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The state of Greentech investment and outlook for 2013

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Green Tech entrepreneurs meet investors at the GoingGreen Silicon Valley 2012 event.

At the GoingGreen Silicon Valley conference yesterday, Tony Perkins, Founder and Editor of AlwaysOn Networks, referred to the term Green Technology or Greentech. Perkins prefers to use the term Greentech and not Cleantech, since it represents a broader concept and includes clean technologies, as well as other green sectors like building materials, water, chemicals, etc.

Kevin Genieser, Managing Director and Global Head of Clean Technology Banking at Morgan Stanley, talked about the state of Greentech financial markets and gave his overview of 2013.

Investment in Greentech this year exhibits a dark picture: 2012 continued with under performance of clean tech equities with just a few IPOs (initial public offering) in this challenging environment. There was a dramatic investment downturn in early stage startups and overall funding. The change was in particular in venture (VC) funding with a decline in 2012 investment of about 77% of the 2011 levels. In addition, some companies went bankrupt, like A123.

Nevertheless, there have been positive signs: Select stocks outperformed, like EnerNoc and Tesla. 2012 was the third best ever year of funding green projects. A few significant milestones were achieved, including the re-election of President Obama, and a stronger awareness and understanding of the importance of Climate Change and its impact. In April, the Jumpstart Our Business Startups (JOBS) Act passed into law, making it easier for startups and small businesses to raise funds, making the IPO process easier, and availing funding through online crowdfunding. Furthermore, investors with strategic viewpoints are active, including global corporate ventures from all over the world like Dow, Johnson Controls, Schneider Electric, Eaton, Honeywell, Hitachi, GE Energy, and many more.

Some segments have been investing heavily in renewable energy portfolios. The Department Of Defense (DOD), being the biggest consumer of energy in the world, has strategically invested in renewable energy for the past several years. The U.S. Military renewables spending is expected to reach $ 1.8 billions by 2025.

Read more about the 2012 Cleantech investment: Where is the money in cleantech? A take from the VC world.

What are the trends in 2013? Will it be a lucky year for green or clean tech?

Genieser identified emerging clean tech investment opportunities for 2013 and beyond:

1. Solar - There will be continued solar cost reduction with low interest and new financial models.

2. Policy - He predicted progress on policy. As President Obama won a second term, the potential implications on environmental regulation, energy policy, standards, and smart grid operation, are rosier. Although the Obama administration still faces resistance in Republican-dominated Congress, clean energy reform is likely to progress. Superstrom Sandy shifted elected officials and public opinion and changed the dialog at various governing levels. Sandy highlighted Climate Change implications and the needed investment in the energy infrastructure. In addition, most people want renewable energy solutions to be part of the mix in U.S. energy future. Of course, funding cleantech innovation and financing renewable sources need to be at a competitive price of conventionally-generated electricity, such as coal and natural gas.

3. Sectors for growth - Genieser pointed the following growing areas of Greentech:

- Green IT and big data

- Smart Grid reliability, disaster recovery, etc.,

- Hot sectors like water, agribusiness, and the next generation ‘new food’ are attracting funding.

- Collaborative consumption like sharing/renting vehicles: Peer-to-peer car rental cars or person-to-person lending; room rentals in owners’ homes, rent/shared possessions, etc. are also on the rise, where basically solutions for dealing with resources and limitations are gaining traction. P2P – person to person – business models continue to mushroom around the globe.

4. Natural Gas (NG) - the abundant natural gas in the U.S. can turn the country into the largest consumer and exporter of liquid natural gas by 2020. However, Genieser predicted that gas prices are expected to rise by over 41 percent next year, bringing to light that gas is not the only and final energy solution for the U.S.

Visit to read more about The challenges investors face in Cleantech.

As advanced technologies help businesses get better at manufacturing, distributing and managing, as well as improve their operations – items and services become less costly. The Greentech or Cleantech fields, which cover a wide range of various industries and markets, are no different than any other business.

ADDITIONAL INFORMATION

The AlwaysOn (AO) Network and live event series is a business media brand networking the Global Silicon Valley. The AlwaysOn network (www.aonetwork.com) was founded in 2003, and became the first media brand to socially network its online readers and event attendees. AlwaysOn produces and organizes several executive event series (www.aonetwork.com/AOEvents) that include the Silicon Valley Innovation Summit, OnMedia, OnHollywood, Venture Summit Mid-Atlantic, OnDemand, Venture Summit Silicon Valley, Venture Summit East, GoingGreen Silicon Valley, GoingGreen East, and the Global Silicon Valley Economic Summit.

The AO network provides analysis and prediction of top trends and top companies in the digital media, on-demand computing, and greentech industries. Some of the companies AlwaysOn featured in their initial phase include: Google, Salesforce.com, Skype, MySQL, YouTube, Tesla, and Twitter. AlwaysOn provides cutting-edge news, analysis, and access to industry experts.

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