Much has changed since then. With 2012 numbers done and dusted, I figure it’s time to revisit this topic – again, under the light of data. I’ll frame this analysis with the questions I’ve gotten from VCs and entrepreneurs who’ve asked me for an update.

What’s happening to cleantech venture capital?

It’s receding.

• Investment fell 30% in 2012 – and even further at the early stage. The Moneytree survey numbers had cleantech VC investment falling from $4.6 billion in 2011 to $3.3 billion in 2012 – a 28% drop. Further, they showed first-time funding of new start-ups plummeting 58% to just $216 million, and shrinking as the year progressed: By Q4, first-time funding was just 4% of capital invested.
• Limited partners are backing off. VC firms get the money they invest from limited partners (LPs) like foundations and pension funds. Last December Preqin called up 31 LPs that were invested in at least one cleantech-focused fund and asked if they planned to back any new ones in 2013. Only 22% said yes (down from 31% a year before).
• The people are changing. Many VC firms parted ways with their cleantech teams in 2012. While February’s ARPA-E conference had a record number of attendees, venture investors were scarce – replaced by a bumper crop of corporate types.

Why is this happening?

Cleantech VC performance is substantially lagging venture capital as a whole. This wasn’t true in 2011, but things changed fast in 2012.

I arrive at this conclusion by comparing two data sets. On one hand, we have data on the interim performance of 19 cleantech-only VC funds as reported by the California Public Employees’ Retirement System (CalPERS), a big LP. On the other, we have equivalent data for the entire universe of VC funds from the National Venture Capital Association. (The data are expressed as “value to paid-in capital, net to LPs,” which means “the current value of the funds divided by the money put into them, accounting for what VCs pay themselves.”) By comparing cleantech-only fund performance with the full VC universe at the same points in time, we can see whether cleantech is doing better or worse than the asset class.

The answer is that cleantech went sideways in 2012 while VC overall did well. In September 2010, the cleantech VC funds were worth 0.90x the money paid into them while comparable VC funds overall were at 0.96x – roughly the same. Six months later the gap had widened, but both had risen in value and remained within spitting distance. By June of 2012, however (the most recent data available), the cleantech funds had declined slightly while the overall VC universe climbed to 1.23x.

This is why investment is stalling, LPs are hesitating, and cleantech VCs are thinning: Capital invested in other domains is showing a greater near-term return.

If minimal money had gone into cleantech, or if the macro environment were rosier, there might be more willingness to forge ahead. But today, fund managers assess the $25 billion worth of cleantech VC invested since 2003 against a backdrop of shale gas and climate apathy – and tighten the purse strings.

OK, but why is that happening? What’s driving weak cleantech VC performance?

Two factors. First, there have been too few exits.

Let’s consider the gold standard of VC wins – an IPO on a major exchange. When I last did this analysis, cleantech was overperforming on the IPO front: In 2009, 2010, and 2011, cleantech’s share of VC-backed IPOs exceeded its share of VC funding. (Note: One must apply an appropriate time lag applied to the latter – I used five years, which is informed by deal-by-deal fundraising data by cleantech start-ups).

This ended in 2012. Just as in the prior year, three cleantech IPOs took place out of about 50 VC-backed IPOs in total (6%). But cleantech’s corresponding share of VC funding rose to 10% – so cleantech was now underperforming on exits relative to capital invested, instead of overperforming.

(Of course, most VC-backed companies exit through acquisition, not an IPO. But the M&A front looks no better for cleantech. When merchant bank Jane Capital counted up every acquisition of a VC-backed cleantech start-up worth more than $50 million in the last 10 years, it found just 27 of them.)

Second, the winners have disappointed post-IPO. When a start-up goes public, its VC investors rarely get to sell their shares immediately: They have to wait out a lockup period that typically lasts six months. Of the nine VC-backed cleantech start-ups that have done major-market IPOs since 2010 and have been public for more than six months, eight were trading below their IPO price at the 180-day mark.

In four of those cases, the 180-day share price was also lower than the price at the last venture round. That means VCs who bought shares in that round were under water when the lockup expired.

So is the pullback in cleantech VC justified?

Well, it’s certainly expected. The cleantech gold rush of the late 2000s saw hundreds of start-ups funded – many with identical propositions – that greatly exceeded the carrying capacity of their industries: For example, there’s no way that more than a handful of the 219 solar start-ups counted by Greentech Media in 2009 could possibly succeed. This dynamic isn’t unique to cleantech. The Internet VC bubble of the late 90s was the same story, albeit on a much larger scale.

