Efficient Telecom Shelters!

In the last decade, the telecom industry has grown by leaps and bounds. However, this growth has remained limited to urban areas in many regions, and has been marked by low penetration in majority of semi-urban areas.

Many telecom players are currently contemplating expanding their business operations to class B and C circle cities, where the main impediment is reliable, uninterrupted power supply for the base stations and telecom shelters. It is imperative to reduce energy consumption in these telecom shelters, which incur 30 per cent of their expenses on energy.

Against this backdrop, TERI carried out a study in 2008 for Indus Tower Limited, the world's largest tower infrastructure company, on ways to conserve energy and improve energy efficiency in telecom shelters.

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PCM- Phase change material, BTC unit- Base Trans receivers station

The study completed in 2009 suggested eight crucial steps that could reduce energy consumption of existing shelters by approximately 25%. The prescribed steps included increasing shelter temperature without exceeding the safe limit of operation, introducing DC free cooling unit instead of AC free cooling unit in areas that experience two or more months of below 25º C temperature, combining power interface unit (PIU) and power plant with better efficiency, and maintaining the temperature of the battery at 27º C with the help of battery cooler. Use of battery cooler can increase the life of the battery, thereby reducing the frequency of battery replacement.

Additionally, TERI pointed out the necessity of introducing better power management in the PIU, improving the building envelop of the shelter, introducing soft starter in the air-conditioning unit, and downsizing the generator set for better fuel efficiency.

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To carry out this study, TERI analyzed the existing scenarios and energy consumption patterns in the energy sector. A telecom shelter was constructed at TERI Gram in Gual Pahari. The energy consumption performance of the shelter was tested and its energy-saving potential estimated. This was done with the help of extensive test methodologies and protocol that were specifically developed for the purpose. The process also involved monitoring more than 45 parameters through a remote monitoring system for a period of at least a year. The recommendations for reducing energy consumption and increasing efficiency were developed on the basis of these tests.

Rising Sun: India's Solar Power Initiatives Are Shining Brighter

Farooq Abdullah, India's Union minister for new and renewable energy, is a busy man these days. Over the past few months, as the Copenhagen climate summit neared, he has been speaking at seminar after seminar on renewable energy which, most of the time, have been on solar energy. He has also been inaugurating projects, from the launch of a new solar lantern to the commissioning of a solar steam system at a temple kitchen to cook food for 20,000 pilgrims each day. All over India, solar power has found its day in the sun.

On November 23, Abdullah was again in action in Parliament unveiling the Jawaharlal Nehru National Solar Mission. When Prime Minister Manmohan Singh launched India's National Action Plan on Climate Change on June 30, 2008, he had highlighted the contribution of solar power. "In this strategy, the sun occupies center stage, as it should, being literally the original source of all energy," he said. The action plan envisaged eight missions -- for Solar Energy, Enhanced Energy Efficiency, Sustainable Habitat, Water, Sustaining the Himalayan Ecosystem, Green India, Sustainable Agriculture and Strategic Knowledge for Climate Change. Appropriately, the Solar Mission has been the first one off the ground.

Abdullah said the mission "has a twin objective -- to contribute to India's long-term energy security as well as its ecological security. We are living in a world of rapidly depleting fossil fuel resources, and access to conventional energy resources such as oil, gas and coal is becoming increasingly constrained. The rapid development and deployment of renewable energy is imperative in this context and, in view of high solar radiation over the country, solar energy provides a long-term sustainable solution."

The Mission has been launched under the name Solar India. (Ever since the success of the Ministry of Tourism campaign under the Incredible India banner, branding is de rigueur for government projects.) "Solar is currently high on absolute costs compared to other sources of power such as coal," says the Mission document. "The objective of the Solar Mission is to create conditions, through rapid scale-up of capacity and technological innovation, to drive down costs towards grid parity. The Mission anticipates achieving grid parity by 2022 and parity with coal-based thermal power by 2030, but recognizes that this cost trajectory will depend upon the scale of global deployment and technology development and transfer." (Grid parity is the point at which the cost of one power source becomes equal to or lower than grid power.)

