Cleantech companies consider the IPO (San Francisco)

Many cleantech companies are at a crossroads.

Venture capitalists have less money and less appetite to fund the type of capital-intensive companies common in renewable energy production. And there’s not enough evidence to know how the public markets will treat cleantech companies since only a handful of venture-backed cleantech companies have gone public.

Still, many cleantech companies may be out of options and will have to go public in 2011 if they want to stay in business, said Jeff Grabow, head of Ernst & Young’s cleantech unit.

"There is a pipeline of companies that have entered into the liquidity games and they need outcomes," Grabow said. "There are three buckets: IPO, M&A or not making it. And the question is, what bucket will they end up in?"

In the Bay Area, Palo Alto-based electric carmaker Tesla Motors, Redwood City biofuels catalyst company Codexis and Emeryville biofuels maker Amyris Biotechnologies are the only cleantech companies that have gone public in the last 12 months, offering an inconclusive glimpse into how the public markets are treating this sector. In general, the performance of cleantech companies has been lackluster after public offerings.

Solar thermal power developer BrightSource Energy, based in Oakland, hired an investment banker as a precursor to filing an offering next year and Silver Spring Networks has been rumored to be contemplating an offering. SolarCity also has indicated it "could" go public as early as next year, but its CEO said the company hasn’t decided that’s the path it will choose.

Grabow said a lot of these companies are funded by venture investors who raised funds in 2002 and 2003.