Think Inc.
A forum for Hawaii's
business community to discuss
current events and issues

Sunday, October 13, 2002

A bright bond idea | Reducing tech risk



A bright idea

Solar bond measure
is right for Hawaii

By Ed Smeloff and David Hochschild

Hawaii now has an opportunity to use one of the state's greatest resources -- sunlight -- to meet one of its greatest needs -- electricity. On Oct. 3, Lieutenant Governor Mazie Hirono announced that, if elected governor, she will implement a statewide solar revenue bond based on the model pioneered in San Francisco last fall. Given the environmental and political problems created by our country's dependence on fossil fuels, this is encouraging news and we applaud Hirono for taking such a bold step.

Dependence on fossil fuels remains America's Achille's heel, creating political liabilities overseas and environmental problems at home. Our nation desperately needs to reduce its dependence on oil and other fossil fuels and move toward clean, renewable energy. Hawaii is the best-suited state in the country to lead the charge by implementing a statewide solar bond. The state ranks third in annual sunlight, pays the highest electric rates in the nation and relies primarily on imported and highly polluting energy sources.

A solar revenue bond would help increase Hawaii's energy independence, reduce air pollution, decrease consumption of fossil fuels and create new job at no cost to taxpayers.

How does it work? The $100 million solar bond approved by San Francisco voters last fall provides funds for the city to buy solar panels and energy efficiency equipment for public buildings. Since the cost of the solar and efficiency equipment is paid for from the energy savings, there is no cost to taxpayers.

In adapting the San Francisco solar bond model for Hawaii, the state would most likely designate its total electricity bill as separate from other general fund obligations and then track the savings at each state electric meter as the solar and efficiency equipment is installed. The savings would then be pledged to support the issuance of state revenue bonds.

Our nation's energy crisis is only beginning. The fossil fuel supplies on which America relies for its energy are dwindling, increasingly expensive and politically costly. Our dependence on Middle East oil is the single greatest threat to our national energy security. Hawaii relies more heavily on oil as a fuel for electricity generation that any other state.

Emissions from the power plants that run on fossil fuels constitute the leading contributor to global warming. Scientists tell us that a failure to respond to the global warming crisis will lead to rising sea levels, more severe weather patterns and increased rates of communicable disease. The time for debate is over. Investing in renewable energy now will yield big dividends to our world's well-being in the future. The sooner our transition toward renewable energy happens, the better off we'll all be.

Solar energy is a particularly promising technology. Clean, quiet, reliable and requiring virtually no maintenance, solar energy produces electricity during the time of day when it is most needed. And unlike most energy technologies, it has the advantage of producing power in the same place where it's consumed.

Until recently, solar electricity was too expensive for mass use. As a mature technology in an immature industry, however, solar energy is now at a critical stage of growth. Every time the cumulative demand for solar energy doubles, the price of a solar panel goes down by about 20 percent, due to increased economies of scale. The more solar panels are purchased, the cheaper they become. As the price lowers and the technology continues to improve, solar energy's prospects are brighter than ever. As a result, states like Hawaii can both benefit from solar investments and play an important role in bringing the cost of solar energy down nationwide.

Our most challenging times are still to come. A combination of solar, wind, energy efficiency and other clean energy sources can create the mix of resources necessary to retire aging power plants, reduce pollution, and increase the electric system's reliability.

Renewable energy improves the quality of the air we breathe, increases our energy independence and reduces our consumption of fossil fuels. For America as a nation and Hawaii as a state, it's time to unleash the power of the sun.

Ed Smeloff manages power policy for the City and County of San Francisco. David Hochschild is co-founder of the Vote Solar Initiative (

Meet the authors

Ed Smeloff and David Hochschild will speak at a public forum on the Hawaii Solar Bond.

>> When: Thursday from 6 to 7:30 p.m.

>> Where: The University of Hawaii at Manoa School of Architecture Auditorium



Reducing the risk
of high-tech ventures
requires social

By Duane Kuroda

After my last column on proximity and access of customers, I was happy to hear from a few readers who argued that Hawaii was a great place for a high-tech company. I couldn't agree more.

