The largest news in April for clean energy could have been Solyndra’s debt woes, a PR debacle that could prevent its IPO, result in millions of dollars of squandered federal funding and provide a massive PR salvo for opponents of government investment in cleantech movement.
CapeWind - This announcements is important in scope and, perhaps more importantly, precedent. Despite 9 years of protests from a wide-range of opponents, the federal government has acknowledged that our nation’s energy needs are more important than ideological or NIMBY opposition, no matter how heavy-handed. This is an important case for the PR and GR efforts for the entire clean energy industry. Hopefully this is the first of a number DOI-supported wind farms off the Atlantic Coast and in the Great Lakes.
DOE funding – This funding was for research focusing on electrofuels, batteries and carbon capture. From a PR point of view, this is a much-deserved acknowledgment of the importance and potential of these technologies, which often play second-fiddle to solar, wind and smart grid technology. And though the second fiddle status makes sense from a market maturity standpoint, these technologies still address important problems that require solving.
Amonix – Like most clean energy PR, “scalable” and “cost-reduction” are more important phrases these days than “break-through” or “cutting-edge”. Amonix, which emphasizes “scale” and “low energy production costs”, is an example in the shift in how companies position and market their clean energy technologies. Clean energy financing will likely continue this trend, as VCs demand quicker payback and more manageable reliable products. Schwartz is fortunate to work with several interesting companies in solar that are solving the scale and cost issues around traditional solar technologies.
What does this all mean? In a month where a cleantech bellwether fell on hard times, we saw a number of good developments that are fueling cleantech adoption and acceptance. This good PR for cleantech concerns across the board is more than welcome. Let’s hope it continues and reduces the squabbling over the long-awaited climate bill.
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.
Yesterday we had the pleasure of having Camille Ricketts, the lead Green writer for VentureBeat, into our San Francisco office. For the twenty PR clients we work with in solar, smart grid, biofuels, water desalination, carbon management and Green IT, Camille is a top contact--especially for those looking to reach a green investment audience. Camille considers herself to still be a bit new to the Green space, although at more than six months she is a grizzled veteran in the high-turnover world of media.
She ran through a good background of VentureBeat and her specific focus, all of which was useful. But perhaps the most helpful information for a Green PR person is tips and tricks for working with a journalist more effectively. So onto Camille's preferences:
-Follow Up: She is very conscientious about email pitches and will follow up on nearly everything if given the time. Therefore, she prefers second contact to come in the form of an email and requests a bit of patience because she will try to respond.
-Social Media: Camille doesn't mind direct messages on Twitter as long as you have something that can be of use to her. She'll read them and Tweet you back if she is interested.
-Sources: While Camille likes speaking with venture capitalists, she doesn't want a VC source that is simply going to cheerlead for a company. She wants details on why a deal came together and why the VC chose your company over a competitor.
-Embargoes & Exclusives: Both Camille and VentureBeat as an outlet, appreciate the use of embargoes and exclusives by PR people. They will honor embargoes as long as a PR firm is good to its word and VentureBeat does not get scooped after agreeing to one. VentureBeat writers pride themselves on integrity and will not agree to something they won't honor. Like almost all media outlets, they like an exclusive because it allows them to do a longer piece without fear of being scooped. The good news is that I think they're likely to get more exclusives moving forward thanks to a strong syndication relationship with the New York Times web site.
-Future Focus: Camille expects to be writing a lot about Smart Grid and Green IT in the coming weeks as VentureBeat ramps up for its GreenBeat 2009 event in November. With Al Gore, John Doerr and other high profile presenters, it should be a great event.
Overall, Camille shared some great information about working with a top outlet covering how finance and policy are impacting the cleantech market.
The last few weeks may have been the best PR stretch of 2009 for solar, wind and other cleantech and green markets, especially from a finance standpoint. It should provide a considerable uplift to spirits at AlwaysOn GoingGreen next week as the cleantech venture capital, private equity and investment banking community gathers to discuss industry issues in water, smart grid, energy management, solar, wind, energy storage and renewable fuels. Some of the positive news from the past few weeks:
-Treasury grants started flowing from the American Recovery & Reinvestment Act (ARRA), promising to fund a new way of renewable energy projects in wind and solar.
-Vinod Khosla's firm, Khosla Ventures, raised a $1.1 billion round which is expected to help fund dozens, if not scores or start-ups across the sector.
-Cleantech patents hit an all time high in Q2, showing that companies and entrepreneurs continue to innovate and that many new Green technologies are likely coming to market in 2010 and beyond.
