Friday, May 25, 2007

Cleantech bubbles again

Following the recent cleantech report from US analysts Lux Research (as mentioned below), Rob Day of the excellent Cleantech Investing blog sits down with Lux's Matthew Nordan to talk about possible bubbles:

It’s certainly true that the press loves downside stories. We’ve tried to be pretty specific about the two subsegments where we see an excessively high ratio of money and enthusiasm to opportunity: solar and biofuels. It’s hard to look at, for example, New Enterprise Associates’ pursuit of SolFocus and not see flashbacks to the Internet in the late 1990s[...]
Solar and biofuels get outsized attention because they are easy to understand (everyone’s seen a solar cell and everybody’s pumped gas), they’re both experiencing big technology shifts (crystalline silicon to thin-film and corn/cane to cellulosic), they both have government incentives and news flow working in their favor, they both have established valuation comparables (you’re not creating a new category), and they both have enormous headroom for growth – solar was 0.02% of U.S. energy last year! There aren’t many other subsegments where all of these factors line up.

A very good point. Not that this particular corner of the press is overly fond on 'downside stories', of course...

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