My point is that there are several issues of proximity and access that need to be in place for Hawaii to become a serious contender in terms of reputation, talent and attraction to investors. This time I'll touch on social infrastructure.

The creation and support of six incubators in Hawaii is a great idea. One may even argue it was an essential step toward growth and support of high-tech start-ups and entrepreneurs. However, the creation of incubators alone does not differentiate the state or the opportunities available.

Take the field of biotech as an example: There are no fewer than 43 cities across the United States striving to build biotech "hot spots," many anchored by a biotech incubator in specially zoned economic development areas. These incubators survey existing biotech startups, established biotech companies, medical schools and established industry veterans to determine what they need. Many have looked to the Silicon Valley model for the design and implementation of their incubators and associated facilities.

That would seem to make sense, but they don't get the entire picture and may be limiting their vision. There's a dirty little secret I'll let you in on -- Silicon Valley doesn't have a successful biotech incubator model, yet.

Development agencies in the valley are working to change that. While they have done the research and planning necessary to design and build a compelling presence in biotech incubation, they're not just building another incubator.

These agencies wanted to establish Silicon Valley as a leader in biotech as another pillar in its technology foundation. The San Francisco bay area has great schools at Stanford in Palo Alto, Berkeley and San Francisco. And there are four geographically separate mini-centers of biotech -- in South San Francisco, Menlo Park (north of Stanford), Alameda (east of Berkeley), and Fremont (across a bridge from Stanford). This geographic separation has lead to unique isolation in the technology centric bay area. In contrast, the same universities have strong programs in traditional technology areas, but semiconductor, software and networking communities have not formed similar geographic silos.

One key unifying factor is networking associations. In Silicon Valley there are groups such as the Software Developers Forum, Silicon Valley Association of Startup Entrepreneurs, the Chinese Software Professionals Association, Asia-Silicon Valley Connect, International Angel Investors and Stanford's Industry Thought Leaders Series. Networking groups offer centralized mechanisms where entrepreneurs meet and share ideas or learn from other established professionals. These associations have regular meeting places, distribute newsletters, periodically showcase new technology companies and regularly facilitate meetings between investors and would-be entrepreneurs. The goal is to facilitate stronger biotech bonds similar to those of technology's traditional pillars, creating a social infrastructure to unify and even coach biotech entrepreneurs.

More specifically, these forums include discussions on benefits of incubators, finding and building a board of directors, locating angel investors, signing the first customers, etc. The process of re-inventing the wheel for high tech business is shortcut by forums and seminars where entrepreneurs learn from others what mistakes were made, what pitfalls to avoid and what actions were successful for them. I personally would rather learn from others' mistakes, so I only make new ones.

Likewise, these venues support networking, sharing of ideas, business development and overall growth. Several companies have started from entrepreneurs meeting and sharing related visions of technology or business problem solving. I've made contacts and spoken with partners at some of the larger Venture Capital firms and have even met founders of other companies that I now advise. These networking opportunities have been instrumental in building a stronger understanding of the startup process, the expectations of investors, and sharing and cooperation of ideas as necessary to grow your business and help others do the same.

My discussion of Hawaii's preparation in supporting tech should not have a negative impact. While the pessimist might say that there's a long way to go, the entrepreneur would ask, "how can I find the nurturing environment I need to succeed or help build one similar to it?" Success is more likely for those who prepare for it. Opportunity goes to those who create it.

Proximity and access to a social infrastructure that facilitates and develops both entrepreneurs and start-ups will go a long way to encouraging and facilitating high tech growth.

Duane Kuroda is chief executive officer and co-founder of Intrepic Technologies in San Jose, Calif. Reach him at

To participate in the Think Inc. discussion, e-mail your comments to; fax them to 529-4750; or mail them to Think Inc., Honolulu Star-Bulletin, 7 Waterfront Plaza, Suite 210, 500 Ala Moana, Honolulu, Hawaii 96813. Anonymous submissions will be discarded.

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