That last bullet flew under the radar in many circles (a partner in a late stage VC firm I talked to said he had not heard anything about IBM's interest in water) and water as a whole gets less attention than energy on a national level. I am a firm believer that water is the next big sector that will attract massive investment and media attention, as the US comes to better understand that water is a national issue.
Couple all of these developments with Hara and other companies being successful in their fundraising activities, and you have what looks to be a significant financial thaw across various green industries. It could also be with Obama's speech on healthcare reform tonight that some form of bill gets passed and that the Energy & Water bill moves back to the top of the legislative priority list, which could result in the creation of the Green Bank and more funding avenues for cleantech companies.
With GoingGreen, PVSec, Solar Power International, Dow Jones Alternative Energy Innovations Conference, Power-Gen, Clean Tech Futures and a number of other events upcoming, we'll be able to monitor the impact of all of this news on the collective psyche of the cleantech market. It should be a fun final third to 2009.
**Schwartz Plug Alert**
We issued a release today highlighting the growth of our Cleantech & Green PR and Public Affairs Practice during 2009. We've become the Agency of Record for ten great organizations thus far in 2009, thereby doubling our footprint in the market. It's an exciting time to be in PR.
Important news yesterday that the Treasury Department has granted more than $500 million in grants to some major cleantech projects, most of them related to wind power. These grants are in cash versus the traditional 30 percent tax credit that companies had been receiving. Expect solar, wind and biofuels projects to receive additional funding in the coming months.
With new cash flowing in from the government, green VCs and foreign investors, the market is looking at a major rebound in Q4 and 2010. All of the positive news around financing should help offset falling solar panel prices, declining wind patents and biofuel production snafus, leading to a better green PR environment in the coming months.
Schwartz represents a large patent and intellectual property firm, Finnegan, with an established Green industry practice, and we're guessing business has been pretty good for them and firms like them.
What does this mean? Well, we know that Cleantech and Green Venture Capitalists love patents since investing in companies without some legally enforced technical barrier to entry is seen as somewhat foolish. New technology development and a spike in patents could lead to an even bigger rebound in early-stage investing. And while the spike could have been driven in part by emerging-growth companies like Bloom Energy, it also points to the fact that large company R&D is likely increasing in cleantech, for example, automakers in fuel cells, GE and others in wind and smart grid, etc. It also could lead to future acquisitions of smaller companies with strong patent positions, by some of the larger companies in the market.
Many of these patent holders will also likely look for Department of Energy (DOE) grants and R&D grants from other government entities, in order to commercialize some of these technologies. This points to even more competition in the green public affairs world.
Overall, this is yet another sign that the cleantech financing environment and green PR noise will further rebound in 2010.
It has been well covered that VCs have poured billions into cleantech and green the last few years with markets like solar, wind, biofuels, smart grid and batteries receiving a good chunk of those investments. In fact, thin-film solar alone received several hundred millions of dollars in 2008, creating the potential for several big winners or losers among cleantech investments. Very respected firms like Draper Fisher Jurvetson, New Enterprise Associates (NEA), Khosla, Kleiner Perkins and Good Energies led the way, and many VC firms followed.
And while cleantech and green PR firms, the media and venture capitalists all did a great job publicizing the investments, there was an undertone of concern with regards to how the companies would deliver a return to their shareholders (VCs, entpreneurs and employees) and how well served the limited partner (LP) community would be by such investments.
With the credit crunch and struggles of the broader economy, many predicted a cleantech M&A shakeout that would last into 2010 before the market started a recovery. While there has been some M&A, the stimulus package, government adoption, follow-on rounds from existing investors and other measures have helped many cleantech companies weather the storm. So while private companies are not selling themsleves for dimes on the dollar (good news for investors), the market is still not strong enough to support a rash of cleantech IPOs. Or IPOs in Twitter, LinkedIn or Facebook.
So what is the best exit for some private cleantech company shareholders? Enter SharesPost and the hassle-free secondary market exit. The company brings together buyers (private equity firms, VC firms, high net-worth investors and the companies themselves) and sellers (angel investors, VC firms, entrepreneurs and employees) of shares in private companies to provide a third exit for private company sharesholders. SharesPost already has had one Tesla Motors transaction go to contract and escrow, and just released a third-party report on SolarCity which may help facilitate more trades. Multiple buy and sell posts exist for both companies.
Private company data has been a major missing component in facilitating secondary market trades in the past and SharesPost is looking to solve that. This will be a good thing for the market, as it will help keep executive talent working at emerging growth companies, versus seeing everyone head to larger cleantech companies like First Solar, GE and Applied Materials.
