest U.S. green building rating system, LEED, managed by the Washington, D.C.-based nonprofit U.S. Green Building Council, has a residential remodeling program for existing homes that provides resources and tools for remodeling projects, but LEED does not yet have a rating system for existing homes. Build It Green’s system is primarily used in California, with about 70 cities statewide officially embracing their guidelines. The organization is, however, pushing to expand beyond the Golden State.

Cameron Brooks, IBM’s director of solutions and business development for IBM’s Big Green Innovations initiative, says the management system IS THE first TO bring together this type of information into one place and enable water managers to customize the system and make quick decisions.

Distributing water often relies on sprawling and diffuse systems, and water managers today regularly work with spotty knowledge about what is happening in their systems on a real-time basis. IBM’s management platform, which will depend on sensors to read and then transmit the data made from third-party vendors, will make water systems more robust and efficient, Mr. Brooks said. The data will help managers react to problems more quickly, reduce water loss, and implement conservation programs. That should also help drive down costs — treating and distributing water is a costly undertaking and consumes large amounts of energy. The less water you lose, the more you save on the electricity bill.

Mr. Harry Kolar, IBM’s chief architect for sensor-based solutions, compared the water management system to the trend of smartening up the power grid using IT. “Ideally, you don’t just send the water out there and hope it reaches consumers. You can employ intelligent metering in the same way the electric grid is getting more intelligent—from source to tap,” he said.

Neither Mr. Kolar nor Mr. Brooks would comment on the potential size of the market for IBM’s newest offering. But it’s safe to say, however, that it’s massive. People around the world depend on utilities to treat and supply fresh water. And IBM certainly has its sights on all corners of the globe. Already the Armonk, N.Y.-based tech behemoth is working on water projects in Amsterdam, Dublin, and New York. The company is helping the country of Malta to build a “smart” electricity and water utility system.

IBM’s move also highlights the growing interest among technology companies in the water industry. Fresh water is increasingly becoming big business as population growth, contamination, and climate change put pressure on the resource. A 2008 JP Morgan study predicted that by 2025, major economies, including the U.S., Western Europe, China and India, will likely experience significant water problems as consumption outstrips supply replenishment. GE has made water one of its focuses as part of its Ecomagination initiative. Microsoft has developed software to help companies measure and report sustainability data, including the use of water. And, increasingly, venture-backed startups are developing new water-focused technologies, like filtration and desalinization systems.

Gary Klein, managing partner of Affiliated International Management, a water-focused consultancy in Sacramento, Calif., said he sees a significant business opportunity in water management. But he said utilities should also be monitoring their energy consumption at pumps. Just tracking water won’t be enough for communities and utilities to fully understand their water systems, he said.

As part of the announcement, IBM also said it had made a “major breakthrough” in its development of an energy-efficient membrane for water purification. The company said the new membrane is more energy efficient than technologies currently on the market, but IBM wouldn’t say when the product would be ready for commercialization.

Peter Gleick, president of Oakland, calif.-based Pacific Insitute, a policy group, will testify before Congress tomorrow. According to excerpts of his planned testimony provided to Earth2Tech, Gleick will argue that considering energy and water together could offer substantial economic and environmental benefits.

The bill, introduced by Sens. Jeff Bingaman (D-NM) and Lisa Murkowski (R-AK), chair and ranking member of the committee, calls for in-depth research into the energy-water relationship. Besides the DOE, other government agencies would be called to conduct studies if the bill is passed. The Bureau of Reclamation would be directed to evaluate energy use in storing and delivering water from reclamation projects and identify ways to reduce energy use. The Energy Information Administration would be required to continually report on the energy consumed in water treatment and delivery. And the National Academy would be asked to study water use in the production of transportation fuels and different types of electricity generation. The work could lead to better national policies, such as those promoting the use of reclaimed water or phasing out crop subsidies that promote the wasteful use of water.

The Energy and Water Integration Act will likely meet broad support, because the top Democrat and Republican senators on the Energy Committee have introduced it together. It would then be packaged along with about a dozen other issue-focused bills into a single, larger energy legislation that could reach the Senate floor by the end of the month, according to a spokesman for the committee.

