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Opinion
Noah Smith

Clean-Tech Investment Isn't Just a Bubble This Time

The industry has matured, entering a new phase of development that justifies the latest burst of investor enthusiasm.

Bill Gates’ clean-tech fund is one sign the industry has matured.

Bill Gates’ clean-tech fund is one sign the industry has matured.

Photographer: Bloomberg

Green energy investment is hot again in the U.S. To some, the new boom will raise the specter of the clean-tech bust that followed a streak of exuberance a decade ago. But there are reasons to believe that this time the trend is no bubble or mirage.

In the late 2000s and early 2010s, there was an explosion of investment in clean technology — renewable energy, plus other technologies to reduce carbon emissions. At first the money came largely from venture capitalists, but then the federal government stepped in and began providing cheap loans and subsidies. Then in 2011, solar manufacturer Solyndra spectacularly failed, causing an immense political backlash. And that was only the most prominent failure; overall, investors lost about $25 billion when the sector crashed. Money dried up fast. For years, "clean tech" was a dirty word in venture capitalists’ conversations.