03 March 2014

Coming Up: 6th Annual Mid-Atlantic Energy Tech Investment Forum

Six years. We've been running these cleantech and energy tech investment forums for six years. And by "we" I mean my co-founder of the Cleantech Alliance Mid-Atlantic, Kevin Brown of Hobbs & Towne, and me, along with our pal Tom Dwyer, who was part of the original team putting this show together.

Now Tom is at Pepper Hamilton, which joins us as co-sponsor this year, but we'll be at the same venue, as the past few years, the Academy of Natural Sciences in Philadelphia. Or as my kids used to call it, the "dinosaur museum."

This year, we've got another stellar line up, with keynote speaker Bob Inglisformer U.S. Representative for South Carolina's 4th Congressional District, who lost his seat to a tea-party challenger because of his outspoken free-market acknowledgment of climate change and support for green energy solutions. 

Bob went on the found the Energy and Enterprise Initiative at George Mason University, an independent think-tank devoted to promoting free enterprise solutions to climate and energy issues. In other words, he's one of the good guys and you won't want to miss what he has to say.

We'll also have an investor panel, featuring

    • George Coyle, Manager, Investments Technology Ventures, ConocoPhillips Company
    • Michael Smith, Vice President, Head of Constellation Technology Ventures at Exelon
    • Annie Theriault, Vice President, Northwater Capital
    • Tucker Twitmyer, Managing Director, EnerTech Capital

And, of course, our ever-popular company showcase and cocktails with the dinosaurs.

When: April 3rd, 2014, from 4:00 - 7:30 
Where: Academy of Natural Science, Philadelphia, PA 

Be there or be square. Here's how to register for the event: REGISTER

21 February 2014

My Key Take-Aways from the Cleantech Innovation Summit 2014

"There's more optimism than ever for cleantech,"according to Raj Atluru of SilverLake Kraftwerk. 

Atluru was speaking at the Cleantech Innovation Summit in Newport Beach, California last week.

His was not the only optimism to be heard on the dais, in the breakout rooms, and in the halls. In fact, it seemed optimism was at an all-time high after several years of a perpetual negativity death-spiral.

The optimism comes, in part, from the announcement of NEST's acquisition last month by Google for $3.2 billion. That certainly changed the mood. 

Yet also because there are other successes to point to, including Tesla -- whose stock surged in after hours trading on Wednesday after the company announced increased production of the Model S -- and Solar City and others that seem to be riding the current wave of good sentiment for the sector.

In addition, there is the growing understanding that we'd been talking about "cleantech" all wrong before. 

As Brook Porter of Kleiner Perkins said on his panel, "Cleantech is not a sector, cleantech is an attribute."

And that's exactly how others seem to be looking at it today. The buzzphrase at the Cleantech Innovation Summit was "Cleantech Done Right," rather than Cleantech 2.0.

"What Nest proved is that 'sexy' and 'cleantech' can belong in the same sentence," said Andrew Chung of Khosla Ventures. Tesla does too, with its emphasis on design, and making the best car possible, not just the best electric car.

Companies like Nest and OPower make energy data more personal, and as with Tesla, design and ease of use for consumers helps drive their success. But as much as it is about design, it is also about data.

And that points to a not-so-subtle shift in the way investors are talking about cleantech, if they're even mentioning the term. 

It's now all about big data, collaborative consumption, sustainability, waste-to-value, and food production. These are new cleantech investment areas and, as RockPort Capital's Abe Yokell said, "The data rich world of our future is ripe with investment opportunities."

Meanwhile, water issues continue to bubble-up as potential areas of risk and need, especially around shale gas development. Water recycling, reuse, and clean-up is all essential for companies focused on fracking for bountiful natural gas.

"We need to do more with less: less water, less trucks, less impact," said Steven Hall of Schlumberger.

Jeff Guild of BlueTech Research confirmed the need for investment in water, citing energy from wastewater, nutrient recovery, and reuse as key investment areas.

As for utilities, Thomas Brill of San Diego Gas & Electric suggested utilities need to look at how Canon addressed the challenge of digital photography versus how Kodak reacted or how Verizon pivoted from hard assets to wireless services. "There are lessons there for utilities," said Brill.

