Cleantech companies have been controversial for several years, but haven't had much trouble getting investments in the Silicon Valley area. Government funding to companies that ultimately failed is a big part of this controversy. The tables have turned several times where major corporations, venture capitalists, billionaires or investment firms flip flop; taking turns, it seems, to invest in these "green" companies. Silicon Valley is a hotspot for this activity, and is where a majority of the investment money goes.
Cleantech firms crashed, gaining no funding
In 2013, cleantech technology and associated companies saw a large decline in investments. It seemed as if nothing new was coming to the table to excite venture capitalists, government funding and the need for further development of renewable energy resources.
Also in 2013, there were 3,175 applications submitted for clean energy patents. This was record setting and is expected to rise again within the next three years.
The negative attention that Solyndra caused to clean energy innovations and the industry as a whole is what weighed heavily on the stoppage of investments and funding for other clean technology companies. The fact of the matter here is that Solyndra, although a little successful, never left start-up status.
The company gained over $240 million in revenue in the years 2009 and 2010. That was not enough to aid the company in surviving as government funding, of over half of a billion dollars, could not even help the corporation stay afloat due to undercutting from China.
In 2011, Solyndra filed for bankruptcy, laid off all of its employees and is still undergoing an investigation.
Five emerging cleantech firms getting funding
The tables turned for cleantech companies in 2014 with new start-up companies emerging with fresh ideas and valid concepts. Venture capitalists, smart investors, and even corporations have gained interest in these companies, thus providing funding in the way of investments.
It is predicted that five start-up cleantech companies will go public this year. Those companies include:
- Opower specializing in energy efficiency
- Bloom Energy focusing on distributed generation
- Nest Labs focusing on home energy management
- Intematix specializing in LED lighting
- Sunrun focusing on solar finance
With each of these emerging companies already conducting studies and providing hard proof of their findings, venture capitalists and smart investors show interest. This means that these upcoming companies are likely to surpass the expectations of green/clean technology standards.
All of the companies mentioned above have received initial funding and are expected to obtain more throughout the next three years. These companies have also received awards based upon their achievements thus far.
Silicon Valley bank provides insight to SolarCity
Silicon Valley Bank representatives approached SolarCity (NASDAQ:SCTY.DL), a leader in cleantech innovations; discussing opportunities to help companies in this industry manage their finances better. SVB, as it is referred to by locals, has a high regard for companies in this sector given the fact that there is a general need for these companies and the technologies they are building.
Trends in clean energy innovations
In the past, the focus was on solar energy and using renewable energy resources for commercial use. The focus is shifting to attract residential homeowners and small business owners to this style of living. Cleantech investor Matthew Sullivan from Palmetto said, "The emerging companies mentioned above have innovations available that are slated to provide more options for clean, green technology based lifestyles."
The auto industry has already accomplished this rapidly with electric cars and smarter fuel options such as biodiesel and other biofuels that are created from recycled oils.
Also trending is saving consumer's money on energy costs in their homes. This comes from LED lighting options to smart homes and 100 % solar or wind powered homes.
The advancements in clean technology are also warranting the growth of smart grids. Silicon Valley is the ideal testing location for smart grids given the amount of available land that is already set aside for these projects.
Trending energy storage dilemmas
One of the big problems with clean energy is finding a way to store the energy on a larger scale. Large smart grids are an option, but are far too costly. One suggestion is to create micro-grids that will power smaller areas at one time.
Each would be connected to a larger scale sub-station type grid as a control center so-to-speak.
Other emerging trends in clean energy technology
Teaching solar finance or ways to promote the use of solar energy that is financially efficient is gaining in popularity. Also on the rise are water technologies, such as maintaining enough drinking water for the nation while using water for green technology purposes.
Expansion is expected in 2014 in regards to sustainable wind power from turbines. Using these turbines on a larger scale for entire cities is the direction that innovators wish to go in this year.
It is a fact that clean energy technologies grow faster on smaller scales. This is why smaller sectors, such as Silicon Valley, have succeeded. Innovations and trends come and go in this industry, which is why funding also comes and goes. Start-up companies with ideas that can grow and build with technology are gaining the attention of investors on many scales as of late. This means that smart investors, venture capitalists and even the likes of Warren Buffett are investing in the future of cleantech operations and start-up companies as well.
Drew Hendricks has no position in any stocks mentioned. The Motley Fool recommends SolarCity. The Motley Fool owns shares of SolarCity. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.