The decision reflects the poor outlook for the solar market by an energy giant, which had previously raced to tackle various segments of the business — including manufacturing, equipment sales and power plant engineering and construction — in order to compete with its big nemesis, GE. But the growth of the global solar market hasn’t met expectations, Siemens said in a statement, adding that changes in government policies and slim profit margins are among the chief causes.

Siemens’ exit also likely means it will not be actively looking to invest in any more solar startups, for the time being. The company has poured money into startups by either buying an equity stake of the company or by acquiring products from them. Siemens has invested in North Carolina-based Semprius, which developed a new way of producing highly efficient solar cells, and solar energy equipment to use those cells. Siemens bought Israel-based solar thermal technology company, Solel, a few years back. Siemens also inked a supply deal with Enphase Energy, before Enphase did an IPO in March this year. Microinverters are attached to solar panels and convert the direct current produced by the solar panels to alternating current for transport through the grid.

UPDATE: The vice president of business development at Semprius, Russ Kanjorski, told us that Siemens has made clear to Semprius’s executives that its  decision doesn’t reflect its view of Semprius’s technology and business. “The decision also presents an opportunity for Semprius to bring in a new strategic investor as part of its expansion plans.  From an operational standpoint for Semprius, however, it remains business as usual,” Kanjorski said by email.

Siemens made its decision to leave the solar market at a time when many solar manufacturers have suffered big losses and filed for bankruptcy. But those falling prices are supposed to benefit companies that buy the solar equipment for engineering and building solar power plants. On the other hand, the solar plant development business is getting crowded because it’s attracting so many newcomers, like solar manufacturers who want outlets for their products.

The global solar market has faced a glut of solar panels for nearly two years now, and the plummeting prices for them have forced many manufacturers to file for bankruptcy. One of them, organic thin film developer Konarka Technologies, just found a buyer for its German subsidiary. Belelectric, which builds solar power plants with photovoltaic panels, on Monday said it will buy the subsidiary but didn’t disclose the price. Massachusetts-based Konarka filed for bankruptcy in June this year after struggling for years to commercialize its low-efficiency solar film technology.

Nearly 200 more in North America, Europe and Asia will likely disappear in the next few years, according to GTM Research. Nearly half of them will not be around – either because they went out of business or will be bought – in places of high production costs, such as the U.S. GE has scaled back its solar market ambition, too, and decided earlier this year to nix a plan to build a 400 MW solar panel factory.

Even countries with lower manufacturing costs aren’t immune. Just last week, SunPower said it would idle several solar cell and panel production lines in Philippines and let go about 900 employees worldwide. During that same week, Boston-based Satcon Technology, an inverter maker, filed for bankruptcy.

Other solar technologies aren’t faring so hot either. After inking gigawatts of contracts to sell electricity to utilities, particularly in California, solar thermal power plant developers aren’t winning many new contracts in the U.S. these days. Solar thermal technology uses mirrors to concentrate sunlight to generate steam and run turbine-generators. Before the Monday announcement, Siemens was in the business of building solar power plants using photovoltaic panels (with solar cells inside) and also solar thermal technology.

The German company said it will focus its renewable energy business on wind and hydropower instead. Siemens will continue to sell the equipment that makes up a solar power plant, though, such as steam turbines and machines to control a power plant or grid operations, but those products have always come from other business groups, not the solar and hydro division.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Smart Grid Apps: Six Trends That Will Shape Grid Evolution
• Big data meets the smart grid
• Cleantech, meet connectivity: a new era of energy efficiency

NEA closed a monster $2.6 billion fund recently, which was one of the largest venture funds ever raised. Few VC funds can actually raise such a large amount of money these days from their Limited Partners, which are the investment groups that put money into venture firms. NEA’s previous fund invested in online commerce company Groupon, which was potentially one of the best returns in venture capital history.

At the same time, NEA’s allocation of funds into energy technologies has gone down slightly over the past year or two, particularly when it comes to capital-intensive energy generation technologies, which need scale and project financing. NEA Partner Ravi Viswanathan says while NEA previously was shooting to invest between 15 to 20 percent of its fund into energy technologies, he estimates the fund is currently aiming closer to around 10 percent for energy tech now.

Chairman and co-founder of NEA, Dick Kramlich — who’s a VC legend and was one of the first investors in Apple — says that NEA can stay nimble by reacting to market conditions through the dynamic allocation of funds. Essentially if the winds of the markets change, the firm can invest more or less into whatever it likes. Contrast that to some of the more energy-specific funds out there, like Braemar Energy or Nth Power, which have less flexibility.

