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January 4, 2010
Greentech Investment Closes Strong in 2009
After some setbacks in the first and second quarter, venture capital investments in greentech saw its second best year in dollars invested and a record year for the most deals funded in 2009, according to Greentech Media.
The fourth quarter closed at $943 million invested in 100 deals bringing the total 2009 VC investments in greentech to $4.85 billion compared to $7.5 billion in 2008 and $3.5 billion in 2007. Solar was the top recipient with $1.4 billion in 84 deals followed by biofuels with $975 million in 44 deals.
This brings the total number of deals for all four quarters to 356, compared to 350 in 2008 and 222 in 2007.
Significant government funding from the American Recovery and Reinvestment Act (ARRA) was an important factor for 2009 and a trend that should be watched closely in 2010-2011. According to Department of Energy (DOE) just $1.76 billion, representing only 5.3% of awarded funds, has actually been spent as of December 25, 2009. DOE has awarded a total of $22 billion so far.
About Mercom Capital Group
Mercom Capital Group, LLC is a public relations, public affairs and market intelligence firm specializing in clean energy. At Mercom, we help clean energy companies build powerful relationships with media, analysts, government decision-makers and local communities. We arm our clients with timely market intelligence to ensure their competitive position and overall success. Mercom Capital Group is located in Austin Texas with offices in Bangalore India. For more information about Mercom Capital Group, visit: http://www.mercomcapital.com.
To get this and other important news and industry analysis, subscribe to Mercom’s popular market intelligence reports covering solar, wind and smart grid, visit: http://mercomcapital.com/market_intelligence.php
December 21, 2009
Mercom Exclusive: Recently, Raj Prabhu, Managing Partner at Mercom Capital Group, asked Al Velosa, Gartner Research Director, for his 2010 insight on the PV market.
Uncertainty Will Shadow the PV Market in 2010
By Al Velosa
 As you look at the PV market on a global basis, there is a general wave of optimism as we have seen the general pick-up in demand. Germany spearheaded this drive with a great recovery in the past quarter, and will remain the world’s largest market in 2010. We’ve seen large projects installed in the U.S. in Florida, with promising project pipelines across the U.S. The Feed in Tariff in Ontario has demonstrated strong demand up in Canada.
Yet as I peer into my crystal ball for 2010 for the PV market, I see two core trends that will create significant uncertainty in the market and make the CEO’s of PV firms walk a tightrope between business development and supply chain management.
The first issue I see is continued issues with government incentives. There has been extensive discussion in the media about potential changes in German incentives in the middle of the year. Yet they are not the only issue. In the U.S. market we are looking at a dual set of incentive concerns. The more important tactical issue is the renewal of the grant program in 2010. The second is the passage of a national renewable portfolio standard by the U.S. government. It is hard for anyone to predict political compromises. It is hard to see how these issues will evolve in the U.S., especially as the Cap and Trade legislation appears stalled in congress. Other countries have had delays translating their legislation into implemented projects.
The second issue is the excess of capacity we see in the market. Despite Q4 demand, the current installed PV manufacturing capacity is significantly under-utilized. Especially if we look down into the Tier 2 and Tier 3 vendor plants. And this picture is further complicated by expansion plans that have been either ongoing or announced in the past quarter. Tier one vendors are in the process of adding well over a gigawatt of capacity through 2010. All this translates to an enhancement of the oversupply conditions we are in right now.
These two trends lead to a couple of key implications:
Price weakness: We expect to see price degradation of at least 20% over 2009 levels.
Bankability: This remains an issue for both new as well as established firms. Established firms are rolling out new products (thin film or modular solar systems) that will require further investment from them both in terms of warranties and sales personnel.
Relationships: The key growth markets will require a more intensive time investment in relationship building than some PV firms expect. These markets have immature infrastructures, so PV vendors will need to work with utilities and permitting authorities to develop processes for PV projects.