The larger energy bill could include new regulations for the oil and gas industries, energy efficiency, and a national renewable electricity standard. A draft bill for the RES is now circulating in Congress and calls for the nation’s electric utilities to generate 20 percent of their electricity from renewable sources by 2021.

“Developing new policies that integrate energy and water solutions will become increasingly vital as populations grow, environmental needs increase and a changing climate continues to affect our nation’s energy and water resources,” Sen. Bingaman said in a statement.

As is often the case around energy and water issues, California has been ahead of the curve. The California Energy Commission conducted a study in 2007 that found that water-related energy use consumes about 19 percent of the state’s electricity, 30 percent of its natural gas, and 88 billion gallons of diesel fuel every year. Energy is consumed along the entire water value chain, including conveyance, storage, treatment, distribution and wastewater collection. The study concluded that a “major portion of the solution to water and energy efficiency is closer coordination between the water and energy sectors.” But California shouldn’t be seen as representative of the rest of the country. Two-thirds of the state’s precipitation falls in the north while two-thirds of its population resides in the south, meaning water must be transported long distances. The state is also a major agricultural producer.

The full committee will hear testimony tomorrow. In addition to Gleick, witnesses will include Carl Bauer, director of the DOE’s National Energy Technology Laboratory and Stephen Bolze, president of General Electric’s Power and Water group. Photo Credit Alex Anlicker, Wikimedia Commons

The funds come from some of the venture world’s most well-known investors on both coasts: Massachusetts-based Flagship Ventures and Advanced Technology Ventures, and Silicon Valley’s Draper Fisher Jurvetson (the fifth most active cleantech firm in 2008). Oasys says it will use the money to continue to develop its desalination and water treatment process, which it says can produce clean water at significantly lower pressure than traditional reverse osmosis methods. According to the company, that lower pressure means its system uses 90 percent less electricity and fuel to produce clean water compared to most systems.

The technology behind Oasys was developed at Yale University, led by Menachem Elimelech and Rob McGinnis and was seed funded by GreatPoint Ventures. While Oasys doesn’t go into too much detail about its technology, reducing the energy needed (and thus the cost) to separate salt from seawater to make drinkable and usable water is an area that receives a good chunk of the innovation in the water sector. Other startups are working on nano-engineering purification membranes, creating technology to mimic the filter processes of the kidneys and developing chemical substances that separate salt from water.

Because creating and managing clean water is such a nascent industry, it seems like the bulk of the investments have been focusing on early stage companies. As we pointed out last month, early-stage firms and less conventional sectors of cleantech are doing better than most, raising funds and hiring. VCs with already-raised funds are looking to spend on less capital-intensive bets.

Look out for other water startups raising cash in the next few months. Yesterday, we reported that water management HydroPoint Data Systems is looking to raise between $4 million and $8 million, and the company expects the round to close in the second quarter. The company sells an irrigation-control system that uses satellite data and weather-predicting software to help calculate how much water to dispense to different plants, and claims its systems saves water, energy and money, and reduces water runoff.

At this point, water investing is still a small area of cleantech — in 2008 water investments only made up only 1.8 percent, or $148 million, of the year’s cleantech investments. But while the millions for the water sector might not grow too much this year, the percent that innovative young water companies take from cleantech might get a boost as expensive clean power projects have been scaled back.

Water already has reached or exceeded peak ecological limits in many places around the world, he said, noting that 200 million people die of water-related diseases every year. And that is a risk, not only to people and to the environment, but also to industry. The risks to companies are “both real and growing,” he said, adding that very few companies don’t depend on water for something. Companies that use water to make everything from clothing or semiconductors face growing competition, especially from agriculture, which uses 80 percent of the water used by humans, he said.

That’s leading to higher costs and limits on water use in some markets, such as water-constrained Beijing, which stopped permitting new water-intensive businesses to set up around the city, he said. “If water is dirty, you need to pay to treat it up front, not to mention [cleaning it again] afterward to meet standards,” he said. “In the past, water has typically been thought of as a low-cost input to production – and it’s still low-cost in some areas – but that’s changing.”

