Economist Calls Clean Energy Technology an Investment Boom
The Economist said that alternative energy is becoming increasingly attractive to investors, writing: "Investors are falling over themselves to finance start-ups in clean technology, especially in energy. Venture Business Research reckons that investment in the field by venture capitalists and private-equity firms has quadrupled in the past two years, from some $500 million in 2004 to almost $2 billion so far this year."
The magazine said analysts "confidently predict the clean-energy business will grow by 20-30 percent a year for a decade." Because of decisions by politicians such as Gov. Arnold Schwarzenegger, R-Calif., "clean-energy advocates insist growth is sustainable."
Though growth is evident, "there's legitimate debate about a couple of segments," the Economist quoted Cleantech Venture Network head Keith Raab as saying. "In some instances," wrote the magazine, "valuations accorded to firms with no profits - and little chance of making any soon - were reminiscent of the excesses of the dotcom bubble. As Douglas Lloyd, of Venture Business Research, puts it: 'There's too much money chasing too few opportunities. How is it possible [for instance] that this many solar companies are going to succeed? They're not'."
The Economist, editorial , Nov. 18.
From today's EEI newsletter.
1 comment:
"In some instances," wrote the magazine, "valuations accorded to firms with no profits - and little chance of making any soon - were reminiscent of the excesses of the dotcom bubble.
damn shame the way internet dried up and blew away after the dotcom crash. i miss it still.
snark aside, while it's unlikely every solar company will survive, i think it's equally unlikely we'll see these companies burn cash the way the dotcom start ups did - for one thing, they are philosophically inclined towards sustainability. on a more practical level, these are all companies dedicated to producing an actual product, which tends to force managers to be more practical with their capital.
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