Some of our challenges may well be met by innovations coming from one of America's most important allies -- Israel, a country that for geographic and political reasons is focusing on non-fossil-fuel solutions. Israel has emerged as one of the world's leading hubs for technological innovation. The Council on Foreign Relations says, Israel has more start-up companies per capita than China or India or all of Europe. And some of those companies are developing potentially revolutionary clean energy concepts, as "energyNOW!" Chief Correspondent Tyler Suiters shows us in our continuing look at the Israel Connection.

[SUITERS] Of all Jerusalem's holy sites, the workplace of an ancient priest is where inventor Daniel Farb draws inspiration.

[DANIEL FARB, CEO, LEVIATHAN ENERGY] That's the location. It's built over the location where the Holy Temple stood.

[SUITERS] And Ben Katin served there?

[FARB] That's right, Ben Katin was the high priest at the time.

[SUITERS] The time -- 2,500 years ago. The man -- Ben Katin, a Jewish priest and inventor of plumbing technologies. The machine -- what Farb calls the Ben Katin Hydroelectric Turbine. Unlike the big hydroturbines, the ones that generate electricity from the flow of rivers, the Ben Katins are awfully small. They attach to city pipes, running on water systems, sewage flows, even rainwater. That means even landlocked cities -- think of Atlanta or Phoenix or Dallas -- they could produce emission-free hydroelectricity.

[FARB] The important thing about energy and what we're doing is that there's a real need worldwide for every place in the world to advance to the category of being in a sustainable environment and sustainable production.

[SUITERS] Since its founding, the state of Israel has depended almost entirely on imported energy, especially difficult given Israel's neighbors. So the country is searching for unconventional power sources and working with its closest ally, the United States, to bolster energy security.

[ANDREA YONAH, ISRAEL-U.S. BIRD FOUNDATION] There's nothing like confronting a challenge to force you to come up with new and better solutions.

[SUITERS] American Andrea Yonah is with a U.S.-Israeli governmental joint venture promoting industrial research and development.

[YONAH] It's forced them since the very beginning to think outside of the box, to be able to come up with solutions to challenging issues.

[SUITERS] Over the last three years, the foundation and the U.S. Department of Energy have given about $10 million to more than a dozen U.S.-Israeli joint clean energy projects, projects involving solar energy, grid technology, biodiesel fuel development -- projects for the energy challenges both countries face.

[YONAH] I think both sides by themselves can't do what they can do together. You know.

[SUITERS] It's synergy.

[YONAH] It's wonderful synergy.

[SUITERS] A synergy that could include what's just below the surface of the Red Sea, off the coast of Eilat. Here, another Israeli energy innovation is beginning to take shape. And that shape looks something like a Lego.

[KOBI BIRNHACK] We are assembling here, inside, the tower and the wind turbine on top of it.

[SUITERS] Kobi Birnhack is one of the minds behind Ocean Bricks. These are just scaled-down models. The real things are giant cement blocks, hollow so they can float, big enough to support a wind turbine.

[BIRNHACK] Compared to the other systems, we've no need to use the big cranes, the big ships, expensive diving.

[SUITERS] Unlike wind turbines off the coasts of Europe or China, places where the turbines are attached to the sea floor, Birnhack says ships would tow the Ocean Bricks out to sea, wind turbines already in place.

[BIRNHACK] As I said, it's hollow inside. We open the valves here. Controlling by computer, of course.

[SUITERS] And down it goes.

[BIRNHACK] And down it goes on the seabed.

[SUITERS] And down there, once you plug in the turbines' transmission cables and the wind starts blowing, they start sending emission-free electricity to the power grid.

Six pieces like this are now sitting in the Red Sea.

[BIRNHACK] 50 meters from here.

[SUITERS] And those six Ocean Bricks are playing another environmental role. To see for ourselves, our "energyNOW!" team donned wet suits...

It's a little tight. In places I don't want to show on camera.

...and let ourselves sink into the Red Sea.

