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.

cleantech-investing_284_205

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.