Global Leadership

The Mission also notes the advantages of solar power. First, India has great potential. "About 5,000 trillion kWh per year of energy is [used] over India's land area." Second, "solar energy is environmentally friendly as it has zero emissions while generating electricity or heat." Third, from an energy security perspective, solar is the most secure. "The objective of the National Solar Mission is to establish India as a global leader in solar energy," says the document. It then goes on to set ambitious targets -- 1,000 MW by 2013 going up to 20,000 MW by 2022. The policy includes an array of fiscal incentives, the formation of a National Centre of Excellence, subsidies on the sale of power, creation of a single-window clearance mechanism, zero import duty on equipment and components, and the setting up of two to three large solar manufacturing technology parks.

"The Indian solar energy industry can easily rise to the challenge of bringing solar energy to the forefront to help India address the twin challenges of energy security and combating global warming and climate change," said Chandrajit Banerjee, director general of the Confederation of Indian Industry (CII) in a statement welcoming the Mission. "India is particularly well positioned to reap the advantages of solar power, which is clean, free, forever and everywhere."

Most people agree on the potential, but they are uncertain whether the Mission will meet the projections. "I hope it will meet its targets," says Vasant Natarajan, a professor in the department of physics at the Indian Institute of Science (IISc) Bangalore. "It is an imperative in this day of climate change, and the consequences of not pursuing this goal vigorously would be catastrophic." Sanjeev Ghotge, senior fellow and head of the Center for Policy and Sustainability Research at the Pune-based World Institute of Sustainable Energy (WISE), is also optimistic. "It is possible (that we will meet the targets) provided we work hard at it and if the international climate is conducive to helping us do it. It is conditional on both these factors."

Harish Hande, managing director of SELCO Solar Light, which is one of the acknowledged entrepreneurial successes in this area, is skeptical. "I don't think that it (the National Solar Mission) is wishful thinking but I do feel that it is too ambitious," he says. "The demarcation between the on-grid and the off-grid should have been clear. A lot of the emphasis of the 20,000 MW is on centralized solar. For this, a lot of related infrastructure needs to be put in place. Land ownership will also be an issue. In a country like India where 70% of the population is in rural areas, the centralized model may not work effectively. Besides, 20,000 MW in 10 years is too ambitious. It is not just about technology. Technology is only one part of the chain and it does exist already. It's only a matter of improving it. What we need now is the appropriate supply chain, doorstep service and a variety of financial products."

Success Stories

Some success stories have already emerged. Hande and the Bangalore-based SELCO have several such projects. Silk farmers are now using solar lamps instead of kerosene lanterns. Apart from other advantages, this reduces the mortality rate of silkworms. SELCO has also launched headlamps for midwives. It has worked out several innovative financing models. Hande has support from the Rockefeller Foundation.

Also in Bangalore is Crown Solar Power Fencing Systems, which makes solar power fencing, solar lighting systems and security devices. Tata BP Solar, in which BP holds 51% and the Tatas the remaining equity, has a much wider range on offer. This includes lanterns, home lighting, water pumps, water heaters, road studs, street lights and solutions for several sectors such as banking (the Sunbank solar power pack, a cost-effective solution for rural banks) and telecom (the Sanchar solar-powered system). These sectors' rural forays had hit the wall of perennial power shortage. Solar has been one solution.

TERI (The Energy and Resources Institute) has on offer a milk-churning device that runs on solar energy, solar-powered television sets, fans and a lot more. TERI also has a project in West Bengal to promote women as solar power entrepreneurs. Mukesh Ambani's Reliance Industries has a solar group which, among other products, has a water purifier in its range. Photon Energy Systems has launched solar desalination systems. There will soon be a solar version of every appliance that runs on power. "The small-scale appliance market provides us a unique opportunity," says Natarajan of IISc. "Providing a few hours of lighting after sunset in a village house can make a big difference in the education of the children in the household. This can be done by a solar-powered battery charger that, in turn, powers an LED lamp."

Others are considering the grid -- that is, generating power for supply to homes and industry. The public sector National Thermal Power Corporation is going into solar power in a big way. Bharat Heavy Electricals has commissioned two grid-interactive solar power plants of 100 KW each in Lakshadweep islands. The Oil and Natural Gas Corporation is getting into the business as well.

