China Set to Become World's Cleantech Leader

By Rob Day

That big sucking sound you hear... is the sound of China deciding to become a big player in solar project installations, overnight.

It's clear that China is going to be a dominant force in cleantech in the coming decades, starting immediately. But what that will mean for cleantech VCs remains very much unclear. What is clear is that cleantech VCs need to start getting smart about that factor, asap. And thus, so should their LPs.

But should cleantech VCs start investing in China? It's not apparent that US-based investors do very well investing in China, at least without having a local presence on the ground. Since most cleantech-specialist VCs don't have that, are they vulnerable to being left out? There are specialist funds (albeit very few) focused on cleantech in China, are they better-positioned? Or are the markets themselves so specialized (US firms having trouble selling into China, Chinese firms having trouble selling into the US) that they really are totally separate questions?

It will be fascinating to watch how this dynamic continues to develop. Solar and coal-related techs will be where it gets felt first. Every coal-related startup CEO I know is paying a huge amount of attention to China. Many solar CEOs already are, too. Wind and LEDs and industrial efficiency techs will also need to pay close attention.

China has the potential to radically change the way we think about cleantech venture capital and private equity. But I'm not yet smart enough to figure out exactly how...

Comments

[Chad Brown:]

This Golden Sun program China announced to subsidize 50% of the cost of on-grid solar plants and 70% for off-grid sounds big when you look at the size of the subsidy compared to the total cost. But it also sounds like it is limited to 500 MW total. That is about one coal plant. If so, then it is very small relative to the Chinese energy demand and this looks more like a PR effort in the great game running up to a new international climate agreement.

Jul 23 09:34 AM

[jerrydd:]

I think China will add to RE subsidies as they can't afford not to. RE is the low cost energy even now or in the very near future as fossil fuels go way up in price. In fact it's RE that will eventually bring them back to earth. As soon as the economy come back oil will hit $4/gal again next yr and keep going to until it kills the economy again until we become oil independent. China knows this and why they are buying so much now.

The best, cheapest, most profitable RE is small wind, solar thermal/CSP. China already has 1kw wind generators on sale here for $1k/kw, far under the cost of coal plants. And many small US makers are doing the same if China doesn't run them out of business. Yahoo Magnets4less or axial flux for details. Both these will rule future energy as prices go up for fossil fuels and they get into real mass production. Not much investment opportunities in them except at your own home.

CSP is only a 5hp steam or other heat engine, a 3kw alt, 200sq' trough collector for 3kw electric and 12kw of heat for 4-8hrs/day at the peak rating. One can store the heat and get power 24/7 if you want it or can be fired by any bio, fossil fuel when the sun don't shine if needed.

PV is dropping fast in costs and in a couple yrs will beat coal in price/kwhr.

China is going EV big time as we should as they are 3x's as eff as gas cars are and can run off the wind, sun, etc. In a couple yrs EV's will be lower priced than ICE's as batteries are dropping fast with Lithium batts already lower than sealed lead batteries and the rest of an EV is well known and it's EV drive costs less to buy, drive than an ICE by a good amount.

Jul 23 10:56 AM

[Madddog:]

This article doesn't say anything. I wasted a click.

Jul 23 11:18 AM

[Madddog:]

This article doesn't say anything. I wasted a click.

Jul 23 11:20 AM

[IndidnaJohn:]

Yeah Maddog, you're right. Plus it is full of indigestible alphabet soup. What a farce. Will anyone claim that they paid for this trash?

Jul 23 03:13 PM

[Zenfar:]

Well STP is setting up shop here in the US for a reason. So it just may be the other way around.

Long USA solar (thin film and CIGS) and STP.

Jul 23 04:09 PM