Chief Blogger’s Favorite Cleantech Blogs

I’ve personally written hundreds of articles over the years.  I selected a few I thought were pretty timeless or prescient, and worth rereading:

What is Cleantech?  Always a good starting point:

or try, The Seminal List of Cleantech Definitions


The “Rules” in Cleantech Investing – Rereading this one after the cleantech exits study we just did, wow, was I on the money!


VeraSun IPO analysis – Read this carefully, I predicted exactly what would happen, and try the later version Beware the Allure of Ethanol Investing


Cleantech Venture Capitalists Beware, What You Don’t Know about Energy CAN Kill you – The title says it all.



Cleantech Venture Backed M&A Exits? Well, Yes, Sort of . . .

When people ask me, are investors making money in cleantech, I tell them yes, but not by whom or in what you thought they were.

Most of the analyses of cleantech exits do not differentiate for venture backed companies.  So we conducted our own study.

In the last 10 years,’s Cleantech Venture Backed M&A Exit Study shows a grand total of 27 venture backed cleantech deals > $50 mm.

All in all, very tough returns.   A number of 8 to 10 figure fortunes made, just laregly not by the investors spending the 9 and 10 figure investments.

19 where we had data on both exit values and venture capital invested, 8 where we had revenue estimates.

We found a 2.78x Median Exit Value Multiple on Venture Capital Invested

– Those exit numbers include the founders and management’s shares, so average returns to investors would be somewhat lower.

We found a 2.2x Median Exit Value Multiple on Revenues.

$13 Billion in total M&A exit value.  Not bad, until you realize that’s over 10 years where cleantech has seen tens of billions in investment, and we used a pretty broad definition of “venture backed”.  To get there we included Toshiba’s Landys+Gyr, Total’s Sunpower, EDP’s Horizon and ABB’s Ventyx deals.  Those are the top 5 deals by value, and represent 60% of the $13 Billion.  None were backed by investors you would normally think of as cleantech venture capital powerhouses (Bayard Capital, Cypress Semiconductor, Zilkha and Goldman Sachs, Vista Energy).  Three of them included prior acquisitions themselves.

Excluding those and looking at only the transactions where we had both valuation and exit data we found and even weaker $3.8 Billion on $1.8 Billion in venture capital, 2.1x.

Most surprising, if you looked at the list of investors in these Nifty 27 exits, you’d have heard of very few of them.  This is truly not your father’s venture capital sector.

The exits have a surprisingly low tech flavor, and were carried by renewable energy project developers, ESCOs, and smart grid, and solar balance of system manufacturers.

If we had limited this to Silicon Valley venture investors in high tech deals, well, you’d have wondered if M&A were a four letter word.

Interesting, isn’t it?  Contact me at with any questions or if you’ve got deal data you’d like to see included.

David Anthony’s Last Question – Can We Power the US Solely off of Solar?

By Tao Zheng, with David Anthony, an active cleantech venture capitalist, who passed away in April 2012.

 The sun is the champion of all energy sources, in terms of capacity and environmental impact. The sun provides earth with 120,000 terawatt (TW) energy, compared to technical potential energy capacity of single digit TWs from other renewable sources, such as wind, geothermal, biomass and hydroelectric. More energy from the sun hits the earth in one hour than all of the energy consumed on our planet in entire year. In the last blog, we estimated that the technical potential of electricity generation from rooftop photovoltaics (PV) can take over 1/3 of U.S. electricity consumption demand. The next question is: can we power the U.S. solely by solar energy, technically? The answer will rely on development of utility-scale solar farms and energy storage solutions.

Assuming the rest 2/3 of U.S. electricity demand can be fulfilled by utility-scale PV solar farms, we can estimate how much land required to install such solar farm systems. The total U.S. electricity demand in 2009 was 3,953 TWh with 1% annual growth projection in next 25 years. Two third of U.S. electricity demand is about 2,635 TWh. The PV power density is calculated with a weight-averaged module efficiency using market share for the three most prevalent PV technologies today: crystalline silicon, cadmium telluride, and CIGS. The resulting PV power density is 13.7 MW/million ft2, assuming an average module efficiency of 18.5% in 2015. If we assume 10 hours/day and 200 days/year with sunshine, the annual available sunshine time is 2,000 hours. The total land required for solar farms to generate 2,635 TWh, can be calculated as:

Total Land Required = Total Energy Generated / PV power density / Annual available sunshine time

                                 = 2,635,000/13.7/2000 = 96.2 ×109 ft2 = 8,937 km2 @ 100 × 100 km

Therefore, to generate energy equivalent to 2/3 of U.S. electricity demand, we need to install solar panels in a tract of land with size of 100 by 100 km, the area about 0.1% of U.S. land. Technically, to provide electricity for entire U.S. demand, we only need to cover PV-accessible residential and commercial rooftop with solar panels and install solar farms in desert area equivalent to 0.1% U.S land. In addition to rooftop and desert, there are many opportunities for installing PV on underused real estate, such as parking structure, airports, and freeway margins. PV can virtually eliminate carbon emissions from the electric power sector.

