Clean tech is back -- or is it?
Recommend
By Tim Mullaney, Special for USA TODAY
Backers of clean energy technology are getting more bullish again. More than a half-dozen clean tech companies are in registration to go public, and U.S. venture-capital investment in pre-IPO clean tech companies rose 54 percent to $1.14 billion in the first quarter, compared with the same quarter of last year. We spoke to Jay Spencer, director of Ernst & Young's clean tech practice, about the numbers this week.
"There are dollars there -- it's improving on a year-by-year basis," Spencer said, picking up from the post-financial crisis near-collapse of both venture capital and debt-market interest in supporting construction of biofuels refineries, factories for solar-panel components and the like. "Energy is such an important part of everything we do. When you look at the transition to a low-carbon economy, cleantech is the innovation that enables it."
But are things really that good? Venture investment in clean tech actually fell from $1.37 billion in the fourth quarter, and two-thirds of the first-quarter money went to later-stage startups that are preparing to go into production, rather than early-stage innovators.
Getting the older companies to production still requires more than venture capital can afford to do. Clean tech also needs a bigger recovery in the project-finance debt market, the IPOs need to work in order to raise still more money, and the industry continues to depend heavily on aid from a federal government looking at a $7 trillion deficit over the next decade.
The House Republican caucus that is now in the majority voted unanimously against the 2009 stimulus that provided some $35 billion for clean tech. How solid all of those factors really are will only become clear over the next two to four months.