But NEA still firmly believes (like I do) that the global trends that attracted VCs to invest in the cleantech sector, aren’t going away. As the population grows to 9 billion people by 2050, addressing resource constraints — from energy to water to food — will become increasingly important.

NEA partner Scott Sandell emphasizes that the firms investments in energy technology make it diversified. Energy has a longer term horizon than web and mobile technologies, and the market is at a “scale you would never see in IT or healthcare,” says Sandell.

The key, says Sandell, is figuring out which companies can “make it to the end zone.” NEA firmly believes some of its portfolio companies, like fuel cell maker Bloom Energy and energy software company Opower, will be success stories. Viswanathan says he thinks that the next 12 to 24 months will be exciting times for some potential major exits for energy tech firms, which could act as catalysts for the rest of the industry.

The NEA team knows as well as any investors in this space, that strong returns have yet to materialize. “We haven’t seen a wave of high quality exits yet,” says Viswanathan. And Sandell is the first to point out that not all the firm’s energy bets will make it. Some of its startups have had their fair share of struggles over the years, like solar thin film firms Heliovolt (commercialization previously stalled) and Konarka (which recently went bankrupt) as well as electric car maker Fisker Automotive.

But, importantly, NEA plans to continue to back new energy companies, not just continue to fund its current portfolio stable. For example, NEA seed funded and recently led a series A round for solar tracker maker QBotix. In a year when investors are shying away from backing anything related to solar hardware — because of the drop in solar panel prices — NEA is again looking to go against the grain.

Utilizing data and software, investing in the “downstream” of the solar industry and focusing on the overall costs for the lifetime of energy technologies (and not just the upfront costs), are key aims for the NEA partners.

We’ll see if some of NEA’s big energy bets can make it into the end zone. For now, NEA’s massive wins in web and mobile like Groupon are helping the fund move the energy ball forward.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• The fourth quarter of 2012 in cleantech
• Social 2013: The enterprise strikes back
• Social third-quarter 2012: analysis and outlook

Not all venture firms have had the ability to raise so much money from Limited Partners — the investment groups that put money into venture firms. In recent years, some well-known venture firms have struggled to raise such large rounds as their investors have pulled back and taken the stance, ‘what have you done for me lately?’ Only a few, like NEA, Khosla Ventures and Andreessen Horowitz have managed to put together these massive funds.

But NEA famously invested in Groupon, which delivered the firm potentially one of the best returns in venture capital history. NEA invested just $4.8 million in Groupon in 2008, before the company was even Groupon. The value of NEA’s investment in Groupon at the time of Groupon’s IPO was $2.28 billion, though Groupon’s stock has dropped considerably since then. The Groupon investment boosted NEA General Partners onto the Forbes Midas List.

NEA’s Groupon investment also enabled it to make considerably more risky bets in yet unproven areas like cleantech. As I wrote last year, massive wins from firms like Groupon have essentially funded the next-generation of cleantech startups. NEA has invested in a variety of struggling cleantech firms like solar companies Konarka (went bankrupt), and Heliovolt, smart grid company Gridpoint, electric car maker Fisker Automotive, and building materials company Serious Energy.

NEA says it will continue to invest across sectors in “information technology, healthcare and energy technology.”

At least for a few firms, the traditional VC model — that one investment makes back the fund — is still alive and strong. For the rest of them, if they can’t find a Groupon, then they might struggle to remain in the top tier. Particularly as upstart incubators, and angel groups start to chip away at the traditional venture model.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Green IT Q1: Cleantech Breaking Out — and Bracing for Hard Times
• Green IT Overview, Q2 2010
• Home Energy Management: Consumer Attitudes and Preferences

Lux Research says for at least three years it’s given Konarka a “strong caution” rating for its technology that was “ten times higher cost, and ten times lower efficiency and lifetime compared to alternative solar technologies.” More than technology development, Konarka’s skill was in fund raising, says Lux Research, and its “underlying technology was never market ready.” Lux writes:

Driven by the promise of cheap, printed solar modules that can be made colorful and transparent, technically unsavvy investors rushed to invest in Massachusetts organic photovoltaic developer Konarka to the tune of $170 million, with an additional $30 million coming from grant funding. Konarka took that investment and built what it claimed was a 1 GW manufacturing line, although the line would certainly never come close to that capacity.

