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table of contents
clean energy trends 2014. 2
A Record Year for Solar Deployment. 2
VC, Overall Investment Falls. 6
EVs, Hybrids, & Green Buildings on the Rise. 7
Looking Ahead. 9
five trends to watch. 10
1. Enlightened Utilities Begin to Embrace
Distributed Energy Assets. 10
2. Cities Lead Climate Charge by Focusing on Regional
Carbon Reduction. 12
3. Net Zero Energy Buildings Gain Ground. 14
4. Internet-Enabled Clean-Tech Startups Define a New Sector. 16
5. Vertical Farming Sprouts in Cities Around the World. 18
PreMier sPonsors. 20
MaJor sPonsors. 21
about clean edge, inc.. 22
CLEAN ENERGY TRENDS 2014

clean energy trends 2014
Over the past 12 months, the global clean-energy picture has a been a classic good news-bad news story, with dazzling growth, success stories, and soaring stock prices in some sectors – most notably solar PV deployment – but downward trends and policy and finance hurdles in others. As the industry continues to mature and makes its presence felt among decades-old, fossil-fuel energy sources, it faces a host of new challenges and opportunities. Among these are a transition away from early-stage venture capital investments to corporate and later-stage project financing sources; the shift away from nuclear power in Germany, Japan, California, and elsewhere; and pushback from some utilities and regulators who perceive distributed generation as a significant threat to long-established busi-ness models.
a record year
The year 2013 also marked a significant tipping point in the history of clean energy: for the first for solar
time since Clean Edge began tracking global markets in 2000, the world installed more new solar photovoltaic generating capacity, 36.5 gigawatts, than wind power (35.5 GW). Record levels of new solar deployment in China, Japan, and the U.S., combined with a down year in the wind industry, enabled this unprecedented crossover. Although total global wind power capacity remains nearly 2½ times the size of solar, projected double-digit growth rates in solar throughout the next decade mean that wind will not stay No. 1 indefinitely. With the installed cost of solar expected to fall around seven percent annually, Clean Edge projects that by 2021, global cumulative installed solar PV capacity will reach 715.8 GW, surpassing wind power's projected 697.3 GW in that year. Nearly 100 GW of new solar capacity is already under development worldwide, according to researcher NPD Solarbuzz.
Global Clean-Energy Projected Growth
2013-2023 ($US Billions)
$375 $400 $425
Source: Clean Edge, Inc., 2014 The global solar market's continued double-digit growth of 18 percent, plus a modest uptick in bio-fuels, was not enough to overcome the wind industry's lackluster performance. As a result, combined global revenue for solar PV, wind power, and biofuels declined slightly to $247.6 billion from $248.7 billion in 2012.
n Solar photovoltaics (including modules, system components, and installation) grew to $91.3 billion from $79.7 billion in 2012, with a record 36.5 GW installed globally. In contrast to 2011 and 2012, when PV panel costs plummeted more than 20 percent in both years, prices sta-bilized last year, dropping just three percent to $2.50 per watt installed (less than one-third

the cost 10 years earlier.) The industry's boom year in installations translated into strong revenue gains as well. Although prices will continue to drop an estimated seven percent per year over the next decade, to $1.21 per watt by 2023 (see chart on page 4), double-digit annual growth in capacity will fuel strong revenue growth to $158.4 billion in 2023. The U.S. installed an estimated 4.2 GW of new solar PV in 2013, deploying more than Ger- many (an estimated 3.3 GW) for the first time in more than a decade. China installed an eye-popping 12 GW of solar in 2013, according to Bloomberg New Energy Finance – roughly as much as total cumulative solar PV installations in the U.S., and nearly triple the 4.5 GW deployed in China the year before. Prior to 2013, no nation had ever added more than 8 GW in a single year. And Japan, continuing its aggressive renewables push as it struggles to replace most of its nuclear power, also installed a record amount of new solar PV capacity in 2013, approximately 7 GW.
n Wind power (new installation capital costs) fell to $58.5 billion from $73.8 billion in 2012. The industry added 35.5 GW of new capacity in 2013, well below the previous year's record 44.7 GW and its weakest performance since 2008. Indeed, the global wind industry slowed in every major market except China, which installed an astounding 45.4 percent (16.1 GW) of the world's new capacity in 2013, according to the Global Wind Energy Council; the U.S. saw just over one new gigawatt of wind come online. That extended China's lead as the world's largest wind market with 91.4 GW cumulative installed capacity at the end of the year, well ahead of 61.1 GW in the U.S. and 34.3 GW in Germany. But we project modest growth to return in 2014 and to continue over the next decade, with the industry expanding to $93.8 billion in 2023.
n Biofuels (global production and wholesale pricing of ethanol and biodiesel) rose slightly, from $95.2 billion in 2012 to $97.8 billion in 2013. Global biofuels production held steady at around 31 billion combined gallons. We project that the global markets for both ethanol and biodiesel will grow an average 4.5 percent annually over the next decade, reaching a combined $145.6 billion in 2023, with biodiesel prices falling and ethanol pricing remaining fairly stable. We project that these combined clean-energy sectors will continue to grow over the next 10 years, expanding from $247.6 billion in 2013 to $397.9 billion in 2023. Clean energy's mixed-signals theme continued into early 2014, as the industry experienced a range of high-profile successes and setbacks. A highly controversial 60 Minutes segment called "The Cleantech Crash," airing on the first Sunday in January, started the year by rehashing old themes of clean tech as a government boondoggle and venture capital investment disaster. The piece galvanized a significant clean-tech industry backlash against what was viewed as an inaccurate hit piece, most notably by VC icon Vinod Khosla, who featured prominently in the broadcast. Yet one week later, Google announced the acquisition of smart thermostat maker Nest Labs for $3.2 billion, a "moonshot" bet by Google that, with Nest's help, it can design, develop, and deploy ever-smarter hardware for homes and busi-nesses. Another highly-anticipated IPO candidate, energy-efficiency data provider Opower, filed for

its offering in February. And in March, the world's largest auto maker, Toyota, launched the first-ever green bond (more than $1 billion) to fund auto loans for hybrids, plug-in EVs, and other clean vehicles in the U.S.
