By now you know that Green Chip International Editor Sam Hopkins likes to go beyond headlines and straight to what's really making clean energy stocks tick. For him, the story isn't always what stock led a day's cleantech trades or which country put up the most wind turbines in a year. Last week, he brought you an exclusive interview with Iceland's energy authority chief.
Today, Sam is drawing attention to some unsung heroes of the worldwide renewable energy rollout: lawyers.
Publisher, Green Chip Stocks
Why Lawyers are Essential to Cleantech Success
Justice may be blind, but lawyers always have to see clearly. And recently, I've met some legal eagles whose sights are fixed squarely on cleantech.
One Israeli-American law firm is focused specifically on assisting companies that can use both Israel and the United States as bases for global success. ZAG/S&W stands for Zisman, Aharoni, Gayer & Ady Kaplan & Co./Sullivan & Worcester LLP, hence the initials. There's no abbreviation in the joint practice's binational operations, though. Water Resource Development and Renewable Energy & Energy Efficiency each have teams of attorneys tasked with finding opportunities here in the U.S. and in the Middle East's leading economy.
Now, to understand the pivotal role that attorneys play in fostering the kinds of Green Chip Stocks that give this publication its name, we need to explore a sort of paradox in the way the clean energy economy is developing...
The global green energy rollout is both high-tech and grimy as heck.
We have NASDAQ-listed power switch companies like Fairchild Semiconductor (NASDAQ: FCS) and blue-collar job machines like Denmark's Vestas Wind Systems (COP: VWS). Intense work is being done right now to connect new renewable power generation to electricity customers and to get next-level fuels into vehicle tanks. Blowtorches are joining pipes and tiny soldering irons are creating data pathways for all of the heavy-duty stuff to run more efficiently.
For me to really register what's fueling all the anonymous-looking share price charts and market projections I see, I pay periodic visits to fabrication plants and sites where clean energy capacity is being installed.
But there are plenty of people in suits making this all happen, too. Lawyers go through everything with a fine-toothed comb to bring startups to public listings, and there's plenty of elbow grease and heavy lifting on their end.
Heavy Legal Lifting to Bring Cleantech to Market
On Capitol Hill during last fall's ACORE Phase II Renewable Energy Policy Forum, I sat in a room full of well-dressed listeners who were ready to pounce on new legislation as the basis for business. Simply put, everyone was there to find out more about how the U.S. renewable energy market is growing with government help.
I even ran into Matthew Lesko, the guy in the question mark suit who beams on TV about how to get free government money to start a company, go to school, or learn to throw left-handed... He was there for hot tips for readers. And I was there for you readers, who expressed appreciation for a look behind the scenes.
At the Retech conference a couple of weeks back, I took the opportunity to follow up on that policy pow-wow with Jeffrey Karp, a partner in ZAG/S&W's Washington office. He deals with environmental and natural resource issues specifically, steering clients through new and pending legislation like the EPA's finalized Renewable Fuel Standard (RFS2).
Congressman Ed Markey (D-MA) told us at the Phase II Policy Forum that his goal is to create a "Darwinian, paranoia-inducing marketplace" through legislation. For that sort of competitive environment to come to full flower, the participants need to know the rules.
Jeffrey and his partners have to stay on top of cap-and-trade developments, RFS2, and the SEC's recent guidelines on how public companies report the money they spend on climate change risk mitigation.
As these groups of attorneys move, they hack through the legal brush and blaze trails for technology licensing deals, joint ventures, venture capital money, and mergers and acquisitions to pass through.
Take Plasson, Ltd., an Israeli company that makes plastic pipe fittings. Plasson's 1000+ products are used in wastewater processing, mining offtake, and for routing telecommunication cables. Plasson used ZAG/S&W's consulting to snap up a 77% stake in Industrial Pipe Fittings LLC, which is based in Texas.
Or take Madgal, the 30 year-old Israeli company bringing computerized high-end smart faucet designs from the Middle East, where water scarcity is a fact of life and bone of geopolitical contention, to showrooms, bathrooms, and kitchens in the U.S.
Karp's team is making sure that Madgal has its i's dotted and t's crossed so it can get down to business. That means entering into partnerships with local companies to expand Madgal's market reach.
The Sun is Shining on Israeli Cleantech
Many of the companies Jeffrey Karp and his colleagues are involved with are based on kibbutzim. A kibbutz is a type of cooperative settlement unique to Israel, and each one of the nearly 300 of these communities scattered around Israel has a central way of generating money. For some it's dairy (Yotvata); for others it's sandals (Teva/Naot). And now for a growing number, cleantech is the key to prosperity and a high communal standard of living.
Although the kibbutz is essentially a socialistic concept, capitalist tendencies are driving more and more kibbutz-based companies like Madgal to seek out export opportunities.
Others — like Kibbutz Ketura's Arava Power Company — expect to benefit from Israel's own national clean power goals. Located in Israel's arid Negev Desert, very near the border with Jordan, APC has signed up neighboring communities for a photovoltaic network totaling 100 megawatts. I profiled Arava Power back in 2007, long before their recent financing field day.
German engineering conglomerate Siemens has stepped in with $15 million for Arava Power, which amounts to a 40% stake. The Israeli government is encouraging the development of utility-scale solar power at home, though its goal of 10% clean energy in electricity by 2020 falls far short of European and many U.S. state targets.
Even given diminutive national goals, Arava's attorneys obtained the licensing they needed to gain the lead in the domestic market. Feed-in tariffs are coming into play in Israel to stimulate wind energy and small PV power plant development.
And the fact of the matter is that solar is not new to Israel. 95% of the homes in Israel have rooftop solar thermal water heaters, which have been mandatory since 1980. As Eco Energy Ltd. head Dr. Amit Mor told us at Retech, those existing installations are far more basic than what Israeli solar power engineers can do today.
Israel now has a number of technology incubators, where budding biotech firms and clean energy power generators can find initial financing and access to resources, as well as attention from venture capitalists and legal shepherds like ZAG/S&W.
The big dogs — like Ormat Industries, parent of Ormat Technologies (NYSE: ORA) — are developing their own solar arrays to explore utility-scale possibilities to boot.
From idea to market, there are plenty of pitfalls that can be avoided with a good map. Attorneys are the ones doing recon for the Israeli companies on their way toward public listings. Since we're tracking them now, we'll be sure to bring you the latest.