SIOUX FALLS, S.D. -- 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 in the past 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," he 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.

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. SUBHEAD: Efficiency gains attention for cutting emissions and saving resources.

Originally published by DIRK LAMMERS Associated Press.

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