While the public sector is thinking about large scale projects and the private sector about small projects and appliances, there are some crossovers. On December 1, Azure Solar became the first Indian company to sell power commercially in India. Its 2 MW plant may seem small, and the 1 MW it is supplying to the Punjab State Electricity Board isn't going to light up many households. But 1,000 Azures can make a difference. In West Bengal, Titan Energy has just completed the construction of a 1 MW unit for the West Bengal Green Energy Development Corporation.

State governments also are getting into the act. Andhra Pradesh has set aside 6,000 acres in Anantapur district for allotment to companies setting up solar power projects. Three companies -- the U.S.-based SunBorne and AES Solar, and the Hyderabad-based Lanco Solar -- have been issued offer letters. The three companies will together invest around $600 million.

Solar Parks

In Gujarat, the government is talking to the Clinton Foundation, which has launched the Clinton Climate Initiative (CCI) to create and advance solutions to the core issues driving climate change. This is a massive project, one of four solar parks planned across the world. "In partnership with TERI and other technical expert partners, the CCI is assisting the government of Gujarat to prepare feasibility studies for the creation of one or more solar parks in the state," says Olivia Ross, PR director of CCI. "A solar park is an area where solar power is produced on a significant scale. Each solar park will include more than 3,000 MW of solar generation capacity." The 3,000 MW is for starters. The plan is actually for 5,000 MW at a cost of around $15 billion. The Gujarat project is likely to be the first to come up and will become the world's largest solar project. "Solar parks for large-scale generation are needed if we want to wean ourselves away from coal-based power generation," says Natarajan of IISc.

In Maharashtra, summer capital Nagpur is being developed as a solar city. This is a central government initiative: 60 cities all over the country are being designated solar cities. Nagpur is the first. The initial target is to reduce the use of conventional energy by 10%. For Nagpur, the target is by 2012.

Also in Maharashtra, though this is a private effort backed (and partly financed) by the government, is the solar cooker at the temple complex at Shirdi, set up at a cost of $250,000. This feeds 20,000 devotees who visit the Sri Sai Baba Sansthan every day. The plant was inaugurated by Minister Abdullah in July this year. It will save $60,000 a year on LPG costs. Shirdi is not the first, but it is the world's largest. Several other religious sites in India -- including Mount Abu and Tirupati, among others -- have installed solar cookers for preparing meals for pilgrims.

Some problems need to be tackled first, however. One issue has to do with land, according to Ghotge of WISE. Though land acquisition from farmers is a touchy subject, if it is handled correctly, Ghotge believes it may not pose a major hurdle.

Another challenge is that some solar thermal technologies require water. In a state such as Rajasthan, water is available from the Rajasthan canal, but according to Ghotge, "you have to ensure that priority is given to solar thermal projects along the canal areas and not to solar PV generation because PV generation is not dependent on the availability of water. These kinds of policies need to be understood and well thought out in order to be successful."

The question of policy support from the government for high-cost technologies in their initial stages also looms large. Moreover, India will face challenges in absorbing solar power into the nation's power grid and pay for it. "The cost of any technology comes down the moment you get into mass production," Ghotge notes. "It is a chicken-and-egg problem. The companies with cutting-edge technology typically are not very large and don't have deep pockets. They would not like to part with their technologies. They would like to earn money from it, plough it back and grow. We need companies that are solid and not only those that are there to sell out and make money."

Private and Public Efforts

This may be the reason that the private sector has only been nibbling at the edges of this sector and leaving the hard work to the government and government companies. Solar power needs all hands on deck. Is the private sector doing enough? "The private sector has not taken enough initiative and has not put in enough resources and effort for the Indian market," says Hande of SELCO. "This is because of the long gestation period here. What it has done is put up manufacturing plants (of panels) to cater to the needs of the West -- for markets like Germany, Italy and California, which offer subsidies. They (the private players) should have taken the initiative to nurture the India market also instead of waiting for the government to offer incentives. I doubt if this National Solar Mission will make new players take an active stance. They will still wait for everything else to be done by the government. And that is where they are going wrong. They need to show the government how things can be done."

Natarajan disagrees. "I don't think the private sector has stayed out of solar," he says. "Almost all the solar water heater manufacturers, for example, are private companies. Similarly, several photovoltaic manufacturers are private. The announcement of a Mission can only enthuse them more. If there is money to be made, the private sector will come. And there will be money to be made if the government provides the right subsidies. The long-term environmental cost of a coal-based power plant is not factored into the cost per unit of electricity you pay today. This is where the government can step in: Make solar power generation cost competitive by providing a suitable subsidy, or introduce a carbon tax on polluting ways of generating power."

