The impetus for our inaugural insta-blog comes from of all places the New York Post this weekend (March 10th 2012). While not one of the big financial new resources or a daily reading choice for me, on weekends, outside with my early morning coffee, it is one of my staples. The opinions section for the day was littered with three separate articles all rallying against "greentech", or more specifically the Obama administration's efforts to jump start the industry.
- Yet Another Rancid Green Obama Bet - Abound Solar Cuts 70% Of Its Work Force And Freezes Plans For Indiana Plant
- The Electric-Car Brownout - Chevy Halts Production of Volt
- Bam's Bad Karma - Fisker Automotive's Karma Conked Out On It's Test Drive For Consumer Reports
This shouldn't necessarily be a surprise considering the usual mud flinging that goes hand in hand with politics. Previously in the week I had read about Fisker's flop in other publications, how automakers were considering the move to compressed natural gas (LNG has seen an excellent start to the new year), International Battery closed, remembering the Tsunami and the Fukushima meltdown, Trump's efforts to kill wind power in Scotland, the general negativity, or backlash to pure renewables appears to be in full swing.
Let me confess first hand that I am a devout environmental capitalist, I do firmly believe that powering the planet with 100% renewable energy is not only possible, but is financially viable - we'll save that for a future article, and I would ask that commenters refrain from harping on that topic just yet. Coming sort of full circle around to my point, I think that it's safe to say that Greentech 1.0 has run its course. For the most part it was not market driven, but politically motivated. It is my opinion that governments are never good at effectively allocating capital to its highest and best use, thus the current boondoggle.
Fossil Fuels A Temporary Band-Aid
If Greentech 1.0 has been something of a flop, what makes me so confident that there will be an industry comeback? First and foremost we have by no means solved our energy crisis - price dependency and security, despite the constant chatter surrounding Bakken and potential offshore assets, there is still a finite supply of oil. Natural gas is touted as a solution with its availability and cheap prices, but this is a classic case of reaching for the lowest hanging fruit, natural gas is still a fossil fuel, finite, dirty and harvested by way of dubious practices (fracking). These solutions are all temporary and serve only as a band-aid, while not addressing the longer term problem, even if those are a generation or two down the road.
We've heard the arguments above too many times to tell, which begs the question what gives me the hope that there will be a Greentech 2.0 and more importantly what will be the drivers? The primary driver of course will be cost and performance competitiveness of renewables without government subsidies and handouts - the ever slowly creep of grid-parity. Seems unlikely, don't bet on it. Hawaii and some areas of the Southwest US have already reached grid parity. All of the "Going Out Of Business" and "Bankruptcy" signs hanging on the doors of greentech firms means there are deals to be had for savvy individuals and entities to pick up barely used equipment for pennies on the dollar.
It will take some time for all of these blemishes on the greentech industry to wash out. But for those individuals with a long term investment horizon, there will be many opportunities. So it is that we are dipping our feet into the waters by starting our posts here at Seeking Alpha.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.