Energy Efficiency Helps Companies Reduce Costs

For those putting money into solving global energy supply and
demand problems, the former, with its towering, white wind turbines and sleek
solar panels, has always been the star.

Yet technology that has the potential to cut demand drastically
has stolen some of the spotlight this year.

Energy efficiency, which encompasses building automation,  networked
smart grids and advanced lighting, represents the "here and now" of
energy independence, said Kevin Landis, who manages the Firsthand Alternative
Energy Fund.

"It's absolutely hands down the cleanest form of energy," Landis
said. "It's not the power plant that puts out half the emissions. It's the
power plant you didn't have to build at all."

Venture capital funding of energy efficiency companies topped $339
million during the first three quarters of 2008, already exceeding the
cleantech sector's total 2007 investment, according to an Ernst & Young
report based on data from Dow Jones VentureSource.

Arlington, Va.-based GridPoint Inc., the biggest funding
recipient, is working with utilities like Duke Energy and Xcel Energy to give
homeowners extensive information about power consumption levels for lights, fans
and appliances, said Steve Hauser, GridPoint's head of market development.

GridPoint Inc. raised $120 million in fourth-round financing for
its smart grid platform.

Refrigerators are much more efficient than they were 15 years
ago, but their compressors and defrosters simply cycle on and off periodically.
GridPoint's system, in the pilot stage in a few hundred homes across the
country, makes sure those tasks occur only during cheaper, off-peak
hours, Hauser said.

A homeowner would also be able to run diagnostics online and
determine if it makes economic sense to replace an old appliance eating more
than its share of energy.

"Most homeowners don't know that until the thing absolutely
quits," he said.

Major corporations stand to save the most.

McDonald's Corp. has reduced energy use by 3.75 percent through
lighting retrofits, new equipment purchases, enhanced energy tools and
education.

The nation's No. 1 hamburger chain is in the pilot stage using
power line networking technology developed by San Jose, Calif.-based Echelon
Corp.

Echelon has helped companies monitor and control networks for more
than 20 years, but its top executive said the industry is in its
infancy.

"We're still just scraping the surface," said Ken Oshman,
Echelon's chairman and chief executive.

McDonald's spends about $1.5 billion a year on energy worldwide,
mostly on equipment, lighting and air conditioning and heating, said Bob
Langert, McDonald's vice president of Corporate Social Responsibility.

"We have every incentive, both financially and environmentally,
to do better," he said.

Langert said many McDonald's locations are testing the latest
environmentally friendly and energy saving technology.

The company is introducing new fryers which cook the same amount
of food while using about 40 percent less oil and consuming about 4 percent
less energy than standard fryers.

McDonald's restaurants in the U.S. and Canada are also testing
high-efficiency LED lights that can illuminate a parking lot using
about 50 percent less energy, and the company has developed an environmental
scorecard for its suppliers to assess four key measures, one of which is
energy use.

Langert said any way that efficiency companies can provide better,
real-time energy use data and automate ways to save money lets the
restaurant concentrate on its primary task of serving customers.

"The more they can make it simple for us, the better," he said.

Energy efficiency companies say that same technology can be
applied on a broad scale at home.

"Wherever you have a device that uses electricity, it could save
energy just by being aware and by being able to communicate," Oshman
said.