Cleantech Investing: We Are Just Getting Started

Americans are voting with their stock portfolios like never before. And they are investing in cleantech and renewable energy.

The Huffington Post
By Nancy Pfund and co-authored by Noah Walker, Joint MBA/MEM Candidate at Yale University
May 24, 2013

DBL Part­ners’ Man­ag­ing Part­ner Nancy Pfund takes to The Huff­in­g­ton Post to make the point that clean­tech stocks are some of the best invest­ments in the mar­ket — for so many rea­sons. Link to the arti­cle on Huffpo is here.

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Despite the well-​​funded lob­by­ing, adver­tis­ing and mar­ket­ing advan­tages of the incum­bent fos­sil fuel indus­try, unpre­dictable sup­port in Wash­ing­ton and skep­ti­cism from a num­ber of insti­tu­tional and pol­icy ana­lysts, this year the NASDAQ Clean Edge Green Energy Index has out­per­formed broader mar­ket indices and achieved a more than 30 per­cent increase in year-​​to-​​date performance.

Stocks inevitably go up and down and clean­tech secu­ri­ties are no excep­tion, but it is note­wor­thy that for the first time in United States his­tory three of the 10 top-​​performing stocks of the cur­rent cal­en­dar year are clean­tech stocks. As of COB on May 22, SolarCity’s (SCTY) stock price had rewarded investors by grow­ing 271.33 per­cent YTD to $44.30, SunPower’s (SPWR) stock price had increased 241.44 per­cent YTD to $19.19 and Tesla Motors’s (TSLA) stock price had grown 157.57 per­cent YTD to $87.24.

Today, more than 100 women at the fore­front of this new wave of eco­nomic growth gath­ered at the 2013 White House Women’s Lead­er­ship Sum­mit on Cli­mate Change and Energy to dis­cuss an even brighter future for clean tech­nol­ogy in Amer­ica. SolarCity, Sun­Power and Tesla are exam­ples of how pro­duc­tive pri­vate sec­tor and gov­ern­ment part­ner­ships can cre­ate Amer­i­can jobs (more than 6,500 of them) as well as gen­er­ate afford­able, renew­able energy and reduce our nation’s car­bon footprint.

It also turns out that sup­port­ing these com­pa­nies is a good deal for the government.

Yes­ter­day, Tesla demon­strated this point by pay­ing back the entire $451.8 mil­lion remain­ing of its fed­eral loan awarded by the Depart­ment of Energy in 2010 — nine years early and with interest.

The clean­tech indus­try is in its infancy, and as it matures there will be many busi­nesses that do not suc­ceed. How­ever, the industry’s youth also means that clean­tech com­pa­nies have only just begun to take advan­tage of U.S. cap­i­tal mar­kets — the best in the world. As more clean­tech com­pa­nies go pub­lic, the cost of cap­i­tal will decline, allow­ing com­pa­nies to invest in their future, cre­ate Amer­i­can jobs and con­tribute to the vir­tu­ous cycle of inno­va­tion that is already dri­ving down costs, improv­ing func­tion­al­ity to cus­tomers and deliv­er­ing social and envi­ron­men­tal returns.

Finally the exis­tence of more pub­lic clean­tech stocks will allow investors to start replac­ing some of their carbon-​​loaded hold­ings, like oil, gas, coal and auto­mo­biles, with carbon-​​free or carbon-​​lite equivalents.

The future of clean­tech is bright for Amer­i­can investors. In fact, we are just get­ting started.

Dis­clo­sure: DBL Part­ners was a ven­ture stage investor in Pow­erlight (which was sold to Sun­Power), Tesla and SolarCity and still holds a posi­tion in SolarCity. Nancy Pfund sits on the SolarCity board of directors.