U.S. Military Boosts Clean Energy, With Startup Help

With a bill of about $15 billion a year the U.S. military is the largest energy user in the country by far, so the Defense Department has been finding alternative ways to meet its energy needs with help from Silicon Valley.

But this partnership between the military and clean tech companies is taking some heat in the midst of discussions about Solyndra, the failed solar panel manufacturer, and the riskiness of green startups.

From a military standpoint, oil is not only expensive and hard to transport; it's also a liability. Last year there were more than 1,000 attacks on U.S. fuel convoys in war zones, and that's a strategic vulnerability for the military.

"We looked at vulnerabilities for the Navy and Marine Corps, and one of the ones that rose right to the top was our dependence on fossil fuels," U.S. Navy Secretary Ray Mabus says.

"Every time the price of oil goes up a dollar a barrel it costs the Navy $31 million in extra fuel costs," he says.

Green Military Contracts

According to a recent report by the Pew Charitable Trust, over the last four years the military has tripled its investment in technologies like biofuels, solar panels and electric vehicles. The Defense Department spends $1.2 billion a year on alternative energy.

That's great news for people like Bob MacDonald, chief technology officer of Skyline Solar, which makes solar arrays. The company's product is relatively low-tech; the components are off-the-shelf and easy to assemble.

A few years ago, MacDonald saw that the military was looking for clean-tech companies like his to partner with. He flew to Washington to present Skyline's product. It was a new kind of crowd for him.

"There's a lot of brass, literally a lot of stripes and shoulder adornments and things around the table," MacDonald says. "So I kept it simple — 'Sir, yes sir.' "

MacDonald left with a $1.5 million contract to try out his panels on two U.S. military bases, one in Texas and one in Southern California. Now he's eying remote bases in Iraq and Afghanistan.

The two worlds of alternative energy and the military may seem like cultural opposites but they have much in common, says Jon Gensler, an Iraq war veteran who now works for San Diego-based Borrego Solar.

"There's so much that you don't know when you're starting a business and there's so much that you don't know when you're out on patrol in Iraq or Afghanistan. It's the ability to operate comfortably with the unknown," Gensler says.

Powering Up Startups

The hope of many clean-tech entrepreneurs is that the cachet and the enormous buying power of the military can transform their companies, attract more investors, add jobs and change them from scrappy startups into real players.

"Eight years ago we were five people with a completely delusional dream," says Jonathan Wolfson, CEO of Solazyme, which sells algae-based fuel to the U.S. Navy.

"So to go from that to having an entity like the military, which is very, very disciplined and demands tremendous discipline out of its suppliers, it does really good things to help a company like Solazyme," Wolfson says.

But clean energy technology does have its opponents. Republican Congressman Darrell Issa from Southern California criticized the emphasis on green energy at a hearing earlier this month focused on the bankruptcy of Solyndra. The company received and lost half a billion dollars in federal loans.

"The Obama administration has systematically waged a war on carbon-based energy in pursuit of new green energy," Issa said.

Issa and other Republicans have argued that clean tech is just too risky for government investment, despite a law Congress passed in 2007 encouraging clean energy.

It puts Navy Secretary Mabus in the curious position of being one of clean technology's last defenders in Washington. "To lower carbon emissions, to lower greenhouse gas — that's a good thing to have happen," he says.

But those environmental benefits are secondary, Mabus says.

"We're doing this to become a better military, to make us better war fighters. We're doing this as a matter of security," he says.

Mabus says his goal is that by the year 2020, the Navy and Marine Corps will get at least half their fuel from alternative sources.

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