10 Reasons To Celebrate/Grouse About Greentech on Earth Day

We’re partial to just joining up with Grist and saying, screw Earth Day, but since it’s unavoidably happening across the globe on Wednesday, we’ve decided to use the occasion to reflect on the state of greentech. We have a lot to cheer about in this moment — the Obama administration, young people getting excited about careers in energy, and the burst of innovation in startups — but a lot to moan about, too: the darn economy, consumer malaise over climate change issues, and the recent greentech bubble that elevated and crashed quite a few green firms. Here’s our take on what to celebrate and what to grouse about in the greentech biz on the 39th Earth Day:

5 Reasons to Celebrate:

1). The Obama Administration: The Obama administration has done far more in the first few months in office in terms of allocating funds for fighting climate change and spurring greentech industries than I would have predicted last summer. Obama has already started to make considerable progress on his aggressive campaign goals, and has used the stimulus package to allocate more than $40 billion to help turn the energy industry cleaner and more efficient. Now he’s helping guide the American Clean Energy and Security Act through Congress, which calls for the carbon reductions of his campaign promise. His climate change and energy staff is also filled with some of the most progressive scientists and policy makers in the U.S.

2). The Smart Grid’s A Comin': Nourished by more than $4 billion from the stimulus package, the smart grid is getting rolled out and could offer one of the largest drivers of wealth in a decade. At the Fortune Magazine Green conference this week smart grid execs like GridPoint CEO Peter Corsell insisted that that smart grid is already here, pointing to moves from FPL in Miami, and PG&E in California. After the network gets built, then comes the startups and entrepreneurs building the applications.

3). Energy, Hip to Be Square: Long the industry of stodgy utilities, energy is starting to receive a lot of attention from university students and young entrepreneurs. Due to increased media attention, movies on climate change like “An Inconvenient Truth,” and more attention to global trends, students are piling into classes, majors and career counseling offices to discuss the subject, while business competitions like the California Cleantech Open are growing leaps and bounds.

4). Cleantech Relatively Strong: Yes, the economy may have crippled cleantech investing in the first quarter of the year, but the cleantech sector will likely fair towards the top compared to other types of venture investing. Regulation and federal funding will help console wary private investors considering the sector. Check out how far cleantech investing has come: in 2008 it hit $8.4 billion, according to the Cleantech Group, rising from just $506.78 million back in 2001.

5). Energy Efficiency in a Down Economy: In some ways the stumbled economy has actually made greentech investors and entrepreneurs a lot smarter. Energy-efficiency technology, which is at the forefront of investors and the federal policy maker’s minds, can provide some of the fastest return on a cleantech investment. The stimulus package allocated billions for not just smart grid, but weatherization of buildings and general efficiency block grants. While interest in energy efficiency seemed to lag behind last year, overshadowed by more experimental, expensive and sexy clean energy production, the economy has helped to put those priorities at the top of the list.

OK, so it’s clearly not all roses out there. Here’s 5 Reasons to Grouse about the state of the greentech biz:

1). Cleantech Me-Too’s: You might have thought since investors are, for the large part, wealthy persons, they’re also creative and smart investors. Not necessarily — ever look at an average venture firm’s cleantech portolio? For every one solid company you admire on that list, the firm’s often got a good six that are following the pack in their industry. VCs feel validated if their peers have placed competitive bets, which can skew what they end up funding. There is some hope for the un-innovative and IP-less out there: more regulation in an industry like greentech means that there’s more chance to leverage non-traditional technology assets like old-school relationships, or regulation loop holes. You know, aspects for which you don’t need an engineering or science degree.

2). Crash-n-Burn Green Style: All the record quarters of greentech venture investment last year, have helped deliver a growing list of companies that grew way too fast, overcommited, and hit a wall when they ran out of cash. Solar PV maker OptiSolar, which halted production, cut its staff and sold off its PG&E solar deal assets, is the latest example. Biofuel companies Imperium Renewables, VeraSun and Aventine have dried up over the past couple months. Natural gas home-fueling station maker FuelMaker went bankrupt recently. Hey, it’s tough out there.

3). Climate Change Malaise: Overhyped green technologies, products and marketing, as well as lack of understanding of the state of climate change, has led to a feeling of malaise for average Joe. As Elizabeth Kolbert points out in the New Yorker: “Polls show that voters regard the environment in general, and climate change in particular, as, at best, middling concerns. . . In a recent survey, the Pew Research Center asked Americans about their priorities for Congress and the new President. “Dealing with global warming” ranked at the bottom of a list of twenty choices.”

4). The Energy of Politicking: We’re hoping there’s big changes afoot with the quick passage of the stimulus package and the work on the new climate bill, but politicking is something that can easily knee-cap promising green industries. Take the renewable tax credits that for years were only renewed a couple years at a time for clean power industries, due to policy-makers’ (that get elected every couple years) desire to run on a platform of renewing them. The short term renewals discouraged investors from taking a longer bullish view on those markets. We finally got the credits renewed in a more meaningful timeframe, but it’s a lesson on how politicking nudge Washington, Wall Street and Silicon Valley out of sync.

5). Slow Moving: Waiting for utilities to make technology decisions, committees to rule on standards, and car companies to invest in cleaner transportation, can drive anyone crazy. Particularly if you’re used to the faster pace of infotech sectors like Web 2.0. The greentech industry faces some of the slowest moving, business and regulatory logjams, in the emerging technology space, outside of biotech.

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