Five Green Firms to Watch 

BrightSource Energy, EarthSource Forest Products, Makani Power, the Reuse People, and Sungevity.

If the green economy really takes off, the East Bay may have a strong claim as its capital. Albany, Berkeley, Oakland, and Alameda are headquarters for a growing number of environmental consulting companies in sectors such as wind, solar, construction, and energy efficiency. Oakland alone is home to more than sixty green consulting companies that employ 500 people, according to city officials.

Here are five companies to watch.

Makani Power

What if the wind could be harnessed to produce energy at such a low cost that it undercuts the cost of coal, considered the least expensive source of energy on the planet? That's the goal of Makani Power, an Alameda firm that harvests the wind by sending tethered air foils 1,000 feet up in the air to sweep the sky.

Corwin Hardham, Makani's chief executive officer, said this approach will produce more energy with less material for a lower cost of energy than wind turbines. The airfoil is a high-performance wing that is tethered to the earth with a flexible cable and steers like an aircraft under computer control. The wing sweeps through the sky and harvests more wind energy than wind turbines, which require heavy towers and supporting infrastructure.

Founded in 2006, the company is developing small-scale prototypes at its headquarters in Alameda in the hopes of developing utility-sized systems. Makani, named after the Hawaiian word for wind, has received $15 million in funding from Google.org, the philanthropic arm of the Internet company. It employs eighteen people.

The firm is currently testing prototypes capable of producing 10 kilowatts. These small prototypes are large enough to provide power for up to five homes and have much in common with the utility-scale production wings Makani hopes to develop. Using these prototypes, this year the company aims to demonstrate the performance and the safety of the system while it moves to develop the design of a utility-scale system.

BrightSource Energy

This year, BrightSource Energy is gunning to break ground on a solar thermal power station in the Mojave Desert.

Once built, the Ivanpah Solar Energy Generating Station will be comprised of three individual power plants that will collectively produce approxi­mately 400 megawatts, enough to power 140,000 California homes. Its source will come from steam heated by thousands of mirrors concentrating sunlight. BrightSource's project in the desert could be one of the largest utility-scale solar projects built in more than twenty years. The company, with the backing of Google.org, Morgan Stanley, Chevron, BP Alternative Energy, and a host of others, has plans to build a total of fourteen power plants by 2016.

BrightSource, which employs 52 people at its Oakland headquarters and about 150 others worldwide, has been at the center of a struggle between environmentalists and those who want to quickly increase the state's clean energy sources. Environmentalists have raised concerns that the project would disturb the habitats of the desert tortoise and rare plants in the Southern California region. In addition, some complain that the plants and mirrors will mar the beauty of the region. In response, the company reduced the size of the location it would occupy. While that did not satisfy environmental groups, earlier this month, staff members with the California Energy Commission have recommended approval of this project, which still must receive approval of the entire board as well as federal approval since the plants will be on land controlled by the Bureau of Land Management.

After more than two years of environmental reviews, BrightSource is now in a rush. To qualify for a Department of Treasury cash grant, which is designed to offset 30 percent of the cost of the power plants, the firm must break ground this year. Pacific Gas and Electric and Southern California Edison have a contract with BrightSource for the company to deliver 2,600 megawatts of electricity annually by 2016; with the first 100 megawatts coming online in 2012.

The project will be built by Bechtel and is expected to create 1,000 jobs. Even with a federal loan guarantee of $1.37 billion, which will finance 70 percent of the project's costs, the company will spend the year focused on securing additional financing and obtaining permits for the three power plants, said Keely Wachs, BrightSource's spokesperson.

EarthSource Forest Products

When the Bay Area housing downturn hit, so did the market for hardwood lumber. EarthSource Forest Products, a West Oakland company that has been on the forefront of selling sustainably harvested forest products wholesale to the cabinet and furniture trades, has seen its business drop more than 50 percent from a high in 2007 of $24 million in revenues. The company employs 46 people, down from 60.

Founded in 1983, EarthSource gets its wood from vendors in Asia and Central and South America that have been sanctioned by the Forest Stewardship Council, a nonprofit organization that has been the primary group to judge whether wood products are environmentally friendly.

Jeff Hunt, the president, said the company is in a state of maintaining. Suppliers and customers have gone out of business. Even now, with the market coming back a bit, the company's primary issue is that it can't borrow the money it needs to buy inventory.

"If we could buy more inventory," he said, "we could sell more inventory."

The Reuse People

While reusing stuff is a central tenet of many environmentalists, diverting stuff from the dump is the ultimate goal. At the East Oakland site of the Society of St. Vincent de Paul's of Alameda County, there is an industrial eco park of sorts with three businesses whose central aim is to sell what has already been used.

The Society of St. Vincent de Paul's thrift store site in East Oakland began to sublet its space to two other organizations about four years ago. Now, other than the charity's retail store selling clothing and furniture, there is Habitat for Humanity's Restore, which sells primarily new construction materials from the after market that would have been junked. Meanwhile, the Reuse People of America, Inc., a nonprofit organization, is in the business of deconstruction. The firm deconstructs home and buildings and then sells the supplies to people at its store rather than carting truckloads to the dump.

As the construction market collapsed, so did the deconstruction market, said Ted Reiff, the company's president. Its business is off up to 30 percent from last year, Reiff said, adding that its offices in San Diego and Chicago are doing better than in Oakland. The ReUse People employs 20 people.

Fortunately, the company has seen its side training business pick up in places like Muncie, Indiana; and Kansas City, Missouri; particularly for people 17 to 24 years old.

"Deconstruction training has gotten people's attention," Reiff said. "The beauty of deconstruction is they see every part of construction and they learn how to use the tools. ... And if they make a mistake, oh well."

Sungevity

Sungevity, an Oakland-based firm that sells home solar installations, already thought it had something unique: Its call center uses satellite imaging technology to look at people's homes and give them free, quick estimates online for solar installation. The company dispatches contractors to do the work. "We take the pain out of it," said Danny Kennedy, the company's president and a former Greenpeace activist.

Kennedy compares his company to Dell Inc., the computer firm that revolutionized the computer industry by cutting out the supply chain and selling directly to customers online. Since it was founded in 2007, Sungevity has installed almost 300 units mostly in Northern California as well as recently in Southern California.

But the biggest barrier for most homeowners curious about solar remains the expensive upfront costs, which can be more than $10,000. So earlier this month, the company launched an additional strategy that it expects to dramatically increase its sales. Sungevity will install the solar system for free. The customer signs a ten-year lease and pays monthly service fees that are lower than their energy bills.

The lease model idea is already being used by a competitor, Solar City, a Fremont company. Recently, Solar City's chief financial officer Charles Ferer joined Sungevity. The idea is that Sungevity and the banks jointly own a homeowners solar system. What do the banks get out of it? They use about 30 percent of the cost of the solar system as a federal tax credit.

The biggest challenge for this year, Kennedy said, is managing growth. In 2009, the company, with 75 employees, had $3 million in sales. It expects to reach 100 employees by the end of the year and boost revenues. "We'll do five times the business and as much as $20 million in sales this year," he said. "Our biggest concern is how do you grow by four to five times in a year."

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