The 10 best and worst things to happen to cleantech in 2012

December 20, 2012

You can run but you can’t hide — it’s time for all those top ten (top twelve, top five) lists that pervade the Internets in the last few weeks of the year. I’ll be crafting a few for you dear readers, and will be shooting to bring you something a little bit different from the norm.

So here’s my first, where I parse out what I think have been the top 10 best, and the top 10 worst, things that have landed on the cleantech scene in 2012. Feel free to add your own in the comments.

The best:

1). Tesla remains (mostly) on track and is one of the last standing: Tesla hit its goal to launch its second electric sedan the Model S in the Summer of 2012, and reservations have remained high throughout the year. The introduction of the car was met with rave reviews, and towards the end of the year the car won Motor Trend’s Car of the Year award, making it the first electric car to do so. While Tesla did assemble and ship some of those cars more slowly than expected, the company remains on track with its slightly lowered estimates. Tesla CEO Elon Musk even tweeted recently that the company has now become cash flow positive.

In comparison, a lot of other electric car makers, and electric vehicle parts makers, struggled in 2012. A123, which supplies batteries for electric cars, declared bankruptcy, while sales of GM’s Volt and Nissan’s LEAF in the U.S. are lower than expected.

2). Google put almost a billion dollars into clean power: Even though Google isn’t a power provider or utility, the search engine giant invested almost a billion dollars ($990 million) into clean power projects. Google is doing this because it wants to power its data centers with clean power, but most solar and wind are more expensive than fossil fuel power right now.

Last year Google shut down its Google.org-sponsored RE<C project, and many saw this as a sign that Google was moving away from its clean power commitments. However, just this week, Google announced that it has hired energy innovation wiz Arun Majumdar — the former ARPA-E program director — to work on Google.org’s energy research strategy. Expect to see some interesting energy innovation outta Google in 2013.

3). Rock bottom solar prices: Super cheap solar panels might have caused problems for solar manufacturers, but for companies and home-owners that want to put solar panels on their roofs, low cost panels are leading to an unprecedented amount of new solar installations. The super cheap panels has been leading to solar installers doing well, and SolarCity had a successful IPO just last week.

4). Clean Web, Green IT, digital green, or whatever you want to call it: It’s become very clear that investing in capital-intensive cleantech manufacturing technologies is a lot harder for most investors, than investing in software, computing, mobile and the web. Which is why new phrases called Clean Web, and digital green, have emerged to explain startups and big companies that use digital technology to address resource constraints like energy, water and food. See photo below of investor Sunil Paul talking about Clean Web back at Green:Net 2011 (our conference focused on this topic).

5). Big data and energy collide: One of the biggest trends, that is making startups money and actually helping buildings reduce their energy consumption, is new types of energy analytics for energy data. Some of the companies that are playing in this space include Opower, Nest, Tendril, EcoFactor, EnergyHub, Bidgely, Stem, Auto Grid and others.

6). Low power servers: Using low power ARM chips for servers, finally got some more mainstream traction in 2012. Our analysts at GigaOM Pro just held a webinar about this on Wednesday. Earlier this year AMD bought SeaMicro, a startup building servers based on ARM chips, and Intel is also into so-called “microservers,” too.

7). Obama won: We’re not super political here at GigaOM, but the fact that President Obama will be the President for another four more years, means that a lot of the incentives for clean power and energy innovation will remain in place. Some might get cut, but the Obama administration has been really active in supporting energy innovation and put an unprecedented amount of funding into clean power, electric vehicles, biofuels and energy technology through the stimulus package.

8). Chinese investors: Chinese giants like auto parts maker Wanxiang are stepping in to buy up low cost cleantech assets that aren’t getting the needed funding in the U.S. Wanxiang is acquiring bankrupt battery maker A123 Systems (given the deal is approved in the U.S.) and also invested in GreatPoint Energy, and Smith Electric Vehicles. It’s not great for the U.S., but the funds are helping energy innovation stay alive in difficult times.