Can India become a solar superpower? It has a lot going for it. On average, the country has 300-320 sunny days a year. The average solar insolation in a city like Mumbai is about twice that in New York, Berlin or Tokyo. (Insolation is a measure of solar radiation energy received on a given surface area in a given time.) On the other hand, a huge shortage of power exists. According to the Central Electricity Authority, there is a 10% to 12% power shortage in the country. Power cuts in urban areas (referred to as "load-shedding") go on for hours. They are longer in rural areas, where large parts aren't even electrified. However, targets on capacity addition have often fallen by the wayside.

"India can certainly become a solar superpower," says Natarajan of IISc. "We have the necessary scientific expertise and talent; we just need the government to mold this talent by taking the right policy decisions. Announcing a solar mission is easy. Converting that into concrete action in terms of the right policies and investment is the more difficult part. But I think the mission is the right first step." Adds Ghotge of WISE: "It is difficult to say if India can become the biggest player. One does know what Africa will do in this space. They, too, have a lot of potential."

But Hande of SELCO has no worries. "India has the potential to become the biggest player," he says. "More importantly, India has the potential to be the most sustainable player. Unlike countries like Germany, Italy, Spain and the U.S. (California), which are heavily dependent on tax incentives and subsidies, in India we are moving ahead without these. India has the potential to create a much better sustainable infrastructure."

Before the National Action Plan on Climate Change was announced last year, wind power seemed to be winning the race for renewable energy. The government had given the industry several incentives. Companies such as Suzlon were even beefing up their domestic operations with substantial acquisitions abroad. Today, the picture is different. "Solar energy is most certainly a better bet," says Ghotge. "Our resources are very, very large. We need to build on our technologies." Adds Natarajan: "It is much safer and surer in the Indian context than, say, wind because India is blessed with plenty of sunshine the year round and at all places." In other words, the sun is now rising.

Microinverters: A Solar Market That’s “On Fire”

Building clean-technology companies with real revenue on relatively little investment is increasingly possible, and it's happening in the small-but-exploding market for electronics that boost the power output of solar systems.

Several venture-backed companies are rushing in with new products as they play catch-up to the sector's leader, Enphase Energy Inc. Whether the competitors will be able to gain ground on Enphase - and what will happen once bigger corporates swoop down on the space - remains to be seen. "The market is on fire," said Jason Matlof, partner with Battery Ventures, which backed SolarBridge Technologies Inc., an Enphase competitor, in 2007.

All solar panels produce power in direct current, which must be converted into alternating current used on the grid. This is typically done by central inverters, made by companies like Satcon Technology Corp., SMA Solar Technology AG and Power-One Inc., which deal with DC current that is pooled from a string of connected solar panels. The advantage of central inverters is that they are cheap.

The problems with this method of power conversion, however, include relying too much on individual panels. If one panel is shaded, for example, the output of the entire string of panels drops. A malfunction of the central inverter, which is considered the weakest link in the entire solar system, also would cause output from the whole system to disappear. Finally, there's lots of wiring and installation time required, as well as fire hazards associated with high voltage central inverters.

Companies like Enphase are addressing the shortfalls of central inverters by making microinverters, which go on the back of individual solar panels, and do the conversion at that level. There are also companies that make small converters, again located at individual panels, that smooth out the current and help boost the output, but then connect to central inverters.

The entire solar inverter market last year was about $3 billion, according to Ash Sharma, research director with IMS Research. Of that total, microinverters represented just $20 million. This year, he said, he expects the total inverter market to nearly double, with microinverters and converters taking up about $80 million to $90 million in sales.

"Overall in five years it [the new technology] will be less than 10% of the overall [inverter market], but the market itself is growing so quickly it will become a fairly large industry," said Sharma.

Enphase Chief Executive Paul Nahi sees an exact reverse of that vision.

"I think that central inverters will be a small niche in the next four-five years," said Nahi. "It's clear that the movement toward a microinverter is a directional shift in the industry that cannot be stopped," he said.

Enphase began shipping its product in volume in July 2008, and has now sold more than 400,000 units, said Nahi. The company, backed by more than $100 million in venture funding from Kleiner Perkins Caufield & Byers, Bay Partners and others, has seen a meteoric rise in product sales.

