Not much more to this post beyond the headline and news release, but I will say it’s encouraging to see Xantrex Technology Inc. finally announcing some inverter sales in California. In the area of solar, California represents a huge market for Xantrex, which is by far the leading solar inverter provider in the state. Given recent initiatives there to spark greater uptake of solar PV systems, I’d expected an announcement like this each week coming out of Xantrex. Will be interesting to see the company’s next quarter to see what impact California solar is having on sales.

I have a story in today’s Toronto Star about a homegrown company that makes highly sensitive fibre-optic sensors that can monitor the effects of corrosion on oil and natural gas pipelines and refinery operations. Fiber Optic Systems Technology Inc., or FOX-TEK, can be considered a “cleantech” company because its technology helps oil pipelines and refinery facilities operate more efficiently — i.e. companies can optimize maintenance schedules — and also reduces the risk of leaks, fires or explosions that could have a serious impact on the environment and people’s lives. Give the piece a read to find out how the technology works.

The story is timely, given recent corrosion-related oil and natural gas leaks in Alaska that have attracted the attention of the U.S. Federal Bureau of Investigation and the Environmental Protection Authority. Since we all know the oil companies are oozing profits, the added public attention to pipeline and refinery maintenance and safety could lead to renewed spending on new monitoring technologies. FOX-TEK has already sold a couple of its systems to Enbridge Pipelines, is close to announcing a symbolically significant deal with Saudi Aramco (the world’s largest oil company), and is in serious talks with other North American oil and gas companies, including Mexico’s PMEX.

What’s even more interesting is that the technology isn’t limited to oil and gas infrastructure. The fibre-optic sensors can monitor the integrity of bridges, wind-turbine blades, power transmission lines, liquified-natural gas storage tanks, you name it — anything where safety is paramount and corrosion/stress is a huge problem on materials. FOX-TEK also did a neat experiment with NASA, which used the technology to monitor the effects of small space particles hitting something akin to the International Space Station at super-fast speeds. The experiment worked quite well, but FOX-TEK co-founder and CEO Gary Jolly could not reveal what other work his company is doing with NASA.

Whatever the case, this technology is cool. Fact is, if you’ve got to live in an economy addicted to oil and natural gas, it’s best to use technologies that can minimize the impact of these fossil fuels on the environment. FOX-TEK fits that bill.

The World Alliance for Decentralized Energy (WADE), based in Edinburgh, released its “World Survey of Decentralized Energy 2006.” It found that decentralized energy systems accounted for 24 per cent of new power generation in 2005. That’s up from just 12 per cent in 2002, according to an alliance press release. Their goal is to see 20 per cent of the overall capacity reach 20 per cent by 2025, up from the current level of 8-9 per cent. The alliance said most of this decentralized or distributed energy is coming from high-efficiency cogeneration systems. Growth in PV and onsite wind is growing strongly, but from a small base. “Countries such as Denmark, the Netherlands and Finland, where DE share of generation is around 40 to 50 per cent, provide clear evidence that such a goal is not only achievable, but is consistent with the provision of efficient and reliable generation,” according to the alliance.

Decentralized planning, by bringing power generation closer to the source of consumption, reduces the need for costly transmission, lowers associated line losses, and increases the efficiency of the overall grid. This, combined with the fact that renewable energy and co-generation play a key role in decentralized generation, makes it a cleaner alternative to building massive, centralized power plants based on nuclear and coal.

ATS Automation Tooling Systems disappointed the market today by announcing that it was taking a $65-million writedown on its new Spheral Solar unit, which has been delayed in its march toward commercialization because of production troubles. The company said it hired a technical consulting firm to try to work out the problem — not a good sign. Overall, the company’s fourth-quarter performance wasn’t too bad, but concern over the new solar business created a panick, driving the stock down more than 23 per cent on the day. In fact, it was the biggest loser on the Toronto Stock Exchange. The stock closed at $11.99, far off its 52-week high of $18.45.

It’s a mystery what’s truly going on with this company. Analysts I’ve spoken with say ATS is taking this writedown because, without 100 per cent certainty on when the business will start generating cash flow, it has to follow accounting rules. At the same time, the company re-affirmed its timeline for the IPO of its Photowatt solar business, which includes both its Spheral Solar startup and its established Photowatt division in France. It still plans the IPO for the third or fourth quarter of 2006, so perhaps its problems aren’t as deep as it seems. Also, its partner Elk Roofing, which wants to start selling Spheral Solar-integrated roofing products, said earlier this month that they were “getting closer” with the product. Perhaps last-minute troubles emerged?

My overall assessment is that this latest update, while not good news, isn’t horrible news and doesn’t justify the company losing more than a quarter of its value in two days. That’s just ridiculous. Fact is its France-based solar business is doing fine, and I’d rather Spheral Solar get it right before the IPO than prematurely put a product into the market and lose the complete confidence of investors. I can’t imagine the company would work toward an IPO, and stick with its schedule, if things were as bad as the market is painting it.

I expect this stock to pop back in the next few days. At $11 a share, there’s going to be a rush back in. My own worry is that the IPO will be less than spectacular when it does happen, because ATS demonstrates time and time again how awful it is at marketing itself. And if it does drag this out to the fourth quarter, the shine could be off the solar IPO market as the industry enters a phase of even tighter silicon supplies.

GE released its “Ecomagination” report today outlining the company’s cleantech performance since the new business strategy was launched a year ago. So far, they’re claiming success. The company said its revenues from ecomagination products hit $10.1 billion (U.S.) in 2005, up substantially from $6.2 billion in 2004. The company also said its orders and commitments nearly doubled to $17 billion and that its pipeline of certified products has increased by more than 75 per cent.

“Our advanced environmental products and services are helping customers increase their energy efficiency and reduce costs and emissions. And it is providing the growth we expected for GE, as we are ahead of our plan to reach $20 billion in annual sales of ecomagination products by 2010,” said GE chairman and chief executive Jeffrey Immelt. “With oil prices and other energy costs surging and with water scarcity concerns spreading, ecomagination makes even more sense for our investors today than it did a year ago.”

I have questions: Is this growth merely the result of GE re-classifying or certifying existing products as “ecomagination”? If so, are they talking true growth or merely a shifting of revenues from one class to another? It’s great the company is going strong in this direction, but I wonder how they’re calculating all this. I haven’t read the whole report closely, so hopefully I’ll get that answer when I do.

In other cleantech news, the Cleantech Venture Network released its first quarter 2006 investment figures for the sector and the impressive growth continues. During the first quarter of 2006 venture capital investments totalled $513 million (U.S.), up about 53 per cent from the year prior and a quarter-over-quarter gain of 2.3 per cent.

There were 67 separate deals done, down from 73 in Q4 2005 but up 37 per cent compared to the year prior. That said, the average deal size jumped to $8.28 million, up 20 per cent from the prior quarter and about 17 per cent from a year ago. The report said cleantech investments, out of all VC investments, remained in fifth place behind biotech, software, medical and telecom, and ahead of semiconductors.

Keith Raab, chief executive and co-founder of the Cleantech Venture Network, said energy-related deals dominated cleantech investments in the quarter. “The $357 million invested in energy accounted for nearly 70 per cent of all cleantech Q1 investments and 48 per cent of the total energy investment made in 2005,” he said.

Cleantech investment accounted for 8.5 per cent of all North American venture capital investment in Q1 compared to 9.1 per cent in the previous quarter and 7.5 per cent in Q3 2005.

A full report of the data will be released at the Cleantech Venture Forum X in London, England, on June 7.