But just as the boom-and-bust in dot com investment didn’t mean this whole Internet thing was a waste, the same is true for energy and environmental technologies. It’s very likely that multiple billion-dollar companies lurk among today’s cleantech VC portfolios. The question is – given the current retrenchment of capital from the field – how many of them will get the fuel to reach the finish line.

In the main, energy and environmental start-ups need outsized time, money, and risk tolerance to reach a big outcome. (That’s not true of IT-meets-energy “cleanweb” companies like Opower or Venrock-backed Nest Labs, but it holds for the deep-tech start-ups that comprise most of the category.) As our case study, let’s take First Solar, the pioneering thin-film solar maker. The company’s first instantiation was founded in 1990; it took 12 years to ship a product, was restarted in 1999, and consumed $150 million of equity investment (all Walton family money) before its 2007 IPO. But at that outcome, First Solar was worth $1.4 billion valuing the Walton stake at 8.4x. Two years later at the peak of the solar boom, it was worth 199x!

If this is what success looks like – that is, if the majority of cleantech start-ups will need more time and money to reach big outcomes compared with VC-backed companies overall – a few conclusions follow:

• Funds focused solely on cleantech will have a longer and deeper “J-curve” of returns compared with VC as a whole. When they reach the same final return multiple, they will take longer to do so (impacting IRR). Midway through the journey, their performance will look like an “L-curve.”
• To the extent that cleantech start-ups’ time to exit will be 10 years or more, it’s too early to call success or failure on the current crop – because most of them were founded in 2007 or later. Check back in five years.
• Because the time frames to an outcome are longer and the amounts of capital required are greater, cleantech investment should be less spikey compared with investment in, say, Internet start-ups. And lo and behold, that’s pretty much what we see:

Cleantech VC now is like Internet VC in 2001: on the downward slope of a bubble, albeit with a more gradual climb and a gentler descent. Note that Facebook was conceived in 2003 – the lowest point for Internet investing post-bust – and that in 2004, Google’s IPO kicked off the renaissance that persists today.

So is the cleantech pullback justified? The data says it’s too early to call. However, it also suggests that the time frame required to reach a conclusion will greatly stretch 10-year closed-ended funds.

(A diligent reader may point out my own numbers showing that when VC-backed cleantech start-ups have gone public, they’ve mostly done so in less than 10 years. My take is that most of these companies were rushed to public markets before they were ready – explaining the awful aftermarket performance.)

What happens now?

Cleantech innovation is about to take a walk in the woods. Justified or not, the established path of VC-backed investment is narrowing for a generation of start-ups. Some of those companies – and some of the investment managers that have backed them – will break off into the wilderness to find a new route.

In this environment, I see opportunities in:

• Selective recaps. About 270 cleantech start-ups can be characterized as “late stage” (they’ve raised Series C rounds or later). Of those, about 150 have demonstrated proof of economics and are focused on scale-up. If capital keeps receding, there won’t be nearly enough money to fund them to exit – enabling savvy late-stage financiers to pick off the best of the bunch in recaps that reap disproportionate returns. In 2011 I thought this capital gap wouldn’t persist, because the likes of VantagePoint and Silver Lake Kraftwerk were out raising huge funds aimed at it; the failure and scale-back of those efforts leaves the opportunity open.
• Cross-border plays. The U.S. dominates cleantech innovation, but China and other overseas nations dominate deployment. New vehicles are mobilizing to provide cleantech equity investment coupled with cross-border JV creation and operational help – including Formation8 and a stealth-mode firm I can’t reveal.
• Strategic investment, rethought. Large corporations in industrials and energy have strategic motivations to foster cleantech start-ups: The likes of GE and General Motors want an innovation pipeline, while utilities want a stream of new equipment to rate-base. Institutions are forming to organize this activity in a merchant banking model, like Broadscale at the late stage and OnRamp Capital at the early.
• Foreign techno-colonialism. While U.S. investors bemoan a lack of capital for cleantech, many foreign institutions are awash in it – and view American assets as being generally cheap. To U.S. start-ups, they will play a role somewhere on a continuum between savior (e.g. Japanese trading houses bankrolling cleantech start-ups to get the inside track on project financing) and reaper (e.g. Wanxiang’s A123Systems deal).
• Philanthropic capital. The cleantech projects that would most change the world – think electrofuels, solar antennae, advanced nuclear power – are also the least likely to be funded, because they combine long time frames with extraordinary risk. There is a case to be made for impact investment in these fields using philanthropic capital as a charitable activity. A new effort called PRIME, backed by four visionary family foundations, is leading this charge.