The challenges to big utilities from renewables appear to be very real and can no longer be ignored.

"Solar is freaking us out," said Colleen Calhoun of GE Ventures, "It is growing so fast, it is getting so big." 

Calhoun added that when she talks to GE's CEO Jeff Immelt, they talk about "solar, energy storage, and oil and gas -- drilling deeper, farther offshore."

A mystery remains about how energy storage will contribute to the mix, but Cheryl Martin of ARPA-E had some encouraging things to say about the agency's progress on that front.

"We're finally going to make grid-level storage a reality," Martin told the audience in her keynote.

And energy efficiency technologies -- beyond consumer solutions like Nest and OPower -- are increasingly gaining traction. 

"Building automation was a $35 billion business in 2012," according to Will Coleman of OnRamp Capital. "And it's only going to grow."

The question from a commercial building perspective seems to be how to replicate what Nest accomplished with design, user interface, and distribution. How does one translate that success to commercial buildings?

Having problems like that to solve are what leads to innovation, and perhaps that's another reason for investor optimism at the Cleantech Innovation Summit this year. 

22 January 2014

If I Could Speak at Davos: My Top 5 Reasons Cleantech Is Alive and Well

My colleague who posts as @EY_Cleantech had an interesting tweet this morning. She posited the question, If you could speak at the World Economic Forum on cleantech, what would you say?

Here is my answer.

Cleantech isn't dead. It hasn't crashed, hasn't lost its value, and has only grown more important and necessary.

Here's My Top 5 Reasons Cleantech Is Alive and Well:

1.) China. China is finally acknowledging and stepping up to the plate to address its outrageous pollution problem. China's air and water quality is breaking its ability to make progress. The Beijing Municipal Bureau of Environmental Protection estimates it will cost China upwards of $800 billion to clean its air. $800 billion. Beijing alone could cost as much as $163b. And its water doesn't fair much better: seventy percent of the groundwater in the north China plain is unfit for human contact -- not consumption, contact. And only half the water sources for Chinese cities are safe to drink. The Chinese government says it will commit 1.7 trillion yuan ($277 billion) to combat air pollution over the next five years, which is a start, but until then we'll keep seeing scenes like the LED sunrise on Tiananmen Square in Beijing.

LED sunrise on Tiananmen Square. Credit: ChinaFotoPress via Getty Images

2.) Google bought Nest for $3.2 billion. This is a cleantech success story. I don't care whether Nest Labs ever considered itself a cleantech company since its founding in 2011. If cleantech is the set of new technologies and business model innovations that help use natural resources more efficiently, effectively, and responsibly, then Nest, which took a ubiquitous, yet poorly designed technology (the thermostat), made it smart and fun to save energy in homes because its cool and easy to use. That is cleantech.

Nest thermostat. Photo: Nest Labs

3.) Solar, distributed solar. I know, solar was a dirty word for some investors, including the American tax payer, who got burned by solar 1.0. But there's a new game in town now that solar panels are cheap and financing distributed solar has become easier thanks to innovators like SolarCity, Sungevity, and the like. Installations are on the rise and investment is pouring back in.

4.) Tesla Model S. Motor Trend Car of the Year. 2014 Detroit News Readers' Choice Award as North American International Auto Show Most Innovative Vehicle. Yes, D-E-T-R-O-I-T News. Tesla recently announced it had sold 6,900 of its Model S in the fourth quarter -- twenty-five percent higher than the previous quarter and roughly twenty percent more than expected. And with work begun on the Model S sedan, which will sell for about half the $69,000 price tag of its big brother, Tesla is in line for growth and more growth. That's for a company with $21b market cap.

Tesla Model S. Photo: SEA

5.) Many more innovations are needed. Energy efficiency, recycling, water use, as well as purity and scarcity, and food are all ripe for cleantech disruptions, innovations, and solutions. There are still plenty of opportunities out there for entrepreneurs, investors, and others to tackle resource scarcity, use, and management. We've only just begun to address the issues our planet faces. And the need for innovative financing to enable these solutions is also going to grow. Call it what you will, "cleantech" is going to be a growth engine for many years to come.

That's what I would say if I could speak about cleantech at Davos.

21 January 2014

Can Crowdfunding Help Cleantech Ride the Big Data Wave?

