Approval of the Cape Wind project is a major government relations and public relations boost for the wind industry, as project developers, financiers and clean-energy supporters look to develop the gigawatts of power available along the eastern seaboard. As the most hotly contested offshore wind project in history, Cape Wind could be a bellwether for future projects up and down the east coast.
With the WindPower 2010 conference less than a month away, Cape Wind approval is sure to dominate discussion at the event. While Europe has had significant offshore wind power generation for nearly two decades, the US has lagged behind due to coastal community opposition and the lack of longer-term tax incentives which can help fund projects through the years of development it takes to get them up and running.
No matter how you slice it, the DOI decision is a major PR and GR win for the cleantech industry.
There have been a few big announcements this week that have been good visibility for the Cleantech and Green industry from a public relations and government relations standpoint, including a long-time stealth player drawing back the covers and a major DOE loan guarantee for a big solar thermal player. The news comes as the Cleantech Forum in San Francisco and Renewable Energy World in Austin attempt to monopolize attention.
-Bloom Energy came out of stealth on 60 Minutes generating a lot of secondary awareness in the media and blogosphere. One interesting PR aspect of the company's launch, is that by keeping things tight lipped for so long, it was really hard for CBS to interview skeptics familiar with the company. Next comes the most important step for Bloom to separate itself from some other past big cleantech claims--the ability to scale.
-BrightSource Energy received a major loan guarantee from the Department of Energy to develop plants in California. This is a big government relations win for the solar market overall, as the government continues to back solar.
Everyone we talk to is bullish about cleantech in general in 2010, with a potential second boom cycle beginning in 2011. The question is how much new technology ground will be broken and how instrumental will Uncle Sam be in driving adoption/investment.
It's been awhile since we posted on Renewablog and with good reason. After a very busy 2009 in which we saw the federal government's attitude toward renewables and cleantech change overnight, the blog team went on a short hiatus to focus on 2010 client planning.
It also served as good time to reflect on what worked in 2009 from a green public relations, government relations and search-engine marketing perspective, and what else needs to be done in 2010 by cleantech stakeholders. I think most would agree that 2009 ended much stronger than some would have anticipated entering the year.
Even with an underwhleming Copenhagen and the lack of a climate bill, 2010 holds a lot of promise. European and Asian companies continue to look at the US as TNBT in green adoption, even without a climate bill. The EPA's naming of carbon as a public danger and the willingness of the agency to enforce reporting rules has many saying it is only a matter of "when" and not "if" carbon emisssion reductions (CERs) become mandatory. Obama continued to accept and promote new ideas, like "Cash for Caulkers."
But even with some positive signs, there are some things that keep cleantech marketers and public affairs pros up at night, the biggest of which is the midterm elections. It is now unlikely that a climate bill will get passed in 2010. The big question will then be what will Congress look like when it takes up the bill in 2011? If the Democrats have significantly smaller majorities in the House and Senate, will a bill be so watered down that it will have little meaning?
The silver lining is that there are a lot of ways to skin the climate cat, including further EPA regulation or very aggressive, big economy states, like California and New York passing laws that become de facto national standards for cap and trade. The hope is that the federal government takes the renewable-powered torch and runs with it in 2011, but it is comorting to know that if it doesn't, there are ways to move climate measures forward.
So this is the backdrop as we approach the first two renewable energy shows of the seaon: Retech 2010 in Washington DC and Renewable Energy World in Austin. Both are interesting events that tackle very broad themes and market segments, including solar, wind, biofuels, waste to energy, waste heat to energy, geothermal and a number of others. Retech is a bit more policy focused, whereas REW will help shine light on Austin's rapidly growing cleantech credentials.
We'll do our best to take the temperature of both events and report back what we learn.
We've had Black Friday and Cyber Monday. Could today be Green Monday? Based on the positive news we have seen today for the Cleantech industry, maybe it should be.
While the world had its eyes firmly planted on Copenhagen and the United Nations Climate Change Conference, the US government said, "Bring your gaze back to this side of the Atlantic" with a couple of significant announcements.
First, the EPA has declared that carbon dioxide is a public danger giving it the right to further regulate and curb emissions without the consent of Congress. This is a huge step forward in the Obama administration's move to cut US carbon emissions. Essentially, the White House just told the US Senate that it better tune out the energy lobby and focus on the issue at hand. It will be interesting to see if this lights a fire under the Senate to get legislation passed before the EPA enforces something more draconian than private industry would like.
Second, the Obama administration has announced that Green patent review will be fast tracked to 12 months from the current 40 in the hopes of getting new technologies funded and viable in a shorter period of time. This is bound to fuel even more R&D and investment in clean technologies.
All of this comes as the world focuses its attention on Cop15 and the world's largest and fastest-growing carbon emitters, like the US, China and India. How important is the Cop15 event to Cleantech companies?
So important that Earth2Tech's Katie Fehrenbacher and other US-based cleantech reporters and bloggers are on the ground covering and Tweeting from the conference. It should be an interesting 12 days as we learn more about the seriousness with which the world's largest economies will fight climate change.
The final piece of good news was from the solar market which apparently has seen demand start to grow for the first time this year. Many are expecting the US to be 2010's big solar market as PPAs continue to gain traction and renewable portfolio standards, feed-in-tariffs and other policy measures start to have a bigger impact on demand. The EPA declaration could also drive adoption as industrial and utility audiences expand their renewable energy portfolios and accumulate credits ahead of any federal carbon policy.
No matter which way you slice it, today has been a very good day for Cleantech stakeholders.
Cleantech investors, companies, media and green PR folk watched today's A123 Nasdaq debut with intense interest as the battery maker became the first cleantech concern to IPO in some time. Up 36 percent in early trading, A123 has not disappointed. With cleantech patents at an all time high, cleantech investing on the rebound and stimulus money starting to flow, there could be more green IPOs in the coming months.
A123 benefits from being at the intersection of two important trends: energy storage and the electrification of cars. Batteries have long been cited as a technology that needs to improve for renewable energy to reach its full potential. Car electrification dominated discussion among some of the panels at AlwaysOn GoingGreen last week as Tesla, Bright Automotive, Coda, Fisker and their investors littered panels at the event.
Expect A123's IPO to be a further boon to battery start ups in the coming weeks and months, as VCs look to find the next big technology in that sector.
Schwartz Communications is proud to announce that the firm is now a member of the Coalition for the Green Bank, an industry organization in support of the creation of a cleantech financing fund at the federal level. The Green Bank is a measure in the Waxman-Markey energy bill which is currently slotted behind healthcare insurance reform in Congress.
The measure will be an important part of financing future cleantech companies and market adoption. With the Green Bank, a financial recovery and a rebound in cleantech venture capital investment, 2010 promises to be a bright year. There are a number of leading companies, including Applied Materials, Blue Source and GE Energy Financial Services putting their cleantech public affairs and public relations support behind the organization.
We're excited to be part of the Green Bank support team.
Get prepared for more citizien "rage" at town halls. No, not town halls where the discussion is focused on health insurance reform. But instead town halls focused on the energy bill---legislation that could help alleviate US dependence on foreign sources of energy, ease geopolitical tensions by reducing our interest in politically unstable regions like the middle east, battle the effects of climate change, create thousands of Green Collar Jobs and reduce the cost of energy for every American.
The American Petroleum Institute issued a memo (Daily Kos has it) asking "Energy Citizens" (i.e. employees, retired people, anti-environment protestors and the bored) to demonstrate against climate legislation. It seems API has data that suggests jobs will be lost and energy costs will skyrocket if this legislation is passed. Only offshore drilling apparently creates jobs in this country. What does Greenpeace think?
"It's the most powerful among us, masquerading as grass-roots outrage to stifle debate on global warming," Michael Crocker, a spokesman for Greenpeace, said in a statement printed in the Washington Post. I'd agree with that assessment. Drill baby, drill.
Is the energy bill perfect? No legislation can be. But when you are talking about a long-overdue bill to address a ticking timebomb like climate change (or healthcare, or social security, etc), perfect is the enemy of good.
What's maybe most interesting is that there are a number of members of API that also dabble in renewables like BP and Shell, both of whom manufacture solar products and both of whom are also members of the U.S. Climate Action Partnership. Talk about PR conflicted.
Now skeptics may say that Shell and BP only belong to the group to try and moderate policy positions that come out of the group, but it could also be that they have read the tea leaves and know that only the election of Dick Cheney as our next president would stop the movement to renewable energy and stronger climate change policy in the US.
Not to be outdone, the coal industry and other conservative lobbies will join in the rally. Will SEIA, SEPA, AWEA and others turn out people to counter those rallies? If so, the biggest beneficiaries may be people who drag coolers of springs water to the events to sell for $4 apiece as protestors bake in the August sun.
How is that possible? Khosla says that Cleantech is not about solar, wind or biofuels, but about re-engineering the way society lives, from lighting to concrete. When asked about the size of the problem, Khosla says that he sees only opportunities. Furthermore, he talks about how clean technologies have to achieve unsubsidized market viability within 5-7 years or they will struggle to be an investment and commercial success. Overall, just a very interesting interview with someone with an amazing track record of finding breakthrough technologies and companies.