It’s hard out there for cleantech. The woods are scary and the journey is uncertain. But pioneers are charting a new path through the thicket – blazing trails that others will follow.

Matthew Nordan (@matthewnordan) is an energy VC investor at Venrock, one of the oldest and best-performing VC firms. Earlier, he co-founded and led the energy tech analyst firm Lux Research and forecasted technology futures at Forrester. There’s more where this came from at mnordan.com.

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The company has raised this round to continue its growth; it’s now shipping 40,000 to 50,000 of its learning thermostats per month. If the company’s growth continues at this current rate, Nest could reach a shipment rate of 1 million thermostats per year by the summer, say our sources. Note, that’s shipments, not sales, though the figures are clearly closely related.

Some of that growth is happening in Europe, in addition to its shipments in the U.S. Nest sells its thermostats through big-box retailers like Lowe’s and Best Buy, as well as through the online Apple store and its own online website. It’s also struck some initial partnerships with utilities like service provider Reliant. Updated: Nest clarified with me that it doesn’t officially sell its thermostats in Europe but is seeing growing interest from individual customers in Northern Europe who have bought the thermostat. The previous version of this article inaccurately implied larger growth in Europe.

Nest also plans to use the funds to offer a more comprehensive smart home service along with its product, which could include lighting and alarm systems, too, we’ve heard. I don’t know too many details about this, but will add more if I hear more.

We’ve reached out to Nest and are waiting to to hear back on these figures. Venrock investor Matthew Trevithick responded in an email and said “Nest doesn’t comment on funding.” Other investors that have backed Nest include Kleiner Perkins, Al Gore’s investment fund Generation Capital, Lightspeed Venture Partners and Shasta Ventures.

Nest previously raised tens of millions of dollars before this round. Earlier this month Nest announced that it had brought in a new CFO, Tom vonReichbauer, last at Tesla.

Nest only officially launched in late 2011, with a plan to sell its sleek learning thermostat designed by former Apple designer Tony Fadell, who developed multiple generations of the iPhone and the iPod. The thermostat, which costs $250, learns its owner’s behavior and uses smart algorithms to shave off 20 percent to 30 percent of energy used for heating and cooling. The team that built the learning algorithms included Yoky Matsuoka, the former head of innovation at Google, and Stanford Professor Sebastrian Thrun is an adviser to the company.

Nest launched the second generation of its thermostat a few months ago, which has a slimmer body and is compatible with 95 percent of heating and cooling systems in the U.S. They’re also now on version three of the software.

Nest’s growth is one of the few success stories to come out of the cleantech sector in awhile.

Updated at 11AM, April 10, 2013, to correct that while Nest is seeing interest from customers in Northern Europe, its thermostat is not officially on sale in Europe, and it’s not sending considerable shipments there. Nest didn’t disclose how many customers in Europe have bought its thermostat.

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What those new verticals are, the company would not say, just that they’re going to find “other ways to make guys lives easier,” CEO Michael Dubin said. But they’ve gained attention from some of Silicon Valley’s most prominent investors: The round was led by Venrock (David Pakman will join Dollar Shave’s board), and the company raised an earlier seed round co-led by Kleiner Perkins and Forerunner Ventures, as well as Andreessen Horowitz, Shasta Ventures and Felicis Ventures.

The company, which launched this spring, provides its subscribers with razors every month, starting at $1 plus shipping, and giving customers the option of scaling up their subscription to higher price points. Dubin said they were inspired to start the company because they didn’t want women to have all the fun in e-commerce.

“Guys don’t have much,” he said.  ”Girls get to have all the fun.”

Dubin said the company really got big after they released their video this spring, which now has more than seven million views on YouTube.

“We certainly saw an enormous amount of traction after the video. It actually crashed our site for a few hours,” Dubin said. “Sales were thousands of percent higher before they launched the video.”

Dubin said they had trouble keeping up with distribution and requests after they saw the dramatic increase, but that they moved their distribution center out of Southern California and things got better.

