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Green hydrogen, recycling, and next-gen batteries: Checking in on ‘Cleantech 2.0’

Green hydrogen, recycling, and next-gen batteries: Checking in on ‘Cleantech 2.0’

Alok Sindher, the infrastructure and special situations partner at the venture capital firm Fifth Wall, joined Episode 42 of the Factor This! podcast to break down what’s on the way in 'Cleantech 2.0,' and who’s positioned to cash in. Subscribe wherever you get your podcasts.

A new era of cleantech innovation is here. And it’s a good time to take stock of what’s in the pipeline.

Green hydrogen, circular economies, and next-gen batteries are at the heart of  “Cleantech 2.0.” These innovations could take the clean economy to new heights when paired with fresh federal incentives for fighting climate change.

Alok Sindher, the infrastructure and special situations partner at the venture capital firm Fifth Wall, joined Episode 42 of the Factor This! podcast to break down what’s on the way and who’s positioned to cash in. Fifth Wall is one of the largest VCs driving cleantech innovation with $3.2 billion under management.

Next-generation clean energy infrastructure

Sindher has spent his career focused on energy infrastructure.

From consulting oil and gas giants like Shell and Pennzoil, to guiding M&A within the power and utility sector for JPMorgan, where he helped complete the largest utility transaction in U.S. history with Duke Energy's $65 billion acquisition of Progress Energy. He was the partner of renewable energy and infrastructure at the D.E. Shaw Group, now one of the largest global investors in renewable energy infrastructure.

Each of Sindher's career stops influenced his work today as a partner at Fifth Wall, a venture capital firm that has raised $2.9 billion for cleantech startups.

Sindher, a partner at the firm, is eyeing what he calls the next generation of clean energy infrastructure. The projects in the Cleantech 2.0 pipeline stand to build off the emergence of now-mature technologies like solar and (some) energy storage technologies.

Green hydrogen, circular economics, and next-gen battery chemistries have Sindher's attention now. But getting these technologies to commercialization requires a new approach to financing.

"Traditional versions of (VC funds) were designed for a software ecosystem. Where the climate space differs is that most of these companies are going to be in the physical world," Sindher said on the Factor This! podcast. "These technologies will require factories, they'll turn into power plants."

Today, access to capital is a breeze for mature technologies like solar and wind. But the financial sector is inherently risk-averse, creating a gap in available funding for hardware cleantech companies.

Fifth Wall launched a climate infrastructure platform, led by Sindher, to provide capital to cleantech companies that have moved beyond lab and pilot scale, and are now pursuing small-scale commercial projects and first-of-their-kind factories.

That effort has led to investments in electrolyzer startup Electric Hydrogen, electric vehicle charging network Loop, and SOLARCYCLE, a solar module recycler.

"You need a different kind of capital stack to more efficiently capitalize these companies and hopefully avoid some of these mistakes made in 'Cleantech 1.0,'" Sindher said.

Signing SOLARCYCLE

SOLARCYCLE's recycling facility in Odessa, Texas (Courtesy: SOLARCYCLE)

When Sindher visited SOLARCYLE's first commercial-scale facility in Odessa, Texas, he was skeptical of the company claiming to be able to recycle 95% of a solar module's critical materials.

Back in 2018, Sindher was working for D.E. Shaw, and one of the company's solar farms had suffered critical damage during a hail storm. Hundreds of thousands panels were damaged.

"One of the biggest problems was, what are we going to do with all the damaged panels?"

D.E. Shaw wanted to deal with the situation in an environmentally conscious way. But the options left much to be desired.

"My reaction was, this isn't recycling," Sindher said. "They called it recycling, but it wasn't. It was mostly crushing into a landfill."

But Sindher's visit to the SOLARCYCLE plant quickly relieved his skepticism.

The company had a single recycling line that was doing exactly what the company set out to do. Their process went beyond crushing glass or extracting aluminum. It was also pulling out critical materials like silver and copper.

"I saw it with my own eyes," Sindher said. "I saw a facility that was recycling panels in a much more efficient way. True recycling."

With a green light from Sindher, Fifth Wall went on to lead SOLARCYCLE's $30 million Series A round, recognizing an opportunity to immediately expand operations at the Odessa facility.

And while the market for SOLARCYCLE's services remains small since the vast majority of solar projects were installed in the past five years, Sindher said he believes there's additional opportunity around repowering.

Solar modules are getting more efficient, and incentives from the Inflation Reduction Act could lead developers and asset owners to upgrade their panels.

"I can see in the next few years project developers thinking, 'Hey, look, I can put a much more efficient panel from a few years ago.'" And the beauty, Sindher said, is that that site has existing interconnection.