Do I agree with every thing Khosla says? Nope. However, I do agree that Cleantech is bigger than the Web. This is an important point since many have called it a fad.
Cleantech, green, sustainability or whatever you want to call it, deals with a number of fundamental issues that impact all aspects of human life. Examples include drinking water (desalination) and irrigation in drought-ridden regions of the world, transportation (biofuels, batteries, green auto), remote and distributed energy generation (solar, wind, batteries), manufacturing, consumer products, energy efficiency (smart grid, energy management), etc.
I also agree with him that every technology gets overhyped at some point and many cleantech PR campaigns have contributed to that problem by pushing hyperbole when there was nothing behind the courtain. Biofuels are feeling the backlash now and wind is starting to be questioned because of energy storage problems. But will they go away entirely or will they just evolve into something stronger, with savvy entrepeneurs overcoming many of today's challenges? I think it is definitely the latter.
Will the Cleantech movement create ten Googles? I wouldn't bet against it...or Khosla.
To say that the stimulus package currently under review contains significant support for renewable energy, green and cleantech would be a gross understatement. Depending on whose data you use, it is roughly five-to-seven times the total of all VC investment in cleantech in 2008. Or, a little more than twice the total revenue of the solar industry. Wow.
Biofuels will get $800 million. Batteries will get a big chunk. Bottom line: Even if this bill is halved before being signed by President, it will create the largest government investment in renewable energy, likely exceeding all past investments combined.
Government subsidies have been critical to the growth of solar and wind in Europe. The US has lagged behind. This is a major step forward in making the US the world's top producer of renewable energy.
Companies need to take advantage of this opportunity because it will not exist again in our lifetime. It is analagous to being a contractor or steel producer during the New Deal Era. Opportunities exist for both commercially mature and pre-commercial technologies.
Many companies avoid engaging in Government Relations because they don't understand it or they rely on industry associations to execute it on their behalf. If you have a technology that you believe can solve the energy, environmental and geopolitical challenges facing the country, now or in the future, then you should learn about how it works. You will learn a lot about policy making, appropriations, government project management and how to sell to government entities. It also will add to your executive's expert credibility when your public relations team is executing a thought-leadership campaign.
Uncle Sam's House is about to become much more energy efficient and whether you directly engage with him or not, there are many companies that will play a role in helping.
I'll be posting on the historic nature of the stimulus package and the government relations opportunitiy for green companies, projects and technologies, as the federal government becomes the world's largest investor in cleantech. But first, I want to make sure I capture the green elements (if any) of Obama's presidential inauguration speech.
Obama began his speech slightly before 9:07 a.m. PST and in less than two minutes, made reference to the fact that, "the ways we use energy strengthen our adversaries and threaten our planet." He called this usage one of the "indicators of crisis."
9:14 PST: "We will harness the sun and the winds and the soil to fuel our cars and run our factories..."
9:18 PST: "With old friends and former foes we'll...roll back the spector of a warming planet."
9:21 PST: Obama says that countries of relative plenty can no longer consume the world's resources without regards to its effect.
In an 18 minute inaugural address, President Obama addressed energy in four separate passages. Likely more than any previous president. Every passage focused on sustainability or renewability in some reference.
Now all eyes in solar, wind, biofuels, geothermal, tidal, water and energy management (and public and government relations) turn toward the stimulus package currently proposed in the House. More than $50 billion in tax credits, projects and investments in renewable energy are currently included and we'll do a run down of specifics this week.
As we enter 2009, we wanted to take a look at cleantech markets we think will get the lionshare of the media attention during the year. We're calling it the Clean (Baker's) Dozen. We made our selections based on a variety of factors including 2008 venture funding, 2008 media attention, ties to existing large industries (auto, construction) and viability for commercialization.
Here is the list:
-Thin-film solar
-Inverters
-Solar thermal
-Wind
-Cellulosic Ethanol
-Algae
-Geothermal
-Monitoring & Management
-Concentrators
-Storage & Batteries
-Carbon Offsets
-Green Building Materials
-Green Transportation
There are others that should be on this list and that have significant public relations and government relations potential, including Water conservation, purification and potability, but they just haven't taken off yet. We'll do a post on each of these during Q1 and highlight some approaches we think are worth watching. Through our government relations team, we'll also keep an eye on Federal and State funding and policy to see if the G-men agree with our choices.
For weeks now we've been hearing doom and gloom about the health of cleantech investing amid the financial services meltdown and how cheap oil and VC turtling would cripple renewable energy. Well yesterday, SunRun, a residential power-purchase agreement (PPA) provider and in full disclosure, a Schwartz client, received $105 million in backing from a banking institution (of all places).
And it is not just SunRun. EnerG2 (ultracapacitor), ReGen (waste heat to power convertors) and Qteros (biofuels) raised close to $40 million combined in the past week. It's clear that as President-Elect Obama talks more and more about cleantech being a priority, investors continue to bet on renewable energy and green as a good investment for their dollars. For those companies not getting venture or bank backing, the government is a good option B.
One other quick note about the federal climate for renewables: With the news that John Dingle (D-Mich) has been replaced by Henry Waxman (D-Calif) as Chairman of the Energy and Commerce Committee, it is expected that we will see aggressive legislation and appointments related to climate change. Waxman is seen as being much friendlier to solar, wind, higher fuel economy and other environmental policy than was Dingle during his tenure as chairman. This is sure to get the cleantech industry's PR and GR machines trying to drive green legislation in the first 100 days of the next Congress. It should be an interesting first four months of 2009.
In a NY Times Op Ed on Sunday, former Vice President Al Gore outlined a five-step plan for the US to get 100 percent of its electricity from renewable resources. Some interesting points in the piece:
1) He calls for the government to support Detroit (and start-ups like Tesla) in building plug-in hybrids that can feed off of the renewable energy grid he describes.
2) He discounts the validity or at least the current state of "clean coal" technology. Is he right? Who knows? If they are going to try and make clean coal a reality, they need strict regulation around mine safety and ecologically friendly means of mining it.
3) He alludes to a cap-and-trade system for carbon and discusses greater US involvement in being an international leader in carbon regulation. It will be interesting to see if Obama and the Congress tackle carbon legislation in 2009.
It seems in addition to the ambitious plan for government involvement, Gore thinks that Web 2.0 could have a role in green policy movement.
Gore's opinion piece will stimulate a lot of debate and continue the pressure on the incoming Obama administration and Congress to push renewable energy regulation and investment to recharge the economy. It will also drive lots of discussion from green blogs this week.
On Election Eve 2008 I have come to this realization: There has never been a political platform element during my professional career that promises to have a bigger impact on an industry we serve.
In 48 hours, we could be sitting at our desks with a federal government-elect that promises to pump $15 billion into renewable energy every year for the next ten years, including wind, solar and biofuels. Or, we could be left trying to decipher how the president-elect would fit renewables into his overall energy plan that includes dramatic new investment in demoestic fossil-fuel production and very little specificity on renewables. In the latter scenario, it is likely that green companies and PR budgets would be at the mercy of venture capitalists that hold all of the leverage in new rounds of fundraising. The VCs will be sitting on sizeable funds that remain flush with cash and have the luxury of buying into shrinking valuations. This results in more equity for less money invested.
When you consider that $6.6 billion in VC investment has been poured into renewables thus far in 2008 and Obama is proposing federal investment more than double that number, the potential size of the cleantech windfall becomes staggering. This is before factoring in aggressive municipal and state programs that would drive a new wave of green energy adoption.
We recognize that many green companies are in the final stages of budgeting for 2009 and that cleantech marketers are looking for ways to justify an aggressive, yet strategic PR program that can deliver an ROI in a tough economic times. Savvy finance and marketingteams are also exploring how to take advantage of government grants, appropriations and projects via a government relations campaign. How aggressive can/should you get? Tomorrow will tell.
Quick Note: We'll be hosting a webinar on the intersection of public relations and government relations for green and cleantech companies on Wednesday, November 12, 2008. You can register here.
I was watching a CNN political roundtable the other night (Larry King or AC 360) and one of the guests was Joe Klein, a TIME Magazine journalist that just had an interview with Obama (which was published today). He said something that wasn’t explored by the host or other panelists, but I felt was monumental for both its specificity and its implications. Here is the quote from the piece:
"The engine of economic growth for the past 20 years is not going to be there for the next 20. That was consumer spending. Basically, we turbocharged this economy based on cheap credit." But the days of easy credit are over, Obama said, "because there is too much deleveraging taking place, too much debt." A new economic turbocharger is going to have to be found, and "there is no better potential driver that pervades all aspects of our economy than a new energy economy ... That's going to be my No. 1 priority when I get into office."
Lots of arrows have been flung at both candidates for the lack of specifics around their economic plans and priorities should they be elected. This comment from Obama was about as specific as it gets.
So what does it mean for cleantech companies and the green PR firms that work with them? It means that the ITC and PTC extensions were just the tip of the iceberg (not making a climate change pun) and that an Obama administration would make renewable energy investment and development his number one goal over his first four years as president.
This means more legislation and agency investment in renewable energy projects and a much bigger market for cleantech companies. This could be the funding stopgap that companies need should the VC market begin drying up and means that integrated GR/PR campaigns could become much more critical in the next five months.
