The sell order on Aussie clean tech stocks

Negative 16 per cent. Down 39 per cent. Off 32 per cent. Minus 8 per cent. Fell 30 per cent.

These are the last five years of returns for the ACT Australian CleanTech Index. Awful would be an understatement.

The index has underperformed the benchmark ASX200 by over 50 per cent since the middle of 2009. What's more it's underperformed the Small Ords index by a similar margin.

The market capitalisation of the 69 stocks in the index is now at $6.5 billion. In July 2007 it hit a record high of $16.3 billion.

For all this pain, the top 20 stocks within the index have hardly changed since 2009, which shows that few new companies are making a significant impact even though many of the biggest players have weaker valuations than a few years ago.

Looking at the figures on a sector-by-sector basis and it's clear geothermal has run into the biggest roadblocks since the middle of 2007. In the five financial years since, the best return from the geothermal component of the index has been -18.6 per cent in FY2011, and FY2013 is looking no better, with the index already off 17.1 per cent in the first half.

Geodynamics aside, geothermal in Australia is on life support.

Panax, Petratherm, Eden Energy, Hot Rocks, Green Rock Energy, KUTh Energy and Torrens Energy were all spruiked as geothermal stocks to watch back in 2007/08. Right now they all trade at, or desperately close to, all-time lows. They all are worth less than $10 million, most of them less than $5 million. Many of these firms have already shifted focus to other activities.

Geodynamics on the other hand is still worth around $50 million and at least making progress, even in spite of its partner's (Origin Energy) call to opt out of financing for now. That said, any setbacks and its ability to move forward may be deeply compromised as support from government and its key partner will be less forthcoming.

Geodynamics clings to a spot at the end of the top 20 list, after sitting pretty at number six a mere four years ago. This time last year it had fallen out of the top 20, but despite falling around 27 per cent since then, it has managed to re-enter the list. If nothing else it epitomises the weakness of the index.

As I mentioned in an article about the global clean tech index (Renixx), the data shouldn't be confused with investment. There has indeed been substantial clean energy investment during the same period, but the companies making that investment are largely outside of the index. For example, Pacific Hydro, Meridian Energy, AGL, Siemens, GE, Origin and First Solar, not to mention installers like True Value Solar.

Dark days

There is hope that the index's weakness stems from the smartest clean energy players being outside the index.

There is also hope the struggles may simply be the result of growing pains associated with developing new technology. It's not as if this share price weakness in clean tech groups is restricted to Australia and perhaps the early signs of market positivity this year suggest we have reached the point in the market where the only way is up.

It is, after all, said that the darkest hour comes before the dawn. The problem for investors in ASX-listed clean energy companies is it's so dark now it's hard to tell if it can get darker.

Current top 20

1. Sims Metal Management
2. Transpacific Industries
3. Energy Developments
4. Silex Systems
5. Tox Free Solutions
6. Galaxy Resources
7. Infigen Energy
8. Orocobre
9. Pacific Energy
10. Nanosonics
11. Pro-Pac Packaging
12. Ceramic Fuel Cells
13. Coffey Environments
14. Gale Pacific
15. Novarise Renewable Resources
16. Bluglass
17. Wasabi Energy
18. Carnegie Wave Energy
19. CO2 Group
20. Geodynamics

FY 2009 top 20

1. Sims Metal Management
2. Infigen Energy
3. Crane Group
4. Transpacific Industries
5. Energy Developments
6. Geodynamics
7. Transfield Services Infrastructure Fund
8. Quantum Energy
9. Coffey Environments
10. Ceramic Fuel Cells
11. Tox Free Solutions
12. Carnegie Corporation
13. Dyesol
14. GRD Ltd
15. CMA Corp
16. Pacific Energy
17. CO2 Group
18. Viridis Clean Energy Group
19. AnaeCo
20. Orbital Corp