We, too, have long been skeptical of Konarka. It’s amazing that Lux points out that Konarka finally went bankrupt “in the middle of yet another funding round.” Here’s a list of investors that Konarka managed to raise money from: Konica Minolta, Draper Fisher Jurvetson, Good Energies, 3i, Mackenzie Financial Corp., Pegasus Capital, Asenqua Ventures, New Enterprise Associates, Vanguard Ventures, Chevron Ventures, Massachusetts Green Energy Fund, NGEN Partners, Angeleno Group, Total, Good Energies, and 3i.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• The fourth quarter of 2012 in cleantech
• Cleantech and investment in 2013
• The next generation of battery technology

The Massachusetts company filed for Chapter 7 and plans to liquidate its assets to pay back creditors. The company developed organic thin films that it wanted to see installed as part of building façades, and despite raising close to $200 million by our last count, it struggled to find success.

The fact that Konarka, founded in 2001, has lasted this long has been puzzling to some. The low efficiency of organic thin films – the company was selling products that could convert only a few percent of the sunlight that falls on them into electricity as of last year – and the difficulties of finding buyers in the building design and construction market have been persistent challenges for Konarka over the years.

Konarka’s technology used a photo-reactive material printed onto plastic, and they are quite different from the silicon or cadmium-telluride semiconductors used in conventional solar cells today. Instead of encasing the films in glass like other solar panels on the market, Konarka makes its films in protective polymer layers so that they are flexible.

“Konarka has been unable to obtain additional financing, and given its current financial condition, it is unable to continue operations. This is a tragedy for Konarka’s shareholders and employees and for the development of alternative energy in the United States,” said Howard Berke, chairman and CEO of Konarka, in a statement.

Konarka was able to sell its organic thin films for lining umbrellas and shoulder bags, but it wasn’t clear whether these sales and shipments amounted to any significant volumes. Konarka  marketed  its thin films to architects and builders in the building-integrated photovoltaic (BIPV) market, which has barely emerged and is a tough market to crack. Architects like the idea of adding eco-friendly features, but they tend to balk at the added expense and worry about the logistics of embedding, operating and replacing electrical equipment that isn’t likely to last as long as the buildings. The lackluster housing market in the past few years also hasn’t helped.

In 2010, the company raised $20 million from Konica Minolta, which wanted build a manufacturing joint venture in Japan.  Konarka had lined up many other investors, too, including Draper Fisher Jurvetson, Good Energies, 3i, Mackenzie Financial Corp., Pegasus Capital, Asenqua Ventures, New Enterprise Associates , Vanguard Ventures, Chevron Ventures, Massachusetts Green Energy Fund, NGEN Partners, Angeleno Group and Total, the French oil and gas giant who invested $45 million in 2008.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• After Solyndra: analyzing the solar industry
• The fourth quarter of 2012 in cleantech
• Cleantech and investment in 2013

Earlier this month, I wondered if huge returns for VCs from social media IPOs could help make up for large bets on capital-intensive greentech companies that haven’t (yet?) delivered returns. My example was NEA and its potentially massive Groupon win (NEA’s Groupon share could be worth $2 billion on paper, or a 135 x multiple), in contrast to some of its capital-intensive green investments like fuel cell maker Bloom Energy, solar company HelioVolt, smart grid company GridPoint, and solar firm Konarka.

Connie Loizos at peHUB digs into this theme, too, in a column Tuesday night pointing out how a potentially giant return for Kleiner Perkins from an IPO for game startup Zynga could help make up for its tied-up greentech investments.

“[T]here’s no question that Kleiner was losing its footing, and that it’s about to be saved by Zynga,” writes Loizos.

Zynga reportedly could raise up to $2 billion in an IPO as soon as this week, valuing the company as high as $20 billion. That’s twice Zynga’s valuation when it raised its most recent round of $300 million last Summer. If Kleiner owns even 3 percent of Zynga, its stake could be valued at $600 million, writes Loizos.

Kleiner’s previous return that was that solid was its nameplate Google win where Kleiner put in $25 million in 1999 for a 20-percent stake. And we all know the end of that story, or the start of Kleiner’s fame: an eventual $2 billion return for Kleiner’s investors.

Kleiner has some weak, some OK, and some decent greentech bets. Smart grid company Silver Spring Networks was supposed to IPO last year, but still hasn’t, though I’ve been hearing that it might go sometime soon. Electric car maker Fisker Automotive is also supposed to IPO shortly, though hasn’t yet started selling its first car, the Karma. Kleiner made money on biofuel company Amyris’ IPO, and will make money on the IPO of solar inverter maker Enphase Energy.

Oh, those were some of the more promising ones. Bloom Energy is one of the most capital-intensive companies in the Valley and recently started offering an Energy-as-a-Service model, which seems like it would require more money raised (from banks likely) for installations. Alta Rock has struggled with its geothermal projects, and I haven’t heard anything from carbon capture and recycling company GreatPoint Energy in a couple of years. Biofuel company Mascoma delayed its commercial-scale cellulosic ethanol plant, though finally got an investment from Valero.