In California, for example, the largest U.S. solar market, the share of residential solar installations that have Enphase inverters was at 16% as of September 2010, according to state data, up from about 5% a year ago. That's "quite staggering in my view," said Jeff Osborne, analyst with investment bank Stifel Nicolaus.

In a recent report, Osborne listed about a dozen makers of microinverter and converter technologies, many of them venture-backed start-ups with products about to hit the market, citing SolarEdge Technologies Inc., of Israel, and Petra Solar Inc., which serves the utility solar market, as prominent examples. Sharma, of IMS Research, said that he knows of several others that will appear in the next 12 months.

The growing competition doesn't daunt Nahi.

"Our tremendous success will spawn imitators and others that will try to copy what Enphase does," he said. But with a fourth generation of product, developed distribution, brand and technical knowledge, Nahi expects Enphase to hold ground.

The company is also branching into offering home-energy management, like electronic thermostats, that can build upon the software it has for monitoring solar panel performance. The interest in using inverters as gateways to home-energy management seems to be behind the move by central inverter maker Power-One Inc. to purchase Fat Spaniel Technologies Inc. this week.

Other companies, meanwhile, are trying their own ways of tackling the market. SolarBridge, for example, is selling directly to solar panel makers, which will incorporate the microinverters into the manufacturing of panels and then sell to installers and distributors. This includes a 25-year warranty, backed by the panel manufacturer, which is not something Enphase can boast of.

Most of the companies in this space are leveraging outsourced manufacturing, to major manufacturers of electronics such as Flextronics, and can therefore scale quickly, said Sharma.

Currently Enphase sells its microinverters for about $1.10 per watt, which is more than twice as much as a central inverter. The start-ups say that though the upfront cost is higher, solar output is higher, and that the product quickly recoups the initial investment.

This is true in residential installs but is not as immediate in commercial and utility scale plants, said Osborne. Nahi said that a substantial part of the company's pipeline is with commercial projects.

"The holy grail would be to make a micro inverter cheaper than a traditional one. That's a couple years away - that's the disruptive technology," said Osborne.

For venture investors, meanwhile, as the competition increases there's more of an opportunity for exits. SMA bought a microinverter designer, OKE, last year, National Semiconductor has made acquisitions, and Power-One said it's developing an in-house technology.

This type of technology "is a strategic asset to module companies who are suffering from margin compression," Matlof said, and could use the inverter to differentiate their panels and sell these panels at higher prices.

Sharma said that he expects several microinverter and converter companies would be able to survive and compete in the market. The central inverter market, for example, which is much older, has about 60 players. "There's lots of supply, lots of competition, and lots of opportunity," said Sharma.

http://www.enphaseenergy.com

A host of start-ups are jockeying for position as they try to provide alternatives to central inverters, which are cheaper than microinverters but can be prone to problems. It's a key moment in the space, as the overall solar inverter market is growing rapidly and the start-ups try to seize the momentum.

Clean-Tech Ventures See Plunge in Funding

Venture capital isn't flowing into U.S. clean-technology companies like it once was, new investment figures show. The sector is suffering from overall uncertainty in the venture market, coupled with fears about investing in businesses that require a lot of capital, insiders say.

"The general trend has been down, but there are a few notable exceptions," says Paul Holland, a general partner with Foundation Capital, which has backed several companies in the energy-efficiency and smart-grid sectors.

Clean-tech companies, which include everything from wind and solar to biofuel and clean-coal ventures, raised $575.6 million in 53 deals in the third quarter, less than half of the amount they raised in the year-earlier quarter, according to Ernst & Young LLP, based on data from Dow Jones VentureSource, which is owned by News Corp., publisher of The Wall Street Journal. Still, because of a fairly robust first half, the sector may close the year little changed from 2009 in terms of money raised.

Start-ups offering products or services designed to increase energy efficiency attracted the most activity in the third quarter, raising $161.6 million in 17 deals. These companies typically have relatively modest capital needs.

More capital-intensive solar-power businesses, meanwhile, have become less popular with the venture-capital crowd. They have accounted for about a quarter of the total amount invested in clean-tech ventures so far this year, down from about half during 2008.

