Cleantech Investing: We Are Just Getting Started

DBL Part­ners’ Man­ag­ing Part­ner Nan­cy Pfund takes to The Huff­in­g­ton Post to make the point that clean­tech stocks are some of the best invest­ments in the mar­ket — for so many rea­sons. Link to the arti­cle on Huff­po is here.

Despite the well-fund­ed lob­by­ing, adver­tis­ing and mar­ket­ing advan­tages of the incum­bent fos­sil fuel indus­try, unpre­dictable sup­port in Wash­ing­ton and skep­ti­cism from a num­ber of insti­tu­tion­al and pol­i­cy ana­lysts, this year the NASDAQ Clean Edge Green Ener­gy Index has out­per­formed broad­er mar­ket indices and achieved a more than 30 per­cent increase in year-to-date performance.

Stocks inevitably go up and down and clean­tech secu­ri­ties are no excep­tion, but it is note­wor­thy that for the first time in Unit­ed States his­to­ry three of the 10 top-per­form­ing stocks of the cur­rent cal­en­dar year are clean­tech stocks. As of COB on May 22, SolarCi­ty’s (SCTY) stock price had reward­ed investors by grow­ing 271.33 per­cent YTD to $44.30, Sun­Pow­er’s (SPWR) stock price had increased 241.44 per­cent YTD to $19.19 and Tes­la Motors’s (TSLA) stock price had grown 157.57 per­cent YTD to $87.24.

Today, more than 100 women at the fore­front of this new wave of eco­nom­ic growth gath­ered at the 2013 White House Wom­en’s Lead­er­ship Sum­mit on Cli­mate Change and Ener­gy to dis­cuss an even brighter future for clean tech­nol­o­gy in Amer­i­ca. SolarCi­ty, Sun­Pow­er and Tes­la are exam­ples of how pro­duc­tive pri­vate sec­tor and gov­ern­ment part­ner­ships can cre­ate Amer­i­can jobs (more than 6,500 of them) as well as gen­er­ate afford­able, renew­able ener­gy and reduce our nation’s car­bon footprint.

It also turns out that sup­port­ing these com­pa­nies is a good deal for the government.

Yes­ter­day, Tes­la demon­strat­ed this point by pay­ing back the entire $451.8 mil­lion remain­ing of its fed­er­al loan award­ed by the Depart­ment of Ener­gy in 2010 — nine years ear­ly and with interest.

The clean­tech indus­try is in its infan­cy, and as it matures there will be many busi­ness­es that do not suc­ceed. How­ev­er, the indus­try’s youth also means that clean­tech com­pa­nies have only just begun to take advan­tage of U.S. cap­i­tal mar­kets — the best in the world. As more clean­tech com­pa­nies go pub­lic, the cost of cap­i­tal will decline, allow­ing com­pa­nies to invest in their future, cre­ate Amer­i­can jobs and con­tribute to the vir­tu­ous cycle of inno­va­tion that is already dri­ving down costs, improv­ing func­tion­al­i­ty to cus­tomers and deliv­er­ing social and envi­ron­men­tal returns.

Final­ly the exis­tence of more pub­lic clean­tech stocks will allow investors to start replac­ing some of their car­bon-loaded hold­ings, like oil, gas, coal and auto­mo­biles, with car­bon-free or car­bon-lite equivalents.

The future of clean­tech is bright for Amer­i­can investors. In fact, we are just get­ting started.

Dis­clo­sure: DBL Part­ners was a ven­ture stage investor in Pow­erlight (which was sold to Sun­Pow­er), Tes­la and SolarCi­ty and still holds a posi­tion in SolarCi­ty. Nan­cy Pfund sits on the SolarCi­ty board of directors.