Bottom line: This is a very, very good thing for the market.
Quick Note: We'll be hosting a webinar on the intersection of public relations and government relations for green and cleantech companies on Wednesday, November 12, 2008. You can register here.
There likely will be a mixed mood when Solar Power International kicks off tomorrow. On the one hand, rejoice at the extesion of the ITC (invetsment tax credits) and PTC (production tax credits). On the other, fear about the impact that a recession and dropping oil prices will have on the economy. VentureBeat does a great job summing it up here.
I am an optimistic person to begin with, but I honestly think there is a wild card here: The Presidential election. Obama sees renewable energy as not just an economic or oil-price issue, but as an economic and geopolitical one. Ten years ago an oil price dip may have been enough to stem the momentum, but with policy makers now accepting global warming as a real issue and seeing the impact of fossil-fuel dependence on geopolitical issues (Russia, Iraq/Iran, Venezuela, etc) there will still likely be some investment in Green. There are also plenty of projections related to the creation of jobs from the cleantech and green market, including solar, biofuel, electric car and wind manufacturing, solar and wind installation, and office jobs. Call it a Green New Deal.
McCain also has made the link between oil dependency and geopolitical issues. He just tends to favor domestic oil and gas exploration and harvesting as a major piece of the equation. Regardless, I think that there will be a commitment to renewable energy over the next four years that may help somewhat offset the impact of a recession.
So how does it impact cleantech and green PR professionals? If you have an early-stage product that isn't shipping then the tendency will likely be to hunker down, cut spend and try to ride it out. I am not saying that this is necessarily the right approach, but many will likely embrace it. If you are a company with shipping product or a solid pipeline, then turtling from a marketing perspective is dangerous since the last thing you want coming out of a recession is to be an unknown brand in an exploding market opportunity.
I'll be reporting from Solar Power International this week and will do my best to capture the mood of the companies involved.
Quick Note: We'll be hosting a webinar on the intersection of public relations and government relations for green and cleantech companies on Wednesday, November 12, 2008. You can register here.
Happy day for the Cleantech and Green Market as Congress did what everyone was hoping and extended the Investment Tax Credit and the Production Tax Credit. Earth2Tech gives a good rundown of the joy in Greenville and what is included in the bill. It ends an emotional and long battle to get renewed Federal support for renewable energy.
Quick Note: We'll be hosting a webinar on the intersection of public relations and government relations for green and cleantech companies on Wednesday, November 12, 2008. You can register here.
Some random thoughts heading into the most critical five weeks in the history of wind, biofuels and solar, and by extension, the green PPR sector.
-The Senate picked the wrong week to pass an ITC extentsion, as the federal government spends its time focusing on the financial crisis. Hopefully the financial bailout package will be finalized by Sunday and the House will not try to ramrod its own version of the ITC bill through. It will go a long way in determining what kind of mood companies are in at Solar Power International 2008.
-Last night in the Presidential debate you heard Obama waiver on how much of his energy plan he can push through with a huge financial bailout figuring into the budget for 2009 and beyond. This only heightens the importance of renewing the ITCs before the end of the year.
-I know that many see the energy bill as just that...energy policy. However, consider the economic impact that the ITC extension will have on growth of the renewable energy industry, helping create green collar jobs across the country. This includes engineering, IT and office jobs at the cleantech companies themselves, as well as jobs in solar and wind installation and plant construction, and factory workers at new US-based plants for the production of biofuels. Contractors, construction workers, electricians and other skilled workers will be put back to work after watching the new homes market dry up. Bottom line: The ITC extension is as much of a jobs bill as it is an energy bill.
So there are environmental, economic and geopolitical reasons to get something done before the end of the year. Let's hope it happens.
Some random thoughts on which I may expand later after digesting the week at GoingGreen:
-There is a debate between two camps in solar and other incentive-boosted renewables. One camp says there needs to be a focus on markets with resources (abundant sunlight) and less emphasis on public policy. The other camp thinks that policy is the major issue short and long term. I think they are both right in that eventually the technology will be so efficient and cost-effective that it will end the ROI debate, but incentives will still help the market and can't be ignored (hello, Germany).
-Most experts agree that the country cannot afford to ignore nuclear in the short term. That said, many believe that new nuclear wouldn't have an impact for a decade or more (kind of like new oil fields) and so the emphasis should not be on nuclear as the primary solution. Most support keeping it at 20% of our energy source. Elise Zoli of Goodwin Proctor had some of the best points on the subject on the GoingGreen fossil-fuels panel. One point on nuclear by Vinod Khosla that was interesting: The innovation cycle for nuclear is 15 years whereas solar thermal and other technologies will have gone through 15 innovation cycles in that same time period.
-Green and cleantech are the fastest-growing venture asset classes, attracting between 10-14 percent of all venture dollars. It is now the "third leg on the VC stool" with technology and life sciences. -Ira Ehrenpreis, General Partner, Technology Partners
-The most depressing panel of the event was the clean-coal panel. Not depressing in the sense that they made bad points or failed to make a case, but it just seem like the participants anticipated objections and weren't passionate about the subject. One interesting point was made by Oorla Protonics about using natural gas to turn materials into oil. The CEO said that natural gas is the champagne of fossil fuels with oil being the wine and coal the beer. Using champagne to turn materials into low-grade wine or beer is ludicrous.
-Not surprisingly Khosla was the hit of Tuesday and Elon Musk (Tesla, SpaceX) the draw on Wednesday. Khosla talked about how it is "main tech" not "cleantech" that matters and that the market should embrace solutions that can capture 80 percent of the market. He said that using one sheet of toilet paper as suggested by Sheryl Crow is not a solution and that the Prius is a nice status symbol but so are Gucci bags. This is probably the area where I disagree with Khosla most. I know he is looking at it more through an investment lens, but from a practical standpoint EVERY little bit helps. So if what I can afford to do today is buy a Prius and use less goods that leave a footprint, then I should do it. It is analagous to weight loss. If someone focuses on the sixty pounds they need to lose, instead of making small changes to their habits (less sugar, don't eat at night) that result in gradual weight loss, then they will never succeed. I am not saying that we should settle, but there has to be bridges to that 80 percent market solution.
-The most daunting thing from a green and cleantech PR perspective was this: There is SO much noise in the market and we still haven't really seen anything yet. Imagine for a moment that the current financial crisis dies down in Q4, the federal climate becomes green friendly and boosts incentives, the states and municipalities continue their charge. What will that do? Increase funding in cleantech to astronomical levels, likely open the public markets to green IPOs and pour millions upon millions into the marketing and government relations coffers of cleantech and green companies. Most are operating on marketing budgets under $1 million annually today, investing primarily in manufacturing, R&D and go-to-market. Any money they are spending now (and it is not much) is on public relations, search-engine marketing and some local government relations. The second half of 2009? We may see double the number of public companies and marketing budgets in the millions. Advertising will get better and more frequent, and the PR and lobbying noise will get louder. There may be a HUGE government cookie that begins to open in six months.
GoingGreen was a fantastic event held at a great venue. It was yet another cleantech event that was oversubscribed showing the health of the industry. It has made me even more excited for Solar Power International in San Diego. Feel free to get in touch with me if you will be there the week of October 13. jmorris@schwartz-pr.com
Yesterday, Vinod Khosla captivated the GoingGreen audience (the "pin drop" effect) and today it is Elon Musk. He opened his discussion with a quick overview of his new space venture before delving into some Tesla news.
He announced that the new Tesla Model S will be manufactured in San Jose with 20,000 units per year rolling out of a $250 million plant starting in late 2010 with chances to expand (drawing a round of applause). He said the new Sedan will be, like the Roadster, pure electric and seat five adults with more cargo space than any other sedan on the market. It can also fit two rear-facing car seats in the hatch and will have a 300+ mile range option.
He also envisions a fast charging option that will give it 85% charge in 45 minutes and battery pack swap out capabilities that take less time than filling a tank of gas. He expects to unveil the model early next year.
One other interesting aspect of his talk was his endorsing of solar as the power source of choice for electronic transportation. He is a believer in solar on homes, as well as utility-scale solar thermal. The more that Solar PR can draft the Tesla, the better it is for the solar market.
PG&E spoke at yesterday's GoingGreen event and talked a bit about their work in renewables. The speaker didn't take any questions from the audience at the end of the presentation and really just read a laundry list of investments they have made in plants.
Now everyone knows that they are mandated to get a certain percentage of energy from renewables, so the traction they have made is not surprising. The big question is would they be doing it if not mandated? At least their efforts are real, regardless of motivation. As Vinod Khosla said later in the say, he suspects more than half of all green claims are green washing.
The most interesting part of the presentation was when the spokesman cited a statistic that solar costs drop 19 percent for each doubling in manufacturing capacity.
Posting from the AlwaysOn GoingGreen conference and kicking off with the 8am solar panel. As you can imagine, the first question was related to how the ITCs and other policy-driven subsidies around the world dictate the focus of solar companies.
David Holland, managing director of Australia-based Solar Systems, Ltd. sounded the call for government to support emerging technologies and reinforced how critical subsidies are to the market early on. He did raise the point that the industry and those technologies then have a responsibility to deliver on their promise.