All Aboard For Energy

A new energy company may have found its niche in an unlikely spot—the edge of train stations.

Kinetic Traction Systems Inc. is a provider of so-called flywheel power for rail systems. When a train pulls into a station, Kinetic's flywheel system absorbs all of the power generated by braking—as much as three megawatts. It then releases the power 20 or 30 seconds later to help the train accelerate. 

The company, which was spun off from flywheel energy-storage company Pentadyne Power Corp., already has a $4 million contract to install flywheels on the Long Island Rail Road, which is likely to bring the company to break-even, says John Babcock, partner with Rustic Canyon Partners, one of the company's backers. He says Kinetic Traction is talking to engineers at the LIRR about how many more systems they would need, and it may be 100. "A hundred of those at $4 million apiece is a pretty big piece of [capital expenditure]," he says.

Boosting the Sun's Power

SolarEdge Technologies Inc., which makes converters and inverters designed to boost the output of solar-power systems, says it decided to raise an additional $25 million from venture investors to help accelerate its growth.

With the Series C investment from Lightspeed Venture Partners, General Electric Co., Genesis Partners, JP Asia Capital Partners, Opus Capital, ORR Partners, Vertex Venture Capital and Walden International, the Hod Hasharon, Israel-based firm plans to boost production and sales in 2011 and open new sales offices in France, Italy, the U.S. and Asia.

A few years ago, solar systems were all connected to large central inverters that converted alternating current from the panels into direct current consumed on the grid. But several companies started offering "microinverters," or products that attach to individual panels in a solar-power system in order to boost output of the entire system. That market, of which SolarEdge is a part, is now growing rapidly.

The overall solar inverter market last year was about $3 billion, according to Ash Sharma, research director with IMS Research. Of that total, microinverters represented just $20 million. This year, he expects the total inverter market to nearly double, with microinverters and converters generating about $80 million to $90 million in sales. 

Corrections & Amplifications

Inverters for solar-power systems convert direct current from solar panels into alternating current consumed on the grid. An item about SolarEdge Technologies in this article incorrectly said the inverters convert alternating current into direct current.

$161.6

Amount, in millions, raised by start-ups focused on energy efficiency during the third quarter.

What Else Is New?

Here's a look at other recent deals reported by VentureWire:

Solar-panel maker Solaria Corp. added $20 million from Adams Street Partners LLC, Cycad Group LLC and Western Technology Investment to close a Series D funding round at $65 million.

Fundant (Changzhou) New Metal Materials Co., which makes sawing wire that can be used to cut silicon ingots into wafers that are eventually made into solar cells, has received an almost $15 million investment from Sequoia Capital China.

GlassPoint Solar Inc., which has developed concentratedsolar-based systems that help extract oil from depleted fields, has raised $3.5 million in Series A funding, led by Chrysalix Energy Venture Capital.

The Hidden Cost of Going Green

As the manager and producer of a traveling vaudeville show, Amy Warnke was driving constantly, running up huge gas bills and leaving a Sasquatch-size carbon footprint. So buying a hybrid—in her case, a 2007 Saturn Vue—was almost a no-brainer. And it felt like a solution to her highway woes, until the day the battery died. A body shop near her New Jersey home couldn't keep the car running; neither could two different dealerships. "Apparently, you have to be a mechanical neuro surgeon to figure out where the battery is on a hybrid," says the 32-year-old Warnke. A spokesperson for General Motors, which owns the now-discontinued Saturn brand, says it stands by the quality of its products, and points out that some of Warnke's repair problems are covered by her warranty. But she's still flabbergasted by her final bill: more than $1,300. And that's not counting the cost and inconvenience of having her car in the shop—for what turned out to be three months.

Even in tight-wallet times, a surprising number of consumers have shown they're willing to pay a premium for environmentally friendly products. Hybrid cars have more than doubled their market share in the U.S. since 2005. And spending on energy-related home-remodeling projects has been resilient, despite the housing downturn; it totaled $49 billion in 2009, up 29 percent since 2003, according to Harvard University's Joint Center for Housing Studies. But having paid a little extra to go green, many consumers are now encountering an unexpected irritation: They have to pay more than their neighbors to stay green. The price of maintaining, repairing and even getting insurance for green products can often be higher than for their ordinary counterparts. "There are hidden costs that people don't think about," says Tim Haab, an environmental economist and a professor at Ohio State University. And with many tax credits for energy-efficient upgrades likely to expire soon, some consumers are finding themselves having to recalculate the cost of being eco-conscious.