Given these factors for the market, we expect that the top 2 priorities for PV vendor CEOs will be extracting flexibility and low costs from their supply chain while ramping up their business development efforts on a global basis. In fact, supply chain management may end up being the most critical factor. Given how fast changes in government policy may change our supply-demand balance, PV vendors will be managing their supply chains very carefully in a just-in-time fashion.
Therefore, look for continued investment in 2010 in operations management at the leading PV vendors, with a focus on increasing partnerships with leading EMS firms and on obtaining key talent.
Al Velosa is a Research Director at Gartner Inc. focused on the photovoltaic solar market
November 9, 2009
Mercom Capital Group Speaks About Global Market Trends for Utility Scale Solar at the TREIA Texas Renewables 2009 Conference
AUSTIN, Texas – Mercom Capital Group, LLC, an Austin-based public relations, public affairs and market intelligence firm, is pleased to announce that Raj Prabhu, Mercom’s managing partner, has been invited to speak at the 2009 Texas Renewable Energy Industry Associate (TREIA) conference held in Austin Texas at November 8 -10, 2009.
Raj will be speaking at the November 10 breakout session covering utility-scale solar. His presentation will specifically cover global market trends for utility-scale solar. The breakout session will begin at 2:20pm CST. The conference is being held at the OMNI Austin Hotel Southpark.
Copies of the presentation will be made available upon request by contacting Mercom Capital Group at info@mercomcapital.com.
About Mercom Capital Group
Mercom Capital Group, LLC is a public relations, public affairs and market intelligence firm specializing in clean energy. At Mercom, we help companies build powerful relationships with media, analysts, government decision-makers and local communities. We arm our clients with timely market intelligence to ensure their competitive position and overall success. Mercom Capital Group is located in Austin, Texas with offices in Bangalore, India. For more information about Mercom Capital Group, visit: http://www.mercomcapital.com. To get a copy of Mercom’s popular market intelligence reports covering solar, smart grid and wind, visit: http://mercomcapital.com/market_intelligence.php
October 5, 2009
Greentech investment climate showing strong signs of recovery
By Mercom Capital Group
Venture Capital investment in greentech looked a lot healthier in the third quarter of 2009 compared to the previous two quarters of this year according to a report by Greentech Media.
The third quarter closed with $1.9 billion invested in 112 deals compared to $1.2 billion invested in 85 deals in Q2 and $836 million invested in 59 deals in Q1. The dominant investment sector was solar with $576 million invested in 29 deals. Following solar was biofuels with $513 million invested in 17 deals and smart grid with $160 million invested in 14 deals.
Year to date the total venture capital investment in greentech stands at $3.9 billion and is already the second best year for greentech VC investing behind 2008. In 2008 total greentech VC investment was $7.6 billion and 2007 was $3.5 billion.
A huge factor boosting the third quarter greentech VC investment is the money flowing into clean energy projects from the American Recovery and Reinvestment Act. More than $1 billion has been awarded so far this quarter to clean energy projects through the recovery act providing a much needed boost of confidence to the investment community in general.
Data compiled from Greentech Media, Greenbeat, GTM research and DOE.
August 25, 2009
Mercom comments on healthcare IT stimulus winners at thestreet.com
Obamacare's Biggest IT Winners
President Obama has vowed to drag U.S. health care into the 21st century, allocating billions of stimulus dollars to streamline the nation's byzantine health systems. With big financial incentives being dangled in front of doctors and other providers, more than $20 billion will be spent on electronic medical records, the cornerstone of a massive health IT overhaul. Here are some of the stocks most likely to reap the benefits of Obama's ambitious health care agenda....
...Cerner and its rival Computer Programs and Systems (CPSI) are nonetheless well positioned, according to Raj Prabhu, managing partner of Mercom Capital Group, which specializes in health care research.