Expect to see more Cleantech companies on SharesPost in the near future as some of the market darlings realize they are in it for the long haul and founders, employees and early-stage investors decide they need liquidity.
According to a post on VentureBeat this week, cleantech stimulus funds targeted at wind, solar, smart grid, biofuels, carbon management and other key categories, will starting trickling into company coffers come September. New Energy Finance Group predicts that while some cleantech funding will flow in 2009 resulting in a thawing of bank loans and cleantech venture capital, the bulk of the money will be invested in 2010 and 2011.
As a result, September through December will likely be a critical time for cleantech companies in search of government investment or project financing, In addition to the stimulus money, the fourth quarter will begin the FY 2011 appropriations process in earnest. Cleantech companies will likely need to focus on public affairs and government relations during that time to take advantage of what could be the last budgeting cycle with a cleantech-friendly White House and Congress in control.
A new study covered by Kate Galbraith at the NY Times says that Green Collar Jobs grew twice as quickly as jobs in the rest of the economy from 1998-2007. Given that this study doesn't cover the hyper investment in solar, wind, smart grid, green IT, biofuels, geothermal, batteries, green autos, etc. during 2008, and the hiring that resulted, my guess is that the next study will show even faster growth over the past 10 years. Factor in green stimulus measures during 2009 and you likely have something approaching a Green New Deal.
It would be interesting to see what they specifically classify as a green job. Take Schwartz PR. We have more than a dozen cleantech clients and more than 40 people working with those companies. We couldn't say that in 1998, so technically they have been created by the movement to green products, services and technologies. My guess is that this study dramtically underestimates the number of people who have part or all of their employment driven by the growth in the cleantech market, especially people working in green pr, public affairs, marketing, legal services, media and investing.
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.
But perhaps the most consistently well trafficked portion of the show floor was the small wind pavilion, which boasted a number of companies with interesting solutions to providing distributed wind power. Southwest Windpower, a company with a lot of installation traction in the market, was very well received at the show. Mariah Power was another beneficiary of a lot of interest.
One company that didn't make it into the small wind pavilion, but qualifies as a provider in that category is Helix Wind. The company was several rows and columns away from Southwest Windpower and Mariah Power, but seemed to draw nearly as much interest for its unique design.
Small wind is not a new category--some of these companies have been producing product off of a manufacturing line for several years, but it is clear that many commercial and residential customers like the idea of small wind and the asthetics of some of the solutions. From a PR perspective, a lot of small wind companies have yet to make a big PR splash, but as the technology improves, home equity and financing come back, and more states begin offering tax credits, the market will likely take off.
Much like Solar Power International last fall, Wind Power 2009 had the feel of a boom economic environment on Day 1, with the exhibit hall pretty well trafficked and most people upbeat about industry progress. That's not to say I didn't hear the phrase "credit crunch" during the day, implying that the financial lending thaw hasn't taken full effect.
But what amazed me wasn't that the industry seemed upbeat or that people braved swine flu to come to the heartland of the meat packing industry. What amazed me was how much the wind industry has become a national industry in the US. I don't mean that as much from an adoption standpoint, as I do from an innovation standpoint.
My more than a decade in PR has been centered on the coasts, where everyone assumes innovation is a monopoly. Schwartz has done PR for MIT start ups featuring some of the world's brightest minds, and in Silicon Valley/The Bay Area, the global epicenter of clean tech, technology and medical innovation and PR. Everyone knows that the upper midwest, Colorado, Texas, Southern California and Research Triangle Park in North Carolina have their own pockets of innovation (and I am leaving out dozens of others). Yet, I don't think people give enough credit to the rest of the country for building and nurturing innovation and solid companies.
In solar and biofuels, most of the attention is on coastal business areas (Massachusetts, California, New Jersey, Connecticut, etc.) that have done a good job recruiting cleantech talent and nurturing the industries from a public policy perspective. I think most assumed the same was true with Wind. They couldn't be more wrong.
Wind Power 2009 is littered with component, inverter, blade, machine tooling, cabling, services, modeling and turbine innovators, from all around the country. The commitment to wind power in the country's interior was evident from the number of politicians, companies and visitors from landlocked America. Heck, Siemens even announced a new manufacturing plant in Kansas. I talked to some of the companies at the event from Wisconsin, Ohio, Minnesota and others, and it is clear that they are helping lead the next wave of wind innovation.