In comparison, Nathan Lewis, professor at Caltech, predicted a solar farm with land size of 400 by 400 km to generate 3 TW energy to power entire America. The represented area is about 1.7% of U.S. land size, comparable to the land devoted to the nation’s numbered highways. As shown in Figure 1, the red square represents the amount of land need for a solar farm to match the 3 TW of power demand in the U.S. Of the 3 TW energy, only 10% represents electricity demand, and the rest represents other energy needs, such as heating and automobile. Thus, Lewis’ calculation is consistent with our estimation: 10,000 km2 solar farms can generate enough electricity to fulfill 2/3 U.S. demand.

Figure 1. Solar Land Area Requirement for 3 TW Solar Energy Capacity to Power Entire U.S. Energy Demand. (Source: Prof. Nathan Lewis group at Caltech).

One of big challenges using solar to power U.S. grid is intermittency of sunlight. Solar energy is not available at night, and the variable output of solar generation causes voltage and frequency fluctuations on power network. Energy storage technology can smooth the output to meet electricity demand pattern. There are many grid energy storage technologies, from stationary battery to mechanical storage methods. Pumped hydro technology is clearly a better choice for solar energy storage, due to its high energy capacity, low cost, and public safety assurance.

For solar to have a dominant role in the electric power generation mix, in addition to power storage infrastructure, upgrading America’s transmission grid is required. In contrast to traditional electricity generation, solar power collections are distributed across numerous rooftops or centralized in utility-scale farms. Distributed solar requires grid operators to install smart grid technology to monitor power supply and demand and balance thousands of individual generators with central power plants. The current century-old transmission grid needs to be upgraded with high-voltage lines to carry electricity from remote solar farms to consumers. The American Recovery and Reinvestment Act (ARRA), signed into law by President Obama in 2009, has directed $40 billion to accelerate the grid infrastructure transformation.

The U.S. photovoltaic market has been growing quickly in recent years. In 2010, the U.S. installed 887 megawatts (MW) of grid-connected PV, representing 104% growth over the 435 MW installed in 2009. Current trends indicate that a large number of utility-scale PV power plants are in the south and southwest areas, such as in the sunny deserts of California, Nevada and Arizona. For example, the Copper Mountain Solar Facility in Boulder City, Nevada, is one of the U.S. largest solar PV plants with 48 MW capacity, as shown in Figure 2.

Figure 2. One of the U.S. Largest Solar Plants, the Copper Mountain Solar Project with 48 MW photovoltaic in Boulder City, Nevada.

Historically, solar PV deployment has been limited by economic factors, since solar energy is too expensive to compete with traditional fossil fuels, due to lack of economies of scale. However, the cheapest solar cells are now being produced for as little as 70¢ per watt. They are selling for about $1.26 per watt, with prices expected to drop to $1.17 next year. Most anticipate the price of solar module, such as thin film, will hit 50¢ per watt within four or five years. First Solar, the world’s largest maker of thin-film solar panels, has told investors that production costs will range between 52¢ and 63¢ per watt by 2014. When companies can produce solar photovoltaic modules for less than 50¢ per watt, solar energy will reach grid parity. Grid parity refers to the point at which the cost of solar electricity rivals that of traditional energy sources, such as coal, oil, or nuclear. The solar module price drop is driven by cheaper manufacturing costs, lower costs for such crucial raw materials as silicon, and rapidly improving technology. A recent study even claims solar grid parity is already here today, based on a legitimate levelized cost of energy (LCOE), calculated the cost in $/kwh. The value of LCOE is determined by the choice of discount rate, average system price, financing method, average system lifetime and degradation of energy generation over the lifetime. Figure 3 illustrates the effect of initial installed cost and energy output on the LCOE value. For a PV system with production cost at $0.5/W, the initial installed system cost will be $1.5-$2/W, after considering labor cost and module margin. If we assume energy output is 1500 kWh/kW/yr, which is reasonable in south west area in the U.S., the LCOE value in Figure 3 will fall in the range between $0.06/kWh and $0.08/kWh, the lower side of grid parity value for the U.S. residential electricity rates range.

