Wednesday, February 24, 2010

The Bloom is on this rose...

It's been a few years since a company has had as much buzz as Bloom Energy. I've been following their story for a few years, but there is no shortage of fuel cell companies claiming to deliver "freedom from the grid". However, don't underestimate the power of VC connections and every big boy VC is invested with this company (although none of them can actually tell you how it works) so expect to see a steady stream of news coverage for Bloom.

Things that I like to hear:

"EBay said it has already saved $100,000 in electricity costs since its 5 boxes were installed nine months ago. It even claims that the Bloom boxes generate more power than the 3,000 solar panels at its headquarters. Google has a 400 kilowatt installation from Bloom at its Mountain View headquarters." What is not clear is if that cost savings includes the cost of the Nat Gas to run the Bloom Box. You see for all of their talk of getting you "off the grid" you still have to be on that pesky nat gas grid.

The combination of green tech and dark science that no one understands has lead Silicon Valley to pour $400 million dollars into this start-up. I'm not thrilled with the cost - about $800k for commercial units, but they say costs could come down to $3k by the time the unit is ready for your house. Payback right now is close to 20 years, given an expected life of about 20-25 years that is not great. Oh, and did I mention there are companies that have been doing this for a decade?

What about CO2 emissions? NO emissions? I have lots of questions to be answered before I'm ready to call Bloom Energy the next GE. However, remember very, very rich people have risked $400 million backing this thing so you're going to hear about it non-stop until they get paid via IPO or buyout.

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In case you haven't noticed, I tend to be a bit of skeptic and border on being a cynic when it comes to Washington. However, I think this news today of legislation introduced by Sen. Kerry and Sen. Lugar is smart, forward-thinking legislation that could help grow our economy.

"This would enable immigrant entrepreneurs who are creating new companies to secure visas to come to the United States, if there is investment capital available from a sponsoring US venture capital or angel investor of at least $100,000 in an equity financing of not less than $250,000."

Basically, if you're a smart Russian with the next Google sitting on your laptop, you could get a visa so you can operate your firm here rather than Russia. We need to continue to attract the world's best and brightest and this legislation would be a step toward that goal. Feel free to point out the flaws in the legislation, but I don't see any yet.

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Re: Commercial Real Estate - Reuters reports that the American Institute of Architects’ Architecture Billings Index decreased to 42.5 in January from 43.4 in December. Any reading below 50 indicates contraction.

Commercial real estate appears to be in the early stages of becoming a dumpster fire.

Cheers!

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