Final note: Kudos to the American Wind Energy Association (AWEA) for a really well-run event. I was in a mammoth line for registration and it moved quickly, with conference staff making sure people were paying attention and offering help when it was needed. A line half as long at a solar event in 2007 took almost three times as long to move. They also released their quarterly report and a call for a National Renewable Electricity Standard.
April may be taxing for many, but for the Cleantech industry it seems as though things hit rock bottom in Q1. Based on the news of the last two weeks, April funding showers may bring Q2 flowers.
Venture capital, state tax credits and stimulus money have started flowing into a number of cleantech and energy markets, giving the market a lot to PR about. During this week alone, we have seen two lighting-related technology companies announce a round of funding. Nuventix and Luxim each scored rounds for different approaches to the sustainable lighting issue, with the former cooling LEDs and the latter offering a plasma-based ligthing technology.
Meanwhile, energy storage technologies, such as batteries and fuel cells, are getting big tax breaks in Michigan to the tune of $300 million. Technologies that help replace lost auto manufacturing jobs will likely get some public affairs love from states like Michigan, Ohio and Indiana for the rest of 2009 and beyond. The DOE is also joining the party by kicking in $41.9 million in stimulus funds for fuel cell technologies.
Can the cleantech industry sustain the momentum into May? With Wind Power 2009 on the horizon, I expect we'll see some signficiant news from major renewable manufacturers related to that space. We then move into Intersolar Munich before we get to June. Everything considered, it looks as though cleantech could be rebounding from the funding doldrums that slowed things in Q1.
In a recent interview with The Independent, UK Prime Minister Gordon Brown hinted that a slew of green initiatives will be announced as part of the Government's April 22 budget review, designed to drag Britain out of recession on a low carbon path.
Top of the list are new plans for electric and hybrid vehicles, which echo London Mayor Boris Johnson's pledge to make the city "the electric car capital of Europe" earlier this month. The Government is expected to announce trials of environmentally friendly cars in two or three cities and initiate talks with utilities companies to roll out a national network of roadside charging points.
The news coincides with two European Investment Bank loans of £340m to Jaguar Land Rover and £373m to Nissan to fuel the development of green vehicles in their UK plants. But Brown's intent to deploy more low emission vehicles within the public sector should also act as encouragement to smaller, UK-based manufacturers, such as Smith Electric Vehicles and Modec, which are already seeing strong traction amongst high-profile enterprises such as DHL, Royal Mail, Tesco and UPS.
But aside from the automotive industry, what other environmental initiatives are the Government proposing? Well, Brown has promised to set a target of creating 400,000 jobs in "green industries" over the next five years, which loosely encompass "pharmaceuticals, healthcare, education, the creative industries, information technology, bioscience and advanced manufacturing".
Other plans are mooted to include greater support for the development of clean coal, guidelines for the installation of smart meters in every home in Britain, and relaxed planning rules to allow more wind farms to be built.
While not as far reaching as the US' stimulus package, the rumoured measures at least highlight a growing appreciation that green technology could act as a major catalyst for reviving the UK's economy, resurrecting Britain's once thriving automotive sector and reducing the country's dependency on the financial and services industries.
We'll be watching closely for the official budget announcement later this month.
First, Scotland announces it is investing $8 million in algae and seaweed-based biofuels. The reason? Because those sources have no impact on food prices, don't contribute to deforestation and aren't subject to commodity price fluctuations. Bad news for palm oil and other biodiesel types, but good news for my kids which can't stand it when seaweed touches their feet while swimming.
Then Forbes follows with a story about how biodiesels companies are going to have to start shuttering their doors without government subsidies for the same aforementioned reasons. Executives of biodiesel companies using corn, switchgrass and palm oil have called the deforestation and commodity pricing objections baseless, but a major media and government education campaign will need to take place to change perceptions. In the meantime, it looks as though algae-based fuels, like those being developed by Solix Biofuels, are gaining favor with policy makers, commercial customers and biofuel advocates.
One other interesting story from this week is from Sweden where we have our European Green PR headquarters: apparently govenment approval is the only thing keeping Sweden from having the world's largest wind farm. A company called Markbygden Vind AB is planning to install a multi-terawatt wind farm in the northern section of the country. An interesting post from Dave Tyler of Green Options discusses how there is likely to be a race for the biggest wind farm.
With Wind Power 2009 coming up in Chicago in early May, there will likely be a lot of discussion about major wind farm projects and the public affairs and public relations challenges with getting them planned, developed and built.
Earth2Tech has an interesting post on the fact that the stimulus package and cleantech funding from the federal government may be starting to thaw the VC funding freeze. Three companies announced funding this week, which was newsworthy in itself. But also interesting is the fact that none of the companies were in solar and instead were in markets that took the brunt of VC indifference during Q1.
