In this week’s column in Financial Express the topic is about cleantech and the connection between Silicon Valley and India. Last week during the TiECon in Silicon Valley  cleantech was a major topic of discussion and I met a venture capitalist and an entrepreneur who are doing some very interesting things in this space. Ravi Viswanathan is partner at NEA, a well-known VC firm and Rajeeva Lahri, is a first time entrepreneur, who co-founded Signet Solar, a cleantech company that he plans to expand into India.

Here is the article.

Energy. Energy is the basic ingredient for economic growth. Right from the bulb burning in your home to the car you drive to the food and medication you consume to the running water in your bathroom requires some sort of energy. Why, even mobile phones require energy in one form or the other. The growing global demand for energy is fast outstripping the supply of energy. Now factor in global warming and carbon emission and the picture changes quite a bit with countries, companies and individuals looking for alternate sources of energy.

Burning fossil fuels like coal have clear, proven, long-term impact on environment that many studies have demonstrated. “Fossil fuels create huge carbon footprint and there is a big focus now on energy efficiency, and reduce dependency on fossil fuels,” points out Dr. Rajeeva Lahri, co-founder Signet Solar. There is a global search on for generating energy from alternate sources like solar and wind among sources points out Rajeeva.

Alternate sources of energy are also referred to as cleantech, greentech or energy technology. There appears to be no clear definition of what constitutes cleantech. But, what is common to these term is that the source of energy is not based on fossil fuels, but instead comes from wind, sun, biomass, plants etc. “Within NEA we call it energy technology and that is anything with conservation or generation of energy from non-fossil fuels” points out Ravi Viswanathan, Partner at NEA, a venture capital firm in Silicon Valley. Rajeeva agrees with Ravi and says that these terms are used interchangeably and there is a lot of overlapping of these terms.

.

There is a strong upward trend in cleantech investments world-wide with the USA leading the way. “Alternate energy is about $15 billion at the global level that is growing at 40 percent per year,” points out Rajeeva. And in the USA just in the first quarter of 2008 about $571.6 million was invested in cleantech, compared to $483.9 million in the same quarter a year ago, according to an Ernst & Young report. In 2007 VC firms in the US invested about $3 billion in cleantech companies. As is often the case when it comes to investments and innovation trends Silicon Valley is the barometer and a temperature reading from the valley shows that there is a clear upward trend when in comes to investments and innovations in cleantech.

There is a clear shift in the portfolio mix of many Silicon Valley based VCs with cleantech companies forming a significant chunk of the mix. About 10 to 15 percent of NEA’s investment is in the cleantech space points out Ravi. NEA currently has about 20 companies in their portfolio. Other VC firms like Kleiner Perkins Caufield and Byers have also stepped up their investments and currently the firm has about 30 companies in its portfolio according to one report.

Among companies that NEA has invested are Deeya and Suniva says Ravi. Deeya, which is based in Silicon Valley also, has a presence in India. The company makes electrical energy storage system for which India is a natural market. Deeya’s technology is designed as effective and economical replacements for lead-acid batteries and diesel generators. Clearly, like NEA other VCs and companies are looking to expand their presence in India. One such company is Signet Solar that has an office in Silicon Valley and has a manufacturing unit in Germany. But recently Signet Solar announced its plan to expand its operations in India and has in the process of setting up a facility in the southern state of Tamil Nadu.

Not all companies are funded by VCs. Rajeeva’s Signet Solar is funded by family and friends and they expect to break even in the next couple of years. Signet Solar manufactures photovoltaic modules in Germany and next month they expect to receive their first photovoltaic modules. The market is right now in Europe says Rajeeva but in the long-term the market is in India he points out.

Technorati Tags: Rajeeva Lahri,Ravi Viswanathan,Cleantech,Techlife,cleantech in india,ideas,india,tiecon