Despite the economic calamity, the greentech industry didn't do bad in 2009. The Department of Energy will have given away $36.7 billion by the time the calendar rolls over. Venture capitalists and corporate investors will invest more than $4 billion in startups this year, about half as much as in 2008 but more than any other year. Although some electric cars were pushed back to 2010, smart grid deployments started moving from the conceptual phase to reality, while solar got cheaper.
And there were some emerging trends and surprises along the way. Here are some of the best.
1. Solar Sees Its Plumber's Crack: The solar industry has primarily focused its attention in the last few decades on driving down the price of panels and driving up efficiency. In the past year or so, many have begun to try to reduce the cost of installation – that manual construction project goes along with every solar project that can eat up 30 percent or more of the budget. Zep Solar showed off a modular racking system that it claims cuts costs by 50 to 80 cents a watt. Armageddon Energy debuted its racking system and novel panels that let homeowners assemble a solar system in minutes. Suntech Power Holdings and Soliant, meanwhile, said that solar manufacturers will begin to diversify their offerings and sell different solar systems tailored to different customer segments and roofs.
2. Greentech (and Michigan) Go Global: In the past, people discussed green being a global industry to underscore how nations like Denmark and Germany had already created thriving renewable industries. In 2009, it took on a new meaning. Many of the largest American Recovery and Reinvestment Act grant winners turned out to be joint ventures funded or managed by foreign companies willing to open facilties in the U.S. Spain's Iberdrola was one of the big winners for grants for wind farms while two battery ventures with South Korean partners got $312.4 million.
Even without grants, Chinese companies began to flock to the U.S. Suntech announced (finally) that it will open a module assembly plant in Arizona while China's A-Power Generation and a consortium of Chinese and U.S. companies announced plans to build a wind farm in Texas along with a turbine factory.
3. The Utility Industrial Complex Emerges: In his final address as President, Eisenhower warned the country against the potential dangers of the military industrial complex. The Obama administration, however, is cutting back on large, futuristic weapons contracts in favor of conventional forces. Partly as a result, Boeing, Lockheed Martin, Bechtel, Ratheon, BAE Systems and Bechtel all moved more aggressively into smart grid and solar. In a lot of ways, it makes sense, these companies are equipped to handle large, complex construction and fulfillment projects. Bechtel, for example, will serve as the contractor for one of BrightSource Energy's solar thermal power plants. Still, it will be interesting to see if the cost-overruns and lobbying chicanery these companies are often associated with begin to occur here.
4. Algae Isn't Fuel: Although we've spoken to over 60 algae companies and have been told by people in the industry that there are over 100 out there that want to turn pond slime into car fuel, a few companies have begun to emphasize their non-fuel products. Why? Chemicals and food additives sell for one heck of a lot more. Solazyme, for instance, started selling – repeat, selling – oil to the food market. It even released an algae-based substitute for almond milk. Ternion Bio Industries says nutraceutical algae can fetch $10,000 a ton. Cellulosic ethanol makers are doing the same: Zeachem is working on a strain of bioplastic.
Interesting Side Note: Algae actually did well in a recent round of ARRA grants. Of the 19 recipients, three were algae specialists-Solazyme ($22 million), Sapphire Energy ($50 million) and Algenol ($25 million) – accounted for almost $97 million of the $564 million round and two others – UOP ($25 million) and the Gas Technology Institute ($2.5 million) will also conduct research on algae.
5. Do You Take Euros or Won? Conglomerates began to open their wallets in what could be a long string of acquisitions. Although General Electric and Cisco will likely snap up companies, many of the big buyers so far are foreign. Philips, already No. 1 in lighting due because of strategic acquisitions, bought two lighting companies. Taiwan Semiconductor Manufacturing Corp. set up a $50 million fund to move into solar and lighting and has been discussing its plans with Silicon Valley VCs. Samsung said it wants to be number one in solar by 2015. Panasonic wants to participate in smart grid, green homes, solar, batteries, green IT and energy efficiency.
6. Black is the New Black: In the never-ending quest for cheaper feedstocks, some companies began to tout trash, waste streams and sewage as the foundation of their businesses. Although trash often isn't free, it is cheaper than a lot of things. Just as important, it eliminates the costs of storing the stuff in landfills. Axion International showed off plastic bridges from discarded milk jugs. Waste Management and Linde, the chemical processing giant, built a system at the Livermore landfill to turn trash into liquefied natural gas to run garbage trucks. Sollega debuted a solar rack (see plumber's crack at No. 1) made from recycled plastic. Bluefire LLC got $81 million in federal grants, the largest single grant in the most recent biofuel round, to build an ethanol plant at a landfill.
7. Water is the New Weather: Everyone talks about it but no one does anything about it. Energy Recovery had one of the few green IPOs last year. Still, investors did not flock to water. Only five water deals were funded in the third quarter to the tune of $20 million. That was barely more than the money that flowed into tidal and wave energy, a more distant technology. Expect this market, however, to be dominated by giants like IBM and General Electric, so maybe a lack of VC activity is a good thing.
8. Practicality Rules: At the Cleantech Open, the big awards went to EcoFactor and Adura Technologies, two companies that already have energy management systems for buildings out in the market. Although the federal government created ARPA-E to seek out next-generation technologies and gave out $151 million in grants to get it started, most of the ARRA money went to "shovel ready" projects. The "new" green industry is over five years old now in the U.S. so it is about time we moved from the lab to the execution phase.
9. Heat Got Hot: Not really, but I will keep plugging the idea that waste heat represents one of the biggest opportunities out there until I run out of breath.
10. Waiting for Godot's Karma: Some things we thought we might see, but didn't, graduate to general commercial availability in 2009: The Fisker Karma, the green EcoRock drywall from Serious Materials, capacitors from EEStor and the oft-hyped fuel cells from Bloom Energy (although CleanFuel Energy and Panasonic have come out with conceptually similar methane-powered fuel cells). You can't find Nanosolar CIGS panels at Home Depot either. Maybe in 2010.