Water Sector Startups Innovate Efficient Use And Supply

“Whiskey is for drinking; water is for fighting over.” Often attributed to Mark Twain, whoever said that seemed to have quite a bit of foresight, something the mainstream cleantech community is only recently warming up to.

The fights over water use facing utility scale solar thermal projects in the desert Southwest may have a lot to do with opening the eyes of the clean-tech community, but the sector’s challenges and opportunities are much broader than that, as scores of Californians, Middle Easterners, and Australians will attest.  So why, with the problems so immediate and demand remaining strong in the $58 billion annual market for water technologies, has water investment as a percentage of venture investment declined since 2005?

To be fair, said Michael Hanemann at last Friday’s BERC Energy Symposium at UC Berkeley, the private sector has been scratching its head about how to take advantage of business opportunities in water for years, but the opportunities are just not that easy to monetize.  He noted that nearly 90 percent of Americans receive their drinking water from public water systems.

While about half of drinking water utilities in the U.S. are privately owned, these companies provide water to just one tenth of Americans served by public water systems, and only 3 percent of Americans get wastewater services from private utilities (National Association of Water Companies).  There are some giants in the water industry – GE, Siemens and Halliburton are heavily involved, but many may have never even heard of the world’s largest water company, France-based Veolia Environnement.

But despite the lack of hype about the water industry over the last decade, there seems to be an awakening as of late as academics, nonprofits, investors, and entrepreneurs align to take a shot at breaking through the barriers to innovation in the water sector.

For those interested in catching up on the space, the Cleantech Group featured quite an interesting corps of water leaders at its February San Francisco Cleantech Forum, and UC Berkeley’s BERC Energy Symposium had an excellent panel of water experts including Steve Weismann of the California Center for Environmental Law and Policy, Matthew Heberger of the Pacific Institute, Laurie Park of Navigant Consulting, and Noah Goldstein of Lawrence Berkeley National Laboratory, in addition to world-renown professor Hanemann.

Numerous prizes have also recently been announced for water sector startups in an effort to jumpstart investor interest in the sector, and it will be interesting to track the winners’ progress.  The Cleantech Group and The Guardian’s Global Cleantech 100 included 12 water and wastewater companies, and the nonprofit Artemis Project’s annual competition highlights its top 50 water technologies.  Imagine H2O announced French-American vineyard water efficiency startup Fruition Sciences as the winner of its Water Innovators Prize just this past week.

The Water Innovators Prize was particularly focused on water efficiency, an area that has led to a massive decline in industrial water use over the past fifteen years but has had little impact on residential water use.  Let’s all hope that some of these incubators are able to nudge water technologies into the marketplace to make more of a dent in this space and others.  If they succeed, it will be an exciting year for an often-overlooked industry.

Water event tonight:

Imagine H2O is hosting a showcase on water innovations tonight. Learn about exciting new businesses that have risen to the surface. Meet the winning teams and other finalists from Imagine H2O’s recent Water Innovation Prize, the elite water experts who selected them, and Imagine H2O’s ecosystem of water leaders, including John Bohn, Chairman of the California Public Utilities Commission. Learn more…

photo: laszlo-photo