The most interesting point came from John Woolard, CEO of Bright Source who basically said that "eventually the market will shift its focus to markets with a high level of resources," with subsidies taking on less importance. This is actually an interesting way of looking at things and the type of long-term view I think companies should take.
A lot of people are predicting that a change in administrations in Washington, along with a larger anticipated Democratic majority will give the solar industry and other cleantech companies the boost they need in 2009. But given the overall policy uncertainty, companies need to proceed as if they are not banking on the ITCs or take proactive steps to drive government action on subsidies. This includes green public awareness and PR campaigns, and industry collaboration to combat cleantech FUD (fear, uncertainty and doubt).
News this morning that thin-film solar has seen one of its players get another nine-figure round of funding. First was news of Nanosolar and ASA Solar, and now Solopower is rumored (Earth2Tech via VentureBeat) to have raised a $200 million round.
So much for the expiring ITCs impacting financial interest in solar technologies. It is amazing how much investment has gone into the market but even more shocking how much of it has gone into pre-production companies.
It will be interesting to see if thin film dominates Solar Power International the way it did PVSEC. Back in March, it seemed as though solar concentrator companies were getting the most attention.
Next week at GoingGreen we'll also see if the thin-film investment topic dominates the solar conversation. In any event, the break in the noise green and cleantech marketers and pr professionals thought they would get from the ITCs potentially expiring is likely gone. As long as there is cash flowing into these companies they will continue to make noise.
Like many industries, the cleantech PR world is watching anxiously as to what is going to happen with the ITCs. Expiring green rebates and credits, will undoubtedly have some impact on venture funding, the IPO market and company valuations, all of which could shrink PR budgets.
I think what we'll find though is that a lot of companies will view the political climate as turning favorable over the next 12 months and will continue to invest so they can come stronger out of any green recession. We'll know more next week after the AlwaysOn GoingGreen event at Cavallo Point where we are the representing PR agency and a sponsor. Many of the industry's most influential cleantech VCs and investors will present on trends they see in the market. We'll also get a look at some exciting companies and the CEOs of those companies.
It should be fun and educational. We'll be reporting back all of next week from the event.
Scott Kirsner recaps an interesting post about the M&A climate at the end of 2008 in traditional technology and how the softening economy hasn't necessarily killed M&A activity. In it, a Boston-based VC talks about how 2008 saw some relatively major acquisitions in lieu of companies testing a frigid IPO market.
Unlike traditional technology sectors, Cleantech is one area that seemed immune to the cooling of the IPO market during 2008 (specifically, solar companies). There were a number of companies rumored to be filing for an IPO, some who went public and still others getting hundreds-of-millions of dollars in valuation. Now cleantech seems to be cooling too (or at least the success rate is dwindling) and there have been several acquisitions (Schneider Electric acquiring Xantrex is one). So is green like tech after all and the IPO desert is upon us?
Not really. Most say that the cooling of the IPO market for cleantech has more to do with the expiring ITCs, an aversion to investment risk and lack of action at the federal level. I spoke to a VC at the recent PVSEC conference and he said that "every major solar integrator on the west coast was on the chopping block" due to the uncertainty of tax credits. Hyperbole? Maybe.
More likely, opportunists are trying to drive down valuations and acquisition prices by playing on the ITC fears. Our government relations team which follows the regulatory market believes that the cooling of cleantech IPOs is more of a delay in the inevitable than a long-term trend. The fact of the matter is that the federal political climate will warm significantly in February when a new administration is entrenched. Both McCain and Obama promise to be friendlier to cleantech companies than the current administration boosted by, in all estimates by political pundits, larger Democratic majorities in the House and Senate. Cleantech companies just need to resist the M&A urge and hold out for a couple of quarters.
Expect more action at the federal level in 2009, bolstered by more legislation and regulation to drive forced adoption of renewables at the state and local levels. This will reenergize the IPO market for cleantech companies and push even more VC investment. Solar will continue to be the major public-market focus during the first half of 2009, before wind, biofuels and others catch up.
The public market darkhorse? Energy storage which many VCs and entrepreneurs say is the bottleneck in green efficiency and adoption.
And if the climate doesn't warm at the federal level in 2009? Expect that many regions of the country will fill the void with state and local legislation and tax incentives. This includes New England, the mid-Atlantic, Southwest and California. These measures will still give the market enough fuel to support a number of successful companies and prevent any M&A firesale.
Quick Note: We'll be hosting a webinar on the intersection of public relations and government relations for green and cleantech companies on Wednesday, November 12, 2008. You can register here.
If there is one thing that struck me most at PVSEC is how much companies need branding help when targeting international events and markets. There are plenty of examples of serious branding errors by US companies, including Chevy "Nova" ("no go" in Spanish) or the Gerber baby food example in some African markets (don't ask). Those companies had millions to spend on brand and marketing research but made mistakes.
So what happens when you attend an international event with companies that maybe, if lucky, have a seven-figure green marketing, pr and branding budget? Plenty of things lost in translation. Below are some of my favorites at the event, some just slightly comical when you make a play on words and others shockingly wrong. Here we go:
I think they meant "up and coming?" The slogan you can't see under their name also said, "The next level company." I think it is just a tag line lost in translation. Next:
Solar with a slightly unpleasant smell? As long as it produces clean energy. Next:
Translation: Death to the sun. Next:
What is that word running vertically on the left? That would be the word, "lust." I love solar just as much as the next guy, but I mean......okay. Last but not least:
Um. Ah. Not sure anyone else will try to trademark that so the registered symbol might be a bit unnecessary. Enough said.
Next up in the green pr and marketing event calendar? AlwaysOn GoingGreen at Cavallo Point in San Francisco. It should be much more tame than PVSEC and less of a green field opportunity for branding companies.
One of the things that has struck me the most about the PVSEC conference is where a lot of the exhibiting companies fall in the supply chain. There are a lot of silicon suppliers and robotics/equipment manufacturers. Most of the rest are actual cell and string producers themselves.
Along those lines, the sessions and panels were extremely technical focusing on new developments in cell technology. There was a lot of discussion about a-Si, CIGS and other types of solar technology that promise to reduce cost, improve efficiency and deliver on the promise of building-integrated PV (BIPV). By far, the most common technology on the show floor was thin film solar.
It will be interesting to juxtapose this conference versus Solar Power International (or Solar Power 2008 for those who missed the name change) and see if the focus shifts more toward the integrator/consumer of solar technology. I still think there is room for a show focused strictly on renewables for consumers. Obviously, this was never meant to be that and nor did I expect it coming in.
More later including signs that the solar market is indeed very healthy and maturing (heavy investments in cleantech PR and marketing), as well as some unfortunate name and slogan choices for some of the companies at the event (images will be included).
A few first impressions of the city and the conference:
-Having never been here I was expecting a dry, hot Mediterranean climate not unlike California. What I learned is that it is much more variable with my first night feeling like Miami in July. It is still an amazing place and the New Englander in me was a bit nostalgic once I felt the humidity.
-This is an amazing place of "old meets new." There are plenty of buildings and landmarks older than the US itself, but also some amazing modern architecture, including the Arts and Sciences buildings across from where I am staying.
-I was a bit concerned because everything that I had heard about Valencia was that it was not a tourist destination and therefore, people were not as friendly to foreigners as other cities and the percentage of English speakers was quite small. That did not bode well for my high school Spanish 101 capabilities. It has turned out to be the exact opposite. The city is amazingly accomodating to visitors, there are many English-speaking natives and the people are very friendly. Good thing for me because I would be walking the thin line of playing the "Ugly American Flack." Valencia needs better PR as Spain's third-largest city....think of Chicago's international reputation versus NY and LA.
-The PVSEC conference is a melting pot of companies, much more so than a high-tech conference. There are companies from seemingly every country and the cultural differences are somewhat on display in their booths, with different types of designs, marketing slogans and promotional items. Countries I saw represented include the obvious, like the US, Germany, Spain, Japan and China. Also represented were Thailand, Canada, France, Italy, Belgium and Nigeria. That's at least four continents I saw represented without specifically looking for companies from South America and Australia, and I would be shocked if there were not at least one from each. Think a VC would fund my solar start up in Antartica? One word: monopoly.
-I spoke to a lot of people about the solar climate in the US and most are disappointed with the amount of support being given to solar by the federal government. They see no reason why the US should not be leading in renewables. How do you say, "preaching to the choir" in Spanish? They are not confident that making the ITCs retroactive (if not extended) would have much impact. I still think that companies that continue to invest during this bump in the road will come out on the other side much stronger than the competition.
-From a cleantech PR standpoint, it did not seem as though there was a lot of news from the show, nor was there much media walking around the convention hall. A majority of the people manning booths were salespeople and engineers, with a small smattering of marketing people mixed in.
-A quick Google News search confirms my last point. There are only 19 original articles that pop up when you search for "PVSEC" with an increase to 53 when you expand out the full spelling of the conference name. I am not sure if this is because of a lack of announcements or the scant physical media coverage at the event. It may be worth moving the event to another city next year that is closer to the European media centers, especially if travel costs remain high. The good news for the cleantech marketer and PR professional is that it is not nearly as noisy as other events, so there is a fairly decent chance of getting some attention at PVSEC.