These challenges translate into opportunity for water companies, and the water market’s huge size – an estimated $400 billion to $500 billion per year, Gleick said – adds to the attraction. But while opportunities and solutions exist, sometimes they’re hard to find, Gleick said.

For one thing, the water industry is very complicated, with many moving pieces. “People who understand water technology often don’t understand economics, and a corollary is people who understand economics don’t always understand water economics,” he said. “Water is a weird thing.”

For example, water may be an economic good, it’s also a human right. While the cost of water is far lower than the actual cost of extracting that water, raising prices would doom the poor. It’s difficult to find solutions to the water crisis that can generate enough money to be economically sustainable. “It’s entirely possible to create brilliant water technology that the places that need it the most can’t afford,” he said.

The low price of water also keeps it from being economically viable to transport very far. “If you think about a tanker full of oil, it has a far higher value than a tanker full of water,” he said. “So you can only transport [water] so far before it becomes cheaper to do something else, like desalination.”

Gleick ended by saying that solving the water crisis is a difficult but tremendously important task, requiring efficiency and conservation, advanced economics, smart technology and better governance. “Water is already constricting industrial production and growth in some regions, leading companies to think about their water and ecological footprint in ways didn’t use to have to,” he said.

At the summit, companies like Switzerland’s Geberit International will be on hand to show off the latest in sanitation technology, and this year’s conference features a Sustainable Sanitation Pavilion exhibiting the latest in low-water and waterless toilet systems. Some low-water toilets have a dual flush system, using a larger amount of water for solid waste and a smaller amount for urine. But the WTO believes advanced dry toilets could be the future of the technology.

“It makes no sense to flush excreta with precious drinking water and try to filter it back again,” the WTO said on its web site. “This is too costly in terms of money and energy.” Although many so-called dry toilet systems throughout the world consist of a simple hole in the ground, new systems can treat human excreta as a resource. According to a paper on ecological sanitation from the Stockholm Environment Institute, urine and feces can be stored and processed on site in a waterless system, and then further processed off site until they are free of disease. The nutrients in the excreta are then recycled by using them as fertilizer.

If you can make it over to Macau, take a look at the solar-powered commodes that can run without water, and the whole-bathroom systems that convert waste into biogas, which can then be used to provide hot water for bathing and washing.

The WTO (not to be confused with that other WTO) is one of the few organizations to focus on toilets instead of water. General water efficiency and sanitation technologies tend to receive more attention and resources than technology sporting the slightly more embarrassing “toilet” moniker. The nonprofit group says on its web site that founder Jack Sim created the WTO to break the taboo of toilet and sanitation and legitimize it for mainstream culture. The WTO works with groups including the U.N. Economic and Social Commission for Asia and the Pacific and Habitat for Humanity on improving toilet and sanitation conditions worldwide.

The system works by pulling data from 40,000 independently operated weather stations to create a high-resolution weather map that gives WeathTRAK information down to the square kilometer. Beyond merely measuring rainfall, the system figures out a given area’s evapotranspiration rate. That information is then transmitted to the field via cellular networks where smart irrigation hardware can decide if plants in the landscape needs more water.

Landscape maintenance contractors simply program into the system a few key environmental factors, like what sorts of plants they’ve planted and what the soil type is; WeatherTRAK will then water the landscape on schedule with minimal waste.

Founded in 2002, the company is backed by cleantech VC heavyweights like Rockport Capital, Firelake Capital and Chrysalix Energy. HydroPoint has sold systems to customers like Google, eBay and Lockheed Martin, all of which use WeatherTRAK to monitor landscape watering across their campuses.

HydroPoint says that the typical return on investment for a customer is between one and two years in terms of water savings. The company estimates that in 2007 alone, its 15,000 subscribers saved more than 6.7 billion gallons of water, reducing their costs by $60 million. And that’s just a drop in the bucket in terms of water waste in the U.S. Some areas of the country are so water-constrained they’ve even set up whistle-blower programs, such as in Fresno, where citizens can report online cases of water waste.

In the late ’90s, Pickens took advantage of a uniquely Texan law that allows the state’s residents to buy up underground water rights — whether they own the land on top or not. He bought up enough water rights to establish his little corner of the Ogallala Aquifer as a fresh water district, which would have allowed him to invoke eminent domain in order to build a giant water pipeline from West Texas to Dallas.