"Like McKesson, these guys are on the hospital side," he told TheStreet.com, adding that customers will soon know what systems they can buy. The U.S. government is currently laying out its criteria for what constitutes "meaningful use" of electronic records, according to Prabhu, who says that this should be in place in October or November... Click here to read the article in its entirety.
August 20, 2009
Clean Energy Companies Struggling to Keep up as New Incentives and Policies are Added Everyday
By Mercom Capital Group
For clean energy companies, wading through a maze of federal, state and local policies as well as financial incentives can be a very intimidating task. Yet it is absolutely essential in order to get to the next level of competitiveness in an extremely dynamic and fluid industry. Within the 50 U.S. states, there are currently over 750 varying financial incentives and over 350 different policies at the federal, state, county and local levels to be dealt with in order to stay competitive and take advantage of the opportunities available in the marketplace.
Developing a renewable energy project or starting and growing a clean energy company is a challenging task in today’s market conditions, with most companies dependent upon favorable policies and financial incentives in order to stay cost competitive.
In the first illustration, we demonstrate the perplexity of the various state policies and incentives that change almost daily. Having real time intelligence to keep track of the markets, incentives and policies is a must for any company looking to enter new markets and capitalize on the benefits these policies offer. "Beyond competitive products and technologies, clean energy firms that want to outperform in the US market will need a sophisticated public affairs and government relations program and savvy policy partners who are very familiar with the latest developments from the federal level all the way down to the county level," according to Gartner Research Director Al Velosa.
Raj Prabhu, Managing Partner of Mercom Capital Group, commented, “Along with federal and state incentives and policies, there are also local city and county programs that cannot be overlooked and requires constant attention. Of course, companies cannot make their decisions solely based upon policies and incentives without looking at market size and opportunity.”
In the second map, we have included the retail sales and retail electricity rates, providing a truer reflection of the overall markets. For example, Texas had a total of 344 million Mwh in retail sales in 2007 and is by far the largest energy market in the nation, larger than most countries. These larger markets demand attention regardless of current policies or incentives. Companies need to get into these markets early to begin building relationships and making a presence. Having a local presence and being part of the business community will allow companies to work from the inside and have a say in how the policies and incentives will be shaped the future.
Having a strong public affairs program, along with real time market intelligence that will deliver timely information about your markets and the policies that can affect your business is a must for clean energy companies that are looking to make an impact in these larger markets.
August 14, 2009
It’s Heating up in India - Highlights from the 3rd Renewable Energy India 2009 Expo
By Mercom Communications India Private Ltd.
The 3rd Renewable Energy India 2009 Expo held in New Delhi, India on Aug 10-12, 2009, had an impressive turnout from around the world. The event echoed the mood of the renewable energy industry in India, upbeat, yet uncertain. The participants were very excited about the future of renewable energies but were unsure about the effects of the global recession and the support the renewable energy sectors will receive from the Government of India.
Mr. Deepak Gupta, India’s Secretary for the Ministry of New and Renewable Energy, commented, “The Government is likely to roll out a plan to add 20 gigawatt solar-based power generation capacity by the year 2020. The solar mission has been approved in principle, now we have to work on the roll-out. Hopefully, we will go to the Cabinet in the next couple of months so we can roll-out the plan this calendar year.”
Indian companies are of the opinion that the investment interest in the industry is strong but government support is critical at this point. There were many Indian companies which commented that the demand in domestic markets for PV needed to be boosted rather than be dependent on the export markets.
There was a good showing of international companies looking to take part in the future of India’s renewable energy markets. The conference hosted pavilions for Germany and the U.S., and there was good attendance from companies representing China and Taiwan as well as a few other European countries. As expected, Solar was the predominant sector at the conference; however, representation of Wind companies was commendable.
From a regional perspective, Gujarat and Rajasthan were the two Indian states that stood out in their efforts to encourage the clean energy drive. Both of these state governments have laid out aggressive plans to bring clean energy to every household in their respective states.
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