As Loizos puts it:

“The reality is that Zynga represents the first — and potentially only — tangible opportunity for Kleiner to hit the cover off the ball as it did with Google.”

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• The fourth quarter of 2012 in cleantech
• Social 2013: The enterprise strikes back
• Social third-quarter 2012: analysis and outlook

The Massachusetts company said Monday it has installed the largest organic photovoltaic (OPV) solar thin-film installation of its kind at its factory in New Bedford, Mass., an announcement designed to broadcast its participation at the Intersolar trade show in Germany this week. Konarka’s OPV films use a photo-reactive material printed onto plastic, and they are quite different from the silicon or cadmium-telluride semiconductors used in conventional solar cells today. Instead of encasing the films in glass like other solar panels on the market, Konarka makes its films in protective polymer layers so that they are flexible.

OPV films also have far lower efficiencies than solar cells in panels that sit on rooftops today. Konarka’s 40 Series OPV films, for example, have less than 2 percent efficiency. Rooftop solar cells have efficiencies typically in the mid-teens. Konarka was able to develop a cell in its lab last year that could fetch 8.3 percent efficiency, but a lab cell takes a while to become a commercial product.

The company, founded in 2001, has raised close to $200 million in private equity, according to our calculations (and reported by various other outlets). In March last year, Konarka said it lined up $20 million from Konica Minolta, which wanted to create a manufacturing joint venture with Konarka at some point. We are waiting to hear from Konarka on its progress with Konica as well as more information about its latest pilot installation.

Konarka has shipped its films for lining umbrellas and shoulder bags, but it’s not clear whether these shipments and sales represent any significant volumes. Konarka has been marketing its OPV films to architects and builders in the building-integrated photovoltaic (BIPV) market, which has barely emerged and is a tough market to crack. Architects like the idea of adding eco-friendly features, but they tend to balk at the added expense and worry about the logistics of embedding, operating and replacing electrical equipment that isn’t likely to last as long as the buildings.

The lackluster housing market in the past few years also hasn’t helped. Just last week, Dow Chemical said it was delaying the launch of its solar shingles for the roofing market. Solar shingles are among the building integrated photovoltaic (BIPV) products that solar companies hope will one day become widely adopted.

Konarka wants to stick its OPV films on glass building facades. It installed a pilot project on an office building owned by Arch Aluminum and Glass in Florida more than a year ago. At the time of the announcement, Konarka said it was working on a transparent version of the OPV films because architects seemed to favor them over the more opaque variety for aesthetic reasons.

But transparent films aren’t as efficient at converting sunlight into electricity, said the company’s then-VP of business development, Terri Jordan. The pilot project at Konarka’s New Bedford factory uses semi-transparent films. The company hired a new business development and CTO earlier this year.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• The fourth quarter of 2012 in cleantech
• Cleantech and investment in 2013
• The next generation of battery technology

In February, Silver Lake announced it was launching what will likely be a sizable ($1 billion says Primack) clean energy fund with investment from billionaire investor George Soros. The fund will be led by former Foundation Capital Partner Adam Grosser, Cathy Zoi (formerly the Obama administration’s acting under-secretary for energy and assistant secretary for energy efficiency and renewable energy) and reportedly Atluru and Martin Fichtner, formerly with Elevation Partners. (I’ll be interviewing Grosser and Zoi on stage at Green:Net on April 21 next week in San Francisco. Register here).

At Foundation, Grosser worked on investments in firms like Silver Spring Networks and EnerNOC, and he is the only investor I put on this list of Top 15 Smart Grid Influencers back in mid-2009. At the DOE, Zoi has had a prime spot to observe and connect with a multitude of energy startups.

Atluru has been leading DFJ’s cleantech investments since 2001, and he sits on the boards of startups like CoalTek, Great Point Energy, Konarka, and Scientific Conservation. Primack reports that it seems like Atluru wanted to go one way in cleantech and fund companies looking to bridge the commercialization gap, while DFJ wanted to focus its cleantech investments more on where cleantech meets IT.