Figure 3. LCOE contours in $/kWh for solar PV systems for energy output versus initial cost of the system for a zero interest loan, discount rate of 4.5%, degradation rate of 0.5%/yr and 30 year lifetime (Courtesy of Prof. Joshua Pearce at Queen’s University)

Based on the analysis above, it is reasonable to believe we can power the U.S. electric grid solely by solar PV, technically and economically. Thomas Edison had a great quote on solar energy: “We are like tenant farmers chopping down the fence around our house for fuel when we should be using Natures inexhaustible sources of energy — sun, wind and tide. … I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.”


David Anthony was the Managing Director of 21Ventures, LLC, a VC management firm that has provided seed, growth, and bridge capital to over 40 technology ventures across the globe, mainly in the cleantech arena. David received his MBA from the Tuck School of Business at Dartmouth College in 1989 and a BA in economics from George Washington University in 1982. David passed away in April 2012. 

Tao Zheng is a material scientist in advanced materials and cleantech industry. He held 20+ patents and patent applications, and published many peer-reviewed papers in scientific journals. Tao Zheng received his B.S. degree in polymer materials sciences from Tsinghua University in China, and a Ph.D. degree in chemical engineering from University of Cincinnati. He obtained his MBA degree with distinction in finance and strategy from New York University, Stern School of Business, where he was designated as “Stern Scholar” and received “Harold Price Entrepreneurship Award”. 

Wanted: Chinese cleantech capital and connections

With the emergence of China as the globe’s cleantech powerhouse (see Why China has already overtaken the U.S. in cleantech), it’s become fashionable for cleantech companies with products to sell to target China seeking large purchase orders.

What’s not been so popular is to go to China seeking investment capital.

We and a handful of companies did both last week. And we learned a bit about the current state of cleantech in China in the process.

The latest installment of the Northern Cleantech Showcase, Kachan’s event series that matches leading cleantech companies with investors and large enterprises around the world, presented seven of the most interesting Canadian cleantech companies seeking linkages with China to teeming invitation-only rooms in Beijing and Shanghai. But more on that in a moment.

Venture alive and well in China
Why go to China for capital? Selling into China makes sense, but equity investment? While not yet a genuine nexus of VC like North America or Europe, there’s been a potentially important upswing in cleantech venture capital deals in China in recent months.

Industry observers take note: At $176 million as tracked by cleantech data provider the Cleantech Group, more cleantech venture capital was invested in China in the second quarter of 2011 (the latest quarter for which numbers were published as of this writing) than any other country except the U.S. This is potentially significant, as China has historically trailed as one of the least active jurisdictions for cleantech investment since the category’s inception in 2002.

That said, quarterly analyses should always be taken with grains of salt—as one or two quarters do not always meaningful trends make—but China, in this latest quarter, dramatically pulled ahead of Canada and the U.K., traditionally strong countries after the U.S. So it was timely that we were in China asking for money.

Cleantech Venture Investment by Country Q211

Source: Cleantech Group

The rise of Chinese corporate capital
Venture capital aside, in the two years since I last visited mainland China, another dramatic change seemed the level of interest from state-owned and other businesses in clean technologies. It’s indicative of China’s new green order: the country’s latest five year plan places a strategic emphasis on clean and green technologies as a cornerstone of China’s economic growth and improvement in standard of living. And what its five year plan articulates, the country implements. Fast.

For instance, China’s ENN—the largest private clean energy solution provider in China, which sent someone to meet our Northern Cleantech Showcase companies—just announced that it intends to invest $8 billion in clean energy overseas in the next decade. That’s one company earmarking eight times the amount the Canadian government (through its arms-length cleantech investor SDTC) has committed for venture-style investment into cleantech innovation. Other state owned enterprises sent people to meet with our companies. Corporate China has been told to get into cleantech, so expect it to do so in a very big way, very quickly.

It’s easiest to appreciate just how fast China can react to central government decrees by comparing before-and-after pictures of places like Shanghai.

Shanghai skyline

In only twenty years, Shanghai transformed into a decidedly vertical city. Consider the investment of power, petroleum, materials, capital and human effort required.

