Global environmental challenges
GE, VCs put $30 million in Silicon Valley startup’s “smart windows”
A $30 million investment in Soladigm, a Silicon Valley startup that makes “dynamic glass,” by General Electric and other investors offers a window into where venture capital may go in 2011.
Soladigm uses an electrochromic process to electronically darken or lighten windows to save on costs for heating, ventilating and air conditioning, or HVAC in industry parlance. The company’s dynamic glass darkens during the summer or hot times of day to cut air conditioning use and lightens when the weather is cold to capture and retain heat.
“We can save about 25 percent of the HVAC energy load,” Rao Mulpuri, Soladigm’s chief executive, said in an interview. “That has the capital benefit of resizing HVAC systems to handle a lower load than you would otherwise have.”
Energy efficiency products and services that offer customers a return on investment are likely to attract investors in the coming year as federal incentives for big renewable energy projects start to sunset, according to Dallas Kachan, managing director of Kachan & Co., a San Francisco research and consulting firm.
“We predict energy efficiency will emerge as the clear rock star of clean tech in 2011, not just in terms of dollars invested, but in mindshare,” Kachan said in an e-mail.
Among Soladigm’s new investors is General Electric, which has made big plays in energy efficiency. GE in November named the Milpitas, Calif., startup as one of the winners of its $200 million Ecomagination Challenge contest that sought partners and ideas for the conglomerate’s green building and smart grid efforts.
Other investors in Soladigm’s latest round include DBL Investors, NanoDimension, includes Khosla Ventures and Sigma Partners.
Electronically tinted glass is not a new idea but technological, durability and cost challenges have kept such windows from becoming a mass-market product.
Mulpuri said that Soladigm has solved those problems and is producing dynamic glass on a pilot line in Silicon Valley. The new funding will be used to equip a factory in Mississippi that is set to begin commercial production in late 2011 with products shipped to customers in 2012. Soladigm received $44 million in incentives from the state of Mississippi for the plant.
He said Soladigm’s glass will be more expensive than conventional high-efficiency glass but is expected have a reasonable payback period.
Soladigm will target both commercial and residential markets, according to Mulpuri. The company’s glass can be activated from a wall switch or incorporated into a commercial building’s environmental control systems.
A competitor, Sage Electrochromics of Faribault, Minn., in November scored an $80 million equity investment from glassmaker Saint-Gobain. The United States Department of Energy also has granted Sage a $72 million loan guarantee to build a new factory.
(Photo courtesy of Soladigm.)