Cleantech Sector Investment Thesis
One of the key differentiating advantages of 118 West Capital is we stay within our core circle of competence. The sub-sectors of ‘Cleantech’ as we see it are as follows:
Wind, Solar, Geothermal, Biomass
Electric Vehicles
Clean Energy Storage (e.g. batteries and related tech)
Energy Efficiency (Building Automation and Retrofitting)
Smart Grid Technology and Services
Explore Cleantech.
Governments, corporations, and institutions around the world are responding to the threat posed by climate change. The Cleantech opportunity originated from influential government mandates around the world:
U.S.—tax credits and renewable portfolio standards.
Europe—feed-in tariffs and carbon pricing.
China—tax incentives, preferential pricing, credit guarantees and other substantial mechanisms which have made it the world’s largest producer, exporter and installer of solar panels, wind turbines, batteries and electric vehicles.
As manufacturing capacity and project development ramped up globally, the industry gained major momentum which led to significant and sustained declines in the cost of key inputs.
Declining cost of solar power
Source: NREL
Renewable Portfolio Standards in the United States
Source: National Conference of State Legislatures
“Technologies consistent with long-term climate sustainability include flexible power grids, efficiency solutions, electric vehicle charging, energy storage, interconnected hydropower, green hydrogen and other technology investments consistent with long-term energy and climate sustainability. ”
— Global Renewables Outlook: Energy transformation 2050 – IRENA (International Renewable Energy Agency)
Cleantech Industry Growth
The value propositions of certain Cleantech technologies like solar and wind are now surpassing those of incumbent technologies (i.e. fossil fuels) in more and more regions around the world. In 2019, renewable energy outpaced coal for the first time in American history. Energy produced by wind and solar accounted for approximately 50% of renewable energy consumption.
Declining cost of wind power
Source: IRENA