"Big data is a coming wave of 'green gold,'" says Nick Eisenberger of Pure Energy Partners."Information technology will be the most powerful tool to address resource challenges in our lifetime."

Eisenberger was speaking at the Markle Foundation offices in New York, where Agrion, which bills itself as the global network for energy, cleantech and corporate sustainability, convened an impressive roundtable to talk about advances in funding new ideas and uncovering innovation for energy and sustainability.

Moderated by Peter Gardnet of Breaking Energy, the panel featured, in addition to Eisenberger, Benjamin Healey of Connecticut's Clean Energy Finance and Investment Authority (CEFIA), Richard Robertson, Solar Energy Business Development Manager with GE Ventures, and Dr. Jon Roberts of the Clean.Data.Project.

"Energy is where the most data is," said Clean.Data.Project's Jon Roberts. And the panelists agreed its where the most opportunities are in energy, improving its generation, use, and efficiency. Yet not all the necessary datasets are open.

"The biggest obstacle is generational," Eisenberger claimed. "The older generation, my generation, is not comfortable with the 'open' in open innovation."

Richard Robertson explained how GE Ventures has invested in Quirky, a crowdsourcing platform for inventors, and has turned to the crowd for help with design and product naming.

The innovation is out there, Robertson suggested. 

"Sungevity has an incubator in their Oakland facility, and Solar Mosaic [the crowfunding platform] is in that incubator,” said Robertson. “Mosaic is looking at not just solar projects, but wind, energy storage. They're putting projects in the ground." 

At least one audience-participant in the Agrion session, a project finance expert, called into question some of the deals Mosaic and others are funding and the stated returns listed on the Mosaic site. "We wouldn't fund those projects," he offered. "It's like charity."

But that's precisely the point made by Mosaic and others, such as alternative financing renewable energy companies SolarCity, SunRun, and United Wind, among others. They are there to fund the deals no one else will, deals that aren't big enough for the big banks, which is a pretty good sized niche.

That is, in fact, why these new models exist.

For those not familiar with the Mosaic model: projects are listed on its online marketplace, which allows investors pick projects to fund and then provide the capital for rooftop solar installations. The investors are repaid once the project is up and running and generating electricity. Their first projects were mostly on affordable housing in California.

The company provides capital to developers at about 5.5 percent and collects a 1 percent fee, according to some sources, returning roughly 4.5 percent.

“To rapidly deploy clean energy, the industry needs access to low cost capital and lots of it,” Mosaic co-founder, Billy Parrish, told Bloomberg News last year. “We are able to source capital from the crowd and lend that capital to clean-energy developers at lower interest rates than they would get from banks.”

Platforms like Mosaic, which seek a large, “democratic” community of engaged funders, as opposed to the elite accredited few, got a boost last year when the SEC released its proposed guidelines about crowdfunding as it relates to the Jumpstart Our Business Startups or JOBS Act.

If the admittedly hand-picked crowd at the Agrion session is any indication, crowdfunding is here to stay.

However, as several roundtable participants suggested, it may be best deployed as part of a mix of financing options.

25 November 2013

Number 9 Dream and a Note of Thanks to Readers

Nine years ago yesterday I wrote my first blog post here The Green Skeptic. Some 900+ posts later, my come more slowly and less frequently as other forms of writing and communication have usurped the blog's domination, but it's still chugging along.

As John Lennon sang in his song "Number 9 Dream" from his 1974 LP, Walls and Bridges:

"So long ago
Was it in a dream, was it just a dream?
I know, yes I know
Seemed so very real, it seemed so real to me..."

Nine years does feel like a dream. I never dreamed I'd still be publishing this blog nine years later, even on a less regular basis than some years.

A lot has changed in nine years, but one thing remains steadfast: my appreciation of you, my readers.

You come from 10 countries (according to Google Analytics), with the United States, France, and China topping the list, followed by the Ukraine, Germany, and Russia; then the UK, Belgium, Slovakia, and Hong Kong.

An eclectic list, indeed. If your country is represented or if it is not, please let me know.