The expansion of clean energy occurs total installed Pv system Prices
in a bigger-picture context that finds global average
many of the world's largest energy-using system Price
nations struggling with choices for their energy future. At Clean Edge, we continue to believe that the energy story in the developed world will be the growth of natural gas, renewables, and efficiency, with coal-fired and nuclear power plants on the wane. But reality is more muddled.
In Germany, for example, Chancellor An- gela Merkel's plan to shutter all of the na- tion's nuclear plants by 2022 has caused a small resurgence in coal-fired power. Although Germany leads the world's large economies with 23 percent of its energy from renewables, critics say its push for a non-nuclear future has yielded high elec- tricity rates and increased CO2 emissions. Source: Clean Edge, Inc., 2014. 2007 through 2013 are The Japanese public overwhelmingly op- actual figures and 2014 through 2023 are estimates poses re-starting that country's nuclear global clean-energy Market size 2000-2013
wind Power
biofuels
global Market size
global Market size
global Market size
Source: Clean Edge, Inc., 2014

power plants in the wake of the 2011 Fukushima nuclear disaster, but many national leaders, includ-ing Prime Minister Shinzo Abe and recently-elected Tokyo governor Yoichi Masuzoe, are pro-nuclear. In the U.S., non-hydro renewables (solar, wind, biomass, and geothermal) accounted for 41 percent The Japanese public
of new generation capacity added in 2013, more than triple the contribution of coal, oil, and nuclear combined. (And although they are short-term statistical anomalies, it's worth noting that renewables opposes re-starting
made up 100 percent of capacity added in November 2013 and 99 percent in January 2014). But that country's nuclear
renewables' contribution last year was down from 51 percent in 2012. Wind power's drop from 42 percent in 2012 to just 10 percent in 2013 (trailing solar for the first time) was one factor, but the big-gest reason was the boom year in new natural gas capacity, which dwarfed all other energy sources at 47 percent of new capacity.
u.s. new generation capacity
istration continues (Percent of added Mw)
to tout an ‘all of the above' energy mix, and in early 2014 ap- proved a $6.5 billion Department of Ener- gy loan guarantee to Southern Company's Natural Gas
utility to build two Waste Heat
additional reactors at its Plant Vogtle site near Waynes- boro, Georgia – the first new nuclear reactors in the U.S. in 30 years. Total loan guarantees for 2012 2013*
the project are $8.3 Source: Clean Edge analysis of FERC "Energy Infrastructure Update" reports with data derived from Ventyx Global LLC. *2013 capacity additions repre- billion. By contrast, sent preliminary estimates reported by FERC and are subject to change. ** Other Includes nuclear, oil, and other sources the largest DOE loan guarantee to a clean-energy company, under the program widely criticized by 60 Minutes and others as a boondoggle – was $1.6 billion to NRG for the 392 MW Ivanpah concentrated solar power plant, which in February began delivering electricity to the grid.
Nonetheless, the global "nuclear renaissance" predicted before the 2011 Fukushima disaster in Japan is now highly unlikely, and coal, accounting for only 10 percent of new generation capacity in the U.S. last year, is generally on the wane in the developed world. Natural gas continues to pose the biggest competition for renewables, although the potential for pairing natural gas-fired plants with solar and wind farms remains high, especially as large-scale battery storage technology advances and drops in price.

vc, overall
2013 saw the continued decline of venture capital as a source of clean-tech funding. For the second investMent
consecutive year since their peak of $7.5 billion of 2011, VC investments in U.S.-based clean-tech companies fell. In 2013, such investments slipped to less than $4.4 billion, the lowest total since 2009, according to data tracked annually by Cleantech Group. Even more notably, clean-tech investments as a percentage of all U.S. VC dollars fell from 21.4 percent in 2012 to just 14.9 percent, the lowest level since before the late 2000s clean-tech boom—2007, to be precise.
clean-tech venture capital investments in
u.s.-based companies as Percent of total 2001-2013
clean-tech
total venture investments
clean-tech venture
Percentage of
Source: Cleantech Group and PricewaterhouseCoopers/NVCA data with Clean Edge analysis, 2014. Clean- tech venture investment includes seed funding and follow-on rounds prior to private equity activity related to stake acquisitions or buyouts While that VC boom was mainly fueled by solar and biofuels startups, the top VC deals of 2013 com-prised a much more diverse range of clean-tech sectors. Seven different sectors were represented among the 10 largest deals disclosed. Two of the top 10 recipients (Uber's $258 million round, the year's largest, and Lyft's $60 million) were from the transportation sector, but as ride-sharing services they also represent the emerging growth sector of Web-based clean tech business models known as cleanweb (See Internet-Enabled Clean-Tech Startups Define a New Sector on page 16.) Beyond venture capital, total global clean-energy investments fell for the second straight year, ac-cording to Bloomberg New Energy Finance. Global investments in 2013 were $254 billion, down from $286.2 billion the previous year and well below the peak of $317.9 billion in 2011. China saw its first year-to-year decline (of 3.8 percent) in more than a decade, while U.S. investment levels dropped 8.4 percent. But the big story was in Europe, where lower feed-in tariffs and other subsidies caused a plunge of 41 percent, to $57.8 billion from $97.8 billion in 2012. Japan, by contrast, enjoyed a clean-energy investment increase of 55 percent to $35.4 billion, the vast majority of it funding the nation's post-Fukushima solar energy boom.