“Obviously everyone has scaling pains and we were no exception,” he said, noting that they’ve resolved those issues now. Dubin said the money would be used primarily for hiring, and the company is expanding to Canada on Thursday, where the cheapest option subscription option will be $3.50 per month, including shipping.

Here’s the video that sent Dollar Shave Club toward success:

Correction: This story has been updated to reflect that Dollar Shave Club’s CEO is named Michael Dubin, not Mark Levine.

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Sapphire says with this latest round it has raised more than $300 million in private and public funds. The new capital will go towards building out a commercial algae energy demonstration plant — the Green Crude Farm — in Luna County, New Mexico.

Founded in 2007, Sapphire has had a relationship with Monsanto for at least a year. Monsanto wants access to Sapphire’s genetic research technology to use it for its own agricultural development. Using Sapphire’s genetic technology, Monsanto can isolate traits in algae (like high yields and stress traits) that could be used to tweak its other crops. Monsanto’s CTO Robb Fraley said in a release last year that algae is an “excellent discovery tool,” for agricultural genetic research.

The deal between Monsanto and Sapphire is also another example of how corporate investors, particularly in the biofuel sector, will be crucial to helping startups scale and reach commercialization. Other biofuel companies are connecting with big oil, and Codexis has linked up with Shell, and Synthetic Genomics with Exxon.

Sapphire Energy is one of a dozen algae fuel companies that has ambitious plans, but has yet to reach large scale commercial production. Algae company Solazyme was one of a few companies that went public in recent years but has focused first on using its algae for personal care and food products instead of fuel.

Sapphire has stated more aggressive plans than most. Sapphire previously has said that it planned to ramp up its production to 1 million gallons of algae-based diesel and jet fuel per year by 2011, 100 million gallons per year by 2018, and 1 billion gallons per year by 2025. Update: Sapphire now has revised its projects to say that this farm in New Mexico will be able to produce 1.5 million gallons of green crude by 2014.

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There’s been a pile of negative news about cleantech start-ups recently. I’ve heard it said more than once in the past month that venture-backed entrepreneurship clearly isn’t working here, so maybe we should all pack our bags and go home. Given the human bias to extrapolate individual events into overarching trends, I figured now would be a good time to review the data so far about cleantech VC performance – and I stress data, not anecdote or assertion! – to see what we can learn.

This is a meaty topic, so I’m going to cover it in four posts. Today I’m going to focus on the money – how much capital has been available for cleantech start-ups so far, and what we can expect in the next few years. Two subsequent posts will address the VC investors that are supplying this cash, as well as the experiences of start-up companies that have achieved liftoff. In the final post, I’ll wrap it all up with some parting thoughts.

The chart below shows cleantech start-up investment from 1995 through 2010. My data set is cobbled together from multiple sources, aiming to capture the breadth of the energy, environmental, materials, and agricultural technologies that most people refer to when they say “cleantech.” Varying definitions mean that these figures won’t equal those from the Moneytree survey or the Cleantech Group, but the trends should be the same. I divide this era into four periods. During each, cleantech start-up investment had a different driver:

• 1995 to 1999: Baseline. This period shows us what cleantech start-up financing looks like when there’s no external forcing function to influence it. The answer is $200 million +/- $100 million per year in 30-50 transactions annually. During this period the venture capital industry as a whole grew dramatically – from about $7 billion invested per year to more than $50 billion – so cleantech accounted for a shrinking percentage of the total.
• 2000 to 2005: Bubble fumbling. The year 2000 saw the peak of the Internet bubble and a commensurate peak in total venture capital investment: An all-time record of nearly $100 billion went into start-up companies that year, mostly of the Internet variety. But the bubble promptly burst, and VC firms that had just raised billions of fresh dollars had to find something other than dot-com start-ups to invest them in.

I’d characterize what happened in the years that followed as “fumbling around for another bubble,” marked by broad interest in the physical sciences instead of cleantech per se (you may recall this as the time when nanotechnology became an investment meme). Cleantech benefited considerably from the fumbling, however, and in 2005 start-up investment in the field broke $800 million – several times greater than in the late ‘90s.

• 2006 to 2008: Gold rush. Starting in 2006, cleantech became a major VC focus area, and start-up financing rose by 50 percent + annually for three years. You might think this happened because all the venture capitalists went to see “An Inconvenient Truth” on the same night, but I think a different sort of herd mentality was at work: In Q4 2005, three solar companies went public, all at valuations around $1 billion – namely Q-Cells, SunPower, and Suntech – and hundreds of VC firms hopped on the bandwagon. (You may mock the VC asset class for collectively deciding that cleantech was the next big thing, but you may also respect it for recognizing the intersection of favorable secular trends with a quarter-century of neglected tech innovation!)

