As an EcoGeek, I spend a lot more time thinking about science and technology than savings and loans. But there's no doubt, a strong economy would help the cleantech revolution get a foothold...and a weak economy will hurt it.
So I've been spending the last few days combing through all of my favorite investment resources, trying to figure out exactly what this "worst crash since the great depression" really means. How will it affect this burgeoning revolution...and what does that mean for the planet.
It seems that the news is mixed. Many have speculated that cleantech investments are one of the best places to be right now. And I have indeed seen that in my own portfolio. While there have been losses across the board, my cleantech and energy investments have lost the least. It seems that investors see clean energy as one place that will continue to grow despite an economic downturn.
This has, of course, been helped by the Senates approval (finally) of an energy bill that includes tax incentives for clean technologies (mostly solar and carbon sequestration.)
But there's bad news too. Two articles I read today have got me believing that there simply will not be enough money to go around for the sector to grow as fast as it should. CNET's Greentech blog is saying that talk of a clean technology bubble is, in fact, a red herring distracting us from the true problem of not enough capital to get companies to full scale.
The problem, they say, isn't getting the startups funded initially. In fact, VC investment has never been stronger. The problem is bridging the gap from startup to full commercialization. That requires strong investment in the form of IPOs or acquisitions. And in this climate, investors aren't looking to invest, and even the biggest corporations are having trouble getting loans for big purchases.
My go-to guy for cleantech stock news, Tom Konrad, is also worried. He deals exclusively in stocks, with no venture investments, so his concerns are more more based around current companies than startups. And his prognosis is grim: Sell everything that is going to need a new money. In short, Tom doesn't think that the investment will be easy to procure, so he's unloading stocks in young companies that are going to need capital.
Instead, he suggests buying up established companies with fingers in lots of cleantech pies already. Companies like Johnson Controls, Philips and even good ol' GE who have government contracts or large stakes in wind energy, energy efficiency, or power distribution.
To see all of Tom's top ten, check out his AltEnergyStocks blog.
All of this seems pretty wise to me...and not entirely encouraging. While it's undeniable that cleantech offers the most obvious path toward continued economic growth, there's just no way to get people spending in a significant economic downturn.
The ultra-rich will keep their venture investments going, but they will likely be disappointed when it comes to IPOs or acquisitions in the next couple of years, and the value of little alternative energy companies who's stock prices are based on projected growth, not current revenue, will probably flounder for a few years.
I'm calling this some pretty bad news, especially since we can't afford a delay on a lot of this stuff...as investors yes...but as inhabitants of the planet earth as well. If the government isn't able to take a leadership stance on carbon markets and subsidies because of the current turmoil...that would be a true disaster.
If they do, then I can see clean technology leading us out of this mess a lot sooner than most people are predicting. If they don't, then we're going to have to wait far too long for the rise of clean technology...and it's possible that stronger foreign markets will beat us to that particular punch, possibly making American markets (and a lot of our companies) surprisingly obsolete.
written by August Flanagan, September 27, 2008
written by Tom Konrad, September 27, 2008
written by dOgBOi, September 28, 2008
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