Cleantech VCs ready for 2008

According to the National Venture Capital Association (NVCA), VCs are going to continue to pour money into Cleantech areas beyond solar and biofuels. There will be consolidation, more venture-backed IPOs and an eventual over-valuation of the sector. See the NVCA Report.

Will the sector really become over-valued though? With global demand increasing everyday from the emerging market – notably the drastic increases seen in the middle classes of India and China – it is very hard to state exactly where an upper boundary exists. Growth these days is not limited to the US, but it is measured in a global framework that is only beginning to be defined by newer business trends and strategies.

Global warming and energy reserves continue to be an issue that becomes more evident everyday. Until realizable change is evident, the cleantech market will continue to grow and expand at obscene CAGRs. We are only at the dawn of a new era in renewable energy and cleantech; hang on for the ride.

Cleantech Jobs on the Rise

I am not surprised to read (Newsweek via MSNBC) that job opportunities are on the rise in the cleantech “green-revolution” sector. Notable niche areas mentioned include solar energy, biofuels. The article describes an upcoming trend:

Based on the flow of venture capital, K. R. Sridhar, CEO of the fuel-cell
start-up Bloom Energy, believes the clean-tech sector could produce 50,000 new
jobs by 2010. Peter Beadle, president of, cites estimates that the
solar sector alone could employ 2 million people by 2020.”

Interestingly, these jobs are geographically dispursed (across the US), unlike clusters of high-tech startups found in Silicon Valley during the tech boom.

From a finance perspective, analysts at Lux Research state that venture-capital investments in the clean-tech sector jumped from $623 million to $1.5 billion (2005 to 2006), led by solar power and biofuel.

Cleantech: Biodiesel, Solar and Wind

Some news today highlights Biodiesel, solar and wind technologies in the era of cleantech and renewable energy.

The first article discusses a study that was just completed in Ontario, Canada that analyzed the use of biodiesel as an alternative fuel source for agricultural use. This study, which was co-sponsored by the NRC, Environment Canada, Agriculture and Agri-Food Canada, the Ontario Soil and Crop Improvement Association, UPI Energy, and the University of Guelph, is hoped to accelerate the adoption of biodiesel use in on-farm applications across Canada. More at Evaluating Biodiesel Fuel For Tractors In Canada.

Solar power seems to still be behind in the race for the most cheap, and efficient technologies despite being around for a number of years. There are a few problems that need sorting out (listen here scientists, and business-types), “the development of complimentary technologies, in particular low-cost storage of electricity, is critical,” says Erin Baker, who is a scientist at the University of Massachusetts that led a USDoE study in the area. Baker’s other finding notes that government dollars won’t bring this technology to fruition along, and that private investment is needed in the manufacturing sector specifically; tax breaks, and public-private collaborations will also help to push this technology forward. The article “Cheap, Efficient Solar Power: What’s Needed Now To Get There? gives a great analysis that discusses the order of investment to develop solar tech:

  • Focus first on getting power from the new inorganic materials that show promise but are far from viable for large scale production
  • Then focus on purely organic cells with organic semiconductors; these hold the promise of low costs but still haven’t achieved high levels of efficiency and face serious stability problems
  • Last, investigate third-generation cells, which use entirely different technology but may ultimately yield much more power

Wind turbines are another fast-moving technology with much promise. So much so that Mitsubishi Ups Investment in Wind Turbines threefold to increase its wind turbine capacity to 1,200 megawatts / year by March 2009. As Paul Kedrosky points out, that is about two-thirds of what the city of Atlanta requires on a typical summer day.

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