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Deal Radar 2009: Infinia

Posted on Monday, May 4th 2009

Today’s Deal Radar brings cleantech and solar energy back into the limelight with Infinia. The Kennewick, Washington-based company is an energy technology company whose Stirling Solar products convert solar energy into electricity. As a company, Infinia has been around since 1985 and has successfully commercialized the Stirling engine for a number of applications, including combined heat and power and as a heart pump.

In 2005, Infinia realized the potential of the Stirling engine as a solar application. The company saw that a properly designed and packaged solar power generation appliance using its proprietary free-piston Stirling engine to convert solar thermal energy into electricity could be made by Tier 1 and Tier 2 automotive parts suppliers and manufactured inexpensively using existing manufacturing capacity worldwide. They believe that such an appliance could “dramatically” expand the number of sites that could be used to harvest sunlight and could provide a much lower cost solution in many situations.

Infinia believes that its ISS3000 offers industry-leading performance, highly scalable production, dramatic siting and project advantages (it does not consume water, does not need flat ground, can fit within existing transmission and distribution system capacities, and has short order-to-delivery lead-times) and low-cost solar power. Since the company’s approach to product design and development takes advantage of common materials and existing manufacturing processes to deliver product more quickly, it is more cost effective. Infinia plans to start producing its Infinia Solar System in the second quarter of 2009.

With its ISS3000, Infinia is addressing a market that is projected to be the largest and fastest-growing segment of the solar power market and is expected to total more than $110 billion by 2015. The company is currently serving quick-moving solar asset developers who are looking to build modest to large-sized utility-scale, solar-based power plants in Spain and the United States. Power from these assets will be sold under feed-in tariffs and power purchase agreements.

The company uses a primarily outsourced manufacturing/direct sales/product sales business with significant pricing flexibility. For prospective deployments in the 20 MW and less range, they intend to price against PV panels and systems. For prospective deployments above 20 MW, they intend to price against troughs and towers. The company has finalized sales agreements representing demand for more than two years of planned production, and they expect initial installations to be on line in the fourth quarter of 2009.

The company has raised $70 million so far: a $3.5 million in angel financing from Power Play Energy in early 2005; a $9.5 million Series A from Khosla Ventures, Idealab, EQUUS, Vulcan Capital and Power Play Energy in June 2007; and a $57 million Series B from GLG, Wexford, Foxconn, Khosla Ventures, Idealab, EQUUS, Vulcan Capital and Power Play Energy in April 2008. Though the company is not profitable yet, it believes that its low-capex production model will allow the business to become profitable quickly and will produce strong positive cash flows.

Suggested Reading:
Green Grants To Xunlight: CEO Xunming Deng
Deal Radar 2009: Sungevity
Deal Radar 2008: SunRun

This segment is a part in the series : Deal Radar 2009


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Infinia is making the right move by focusing on putting out a lower cost solar product. The whole issue with solar is that you have to pay so much up front, unlike non-renewables where you pay as you go. Most companies are focused on short-term results, so taking on the huge initial cost of switching to solar power is not always the best option for in our for businesses, especially in our current economic situation. I believe Infinia recognizes this and that is why they are focusing their product market on small and medium sized solar power plant developers, even though their product has applications for powering residential homes or businesses.

My main concern is that even with the financing that they have received and the cost savings that the Infinia Solar Systems offer, will they be able to compete in the long run with solar systems like PVs, towers, and troughs. Infinia will have to compete with heavyweights like Google and BP Alternative Energy backing BrightSource and their towers. Towers also provide cost savings over PV. In the US and outside of the southwest, PV is the main choice for solar. Forecasts show the cost of PV going down in the future and PV is working on improving its storage capabilities, so 2 of the main advantages of Infinia Solar Systems may erode over time. Infinia has a great product, but there are many hurdles to overcome in order for that great product to turn into long-term sustainable profits.

Nich Cope Monday, May 4, 2009 at 2:52 PM PT

Infinia is setting very high expectations in the Solar community. There are inherent design issues in Stirling engines which may cause this technology to fail -> 1. moving parts 2. Helium leakage, 3. the large area of land required compared to PV [ 10-20 acres/MW for Stirling vs. 3.5 – 4 acres/MW for PV]. Infinia has not even sold a single finished product in the market and they have not even gone into production. Their claim of 35-40% efficiency may not be realistic. A more realistic efficiency would be in the 20% -25% range.

With 2nd and 3rd generation PV technology production ramping up and their efficiencies getting upto 25%, they may prove to better than Dish Stirling technologies. The key disadvantage that will prove to be the downfall of Dish Stirling technologies is the area required for installation. PV requires less than 4 acres per MW and this keeps coming down with the advent of newer technologies whereas Dish Stirling requires 10-15 acres per MW. Scale that up and land use goes up exponentially compared to PV.
Infinia has a peak market potential of 10 -15 years, so they better ramp up their production before 2nd and 3rd generation PV hits the market.
Comments are welcome!

Vin Jal Friday, November 13, 2009 at 12:19 AM PT

Dalmia, an Indian cement company, tied up with Infinia to install 10 MW capacity in Rajasthan, India. Here is the project report from their website ->http://www.dalmiacement.com%2Fhome%2FDPR_Dalmia_Solar_19-08-09.pdf&ei=wxj9SsXbH9GfkQWW_vjwCw&usg=AFQjCNGIL2CwR09dw2hz8ksQT4RMh7GdFQ&sig2=SwayhNUlRQMliNsLhuwyQg

Vin Jal Friday, November 13, 2009 at 2:08 AM PT

Apologies folks. I am having trouble with pasting URLS. The correct URL for the Dalmia Infinia project is http://www.dalmiacement.com/home/DPR_Dalmia_Solar_19-08-09.pdf

There are several other documents related to this at http://www.dalmiacement.com/home/power.htm

Vin Jal Friday, November 13, 2009 at 3:56 AM PT