What drives green innovation in a time of financial crisis? Ira Ehrenpreis thinks now is a better time than ever for companies wanting to invest. The Wright brothers managed to fund their project and by doing so defined a century of flying. The military was their first buyer. Now, we're in the beginning of the century of cleantech, and the industry is turning to the government stimulus package to get things rolling. There are similarities between airplane construction in 1909 and cleantech development in 2009. At least according to Ira Ehrenpreis, General Partner of Technology Partners. Today he spoke to the visitors of Think Green, the ThinkEquity conference on cleantech and alternative energy, taking place in San Francisco. Ehrenpreis was not the only one pointing out the potential of investing during times of crisis. Kevin Surace, CEO of Serious Materials, agreed. "VCs are still writing checks, but at a lower valuation. If you have money and you can write checks I think it will never be cheaper than this. VCs are investing at a quarter of the value compared to just two years ago, " he commented during one of today's panel discussions. Kevin Surace accused the big U.S. building and construction companies for being too slow to innovate, hanging on to old technology and materials that's been in the market for decades. "The old guys aren't going to do anything. The size of our own research and development team is larger than any of the U.S.-based construction companies. They look at R&D as overhead. We would never cut R&D," he said. Keith Gillard from BASF was eager to defend himself, however, he admitted that most of the research and development is taking place in Europe. "BASF is one of the old guys, but we spend billions of euros every year on R&D, including construction materials. Even though the new guys have the ability to innovate, you should not count the old guys out." he said. "Much of the materials we're competing with was introduced to the market in 1890 to 1950," sighed Don Young, CEO of Aspen Aerogels. With the stimulus package from the Obama administration focusing on renewable energy, we're living in a time when governmental influence on the market increases. But government money isn't just handed out to anyone with a cleantech project in their back yard. You need to know where the decision makers are and how to reach them. Also, the people investing aren't your average VC. Suddenly state officials, schools and city representatives are on the other end of the table. And they're aiming for energy efficiency. "When you choose a window, it needs to be the best return on investment. We find ourselves writing programs for the cities, and then bid on them. Lot's of work, but without question there's a chance to get a lot of money from the stimulus package," said Kevin Surace. "There have been some landscape changes out there. Some buckets of money we've been chasing have moved," said Keith Gillard.

China. The world can cut down carbon emissions in a big way with its cooperation. Will it happen? Yes, says Steve Chadima, vice president of external affairs with Suntech Power Holdings, the large Chinese solar module maker. Suntech right now is bidding on a 10 megawatt solar field being supported by the Chinese government, he said during a presentation at the ThinkGreen conference sponsored by ThinkEquity in San Francisco this week. "We expect hundreds if not thousands of megawatts to follow," he said. The U.S. market will likely explode next year and China will follow after that, he predicted. Phil Adams, president of WorldEnergy, which has created a carbon and electricity auction system, agrees. The government stays in power when it has the cooperation of the people. If things go bad -- really bad -- the legitimacy to rule is questioned. (Dynasties fell for the same reasons.) And China has suffered a large increase in protests over environmental issues. The government will need to clean up to maintain power, he argues. But the signs of actual, constructive action are limited, says Venrock's Matthew Trevithick. Ten megawatts? Not going to set the world on fire. A few years ago, He was in China to check out some green technologies being prepped for the Olympics. The trip was canceled. Giving up the economic juggernaut for a better, cleaner environment could be a tough sell, he added. From my own experiences and interviews in China, I am in the middle. Environmental issues have cropped up. China sees a way to make huge amounts of money from green technologies. The country also doesn't want to be beholden to imports of oil. But if going green would hamper growth, even average Chinese citizens will probably balk. The changes in lifestyle that have occurred due to the rising economy will be too big to swallow. One person I interviewed, Liu Bo, who ran a Linux company, spent the first 30 minutes of our talk telling me about his experiences working 15 to 20 hours a day on a collective farm. "The two years of hardship taught me to face difficulties," he said. "What could be worse?" Another person, who runs PR for a large U.S. company, told me how his family was the first he knew to ever get a TV. It was 1979, and they bought a six-inch black-and-white TV. His mom was worried the police would arrest them. Now he lives in luxury.

If you look at the numbers, green power has momentum. Close to 60 percent of the new generating capacity added in the U.S. in 2008 revolves around new renewables, i.e., solar, wind, geothermal and other renewable energy devices that aren't large hydroelectric dams. That comes from Travis Bradford, who heads up the Prometheus Institute. (Prometheus and Greentech Media conduct joint research and hold events together.) "Over half of the new capacity comes from new renewables," he said. That's a pretty good spike. In 2005, new renewables only accounted for about 15 percent of marginal capacity. In 2006, it jumped to 30 percent and then to 45 percent in 2007. Overall, about 40 gigawatts of new renewables have been added in five years. How many gigawatts of nuclear have been added? That number would be zero, he added. Renewables could potentially also gain on traditional power because of the credit crunch, he opined. Granted, not many people want to fund new solar plants. But have you looked at the price of erecting a nuclear reactor these days? The liquidity crisis could hurt traditional power more than  renewables.