Cleantech Investing Still Makes Sense[Excerpt from SJF Ventures’ Managing Director, Dave Kirkpatrick’s, blog post]
Given the recent bankruptcies of U.S. solar manufacturers Solyndra, Spectrawatt and Evergreen Solar, some are asking if cleantech investing is viable. At SJF, our cleantech portfolio companies are achieving great results, particularly utilizing capital efficient, innovative business models that can thrive in the U.S. market. These firms are applying new business models to a variety of well established sectors that have been slower to apply new ways of conducting business. These business model innovations drive efficiency gains and create economics that work today particularly in recycling, asset recovery, infrastructure, and agriculture.
Likely we will see more failures in upstream U.S. solar technology companies in the coming year, given the relentless price declines being driven by the scale up of Chinese PV module manufacturers, fueled by national and regional government subsidies. In 2006, SJF conducted a webinar on the merits of investing in downstream solar in the U.S. (installation, development, finance) in comparison to upstream manufacturing which must compete globally. We reprised this analysis in March 2010 with a discussion of the two models of cleantech VC investing, the ‘today markets’ approach of SJF Ventures as compared to the ‘tomorrow markets’ approach of much larger cleantech funds working on breakthrough technologies. Later in 2010, SJF Ventures led a Series A financing in Community Energy to carry forward that theme in the solar markets with a company that innovatively combined a downstream utility scale solar project developer with a proven wind developer and REC marketing firm scaling up its solar development business.
Read the rest of the the commentary here.
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