The World's #1 Renewable Energy Network for News, Information, and Companies.

Clean Tech's Challenge of "The Disconnect"

Who's harder to educate, investors or politicians?

That was a question left on the minds of the 400 attendees at the eighth annual Clean-Tech Investor Summit, co-produced by Clean Edge and IBF, and chaired by Technology Partners’ Ira Ehrenpreis, on Feb. 1-2 in Palm Springs, California. In the wake of the 2008 financial crisis, government budget constraints at all levels, and the Solyndra bankruptcy fallout, the clean-tech industry continues to face a huge challenge of perception in the investment and political arenas. And in both financial markets and election campaigns, perception quickly becomes reality.

The clean-tech industry is growing up in a sound-bite, 140-character world that’s very easily exploited by forces that want to marginalize the industry for their own political or financial gain. So the “S word” Solyndra spooks policymakers and potential investors alike. In that skeptical and even hostile environment, companies seeking capital often feel like, in a great phrase from Morgan Stanley managing director Kevin Genieser, people “trying to sell great houses in really bad neighborhoods.”

But to me, the clean-tech industry is actually a really good neighborhood with some bad houses. Renewable-energy technologies are becoming more mature, reliable, scalable, and above all, affordable. Solar companies, for better or worse, know full well how plunging PV prices have affected their businesses in the last 18 months. A California Public Utilities Commission report released the day after the Summit revealed that renewable-power contracts offered to the state’s utilities last year were priced an average of 30 percent lower than in 2009.

And public support for clean energy is broad-based and deep, with poll after poll showing high numbers of Americans – across the political spectrum – in favor of increased R&D funding and deployment. In the latest example, a focus group of swing voters polled during President Obama’s State of the Union address rated his mentions of clean energy higher than any other issue except one: the death of Osama bin Laden.

Clean energy’s attributes – domestic energy supply, job creation, reduced pollution ­– are resonating with the public. But you wouldn’t know it from the current inaction/hostility in Congress, and that’s the political disconnect that was on the minds of Summit attendees. Clean tech “has been infected with the toxic political culture,” said conference chairman Ira Ehrenpreis, general partner at venture capital firm Technology Partners. The result? Among other effects, noted ARPA-E director Arun Majumdar, the U.S. has fallen to ninth in the world in clean-energy investment as a percentage of GDP.

No one had any easy answers on how to bridge this disconnect, particularly in an election year that has often given new meaning to the term “silly season” (two words: Donald Trump). But one tactic that could really help in the perception game is getting our politicians more educated about the massive amount of clean-tech deployment underway in the U.S. military. From biofuels-powered Navy destroyers to the largest-ever U.S. residential solar deployment project – SolarCity’s SolarStrong initiative on military housing – the Pentagon is emerging as one of the world’s biggest advancers of clean tech. Getting that message out would go a long way to thaw the cultural Cold War that slaps the liberal Democrat label on clean energy and the conservative Republican brand on fossil fuels.

On the investment side, innovators know all too well that game-changing technologies that challenge the status quo can be a tough sell. “It’s a very, very shallow pool of investors who really understand this space,” said Solazyme co-founder and CEO Jonathan Wolfson, whose algae-based biofuels company has seen its share price fall by half since its peak after a successful IPO in May 2011. “We think our technology is completely disruptive. But right now, we need to educate investors in what is still, despite all the Facebook IPO headlines, a pretty risk-averse market.”

In the Summit’s annual panel on the state of clean-tech exits, KeyBanc Capital Markets managing director Russ Landon pointed out that current high turnover among investment fund portfolio managers makes entrepreneurs’ and VC’s education challenge that much harder. “People new to the space are more likely to react to mainstream comments against clean tech,” he said. “And most clean-tech companies will always have two big hurdles to deal with that other spaces don’t – high capital requirements and policy/subsidies.”

It’s tough times in the trenches, for sure. But one great value of events like the Summit is the chance to step back and assess the big picture – the long-range view that transcends any particular quarterly report or election cycle. Since General Electric launched its Ecomagination initiative in the last decade, its commitment to clean and efficient technologies has never wavered – it has only increased. That’s in spite of the lack of a price on carbon that GE and many other large companies have aggressively sought. “We’ve been using the weapon of innovation to eliminate this concept of a false choice between economy and environment,” said GE’s Ecomagination VP Mark Vachon, the Summit’s closing speaker. “I know it’s been bumpy out there. But the need for these technologies is only going to increase.” In time, hopefully even investors and politicians can understand that.

Wilder is Clean Edge's senior editor, co-author of The Clean Tech Revolution, and a blogger about clean-tech issues for the Green section of The Huffington Post. His new book, Clean Tech Nation, co-authored with Ron Pernick, will be released in September by HarperCollins. E-mail him at wilder@cleanedge.com and follow him on Twitter at @Clint_Wilder.

RELATED ARTICLES

Rooftop Solar Panels

Hypocrisy? While Buffett Champions Renewables, His Company Fights Rooftop Solar

Mark Chediak, Noah Buhayar and Margaret Newkirk, Bloomberg Warren Buffett highlights how his Berkshire Hathaway Inc. utilities make massive investments in renewable energy. Meanwhile, in Nevada, the company is fighting a plan that would encourage more residents to use green power.
Japan Microgrid

Born from Disaster: Japan Establishes First Microgrid Community

Junko Movellan, Correspondent Although Japan's Fukushima prefecture is most commonly associated with the 2011 disaster due to the nuclear power melt-down, Miyazaki prefecture, located north of Fukushima, suffered from the largest death toll, close to 10...
Renewable Energy Finance

Clean Energy ETFs Are on a Tear

Eric Balchunas, Bloomberg Green investing used to be synonymous with losing money. But while the S&P 500 Index is up 2 percent this year, and the MSCI All-Country World Index is up 5 percent, clean energy ETFs have double-digit re...

Wheels, Towers and Trees: Unconventional Renewable Energy Technologies in the Pipeline

Andrew Williams, International Correspondent A number of companies around the world are developing novel technologies in an effort to grab a slice of the global renewable energy market.  Although many of these technologies are simple incremental improvements to e...

CURRENT MAGAZINE ISSUE

03/01/2015
Volume 18, Issue 3
file

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @megcichon @jennrunyon

FEATURED PARTNERS



EVENTS

Doing Business in Brazil – in partnership with GWEC, the Global Win...

Brazil is one of the most promising markets for wind energy.  Ranke...

EU PVSEC 2015 (European PV Solar Energy Conference and Exhibition)

The EU PVSEC is the largest international Conference for Photovoltaic re...

Using Grid data analytics to protect revenue, reduce network losses...

COMPANY BLOGS

EU PVSEC 2014: Call for Papers Receives Great Response

More than 1,500 contributions apply for presentation in AmsterdamScienti...

EU PVSEC 2014 extends its Scope

Added focus on application and policy topicsAbstracts for conference con...

Boulder County Residents Generate Their Own Energy with Community S...

Despite a soggy afternoon, solar energy advocates gathered at ...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS