Part 2” in our highlights from the 2015 Cleantech Open (CTO) Western Regional Showcase features another cleantech industry icon: Nancy Floyd, founder and managing director of Nth Power. Nth Power, a pioneering energy venture capitalfirm, has $420M under management and has invested in 58 companies, including market leaders in renewable energy, energy efficiency, smart grid, clean transportation and green buildings.

In her remarks at CTO, Nancy thoughtfully discussed what she believes to be the three distinct chapters in cleantech investment. As with any good novel, the discussion was full of drama, suspense, and a good dose of humor.

Chapter 1 — “The Era of Deregulation”

In this earliest stage of actual cleantech investment, the focus was on smart grid applications, where the utility was the primary customer. We hadn’t hit mainstream yet, and there was a strong bias against risk. Scaling took longer and was more complicated than expected.

Chapter 2 — “Big Energy Supply”

Floyd considers the second chapter the “Post-Enron” era after the collapse of the infamous Texas-based energy services company. It was “a perfect storm for cleantech investment.” Investors recognized the connection to semiconductors, a sector they were already comfortable with. Nearly 700 cleantech companies were funded to a tune of $25 billion (seven times the investment levels of Chapter 1)! As a result of this robust activity, government investment also picked up substantially, with resources such as the Department of Energy loan guarantee program.

Chapter 3 — “Decentralized Energy Future”

Beginning in 2012, this current phase of cleantech investment is characterized by the rapid rise of rooftop solar, which is considered by Floyd to be a “customer-led revolution.” At the same time, we have experienced a severe contraction of VC investment in cleantech. All of the generalist VC funds have disbanded their cleantech teams, and “Who can blame them?” stated Floyd.

So who’s funding now? Some of the best bets include large corporate investors and family-owned enterprises. Corporations recognize these investments as opportunities for early access to new technology. Today, we see particular investment focus on smart transportation and microgrids.

Floyd closed her remarks with an homage to David Letterman, delivering her Top 5 influential factors that support her “bullish” view on cleantech investment:

5. Volkswagen: The scale of public outrage over the company’s recent emissions scandal sent a clear signal about the demand for cleaner technologies and expanded carbon footprint awareness. Climate change is now a business risk, and there are burgeoning shareholders resolutions to back that up.

4. E.P.A. Clean Power Plan: States now have the flexibility to meet standards as they see fit. And while 10 states are suing the EPA, the vast majority are running full steam ahead.

3. New Sources of Capital: Corporate investors discussed above along with angel networks and accelerators are picking up the funding slack.

2. Beautiful Products: Companies like Tesla and NEST are changing perceptions about the industry. (You can be sustainable and sleek at the same time!)

1. Pope Francis: His recent messaging on climate change is already impacting public opinion. A Pew Center Survey showed that 46 percent of the population views climate change seriously compared to 33 percent in 2013.

Nancy Floyd, founder and managing director of Nth Power.