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Stunning Cleantech 2012

It’s been a busy, ummm interesting year.  We’ve tracked profits to founders and investors of $14 Billion in major global IPOs on US  exchanges and $9 Billion in major global M&A exits from venture backed cleantech companies in the last 7-10 years.  Money is being made.  A lot of money.  But wow, not where you’d imagine it.

5 Stunners:

  • Recurrent Energy, bought by Sharp Solar for $305 mm, now on the block by Sharp Solar for $321 mm.  Can we say, what we have here gentlemen, is a failure to integrate?  This was one of the best exits in the sector.
  • Solyndra Sues Chinese solar companies for anti-trust, blaming in part their subsidized loans????????  Did the lawyers miss the whole Solyndra DOE Loan Guarantee part?  It kind of made the papers.
  • A123, announced bought / bailed out by Chinese manufacturer a month ago, now going chapter bankruptcy and debtor in possession from virtually the only US lithium ion battery competitor Johnson Controls?
  • MiaSole, one of the original thin film companies, 9 figure valuation and a $55 mm raise not too long ago (measure in months), cumulative c $400 million in the deal, sold for $30 mm to Chinese Hanergy just a few months later.  (Not that this wasn’t called over and over again by industry analysts.)
  • Solar City files for IPO, finally!

 

My call for the 5 highest risk mega stunners yet to come:

  • Better Place – Ummmmmmmmmm.  Sorry it makes me cringe to even discuss.  Just think through a breakeven analysis on this one.
  • Solar City – a terrifically neat company, and one that has never had a challenge driving revenues, margin, on the other hand . . .
  • BrightSource – see our earlier blog
  • Kior – again, see our prior comments.  Refining is hard.
  •  Tesla – Currently carrying the day in cleantech exit returns, I’m just really really really struggling to see the combination or sales growth, ontime deliveries, and margins here needed to justify valuation.

I’m not denigrating the investors or teams who made these bets.  Our thesis has been in cleantech, the business is there, but risk is getting mispriced on a grand scale, and the ante up to play the game is huge.

 

What’s Beyond Zero Emissions Vehicles?

by Paul Hirsch

The automotive industry has invested billions in alternative fuel technology since that first Prius rolled off its assembly line. And these days a growing portion of that investment has been focused on zero emission technologies, such as battery electric vehicles (EVs) and hydrogen fuel cells.

Yet as a professional tasked with commercializing the next generation of alternative fuel vehicles, I can’t help but feel like zero just isn’t good enough. Pushing emissions off board and upstream to a dirty power plant may solve the automaker’s problems, but it doesn’t solve the Earth’s.

Which is why I was truly excited when, last week at the Los Angeles Auto Show, Honda introduced their “total energy management system.” The system consists of an EV, like the electric Fit they debuted at the show, as well as a Honda-developed solar charging station. An experimental solar hydrogen station is already being used to power the company’s FCX Clarity fuel cell vehicle. Honda is not only thinking about how many EVs they can put on the streets, but how to guarantee their customers a clean energy commute day after day.

This is not the first attempt by an automaker to offer its customers a clean energy solution. Tesla Motors has promoted a Solar City charging station for its electric Roadster, demonstrating Elon Musk’s strategic interest in providing the clean electrons to power his clean car (Musk is CEO of Tesla and led the initial funding of Solar City). The Tesla-Solar City project and Honda’s recent announcement highlight a new opportunity for the auto industry – end-to-end sustainable personal mobility.

Where the industry goes from here is anyone’s guess, but the possibilities are promising. Toyota already operates a housing development subsidiary in Japan that offers homes equipped with solar panels and rainwater recycling systems. Imagine the experience if this business were integrated with Toyota’s automotive operations: when you buy into an “ecommunity” of carbon-neutral dwellings, selecting the battery range of your plug-in vehicle could become as routine as picking out your home’s paint color or bathroom tile. Or better yet, you could select to participate in a community car share program to accommodate a less frequent need for your own car.

This vertical integration of energy generation stations with the vehicles that demand their energy would go a long way toward aligning auto industry objectives with the needs of the planet. If automakers were also fueling their vehicles, they would have a strong incentive to make cars as efficient as possible. And that vertical integration would bring us much closer to a future of sustainable personal mobility.

Paul Hirsch is a Senior Product Planner at Toyota.