Is the Sky Falling for Cleantech Investment?

As Henny Penny cried, "The sky is falling, the sky is falling."

And to look at the latest report on quarterly cleantech venture investment released last week by Cleantech Group, one might think the same is true for this sector.

"Measured by dollars invested, cleantech venture investment fell 14 percent compared to the previous quarter ($1.88 billion) and was off 25 percent from 2Q11 ($2.15 billion),” according to the Cleantech Group. “The number of deals recorded in 2Q12 was 155, compared to 197 in 1Q12. The tally may rise again once all investors have reported all deals."

But does it really mean the sky is falling?

“Despite headwinds facing the sector and global economic instability, we continue to observe top tier funds such as Khosla Ventures, Kleiner Perkins, NEA, and others actively investing into cleantech,” said Cleantech Group CEO Sheeraz Haji in a press release. 

“While some may be ducking ‘cleantech’ as a label in North America," Haji noted, "growth in technologies addressing resource and energy challenges remains strong and both corporate and investor interest remains high.”

"The dip in cleantech venture capital this year is not unexpected," Dallas Kachan of Kachan & Co., wrote in an email to me last week. "We forecasted a decrease in cleantech VC in 2012 due to a tightening in the investor fundraising climate, waning policy support in the developed world, perennial concerns about IRRs in cleantech and macro-economic turbulence and other factors.”

Another factor may be that investors who were dabbling in cleantech the past couple of years have fled the sector, which may have artificially inflated the numbers in previously quarters and years.

I've also been hearing from several investors and entrepreneurs with whom I speak to regularly, that there's still an overall belt-tightening in the investor world.

Other investors may not be convinced the sector will thrive without a carbon price, which we won't see any time before the November election -- if then!


The news isn't all grim, however, and venture capital is not the only money in the sector.

Increasingly, big companies are filling the gap from the venture community and those firms that are in it for the long haul are making follow-on investments. 

"The largest companies in the world are buying their way into clean technology markets," Kachan noted in the same email exchange, "supplementing the role of traditional private equity and evidencing a maturation of the cleantech sector. A decrease in venture is being made up for by a rise in corporate involvement in cleantech."

Still, there has been a shakeout in cleantech companies as subsidies get pulled and follow-on money ceases its flow.

"A lot of cleantech startups have been getting shaken out and will continue to do so," wrote Rob Day in his excellent take on the Cleantech Group findings.

Day also noted some positive news, however, that Limited Partners (LPs) "finally appear to be slowly getting   back into the habit of funding cleantech venture capital firms. So I think we'll see a pickup in deal flow in the second half of the year. But probably not enough to forestall the ongoing shakeout."

As Day and others have noted, deal counts may be more indicative than dollars when it comes to judging the overall health of investing in the sector.

The top two sub-sectors in terms of deal counts in the Cleantech Group report? Energy efficiency and water.

How to Save a Planet - On a Budget: New ebook featuring The Green Skeptic

My insights on cleantech investing are featured in a new ebook from The Energy Collective. How to Save a Planet - On a Budget. 

Built from the webinar we did last November, the book offers insights from over a dozen experts in the field and includes pertinent information for companies, investors, and clean energy advocates. 

The book asks the critical question, How can we drive progress to a clean energy economy when governments are broke and investment is scarce?

My thoughts can be found in Chapter 3, "The Changing Shape of Clean Tech Investment."  

Download it free here: How to Save a Planet - On a Budget

For those concerned about the planet’s well-being, it’s one of the crucial questions of our time, one that may have implications for our environment for generations. In a time of financial scarcity, our goal at TheEnergyCollective.com is to figure out how companies and governments can shift to greener, cleaner consumption of energy, and, most importantly, how they will pay for the infrastructure projects that are essential to limiting our output of climate change-causing greenhouse gases.

To that end, we conversed with a diverse group of experts and examined case studies that describe viable solutions to our climate crisis in the midst of an economic crisis. We hope this content will be of interest to energy professionals looking to learn about where the industry is going, those in cleantech interested in financing solutions, those in government hoping to improve local infrastructure, and advocates, journalists, policymakers and policy wonks looking for the latest insight on market solutions to climate problems. 