-One of the most interesting early conversations I had was with a director of the EPIA. The European Photovoltaic Industry Association is pretty well organized and is very much taking a coopetition approach to the market. They anounced some staggering figures this week that say that solar could employ 10 million people by 2030 and power 4 billion people. That is a lot of green collar jobs.
That's all for now. Off to attend sessions and meet with more folks.
Great post from Katie Fehrenbacher at Earth2Tech today about how the selection of Biden would impact the future of cleantech. This is especially important at the time when many are concerned about the expiration of the ITCs and the impact it will have on adoption.
Regarding the ITCs, I have spoken to many people in the cleantech industry in the past months and will speak with many more at PVSEC, AlwaysOn GoingGreen and Solar Power International. Everyone with whom I have spoken expects the change in political climate come January to compensate for any lag in incentive coverage at the beginning of 2009.
What does this mean from a marketing budget standpoint? It varies by company, but many are pushing ahead with cleantech PR, government relations and advertising spend in Q4, looking to be well positioned when the new administration and Congress push a renewable-friendly agenda in 2009. Others are sure that even if action by the federal government is delayed, enough large (population) states will increase incentives (California, Texas, New England, New York and New Jersey) to make the investment worth it.
I know many think that green has reach a bubble stage and this is the natural cycle of the bubble bursting, but I don't think we have even scratched the surface of green adoption and investing.
Some other thoughts since my last post:
-WSJ post on a recent survey saying that Americans want their energy clean and cheap. Well, duh? My guess is that most would accept clean and comparably expensive for the short term, in order to reach clean and cheap. They just have to see a clear path to getting there and it will be tough since regional solutions make the most sense.
-Interesting post from Michael Kanellos of Greentech Media on "Five Inconvenient Truths" for the cleantech revolution. The most interesting was #5, which predicts that Haliburton, Chevron and others will eventually benefit. Do people think that the cleantech revolution will result in the collapse of these companies? I think history shows that whenever there are disruptive technologies in a market, the established forces try to slow adoption but then ultimately work to become part of the revolution through R&D or acquisition. Think of the Internet (Microsoft), open source (IBM) or software-as-a-service (Oracle) as examples. The bigger issue won't be the adoption and driving of geothermal by large energy interests but the manner in which they go about exerting their influence. Provided the PR around their entrance into cleantech is done correctly (honest, transparent and sincere), they can counteract some (but never all) of the skepticism.
-CNET does a great round up of clean car technology. It will be interesting to see how it plays out long term. Will it be plug-in electrics and hybrids, which will require a non-coal based electricity grid to have the most impact or hydrogen fuel cells which require a complete overhaul of the fueling infrastructure? Out of all of the markets, including solar, wind, hydro and others, this is the one that will have the biggest impact on everyday life.
-Ping me if you'll be in Valencia, San Diego or at Cavallo Point in the coming weeks. The next two months should be fast and furious in the cleantech world.
After a long hiatus in which I took a couple of trips and battled a sinus infection, it's great to be back in the saddle on Renewablog. Not to mention I returned with exciting news.
Schwartz has partnered with AlwaysOn to sponsor and represent the GoingGreen event. GoingGreen has become the premiere cleantech industry event focused on green financing, venture capital and emerging growth companies in solar, wind, green IT, sustainability, biofuels, etc.
GoingGreen kicks off what will be an action-packed Fall for the renewables market, as PVSEC Europe, GoingGreen, greenXchange Xpo and Solar Power International (the artist formerly known as Solar Power 2008), all take place between Labor and Columbus Day week. If the other conferences have a line-up like GoingGreen (Raj Atluru and Steve Jurvetson, Vinod Khosla, Ajit Nazre, Ray Lane, etc.), we are in for one great stretch of conferences. One topic that is sure to be top of mind? The expiring renewable tax credits and the impact that a change in Washington will have on industries like solar, biofuels, wind and hydro.
If you attend the events, let us know what you think. I've been waiting for this stretch all year long.
This is another example of the considerable movement at the municiple and state levels to drive green adoption. While this is a great thing for green vendors, it makes the job of cleantech PR practitioners and marketers much more difficult, as they are tempted to take a patchwork local-market approach to selling their wares.
While local PR programs are effective (we've been executing them for medical clients for nearly two decades), green is a different market that requires as much nationwide education as it does adoption. This is especially true as the federal climate becomes more politicized in an election year and much of the legislation introduced in 2008 is more about drawing battle lines than about getting things signed into law. That will change in early 2009, which makes national PR programs integrated with government relations even more critical. For this reason and this reason alone, it is important that green marketing and PR organizations not get too myopic.
With all of that said, bravo to San Francisco for taking the initiative to get a program in place. It will lead to an influx of companies setting up shop in the city and create a number of green collar jobs in the area.
It will be interesting if this also helps draw conferences to the city that have to date been the domain of Southern California, including Solar Power 2008 and GreenXchange Expo. Good days for solar are ahead.
Governor Schwarzenegger has declared a drought in California following one of the driest springs on record. This of course is bad news to the farmers in the state and those of us in the East Bay who want grass for a yard and not a dustbowl.
The majority of the state's water comes from the Sierra snowpack and that pack is thinner this year than in normal years. Some farmers can make up the difference with deep water pumps, but those pumps run on diesel and use 5 gallons per hour, meaning one hour of pumping costs about $26-$30 per hour depending on the cost of fuel.
Conservationists and environmentalists point to global warming as the driver of snowpack reduction, whereas global warming naysayers call the drought cyclical. Regardless of who is right and given the cost of fuel right now, it leads to interesting questions about markets you don't hear much about.
The first market is desalination. This is a technology that has never made sense because of the fuel needed--wood, coal, natural gas--to power a desalination plant. Today, solar and wind, and (longer term) maybe even tidal resources could power such plants and give coastal states (hello drought-stricken Georgia) an almost inexhaustable source of fresh water. Not to mention it would help us deal with rising sea levels (sorry, bad joke).
The other area where renewables could help is deep water pumps. A lot of areas around the country have deep water reservoirs that are expensive to tap and require fuel to harvest. Using wind and solar power would dramatically cut costs for farmers and reduce the strain on reservoirs, rivers and other irrigation options.
If you are marketers in the aforementioned areas, this is a prime time to educate the market and government regulators about the viability of such technologies to generate sales leads and stimulate new investment. It will be interesting to see if either of these areas get any interest at the IDG GreenXchange event or Solar Power 2008. By then, California will be five months into an official drought and no doubt there will be plenty of discussion about the role renewables can play in water shortages.
When posting on a blog it is sometimes easy to overthink your topic and gloss over some of the really simple topics that are incredibly critical. This dawned on me when reading a post by John Gartner at MarketingShift.
This is a critically important point for a couple of reasons:
1) We have reach the second stage in green hype. The first stage was the embracing of Green by hype watchers as the next big thing in business and lifestyle. The second is an age of backlash and skepticism driven by fear that it willbe adopted, along with generalpushback by media and others who will say that adoption is not nearly matching the Stage-One hype. A lot of the media out there right now is focused on the inefficiency of solar, the negative impact of biofuels and freak windfarm fires. This makes it a prime period of time for green washers to get destroyed by media and the general public. Hence, why John's "genuine" statement is important.
2) People sometimes overlook that communications and marketing can come across as condescening. Look at the presidential campaign. You have the campaigns of Hillary Clinton, John McCain and Barrack Obama trying to spin every little piece of information or data their way, to the point that it sometimes gets insulting to the viewer. An Editorial in the NY Times this week accused them of thinking the American people are a bunch of "rubes."
This is how I feel sometimes about green marketing--that is so superficial and transparent, it does more harm than good. So the simple message is: Be genuine and don't condescend. If you have to fool someone or oversell your greenness, it won't appear green to your audience, it will be transparent.
We're often asked by clients if the biggest trade show of the year in their respective space is a good location to announce news. We usually answer their question with a question: "What is the goal of the announcement?"
We explain that if the goal is stand-alone media coverage, they might be better off using the event to pre-brief media and announce a couple of weeks later when the market has exhausted its news. If the goal is to drive business development activities, announcing what they are doing at the show to give sales and bizdev a press release to shop to customers and prospects might be the way to go.
The green/clean tech world is relatively immature when it comes to events. There are several that are vying to become the RSA, NRF, Mobile World Congress or JavaOne of their respective markets---such as Solar Power and GreenXChange Expo--but for the most part there is not yet that one event that makes green marketers exhaust their news arsenal.
But unlike security, open source, application development, retail technology and wireless, green does have a landmark "event" that brings every marketer out of the woodwork with a news announcement: Earth Day. I performed a highly scientific research project (40-second searching of Google News by source) and found about 500 commercial press releases from the past 24 hours that mention Earth Day.
My favorite? Purex announced that Jaime Pressly has become its spokesperson for the company's green campaign. I can just see Joy, Randy, Earl and Crabman doing what they can to stop global warming on My Name is Earl.
But the point is that Earth Day may have officially become the noisiest day in the Green world. The question for marketers then becomes: "Should you announce signidicant news on Earth Day?"
