Investment is down, new capacity is up, and negative press has everyone twisted and turned around—it’s been a roller coaster ride for the cleantech industry.
That ride’s not likely to stop any time soon, from what I saw last week at the National Renewable Energy Laboratory’s annual industry growth forum, an event that brought together about 400 entrepreneurs, investors, researchers, and analysts.
Cleantech companies and investors have taken a beating over the past few years, both in the market and in the media. Global clean energy investment dropped almost 11 percent in 2012, to $269 billion, according to Bloomberg New Energy Finance. In the U.S., the drop was even sharper, with investment falling 37 percent to $35.6 billion.
And while no one I heard from at the conference denied the industry was at a bad place in the hype cycle, some did find sources of cautious optimism.
One is the continuing increase in global renewable energy generating capacity, which grew about 17 percent to 91.1 newly installed gigawatts in 2012.
According to a report from the global consulting firm EY, the combination of decreased investment and rising capacity should be interpreted as a sign that money is going farther, with less capital needed to complete wind and solar projects.
And according to Bloomberg, 70 percent of new generating capacity added between today and 2030 will be renewable.
Keynote speaker Ira Ehrenpreis, a Tesla Motors director and general partner at the venture capital firm Technology Partners, offered an intriguing perspective on this mixed picture when he said the tough times had purged the “tourists” looking for a quick score from the industry.
“We’re at the onset of a movement, the beginning of an era, at the forefront of a century of innovation,” Ehrenpreis said. “But we’re also at a time when others don’t see what we see, this great opportunity before us. Ironically, that may be the greatest opportunity of all.”
Here are some additional notes from the conference.
A New Equilibrium May Be in Sight
There’s no denying the economics of cleantech have changed dramatically in the past two or three years, with ramifications for everyone in the industry, especially in the U.S.
Entrepreneurs face a situation where multimillion-dollar government grants and loans are harder to come by. And the big investments in the tens of millions from VCs for unproven technology are long gone, according to Tim Woodward of Prelude Ventures, which makes seed and early stage investments.
That’s upended the industry’s way of doing business.
“What’s fundamentally changed over the last five years is the idea you’re going to invest hundreds of millions of dollars to get to the point where you’ve finally proven the technology works and then build a factory,” Woodward said. “That dog doesn’t hunt at all, and those types of projects will just never, ever get funded again. There were just too many
