Venture Capital is Shifting from Creating Clean Power to Energy Conservation
Bullish on Energy Efficiency
One of the impacts of a global recession is that those who have money will invest differently. That's even true for big venture capital firms; a few years ago, the hot investment was in startups that were trying to generate clean energy. Solar, wind, algae, cellulosic ethanol, wave power, etc. But since that's very expensive and it can take years before there are any returns, venture capitalists are said to be shifting their attention (for now, anyway) to way to reduce energy demand. Good ol' conservation. More details below.The New York Times writes:
Many investors say developing new forms of energy can consume hundreds of millions of dollars over many years before showing any return. Mr. Grosser's firm, however, is looking for technologies that reduce demand for energy. "We need to move markets with small amounts of money," he said.
About half of the dollars invested in clean technology last year went to alternative energy companies. In the first quarter of 2009, though, only one-third of venture dollars invested in clean tech went to these companies, the National Venture Capital Association said.
We Used to Say a Few Years Ago that Efficiency Wasn't Sexy, But Crucial...
There's still a lot of money into green energy, but now that money is harder to come by, it's only natural that some of the low-hanging fruits that were overlooked a couple of years ago are starting to look attractive.
After all, this image is very scary (it comes from this post: Efficiency is Crucial to a Green Future):
So much of the energy we generate is wasted. There's tons of progress that can be made there, and once we do, it will make it much easier to meet demand with clean power.
Venture capital firms are doing a very smart thing, going after efficiency. As long as there's still enough longer-term investments in new sources of energy, it should pay off big.
Via New York Times
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