Of the 940 or so posts I've written here (or at least since May 2007, when Google Analytics started tracking my posts) the most popular is one that I posted over three years ago on the World Economic Forum's Technology Pioneers. It's being chased by a couple of recaps from Cleantech Alliance events, my "Take-Aways" from the Aspen Environment and Global Philanthropy forums of a few years back, and book reviews for Amy Larkin's ENVIRONMENTAL DEBT and Mark Tercek's NATURE'S FORTUNE, posted earlier this year.

The inclusion of the last two posts on my all-time, top 10, leads me to believe you are still finding relevance in what I write here, which encourages me to keep going -- and perhaps to focus more directly on book reviews and lessons learned from events in the marketplace.

As The Green Skeptic starts its 10th year, I will keep in mind the words I wrote to mark our seventh year together, "I want to thank you again for reading. I hope to keep up my end of the bargain moving forward with good, informed writing about the issues, a healthy skepticism about both hyperbole and hysteria and, most of all, a respect for you, my readers."

Happy Thanksgiving (or "Thanksgivukkah," as we're saying this year).

"Ah! böwakawa, baby, poussé, poussé," as John Lennon sang it. (And if anyone knows what he meant by that phrase, I wish you'd post it in the comments!)

18 November 2013

Know Your Audience (and Its Bite Size), Say Corporate VCs to Cleantech Entrepreneurs

Grant Allen of ABB TechnologyVentures
"Get your stuff together before you meet with us," said Grant Allen of ABB Technology Ventures to an audience of entrepreneurs, investors, and corporate leaders gathered at the offices of Pepper Hamilton in Philadelphia last Thursday. "Do your homework. We're quite clear on our web site what we do. And make sure you have a crisp, compelling script, and a strong, committed management team."

This sentiment was echoed by Michael Smith, head of Constellation Technology Ventures at Exelon. "You need to know your audience," Smith said. "Talk to us like an energy company. We're looking for ways to keep Exelon relevant."

The event, "Energy Giants: Looking for Innovative Investments," was jointly sponsored by Pepper Hamilton and the Cleantech Alliance Mid-Atlantic, and featured Sumit Sarkar of NRG Ventures, in addition to Smith and Allen, on a panel that I moderated.
Michael Smith of Constellation
Technology Ventures

"Large companies aren't good at innovation," Allen offered, "our goal is to be a thorn in the side of internal R&D."

Sarkar suggested that the venture arms of corporations can sometimes be nimbler in response and are constantly scanning for technologies that offer improvements.

Each outlined what they look for in a company and how much they want to invest, their “bite size.”
There was, of course, some discussion about capital "light" companies or technologies, but given the range of their investment thresholds -- from $3M-$250M -- they understand the need for some capital outlay.

While traditional Venture Capital (VC) has been pulling out of the sector, corporate VC (CVC) has picked up some of the slack.

In 2012 for example, according to a recent study, of the total $6.46B investment in the sector, $2.7B came from corporates, up from $2.55B in 2010 and $1.7B in 2006. Q2 of 2013 saw CVC rise to 14% of total venture investment in the sector vs. only 8% in Q1. And 107 CVCs made an investment in the sector in the 1st half of 2013, versus 148 in all of 2012.

Sumit Sarkar of NRG Ventures
Corporate VCs are a little less risk averse than traditional VCs, in part because such companies are full of engineers who can scrutinize a technology's before an investment is made, but there seemed to be consensus that if the technology enables an existing technology perform better, it is going to be worth a look.

All three investors agreed that networking and investment pitch events can serve as a feeder for companies, but having an executive sponsor is best. 

The entrepreneurs in the room, representing everything from energy storage to software that helps increase the efficiency of long-haul truck drivers, seemed to nod in understanding or agreement.

At the cleantech CEO Retreat that I help manage for EY’s Global Cleantech Center this fall, a recurring meme developed around elephants dancing with mice. As small companies (the mice) began to dance with corporates (the elephants) either as strategic partners, customers, or investors.

Some of the concerns for the mice, obviously, were around how not to get crushed while dancing with elephants. But from the elephant side, how can mice get noticed and have something relevant to share?

Hopefully, the panelists at last Thursday’s event helped alleviate some of the stress between species on the dance floor.

(Disclosure: the author is co-founder of the Cleantech Alliance Mid-Atlantic.)