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Green energy: Silicon Valley leads a back-to-basics revolution

Green energy has long aimed to overthrow fossil fuel's stranglehold on world power generation. But for now, Silicon Valley is taking green energy down a different path.

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Big companies are spending money to make their own operations greener. Wal-Mart commissioned SolarCity of San Mateo, Calif., to install solar panels on as many as 60 additional California stores this year, meaning more than 75 percent of its stores in the state would use solar energy.

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But the real trends in clean tech are apparent in the entire "green" supply chain, where Wal-Mart is also a leader, Mr. Tamminen says.

"Wal-Mart is pushing everyone in its supply chain to reduce packaging, use more efficient transport systems, replace toxic chemicals with nontoxic alternatives, and secure food from local suppliers," he adds. "It's 'green' but not the typical clean-tech, Silicon Valley high-tech products and investments you typically think of when saying 'green.' "

Like corporations, cities can play a role in stimulating green technology. San Jose, Calif., signed a contract recently with SolarCity to build 28 solar sites, says SolarCity spokesman Jonathan Bass.

The developments represent a gradual evolution of business models rather than a total paradigm shift. Though the wind and solar sectors remain strong, some experts say the focus is moving away from capital-intensive and fundamentally life-altering industries to companies that yield returns in comparatively short periods.

Bridelux is a leading developer and manufacturer of LED lighting technologies in the valley and was recently named in the annual Global Cleantech 100, the top 100 innovative companies projected to make a significant market impact over the next five to 10 years.

Cypress Envirosystems helps retrofit existing commercial buildings and industrial facilities for energy efficiency and lower maintenance costs. The field is crowded, with Serious Energy, SCi, Soladigm, and Enlighted providing the same services.

"What we have seen, particularly in the last two years, is that VCs [venture capitalists] are saying, 'We are also interested in looking a lot more at short-term types of investments that are not necessarily game changers but work around the edges of clean technology,' " says Mr. Heesen of the National Venture Capital Association.

Companies in architectural designs, building material, and lighting, for instance, will have significant impacts on the amount of oil Americans use, he says. They "can make money in the shorter term, and they are not regulated as heavily."

Of course, Silicon Valley and the broader Bay Area are still thinking big. Solar Trust of Oakland, Calif., which rejected a $2.1 billion loan guarantee from the US Energy Department, has its 1,000-megawatt Blythe Project in California, which it hopes will have an output capacity comparable to large coal-fired and nuclear power plants.

But the negativity surrounding Solyndra has clouded how Silicon Valley is evolving, says Sheeraz Haji, chief executive officer of Cleantech Group.

"Within the US, Silicon Valley has a very prominent place in terms of innovation, financing, and the enormous presence of venture capitalists," he says. "Silicon Valley is going to continue leading the country in the clean-tech field."

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