Picking up some (though far from all) of the VC financing slack is the continued rise of large corpora-tions and financial firms around the world investing in clean tech. Google's multi-billion dollar acqui-

u.s. top 10 disclosed clean-tech venture deals (2013)
($ Millions)
Source: Cleantech Group, 2014 sition of Nest is the most prominent example, but other large deals struck in 2013 included Goldman Sachs' $500 million fund to finance SolarCity PV installations and Wells Fargo's pledge to invest $100 CELS (the NASDAQ
million in tax equity financing in SunEdison projects. Joint ventures and other partnerships between Clean Edge Green
corporates and smaller clean-tech players, such as Softbank's 50-50 joint venture in Japan with fuel Energy Index) soared
cell developer Bloom Energy, continue to be on the upswing. General Electric, Schneider Electric, 89 percent for the
Johnson Controls, Siemens, and ABB are among the large global firms leveraging smaller clean-tech partners. Even some large U.S. utilities, such as Duke Energy, Edison International, and NextEra En-ergy Resources are pairing up with or acquiring solar and other players in distributed generation (see Enlightened Utilities Begin to Embrace Distributed Energy Assets on page 10).
"Corporates are getting more comfortable stepping in at early stages to help get these clean-tech companies to the scale they need to succeed," says Kerry Cebul, a principal in the advisory group at Cleantech Group. Another key trend helping to pick up the clean-tech financing slack is the emer-gence of so-called "yieldcos" – registered, non-traded LLCs established specifically for private-equity investments in clean-energy projects. Two examples, Pattern Energy and NRG Yield, both issued successful IPOs during 2013.
On another industry financial barometer, the performance of clean-tech companies in public equity markets, 2013 was a banner year. Clean Edge, along with NASDAQ, produces two indexes that act as benchmarks for the clean-tech sector: CELS tracks U.S.-listed clean-energy companies and QGRD is comprised of smart grid and grid infrastructure firms. CELS, fueled by the stocks of Tesla Motors and SolarCity among others, soared 89 percent for the year, by far its best performance to date and well ahead of the S&P 500's gain of 30 percent. QGRD gained 24 percent, its best year since 2009.
For the first time, we have expanded the scope of this annual Clean Energy Trends report to track the evs, hybrids,
global growth of green buildings and electric and hybrid vehicles. In the past decade, green buildings, as measured by the number of structures certified by the U.S. Green Building Council's Leadership buildings on
in Energy & Environmental Design (LEED) standard, have seen a phenomenal growth trajectory. In 2003, less than 50 buildings worldwide received LEED certification; last year, 4,617 did, an 8.6 percent increase over the number in 2012—and these numbers exclude single-family residences. Since 2000, the number of LEED-certified green buildings worldwide has seen an impressive compound annual

nasdaQ® clean edge® stock index Performance* (2007-2013)
s&P 500 index
* Index data is provided by FactSet Research Systems and NASDAQ OMX. Index values for QGRD prior to inception (9/22/09) are hypothetical and NASDAQ OMX and Clean Edge make no guarantee of their ac- growth rate (CAGR) of 68.9 percent. This critical energy and resource efficiency sector continues to advance. Net zero buildings, which go beyond the highest (Platinum) level of LEED certification to generate as much or more energy than they use, have moved from pipe dream to reality at notable scale around the world (see Net Zero Energy Buildings Gain Ground on page 14).
global leed-certified Projects 2000-2013
Source: U.S. Green Building Council, with Clean Edge analysis, 2014 The electrification of vehicles, a global megatrend highlighted in our 2012 book Clean Tech Nation, continued at a rapid pace in 2013. Global sales of hybrid and electric vehicles (EVs) jumped 26.4 percent to 2.3 million cars. Annual sales have more than doubled since 2010 (a slight drop in 2011 was an anomaly due to the earthquake and tsunami in Japan, which shut down and curtailed production at Toyota, Nissan, and other leading hybrid and EV manufacturers for several months). Since 2000, hybrids and EVs combined have experienced a CAGR of more than 38 percent. With the U.S. market requiring vehicles to get an average of 54.5 miles per gallon by 2025 and growing demand for cleaner vehicles in China, we expect these strong global growth trends to continue.
global ev and hybrid vehicle sales 2000-2013
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* 2012 2013 Source: Manufacturers' counts, Frost & Sullivan, International Energy Agency, J.D. Power & Associates, LMC Automotive, and Polk, with Clean Edge analysis, 2014 *2011 sales were affected by the earthquake and tsunami in Japan, which suspended production for multiple months Note: Hybrids are gas/electric drivetrain vehicles, and include such models as the Toyota Prius. EVs include all battery and plug-in drivetrain vehicles, including models such as Nissan's LEAF and Tesla's Each year, we select the most important trends to watch in the diverse and maturing clean-tech looKing ahead:
industry. In 2014, our five major trends to watch are: five trends to
watch
n Enlightened Utilities Begin To Embrace Distributed Energy Assets n Cities Lead Climate Charge by Focusing on Regional Carbon Reduction n Net Zero Energy Buildings Gain Ground n Internet-Enabled Clean-Tech Startups Define a New Sector n Vertical Farming Sprouts in Cities Around the World 1. enlightened utilities begin to eMbrace distributed
energy assets
The growth of rooftop solar PV and other distributed generation (DG) and energy storage assets is challenging the traditional utility centralized generation business model as never before. The U.S. utility trade group Edison Electric Institute, in a widely cited 2013 report called Disruptive Chal- lenges, warned of a "death spiral" where utilities add fixed charges to make up for lost revenue from DG, incentivizing even more customers to generate their own power.