Pursuing the same right-of-way he had hoped to use for water, and opting not to wait for his state to set up transmission lines, Pickens plans to transmit electricity from a 4,000 MW windfarm on his 65,000-acre ranch to the rest of Texas by 2011. But while the pipeline may be on hold indefinitely, Pickens still owns more water rights than any other U.S. citizen and one day someone is going to buy that water. A Pickens spokesman told the Associated Press that “discussions with potential buyers of the water from the Ogallala Aquifer continue,” although those discussions were unlikely to generate a deal in the near term.

In the meantime, his greatest potential profits now lie in the passage of Proposition 10, which would provide over $2 billion to fund massive incentives for natural-gas-fueled vehicles and the infrastructure necessary to get natural gas at the pumps. In addition to the water announcement earlier this week, Pickens’ wife quietly sold off a million shares of Clean Energy Fuels, his natural gas company, leaving some to speculate that it might be the next Pickens project put on hold.

But with so many water needs — drinking, agriculture, manufacturing, energy production, waste management — how do you find ways to fund possible innovations? Here’s some tips from Gasson, who moderated an AlwaysOn GoingGreen panel made up by Virgin Green Fund Partner Anup jacob, Miox CEO Carlos Perea, and the CTO Siemens Water Technology Joe Zuback.

1). Scalable solar desalination: There’s a lot of sun in places where fresh water is needed, and using the heat of the sun to power desalinaiton is a natural fit. We need solar clean water solutions that are low cost and can be scaled up.

2). Cheap clean water for agriculture: We need low-cost means of dealing with salinity in the agricultural system. In irrigated lands, particularly in arid areas, salinity can threaten soil and crop production. Finding a low cost way to offer better solutions to irrigate crop lands and keep salinity low is needed.

3). Lower energy salt separation: Desalinating water with less energy. There are a variety of ways that companies are working on this, such as: nano-engineered membranes, reverse osmosis membranes, mimicking the filter processes of the kidneys and mangroves, and working with chemical substances like clathrate hydrates and methane hydrates.

4). Value In Wastewater: We need to find more value in brine or wastewater.

5). Sludge Management: While innovations to clean wastewater are starting to emerge, the leftover sludge is one of the forgotten parts. The sludge tends to go to landfill and is expensive to deal with. We need to turn it into energy, and more efficiently and cost effectively use it.

6). Real-time water quality monitoring: There are a lot of technologies that look at parts of the water supply chain on a certain schedule. But we need advanced, real-time, smart monitoring systems that can, say, send a message to a cell phone that there’s an agent or unknown substance in the water supply.

7). Distribution solutions for drinking and wastewater: Water is expensive and difficult to move around. Investing in infrastructure and distribution will be needed. Former oil baron T. Boone Pickens knows this — he owns more water than any other individual in the country, through rights to the Ogallala aquifer under the same land he is putting wind turbines on. And Pickens is working to get a deal to transport both his wind and water over to Dallas.

AqWise’s system is novel because it employs biological-based water treatment solutions that work in conjunction with traditional waste water systems, which use filtering and skimming systems, as well as chemicals like chlorine, to treat water. The setup, called the Attached Growth Airlift Reactor, circulates plastic biofilm-covered carriers, which look a bit like giant hair curlers, through waste water. The plant matter growing on the carriers’ large surface area pulls organic nutrients, especially carbon and nitrates, out of the waste without the use of filters or chemicals.

The system is cost effective because it can be deployed in an existing waste treatment plant, boosting treatment capacity without expanding or building new facilities, AqWise says. The company markets its systems for industrial applications, such as paper and pulp or textile plants, municipal waste treatment and aquaculture, or fish farm sanitation.

Using biology — including micro-organisms — to clean up water (and remediate other environmental systems) is a growing trend. From controversial ocean seeding to biofuel genomics, biotech and cleantech will continue to converge.

In addition to its HQ in Israel, AqWise has offices in Mexico; its technology is employed in facilities in Spain, Italy and Chile, as well. This funding bodes well for Israel’s goal of boosting its water tech exports to $2 billion by 2010.