Cleantech Stares Down A Tough Road

Although confidence seems up again given the bi-partisan economic stimulus package working its way through Congress, the reality of a possible recession, fueled by the subprime mortgage crisis, spells possible trouble for the cleantech industry as it tries to step into the mainstream in a big way. The biggest question is how the sector can weather the potential bubble and/or slowdown situation facing the economy today.The primary upside is that cleantech is, in part, a direct response to the pressure high energy prices put on the economy. And though oil might take a dip on recession fears, now and then, prices are going to continue to rise, perhaps dramatically, often as a result of pressure outside of the US or North America. On that level, then, the very nature of the energy economy could be a driver that pushes cleantech straight through the other side of a recession, and perhaps could be one of the things that helps ameliorate or end one.C|Net suggests that recession fears could make it tough for cleantech companies, especially those relying on IPOs for their funding. A slow stock market will likely mean such moves, counting on huge buzz for lots of quick buy-in and a rapid share price increase, won’t find the deep pockets it needs among mutual funds and hedge funds and average investors. As the article points out, however, this is not a deal-killer for those looking to go public or attract enough investment, it just means start-ups are going to have to get more creative.The bonus there is that there’s a ton of interest in the commercial world for cleantech and alt energy resources; Wal-Mart and Google are high-profile corporate sponsors, but plenty of solid and legitimate businesses that will be able to weather a recession will be looking to cut long-term costs and cleantech is one of the best ways to do that. So corporate partnerships, like Google’s effort to develop and promote clean-and-green consumer PC options, are likely to spur development and growth where typical investment might fall short.The other major concern, of course, is for the dreaded bubble. The talk about bubbles seems to go hand-in-hand with talk of growth, as though the two are inseparable. In some respects they are, of course, as any hot growth sector is going to attract fringe players and fly-by-nighters who want to cash in on the hype without producing a product, not to mention all the well-intentioned folks who just don’t have a solid idea, but can attract cash with their conviction. That stuff is always a danger, but the good news is that the cleantech rise is built on the strong backs of viable technologies. Solar already works, wind already works, LEDs already work, it’s just a matter of presenting them as viable products and bringing down costs through economies of scale. Likewise with cleantech’s cousin green building, there’s plenty of “already here” to what’s just over the horizon.No question a recession at this stage would be a drastic test for the nascent cleantech sector, but the strengths that can see it through are already realized, already working to push past uncertainty and doubt about the economy.

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