Two Pasadena firms are supplying the financial brains and brawn for the green revolution
By Jake Armstrong 04/28/2011
If clean energy someday does save the planet from carbon-based ruin, mankind might want to throw some praise Pasadena’s way.
That’s because the Crown City has emerged as a frontrunner in the cleantech movement, propelled by the blend of brains and financial brawn found locally.
A solar-powered turbine in the high desert, solar equipment that chases the sun’s rays and disposable methanol fuel cartridges — all are clean energy innovations that may not have got off the ground if not for Idealab and Entretech, two Pasadena based entities that have helped Pasadena reach a prominent place in the multibillion-dollar cleantech market.
In fact, Pasadena ranked ninth among the top 10 cleantech cities in the nation, joining a list that includes far larger cities like Boston, San Jose and San Francisco, according to Cleantechies.com, a Web site devoted to the cleantech trade.
And with investment in cleantech expected to surge in the coming years, given the country’s insatiable craving for energy and the growing mindset that such energy should be renewable, smart money is on Pasadena’s already established cleantech support system addressing one element that’s dogged the industry all along: cost.
“There continues to be a lot of interest in people looking at ways to make any of these alternatives more cost effective,” said Teresa Bridwell, vice president of corporate communications for Idealab, which since its debut in 1996 has spawned innovations ranging from the first paid Internet searches — a precursor to Google’s business model — to eSolar’s sun-powered turbines, which are currently powering about 4,000 Southland homes through a partnership with Southern California Edison.
Launching a cleantech company is fundamentally different from starting other businesses, according to Bridwell. Part of the challenge is that the business is more capital intensive and the customer base tends to be fairly specific, such as utilities or large organizations, rather than the typical everyday consumer.
“They’re solving big problems, in many cases,” Bridwell said.
Cost and efficiency often add to the challenge. One concept Idealab has seized on to reduce the cost of generating solar power is the solar turbine. It’s now in practice at Burbank-based eSolar and Thermata, two companies to which Idealab provided seed money to get started and still maintains a share in.
Thermata is devising a way to give manufacturers the ability to install such turbines on the roof in a way that’s cheaper than natural gas, while eSolar is employing the same concept on a much larger scale at its 5-megawatt Sierra Sun Tower in Lancaster. That project is expected to reduce emissions by 7,000 tons a year, which is the same as planting 5,200 trees, removing 1,300 cars from the road or saving 650,000 gallons of gas annually. Plus, that turbine technology is said to be rivaling the cost and efficiency of other generation methods.
“You just approach a problem in a slightly different way,” Bridwell said. “With eSolar or Thermata you’re just finding better ways to create that energy more efficiently. You are not really inventing the concept so much as making it more efficient and therefore more cost effective.”
Idealab opened in 1996 and has since created nine cleantech companies and many others in communications and security, Internet services and automation.
Founded 11 years ago, Entretech is a nonprofit partnership between the city of Pasadena and Caltech that was designed to bolster the number of high-tech companies along the Foothill (210) and Ventura (134) freeway corridors.
With funding from sponsoring businesses, individual donors and other sources, Entretech has helped fund and support more than one dozen cleantech companies producing everything from batteries that store and produce more power to advanced biofuels to portable solar power systems that help bring power to rural India.
Starting a cleantech company is most often a high-cost, high-risk proposition. But private investment in cleantech is rapidly growing, according to Next 10, a nonpartisan San Francisco-based think tank focusing on the nexus of economic, environmental and social policy in California.
As of 2009, California had drawn in $11.6 billion in cleantech venture capital, a full quarter of what had been invested worldwide, according to Next 10. In the first six months of 2010, cleantech investment was nearly three times higher than in the same period the year prior. Additionally, the Golden State holds claim to more green technology patent registrations than any other state, beating out second-ranked New York by 150 patents. And Californians on average used 20 percent less energy in 2008 than they did in 1970, according to Next 10.
“California’s world-class talent, research centers and businesses, coupled with its innovative clean energy policies, uniquely position us to invent and deploy technology and benefit as a market leader,” said F. Noel Perry, founder of Next 10.
The Los Angeles region ranked third statewide in cleantech technology investments, with more than $500 million, falling behind San Francisco and Silicon Valley, where more than $2 billion is invested.
Cleantech Group, which analyzes the industry, says one of the primary drivers behind California’s rise in the industry is its landmark global warming law, Assembly Bill 32, which survived Big Oil’s attempt to repeal it and requires the state to substantially reduce greenhouse gas emissions by 2020. Cleantech firms have steadily been collecting investment money since the bill was signed in 2006.
And green jobs have followed that influx of cash. Next 10 found in January 2011 that creation of green jobs had outpaced the creation of other employment at a rate of three to one. The so-called “green economy” now embodies a total of 174,000 jobs in the state, mirroring the growth in software-related jobs since 2005, the group said.
“The green job data is significant because these jobs are growing in every region across the state, outpacing other vital sectors, and generating business across the supply chain,” Perry said. “There are very few business sectors in a state as large as California that employ people across every region. The emergence of this vibrant core green economy can be attributed to California’s history of innovation, as well as our forward-looking energy and energy efficiency policies.”