I think the answer would be a resounding "No." Earth Day is much too noisy, especially when you also factor in this year's Presidential campaign, earnings season and just about every other news event that could drown out a momentum announcement, new corporate green initiative or donations to a green charity.
My advice? Avoid Earth Day like the plague and don't contribute to the noise being created by marketers in every sector from detergents to light bulbs. Better yet, follow the advice of my eight-year old daughter who said, "Let's shut everything off today that uses electricity, including the Wii, Webkinz, the TV and the toaster."
Generation Green speaks. Shut off your computer, take the day off and celebrate Earth Day away from the noise.
The public will for change exists. The research supports it. The economics are getting there. So what's the problem? Some of the same problems that have stifled green adoption for the past several decades. In the specific cases below? Politics and Detroit.
Word from both Chris Morrison of VentureBeat and Craig Rubens of Earth2Tech that the City Supervisor in San Francisco has stalled a plan that would have provided $6 million in consumer solar rebates to residents that implement solar electric systems. His concern? That only the wealthy will be able to take advantage.
I know housing prices in the city have come down a bit, but aren't most property owners in San Francisco considered wealthy anyway? Aren't there also programs and special financing in place for solar installations for affordable housing projects? I know that solar on affordable housing is one of the areas where Schwartz client Borrego Solar specializes, so I suspect the answer is "yes." I think it is time that politicians get creative and invest more in green rebates and tax credits, rather than focusing solely on which is the best approach, taking credit and further delaying something that is sorely needed.
I really think the best analogy for some of the inane debates taking place in the cleantech and renewable energy world are analagous to firemen watching a house burn down while they argue over whether it is most effective to use foam, water or sand, and which qualifies as a truly efficient fire-fighting tool. I hate to disagree with the great Billy Joel, but we did start the fire and we are continuing to feed it.
Last week saw the release of a report predicting that solar would see a serious speedbump in 2010, as the current shortage of polysilicon eases and solar cells flood the market. The report predicts difficulty for both thin-film players and the chrystalline silicon makers that depend on polysilicon as a key ingredient in their products. For green marketers in solar, this could mean that the window of opportunity is much smaller than previously thought.
This report looks at the supply side of the equation and sees doom for manufacture profits and gloom for their investors. I wonder, however, how much the report thoroughly investigated the demand side of the equation. There are a number of things that should increase solar demand in the coming years and may partially or substantially offset any increase in supply:
Improved storage capacity--one of the biggest technology bottlenecks to the adoption of all renewals has been battery and storage efficiency. That said, millions are being invested in battery companies right now, including A123, Lion Cells and Seeo, which will help in terms of power storage in applications like electric cars, solar and wind. If the storage gets better, then the demand and ROI will go up significantly.
Speaking of electric cars--one of the biggest contradictions in my mind is the use of an electric car charged on coal-generated electricity. What's the answer? Charging it with renewables. The use of solar combined with good battery technology and electric cars just makes too much sense. It also doesn't require substantial infrastructure overhauls like changing the types and locations of fueling stations. A solar implementation on a house, office building or even carports, would be a huge advantage.
Government support--next January will definitely see a change in the political climate for solar and other renewables. All three major presidential candidates have stated that they believe in renewable sources of energy and will commit more investment in areas like solar. This includes direct investment in R&D and other areas, but also better federal tax incentives and rebates. These rebates will allow solar companies to protect some of their margins as the supply of solar increases.
There is no doubt that solar is riding high right now because of the perfect storm of high demand, low supply and large sums of investment. It also makes sense that the market wil mature eventually and it will be a bit more commoditized. But to predict it is going to get there in two years is a bit silly IMHO, since we have just begun to scratch the surface of building integrated photovoltaics and other solar applications beyond the panels you see today.
So I am going to have to report back on how WIREC day two went in a future post as our meetings today took us to locations off site, but still some interesting tidbits I didn't get to yesterday:
-One business development executive at a solar concentrator company said that he got in "very early" on sponsoring and exhibiting at WIREC, giving him a large booth size and prime location alongside the big boys (BP, Chevron, etc). If you are a green marketer with a gambler's mentality, there is definite risk and reward to taking this approach. He saw enormous reward as they were front and center to anyone entering the expo. A solid relationship with ACORE also helps.
-On which shows should you gamble if any? The best shows are obviously ones in which there are other local key audiences that can be leveraged in case the event is a bust. If you can schedule some local meetings/drop-bys off site, you can still end up with qualified prospects from the travel associated with an event. DC is a great location since there are a lot of companies with headquarters in the area, as well as a media and government-rich audience with whom you can network. The San Francisco Bay Area, Boston and New York are also good locations. Anything beyond those markets can be tough depending on your vertical focus.
-From a speaking perspective, it can be tough to justify the time and expense to present at an unproven event. Nothing is worse than having your executive speaking to a room of six unqualified attendees who don't ask questions. Therefore, while taking a chance on exhibiting costs can be prohibitive, so is the credit capital cost of sending your executive to an unknown conference.
-I met with an investment company (hybrid of an investment fund and a venture firm) that actually sees the renewable energy world very similarly to the way that green marketers and marketing/PR firms see the industry. Solar and wind are the most mature, with biofuels, hydro power and others a bit further off. That is not to say that companies in those markets cannot benefit from government relations, public affairs and PR, but those campaigns would be built around early mindshare, driving investment and and educating the market. Solar and wind tend to be the companies in a position to commpete on a product basis.
-WIREC was not very well attended from a media standpoint, but there was a young analyst firm exhibiting, Emerging Energy Research. It is interesting to see some of the boutique firms beginning to pop up offering advisory services to vendors of renewables and consulting services to commercial and government organizations. Who will be the Green Gartner?
-The most interesting item to come out of the WIREC show? How much government money there is that can be invested in renewable companies, but how few companies understand how to tap it. Government relations seems to be the great untapped market opportunity for a lot of renewable companies. It is money that requires no diluting of equity, no forfeiting of intellectual property rights and no decision as to whom you sell the product. If I were a VC concerned about becoming over invested in one of my portfolio clients, this would seem a like a great option since my equity stake and value would only be positively impacted by bringing on the government as an investor. With $152 million going into solar and $53 million (approximately) going into wind, GR seems like a great place to get a significant ROI.
Here endeth my WIREC visit. Off to Dulles to complain about the lack of midday direct options to the West Coast.
Tuesday marked the first day of WIREC and it was an interesting start. Some observations:
-Kudos to the WIREC folks for doing a much better job than some other conferences at having an efficient registration system. At Solar Power 2007 in Long Beach, a colleague and I stood in line for more than 90 minutes for badge pick up (we pre-registered) and ended up missing a meeting as a result. WIREC knew the event would be well attended and they prepared accordingly. It took about four minutes to get our badge.
-While photovoltaic (PV) solar was the rage at Solar Power 2007, solar concentrators seem to be the most prevelant technology at WIREC. Sopogy, SkyFuel and Abengoa were a few of the concentrator companies exhibiting, albeit with slightly different strategies and target markets. Global Solar Energy was one of the major PV manufacturers present (*disclosure: GSE is a Schwartz client).
-Wind and solar are again the most dominant technologies on display in terms of commercially available products. Also well represented are biofuels, biomass and firms looking to service those companies (legal firms, government relations, etc.).
-Big kudos to ACORE for sponsoring a free lunch and again to the WIREC folks for having enough seating.
It'll be interesting to see if the traffic picks up a bit more tomorrow and to see what companies are saying regarding the ROI of exhibiting. There are obviously a lot of these events popping up around the country and abroad, and finite green marketing budgets need to know which events are worth the growing costs.
It's been a very busy week as I prep for a trip to WIREC in Washington D.C. The Washington International Renewable Energy Conference is a gathering of renewable and cleantech companies of all types. It just so happens that WIREC is taking place just as the wind lobby gets together in Washington for a major push.
WIREC also coincides with the House's passing of renewable energy legislation that would increase oil company taxes and extend renewable energy credits (via Earth2Tech). Not everyone is convinced that the legislation will get signed.
Everyone has seen solar and wind really take off over the past two years. What's next? Well, if you follow the money it could be biofuels. Mascoma got $50 million in funding. It will be interesting to see if 2008 is the year new fuels really start coming to market ... maybe 2009 will be the year we see the changes in infrastructure to support those fuels. In any event, the market is about to get noisy for you biofuels marketers.
But let's be honest ... the markets of all renewables will explode in the next year as we have the perfect storm of increasing demand, huge rounds of financing and an anticipated change in the political climate for renewables.
I'll be sure to report some of the interestings things I see and learn at WIREC. For those attending the event, safe travels.
This past week was interesting, highlighted by a study, a survey and a political plea.
First, an interesting survey was released this week that said that green features are finally delivering in terms of home sales by adding a $9,000 premium to the sale price. This gives consumers yet another way to recoup the up-front costs of installing a solar, wind or other renewable system. This is undoubtedly great news for green marketers. This type of data can help overcome some of the concerns about ROI, especially in a market where home values are dropping. Now we just need the home appraisers and banks to catch on.