Cleantech companies featured in China
I was in China last week presenting seven companies selected by a jury of partners and venture capitalists. In some cases, the companies were seeking investment. In others, they sought joint ventures and partnerships. Having done cleantech business in China for many years, we invited appropriate investors, state-owned enterprises, multinationals, potential joint venture partners and others most likely to propel our delegate companies. And like our last event to the Bay Area (see Seven cleantech companies Silicon Valley just learned about), the formula worked; the presenting companies got quality leads.

Northern Cleantech Showcase Beijing China 2011

Attendees in Beijing listen to pitches from 7 innovative cleantech companies at the Northern Cleantech Showcase at Ernst & Young’s offices. More photos from the event on Kachan’s Facebook page. Like our page and follow us.

In alphabetical order, companies that presented at Northern Cleantech Showcase China 2011 included:

Delaware Power Systems: Technology for EV and PHEV battery systems – Electric vehicles require advanced battery systems to provide reliable power. Delaware is focused on developing scalable smart battery modules for EVs. Its technology promises to make EV battery systems safer, more reliable and last longer while reducing cost.

EnerMotionWaste heat recovery from vehicle engines – EnerMotion improves energy efficiency in current and future vehicle technology, provides environmental benefits, maximizes existing transportation infrastructure and offers a fast payback for customers.

EnovexCarbon capture with lower capital cost and energy requirement – Today, the best carbon capture solutions impose 30-35% energy penalties on power plants. Enovex has developed a system only requiring half that, and has attracted interest from large energy companies.

Eve Innovations: Coal-like fuel replacement from waste – By converting almost all organic waste to a commercial fuel product for industrial or retail markets, Eve Innovations removes the need to dispose of the waste, thereby reducing costs and logistics involved with waste disposal.

exchangenergy: Geoexchange expertise – exchangenergy designs and installs high efficiency and site specific geoexchange and geothermal systems. The company is seeking international expansion into China, offering project and international best practice expertise for residential developments.

Remco Solid State LightingPower & thermal breakthrough for high power LED lighting – Key barriers have held back the use LED lighting for high power lighting applications. Remco has developed and patented technologies aimed at power control and thermal management. The company’s LED street light tests suggest it can reduce street light electrical energy consumption by up to 70%.

VizimaxAutomation systems for power grid modernization – Vizimax’s products help the electric grid reduce network outages by automating substations and the interconnection of renewable energy to the grid. Customers include Siemens, Alstom Grid, Schneider Electric, National Grid, NYPA, PowerGrid of India and others.

Leading Chinese VCs attended the Northern Cleantech Showcase presentations, and presenting companies were well received. “The presentations were informative and we made connections to interesting new companies,” said Qiyong Cao, director of research for leading Chinese cleantech venture investor Tsing Capital.

Delegate companies were awed by the scale, speed and commitment in China for embracing clean and green products and services. “Where North America has subdivisions of single family homes, Beijing and Shanghai have built subdivisions of high-rises,” noted Jeremy Jacob, CEO of Vancouver-based exchangenergy, seeking to share his company’s experience at the Showcase in building high end geoexchange systems.

Beijing NCS China 2011 networking

Attendees network with presenting companies at Northern Cleantech Showcase presentations in Shanghai. More photos from the event on Kachan’s Facebook page. Like our page and follow us.

The Northern Cleantech Showcase China 2011 events were produced with the support of Ernst & Young, the Greentech Exchange and Jiaxing Xiuzhou New Area—the business development arm of a new business park in Jiaxing, a city just southwest of Shanghai.

Jiaxing officials took Northern Cleantech Showcase delegates on a tour of the area, impressing them with logistical prowess and commitment to manufacturing scale. Large companies like ProLogis and Wal-Mart chose the Jiaxing area for distribution centers because of rail, highways and deep sea port connections.

Cleantech companies like Silicon Valley’s Sunpreme are choosing the area because of significant labor, tax, rent and facility incentives aimed at cleantech companies. And, of course, then there’s what’s increasingly referred to as “Chinaspeed”: Northern Cleantech Showcase delegates toured a Sunpreme factory in Jiaxing that had been assembled from scratch less than 5 months from when the company’s contract had been signed in April. Delegates couldn’t believe that the factory, with its spotless, polished floor and freshly painted offices, had just been built.

More information on Jiaxing’s Xiuzhou business park can be found here.

We’ve posted more photos from the Northern Cleantech Showcase China 2011 on Kachan’s Facebook page. Like our page and follow us. Or you can follow us a number of other ways here.

Originally published here. Reproduced by permission.