TODAY’S STUDY: WHAT NEW ENERGY INVESTORS EXPECT

What makes the Jeffries survey valuable is that there is nothing official about it. The survey, highlighted below, is just an aggregated whisper from New Energy insiders attending a New York City conference.

The survey is to statistically solid studies what a Consumer Reports product rating is to a Facebook conglomerated opinion about the same product.

That’s the point: Social media’s assumption is that people are more likely to care about the opinions of their Facebook friends and trust them. The survey’s assumption is that unscientifically skewed insider opinions from people who have skin in the game is more compelling than cold hard statistics.

The downside of the survey results is they have something of the herd mentality about them. NewEnergyNews was recently at a conference of big bettors where the momentum gathered day-by-day and speaker by speaker for natural gas. It was bizarre.

The new shale deposits certainly represent an increasingly important force on the U.S. energy landscape but the instant the supply-demand curve tips (it will) and the natural gas price plummets (it will), the buzz will buzz off to the new new thing.

Energy is a long game. In the long run, nothing beats the logic of this good earth’s sun, wind, deep heat and flowing waters. Whatever might be T. Boone Pickens’ latest pitch, the formula remains simple: Get the cars on the grid and clean up the grid.

The Jefferies 2011 CleanTech Survey Results; A Review of Investor Sentiment
April 2011 (The Jeffries Group)

Jefferies hosted its 11th Global Clean Technology Conference on February 23-24 in New York, with more than 100 public and private companies and 700 attendees, including strategic and financial investors, high-level policymakers and industry thought-leaders in attendance. The Jefferies CleanTech Survey, which was conducted at the conference, was designed to provide insight into investors’ views towards the fundamentals driving the certain subsectors of the renewable energy and sustainable technologies markets.

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Survey Findings

- Investors believe that a myriad of factors, including an accepted carbon pricing policy, continued government subsidies and a continuation of the capital markets recovery are key growth factors for the clean technology sector.

- From a geographical perspective, Europe, followed closely by China and North America, is perceived to be driving innovation in clean technology.

- More than 70% of investors believe that a full recovery of the IPO market for clean technology companies is likely to materialize in 2012 or later.

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- Investors expect that North America will deploy the most smart grid infrastructure, followed by China and Europe.

- Large conglomerates are expected to begin consolidating clean technology companies after 2012, although 41% believe that consolidation could begin in 2011 or 2012.

- Electricity rates in the US are expected to increase, with 66% of investors expecting rates to increase between 3% and 5% and an additional 13% of investors believing that rates will raise 10% or more.

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- Electricity rates in Europe are expected to increase more dramatically, with 50% expecting rates to increase between 3% and 5% and 27% expecting an increase of 10% or more.

- 84% of investors believe that clean water will become a mass investible theme by 2020. 13% believe that it will never become a mass investible theme.

- 70% of respondents believe that the US should pursue a nuclear strategy.

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- 20% of respondents believe that electric vehicles will be mass adopted by 2015, and 67% believe that they will by 2020. 4% believe that they will never become mass adoptable.

- Smart Grid/Energy Efficiency, Solar PV and Energy Storage are the most attractive investment themes for investors.

- Investors expect to commit capital in the Smart Grid/Energy Efficiency, Solar PV and Energy Storage sectors in the next two years.

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- Investors believe that utility scale projects and commercial rooftops are more important than residential rooftops for solar, with 45% and 39% of the vote, respectively.

- 46% of respondents believe that by Q4 2011, standard silicon modules will be selling on average between $1.00-$1.25/watt. An additional 37% believe these modules would be in the $1.25-$1.50/watt.

- 41% of respondents believe that by Q4 2012, standard silicon modules will be selling on average between $1.00-$1.25/watt. An additional 35% believe that these modules will be selling below $1.00/watt. The remaining 24% believe the modules will be selling somewhere between $1.25-$1.50/watt.

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- Inverters, followed by Cells/Modules and Projects/Installation are the most attractive sectors of the solar supply chain to investors.

- 59% of investors believe that spot polysilicon prices will be $50/kg, and 26% believe that they will be priced at $75/kg.

- 56% of investors believe that spot polysilicon process are headed to $50/kg in 2012, followed by 28% of respondents that believe spot polysilicon prices will be $40/kg.

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- 71% of investors believe that there will be two-to-five competitive new thin film solar companies by 2012, while 6% of investors believe that there will be more than five new competitive companies.

- 75% of investors believe that there will be between two and five solar company IPOs in the US in 2011 and 2012.

- 57% of investors believe that there will be more than five solar company IPOs in Asia in 2011 and 2012, and 43% believe there will be between two and five Asian solar IPOs in 2011 and 2012.

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- 83% of investors believe that installed MW growth rates for solar will be flat or up (from 10% - 20%) in 2011. An additional 11% of respondents believe that rates will be up more than 20%.

- 80% of respondents believe that installed MW growth rates will be up at least 10%, with 21% of that number believing that rates will be up more than 20%.

- Nearly half of respondents (46%) believe that 10GW of offshore wind will be deployed by 2020, with an additional 32% believing that 20GW will be deployed. 21% believe that 30GW or more will be deployed by 2020.

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- 58% of investors believe that MW growth rates will be flat or increase up to 10% in 2011, while 23% believe they will be up between 10% and 20%.

- An overwhelming majority (90%) of respondents believe that MW growth rates for wind will increase up to 20% in 2012.