Business & Tech

How Clean Tech Survives the Recession

Patch was inside Cooley's annual clean tech conference.

The Palo Alto Patch Editor was liveblogging and tweeting from the 4th Annual Cooley Clean Energy and Technologies Conference at . Here are the highlights: (Note: reporting begins with the most recent event.)

12:15 p.m.

David Kirkpatrick – NRG Solar, LLC

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We’re gonna be at cents per watt in the solar industry, and some companies aren’t going to be able to compete. Somebody’s gonna build a better mouse trap, and there are gonna be winners and losers.

12:00 p.m.

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Dan Shugar:

“We’re at an inflection point with energy in this country.” Coal power is fading away, solar is on the rise.

11:50 a.m.

Dan Shugar:

I’ve never been so excited about solar than I am right now. Today, solar energy is lower cost than nuclear energy. We are lower cost than gas. We are competitive with coal. We’ve been the fastest growing energy technology 10 years in a row. I think it’s gonna be the biggest energy source in 2030.  And we’ve got a great story. There are more people working in solar than in coal. More people than in steel mills.

While the rest of the herd runs away and puts their head in the sand, there are great opportunities to invest in this industry.

11:45 a.m

David Kirkpatrick – NRG Solar, LLC

I think it’s a very exciting time in solar. Years ago when our company was bought out by GE, we grew our wind business from $3 billion to $8 billion in sales in three years time. Turbines got cheap, cost of power rose. I think we’ll have a similar situation with solar. We need this to be a very high volume, low cost business for solar to play an important role.

11:40 a.m.

Dan Shugar – Solaria can build a 100 MW factory for 25 cents/watt or $25 million.

10:00 a.m.

Break time!

9:50 a.m.

What's hot in clean tech:

Bill Reichert: Things that are highly differentiated that have visibility on having an impact in a relatively short period of time. There really isn’t any clean tech sector that isn’t open for innovation and opportunity. You have to have a novel technology.

Micahel Manson: The thing that I look for is a good team. Speed to market is absolutely essential. Final thing is passion. Inevitably a problem entrepeneurs have is that they think they can do everything themselves.

Mitch Lowe: Don’t be dependent on policy. Have capital efficiency. Have a value proposition that can be explained to customers really quickly.

John Balbach: On energy generation side: how can we get to parity with alternative energy? Wind and solar is very close. The supply side shows up and is oversupplying at an incredible rate. We have 76,000 MW of supply ready to get into the market for a 55 MW demand. Energy storage is the next holy grail. In the next 3-4 years I think we’ll actually get utility energy storage facilities built.

9:45 a.m.

Bill Reichert – Garage Technology Ventures:

It’s really hard to get your nose above the water line that will get investors to go wow, this is exceptional, this is really something different. That’s the bar now. You have to find a way to scrape it along and get it to the proof points so the investors don’t say oh my god, another bah, bah, bah company.

You have to plan raising funds as an enterprise sales campaign. The key there is rifle shots. You can’t just shotgun out to the investment community and say, I’ve got the name of every investor in clean tech. It’s like an enterprise sale. You’ve got to find influencers, you’ve got to find decision makers, you need to meet them and you need to close them.

9:30a.m.

Michael Manson – Motor Excellence:

Every entrepreneur rides two ponies. One is tied to fear, the other is tied to hope. You can’t let one get ahead of the other. Entrepreneurs sell the future too easily. Commit to cash flow they don’t receive. We tie our expectations and future options to a very tight timeframe. We’ve been very successful in that. Also gone to industry money. Instead of VC, which has been difficult to access, we’ve got money from industry and used that to set up side companies.

John Balbach - CleanPatch, LLP:

It’s really the strategics and the corporates that will be carrying this market for the next two years.

Mitch Lowe - Greenstart:

Generally takes 3-4 months to get to a term sheet. Antother 4-6 weeks to get a term sheet done. Funders want a presentation why they should care. How are you gonna change something? What sort of market are you going to upend? How does that translate? And then a demo. And a financial model that looks out 3-4 years and shows what that looks like.

Advice: don’t raise too much. It’s going to be diluted, you won’t have good terms, and it’s going to cause you to make bad decisions.

9:15a.m.

Nathaniel Bullard - $243 billion in clean energy funding last year globally. 30% growth over previous year.

More money went into clean energy capacity last year than into generation capacity for fossil fuels last year: $187 bil vs. $219

Clean energy investment is 1/9th amount spent on oil last year.

9:00 a.m.

The real story at the EPA is mercury. The mercury emissions out of the smokestacks of coal-fired facilities are toxic. That’s the place where the battle between Congress and the Administration is really going to be quite critical.

Lessons from China:

They have a national energy plan that is tilted in favor of national strategic goals. It gets rid of the thing that plagues us, which is total uncertainty.

