Green on Greentech

Do you pay attention to what a smiling venture capitalist, speaking to a room full of investors, says are his favorite hot sectors in the industry for new investment? Or should you - sensing a red herring - invest in the exact opposite direction? Hmmm...

That's the quandary longtime cleantech investor Bill Green, managing director of the cleantech practice at VantagePoint Venture Partners, himself recognized when he addressing an audience of 400 investors and others today in San Francisco.

Speaking at a greentech summit organized by boutique investment bank ThinkEquity Partners, Green began with the disclaimer above, and then launched into what he said were areas in which he believed there would be opportunities in 2007.

Bill Green (L) opines about the future in a chat onstage with ThinkEquity senior research analyst David Edwards (R). >

First, residential solar installations should be made easier, Green said. The "downstream" elements of solar installations (i.e. hauling panels onto rooftops, drilling holes) represent too high a percentage of a system's cost. That, and other considerations, like not being able to easily tell how much one's system is generating, negatively impact the uptake of solar, he said, suggesting this area was ripe for investment and innovation.

Green and Edwards noted that SunPower, which also spoke at the conference, seemed to be moving to make buying solar easier with its recent acquisition of solar integrator PowerLight. The two likened the vertical consolidation move to the telecom industry's grab for the "last mile", and suggested similar consolidation in solar might be coming.

The industry needs more residential solutions that combine solar thermal (water heating) with solar photovoltaic (power generation), Green said.

Green is a fan of tried-and-true solar thermal as appropriate and efficient technology. He pointed to a recent Pacific Gas & Electric RFP for a large solar thermal installation, and the success of twenty-year old solar farms in the deserts of California that were based on thermal technology and still going strong.

"Something's happening" in electric cars, Green said, noting increased consumer interest and vendor activity. (the Cleantech Group agrees, based on recent news in electric/hybrid vehicles we've been reporting on.) Why the growing popularity of electric cars, even relatively inaccessible ones like the high-profile Tesla? "You can actually imagine yourself in a Tesla," he said.

"VCs love to talk about water as an critical cleantech/greentech sector," Green also noted, yet reflected on how precious little development, and therefore investment activity, there seemed to be in it. His comments echoed those of Edwards of ThinkEquity and other speakers through the day, who recognized water as important, but then didn't have much to say about it.

Water wasn't exactly the highlight of the discussion for attendees to ThinkEquity's conference, which reached standing-room-only at times through the day >

Green suggested that water lacked sexiness because investors in the first world turn on their taps and water usually comes out as expected. But that still wasn't the case in much of the rest of the world, he pointed out. And the problem was potentially positioned to get dire. "If you subscribe to the Al Gore theory of climate, there are going to be a lot more thirsty people soon," he warned.

Finally, Green suggested that the creation of financial products and services to lower the barriers for adoption of renewable products - such as solar, wind, low emission vehicles and others - were legitimate investment opportunities. But he cautioned that they weren't necessarily defensible. "As soon as you figure out how to do it, others will too," he warned.

Cleantech developments making news in the past 24 hours

• AES raises $1.58B with China Investment
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