SAN FRANCISCO (Private Equity Week) – Earlier this month an officer with the California Highway Patrol noticed something out of the ordinary near the desert town of Tehachapi, which is home to the Tehachapi Wind Farm, the second largest wind farm worldwidOne of the 125-foot tall wind turbines was spinning out of control in 50 mile-per-hour winds.
“It looked like a propeller on an aircraft…and it was giving off a loud racket,” CHP Officer Ed Smith told Reuters.
The brake on the windmill had failed and there was a chance it could
spin completely out of control. The CHP closed a stretch of nearby
Highway 58 for 10 hours, until the winds died down.
Green Energy Technologies, an Akron, Ohio-based startup, is trying
to prevent such a dangerous incident from happening again. The startup
company contends it has developed a smaller and safer wind turbine it
aims to install on commercial rooftops.
The company raised $2 million in its first institutional financing
last week from roofing-services company Roth Bros. Inc. to finance
initial production and development of its 60-kilowatt WindCube turbine
Roth Bros., which has been expanding its energy efficiency and green
business practice, services the roofs of large customers, such as the
Simon Property Group, which operates shopping malls nationwide.
“We are working every day with energy and facility managers looking
for ways to reduce their energy bill and shrink their carbon
footprint,” says Paul Belair, president of Youngstown Ohio-based Roth
Bros. “There is a huge potential demand for a product like the WindCube
from building owners.”
“It gives us a lot of credibility,” founder Mark Cironi said of the investment from Roth Bros.
Green Energy had financed its first three years of research and
development after having previously raised $1.5 million from friends
and family, according to Cironi. The company, founded in 2006, has also
applied for a $1.5 million federal government research grant.
The company’s WindCube product, which features blades that are only
15 feet in length, is smaller compared to the turbines on a wind farm,
which can feature blades that stretch up to 230 feet in length. Cironi
says that the WindCube turbine is mounted inside a funnel, making the
system quieter and safer than traditional turbines that “whoosh” loudly
as the blades pass the turbine mast.
Green Energy contends that the WindCube can produce enough energy
for a range of users, from industrial companies and commercial office
buildings to college campuses. The WindCube produces about 160,000
kilowatt hours per year under normal conditions, or enough energy to
power roughly 14 U.S. homes per year. The average U.S. home uses about
11,000 kilowatt hours per year, according to the U.S. Energy
The WindCube system costs $279,000, and Cironi says the company is
receiving a huge boost not only from the Tehachapi Wind Farm incident,
but from state and federal incentives.
“It’s become much easier to market our product since the federal stimulus package was passed,” Cironi says.
The American Recovery and Reinvestment Act of 2009 contains a
provision that allows buyers of “small wind” systems an uncapped
investment tax credit of 30% of the total installed cost for systems
placed in service between now and 2016.
Hopes of a boom in the wind energy industry have fallen flat in the
recent years. But the United States added 2,800 megawatts of
wind-energy capacity to the grid during the first quarter of 2009, up
from the 1,400 added during the same period of 2008, according to the
American Wind Energy Association. Green Energy isn’t the only company
targeting smaller wind installations.
Flagstaff, Ariz.-based Southwest Windpower raised $10 million from
Altira Group, Natural Gas Partners, Rockport Capital Partners and GE
Energy Financial Services last month. Southwest Windpower, which is
targeting customers who want to put wind turbines on their roofs, has
raised more than $28 million to date from venture capitalists.