Clean Technology

Clean technology, or cleantech, refers to products or services that deliver greater resource efficiency and reduced environmental harm when compared to other available alternatives. Cleantech is not an industry but rather describes a thesis that can be applied to a range of industries, each with their own particularities and complexities such as: 

• Energy generation, distribution, and end use
• Water purification, use, and treatment/ re-use
• Industrial manufacturing
• Waste treatment and disposal

Cleantech applications can represent products and services as diverse as:

• Renewable energy sources such as solar or wind, or financial structuring and other business model innovations to deliver them
  
• Energy management applications such as demand response, which reduces peak power loads of electric utilities, or improved power electronics to reduce standby power usage of computing and other devices
  
• Energy-efficient lighting technologies, such as high-intensity LEDs
  
• Applications to increase the environmental performance of incumbent industrial assets, such as cogeneration (aka combined heat and power) or improved power plant flue gas scrubbers
• Waste to energy technologies such as plasma arc waste treatment
  
• Green chemistry innovations, such as the development of plastics from agricultural products or development of non-toxic pesticides and other consumer products
  
• Improved membranes to reduce the cost and increase the efficiency of water purification
• Software applications, such as tools for tracking and validation of carbon offset transactions or tools for optimizing industrial plant energy usage
  

Cleantech applications may or may not use innovative or revolutionary technology. They can also represent innovations in business model or product delivery, such as the application of power purchase agreements (PPAs) to solar photovoltaic (PV) project financing or the use of energy service companies (ESCOs) to monetize energy efficiency improvements.

In our view, cleantech also includes things which demonstrably make resource use less harmful even if not totally benign including such controversial areas as clean coal. We believe in the axiom that the perfect is the enemy of the good, and assert that those who take a purist approach to technology will miss significant opportunities to effect positive outcomes. Often, incremental improvement of dirty industrial technologies can have much greater impact than those things touted as clean technologies, such as solar PV or corn ethanol, simply because of greater scale.

Note that firms in the cleantech category may not market themselves specifically as cleantech, and investors who place capital into these types of firms likewise may not necessarily consider themselves to be cleantech investors.