October Cleantech Roundup:
Asset Sustainability Weighing on Investors

Clean Energy Trust’s monthly cleantech roundup recaps the most relevant information on the cleantech sector, from policy changes to technology updates and investment news.

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Cleantech might have passed under the radar given the amount of national news, but October 2016 was a particularly busy month. Asset management firms worked to incorporate sustainability into their investment strategies, a fuel cell unicorn startup quietly filed an IPO, and Tesla launched another ambitious product. October also saw the single largest purchase of renewable energy ever by the US government.

Startups and Investment

Some cleantech companies are rebranding to be more attractive for investment. Because many VCs got burned in the early wave of cleantech investing, many companies are now painting themselves with a coat of the burgeoning “smart cities” allure. By being seen as a key contributor in a larger ecosystem, these companies are trying to wash away the niche “green” branding that might keep wary investors at bay.

In contrast, BlackRock and other asset management firms are starting to see sustainability as a portfolio strength. They recently issued a warning to investors to protect their portfolios against the risk of climate change particularly caused by GHG emissions. The research firm Morningstar has also started to grade assets on sustainability scores as more investors see their necessity, especially for predicting long-term gains. For some startups, sustainability is a key focus from their incorporation. Even though these startups might not be directly in the cleantech industry, many see this as a key component to their long term success.

On the less theoretical side, Bloom Energy, once valued at $2.9 Billion, has quietly filed IPO plans with the SEC. The company has bet big on fuel cells as an integral part of the future of energy. However, the fuel cell industry has been notoriously volatile with many companies seeing their market caps spike and then quickly plummet. Many have also criticized Bloom Energy for only being sustainable on the margin. Because Bloom’s fuel cells use natural gas, they have much larger carbon footprints than other energy storage solutions. And yet they are often being grouped into the same cleantech industry. Bloom has been successful as a private company with an almost $3 billion valuation in 2011. We shall see if they can buck the trend of the fuel cell companies that have gone public before them.

The airline industry has long been a target for climate change activists due to their heavy use of fossil fuels. While some airlines have worked to use alternative fuels, others are using investments in other areas to offset their emissions. Recently, airlines agreed to spend $24 billion on carbon offset schemes. This deal creates a comprehensive framework for airlines to adhere to and plan for. It also obviates the need for  airlines to navigate patchwork regulation with countries like Canada and China as well as the EU beginning to put prices on carbon emissions.

New Business Ventures

Tesla unveiled its vision for a wholly connected solar-electric home system, the next phase of Elon Musk’s vision for residential energy use. Tesla will begin selling solar panels directly integrated into a customer’s roof. Enthusiasts will also have the option to bundle together Tesla’s other products: a battery to store excess energy, the Powerwall 2, and their marquee electric vehicles. The addition of the solar roof to their product line is part of Elon Musk’s case for Tesla to acquire Solar City, a merger first announced in June. However, some feel that while this integrated solar roof looks great, this announcement continues a trend of Musk promising too much without providing key details.

Directly competing with Tesla in the energy storage space, Sonnen is partnering with AutoGrid to build out software to help utilities manage “help energy project developers, utilities and other energy service providers better manage, optimize and aggregate sonnenBatterie systems and other distributed energy resources.”

Latest Policy News

President Obama’s Department of Defense continues its push for sustainable energy particularly for use on naval and army bases. Recently, the Navy procured the U.S. Government’s largest clean energy purchase ever. The 150-megawatt solar plant in Arizona will provide energy for 14 naval installations around California. The Department of Defense has been one of the biggest proponents of clean energy technologies. Climate change is poised to worsen existing conflicts around the world with potential droughts and crop failures. Energy independence and efficiency are also key for our forces to be able to reduce vulnerable supply lines, reduce dependence on foreign powers, and focus funds on where they are most needed. CET recently featured cleantech startups working with the DoD to accomplish these goals.

As part of global climate talks, the U.S. will be unveiling its path to decarbonize the American economy by 2050 in Morocco. The hope is that roadmaps like these will provide examples and templates for other countries looking to work together to tackle climate change. These plans are also part of the 2015 climate accords struck in Paris.  

By Alex Foucault | November 14, 2016