The cleantech crunch is on. And a few juicy tidbits are coming to light.
Optisolar – Crunched. Several 9 figures into it, what do we find? The only thing of real value are the development deals in a post subsidy boom year. Is it a “financial market” issue? Only if manufacturing and technology development are “financial market issues”. Several of my long time clients have deep pockets actively looking to finance “financial market issues” for renewable power plants – assuming the numbers actually stack up on the project, that is. Actual returns have proven to be quite skinny in many cases. Buyers from the energy sector looking under the hood can be such a downer.
Tesla – for all intents and purposes looking for a bailout. But at least they’re shipping now, sort of. 100 cars I think? Good money, if the margin is positive. Keep this up and they should be at several percent of tiny little Jaguar’s US sales volumes with a year or two. Why do sane people want to be in the automotive business again? Oh – that’s right, because it’s not really the automotive business – it’s the ELECTRIC automotive business, and we can really outcompete those dinosaur automotive companies in EVs. And I’m sure the new batteries will just solve everything. I wonder who will sell us the materials for those new batteries, maybe the oil companies, here, and here whom we are going to replace and our automotive competitors? Wow. That’s a business plan that gets me really, really excited. Not.
Solyndra – the bailout came through. Yippee! Will it be enough? I’m sure coating CIGS on 1,000s of cylinders is a brilliant way to be cheaper than CdTe and A-Si on large scale glass. The sounds like a great way to make replicable, scalable 30 year devices.
VeraSun – the deal that helped build the investor craze for ethanol – finally sold off in pieces in bankruptcy. To whom? A Texas refiner known for picking up refining assets on the cheap. Note to Vinod, yes, ethanol is much, much more expensive than gasoline, any way you cut it. And no, refining feedstocks into fuel is not a wonderful new business that should trade at tech multiples. Way to go Valero (VLO)! But don’t worry, all the “good” deals are doing cellulosic ethanol – you know the btu poor, hard to transport, pain in the rear to refine feedstock which we don’t own using technology currently at 0.25% of the scale of the average oil refinery. That’s where we’ll make our “smart” money.
MMA – Along with SunEdison one of two companies to create the solar PPA model. Sold off.
What are we learning? Energy – and yes, I’ll say it again, cleantech is energy – is all about owning the resource. Not the technology. In energy technology follows resources, not the other way around.
And lots of deals and money are there to be had, maybe just not for the cleantech venture capitalists who insist it’s all about the technology and the startup, not the resource. I guess it is if you like to gamble.
Learn people, learn. Or you could just follow Kleiner into their next Energy Bloom.
Neal Dikeman is a Partner at Jane Capital Partners LLC.