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Cleantech Investing: We Are Just Getting Started

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Co-authored by Noah Walker, Joint MBA/MEM Candidate at Yale University

Americans are voting with their stock portfolios like never before. And they are investing in cleantech and renewable energy.

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 Investors 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.

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