…AND THE OUTLOOK FOR OH NINE

It’s not just the lack of a crystal ball that makes predicting the 2009 fate of New Energy real guesswork. It’s that there are so many factors at play.

Will credit open up? Have wind and sun and next generation biofuels and battery-powered personal transport proven themselves worthy of investment even when there isn’t much to lend?

Will the federal stimulus money be adequate if private money does not come through? Will the federal stimulus money that comes through be spent wisely?

Alan Salzman, CEO/Managing Partner,VantagePoint Venture Partners: "What we'll see play out in 2009 is going to be the new administration's desire echoed by a lot of us, for solutions to our energy situation contrasted with the reality that the guys who have the money to develop new energy sources are the oil companies."

Venture capital jumped an estimated 25% over the previous year in 2008 but fell off dramatically in the 4th quarter. Anybody who promises how much it will come back and exactly when in 2009 or 2010 should not be trusted.

There are, however, 3 things anybody can take to the bank (the banks that are still open): (1) The New Energy industries have ample shovel-ready, research and generation projects; (2) money that goes into New Energy will have a multiplier effect in jobs and innovation that will help bring the economy back; and, (3) when the economy comes back it will need New Energy.

Exciting footnotes: (1) Grid parity is in the air for the solar industry. Salzman, VantagePoint Venture Partners:"You can measure in months, not years, how far we are away from being able to produce solar power at prices that are competitive with fossil fuels…" (2) Salzman also predicts Battery Electric Vehicles (BEVs) will do for the auto industry what the personal computer did for the computer industry and what biotechnology did for the pharmaceutical industry.

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Cleantech forecast: guardedly optimistic
Matt Nauman, December 31, 2008 (San Jose Mercury News)

WHO
New Energy entrepreneurs; Venture capitalists; Navigant Consulting; iSuppli; The America Wind Energy Association (AWEA); Emerging Growth Research; Better Place

WHAT
Solar, Wind, Battery Electric Vehicles (BEVs) and Energy Efficiency will develop and grow in the coming year.

New Energy is now price competitive and will become moreso. (click to enlarge)

WHEN
- 2007 venture investment in New Energy: ~$6 billion
- 2008 venture investment in New Energy: ~$8 billion
- 2009 venture investment in New Energy: ~$7 billion (predicted)

WHERE
- New Energy jobs expected to offset job losses internationally, nationally and locally.
- Solano County, Northern California: Newly online 151-megawatt Shiloh II enXco wind project.
- Roscoe, Texas: 781.5-megawatt project scheduled to come online by mid-year.
- Better Place will put its first EVs on the road in Israel.
- VantagePoint Venture Partners in based in San Bruno, CA.
- CMEA Ventures and Emerging Growth Research are in San Francisco, CA.

WHY
- Predicted for solar in 2009: The 8-year extension of the federal investment tax credit, with increased benefits to residential and small system purchasers as well as to utilities for large-scale projects means (1) increased installations, (2) more jobs, (3) more big projects
- Navigant Consulting predicts 440,000 U.S. solar jobs by 2016.
- iSuppli predicts a big increase in panel production (to 11 gigawatts) and an oversupply that causes a world panel revenue drop-off of 19% ($16 billion in 2008, $13 billion in 2009)
- Predicted for wind in 2009: More big growth, including a new “biggest facility” for the U.S. (Roscoe, Texas, 781.5 megawatts, due to come online mid-year)
- Emerging Growth Research predicts 6,000-to-7,000 new megawatts of installed wind power capacity for the year.
- Predicted for electric cars in 2009: (1) Car shows will show 2010 plug-in hybrid electric vehicles (PHEVs) from Toyota and GM and improved 2010 hybrids from Honda and Ford; (2) Tesla will continue making/delivering all-electric vehicle (EV) sportscars; (3) Better Place will develop its ambitious, innovative region-based EV program around the world and put cars on Israeli roads;
- Predicted for Energy Efficiency in 2009: As the cheapest emissions-free energy, it will grow bigtime with regional programs (example: PG&E’s SmartMeter) starting up and green building codes gaining momentum.
- The PG&E will install 10 million SmartMeter units by 2012.
- Venture money is going to efficient LED lights, green building materials and gird efficiency software

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QUOTES
- Alan Salzman, CEO/Managing Partner,VantagePoint Venture Partners: "The vast majority of people believe we've got to stop doing what we've done (regarding energy policy)…Obama is one of those people.''
- Bruce Pasternack, CMEA Ventures: "[The Obama energy people] clearly recognize the urgency to get moving,"
- Alan Salzman, CEO/Managing Partner,VantagePoint Venture Partners: "All cars will be electric in the future…"