We cover:

• Paying the true cost of energy through carbon pricing
• Can carbon markets drive green innovation and infrastructure?
• Public-private cooperation for a greener economy
• The economic case for green infrastructure
• Cleantech startups and the venture capital funding climate
• Federal policy and cleantech

Featuring Input from:

• Gernot Wagner, Environmental Defense Fund
• Marc Gunther, FORTUNE
• Jesse Jenkins, Breakthrough Institute
• Will Coleman, Partner, Mohr Davidow Ventures
• Thiemo Gropp, co-founder, DESERTEC Foundation
• Andrew Carman, Head of Americas for Project & Structured Finance - Infrastructure, Cities & Industry, Siemens Financial Services, Inc.
• Jo Danko, Global Director for Sustainable Solutions, CH2M HILL
• Lucas Merrill Brown, Rhodes Scholar, Oxford
• Kirk Edelman, President and CEO, Siemens Financial Services U.S
• Lane Burt, Technical Policy Director, USGBC
• Lee Thiessen, Executive Director for Climate Change Policy and British Columbia’s Climate Action Secretariat
• Janet Peace, VP of Business and Markets Strategies, C2ES
• Dan Shugar, CEO, Solaria
• Scott Edward Anderson, founder, VerdeStrategy

Download it free here: How to Save a Planet - On a Budget

Baby You Can Drive My (Electric) Car - EVS26

Electric vehicles have come a long way since the days for the botched EV-1 experiment of the 1990s. 

Fisker Karma

Formerly considered tin cans without much oomph or sex appeal, EVs took a back seat to the more trendy hybrids (Prius) and powerful SUVs.

Yet, if this year's EVS26 at the Los Angeles Convention Center proves one thing to me it's that electric vehicles range from the sexy sports cars (Fisker Karma and Tesla S) to a rather sedate sedan from Coda Automotive.

In between are new arrivals, such as Lexus and Lotus, and major players like the Nissan Leaf and Chevy Volt.

Trucks and motorcycles, too, including the improbable, gorgeous Siemens Smart Chopper, were well represented, along with personal mobility devices such a GM's EN-V and a proliferation of electric bicycles.

There was not much in the way of fleet vehicles at this year's EVS, certainly not compared to when the show was in Shenzen, China, according to some. But we know from talking to several at the show that partnerships with FedEx, UPS, and companies like PepsiCo loom large in the sector.

Charging technologies were heavily represented, including a few wireless options.

The trouble with electric vehicles, however, is their reputation as de-featured, boring, and even unexciting. What gets lost, according to acolytes, is that these cars are fun to drive.

Drive a Nissan Leaf or a Chevy Volt, and I have to agree: they are boring. Why? Because they drive just like a regular car, a little quicker pick up at acceleration perhaps, but essentially you're driving a comparable internal combustion engine vehicle made by Nissan or Chevy.

Siemens Smart Chopper

Okay, there is an on/off button like the one on your computer, but it's not very different from their other offerings.

The Tesla and Fisker and Remy, as well as the Qualcomm-Halo-sponsored racing car, however; now, you're talking something that will give your heart a little race.

A few take-aways from the show:

1.) We've got a loooong way to go before mass adoption of these vehicles will happen.
2.) There are more entrepreneurial charging methods/technologies out there than will likely survive, and
3.) The "cool factor"/fun to drive conundrum must be addressed if we're ever going to get the public to switch to EVs.

Finally, things like range anxiety, cost, and perceived risk are still all very real obstacles to widespread public adoption.


But make them fun to drive and we will drive.

Why Can't Water Get No Respect?

Matt Damon with Water.org CamelBak Groove bottle 

We take it for granted, yet we can't live with out it. We are made of water -- more than 60 percent water.

But so is the clothing we wear and the food and drink we consume.

Think about it. A pair of stonewashed jeans takes roughly 500 gallons of water, including growing, dyeing and processing the cotton. A t-shirt? 700 gallons. The cup of coffee I'm drinking as I write this? 35 gallons. A pint of beer? 20 gallons. 