As a result, cleantech start-up financing skyrocketed to exceed $4.5 billion in 2008. Note that toward the end of this period, after initial bets were placed, money began to shift away from brand-new companies: Seed/Series A financing fell by 29 percent from 2007 to 2008.

• 2009 to now: Retrenchment. In September 2008, Lehman Brothers filed for bankruptcy and the stock market went into free-fall, losing 30 percent of its value by year-end. This spooked investors of all types, venture capitalists included, and cleantech start-up investment dropped by a third in 2009. For entrepreneurs launching new businesses, the more significant development was that Seed/Series A funding fell by half, returning to 2006 levels.

2010 brought a substantial recovery, but not a new peak, while Seed/Series A funding for new start-ups stagnated. As for 2011, the year’s not over yet, but based on current figures this year will be flat or down overall with a level of Seed/Series A investment comparable to 2010.

Now let’s zoom in and look at just the last five years. Three big trends come into focus:

• Financing rose sharply to a peak in 2008 and bounced around after that.
• Late-stage financing has ballooned as more companies have “graduated” to big Series D and later rounds, where they need lots of cash to build factories, hire sales forces, establish distribution channels, etc.
• Seed/Series A financing for brand-new businesses has fallen substantially.

So far we’ve been looking at this data by dollars invested. We can also look at it by rounds completed:

This evens out the visual a bit because the late-stage investments aren’t weighted up by their disproportionate value. However, they still predominate: Sixty-six Series D and later rounds were raised last year, more than other stage. In contrast, the number of early-stage investment rounds has plummeted. Nearly 100 new cleantech companies per year received seed/Series A funding in 2007 and 2008, but only 50 or so did in 2009 and 2010.

What’s next?

All of this rear-facing stuff is fine and good, but if I’m an entrepreneur, I want to know what’s going to happen in the future. If my cleantech business will require lots of late-stage capital down the road, what is the competition for that money going to look like?

We can answer this question by using yesterday’s financing data to project tomorrow’s capital requirements. We know, historically, the percentage of companies that have “graduated” from Seed/Series A to Series B, B to C, and so on. We also know the proportionate amounts of money that companies tend to raise in each round, and we can make an informed guess at how long each round of funding lasts.

Equipped with these numbers, we can build a simple forecast of how much cleantech start-up financing will be required in the future. I used the assumptions below. (One big thing to note: For simplicity’s sake, I’ve assumed that the number of new companies raising Seed/Series A financing each year – as well as the average Seed/Series A round size – will remain at 2009-2011 levels. This obviously won’t happen, but it’s not important to the argument I’m going to make.)

When we apply these assumptions about the future to the population of companies launched in the past, we generate this forecast:

You can see the big takeaway here: There will be a path-breaking requirement for late-stage financing in 2012-2014 as the “baby boom” of companies formed in the last five years plays out. In 2008-2010, an average of $1.8 billion per year went into Series D and later rounds – but during 2012-2014, an average of $3.3 billion per year will be needed. That’s an extra $1.5 billion in late-stage financing annually, or $4.5 billion across the three years.

So will this money be available? Or will otherwise-auspicious cleantech start-ups go begging?

I’m betting that the money will be there. I posit that a number of VC and private equity pros all ran this spreadsheet a year ago, reached the same conclusion, and started raising late-stage funds. Examples include:

• VantagePoint is reportedly in the market for a $1.25 billion cleantech growth fund.
• Silver Lake Kraftwerk, a new vehicle also raising money now, is said to have a $1 billion target.
• BlackRock and NTR announced a new late-stage cleantech fund back in February. I’m not sure where this one stands, but if it goes forward, a fund smaller than $1 billion would be out of character.
• Kleiner’s $500 million Green Growth Fund – first allocated in 2008 – has apparently been re-upped, since it’s now self-described as a “$1 billion initiative”.
• Khosla’s new $1 billion fund is half-allocated to cleantech, and I’d bet most of that portion is aimed at late-stage investment – perhaps $300 million?
• Hudson Clean Energy’s $1 billion first fund, raised in 2009 and focused exclusively on late-stage investments, should still have some fresh capital – and in the meantime the firm appears to be raising a second one worth $1.5 billion

The entities above would get you near $4.5 billion all by themselves, and the shift to later-stage allocations among all the other VC investors should be sufficient to cover any shortfall. So I think we can conclude that there will indeed be adequate late-stage financing for cleantech start-ups in the next few years – and happily so, since the need will be unprecedented.