This has caused many large utilities to fight regulatory battles Utility holding company Edison International, through its subsidiar- in about a dozen U.S. states as they attempt to reduce the ies, generates and distributes electric power. Its most significant holding credits that rooftop solar customers get for the electrons that is Southern California Edison (SCE), their PV panels (and other distributed assets) return to the an investor-owned utility and one of the country's largest utility compa- grid, a policy known as net metering. In the most contentious nies. SCE services an approximately 50,000 square-mile area of southern Utilities are fighting
battle to date, Arizona regulators in November 2013 approved California for a population of nearly 14 million people, and currently sources regulatory battles
a 70 cents-per-kilowatt system capacity charge for rooftop 19.9 percent of its power from renew- against rooftop
solar users, or roughly $5 per residential system per month. able sources. solar in about a
Local utility Arizona Public Service had sought a much higher Serving the Southern California dozen states
tariff that could have penalized solar system owners with market that's considered ground zero for the U.S. solar industry, Edison – charges closer to $50 per month. through unregulated subsidiary Edison Energy – is arguably the leader among But some forward-looking utilities, if not fully embracing a large utilities in beginning to embrace distributed solar. Its 2013 acquisition distributed energy future, are making investments, forming of SoCore Energy and investment in Clean Power Finance are exemplary; partnerships, and acknowledging that the threat of DG might expect to see more moves like these. also be a business opportunity. In 2013, for example, $12 It also invested in Optimum Energy, a provider of efficiency technologies for billion utility holding company Edison International acquired large commercial HVAC systems. SoCore Energy, a Chicago-based rooftop solar developer brain trust
Theodore F. (Ted) Craver Jr. was
focused on retailers like IKEA and Walgreens. NextEra Energy elected chairman, president, and Resources, the wholesale generation unit of Florida Power CEO in 2008. Before joining Edison in 1996, Craver was executive vice & Light parent NextEra Energy, bought Smart Energy Capital president and corporate treasurer of First Interstate Bancorp. Another key and its portfolio of government and academic solar PV exec is senior VP of strategic planning customers in the Northeast. Edison, Duke Energy, and two Bert Valdman, formerly with Puget Sound Energy. other unnamed utilities made investments in Clean Power Finance (CPF), a San Francisco-based provider of software and Edison International is a publicly- traded company (NYSE: EIX) with services to spur financing of residential solar. Exelon-owned 2013 revenue of $12.6 billion and net Constellation offers a solar leasing program for homeowners income of $1.2 billion. in six Northeast states, partially through a partnership with our take
Edison, along with Duke Energy and
residential developer Astrum Solar in Annapolis, Maryland. NextEra, are the big players to date among U.S. utilities dipping their toes And New York utility PSEG Long Island is paying local develop- into the business opportunities of ers to install solar on homes in parts of its service territory.
distributed solar and storage. They'll be closely watched by both the utility and solar industries. "Some utilities are starting to say, ‘Why don't I make money in distributed generation, the way I do in all other areas?'" says Nat Kreamer, CEO of CPF. At the Solar Power International trade show in October 2013, CPF hosted a dinner for senior executives of large utilities interested in distributed solar. "That would not have happened even 12 months earlier," says Kreamer.
The trend extends far beyond U.S. borders. In Germany, still the world's largest market for distrib-uted solar PV, utilities are starting to transform their business models to accommodate more solar and distributed resources. RWE, Germany's second largest utility, is overhauling its entire business strategy, noting that DG will be "the only growth segment in the European power generation mar-ket" for the foreseeable future. In Japan, not only does the DG portion of the post-Fukushima push for solar growth (seven new GW in 2013) create a challenge for centralized utilities, it also represents a growing evolution of tech and finance models for distributed assets: the country already has some 30,000 homeowners who use fuel cells like Panasonic's Ene-Farm to generate power on site. Customer-sited battery technology is considered to be where solar was around ten years ago – still expensive, but gaining early adopters. Emerging suppliers of "intelligent storage" batteries that can be quickly ramped up and down – like Stem and Demand Energy Networks – can help utilities with grid management and stability, but their customers would like to be compensated for providing those services to the grid. And SolarCity has entered the distributed storage business as well, offer-ing its commercial solar PV customers a Tesla Motors-made battery system called DemandLogic.
As DG and distributed storage continue to grow, energy regulators will need to adapt as much as the utilities they regulate. "They will have to transition from being rate setters for monopolies' rate bases," says former Federal Energy Regulatory Commission chairman Jon Wellinghoff, now a partner at the law firm Stoel Rives. "They'll (need to) be setting rules for competitive markets." Solar Switch Forces Utilities to Shift Priorities Why Are Some Big Utilities Embracing Small-Scale Solar Power? Japanese Energy Giants Rush Into Storage as Solar Booms Why Edison Wants A Piece Of The Rooftop Solar Business Under Threat, Germany's Second-Biggest Utility Says It Will Create a New ‘Prosumer Business Model' SolarCity Taps Tesla Battery Tech for New Energy Storage Biz clean Power finance
companies
to watch
Pseg long island
2. cities lead cliMate charge by focusing on regional
carbon reduction
With little progress on meaningful global climate pacts and often frustratingly slow action at the national level, the world's location
cities are increasingly taking center stage in the fight to reduce London
carbon emissions. And for good reason. Many of the world's largest metro areas, from New York to Mumbai, are coastal and particularly vulnerable to the very real impacts of carbon emissions – making climate change a very real and present danger. In addition, policy changes are often easier at the municipal level; cities tend to control building codes and land use rules, holding the keys to encouraging mass transit and C40 is a network of the world's compact development. largest cities working to reduce greenhouse gas emissions. Members receive tools to help them benchmark While many overarching energy policies are made at the their efforts and pool best practices federal level in the U.S., some cities and regional utilities to reduce carbon emissions.
the buzz
have been taking a more active role in updating their energy Marquee-name mayors, philanthro- infrastructures, especially in the aftermath of devastating pists, and thought leaders give C40 the clout to do its job. Getting cities storms like Hurricane Katrina in 2005 and Superstorm Sandy to disclose emissions data and detail on their anti-carbon efforts is a key Cities and regional
in 2012. The report A Stronger, More Resilient New York, to progress, and the group's cachet, utilities are updating
published as part of that city's post-Sandy Special Initiative for funding, and research encourage their energy
Rebuilding and Resiliency, launched 23 initiatives specific to brain trust
electric utilities. The initiatives include regulatory overhauls Rio de Janeiro Mayor Eduardo Paes is the current C40 chair—a position held especially in the
to support long-term capital improvements, including scaling previously for two years by former aftermath of
up distributed generation and microgrids. "The City will take New York Mayor Michael Bloomberg, now president of the C40 Board of devastating storms
steps to diversify and improve the sources of the city's power Directors. Working closely with the Clinton Foundation's Climate Initia- supply," the report notes, "and to do so in a way that will con- tive, and counting mayors of 11 of the world's largest cities as members nect the city directly to new, low-carbon generation sources, of its steering committee, the group which address some of the causes of climate change." does not lack for big thinkers. Seattle has taken its longtime climate leadership a step C40 is backed by some of the phil-anthropic world's heaviest hitters, further, announcing a plan for the entire city to reach net zero including the Clinton Climate Initia-tive, the World Bank, and Bloom- emissions by 2050, focusing on road transportation, energy berg Philanthropies—which itself is use in buildings, and waste. It plans to use congestion pricing contributing $10 million from 2014 through 2016. to fund some of the changes, and its two major pension funds are divesting from fossil fuel investments. Seattle ranked Participation in the group has ninth among U.S. metro areas in Clean Edge's 2013 Clean Tech been great initial publicity for C40 members, but ongoing detailed Leadership Index, placing No. 5 in the green buildings and reporting on carbon emissions and their sources is part of helping fight advanced transportation categories.