Over 130 gallons of water to make a 2-liter bottle of soda (not sure if that counts making the bottle itself); and that hamburger adds another 630 gallons.


Pretty twisted, huh?

According to water.org, the average American uses 176 gallons of water per day compared to 5 gallons of water the average African family uses each day.


That five-minute shower my teenage son takes uses more water than the average person in a developing country slum uses for an entire day -- if they can get access.


Last night, water.org received the World Social Impact Award from the World Policy Institute at its 50th Anniversary celebration.

Those of us in the audience were grouped by issues and asked to get into dialogue with our table mates. I sat at one of the water tables.

We were led in our discussion by Sanjay Bhatnagar of WaterHealth International and Dr. Upmanu Lall, the Alan and Carol Silberstein Professor of Engineering at Columbia University and director of the Columbia Water Center.

Our table quickly came up with a critical question: Why can't water get no respect?

Water is the Rodney Dangerfield of natural resources. And yet it's critical to our lives and livelihoods; indeed, our very survival depends on it.

We didn't have any answers, other than the usual fact that water isn't priced appropriately and it is relatively abundant. Perhaps we need price signals like we have for oil that tell us how much our water actually costs, one of our group suggested.

Dr. Lall shared with us some research he's privy to concerning a technology that may solve the production of clean drinking water. But our group was pretty clear that access will continue to be an issue that we need to address.

And that's why organizations like water.org -- although they may be just a drop in the bucket of needs -- are so important and deserving of recognition.

Earth Day 2012: Maya Lin's "What Is Missing?"

Maya Lin and me discussing "What is Missing?" in 2008.

A few years ago, Maya Lin told me about her plans for a "last memorial," an ongoing, multimedia, multi-site project that unfolds every Earth Day. 

She calls it "What is Missing?" 

I wrote about one component, "Unchopping a Tree," back in 2009.

Another component is a global online memorial that Lin hopes will "connect us personally to what we are witnessing diminish or disappear from nature, in the hope that raising awareness about these poignant stories of loss will help spur action."

Last year, she quietly launched phase one: a Map of Memory. But, as Maya says, "to focus only on loss was too depressing, which is why we waited until this Earth Day to go public." 

The second phase is called Conservation in Action and features stories about ecological restoration and conservation around the world. 

On the site viewers can learn what is being done by conservation groups to protect what is missing before it is missing, including partners such as  Cornell Lab of Ornithology and World Wildlife Fund. 

"We are here to give people hope that so much is being done to help," says Lin.

Yesterday, Maya sent around a helpful guide for using the site:

Click on Time Travel  to go between map of past (the Map of Memory) and the present (Conservation in Action).  

Check out View in Time and View in Place  and see what happens.  

Then select Sort   to better understand the content.(On the Map of the Present, Red 's and green 's highlight conservation successes and disasters) we also allow you to see all the Core Videos we have produced. Those Core Video dots have a sound rollover. With over 600 historical entries on the Map of Memory, you can learn about what the world used to be like from an environmental standpoint.

Lin also wants this to be a truly interactive memorial, where you can add your own memory of what is missing for you -- a place that was important to you that is now paved over or a species that meant a lot to you that is no longer found where you remember it being. She also wants to know about the work you and others are doing to help save or restore a place that's important to you.

"What Is Missing?" Screenshot

Throughout her career, Maya Lin has challenged us to look at the world differently. Her art and architecture often use elements of the natural world to shake up our perception of what is around us. Her memorials have changed the way we think about memorials and how we interact with them and with our memories.


With "What is Missing?" Lin challenges us again to think differently about our relationship to the Earth and the species with which we share the planet.


This Earth Day, take stock of what is missing and spend some time on "What is Missing?" contributing your own memories.

Why Cleanweb Will Beat Cleantech

Blake Burris and my friends at Cleanweb Hackathon have created an excellent primer on "Why Cleanweb Will Beat Cleantech."

Have a look:

Why Cleanweb Will Beat Cleantech

View more presentations from Blake Burris

You might also enjoy the narrated version of the deck on YouTube by @cleanwebvc: CleanWeb