The submerged Ocean Bricks, they can become artificial coral reefs, potentially replacing some of the natural reefs lost to environmental changes. Birnhack's company planted these bricks about three years ago, and the marine life in this corner of the Red Sea really seems to like the idea.

Pretty cool.

Wind turbines embedded on those bricks -- for now they exist only in computer animation. But Birnhack has a vision, and it involves the United States. If offshore wind farms ever come to the U.S. -- right now we're still only in the planning stages -- Birnhack says Ocean Bricks will be the most cost-effective choice.

[BIRNHACK] Only to build one megawatt offshore, now price, the existing price, is around $6 million.

[SUITERS] And with your set, the price would be?

[BIRNHACK] We can cut the price about $3.5 million.

[SUITERS] Planting Ocean Bricks off the North Atlantic coast would be another example of the American-Israeli clean energy partnership.

[YONAH] Israel brings its innovation, its technology, its "thinking out of the box" ways. And the U.S. brings the ability to take those new technologies and bring them to market.

[SUITERS] Exactly what Daniel Farb wants for his other clean energy ideas.

[FARB] This foil shape here is meant to accelerate the wind coming into the wind turbine.

[SUITERS] Almost like a funnel?

[FARB] It's in a sense like a funnel.

[SUITERS] That's just a model. This is the prototype for his more energy-efficient wind turbine design, the "wind tulip," what Farb calls another example of Israeli innovation made for the U.S. market.

[FARB] In Israel, there's a very innovative way of thinking, which, to some extent, you have on the West Coast as well, but here I'd say it's more scientific innovation and it's more concentrated.

[TEXT ON SCREEN] To learn more about Israeli innovations, read Tyler's blog at energyNOW.com.

[SUITERS] And maybe more inspirational as well. Farb is already scouting locations for his Ben Katin turbines in Jerusalem.

[FARB] The holiness of the location helps inspire one to be more intellectually productive.

[SUITERS] And you're seeing the results so far?

[FARB] I hope so.

[SUITERS] In Israel, Tyler Suiters, "energyNOW!"

[ASSURAS] The projects you just saw are pretty much still on the drawing board but at least one other has already made it to the U.S. BrightSource Energy, a solar company operating in both countries, is building the largest solar plant in the world in California's Mojave Desert. It's modeled on a smaller version in Israel's Negev Desert and is backed by a $1.6 billion loan guarantee from the Department of Energy, the largest amount the DoE has awarded to a renewable energy project. It's the same Department of Energy program that backed failed solar panel maker Solyndra.

More on the Solyndra fallout a little bit later, but first, California is considered by many to be the nation's leading renewable energy state, and it's not just solar and wind. Companies there have been tapping power hidden below the ground for decades. Take a look at this energyTHEN from 1958.

[Film projector running]

[ANNOUNCER] This is one form of thermal, or heat, power. But this is in California, U.S.A., not Russia. In the Big Geysers area, 85 miles north of San Francisco, steam wells are test tubes for pioneering American attempts to tap heat and power that lie within the Earth for producing electricity. Completed wells are valved and the steam diverted to horizontal pipe to await connection with a mainline to a generator. Heat long trapped in the Earth may be one answer for a power-hungry world, where fossil fuels may run out.

[ASSURAS] Today, that part of the Mayacamas Mountains hosts the largest geothermal power complex in the world. It's home to 15 power plants owned by Calpine Corporation, which says those plants can generate enough electricity for 725,000 homes. Still, less than 1% of the electricity in the U.S. is geothermal, according to the Energy Information Administration.

Coming up, at one time, even geothermal was a far-fetched idea. Could some more radical thinking yield the solution to stopping climate change?

[SAMUEL THERNSTROM] If you could make these clouds denser, and therefore brighter, whiter, they would reflect more sunlight.

[ASSURAS] Geoengineering ideas that could help the planet, but are they worth the risk?

And how to pay for clean energy technologies that could also help the planet. Our guests mix it up over the impact of the Solyndra bankruptcy on clean energy investments.