The Southeast is power-hungry. At least when it comes to proving its clout as an EnergyTech hub.
Startups — with the help of academic partners, corporate innovation programs, and pure grit — grew the Southeast’s renewable energy ecosystem over the past decade. As the national conversation focuses on funding new energy programs and updating utility infrastructure, many in the space think that the region can emerge as an innovation center in the new CleanTech economy.
Building A Southeast’s EnergyTech Hub
West Virginia coal mines and Gulfshore oil rigs might be the first things that come to mind when you hear Southeast energy sources.
But solar energy companies in Georgia, Tennessee, and North Carolina have had a strong track record in the area.
Early EnergyTech innovation grew out of university programs like NC State, UNC, Duke University, Appalachian State, and Georgia Tech. This Southeast-based talent pipeline was key to building up the CleanTech and EnergyTech space in a region not always on the cutting edge of green living.
Then came the accelerators.
In 2019, Techstars announced the launch of its EnergyTech accelerator in Birmingham, Alabama.
ATDC has also graduated several renewable energy-focused startups throughout the years, including solar carport startup Quest Renewables and hydroelectric startup Emrgy. Early players in the energy efficiency space like Verdeeco, Urjanet, Suniva, and Innovolt also grew out of ATDC.
Georgia is also home to the ‘Living Lab Highway‘ and Solar Road, which fosters innovation in transportation technology and clean energy.
Mike McQuary, CEO of Atlanta-based JTEC Energy, told Hypepotamus that “while we don’t have some of the State incentives that attract other companies to set up shop, what we do have in the Southeast are some excellent colleges that provide talent for the science and engineering necessary to drive alternative energy solutions. Intellectual capital is at least as important as financial capital.”
Who Is Shaping Local EnergyTech
Atlanta startups have played an important role in how we think about alternative energy sources and the traditional electric grid. In fact, three recent winners of the US Department of Energy’s Solar Prize have been from Atlanta.
One such startup, Solar Inventions, is improving the actual solar cell manufacturing process. CEO Bill Nussey told Hypepotamus that the improved silicon solar cells, used in close to 95% of solar panels, can decrease manufacturing costs without the need to buy new equipment.
Nussey is also the host of the popular podcast Freeing Energy.
Resilient Power Systems, a recent Techstars Alabama graduate and another Department of Energy’s Solar Prize recipient, is modernizing the electric grid and making it possible to install large EV charging stations in a couple of days (as opposed to the traditional three to four weeks). “The infrastructure is one of the main roadblocks,” Josh Keister, President of Resilient, told Hypepotamus. “After that, it’s a pretty easy business decision.”
He added that Resilient is looking to solve the ‘chicken and the egg’ problem when it comes to local EV adoption by easing the deployment process.
Atlanta startups are also rethinking the very way we create energy. JTEC Energy, led by Lonnie Johnson (inventor of the Supersoaker) and Michael McQuary (previously President and COO of Mindspring), developed a more efficient way to turn heat into electricity. Its solid-state thermo-electrochemical process has applications for everything from deep space exploration to transportation right here on Earth.
Atlanta’s Optimal Technology, a recent Google for Startups Black Founders Fund recipient, is using machine learning to help understand and ultimately lower a building’s energy consumption, and Cloverly, a startup that grew out of Southern Company’s sustainability efforts, is leading the charge for carbon offsetting in the retail space.
Outside of Atlanta, Nashville’s Silicon Ranch is a leader in solar farms across the region, and Raleigh’s GridBridge, acquired by Tennessee-based ERMCO back in 2017, is improving how energy is distributed and utilized on the electric grid.
The Road Ahead For Southeast EnergyTech
Necessity, as the old proverb says, is the mother of invention. Perhaps it is better to think, at least when it comes to the Southeast CleanTech and EnergyTech space, pure entrepreneurial energy fostered invention.
Unlike West Coast startups, the Southeast CleanTech scene did not grow as a result of skyrocketing energy costs or strict state government mandates.
Yet the environment has caught the attention of bigger players in the electric vehicle manufacturing industry.
Dalton, Georgia is now home to the largest solar panel manufacturing plant in the Western Hemisphere, and Commerce, Georgia will soon be home to an electric vehicle (EV) battery plant powering Ford and Volkswagen.
But the road ahead is certainly in constant flux.
Beyond politics, EnergyTech has traditionally faced an uncertain road when it comes to venture capital, particularly in the Southeast. The mid-2000s saw new energy bills and a push to decrease the use of fossil fuels. Investments in solar, wind, and battery tech companies skyrocketed and VC funding in CleanTech grew to $25 billion by 2011.
Then came the financial crisis. And, perhaps most importantly, the realization that investing in CleanTech is a long game.
90% of cleantech companies that received funding after 2007 ultimately failed to return even initial capital investments during the CleanTech Bust of 2011, according to an MIT analysis.
“In energies, companies require a very different kind of management, they take longer to build, and they typically benefit from people that have a lot of operational experience,” Nussey told Hypepotamus.
But the winds appear to be shifting. With the national and international focus on CleanTech, along with shifts in consumer demands, VC funding in the CleanTech space is up 3,750% since 2013, according to a recent PWC study.
“In the past few months, we’ve seen even more confirmation that environmental sustainability is top of mind for businesses,” said Cloverly’s Emily Bailey. “From the small business owner to the Fortune 500s, they’re finding that the consumer demand, and even expectation, for environmentally-aware, eco-friendly brands is here to stay. We believe that as Gen Z enters the consumer market, it will become even more important for businesses to proactively take accountability for their impact on the planet.”
With a decade of lessons learned and operational leaders already in place, many in the Southeast are ready to capture the moment.
“There’s been a lot of talk about things, but now we are seeing deployment,” Emmit Owens of the Research Triangle CleanTech Cluster told Hypepotamus.
“Deal flow has increased ten-fold and the market is supercharged,” Joules Accelerator Executive Director Bob Irvin said. “Despite setbacks from Covid, there is an explosion of interest in clean technologies to meet climate goals through corporate innovation, venture capital investment, university and laboratory research, and national policy initiatives.”
Resilient’s Josh Keister told Hypepotamus that now is the time to transform fundamental thinking around renewable energy and electric vehicles. “The market is speeding up. We talk about the pandemic speeding up sectors like delivery and transportation, so we are seeing electric vehicle adoption actually moving faster.”
It’s still too early to tell what new manufacturing giants and an increase in CleanTech capital will mean for the local startup community. But those in the CleanTech space believe the Southeast has positioned itself well for the future.
“I think the race is early and I don’t think there are any clear winners,” added Solar Inventions’ Nussey. “There’s an assumption that Silicon Valley always has the advantage and I just don’t see it….the Southeast and Atlanta have an opportunity to take global leadership on this.”