climate change in a measurable way. Exchanging best practices publicly can benefit all cities and help build Outside of North America, a number of cities have focused on the political will needed to make similarly aggressive emissions reductions. Copenhagen, which progress on carbon reduction.
aims to be fully carbon neutral by 2025, plans for half of its total energy consumption to come from wind by 2020, up from 30 percent in 2012, according to the Danish Wind Industry Association. The city is converting a centralized citywide oil and coal-based heating system to one fueled by biomass from straw and wood pellets, along with combined heat and power generation. More than 400 German municipalities, including Berlin, Frankfurt, and Hamburg, have joined forces under the umbrella of Klima Buendnis (Climate Alliance), a Europe-wide organization with more than 1,600 city, municipality, and district regions. The German members have committed to reduce CO2 emissions by 10 percent each year and to cut 1990 per-capita CO2 levels in half by 2030. To do so in a measurable way, the alliance offers tools for CO2 monitoring, and guidelines on developing climate change policies. Berlin's Energy Saving Partnership, started in 1996 in partnership with the Climate Alliance, has invested more than 60 million euros (about $82 million) in energy efficiency and building retrofits, yielding a 26 percent drop in building energy consumption, reducing CO2 emissions by nearly 600,000 tons from 1996 to 2012. In Australia, the city of Sydney found that public lighting drove a third of its municipal operations' total electricity use. Over the next few years, it will replace 6,450 more lights with LEDs, reducing GHG emissions by 70 percent and saving US$800,000 per year on electricity. One of Sao Paulo, Brazil's biggest GHG problems has come from trash disposal from its 10 million residents, with decaying waste in landfills generating methane and other gases. The city installed thermoelectric power plants to harness this fuel, cutting emissions and supplying seven percent of the city's power.
"As innovators and practitioners," says former New York City Mayor Michael Bloomberg, "our cities are at the forefront of this issue – arguably the greatest challenge of our time." Cities Lead in Crafting Carbon-Neutral Environs Copenhagen's Ambitious Push To Be Carbon Neutral by 2025 Eyes on Germany: Municipal Climate Change Efforts and North-South Climate City Partnerships Can Cities Solve Climate Change? Grants To Make Buses More Environmentally Efficient Which Major Cities are Leaders in Reducing Greenhouse Gas Emissions? black & veatch
ch2M hill
siemens infrastructure & cities usa
3. net Zero energy buildings gain ground
In 2006, the Cascadia Green Building Council in the Pacific Northwest launched the Living Building Challenge, creating a formal goal for worldwide architects and designers to create structures that generate as much or more energy than they consume, along with other sustainability attributes. Eight years later, net zero energy buildings are increasingly becoming a reality across the globe. The growing needs for employees
Nearly 11,000
emissions reduction and climate resilience are driving the trend, while falling costs of on-site generation (especially Arup is a multi-national building de- solar PV), ultra-efficient HVAC systems, LED lighting, and sign with a portfolio of more than 20 electrochromic glass (which saves energy by changing zero-net energy or deep energy effi-ciency projects to its credit worldwide. shading properties) are making the net zero energy goal more the buzz
realistic and affordable. And new policy mandates in places With its ambitious projects around such as California and Europe are expected to help drive the world and a willingness to take on risks that other companies aren't, unprecedented growth in the next two decades. Arup is seen as the go-to firm for executing on sustainable and innova- Within the past two years, the opening of several high-profile tive designs. Projects have included the John W. Olver Transit Center buildings has raised awareness and helped prove the net in Massachusetts, the first zero net zero energy concept, even at relatively large scale. The John energy transit center in the U.S., and Northern Arizona University's ap- W. Olver Transit Center in Greenfield, Massachusetts is a plied R&D facility that uses 89% less bus terminal and office complex completely powered by energy than a typical building of its size. Arup's solar-powered design for 22 geothermal wells, a 98-kilowatt solar array, and a wood a net zero sports stadium in Qatar, pellet-fired boiler. The six-story Bullitt Center in Seattle, site of the 2022 World Cup, will keep the stadium at 73 degrees when it's considered "the greenest commercial building in the world," 111 outside, even with the retractable roof open. The opening of
achieves net zero in water use (by collecting the region's several high-profile
ample rainfall) and waste (with composting toilets) as well brain trust
Group board chairman Philip Dilley,
buildings has raised
as energy. Salt Lake City's Public Safety Building houses the along with 13 directors across the awareness and helped
city's police and fire departments in a 174,000 square foot globe, operate from a set of core values that maintain the sustainability prove the net zero
facility that uses solar PV, solar hot water, and LED lighting to vision established by late founder achieve a perfect Energy Star rating of 100. The headquarters Ove Arup long before the term was invented. of solar supplier SunCarrier Omega in Bhopal, India, the nation's first net zero building, is 100 percent powered by the Arup has 90 offices in 38 countries. company's tracking solar PV arrays, small wind turbines, and Although not publicly traded, the firm makes its finances public and had battery storage. $1.69 billion in revenue in fiscal 2013 with a profit of $33.5 million. Net zero goes a step beyond even the greenest green build- ings by monitoring a building's actual use. To qualify for net Arup has long been at the lead- ing edge of architecture and design zero certification from the International Living Future Institute trends. Its size and global reputation (now Cascadia's parent organization), a structure must use the for sustainability innovation make the firm well positioned to lead as net same or less energy than it generates over a one-year period. zero energy buildings gain momen-"The focus is on performance – how you operate the buildings tum in the coming years.