My concern, as you might expect, is that there may be insufficient Seed/Series A capital available to fund new cleantech enterprises. The limited partners who supply VC firms with money to invest are putting less and less capital into VC overall, and the share of that money that will be allocated to cleantech is unlikely to grow in the near term. If shrinking cleantech allocations get disproportionately earmarked toward late-stage investment, Seed/Series A capital will be thin on the ground. I’m self-interested in this because our team at Venrock invests early, we prefer to do so in conjunction with peers, and we already have fewer co-investors available to us now than we did two years ago.

This brings us to a different question: What would have to happen for LPs to pump more money into cleantech rather than the same or less? That depends on returns, which I’ll address in the next post.

Matthew Nordan (@matthewnordan) is an energy VC investor at Venrock, one of the oldest and best-performing VC firms. Earlier, he co-founded and led the energy tech analyst firm Lux Research and forecasted technology futures at Forrester. There’s more where this came from at mnordan.com.

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“If they do what they are supposed to, nuclear reactor construction will be much more costly and much less inviting as a policy option as a result of the Fukusima accident,” said Cooper in a research note.

According to Cooper’s research, the construction costs for reactors after Three Mile Island (the nuclear incident in 1979 in Pennsylvania), but before Chernobyl (the incident in 1986 in Ukraine) were 95 percent higher than those completed before Three Mile Island. That resulted in electricity costs that were 40 percent higher. The construction costs of the reactors constructed after Chernobyl were 89 percent higher than those completed between Three Mile Island and Chernobyl, which delivered electricity costs 42 percent higher.

It’s not rocket science to realize that major disasters would cause extra safety costs, but that’s a massive leap. Cooper says the cause was a continued extension of the construction period and new design changes required by safety concerns.

The Nuclear Regulatory Commission (NRC) is already reviewing nuclear plants planned for construction in the U.S. and has a task force assembled to see if there are lessons to be learned from the Japanese disaster. Nuclear provides 20 percent of the electricity in the U.S. Other countries like Germany are reviewing their nuclear plans, too.

Beyond cost, the Japanese nuclear disaster could lead to the development of next-generation nuclear technology coming “to a screeching halt” in the short term. That’s what Ray Rothrock, a partner at venture firm Venrock and a former nuclear engineer, predicted. Rothrock was working as a nuclear engineer back when Three Mile Island occurred and witnessed at least a six-month clamp-down on nuclear tech as the NRC reviewed the industry.

For a startup like NuScale, which is making a modular nuclear reactor design and is planning on submitting its application to the NRC for review within 18 months, a very busy and cautious NRC could mean a significantly longer time to pass regulatory hurdles and get to market.

It’s generally believed the ongoing situation at the nuclear plants run by Tokyo Electric Power Co. looks to have surpassed the severity of Three Mile Island. Department of Energy Secretary Steven Chu made that assessment in a hearing before the House Energy and Commerce committee. That could mean the cost effects, tech ramifications and policy decision are even greater than after previous disasters.

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That was the case when Rothrock was still a working nuclear engineer back when Three Mile Island occurred. At the Cleantech Forum in San Francisco on Wednesday, Rothrock said that in the wake of Three Mile Island, the U.S. Nuclear Regulatory Commission (NRC) immediately began a review process of U.S. nuclear plants that took half a year to get through. For a startup like NuScale, which is making a modular nuclear reactor design and is planning on submitting its application to the NRC for review within 18 months, a very busy and cautious NRC could mean a significantly longer time to pass regulatory hurdles and get to market.

Venrock has backed stealthy nuclear company Tri-Alpha Energy, which has been working on technology out of the University of California at Irvine that involves a mixture of hydrogen and boron that “chase” one another in a plasma electric generator, according to a U.C. Irvine report.

CMEA Principal Rachel Sheinbein, who also spoke on the panel at the event, said, “Three Mile Island set us back 30 years, and we lost the opportunity to be a world leader in nuclear.” CMEA has invested in NuScale.

