Sac Bee recap of the Clean Energy Showcase!

Business - 'Green' energy firms get tips on how to help industry grow - sacbee.com

'Green' energy firms get tips on how to help industry grow

By Clint Swett - Bee Staff Writer

Published 12:00 am PDT Friday, October 12, 2007
Story appeared in BUSINESS section, Page D4

While the Sacramento region has many basic ingredients to become a hub for the "green" energy movement, success will depend upon expanding access to investment capital, streamlining government regulations and mustering broad government support, industry veterans told attendees at a Davis conference Thursday.

A procession of speakers at the Sacramento Region Clean Energy Showcase on the UC Davis campus praised the region's exuberant entrepreneurs and their collaboration with researchers at local universities. It's estimated that roughly 80 regional companies are now focusing on clean energy products.

The public, increasingly aware of global warming issues, is ready to embrace and pay for solutions to environmental problems, experts told 300 attendees. Now it's up to local governments and businesses to adopt the technology fostered in the area, said Ben Finkelor, program manager of the UC Davis Energy Efficiency Center, which focuses on bringing energy technologies to the marketplace.
Still, there is some progress along those lines. Rocklin, Loomis and Roseville have adopted resolutions committing their city governments to increasing the use of green energy products.

Local venture capital firms have made significant investments in the region's green technology companies. Folsom-based Velocity Venture Capital, for instance, has partnered in funding three local companies to the tune of $7 million in the past year, said Jack Crawford Jr., a general partner in the investment firm.

"It takes a lot of money for research and development and a lot more for demonstration projects and implementation," said Dennis Schuetzle, president of the Renewable Energy Institute International in Roseville.

"We trail the Bay Area in how much funding is available," said Jacob Jorgensen, a Velocity Ventures partner, who estimated that Sacramento VCs have only about 5 percent of the capital that their Bay Area brethren receive. "Success begets success. You have to start small and work toward building companies here."

Even as entrepreneurs chase capital, they must also attempt to persuade regulators to give new ideas a try. In the building industry particularly, business owners say, the rules have not kept up with advances in green tech construction.

"Anytime we do anything new in the construction process, it's a challenge," said Jim Bayless, president of Roseville-based Treasure Homes, which specializes in building solar-equipped homes. "Regulatory bodies and inspectors tend to be resistant to change."

Tom Tenge, a sales executive with office developer Business Central, estimated that his new project in El Dorado Hills will take a month longer to get approval than it normally would because of energy-saving features.

"Anytime you are outside the box, it takes more time," he said. "And we're always outside the box."

Tenge also noted that lenders are often reluctant to finance the extra costs that a green project might entail. In his latest project, for instance, he said some modest energy-saving features will add about $1 million to the $18 million price tag.

"While (lenders) say they are thinking about green, this is the green they are really thinking about," he said, holding up a dollar bill.

Still, the speakers said the region enjoys some significant advantages in its efforts to become Green Acres to the Bay Area's Silicon Valley:

• The University of California, Davis, and California State University, Sacramento, provide significant intellectual and research horsepower.

• As the state capital, Sacramento is at the center of major policy initiatives to combat global warming.

• Green tech encompasses a broad variety of industries, ranging from agriculture to construction to computer technology -- all areas well-represented in the region.

• And finally, there is little hope that the price of traditional energy sources, such as fossil fuel, will decline significantly, meaning alternative energy has a bright future.

About the writer:

• The Bee's Clint Swett can be reached at (916) 321-1976 or cswett@sacbee.com.

The Bee issues a call to arms to attract green businesses!

The Sacramento Bee issues a strong call to action for area businesses and governments to step up efforts to make the area more attractive to green businesses.

Why is this here? We worked with the Bee editorial board to help them understand the issue and help raise awareness of the Sacramento Region Clean Energy Showcase on October 11 at UC Davis. Not registered yet? Go to the event and register onsite!

Editorial: Is our region ready to be a clean-tech mecca?

Local actions will determine whether companies want to make their home here

Published 12:00 am PDT Wednesday, October 10, 2007
Story appeared in EDITORIALS section, Page B6

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Unless you are awakening from a Rip Van Winkle nap, you've probably noticed that the hottest field of California business is the so-called "clean-tech" sector.

Clean tech is a catchall term for small and large businesses devoted to alternative power, energy efficiency, green building products and environmental technologies. In the first quarter of this year, U.S. venture capitalists invested $264 million in 23 clean-tech deals, with much of that capital flowing to and from California businesses -- for obvious reasons.