is enormously important," says Denis Hayes, president and CEO of the Bullitt Foundation. "A well-operated LEED Silver building is much better than a poorly-operated LEED Platinum one." Although skeptics may contend that examples of net zero buildings are isolated, that will change dramatically in coming years. The European Union has mandated that all new public buildings must achieve "nearly zero" energy status by the end of 2018, and that all other new buildings achieve the same status by the end of 2020. Strong mandates in 17 Asia-Pacific nations will increase that region's share of global near-zero buildings to 39 percent by 2017, according to Lux Research, with most growth in India, China, South Korea, Japan, and Australia. In California, the sweeping new building code mandates known as Title 24 take effect this year; they require net zero status for all new residential construction by 2020 and for all new commercial buildings by 2030. In the 2013 Energy Efficiency Indicator survey conducted by The Institute for Building Efficiency (an initiative of Johnson Controls), more than 70 percent of 3,000 worldwide building decision-makers said they intend to achieve zero, near zero, or positive energy status for at least one of their buildings in the future. In addition, the U.S. Navy and Marines are aiming to have half of their U.S. bases and other facilities achieve net zero energy status by 2020; several U.S. Army bases share the same goal.
Beyond individual buildings, some locations are aiming to achieve net zero energy communities. The largest in the U.S. is the West Village area on the campus of the University of California-Davis, a closely watched $300 million project hoping to serve as a model for similar efforts worldwide. Another large net zero district initiative is FortZED in Fort Collins, Colorado (population 140,000), encompassing the city's downtown and the campus of Colorado State University.
"World's Greenest Office Building" Makes Net Zero Look Easy Auckland Business Goes Net Zero Energy Net Zero Energy Buildings Attract ‘Knowledge Workers' The Packard Foundation Achieves Net Zero Energy Building Certification Walgreens Opens First Net Zero Retail Store Building Code Revision Launches California Toward Zero Net Energy Buildings international living future institute
new building institute
terrapin bright green
4. internet-enabled clean-tech startuPs define a new
sector
In our 2012 book Clean Tech Nation, Clean Edge managing director Ron Pernick and senior editor Clint Wilder named Connectivity as one of the "Six C's" driving clean tech forward (along with Costs, Capital, Competition, Consumers, and Climate). Now, clean-tech business models enabled by Internet, wireless, and cloud-based technologies are growing rapidly, creating the emerging and increasingly well-funded industry sector known as cleanweb.
technology
Lyft is a peer-to-peer ridesharing
program that uses mobile devices to
Definitions of the sector vary, but most use web-based facilitate connecting riders needing a systems or apps to save energy, deploy renewables, and ride and drivers with a car to share. use resources more efficiently. Cleanweb is often linked the buzz
Since its launch in 2012, Lyft has
with what's known as the share economy, where consumers provided more than a million rides. connect online to share car rides, home repair equipment, or The company has quickly expanded from San Francisco and is now in other products and services, disrupting traditional purchase 22 U.S. cities with plans to continue expansion domestically and overseas. or rental models and saving resources. Other definitions of So far, Lyft has outpaced a slew of competitors, including Sidecar and cleanweb encompass "big data" companies such as C3 Energy Uber, in both customers and funding. Cleanweb is often
and Opower, whose massive databases on consumer electric- brain trust
linked with what's
ity usage help power homes and businesses more efficiently, Lyft is the brainchild of CEO Logan Green and President John Zimmer, known as the
and Optimitive, a Spain-based provider of online programs finalists in BusinessWeek's 2009 list share economy,
that monitor energy use in industrial processes and water of U.S. Entrepreneurs Ages 25 and Under. Lyft grew out of Zimride, where consumers
treatment plants. It also encompasses companies like Mosaic a ridesharing service for college students started by the pair in 2007 and Clean Power Finance that are using the web to unleash after a mutual friend introduced them on – where else? – Facebook. Zimmer funding for solar installations and efficiency projects.
found that 80 percent of seats in cars on U.S. roads are empty. As in many online businesses, barriers to entry are relatively low, and new business concepts in this sector sprout almost The company has raised more than $150 million in venture funding from daily. Would-be entrepreneurs at cleanweb "hackathons" in Andreessen Horowitz, Founders Fund, Google Ventures, Mayfield Fund, K9 places like Berkeley, San Francisco, Boston, and New York Ventures, Floodgate, and others. compete to create the best new concepts. The Cleanweb Initiative, an online network where many of the same folks In the cleanweb/share economy world where some models can seem a bit share ideas and collaborate, has thousands of members flighty, Lyft is helping legitimize the sector with an expanding business and even more impressive VC funding. Its cutesy branding – pink But the cleanweb sector is more than just a grassroots effort, mustaches on the front of its drivers' cars – belies a savvy business culture and is becoming serious business, attracting major funding and growth trajectory worth keeping an eye on. But the biggest hurdle and thousands of customers. Cleanweb treads on VC's histori- for Lyft and its competitors may be cally familiar high-tech turf of software and the web. "It's less local opposition from the taxi industry and public officials. Cities such as capital-intensive, leverages technologies that VCs are very Las Vegas, Miami and St. Louis have banned rideshare services, while familiar with, and can create value very quickly," says Nicholas others like Seattle have severely restricted them. Industry disruption Eisenberger, managing partner of Pure Energy Partners, a can be messy. leading funder in the sector. "I'm not suggesting that all clean-tech venture capital should migrate to cleanweb, but it helps traditional VCs to see the opportunities in resource efficiency – and also helps clean-tech investors to see the power of the IT tools that are out there." Prominent cleanweb players to date include Lyft, a San Francisco-based ridesharing service with more than $80 million in venture funding (see profile); other ridesharing providers Sidecar, also in San Francisco, and Washington, D.C.-based Ridescout; and WegoWise, a Boston-based startup whose online benchmarking platform compares a building's water, electricity, and gas usage (the ‘WEG' in the name) to data it's collected on 10,000 structures. Sidecar CEO Sunil Paul is credited with coining the term cleanweb. In addition to these pure plays, sometimes a joint venture yields a cleanweb business model. HonestBuildings, a free online network connecting players in the real estate business, now offers real-time, online energy monitoring for buildings thanks to a partnership with energy performance software provider Lucid. Noesis Energy provides a similar online market-place for building efficiency vendors seeking new projects.