They use low-cost capital to provide finance because they don’t want to create rate-shock for their consumers. Main users are businesses.

Warning: they don’t actually have coherent finance programs. They use finance everywhere. With a search party you can’t find real coherence in their lending programs. There is a real risk that they are overleveraging their economy.

8:35 a.m.

Solyndra, whatever you might have done with your money in 2009, it had been vetted for four years by the Bush Administration, and that administration wanted to fund it but Dick Cheney said: we’re not going to do anything with alternative energy because oil and gas and coal are plentiful.

Let’s end taxes on the alternative energy industry. Whatever alternative energy is, it is a nascent industry, let’s not kill it with taxes. For 10 years, if and when there actually are profits, they aren’t taxed.

Why don’t we reward utilities who advance efficiency services?  Let them keep any monetary savings from increased efficiency versus it going to the regulator.

Why don’t we make a long list of all the measures that can be taken and join me in the concept that we can sell risk and reward as a concept to Congress? You have to break some eggs in order to get omelets. We have to stand up and push back and have every state form coalitions. Firms in every single state need to say, whatever this Coalition for Green Capital is, we want to be a part of it.

8:25 a.m.

Reed Hundt, former FCC Chairman takes the stage.

I’m here from the entertainment capital of the world—Washington, D.C. is Hollywood for ugly people.

Barack Obama is unlucky in some respects, but he has always been lucky in his opponents.

The Solyndra story should make us wonder if we can keep the republic going through this age of unreason. In the real world, we should expect the government to do everything it can to jumpstart the clean energy revolution. In the real world we would applaud the fact that my friend Matt Rogers at McKinsey left to take a job with an infinitesimally smaller salary and did more for innovation in wind and solar in the last two years than what this country produced in the previous twenty.

Four pillars of DOE strategy: innovation, policy, finance and managerial discipline.

What the Obama admin did at DOE is the fastest turnaround of a government agency I’ve ever seen in my life… all done with the goal of establishing long-term success.

8:20 a.m.

Gordon Ho:

China putting 10 times the investment in clean tech vs. USA.

GE Conicophllips NRG – investing $300 million in clean tech in next four years.

There have been over 600 clean tech joint ventures to date worth over $8 billion.

8:15 a.m.

Gordon Ho opens the conference:

Basic fundamentals of Clean Tech Industry remain strong. Demand is rising; price of oil isn’t coming down any time soon.

Who’s going to fund the next generation of clean tech startups?

Angel investors are stepping up in early-stage investments.

CleanTech Syndicate – 11 private families – worth $30 billion wanting to deploy $1.4 billion in next few years.

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The Big Issue: Some analysts predict a looming venture and growth funding shortfall for clean tech companies—which players will step in to bridge the gap?

While the clean energy sector continues to attract significant investment, the landscape for early stage funding is rapidly changing and the environment for later stage clean tech companies seeking large-scale commercialization and expansion capital remains challenging.

The Discussion — The Future of Clean Tech Financing & Innovation: The conference will focus on strategies for successfully accessing public and private financing in the face of ongoing economic and policy uncertainty in an increasingly global economy. Experts will discuss the latest trends and provide insight into diverse sources of both early stage and large-scale financing for clean tech companies, including: the emergence of incubator programs, growing role of angels, venture capital and private equity, public markets, federal financing programs (grants, loans, insurance), corporate strategies, and international investors.

The Inside Power Players: The conference will include a series of expert panels, high visibility keynote, and Fireside Chat addressing the increasingly critical issues and opportunities facing clean tech financing and clean energy innovation in today’s global economy.

  • Featured keynote speaker Reed Hundt, CEO of the Coalition for Green Capital, will kick off the morning’s discussions. Hundt served as both former Chairman of the Federal Communications Commission (FCC) as well as a team member of President Barack Obama's Presidential Transition Team. Currently, he is on the Board of Directors of Intel Corporation, Serious Materials, Telegent Systems, and Vanu, Inc.
    • Cooley Partner, Tom Amis and Deloitte Partner Brian Goncher, will lead panels addressing Early Stage Financing Strategies and Later Project Stage Financing Strategies, including speakers:
    • Raj Atluru, Director, Silver Lake Kraftwerk (SLKW)
      • John Balbach, Director, Development of CleanPath, LLC
      • Dan Baldi, Relationship Manager, Silicon Valley Bank (SVB)
      • Gabriel Kra, Managing Director/Chief Investment Officer, Elan Management
      • Bill Reichert, Managing Director, Garage Technology Ventures
      • Dan Shugar, Chief Executive Officer, Solaria Corporation
      • Paula Stern, Chairwoman, The Stern Group
      • Lynn Tabernacki, Managing Director, Renewable Energy and Sustainable Development Programs, Private Investment Corporation (OPIC)


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