Navigant Research Blog

Beyond Headlines, Cleantech Successes Multiply

— June 10, 2013

The recent failure of Better Place has added to the cleantech industry’s bad reputation among investors.  Highly publicized failures of companies such as Solyndra, A123 Systems, Better Place, and CODA have led to headlines that suggest success may be nearly impossible.  But the negative press ignores a range of companies that are well on their way to long-term prosperity.

The most obvious example is Tesla Motors.  After reporting record sales figures and achieving profitability for the first time, Tesla’s Model S luxury sedan received top marks from Consumer Reports.  In the midst of these accomplishments, the company paid the remaining balance on a $465 million Department of Energy loan 9 years ahead of schedule.  Stock prices skyrocketed from $55 to a high of almost $115 in just 3 weeks, giving the company a market cap of more than $12 billon.  Investors who were shorting the stock could now lose big for betting against Tesla’s success.

Likewise, SolarCity’s share price has increased over 200% since the company went public last December, and Enphase Energy and SunPower shares have risen steadily in the last 6 months.  Many privately held companies have grown successfully as well, with backing from big name investors and venture capital firms.

Ample Opportunity

With many new technologies, there is often an expensive adjustment period before affordable prices are achieved and sales become widespread.  That’s not to say that electric vehicles and solar panels will be adopted as easily as DVD players, but the curve will look the same over time.  Prices of solar panels, wind turbines, and electric vehicles have already dropped and are inching closer to matching their traditional counterparts.

Clean technologies and the companies that produce them are here to stay, and the industry is growing.  For plug-in electric vehicle sales, Navigant Research forecasts a compound annual growth rate of 39% between 2012 and 2020.  There will continue to be headline-grabbing failures along the way, but the successes will start to outnumber the flops as the cleantech industry matures.

 

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