In some cases, cleanweb companies are increasing the efficiency of clean-tech industries them-selves. So-called soft costs, including customer acquisition, account for 64 percent of residential solar installation expenses and 52 to 57 percent of commercial PV system costs, the National Renewable Energy Laboratory reported in late 2013. New York-based startup SolarList provides its door-to-door sales force of college students with an app that lets homeowners assess the costs and paybacks of solar on their roofs, then sells these qualified leads to installers. Mosaic streamlines solar financing by enabling crowdfunding via the web; in just over a year, it has raised more than $6 million from more than 2,000 individual investors. "Catalyzing clean tech is a major component of cleanweb," says Eisenberger. Cleanweb Companies Attract Big Data and Big Money Turbocharging Efficiency with the Internet Cleanweb Investment Shows No Signs of Slowing Down Cleanweb or Deep Tech: Diverging Paths for Energy Startups Lyft Lands $60 Million Cleanweb: Is IT the Secret to a New Energy Future? the cleanweb initiative
5. vertical farMing sProuts in cities around the world
The earth's population is projected to reach 9 billion by mid-century, and its people will need 69 percent more calories location
in 2050 than they did in 2006, according to an analysis of United Nations data by non-profit environmental group World www.farmedhere.comResources Institute. To meet this demand, the world needs higher crop yields of more calorically-dense, nutritious food. Food security, safety, climate impacts, and resource scarcity problems persist as well: Japan, for example, currently imports 75 percent of its food, while the Middle East deals A local produce grower in Chicago, with water scarcity. So agricultural researchers are working FarmedHere uses two vertical farming to produce more calories with less land, energy and water, methods: an aquaponic system for herbs and tilapia fish, and an ideally closer to the urban centers where population growth is aeroponic system from AeroFarms most prevalent. for leafy greens. The growing cycle for the greens is 18 days, compared with more than 60 in conventional Part of the solution lies in vertical farming. The idea is to grow agriculture. fruits and vegetables in state-of-the-art buildings, on racks and multiple stories, rather than on traditional farmland – all Winner of a 2013 Chicago Innovation Award in the up-and-comer category within city limits. Vertical farming technologies include for startups, FarmedHere produces hydroponics (growing food in a solution instead of soil); more than a million pounds of greens each year. Its products include basil, aeroponics (growing food in an air or mist environment); arugula, and mixed greens, and are aquaponics (raising aquatic animals with plants, each feeding in more than 60 stores in the city, including Mariano's, Whole Foods Mar- Vertical farming
the other), energy-efficient lighting, living building facades, ket, Fresh Farms, and Green Grocer. technologies include
green roofs, and more. This combination of techniques and brain trust
technologies makes vertical farming more resource-efficient CEO Jolanta Hardej is a former mortgage financier who switched than conventional agriculture, and vertical farms in city industries after the financial meltdown buildings are close to where the food is consumed, saving of 2008. In an interview with Japan and aquaponics
Aquaponics magazine, Hardej said further on fuel and transport emissions.
that before her career switch, the only gardening she knew anything about Depending on crop and technique, vertical farming yields four was her grandmother's backyard plot in Poland. Her brokerage experience to ten times as much as traditional farming methods in terms of gave her access to progressive-mind-pounds of crops – using less water and energy per square meter, ed investors, and she started with an experimental, small-scale facility. according to Dan Albert of Seattle-based urban farm Farmbox bankrollers
Greens. Crops also can be stacked in vertical racks, and grown National organic food powerhouse 24/7 year-round in climate-controlled environments. New Whole Foods loaned FarmedHere $100,000 to expand its organic aqua- York-based AeroFarms claims its technology yields 22 crop culture operation into a previously turns a year, compared with conventional farms' two or three. abandoned 90,000 sq. ft. building, adding 150,000 sq. ft. of growing SkyGreens, located in Singapore, uses hydraulically-driven space.
vertical systems to ensure tropical vegetables get consistent our take
sunlight exposure in its greenhouses. Kyoto, Japan-based FarmedHere uses multiple vertical
Nuvege uses vertical farming to pack 271,000 square feet of farming methods to produce food
sold across Chicago. Its Whole Foods growing space into a 31,000 square foot building. The dense backing gives it a distribution network planting arrangement makes watering go further, yielding a and a certain scale, which has proved a struggle for some of its peers. While 50 to 70 percent reduction in water consumption compared some vertical farming remains on a hobbyist scale, FarmedHere is a with traditional agriculture. The company produces 7.6 million viable commercial enterprise. heads (760 tons) of lettuce per year, and says the controlled environment lets it manage crop nutritional value more effectively.
