The cleantech asset firesale: Whose fault is it?

There’s been an unsurprising amount of anger and political games from Republicans over the recent announcement that Wanxiang Group would invest $465 million in ailing American battery maker A123 Systems, effectively taking control of the company. Probably the most succinct political statement came from the Romney campaign to The Wall Street Journal when a spokesman said, “It is unfortunate Obama borrowed from the Chinese to give taxpayer money to prop up green energy companies that the Chinese are now buying.”

A123 Systems received a $249 million grant from the DOE and is in line to receive another $100 million in tax credits from the state of Michigan where it has a production plant. The fact that the sum of American taxpayers’s R&D investment will end up in the hands of an aggressive Chinese conglomerate does not sit well with many people.

But these types of deals shouldn’t surprise anyone, and we can expect more of them. China has always been more gung ho on cleantech and renewable energy than America due to its sincere desire to end its dependence on foreign energy imports. China has put up $216 billion in subsidies for cleantech over the past few years and even in the past quarter, Chinese cleantech investment surged 92 percent to $18.3 billion.

The China Development Bank provides extensive credit lines to solar companies, in particular, to keep the companies going through difficult times. There just isn’t the similar commitment to cleantech in the U.S. compared to say the American automotive industry whose bailout cost taxpayers at least $25 billion.

So with financing tight in the U.S. for new energy players, A123 Systems had no choice but to look for its savior in a place that does support cleantech. And while no one wants to admit it, A123 was fortunate to have found a lifeline as without it, the company was headed for bankruptcy and layoffs at its U.S. plants.

The other reason these deals make perfect sense is that Asian companies have tremendous experience with taking a technology and scaling it with inexpensive labor and a highly flexible factory systems. Seoul based Hanwa is looking to make a play for German solar cell and module maker Q-Cells. In 2008, Q-Cells was the largest solar cell maker in the world, and the company has invested year to year in improving its cell efficiency as well as supporting next generation CIGS technology. It’s currently insolvent.

There’s a real opportunity for a company like Hanwa to scoop up the assets and position itself in the solar PV market. Leading Chinese solar panel maker LDK acquired German based Sunways a few months ago with a play to get better access to the German market.

So I’d say we’re at the beginning of this consolidation trend and the real unfortunate news is just that there aren’t enough Asian buyers to meet the amount of European and American cleantech companies that are failing (still waiting for Solyndra’s buyer, now aren’t we).

And this isn’t healthy consolidation. Healthy consolidation occurs when a larger company purchases a smaller company to increase efficiencies of scale. What’s going on here is that physical and intellectual assets are being bought cheaply, wiping out investments and devaluing those assets themselves.

When thinking about cleantech investment and solar in particular, the real question in my mind has to do with how long we’ll wait before the market has thinned out, manufacturing power is left in the hands of a few players, and prices start to stabilize. And then will there be enough organic global demand to support batteries and solar panels which are still not cost competitive with their fossil fuel foes.

Everyone believes we’ll hit that point where they are cost competitive, but for the time being it’s mostly Asian companies and Asian governments that want to take the risk and invest the capital to position themselves for that future energy economy. Can we blame them for that?

Question of the week

How much more acquisition movement will we see from Asian players in cleantech?

Piazza gets $6M Series A to help with college homework

Piazza, the social network that lets college students and instructors discuss material online, has closed on $6 million in a new Series A funding round. Piazza’s service is meant to counteract study group snobbery and eliminate students’ fear of asking “dumb” questions.

Today in Cleantech

The state-by-state setbacks for utilities’ smart grid dreams have come to Illinois. The Chicago Tribune reports that a court ruling has found the Illinois Commerce Commission was wrong to allow utility Commonwealth Edison to pass on certain costs to its customers — including the $5 million passed on to customers in 2008 for a smart grid pilot project. ComEd has said that, barring an appeal, it may have to seek alternative means of paying for the project. This, in turn, could be bad news for Silver Spring Networks, Tendril, and others involved in the project, which involves smart meters, solar panels, battery energy storage, self-healing grid technologies and a host of consumer energy pricing programs.

How to Deal With: I’m Not Paying For That Smart Meter

In most states utilities raise electricity rates in order to pay for the installation of new gear like smart meters — so consumers basically cover the cost of the upgrade. But some consumers and PUCs aren’t so happy about those terms.

Colloquy: An IRC Client that Feels at Home on Your Mac

Many users shy away from using IRC as it’s perceived to be complex and difficult to use — an impression not helped by the design of many IRC clients. Colloquy is different — it’s an open-source IRC client for OS X that’s easy-to-use and looks great.

Macworld 2010: In Closing

In the first year that Macworld Expo San Francisco did not see Apple (s aapl) attend, the speculation leading up to the show was centered on what Macworld Expo would be like without its best known exhibitor. David Pogue gave us a look at the world without Apple, and then the show itself gave us a look at Macworld Expo without Apple. The results in both cases were still pretty enjoyable.

In any other year, the start of Macworld Expo would mean looking forward to a riveting Stevenote with all sorts of product announcements. This year, the Expo started with David Pogue of the New York Times leaping on stage to do his best Steve Ballmer impersonation.

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The highlight of the opener was a clever and entertaining stage play of “It’s a Wonderful Mac” which riffs on the premise of “It’s a Wonderful Life” starring Jimmy Stewart by imaging what the world would be like without Apple. Read More about Macworld 2010: In Closing

Is Twitter Replacing the RSS Reader?

rssLast Friday, I was attending Portland’s weekly Beer and Blog event, and I stumbled across what later turned out to be an interesting trend. I had two separate, unrelated conversations about an hour apart with people working in the technology industry who once used RSS readers but had mostly abandoned them in favor of using Twitter to find news and interesting blog posts. I talked to a couple of other friends and posted the question on Twitter, which confirmed that many people are using Twitter as an RSS reader replacement. Read More about Is Twitter Replacing the RSS Reader?

Clairvoyant, Xtreme to Convert Idle Ford Plant Into Renewable Energy Park

An idle 320-acre Ford Motor Co. plant, which during its 52 years of operation assembled 6.6 million Lincoln Continentals, Ford Thunderbirds and other vehicles before halting operations two years ago, is getting reincarnated as a renewable energy equipment manufacturing park.
In a symbolic win for those hoping the U.S. can replace some of its thousands of lost automotive jobs with green ones, three greentech companies on Thursday announced a plan to retrofit a Ford (s F) assembly plant in Michigan (the state with the highest unemployment rate in the country) to manufacture equipment for wind and solar projects, and to set up a renewable energy training center. Along with Ford Executive Chairman Bill Ford and Michigan Gov. Jennifer Granholm, chief executives of Xtreme Power, Clairvoyant Energy and Oerlikon Solar revealed the plan at a ceremony at the Wixom, Mich., facility. Read More about Clairvoyant, Xtreme to Convert Idle Ford Plant Into Renewable Energy Park