It is generally believed that the ongoing situation at the nuclear plants run by Tokyo Electric Power Co. looks to have surpassed the severity of Three Mile Island. Department of Energy Secretary Steven Chu made that assessment in a hearing before the House Energy and Commerce committee this morning.

However, beyond the immediate knee-jerk reaction that could come from the NRC in the U.S., Rothrock thinks next-generation nuclear technology development will ultimately be able to learn from any design issues with the GE mark-1 reactors that were used in Japan and are undergoing a partial meltdown right now. Ultimately, when problems happen with reactors, it’s all the more reason why new nuclear technology needs to be developed, said Rothrock.

Both Rothrock and Sheinbein pointed out the aging design and technology that was being used in the GE mark-1 reactors in Japan. They worked as designed, said Rothrock, but the design was just an older system.

The CTO of NuScale, Jose Reyes, who was the third speaker on the panel, pointed out some of the innovations that his company has developed that he thinks could make nuclear technology safer and more economical. NuScale has built a modular system that has a passive safety design that is built underground, suspended in water and uses a much smaller amount of fuel per module. A NuScale module has 5 percent of the fuel that a large nuclear plant has, said Reyes.

The NuScale design does not require an external power source or an external supply of water, delivered by pumps or generators, said Reyes. Instead the fuel is suspended in a 30-day supply of water, and because it’s housed in water, it has a better ability to withstand earthquakes. Reyes said one second after a NuScale reactor is shut down, it’s producing only 10 MW of thermal energy. One hour after shutting down, a NuScale reactor is producing 2.5 MW of thermal energy.

The modular simplified design will be lower cost, too, says Reyes. That’s partly because the reactor can be built and assembled offsite, then brought to the site to be completed, reducing the time to produce electricity from 6 years to 3 years. The smaller reactors are also a lot less daunting for utilities to put up the initial capital, compared to a $10 billion large nuclear reactor.

Of course, NuScale isn’t a commercialized technology yet, and now could face even more time to commercialization now that nuclear safety is front and center.

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BillFloat, a San Francisco–based startup that wants to pay your bills and give you more time to come up with a payment, launched its services officially today (the site soft launched last week). The company also announced a $4.5 million Series A round of funding from First Round Capital, with participation from Venrock and PayPal. The venture fund and the payment company provided seed capital for the company, which was founded last year by Ryan Gilbert and Sean O’Malley, both of whom were entrepreneurs in residence at Venrock when they came up with the idea.

Earlier this year, PayPal said that it provided seed funding as part of its ongoing attempts to expand the online payments market, but it still wasn’t clear what BillFloat was exactly. Gilbert said that he and O’Malley had been thinking of a number of different services and features that would change the way consumers and businesses engage in online transactions and were going to experiment and launch them over time. It’s not clear whether the BillFloat site that just launched is the first in this series of services.

The idea behind BillFloat is a simple one: in a sense, the company acts like a big brother and pays your bills if you can’t come up with a payment by the deadline (the service has more than 3,000 U.S. billers in its database, from phone and cable companies to insurance providers). You then get up to 30 days to pay BillFloat the invoiced amount plus a handling fee. Since many retailers and service providers charge substantial penalties if you miss a payment, BillFloat hopes to save users that pain and still make enough from its fees, which it says are smaller than the majority of those penalties (they start at $4.99 per bill).

One interesting element of the service is that BillFloat doesn’t do any kind of credit check on users before it agrees to pay their bills — the company says that it has a “decisioning engine” that determines to whom it should extend its micro-credit that makes a standard credit check unnecessary. One of PayPal’s claims to fame is a similar algorithm and software system that the company says can determine from a range of factors, including a search of various web databases and online activity, whether a person is a good credit risk or not. PayPal likes to say that it knows whether it will accept you as a customer before you have even finished filling out the initial signup form.

BillFloat is similar in some ways to another PayPal-related service called BillMeLater, which eBay acquired in 2008. The service allows consumers to pay for a variety of goods and services with what amounts to a digital IOU, requiring them to provide only their date of birth and the last four digits of their Social Security number.

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Given the amount of money pouring into these technologies from both public and private sources, how can we distinguish between the likely winners and losers? Based on factors like revenue per employee, patents, performance metrics, production capacity and other data, Lux has identified gaps between long-shot ventures that would make risky investments and weak partners, and companies with disruptive core technologies and other key characteristics that make them promising targets for mergers, acquisitions or licensing deals.

