Despite the economic calamity, the greentech industry didn't do badly in 2009. The Department of Energy will have given away $36.7 billion by the time the calendar rolls over. Venture capitalists and corporate investors will invest more than $4 billion in startups this year, about half as much as in 2008 but more than any other year.
Although some electric cars were pushed back to 2010, hybrids and electric cars are clearly not going away. Ford says that in 2020, 25 percent of cars coming out of factories will drive in part or wholly on electricity. A massive surfeit of solar panels also made it cheaper to put panels on your house.
And some interesting trends and surprises emerged along the way. Here are some of the best.
1. Solar Fixes Its Plumber's Crack: The solar industry has primarily focused its attention in the last few decades on driving down the price of panels and driving up efficiency. In the past year or so, many have begun to try to reduce the cost of installation – that manual construction project goes along with every solar project that can eat up 30 percent or more of the budget. Companies didn't concentrate as much on installation on installation because, after all, how many scientists does it take to make sure a contractor shows up on time for a job.
But it's changing. Zep Solar showed off a modular racking system that it claims cuts costs by 50 to 80 cents a watt. Armageddon Energy debuted a racking system and novel panels that let homeowners assemble a solar system in minutes. (see video here of founders Dmitry Dimov and Mark Goldman slap one together in three minutes.) Others have started to diversify their offerings, tailoring panels for different customers and different roofs. It will be like the PC industry.
2. Greentech (and Michigan) Go Global: In the past, people discussed green being a global industry to underscore how nations like Denmark and Germany had already created thriving renewable industries. In 2009, it took on a new meaning. Many of the largest American Recovery and Reinvestment Act grant winners turned out to be joint ventures funded or managed by foreign companies willing to open facilities in the U.S. Spain's Iberdrola was one of the big winners for grants for wind farms while two battery ventures with South Korean partners got $312.4 million.
Even without grants, Chinese companies began to flock to the U.S. Suntech announced (finally) that it will open a module assembly plant in Arizona while China's A-Power Generation and a consortium of Chinese and U.S. companies announced plans to build a wind farm in Texas along with a turbine factory.
3. The Utility Industrial Complex Emerges: In his final address as President, Eisenhower warned the country against the potential dangers of the military industrial complex. The Obama administration, however, is cutting back on large, futuristic weapons contracts in favor of conventional forces. Partly as a result, Boeing, Lockheed Martin, Bechtel, Raytheon, BAE Systems and Bechtel all moved more aggressively into smart grid and solar.
In a lot of ways, it makes sense; these companies are equipped to handle large, complex construction and fulfillment projects. Still, it will be interesting to see if the cost-overruns and lobbying shenanigans these companies are often associated with begin to occur here.
4. Algae Isn't Fuel: Although I've spoken to over 60 algae companies and have been told by people in the industry that there are over 100 out there that want to turn pond slime into car fuel, a few companies have begun to emphasize their non-fuel products. Why? Chemicals and food additives sell for one heck of a lot more. Solazyme, one of the early leaders, started selling – repeat, selling for real money – algae oil to the food market. It even released an algae-based substitute for almond milk. It's not bad, although not as good as the algae brownies. Ternion Bio Industries says nutraceutical algae can fetch $10,000 a ton. Cellulosic ethanol makers are doing the same: start-up Zeachem is working on bugs that could emit chemicals for plastics.
5. Do You Guys Accept Euros? Conglomerates began to open their wallets in what could be a long string of acquisitions and so far many of the big buyers so far are foreign. Philips, already No. 1 in lighting due because of strategic acquisitions, bought two lighting companies, including one founded by Segway inventor and all-around eccentric Dean Kamen. Taiwan Semiconductor Manufacturing Corp. set up a $50 million fund to move into solar and lighting and has been discussing its plans with Silicon Valley VCs. Samsung said it wants to be number one in solar by 2015. Panasonic wants to participate in smart grid, green homes, solar, batteries, green IT and energy efficiency.
6. Black is the New Black: In the never-ending quest for cheaper raw materials, some companies began to tout trash, waste streams and sewage as the foundation of their businesses. Although refuse and discards often aren't free, it can cheaper than a lot of things, like oil from a deep well in the middle of the ocean.
Just as important, doing a Sanford and Son and repurposing trash eliminates the costs of storing it in landfills. Axion International has created plastic bridges from discarded milk jugs that can hold up trains and tanks. Start-up Sollega debuted a solar rack (see plumber's crack at No. 1) made from recycled plastic.
7. Water is the New Weather: Everyone talks about it but no one does anything about it. Energy Recovery, an Oakland, California-based maker of desalination equipment that remains one of my favorite green companies, had one of the few green IPOs in 2008. Still, investors and entrepreneurs are not exactly flocking to the field. Only five water companies were funded in the third quarter to the tune of $20 million. That was barely more than the money that flowed into tidal and wave energy, a more distant technology.
The hopeful sign is there are a lot of great ideas out there—like Statkraft's plan to turn seawater into energy and the proposal from Mark Shannon at the University of Illinois to recycle toilet water. More on this in a future column.
8. Practicality Rules: At the Cleantech Open, a contest that seeks out new companies, the big awards went to EcoFactor and Adura Technologies, two companies that have already released energy management systems for home and offices. They work, they save money and no one had to earn a Nobel prize to figure them out. The "new" green industry is over five years old now in the U.S. so it is about time we moved from the lab to the execution phase.
9. Efficiency Became Cool: Efficiency was often ignored by investors and entrepreneurs for more sexy fields like wind or cars, but with Steve Chu, efficiency's number one fan, moving to Washington to become Secretary of Energy, the dialog has changed. Retrofitting homes, schools, office buildings will become huge industries. This many hammers haven't swung in American since golf course and library building frenzy of the New Deal.
10. Waiting for Godot's Karma: Some things we thought we might see, but didn't, graduate to general commercial availability in 2009: The fancy Fisker Karma sports coupe, cap and trade legislation, the capacitors from EEStor that allegedly can recharge in minutes and let electric cars run for miles and the oft-hyped fuel cells from Bloom Energy that apparently will let you take your home off the grid.
You can't find those fancy copper indium gallium selenide solar cells that investors have plunked more than $2 billion into at Home Depot either. Maybe in 2010.
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