I have been asked a few times about the investments in alternative energy sector and where I think things headed. While I think there is a genuine new-found interest in this sector due to the improved technologies and reduced cost of implementation, a lot of it is also due to the hype built into some prospects – such as corn-based ethanol. Solar, wind, bio-diesel, cellulosic ethanol, and thermoelectric power generation are, otherwise, great technology areas to be investing in. At the end of the day, a lot of pawns will fall before a king will make it to the throne – but that is what venture ivestments are all about. The combination of tightening environmental regulations, high oil prices, improved alternative energy technologies, scalability in implementation, and available capital will certainly continue to drive this sector closer to success. Several companies have already had phenomenal exits (IPOs and M&A), and full-stream commecialization is under way (e.g. wind farms in Germany and solar power in California. One sign of success is that large companies like GM, Ford, GE are full-steam moving forward on making their mark seen in thecleantech industry. If the government sprinkles a few subsidies here and there it will be nice, despite the undesirable side-effect of sometimes promoting some technologies over better ones.
Here’s a great article I just read on the investments in clean-tech:
Clean Tech Goes Mainstream
by Ken Silverstein, EnergyBiz Insider
“Clean technology is in vogue. Solar panels and wind turbines are hotter now than ever before. Green energy investments throughout North America climbed to $1.6 billion in 2005, 43 percent more than the year before.
Such venture capital is on the rise because of high energy prices, the concern for air quality and technological advancements. But the major catalyst that will ignite future development will be the Energy Policy Act of 2005 enacted last fall. Seed money has been holed up since the 2001 recession. But, now with a good economic prognosis and some lucrative tax incentives, capital is flowing into the green arena.” read more…