More than any other state, California has passed laws to encourage sustainable energy and development practices. The state's global warming law, its renewable energy standard and its solar initiatives are just some of the measures driving entrepreneurs to innovate and market new practices and products.

Full article here.

Could be big!

I think these guys should come to the Clean Energy Showcase on 10/11 in Davis!

Recycled building material maker to lease 70,000 feet in Sacramento

Sacramento Business Journal - by Melanie Turner Staff writer

Dennis McCoy | Sacramento business journal

Richard Rios, chief executive of Verde Development, peers through his recycled building blocks.

A Sacramento startup is gearing up to become the Northern California distributor for a company that makes "green" building blocks.

Verde Development Inc. expects to close in mid-October on $3 million in private equity funds. The company would use the money to lease around 70,000 square feet for a plant to manufacture the blocks for Apex Construction Systems Inc., which specializes in green construction materials.

Verde is looking at buildings in Natomas and West Sacramento.

The four-employee company is at the McClellan Technology Incubator. Plans call for 50 workers next year, once the company sets up its factory, Verde president and chief executive officer Richard Rios said.

The building blocks are made of 89 percent recycled polystyrene -- the white packing material used to pack televisions and other products, said Robert Budihas, vice president of sales and marketing for Apex in Portland, Ore.

"There's no avenue to recycle it besides putting it in landfills," Rios said of the lightweight material. "We shred it and make a building product out of it."

In the manufacturing process, polystyrene is mixed with concrete and bonding agents. The company claims the resulting blocks, which form the interior walls of custom homes and other buildings, are better insulators than wood and resistant to mold, insects and fire.

East heads West

The blocks are based on technology Apex licensed from entrepreneur Gabor Boronkay, owner of Dura Thermolith Ltd. in Budapest, Hungary. Apex holds the rights to the product worldwide, outside Hungary, Budihas said.

The 4-foot-long interlocking blocks have channels to accommodate Rebar and concrete to give walls more strength.

Apex Construction Systems was founded in 2003 and has raised $12.6 million in venture capital and angel money. DFJ Element LP of Philadelphia and Menlo Park led the funding.

Apex is not disclosing revenue or whether it's profitable.

In May, Apex opened its first full-scale factory in Phoenix. The company also just finalized an agreement to open its second U.S. manufacturing plant near San Bernardino. The California plant is expected to open as early as July, Budihas said.

A Sacramento-area plant would be the company's third.

Homes and other buildings have been constructed using Apex blocks in Oregon, New Mexico, Arizona, Utah and Colorado, Budihas said.

Only builders in jurisdictions where International Code Council approval is not necessary have been able to use the material, he said. The ICC is a membership association that develops codes used to construct buildings. Most U.S. cities, counties and states use codes developed by ICC.

Plans to expand Apex and Verde essentially are at a standstill until the product can get an ICC number and other state approvals. Apex expects to get its ICC certification in the next 30 days.

In Sacramento, Rios has received product from Apex's Phoenix plant, but without the proper approvals he can't distribute it to customers.

Outside the mainstream green

While consumers and green builders embrace these types of new building techniques, companies face hurdles getting projects approved by local building departments, said Scott Blunk, president of GreenBuilt Construction Inc. in Sacramento.

"It's not mainstream," he said. "You can build 50 houses, but every inspector's not going to see it. It's just going to be new to everyone."

Steve Kendrick, a principal at LPA Inc. in Roseville, said his architecture firm would consider using the blocks if Verde gets its approvals, as well as a nod by the Division of the State Architect.

"We move a little cautiously when it comes to a new product like that, whether it's Verde's or anybody's," Kendrick said. "Typically, new products like that do have trouble getting traction in the market."

A similar technology has been used to build homes in eastern Europe for decades. The early origins of Apex and its more established competitor Rastra Corp. of Scottsdale, Ariz., both are linked to eastern Europe. Other competitors include Perform Wall LLC of El Paso, Texas, and Amazon Forms One Inc. of San Antonio.

Jerry Kachlic, owner of Pyramid Installations LLC in Phoenix, has been using blended insulated concrete forms, similar to the Apex product, for about nine years. He plans to switch to building with Apex blocks exclusively.

"Their manufacturing facility is brand new, and their technology is far superior," he said, adding that the blocks are easier to install.

Rios said the cost of the block runs about 3 percent to 5 percent more than a wood-frame building, but a block-based structure has added benefits, such as fire and mold resistance.

"Based on the feedback I've received from trade shows and personal contacts in the area, this region could be a trendsetter for the rest of the state," he said.

melanieturner@bizjournals.com | 916-558-7859