startupmania

As of this writing, I’m in Eilat at the EilatEilot 2010 convention, to which me and Ofer Dak were invited by the courteous people at the Technologies Group. The convention focuses on Israeli start-ups dealing with CleanTech. We tried to understand what it really means to become energy efficient, and who’s slated to provide us with new, green energy.

The three-day convention was attended by many “energy professionals”, starting from Israeli politicians who are tied to the local energy infrastructure, to international officials who are trying to influence the global energy production map, all the way to dozens of suppliers, inventors and local utilizers of energy solutions.

Many came in suits and ties, in the midst of the scorching Eilatian “winter”, and in nearly every corner you can spot representatives of the world bank, the state of New York, European or Korean conglomerates, and leading US NGO reps. It seems that the EilatEilot convention has become a world-scale networking event, with a cosmopolitan vibe.

While we flew to Eilat with fresh memories from the Copenhagen climate committee, and even argued about the ClimateGate incident on the way, between the convention halls, at the Dan Eilat hotel and the show floor at the Herod hotel, people are no longer mentioning the environment and the future of our planet.

It seems that CleanTech in Israel, circa 2010, is mostly about regulations, government subsidizing, the price at which we can charge the electric company for each solar kilowatt, and exactly how many kilowatts can we get out of one meter of sun.

The “dream” square is currently occupied by talks of SmartGrid, the ultimate electric grid which everyone agrees is the “next big thing“ and should turn the old model of energy supply into something a lot more internet-esque.

The idea, basically, is that a consumer will be able to purchase as much electricity as he needs, when he needs it, at a rate comfortable to him and according to the energy consumption profile he wishes to adhere by. A particular device’s energy consumption will be common knowledge, and we could plan our usage according to lower rates at hours with less of a strain on the grid.

While Israel, with only one electric company and no real option of sharing electricity with its neighbor, will never likely be a world leader in SmartGrid application, it is possible the Israeli start-ups will develop sensors, control mechanisim and computing solutions for the global SmartGrid strategy and will be purchased by one of the big companies abroad.

Guido Bartels, general manager of IBM’s global energy and utilities, told me that in order to successfully develop SmartGrid solutions, or, as he calls that wider global efficiency program, SmartPlanet – a program meant to connect to the transportation and health industry among others – Israeli start-ups will need to install SmartGrid solutions in Israel, and actually deal with the industry and not just planning and marketing

Without my asking, he mentioned Better Place, a company that may work in Israel, in the same way he mentioned the other industry giants. I’m not sure if it’s because he’s here now, but my impression is that the man in charge of energy at IBM talked of Better Place as a partner in a long, global path, and not just another Israeli start-up.

The CleanTech start-ups I met at the convention, are very different from software, internet or hardware start-ups. These are not Linux geeks, iPhone-toting CEOs or data security enthusiasts. This is a combination of physicists and contractors that need to know how to market their projects to land owners, gain government permits to build, find funding and keep good contact with various government companies and make sure that dozens of tons of equipment are properly installed. Also, you have to promise to the customers the renowned Return of Investment (RoI).

Like in many organizational computing conventions, RoI is a key term here as well. Some start-ups promise a 5-year RoI, while some declare an 8-year period, if only you bring forth a permit to build a solar farm, a signed deal with the electric company for future sale of power and funding.

But in today’s Israel, before the real “Green Revolution”, there is no one who can present real data regarding installation of alternative energy sources that has brought real monetary savings and has covered the system’s purchase and installation costs. This, of course, includes the government subsidy the entire way.

Another variable is the wear and tear of the expensive equipment, as well as that the repair work of energy production devices after several years of use. Most supplier promise a warrantee good for five years, but the people I met have no idea what holding a solar farm for ten years is going to cost, which expensive replacement parts or adapters will need to be repurchased and is now even the right time to dive into the field.

Like in many new fields, it seems that CleanTech entrepreneurs can be divided into two groups – the alternative energy fields and the proponents of energy efficiency. The former believe that we live in the center of a galaxy rife with energy and we just need to learn how to collect it from the sky, earth, wind and water. The latter are basically a modern version of my grandfather, may he rest in peace, who always made sure to turn off the light, fearing that single 40 watt bulb will drain away his entire life savings.

Among the first group, I noticed the start-up Pythagoras Solar from Petach Tikva, founded by Gonen Fink, a former executive at Check Point, employing about twenty employees. Pythagoras Solar are developing clear walls for buildings, ones very similar to the exterior of the Azrieli towers, but with solar panels built in. According to Pythogoras Solar representatives, the company has already secured investments from the venture capital funds Israel CleanTech, Pitango and Evergreen, and it is designating its Building Integrated Photovoltaic units for skyscrapers. They are about to take part in their first project, and their “energy walls” are set to be a significant part of a large construction site in San Francisco.

Another interesting solar start-up is Solaris Synergy from Jerusalem, they develop “Solar Rafts” that are meant to float on lakes. According to Dr. Elyakim Kassel, the company’s business development manager, the lake’s water help cool the solar device, the bottom half of which is submerged in the water, and thus prevent damage to the silicone cells the unit is made of. Likewise, these floating devices do not require any specific permit and is a very convenient solution to energy companies that happen to own water reserves. Kassel revealed that Solaris Synergy has already signed a deal with Israeli water company Mekorot, which, according to him, is the largest Israeli consumer of electricity and during 2010 will lay out their system in the Taoz water reserve, near Latrun. The experimental facility is set to create roughly 200 kilowatts of electricity for every hour of sunshine.

Among the start-ups working in the energy efficiency field, I was attracted to Powercom, an electric meter maker from the Ramat HaKovesh kibutz, employing roughly 25 people. The company makes meters that can be remotely read, and power outlets that can monitor, via RF frequencies, the energy consumption of the device connected to them, and even allows control of the current flowing to the customer via PLC. The company’s representatives informed me that they are entering a significant pilot with the electric company and may even receive a venture capital investment from it. The promise that within months, after the finish the installation process of their product in Israel, they will begin marketing LCD screen and smart splitters that allow any customer to receive an updated picture, in real time, of his or her energy consumption at home. Additionally, Powecom even declares their ability to provide detailed electric bills, through a remote read of the meters belonging to those customers who wish to manage their own electric bills, an option which may suite small kibbutzes or malls that own their own, internal system of electric supply and payment charges for consumption.

Translated by Itai Rosenbaum