Industry experts say that in many cases, higher expenses are just the price to be paid for owning an upscale, niche product. Parts and expertise for upkeep can be in short supply—few neighborhood handymen are likely to have a spare hybrid battery or green-certified home-coolant system lying around, for example. "It's not like they are making a million of them and selling them all at Home Depot," says Lino Carosella, an EPA-certified renovator in the Philadelphia area. Then again, just because a product becomes more popular doesn't mean its cost of ownership will drop. Insurance rates for hybrid cars, for example, are likely to rise in the near future, now that more people are driving them (and wrecking them).

To be sure, many people don't put dollars and cents first when going green, basing their decisions instead primarily on ethics and their desire to help the plaqnet. And given the potential for long-term energy savings, many buyers will still probably come out ahead financially. But some green advocates fear that in a sluggish economy, even minor extra costs could bog down the green movement's momentum. We take a look at how some of these hurdles are tweaking the ownership math for cars, home improvements and appliances.

Home Improvements

Energy-efficient home upgrades are the textbook example of green economics. Take solar panels: The typical solar-power installation costs about $24,000; as sun power kicks in and utility bills shrink, the systems generally pay for themselves in a decade. But many homeowners have found this equation doesn't account for other incidentals. Three years ago, former marketing executive Rob Saffer started building a certified green home in Woodstock, N.Y., complete with an advanced solar electricity system. Just as he expected, Saffer hasn't had to draw power from the local utility since he flipped the solar switch. But he's still paying a bill to the power company—to his surprise, he's learned there's a service charge of $240 a year for residential customers to stay connected to the grid. Saffer also saw annual insurance premiums for his home rise by about $100 after his insurer decided that the system increased the house's value by $60,000, and he has to periodically plunk down another $100 to apply cleanser and antifreeze to the water-heating apparatus. "I still think the system will pay for itself," says Saffer, "but it will pay for itself more slowly than I was led to believe."

Certainly, all kinds of home power systems require regular maintenance; an upkeep contract on a traditional heating and air-conditioning system, for example, can cost up to $400 a year. But for many green homeowners, the cost of replacements and repairs is still a blank slate—simply because the products don't yet have much of a track record. Solar power, which has been around for a few decades, offers a reminder that costs go beyond installation. Lyndon Rive, chief executive officer of Foster City, Calif.–based solar panel installer SolarCity, says the biggest replacement cost is often the inverter, the circuit that converts solar energy into usable electricity. It costs $2,500 to replace an inverter, and a homeowner is likely to have to swap it out once or twice after their warranty expires. It's "the weak link," says Rive.

Many homeowners assume that green improvements will pay off by adding value to a home. So far, though, there hasn't been evidence of a "green premium," says Kermit Baker, director of the Remodeling Futures Program at Harvard University's Joint Center for Housing Studies. That's partly a function of the housing meltdown, which has kept a lid on real estate prices in general. In addition, because many green materials and products are still relatively new, the quality and durability is untested. Bamboo flooring, for instance, is a favorite among eco-friendly builders, in part because it's considered sustainable. But it can sometimes scratch more easily than hardwood, says Carosella, the Philadelphia remodeler. Mark Elwell, owner of Bamboo Flooring Hawaii, says high-quality bamboo that's at least five years old when harvested is stronger than some traditional hardwoods, like some oaks and maples. But he adds that due to lack of regulation and a rush of producers entering the business, "there's a lot of product out there that's young, and it's softer. You get what you pay for with bamboo."

Hybrid Cars

When hybrids first started to gain some traction, people who bought them became awfully popular with auto insurers. Early adopters were seen as model customers, more responsible on the road than the average driver, says Greg Horn, vice president of industry relations at Mitchell International, a provider of information services to insurance companies and body shops. As a result, many auto-insurance providers gave discounts of 10 percent off premiums.

That honeymoon, alas, may end soon. As gas prices went up and more people bought hybrids, the number of accidents and tickets rose too, making the hybrid-driver profile riskier. Horn estimates that premiums for hybrids could rise by 20 percent over the next six months to a year. Not only will hybrid owners lose their discount, but they'll actually pay about $100 a year more than the average driver.

