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Stimulus Particulars: 7x 2008 Cleantech Venture Capital Investment

To say that the stimulus package currently under review contains significant support for renewable energy, green and cleantech would be a gross understatement. Depending on whose data you use, it is roughly five-to-seven times the total of all VC investment in cleantech in 2008. Or, a little more than twice the total revenue of the solar industry. Wow.

So where is the money going and what is being proposed? Huge chunks of it will go toward improving the energy grid and increasing its dependance on renewable resources. Other chunks will go toward making government buildings and facilities at all levels more energy efficient (including renewable power), but it doesn’t stop there. Schools and low-income housing see some benefits as well.

Biofuels will get $800 million. Batteries will get a big chunk. Bottom line: Even if this bill is halved before being signed by President, it will create the largest government investment in renewable energy, likely exceeding all past investments combined.

Government subsidies have been critical to the growth of solar and wind in Europe. The US has lagged behind. This is a major step forward in making the US the world’s top producer of renewable energy.

Companies need to take advantage of this opportunity because it will not exist again in our lifetime. It is analagous to being a contractor or steel producer during the New Deal Era. Opportunities exist for both commercially mature and pre-commercial technologies.

Many companies avoid engaging in Government Relations because they don’t understand it or they rely on industry associations to execute it on their behalf. If you have a technology that you believe can solve the energy, environmental and geopolitical challenges facing the country, now or in the future, then you should learn about how it works. You will learn a lot about policy making, appropriations, government project management and how to sell to government entities. It also will add to your executive’s expert credibility when your public relations team is executing a thought-leadership campaign.

Uncle Sam’s House is about to become much more energy efficient and whether you directly engage with him or not, there are many companies that will play a role in helping.

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Jason Morris

Jason Morris

Executive Vice President at MSLGROUP

Comments (1)

  • Martin Gruber

    I realize I am late to the party with this, but I think a good chunk of the stimulus should be invested directly in venture capital firms and earmarked for greeen projects. Increased government spending is a pure fiscal loss for the taxpayer, whereas investment will generate profit. Yes, the increased spending creates benefits to the taxpayer in the form of externalities, but direct investment does that and returns direct revenue (in the long term) too. Also, the needs of government do not match perfectly with those of the rest of society. For example, upgrading the electrical grid is something we will not do again for decades, so not all of the relevant technology will remain relevant. I’m not saying not to do it, but $10 billion directly invested in venture firms under the same terms as other investors would do more. I am interested in pushing for this to be put in, and would to get some venture voices behind me on this.

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