Energy for lighting is one of vertical farming's greatest expenses, making it a financial challenge if not carefully and properly designed. Lighting researchers, notably Philips, are creating ever more efficient red- and blue-spectrum LEDs to feed plants. Other researchers are testing sensors that provide data to optimize crop yields and nutrient density, or decrease energy and water use. Vertical farmers also are experimenting with a variety of non-traditional growing spaces: retrofitted warehouses, basements, sub-basements - even restaurant closets or under grocery stores. When judging farming for the nutrient-rich foods that will help feed the population boom, success depends on producing calories efficiently. Vertical farming success may also be measured in terms of kwH per grams of fresh produce weight. "The real question is, at what point are you comparable to conventional agriculture?" asks Caleb Harper of MIT's CityFarm project, which is modeling energy use in both conventional and vertically-farmed produce, and sharing the data with global stakehold-ers to increase production. Vertical farmers also are working on sustainability as they increase yields, sourcing nutrients such as nitrogen, phosphorous, calcium, and potassium from the waste products of chicken and yogurt producers. Vertical farming is still a tiny niche compared to conventional ag, and often focused on high-end boutique produce. But that's a common characteristic of early-stage technologies, such as early biotech concentrating on expensive pharmaceuticals. This emerging sector's systems, technologies, techniques, and goals are sparking breakthroughs in resource efficiency that may not only improve vertical farming, but traditional agriculture as well. "Everyone has a tiny farmer inside of them," says Harper. "They want to grow food - it's innate, but it's really complex." Does It Really Stack Up? Five Examples of Creative Urban Agriculture from Around the World Newark, NJ: Farming Mecca? Singapore's Vertical Farms Urban Farming in London's World War II Bomb Shelters Vertical Indoor Farms Are Growing in the U.S aerofarms
Mit cityfarM
www.nuvege.com sky greens
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clean edge, inc., founded in 2000, is the world's first research and advisory firm
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benchmarking services including stock indexes, utility and consumer surveys, and re-
gional leadership tracking, providing companies, investors, NGOs, and governments with
timely research, trending analysis, and actionable insights. Managing director Ron Pernick
and senior editor Clint Wilder are coauthors of the widely acclaimed business books The
Clean-Tech Revolution (HarperCollins, 2007) and Clean-Tech Nation (HarperCollins, 2012).
To keep abreast of the latest clean-tech trends, or for more information on the company,
visit www.cleanedge.com.
ron Pernick, managing director of Clean Edge, is an author, analyst, and entrepre-
neur with three decades of high-tech and clean-tech experience. He is the coauthor of two
books on clean-tech business and innovation, Clean Tech Nation (HarperCollins, 2012) and
The Clean Tech Revolution (HarperCollins, 2007). At Clean Edge he has coauthored more
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disclaiMer
Sponsors did not participate in the preparation of this report and are not responsible for the information contained herein. In addition, sponsors may have relationships with the entities discussed in this report. Information contained in this report is not intended to be investment advice or used as a guide to investing and no recommendation is intended to be made as to any particular company in this report. acKnowledgMent We would like to acknowledge and thank venture data provider Cleantech Group, our re-
port sponsors, and all those interviewed that made the production of this report possible. Chubb (www.chubb.com) For the past three decades, Chubb has provided a wide range of renewable energy, technology, and manufacturing companies with scalable, future focused insurance solutions. With a worldwide network of some 120 offices in 27 countries staffed by more than 10,000 employees, Chubb's global expertise, risk engineering, and claims services help Clean Tech companies keep pace with the velocity of changing risks. To learn more about Chubb, please contact your local agent or broker today or learn more at www.chubb.com/businesses/cci/chubb14966.html. SolarCity (www.solarcity.com) is the nation's #1 full-service solar provider. We have disrupted the century-old utility industry by providing renewable energy directly to consumers, businesses, and the military for less than the cost of traditional utility bills. We make clean energy easy by taking care of everything from design and permitting to monitoring and maintenance, and our customers are able to control the source of their energy and lock in low rates for years to come. To learn more about corporate Wells Fargo & Company (www.wellsfargo.com) is a nationwide, diversified, community-based financial services company with $1.5 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial fi- nance through more than 9,000 locations, 12,000 ATMs, and the Internet. The company was ranked No. 25 on Fortune's 2013 rankings of America's largest corporations. Since 2005, Wells Fargo has provided more than $21 billion in environmental finance, supporting sustainable buildings and renewable en- ergy projects across the United States. This includes investments in more than 260 solar projects and 34 wind projects that generate enough clean renewable energy to power hundreds of thousands of American homes each year. For more information, please visit. www.wellsfargo.com/environment.
Autodesk (www.autodesk.com) The unique Autodesk Clean Tech Partner Program supports the efforts, innovations, and environmental advancements of clean technology pioneers, providing world-class software to design, visualize, and simulate their ideas through Digital Prototyping. Program participants receive software licenses valued* at up to $150,000 for just $50. Used by millions of design professionals worldwide, Autodesk® software helps users create a better, more sustainable world. For more informa- tion on the program visit www.autodesk.com/cleantech. *Value based on up to five commercial licenses of each application. Environmental Entrepreneurs (E2) (www.e2.org) is a national community of business leaders who promote sound environmental policy that builds economic prosperity. We are a leading resource for understanding the business perspective on environmental issues. From clean energy to agriculture, our members have founded more than 1,700 companies in dozens of industries. Our members have created more than 570,000 jobs and manage about $175 billion in venture and private equity capital.
Mintz Levin (www.mintz.com/practices-industries/industry/energy-clean-technology) is a law firm with 450 attorneys serving clients worldwide. The Energy & Clean Technology Practice of Mintz Levin has been selected as one of the "Top 10 Clean Technology Firms" by LMG Clean Technology and Renewable Energy and has been ranked #2 nationally among top Clean Technology law firms, according to Water- shed Capital Group, and the practice was listed as a "Best Law Firm" by U.S. News & World Report, both in Boston and nationally. Recently, the practice was also ranked among the 2012 "40 Hottest Partners in Bioenergy and Bio-based Materials" by Biofuels Digest. The practice serves more than 300 clients, and since January 2006, the practice group has closed 300 transactions in this sector totaling over $7 billion.
Sparkpr (www.sparkpr.com)is one of the largest independent PR firms in the world. Headquartered in San Francisco, with locations in New York and Cape Town, Sparkpr works with startup companies in a variety of sectors, as well as many of today's most recognized technology brands. The Sparkpr greentech practice is at the forefront of the industry, advising innovative clients from energy efficiency and renewables to automotive. Sponsorship does not constitute endorsement of any product, service, or idea discussed herein.

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