If insurance does rise, it won't just be because of bad driving. It'll also be because it's more expensive to repair a hybrid. On average, claims for collision-damage repairs are $182 more than on a nonhybrid car—a difference of 6.5 percent per job. Engine problems can be pricier too, because many mechanics aren't familiar with hybrids' high-voltage drive systems, says Bob Rodriguez, manager of special testing programs at the National Institute for Automotive Service Excellence, a trade group. Consequently, hybrids are likely to wind up getting worked on at a dealership, where overhead costs are often higher than at independent shops.

Maggie Gilliam, a child-services supervisor in Orange County, Calif., always takes her 2007 Honda Civic hybrid to the dealer, but contrasting her bills with those for her husband's nonhybrid compact can be fairly painful. Over one stretch, Gilliam says, the bill for three repair trips for her Civic was $1,745; for the nonhybrid, it was less than $500. Still, Gilliam says she's glad to do her part to help the environment: "I wanted to be part of the big change." A Honda spokesperson says that once the company's warranty is taken into account, "hybrids do not cost more to repair than a regular vehicle."

Home Appliances

Eco-consciousness and water don't always mix. Carol Bevins bought a front-loading LG high-efficiency washing machine three years ago in hopes that she could cut down on water usage for her family of three. These days, though, the Lebanon, Va., sleep-disorder lab technician says she pines for the days of her old water guzzler. Not only was the eco-friendly washer $500 more expensive than the standard washers she looked at, but she says stores near her home tend to charge at least $2 more per bottle for the special detergent it requires. All that might have been worth it, of course, if the eco-friendly washer were getting the job done. But instead, Bevins says, "it spurts a little water in there, and you can't get your clothes clean." Bevins says she has to wash each load multiple times to get stains out.

A spokesperson for LG says Bevins's problems could be the result of her washer being installed or maintained improperly; the company says the machine's drum has to be cleaned once or twice a month. And manufacturers say many stores don't charge extra for green detergent. But complaints like Bevins's are common among owners of eco-friendly washing machines and dishwashers. Most of these devices lower their environmental impact by using less water per load, but that can leave owners uncertain about how best to get their clothes and dishes clean. Suzanne Shelton, president and chief executive of Shelton Group, an agency that specializes in sustainability and energy efficiency, says problems with cleaning products are one of the biggest concerns in consumer focus groups—in part because eco-friendly detergents are also proving to be less tough on dirt than their traditional predecessors. "Do I pay more for the totally natural cleaner and then use twice as much water because I have to wash everything twice?" wonders Shelton. "Or do I save by using the chemicals and only doing the wash once and using less water?"

Reorganizing for Project Management at Prevost Car

In July 1994, the vice-president of production at Prevost Car in Quebec City, Canada, was told that he would have to expand production capacity 31 percent(%) in the next five months. In the past, such a task would start with a bulldozer the next day and the work would be under way, but no one knew at what cost, what timetable, or what value to the firm. Realizing that he needed some fresh ideas, a structured approach, and that there was no allowance for a mistake, the VP contacted a project management consulting firm to help him.

The consulting firm set up a five-day meeting between their project managers, a value engineering expert, and the seven foremen from Prevost’s main factory to scope out the project. The group produced a report for senior management outlining a $10 million project to expand the main factory by 60,000 square feet, and a follow-on potential to make a further expansion of 20percent more. The detail of the plan came as a revelation to top management who approved it after only two days of study. After it was completed on time and on budget, the firm also committed to the additional 20 percent expansion which also came in as planned.

The success of this project resulted in “infecting” Prevost Car with the project management “bug”. The next major task, an initiative to reduce workplace injuries, was thus organized as a project and was also highly successful. Soon, all types of activities were being handled as projects at Prevost. The use of project management in manufacturing firms is highly appropriate given their need to adapt quickly to ferocious international competition, accelerating technological change, and rapidly changing market conditions. In addition, Prevost has found that project management encourages productive cooperation between departments, fresh thinking and innovation, team approaches to problems, and the highly valued use of outside experts to bring in new ideas, thereby breaking current short-sighted habits and thinking. As Prevost’s VP states: “Right now it’s a question of finding what couldn’t be better managed by project management.”