The Promise of Clean Energy Student Entrepreneurs

Cleantech investing has taken quite a hit in recent years. Last year, CBS News highlighted the “cleantech crash” on U.S. primetime television, and Bloomberg New Energy Finance, a Bloomberg-owned energy data firm, has tracked the multi-year decline in cleantech investing. However, there are additional trends that tell another side of the cleantech story and suggest innovation and hope for a low-cost, low-carbon future are far from gone.

Consider Unified Solar, for example — one of many start-ups emerging from student business plan competitions focused on clean energy. Unified Solar took off after winning the $225,000 grand prize in the 2014 MIT Clean Energy Prize (MIT CEP) competition. “We truly believe in our product’s ability to accelerate the adoption of a clean and renewable energy,” says Arthur Chang, an MIT PhD candidate and inventor of Unified Solar’s technology. “Our vision is to get our small chips in all solar panels to increase energy capture, improve module reliability, and ultimately unlock a greater solar energy market size.”

Solar cells, the building blocks of solar photovoltaic (PV) panels, are traditionally connected in series to form a panel; these panels are then connected in series to create a string, which are then connected to create a solar PV power plant. This simple configuration results in the “weakest-link” problem, where an underperforming cell can limit the output of an entire power string or, worse, create local “hot spots” due to overheating, actually consuming energy in the process. Underperformance is pervasive in the solar PV industry and can be caused by a variety of factors such as partial shading, surface soiling, and material aging.

Unified Solar is developing an integrated circuit solution to address these problems, recover lost energy, and improve PV power plant reliability. Its unprecedented solution optimizes power at the cell-level by transforming series connections into pseudo-parallel ones, forming an effective “super-cell” to eliminate nearly all of the adverse effects caused by the weakest-link problem. “We are moving fast to get the chip design behind our patented technology finalized and are eager to launch into performance testing with national and third-party laboratories,” says Chang.

With the ingenuity and passion of student-entrepreneurs such as those at Unified Solar, it is unsurprising that the start-ups emerging from the MIT CEP and other business plan competitions have bucked international trends and found success in a field known for being unforgiving for entrepreneurs. In such a challenging environment, these competitions can play a key role in helping start-ups become successful businesses by providing mentorship from other successful entrepreneurs and industry experts, expanding their networks and opening opportunities for partnerships, and lending credibility and national exposure that can be crucial to securing additional funding or finding the right strategic relationships.

The MIT CEP organizing team has seen anecdotal evidence to suggest recent trends such as declining oil prices and lower investment into the space are nothing more than headwinds blowing against a much stronger force. For one, declining investment dollars are at least partially explained by declining costs to implement certain technologies and entirely new, cost-effective solutions such as those Unified Solar is developing.

Venture dollars raised by other MIT CEP participants are evidence of a surviving and active fundraising environment, with past competitors CoolChip Technologies, Radiator Labs, and Altaeros raising close to $10 million last year alone, including from investors such as Verizon and Softbank, names you would not typically associate with energy but who are starting to see the importance of a renewable future for their overall company strategies. This matches a broader trend: in the past year, global investments in clean energy have increased 16 percent. Indeed, since MIT CEP alumni have gone on to raise over $220 million in capital since 2008.

Further evidence of the appetite of investors for innovative energy startups comes from the over $400,000 in sponsor dollars from organizations like Eversource Energy, GE Ventures, GDF Suez, and Morrison and Foerster. In addition, new types of investors are entering the space; organizations like Factor(E) are funding energy entrepreneurs in the developing world, and the PRIME Coalition is working to enable philanthropists and family foundations to combat climate change through clean energy investing.

However, given the intricacies of the energy industry, capital alone is not enough. Strong entrepreneurial ecosystems must be built to support budding ideas. Indeed, Arthur Chang of Unified Solar noted that “the Clean Energy Prize competition and organizing committee have really helped us gain access to a network of outstanding mentors, premier accelerators, and potential investors.”

The MIT CEP hopes to act as a model for universities and policy makers looking to take ideas out of university labs and entrepreneurs’ minds and put them into the marketplace. Though it pioneered the student energy business competition, it is not alone in its mission of spurring student energy entrepreneurship; in the years following the MIT CEP’s inception, other energy business plan competitions have emerged around the U.S. and Europe, showing great promise as catalysts for the innovation needed to create a low-carbon economy. In addition to these other business plan competitions, on and off campus energy organizations such as the MIT Energy Club, Boston-area Greentown Labs, the Massachusetts Clean Energy Center, and Cleantech Open are working to create excitement and opportunities for student entrepreneurs.

As nations continue to develop policies to combat climate change, it is important that the entrepreneurial ecosystem, starting with student entrepreneurs, is not forgotten. Indeed, student entrepreneurs might be our best hope yet.

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