Wind, biofuels and smart grid were the three markets drawing interest from several noteworthy investors, including GE Capital, DFJ, Polaris and Altira Group, a slightly less well known cleantech and energy venture firm with a pretty broad portfolio. Altira invested in both Southwest Windpower and OPX Biotechnology.
The third company that received funding was Ember, the company behind the ZigBee wireless networking and control standard for smart meters. All three of the aforementioned markets, wind, smart grid and biofuels, stand to benefit from the stimulus package, including renewable energy and smart grid loan guarantees, tax credits, state energy projects and direct investment from the DOE.
We've talked before about how the Federal Government would serve as a bridge investor for the cleantech industry and eventually attract VC dollars back into the market. When companies can get capital from other sources that don't dilute company equity, it takes some of the risk out of the investment for private equity groups and VCs, while making the return potentially much more lucrative.
It used to be that PR was the engine that drove visibility with investment audiences. Now cleantech companies, including solar, wind, smart grid, energy management, biofuels and others, should be thinking about integrating public affairs and PR together to secure government funding and VC dollars.
Will the stimulus ultimately bring back the cleantech VC market? Time will tell, but having the government as a customer and/or financial backer could be the thing that gets cleantech and green companies through the economic downturn.
GoingGreen East 2009 was full of great chatter about energy efficiency, batteries, storage, VCs and the government's deep pockets. Check out a quick podcast discussing what we saw here.
As Scott Kirsner says, everyone from top VCs to Secretary of Energy/Environment Ian Bowles to the CEOs of 1366 Technologies, Ze-Gen, Mascoma, Oasys Water, and GreatPoint Energy will be in attendance. Check out both Renewablog and the live show feed on the GoingGreen site for real-time updates.
Regardless of how the government balances speed and accountability, there are three undeniable points about the stimulus:
-The amount going into green and cleantech is enormous
-The quicker those funds are invested, the better it will be for job creation
-The money needs to be invested transparently and not just go to the same government contractors and companies that have milked Uncle Sam for the past three decades
Yep, we here at Renewablog have our geek side. Spent part of my long weekend poring over a couple of old copies of the MIT Technology Review. They certainly know how to fuse clean tech science and business viability in a reader-friendly way.
My favorite recent piece is the February cover on the "smart" grid. Actual reporting (site visit to GE Global Labs in NY) and killer graphics showing how the current grid is set up backwards for solar and wind (big pipes by thirsty urban centers, small pipes in the solar Southwest and windy Great Plains) make it a must read.
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.
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.
A lot of folks have been upset with the House of Representatives sudden embrace of fiscal responsibility and as a result, the lack of approval for a Senate bill last week that would have extended the production tax credit and investment tax credit. Now some are grumbling that the inclusion of the ITCs and PTCs in the rescue or bailout bill is also not ideal.
So people fall into two camps: those that want a fiscally sound, stand-on-its-merits bill and those that think ANY bill that extends the ITCs and PTCs is a good thing. It is an interesting debate, although one that is probably moot with the likely passage of the bailout bill today.
I can honestly say that this is the most anticipated piece of public policy in the more than 10 years I have been in PR and certainly the most antipcated by green and cleantech PR agencies in the recent development of 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.
What financial crisis? Cleantech investing hit another record in Q3 as money poured into the market at a clip of $2.6 billion (thanks, Cleantech Group). Amazingly, I still am not among those that thinks there is a Green Bubble since this trend has largely been unsupported by the Federal Government.
Yes the ITCs and PTCs have been good for the industry, but with a new administration and bigger Democratic majorities in the House and Senate, I think we have only scratched the surface of advancement and adoption. When you also throw in a weakening economy, a weak dollar and technology bottlenecks yet to be solved, like energy storage, it is plain to see that greener days are ahead.
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.
The bill is expected to pass through the Senate quickly and has a number of other popular additions (including the alternative minimum tax) that they hope will get more House support. I can't imagine Bush not signing the bill if it makes it to his desk unchanged.
This is a critical week for the solar, wind and other industries, as well as for cleantech and green PR agencies, law firms, VCs and every other market that services them.
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
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.
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.
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.
-Word is that geothermal is getting investor attention and beginning to take off. This is very interesting because the government is also boosting its investment in geothermal in the FY 2009 budget. Others getting a boost? Solar PV, Wind and Biomass. The news is not quite as good for tidal energy.
Finally, a cool round-up of money-saving, green gadgets on CNET.
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.
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.
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.
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.
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.
