Let’s not sugarcoat it like that pecan pie you’re going to eat tomorrow tonight. Cleantech, or whatever you want to call the sector these days, has had a hard year. The politicization of cleantech in an election season, fewer venture capitalists funding new companies this year, and widespread solar bankruptcies were all hurdles that cleantech entrepreneurs, investors and innovators had to face in 2012.
But there were also quite a few things that excited me this year, which in honor of our upcoming day of thanks, I’ve decided to call out. Here are 10 things to be thankful for in cleantech.
1). Obama won: Thank goodness. The entire cleantech sector dodged a bullet — and breathed a sigh of relief — as the votes rolled in and President Obama was re-elected for a second term. Obama delivered an unprecedented amount of cleantech funding: billions in incentives for clean power, electric cars and energy efficiency through the stimulus package. While the incentives won’t likely be as high as they were when the stimulus package was determined, if Mitt Romney had won, it would have likely been a real blow for cleantech. Romney is a self-professed coal-lover, who used speeches to point out misspending for clean power companies, and made a now infamous joke (post Sandy) about climate change.
2). New solid customer: Internet infrastructure: A growing amount of Internet companies — and web infrastructure providers — are looking for ways to add more clean power to their data center energy consumption mix, and are also looking for ways to be less reliant on the power grid. Some of the leaders in this area include Google (s GOOG), eBay (s EBAY), Microsoft (s MSFT), and Apple (s AAPL), and many of these companies have invested in both solar systems, energy efficiency technology and even fuel cell farms. Fuel cell maker Bloom Energy has managed to find a niche and growing market here.
There’s also a growing trend of IT companies looking to utilize low power servers — servers built off of low power cell phone chips. AMD this year acquired startup SeaMicro, and weeks ago AMD launched its SeaMicro low power server. Calxeda just raised $55 million to move toward commercializing its own low power server product.
3). Digital green, or clean web: Cleantech — from a VC and entrepreneur perspective — is in a transitional state. But in the meantime, clean technologies that are based on IT — like mobile, big data, cloud computing, software — are still seeing a lot of innovation and investment. Examples of startups in this sector include Opower, Nest, Solar Mosaic and Sungevity. Investors are calling this sector different things — Greenstart calls it digital green, Spring Ventures calls it Clean Web, and MDV calls it where cleantech meets IT — but it all means the same thing to them: a way to make money that more closely mimics making VC investments in web and mobile companies.
4). Smart thermostats: A particularly interesting area to me in terms of the smart grid and cleantech startups is the growing use of thermostats that are connected to the internet and that can smartly cut building energy use. Nest says it’s sold in the mid-hundreds of thousands of its learning thermostats, which can learn the users behavior and shave off energy consumption overtime. EcoFactor’s service is being used in a commercial deployment in Las Vegas, and Opower’s software is being used in three utility trials with Honeywell’s (s HON) thermostats. Startup EnergyHub is also working on providing the software for smart thermostats.
Connected thermostats could be the answer to what utilities call demand response, which is basically turning down the energy use of its customers during peak times of day. The customers agree to the programs and can see lower energy bills. If the system is automatic and non-intrusive — which can be done using smart thermostat analytics — customers are far more likely to join the programs, and the utility’s results are better.
5). Tesla: Electric car maker Tesla (s tsla) has one of the most ambitious ideas in cleantech, and has actually — mostly — delivered on its goals. Yes, it was slow to get its estimated volume of Model S cars out to owners in 2012, but it’s on track to deliver its new estimates over the coming months. The company is also one of the few cleantech ideas that have captured the imagination of the public, and recently won Motor Trends’s car of the year award — the first time in history that an electric car won it.
6). The learning curve: Like I said, cleantech is in a time of transition. And I think that’s a good thing. As Greenstart founding partner Mitch Lowe said on a recent panel I moderated, fewer companies are being funded, but that just means the bar is higher. While bubbles are fun — like the one that grew in cleantech between 2006 and early 2008 — bubbles mean a lot of stupid money is flowing. Hopefully the smarter money of the next 18 months will deliver some breakthrough cleantech startups.
7). Cheap solar panels: One of the most dramatic clean power economic factors to emerge in 2012 occurred via super cheap solar panels coming out of China. While rock bottom solar panels make a difficult market for competing solar manufacturers, that ecosystem has created a boom in solar panel installations. In the U.S. there are now 250,000 rooftop solar panel installations, and companies like SolarCity are seeing large growth.
8). Wish for big ideas: Outside of cleantech, in the general tech and IT markets, there’s been a growing drumbeat of entrepreneurs and investors calling for greater attention on “big ideas.” While there can be easy money in social media and mobile apps ($1 billion for Instagram), there’s an emerging discussion around technology being used for higher aims, like solving problems for resource constraints. Investor Peter Thiel has been a chief champion of this approach and recently created a growth fund that will tackle big problems — the fund has already backed firms like compressed air energy storage startup LightSail Energy. They’re not calling it cleantech, but it is under the hood.
9). Meat 2.0: When the population explodes to 9 billion people by 2050, livestock for consumption could become a constrained resource — particularly because the emerging middle class in developing countries are increasing their meat consumption. That’s one of the reasons that innovation is occurring around fake meat. As Greentech Media wrote, paraphrasing a VC: “having a “fake meat” company in one’s VC portfolio was becoming a must-have, like having a cloud computing firm or a failed thin-film solar company.” Beyond Meat is one startup and Sand Hill Foods seems to be another. Modern Meadow
Meat is a startup working on meat manufacturing, with backing from Thiel.
10). Collaborative consumption: And another sector of cleantech that’s not really cleantech: sharing goods. The next-generation of young people are less interested in owning things, and more interested in gaining access, or using things as a service. That makes the use of goods more efficient and sustainable. You don’t need to buy a car, because you can pay for access via Zipcar. There’s tons of startups in this space from giants like Airbnb, to new comers like electric scooter rental startup Scoot Networks.