Second, a controversial study released from UC Berkeley that basically lables solar a waste of money from a residential perspective. It says that the cost of installing a solar system makes is too expensive when compared to its benefits. There are some things, however, that the study seems to have overlooked. Not all states allow consumers to sell energy back to the grid (net metering) or go negative on their energy bill. If that happened, it would certainly help in terms of offsetting the cost of the system. It also ignored the survey that showed the impact of green on the price of a home. For green marketers, this is not the type of study you want to see when it seems the market is taking off. The research did take a very narrow view, but we will likely see more of this and not less in 2008 and beyond.
Finally, a plea from the governors of coal-producing states that clean coal not be forgotten as part of the renewable-energy agenda. This is critical to states like Pennsylvania, West Virginia and other large, coal-producing states. It will be interesting to see where this goes. Many have called "clean coal" a farce, based on technology that hasn't even been developed yet. There are also serious concerns about the way in which coal is harvested, including strip mining and other environmentally unfriendly means. Is clean coal real or a dream? We'll see in the years to come, but we should see a lot more noise about it given the number of state economies that depend on it.
-Also on E2T, PG&E said that their latest geothermal contract will allow them to meet the 20 percent threshhold set by the state for electricity from renewables. This is important because one of the stock objections from utilities has been that cleantech hasn't advanced to the point where it is economically possible to generate large percentages from renewable sources. Green marketers now have an example to give when that objection is made by legislators and other key audiences.
-And finally, as I posted about earlier last week, the House is finally pushing a bill that would extend the renewable tax credits and rebates that are so critical to consumer and business adoption. This would help sustain the market has seen over the past several years.
This is huge news as the credits help offset the cost of implementing solar, wind and other renewable technologies. The more quickly economic incentives increase, the quicker we will be out of early adopter phase in the market. This will help cleantechs grow more quickly and result in better education of the marketplace. It also will help encourage continued investment in renewables by VCs and Wall Street, which will help preserve the marketing budgets of cleantech companies.
As mentioned in previous posts, federal incentives make the most sense because they encourage nationwide adoption. The states and municipalities can still add on top, but the move to cleantech should be a national effort. There are some holes in the legislation as pointed out by Rubens, but overall it is a great step in supporting continued market growth.
There has been a lot written about the failure of the federal government to renew or increase the renewable energy incentives and tax credits that are set to expire. In the meantime, cities and states have picked up the slack, developing initiatives that tie funding of solar installations to property taxes and city bonds. San Francisco, Berkeley and other cities around the country are creating these types of initiatives while they wait for a political climate change in Washington.
These regions are right to do what they can to advance the use of renewable technologies, but long term something needs to be done nationally. People who do their part to reduce their carbon emissions and reduce the strain on the power grid should get some sort of universal credit or break. You could have one neighbor receive thousands in incentives and tax breaks, while the other gets little incentive to install a renewable energy system. This is wrong.
It is analogous to two households with an adjusted gross income of $60,000 getting dramatically different tax rebates as part of the economic stimulus plan just passed. Cities and states should continue to do what they can to advance the use of renewables while the federal government sits in gridlock. But long term, Washington needs to do something aggressive that improves upon and superscedes local incentives.
It is unlikely that the political environment will change until January of 2009. In the meantime, marketers will have to continue to target areas where tax breaks and incentives make adoption more likely. National campaigns certainly don't hurt in terms of education and awareness, or in priming the pump if the federal climate does change, but direct lead generation is more likely to happen in localities. Some may even invest most of their marketing dollars in Europe where Germany, Spain, the UK and others continue to adopt renewable plans at a furious pace.
You may seen the news this week that Schwartz has officially announced a Renewable Energy and Green Practice. Some folks will be shocked that this is something that we are just announcing since we---like some other firms---have been talking about it and executing on it for more than a year.
We were tempted to put our stake in the ground in early 2007, announcing to the world that we were making a concerted effort to build out the practice and that we were ready to help cleantech companies achieve their PR goals. We were even more tempted as we executed Green campaigns for clients like Rackable Systems, McNamee Lawrence, Shawmut Design and Construction, and CheckFree. It was tough to resist making noise when we began working on pro-bono projects, like the San Francisco Waldorf School and the Business Council on Climate Change (BC3), and commercial projects, such as AgileWaves.
So why did we wait? Well, clients always ask us when they should announce a new product or service offering. Our response is usually, "If PR is the only driver of the announcement date, we should wait until you have a compelling story around the product or service, including customers that support the fact that what you are bringing to market is truly differentiated."
The news is not that we are entering the Green PR world. It is that we have a differentiated services offering, including aggressive media and government relations, that is already helping our cleantech clients achieve their business goals. The news is that we are taking what is our single biggest core competency--helping emerging growth companies facing heavily entrenched, better-funded competition level the playing field through PR--and applying it to a market that needs it more than perhaps any other technology market in history.
Renewable energy companies face significant challenges, many of which I have blogged about the past. They face one of the largest and most entrenched industries in the world in the form of traditional energy (oil, gas, coal, etc), as well as the marketing and lobbying arms of numerous industries that don't like being regulated (auto, utility, manufacturing).
They also face very steep, well-funded competition within their own markets now that VCs around the world are sinking eight and nine-figure rounds into companies in solar, wind, fuel cells and biofuels. They also face large corporations in other markets who have begun developing and acquiring their way into renewable energy.
Bottom line: This is the ultimate David versus Goliath story and a story in which we are relishing the opportunity to play a part. We now have officially been cast in a role and are packing a pretty big slingshot.
Great story today in the NY Times by John Markoff and Matt Richtel about how California is leading the solar charge, with massive amounts of investment, subsidies and jobs being created as a result. There was also news today of Applied Materials making a large acquisition of an Italian solar company for $334 million dollars.
These two stories are both great news for emerging-growth solar companies. They both support the position that solar technology is not an energy-crisis fad, but a long-term viable market. The Applied Materials deal will continue to send the message to investors that there are lucrative equity events waiting for them in renewable energy. It also may signal to Applied competitors that they need to be more active in investigating the market. As I've mentioned before, the market needs some big fish to bring their marketing budgets, lobbying arms and workforces to market to educate key audiences renewables and move the industry forward.
This is a trend that is not going away anytime soon.
The practice of Greenwashing has made lots of news lately, as some companies overstate their commitment to green practices and the FTC threatens to investigate. I'd like to think it's a case of marketers not being fed accurate information versus marketing and PR intentionally trying to mislead the public, but until some internal memos make their way public, we'll likely never know.
I've been seeing a lot of General Motors ads recently pushing that company's commitment to green technologies, from greater fuel economy to hybrids, from biofuels to electric. Most will say that history should dictate a great deal of skepticism with regards to how committed GM actually is to greening their product line, pointing to the short-lived infatuation with compact cars among U.S. automakers in the late 1970s and early 1980s.
That said, the economic, ecological, geopolitical and social benefits of going green have never been better publicized, and I think the growth of Toyota and Honda have slapped U.S. automakers with a dose of harsh reality.
I am cautiously optimistic that what GM's CEO says in this CNET interview is true and that American auto manufacturers are committed to creating products that deliver the aforementioned benefits. Let's hope this is not a case of the largest U.S. auto company greenwashing the public in hopes that the market will again eventually favor the gas-guzzling behemoths that dominated the market over the past decade. Unfortunately, some suspect this is the case and will likely not believe Detroit can be green until they drive the proof.
Greenwashing is a foolish practice if done intentionally. It is analogous to a company claiming to have great data security only to find out later that the company was lax and suffered a breach. The PR damage of being accused and/or found of greenwashing is much worse than the likely benefits of making false claims about practices. It betrays the number one rule of marketing and PR: tell the truth.
Unfortunately, there are hundreds of companies out there likely partaking in greenwashing, meaning we will likely see more of it in 2008 than ever before.
I saw a great profile on CBS News regarding some engineers who took a traditional hybrid car and equipped it with additional battery power and a plug-in power source. It turns out that when you drive the car fully charged, it doesn't have to have to use the gasoline engine for the first 40 miles--highway or city! This means that the majority of Americans (81 percent according to the report) likely wouldn't have to use gas at all, provided there was a way to charge the car at work or at a transit station. This includes me, as I commute a grand total of seven miles everyday to BART and back.
This raises a few different points (some marketing-related and some not):
- Sooner or later, the laggards in the auto industry will not be able to discount the advances being made in clean-car technology. They will be committing marketing and sales suicide if they don't start embracing the move toward ecologically friendly options. As I stated in a previous post, the green halo is only going to get brighter with all of the environmental education happening at primary and secondary school levels.
- Will the adoption of electric cars and vehicles that do little harm to the environment damage the move to mass transit systems? If people aren't doing damage to the environment and their fuel costs are next to nothing, what will make them (other than a long commute) want to carpool or take public transportation? Marketers of mass transit will eventually have to start doing more to differentiate their service if the economic and environmental reasons aren't compelling. Food and beverage service, satellite TV and radio at your seat? I'd be sold.
Battery technology has to improve dramatically (not an epiphany, well publicized).
The electricity charging the car has to come from renewable sources. This could include a solar array at a home, business or parking structure, or the embracing of renewable sources by utilities, such as that produced by solar or wind farms. Charging a car with juice from coal-based energy is not a very clean option.