9). Food and Ag tech innovation: One of the most interesting areas to emerge in recent months is startups that are looking at ways of using technology to make food consumption and production more sustainable. There’s now startups building new types of plant-based proteins, invitro meat printing, biotech for crop development, new kinds of insurance for crop production, and more.

10). Desire to address “big problems”: Pervasive across the web and mobile sectors, is a growing desire of entrepreneurs to tackle really “big” and difficult problems. The idea has even graced the cover of the MIT Tech Review recently. As those struggling in the cleantech sector know, this is one of the main reasons that many cleantech entrepreneurs started their businesses. Now a second wave of web entrepreneurs is focused on “big problems” with new investment methods like Peter Thiel and Obvious Corp.

+1: Bill Gates. An outsider to energy that’s fully embraced funding and discussing energy innovation.

The worst:

Since there were a lot of bad things to happen in cleantech in 2012, I’m just going to briefly run down some of the hurdles:

1). Electric cars struggled: Electric vehicles moved way more slowly than expected in 2012. The Volt and the LEAF are below their numbers in the U.S., and Better Place is struggling gaining traction in Israel, it’s first target market. Fisker Automotive has been plagued by problems, and battery makers like A123 Systems have gone under.

2). Solar prices hurting manufacturers: Solar prices kicked solar makers in the teeth in 2012 (and yes, this is also one of the best things). There’s been dozens of solar companies that have closed factories, gone bankrupt or gotten out of solar completely in 2012. It’s even affecting solar thermal companies, which make systems that use mirrors to harness the sun’s rays to make heat, as well as solar concentrating thermal companies, which have developed hybrid systems.

3). Natural gas prices undercutting clean power projects: Super cheap natural gas might make the U.S. energy independent and lower overall carbon emissions, but the low prices are making wind and solar projects less economical. Expect higher natural gas prices in 2013, as they really can’t get much lower.

4). Cleantech got politicized: Cleantech, clean energy and electric cars became fodder for the U.S. Presidential election and it has yet to recover. Somehow clean energy became a cause to fight for by the left, and fight against by the right, despite that some red states are adding clean energy jobs at a faster rate than blue states. Hopefully that will die down now that the election has been decided.

5). Lots of cleantech investors lost money: Many of the generalist venture capitalists that put money into cleantech over the last 5 or 6 years have lost money, and decidedly pulled back on investments in 2012. That will continue in 2013. Though, this is also a good thing, as it is weeding out investors that didn’t make money. The same thing happened in the dotcom bust.

6). World coal domination: As developing countries look to add more and more cheap energy, coal is becoming the defacto energy option. By 2017, coal could replace oil as the largest source of energy. That’s really bad as coal doesn’t just have a lot of emissions, but it has other problems like air pollution, and safety issues for workers. There’s a time factor for clean technologies, and if the world becomes even more dependent on cheap fossil fuels it’ll be hard to turn that boat around.

7). UN climate change discussions: Every year they don’t deliver on important decisions, and end up determining just the very basic needs in the 11th hour. It’s time for a new method of discussion, and a new way to make these important decisions.

8). Advanced Equities: The Chicago broker that raised funds for capital intensive cleantech companies like Fisker, Bloom Energy, SolFocus and Serious Energy, was charged and settled with the SEC over lying to investors. It makes the entire industry, and particularly the VCs that invested early in these companies, look really bad. Thanks guys!

9). Solyndra still hurts in 2012: Despite that Solyndra’s fall was over a year ago, the ghost of the company is still hovering over cleantech deals, investment, political discussions, and the public’s view of solar.

10). Expensive and slow moving battery innovation: One of the reasons electric cars are still not mainstream is because the batteries needed to power them are too expensive and don’t give the cars enough range. While there are a lot of innovative new battery startups, chemistry just moves a lot slower than computing innovation. Sigh — look out another decade for game changing battery innovation.

(c) 2012, GigaOM.com.

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