One thing’s clear from the analysis: While many startups generate buzz when they raise new funds, high profile investors hardly put them first in line for market viability. Lux offers a sobering statement for young fermentation ventures, including those working on cellulosic ethanol, butanol, propanol and methanol. Put simply, scale trumps tech (see our map of companies racing to build cellulosic ethanol plants in the U.S.):

“Right now, all of these companies are in a heated race to achieve that low cost [competitive with petroleum counterparts], which can only happen at commercial scale; companies that get there first — due to favorable funding, government assistance, or operational excellence — will have the best prospects even if their technology isn’t the absolute best in class.”

This puts Canada’s Iogen, backed by oil giant Shell in a strong position. Founded in 1974 and producing small amounts of cellulosic ethanol for the last six years at a demonstration plant in Ottawa, Iogen uses specialized enzymes to convert straw feedstock into sugars, which it then ferments and distills to make cellulosic ethanol.

But while Iogen earned top marks from Lux based partly on its age and maturity, Mascoma, at less than five years old, also scores well in Lux’s rubric, joining Iogen in achieving “top chef status.” Lux cites “strong financial support from investors” (who include a number of Silicon Valley venture firms, such as Khosla Ventures, Kleiner Perkins and VantagePoint Venture partners, as well as General Motors), and Mascoma’s “potentially cost-cutting” process for breaking down cellulose and fermenting the sugar with a single microbe.

Qteros, on the other hand, backed by billionaire investor George Soros, as well as BP, Valero and Venrock, has a tough climb ahead. Lux notes that although the startup, founded in 2006, “is young and still has opportunity to prove its mettle,” progress has been “steady but slow,” delivering only lab-scale production and lacking high-profile partners. The next two years, Lux predicts, “will decide the company’s fate.”

Other high-profile biofuel startups didn’t score quite as well as we would have expected. Government-backed Range Fuels, which is one of the companies closest to producing cellulosic ethanol commercially, garnered a “wait-and-see” rank, as did ZeaChem, Coskata, Ze-gen, Solix Biofuels and algae gorilla Sapphire Energy – reflecting “significant unknowns” about the companies’ tech or markets.

Algae technologies, given their very early stage, show the most variation of any other tech category. They still have plenty of skeptics, including aggressive cellulosic biofuels backer Vinod Khosla. Lux writes, however, that “While the majority of companies are still trying to decide upon end markets to pursue,” collaboration, cross-licensing and joint ventures between developers of algae tech tied to particular local conditions (deserts in the Southwest vs. salty inland lakes, for example) will deliver commercial success for some combination of today’s technologies.

Some of the strongest players in Lux’s ranking include Phycal, Algenol and Solazyme — a 7-year-old startup that had one of the first development deals with an oil company and expects to be able to commercialize its technology in the 2012-2013 time frame.

For genetic modification tech, energy and agricultural giants such as Shell, Chevron and Monsanto represent the most promising exit strategies for startups, according to Lux. “Though the production of energy crops for fuel is economically questionable, this family of technologies” can be used for agriculture, “a market that will never run dry.”

Image courtesy of Coskata.

Net Neutrality Hearing Totally Comcastic; During a hearing last Friday, a three-judge panel questioned whether the FCC has the authority to impose net-neutrality rules without an explicit congressional mandate. (AllThingsD)

BBC Expands iPlayer Beta on Freesat; the Freesat version is currently available on Humax set-top boxes, and will become available to all Freesat HD set-top boxes and HDTVs over the coming months. (BBC Internet Blog)

Mark Cuban on 3-D, HD, LSD; The WSJ talks to Cuban about which gadgets he’s looking forward to seeing, why he thinks 2-D-to-3-D video processors are a “cheat,” and what exactly he was thinking when he compared 3-D to LSD. (Digits)

Internet on TV is a highlight at Consumer Electronics Show; the most promising new products were not expensive, content-deprived 3DTV sets, but Internet-connected HDTVs. (Washington Post)

DirecTV Tells Its Growth Story; CFO Patrick Doyle said gross subscriber additions should decline, but that the satellite-TV giant sees growth opportunities in apartment buildings and a more aggressive broadband offering. (Multichannel News)

Ensequence Cuts More Jobs; the interactive TV solutions provider has conducted another round of layoffs in an effort to refocus its efforts on its core business. (InteractiveTV Today)

SpeedCine Goes International; the database of legal feature films available for streaming or downloading expands to the international market today, serving every computer user worldwide. (press release)

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