Clean energy companies have made money for some investors, but that doesn't mean they're successful businesses. Clean energy – or clean tech – will create winners eventually, but maybe not in the United States.
The sector doesn't have enough original ideas, Mr. Thiel said, and many clean energy technology companies are being run by idealists who are short on business savvy.
Those comments drew a sharp rebuke from fellow venture capitalist Vinod Khosla: "I challenge anyone to claim that clean tech done right is a disaster." Over the past year, Mr. Khosla noted that the three clean tech initial public offerings that he has been involved with have generated more than $1 billion in profits. Six more IPOs are in the pipeline.
So who is correct? Are clean tech sectors – such as biofuels, wind power, solar power, efficiency, green chemistry, and automobiles – flops or booming successes?
It depends on who's doing the measuring.
If the goal of clean tech is to displace consumption of fossil fuels, then we have to call some sectors a flop at this point. The US Environmental Protection Agency has rolled back the advanced biofuel mandates by more than 90 percent because companies could not deliver. To date, there is still no qualifying production of cellulosic ethanol, even though 350 million gallons were mandated for 2010-11. None of the IPOs Khosla mentioned are yet producing and selling commercial quantities of product.
If the goal of clean tech is to make money for investors, then call it a winner – but only for some.