Solar power shines as clean tech industry grows
Andrew S. Ross
Friday, April 8, 2011
What with gas prices soaring, nuclear energy off the table, at least for the time being, and Republicans looking to dismantle environmental regulations, how is clean tech investment looking these days?
Not bad, according to a survey released this week by Cleantech Group, a San Francisco global consultancy. The dollar amount of venture capital invested worldwide - 85 percent of which went to North American companies - totaled $2.57 billion in the first quarter of 2011, up 52 percent over the previous quarter, and a third more compared with the same period last year.
But the total number of deals - 159 - was one of the lowest, by quarter, since 2009, and most were follow-on investments, as opposed to new ones. "You're seeing a much, much larger average deal size, which just indicates a much stronger bias toward later-stage, bigger-check deals," said Cleantech CEO Sheeraz Haji.
Despite the recent shakeout in the industry, solar remains the most attractive sector. Oakland's BrightSource Energy, which is building one of the world's biggest solar power plants in San Bernardino County, led all comers with $201 million from venture capitalists, including Silicon Valley's VantagePoint Venture Partners and Draper Fisher Jurvetson.
This week, Alstom Group, a French energy and engineering conglomerate, put an additional $75 million into BrightSource, with a view to jointly developing solar power plants in Europe and Africa.
Notable among the few earlier-stage solar investments is a Santa Clara startup, Alta Devices, which snagged $72 million from a long list of investors, including Kleiner Perkins Caufield & Byers, currently the world's biggest clean tech VC investor, and New Enterprise Associates. That has led some observers to suspect the company has something up its sleeve.
Bay Area investments outside the solar sector include $100 million for Sunnyvale fuel cell producer Bloom Energy and $75 million for Pleasanton's Fulcrum BioEnergy, which manufactures ethanol from waste products.
Choice move: Tioga Energy Inc. is more into the financing rather than generation end of the solar business. That's one reason the growing company decided to relocate its Silicon Valley headquarters to San Francisco's Mission Street, just off the Embarcadero.
"As a financial center, San Francisco brings us closer to our financial partners. It also has a greater talent pool of people who understand sophisticated financial models as well as green technology," said sales and marketing VP Marc Roper.
The 4-year-old company, which also has an office in Canada, is bringing about 20 employees to the city, but that number is expected to double in the next 18 months, Roper said. "The move highlights San Francisco's strength as a destination for leading clean tech firms," said San Francisco Mayor Ed Lee.
Backed by $35 million in venture capital from San Francisco's Nth Power, Silicon Valley's NGen and Draper Fisher Jurvetson, the company sets up financing mechanisms, called "power purchase agreements," to build and install solar power sites. It would not disclose sales figures but said it recently completed its 100th project with private companies and institutions nationwide. Bay Area clients include the Lafayette school district and the Humane Society Silicon Valley.
Another reason for the San Francisco move: "The market we serve is driven by policy, and San Francisco's is at the forefront of policy that supports our market," Roper said. "It's the focal point for California, which is driving policy in the rest of the country."
