Wednesday, August 20, 2008

Morgan Stanley’s David Chen on Renewable Energy Markets

From GreenLight:

“How do we know we’re not in a cleantech bubble?”

This is a question David Chen gets asked a few times a week.

Chen is Morgan Stanley’s Head of West coast Clean Technology Banking and he spoke in Menlo Park last Friday at an AlwaysOn breakfast event, a warm-up for their GoingGreen event in September.

So, how do we know we’re not in a cleantech bubble? David answered that question:

  • The end markets are real and large.
  • Investors are more discerning.
  • The tremendous amount of capital required means fewer “me-too” stories.
  • The coming grid parity environment can sustain multiple winners.

Nevertheless he still sees “volatile stocks driven more by momentum than fundamentals” as bankers and investors engage in an “obsessive quest for the next First Solar.”

He had a few more choice observations:...MORE

Eric Janszen, writing for Harpers in January, had this chart of his best guess trajectory:

Total market value: Alternative energy and infrastructure. Estimated fictitious
value of next bubble compared with previous bubbles.

See also our post linking to Mr. Janszen and others:

As One Economic Bubble Bursts, Another Takes Hold

Psst: Do You Want to Know the Future of Renewable Energy Investing?

Recession-Plagued Nation Demands New Bubble To Invest In