If that’s the case, Atluru’s ambitions fit right in with the goals of Silver Lake Kraftwerk. Grosser told me earlier this year that Silver Lake Kraftwerk will likely focus more on scaling some of the already proven cleantech innovations past the so-called Valley of Death, and will be far more global in scale. Silver Lake, in partnership with billionaire investor George Soros, spent the past 18 months reviewing what had worked and what hadn’t for cleantech investing, and has been developing an investment thesis. What the team has learned is: 1) focus on growth scale financing, and 2) go global.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Cleantech and investment in 2013
• Locating data centers in an energy-constrained world
• Ups and downs for cleantech in Q1

By my rough calculations, the company has raised close to $175 million in private equity and $20 million in government grants. That puts it close to the $200 million mark, which only a few greentech companies have achieved, including smart grid network maker Silver Spring Networks and thin film solar firm Solyndra.

Konarka’s special sauce lies with its organic solar panels. The “Power Plastic” is able to absorb a much wider spectrum of light than other thin films, allowing for higher efficiencies and even indoor applications.

So with all that funding will Konarka, which spun out of the University of Massachusetts in 2001, be churning out its Power Plastic in significant volumes soon? Seems like it’s getting ever closer and starting to ship initial volumes, but, hey, we understand that the transition from pilot to commercial scale takes some time to ramp up. And if they’re manufacturing and shipping a lot of product, then they’re being very quiet about it.

Back in October 2008 Konarka officially “opened” its manufacturing plant in New Bedford, Mass., which was supposed to have a production capacity of 1 gigawatt per year. At the time the company said it planned to hire more than 100 additional employees as production increased toward capacity over the next 2-3 years, and that commercial production of its branded organic photovoltaic “Power Plastic” was supposed to start in the first quarter of 2009.

You might remember that October 2008 was also around the time of the big market crash, and all of 2009 proved economically difficult. In February 2009 Konarka raised just $5 million in financing for manufacturing and job creation in Massachusetts in the form of a long-term loan from the Massachusetts Development Finance Agency and the Massachusetts Renewable Energy Trust. And a Konarka spokesperson told us in Feburary 2009 that Konarka planned to start shipping its first products from the New Bedford plant around the end of the first quarter or the beginning of the second quarter of 2009.

All of 2009 I was waiting for some big announcements about commercial volumes from Konarka but over the year the company announced a variety of small first time shipments. For example, in April 2009 a company called SKYShades received its first shipment of Konarka’s solar power plastic.

We’ve reached out to Konarka and are waiting to hear back on how far along they are in production. Like we said, it’s a gradual process to ramp up volume manufacturing.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• The fourth quarter of 2012 in cleantech
• Cleantech and investment in 2013
• The next generation of battery technology

Heliatek will use the funding to build an initial production facility in Dresden for its organic solar cells. The startup, which uses vacuum technology to deposit the conductive material on film substrate, says its technology will lead to efficient, flexible and extremely lightweight PV modules — as much as 40 times less than today’s conventional technology. That’s why Heliatek is starting off targeting mobile applications, such as handbags that can power cell phones, though the company didn’t say when its production facility or its first commercial products would be ready. The company also believes it can find a market in “architectural solutions” (presumably building applications where weight is an important factor) and in regions with “weak infrastructures.”

Organic solar cells are widely viewed as a possible low-cost alternative to silicon-based cells, but their biggest shortcomings to date are low power conversion efficiencies (currently in the range of 6-7 percent compared with silicon-based cells in the 12-20 percent range) and poor durability, according to the Department of Energy. Heliatek says its cells have been third-party certified as reaching an efficiency of 6.1 percent, and the German solar PV developer says that will improve to 8-10 percent within three years. Heliatek, which is based in Dresden and Ulm, said the high degree of purity of the organic materials it’s using will yield longer-lasting solar cells.

In the meantime, Heliatek will be keeping a close eye on Lowell, Mass.-based Konarka Technologies, a leading organic solar cell developer.  Konarka, which raised $45 million in funding last December, has since announced sales agreements to embed its solar cells into portable electronics and consumer products and has partnered with an architectural aluminum builder to develop a building wall made of solar panels, glass and aluminum. Konarka began mass production of its Power Plastic films in October 2008 at a factory in New Bedford, Mass.   

Another player in the space is El Monto, Calif.-based Solarmer, which is developing strips of organic solar cells that could be attached to the back of cell phones to extend their battery lives. The company has achieved a 6.77 percent efficiency, expects to reach a manufacturing cost of less than $1 per watt and aims to bring its first product to market by early 2011. Solarmer hopes to subsequently expand from consumer electronics to building-integrated PV. Heliatek, Konarka and Solarmer might disagree on which of the three has the most promising technology, but they all appear to be on the same page when it comes to where the best opportunities lie for organic PV.   

Image courtesy of Heliatek.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• The fourth quarter of 2012 in cleantech
• Cleantech and investment in 2013
• The next generation of battery technology