Below are some potential investment opportunities in the “green economy” according to Jigar Shah, who has been recently appointed by President Joe Bidden as head of the US Department of Energy’s Loan Programs Office.
These sections of the green economy have not yet reached Wall Street size (e.g., Next Era Energy) and there are no mature business models that have already proven to be as scalable as solar, i.e. they are not yet the ”rinse and repeat’ type of projects. Consequently, these types of opportunities may be attractive for early investors.
For each category mentioned below, I have added some examples of startups that have caught my eye either because they are representative of the category or simply promising.
Buildings / Weatherization
Buildings and their construction together account for 36 percent of global energy use and 39 percent of energy-related carbon dioxide emissions annually, according to the United Nations Environment Program. Globally, building operations (powering lighting, heating, and cooling) account for about 28 percent of emissions annually.
Retrofiting buildings for energy efficiency: Blocpower – has retrofitted more than 1,000 buildings in disadvantaged communities in New York City, with projects underway in 24 cities. BlocPower uses proprietary software for analysis, leasing, project management, and monitoring of clean energy projects that save customers between 20-70 percent on annual energy costs.
Designable (*) retrofits buildings and offers its clients the opportunity to buy (after personalization), apartments in sustainable buildings.
LED lighting accounts for approx. 15% of the lightning sales. It is expected that the transition to energy-efficient lighting would reduce the global electricity demand for lighting by 30-40% in 2030. Amsterdam Edge building is an example of digital technologies at the service of energy efficiency.
HVAC (heating ventilation air conditioner) retrofits.
Regenerative agriculture enhances and sustains the health of the soil by restoring its carbon content, which in turn improves productivity—just the opposite of conventional agriculture.
Regenerative agricultural practices include:
- no tillage,
- diverse cover crops,
- in-farm fertility (no external nutrients),
- no pesticides or synthetic fertilizers, and
- multiple crop rotations.
Food waste prevention
Avoidance – An estimated 1.3 billion tonnes of food, or roughly 30 percent of global production, is lost or wasted annually, according to the UN Food and Agricultural Organization (FAO).
Biodigesters process farm waste (animal manure & green waste) into free biogas for clean cooking and organic fertiliser for better crops and healthier soil.
Not mentioned by Jigar Shah, these two categories deserve to be added since they have an immense potential to contribute to climate change mitigation and wealth creation, in emerging markets:
Cooling as a Service
Future Pump (*)
“I am always optimistic. I am not sure how one could not be. We have the technology today to solve major problems around the world on food production, clean water, electricity access, waste, sewage, and other basic dilemmas. I am excited that my generation will be the one that sees the successful deployment of this technology to truly make the world a more sustainable place”Jigar Shah
(*) I am an investor