Cypress Semi easing off U.S. power grid

SAN JOSE, USA: A California technology company is attempting a feat usually associated with hippies in communes - going off the power grid to generate all its own electricity - and save money.

Cypress Semiconductor Corp, a Silicon Valley-based firm that makes microchips for everything from washing machines to light emitting diodes, wants to generate all the energy it needs to power its headquarters, completely on site and in five years.

Cypress founder and Chief Executive T.J. Rodgers donned a fire-engine red sports coat, blue pants and white shirt to sign a "declaration of independence" ahead of the U.S. Independence day holiday weekend.

"As a businessman, the term green has more than one meaning for me," said Rodgers, an unabashed capitalist who sees alternative energy as a way to make money. He founded U.S. solar panel maker SunPower as part of Cypress and later spun it off as a public company.

Cypress' energy independence goal does not come cheaply.

Cypress' two building roofs are covered in solar panels that were installed in 2000 for $1.5 million. The company has added three fuel cells made by start-up Bloom Energy, which cost about $700,000 each including all subsidies.

The combination currently powers 75 percent of the headquarters, and Rodgers is looking for solutions for the last 25 percent.

He said he expected the Bloom Boxes, as the fuel cells are called, to pay for themselves in five years, quicker than the eight-year payback period on the solar panels that now produce $70,000 worth of electricity annually.

"Once the box is depreciated and paid for, we will make energy for 5 cents a kilowatt hour," he said, adding that the company has a 10-year contract for natural gas, the fuel used to power the fuel cells.

"Today we pay 14 cents a kilowatt hour."

Cypress is paying slightly higher than the current market rate for the natural gas contract, but it locks in the rate for the next 10 years.

"We are betting two years from now it will look like a great deal," he said.

Rodgers said the decision to install the Bloom boxes was based on economics: he expects the power price to rise to $1.20 per kilowatt hour for the company during the peak hours of between 2 pm and 6 pm.

The boxes also offer an extra degree of reliability for Cypress, which otherwise would have to moderate its power use based on the arc of the sun, if it went off grid.

But to go off the grid, Cypress still has to overcome some key challenges, including having a backup power source and finding alternate energy to replace 25 percent of power the company currently gets from utilities.