The horsepower generated in an electric car has to increase or those V-6 and eight-cylinder-loving Americans won't give the electric option a single sniff. Many have joked about the American dependency on heavy, high-powered automobiles. The only thing that has become more obese than our populace are the cars we drive.
Two guys in a garage became a euphemism for the technology entrepreneurs of the dot-com bubble. It seems that those two guys have gone back to inventing what the garage was meant to house--new, greener breeds of cars.
Germany is #1 in solar. The U.K. intends to be #1 in wind. Brazil has long been #1 in ethanol. The U.S.? Does being first in failed attempts to adopt a national renewable energy strategy count?
The recent passing of the energy bill by Congress and subsequent signing by the White House put an exclamation point on what has been a stalled effort to get aggressive renewable energy initiatives adopted at a national level. Stalling by utilities and some energy giants also hasn't helped.
In the meantime, different geographic regions and emerging-growth companies have really led the charge in terms of developing their own programs and investing in various approaches.
While I don't excuse the federal government for failing to advance renewable energy research, adoption and strategies, it may not be a bad thing that states have taken the lead. After all, we are talking about the country with the fourth largest land area in the world. A country so vast that it doesn't make sense to say "we are going to be first in X, because it is the best option for the entire country."
Truth is, the only thing that the U.S. should eventually become first in is consumption of renewable energy. It should serve as a melting pot of renewable energy, as it has served as a melting pot of cultures for hundreds of years.
Reports have begun trickling in regarding the level of green investment during 2007 and they are impressive. VCs continue to see green as a major investment vehicle for their funds, especially in light of the high-flying performance of thin-film provider First Solar. Green tech companies took home $3.4 billion in 2007 and some estimates have placed that figure in excess of $4 billion. In any event, green is getting greener.
What does it mean for marketers? Well, there is good news and bad news.
First the bad news: If you think things are noisy now, you ain't seen nothing yet. More investment means more marketing dollars spent on advertising, PR and other awareness campaigns by your competitors. It means that the market is going to become even more competitive. It means that start-up companies may have enough cash to do in two years what took you three or four. Not to mention some of the massive rounds from 2006 and 2007 went to companies building out R&D and manufacturing, so some of those companies haven't even started marketing yet.
The good news? It means that other companies will be helping to advance renewable energy technologies in the mainstream consciousness with legislators, consumers and corporations. It means more money in the coffers of the renewable energy market to educate key audiences and battle the fear, uncertainty and doubt put forth by lobbyists, critics and some traditional energy companies. Anyone who has spent any time in marketing knows that trying to create a market or raise its visibility is tough to do without a budget that is in the millions of dollars. It can be done, but it helps to have others pulling the cart with you.
The increased investment and competition may also allow marketers to make the case for more budget in 2008 and 2009. Nothing riles a management team or board of directors more than a less mature competitor getting more attention from media, buyers and investors.
A colleague and I got to attend a great event on Thursday. It was the unveiling of a new solar PV system at the Head-Royce School in Oakland. The event involved a full school assembly (all students K-12, teachers and administrators) to debut the new system and featured presentations from the head of the school, a prominent Cal Berkeley professor in the school's Energy and Resource Group, and the president of Borrego Solar, the designer and installer of the system (DISCLAIMER: Borrego is a Schwartz client).
The array on the gymnasium roof, where the ceremony was held, was amazing. Dr. Dan Kamman, the Berkeley professor and a Head-Royce parent, was very passionate and informative. The most amazing thing, however, was the level of involvement of students in the project. The school had formed a "green council" involving kids of all ages that helped consult and plan the project, as well as other initiatives at the school.
A fifth-grade girl and an eighth-grade boy, both members of the Green Council, delivered speeches covering the various green initiatives taking place at the school (e.g., composting, an edible garden, recycling), as well as a history lesson on solar connectors and solar PV systems. The hundreds of students were attentive and clearly understood the significance of the ceremony and took a tremendous amount of pride from their efforts.
Everyday, we hear about new and exciting programs around the country, aimed at making students more aware of environmental challenges and issues, and encouraging them to get involved. I got the sense sitting there listening to the students and hearing about the various initiatives at Head-Royce, that a new "Green" generation was taking shape. It is clear that while there may be occasional, short-term setbacks in the move toward renewable energy, long-term success will be ensured by the education and activism of the next generation walking the halls of primary and secondary schools around the country.
What does this mean for technology companies and marketers? It means that the green halo is not going to go away anytime soon. It means that a new generation of consumers will look at the environmental impact of the choices they make and will make minimizing that impact a key purchasing decision.
I've been asked by several folks which green blogs I read on a regular basis. I can honestly say that my home page when I open up Firefox is Earth2Tech. It's part of a GigaOM network and tends to focus on the technology behind the renewable energy movement. It also provides some great round ups of what is happening in renewable energy markets and on other blogs within the Green universe.
Without further ado, here are some of the other Green blogs on my blogroll:
gristmill--provides great discussions around different topics of the day and closely scrutinizes what is happening at a public policy level in the world of green.
Green Wombat--Todd Woody does a good job blending environmental and technology news on a regular basis as part of the B2 network.
Treehugger--The name speaks for itself, rounding up the best in environmental news.
VentureBeat--True it is not a green blog, but is a great place to see where the funding is going.
- I wish that all sales professionals would recognize PR as trying to help support brand awareness, lead generation and company valuation, and not view them as competition for budget or unnecessary annoyances for their customers
- I wish that public companies would realize that non-material press releases are not an effective way to manage the stock price (especially in an increasingly new-media driven world), but are in fact an exorbitant cost that takes budget and resources away from higher-impact PR activities
- I wish that print advertising would stabilize, because let's face it--there are just some places you can't take a computer to read news and other content
-I wish that publications could expand their staffs so that journalists would have the time to do more in-depth reporting, versus having to constantly spit out news briefs and blog posts
- I wish that clear-cut winners would emerge in the vertical blogosphere so that audiences would not be so fragmented
- I wish that the renewable energy market would continue to grow bringing more technologies to market and radically changing the energy economy
This weekend, my wife and I were getting ready to watch a movie when I saw The American President on TNT or TBS (is there a difference?). This is the one where Michael Douglas plays a widower, single father and a first-term president. He meets and begins dating a lobbyist (played by Annette Bening) from a environmental group. The climax of the movie is a press conference where Douglas says that he is going to send aggressive gun control and climate legislation to Congress--two separate pieces of legislation that he was using as bargaining chips--while ignoring any negotiating he has already done with House and Senate members on the bills. The global warming bill he supports is a 20% reduction of green house gases by a certain date.
Now, I've seen the movie a dozen times (sadly) and it remains one of those guilty pleasure, Saturday afternoon movies that I will likely watch again (it has Michael J Fox, Richard Dreyfus and Martin Sheen as well...great cast). However, something struck me this time when watching it.
I knew that the environmental legislation pushed by Bening's character was a central plot component, but what struck me was that this was a topic for a movie released in 1995. That is 12 years ago now, going on 13. This amazed me because I would never have guessed that climate change has been a mainstream topic for that long. Maybe it is because I thought the debate was still centered on the ozone layer then or because gas was under $2 per gallon. In any case, I was shocked. Yet, it still seems as though we are only now scratching the surface of coming legislation, technology, etc.
What it also made me realize is that David Roberts of Gristmill is right: the world will be a much different place in 2020 when we are nearing the first date in many carbon emission-related bills currently under discussion.
Consider that in 1995Bill Clinton was a first-term president. Solar was a niche industry with little VC or private equity investment and certainly no $200 million rounds. The Dow hit 5,000 for the first time. Yahoo! was founded. Biofuels, fuel cells and ethanol weren't part of the everyday lexicon. CFL stood for Canadian Football League, not a type of light bulb. There was no Internet bubble or tech recession.
Amazing, no? Given the amount of investment in and marketing noise around renewable energy today, I am willing to bet that things will advance a bit more quickly over the next 13 years, with or without Michael Douglas leading the charge.
The House this week passedsweeping energy legislation that hits on a number of key issues. Amazingly, one measure that has sparked tons of controversy and debate in the past seems to be the only consensus measure in this legislation: higher fuel economy standards. Other parts of the legislation have sparked veto threats from the White House.
Other key parts of the legislation include the extension and an increase in solar tax credits for consumers and businesses (opposed by the White House), repeal of oil industry tax breaks (opposed by the White House) and a requirement for 15 percent of all energy to come from renewable sources (opposed by utilities). The Senate will take up the legislation this week. There has already been talk that the bill may get broken up in order to get certain elements passed.
I've mentioned before that the next 12 months are likely critical for the renewable energy industry. Billions in investment have flowed into solar, wind, biofuels and other technologies with the expectation that government mandates will continue to generate and even accelerate demand for renewable sources.
Do I think there is a scenario by which the entire industry stalls as a result of an unfriendly political climate? Not unless oil falls to $20 a barrel, gas to $.99 a gallon and a report comes out saying that trees are causing climate change and not carbon emissions. In other words, no shot. More likely is that individual states will lead the charge on legislation and it will just take a bit longer for renewable energy technology companies to see the rapid growth in terms of revenue and investment that many expect to see over the next decade.
Just as everything is cooling down for the holidays, the renewable energy debates in Washington are heating up.
