FountainBlue’s Clean Energy Entrepreneurs’ Forum

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FountainBlue’s November 2 Clean Energy Entrepreneurs’ Forum was on the topic of Financing Clean Energy Solutions and featured:

• Facilitator Ryan Murr, Partner, Goodwin Procter LLP
• Panelist Jessie Denver, San Jose Solar Program Coordinator, Environmental Services Department, City of San Jose
• Panelist Paul Detering, CEO, Tioga Energy
• Panelist Jeremy Panacheril, US Head Clean Tech and Renewable Energy, Strategic and Commercial Intelligence, KPMG
• Presenting Entrepreneur Lee Edward Colin, VP Business Development, Green Vehicles Inc.
• Presenting Entrepreneur Taber Smith, CEO, Focal Point Energy

Below are notes from our conversation.
An inordinate amount of energy and attention has been focused on clean energy investments and trends and potential. With the peaks and troughs of clean energy investment trends of VCs, policy-makers and others, it has been difficult to navigate the financing path and options, and difficult to develop and maintain the range of relationships – from investor to policy-maker to foundations – necessary to fund the development and deployment of clean energy solutions. Add to this mix the change in administration, both in terms of leaders and direction, and you have an unpredictable funding climate indeed.

This month’s panel provided the following advice on how to finance early-stage clean energy solutions:
• In today’s funding climate, be creative and resourceful and collaborative in getting as far as possible on minimal funds. Building a working prototype and proof of concept with a great team will position you and your company for financing.
• Collaborate with partners who can help you remove barriers to R&D and manufacturing, whether the barriers are with permitting, with the utilities, with development, with production, etc.
• Visionary local, state, national and international leaders want to work with entrepreneurs to remove barriers and build the industry. These policy-makers will impact whether a clean energy company gets financing, so understand who they are, what their motivations and objectives are, and build relationships with them at the local, state and federal level.
• Get creative about financing options working in collaboration with investors, policy-makers, intrapreneurs, grant-makers, and other potential funders.
• When working with policy-makers to secure financing, consider some of their ‘hot buttons’: job creation, advancing the industry overall, solutions providing public benefit, etc.

There was a separate question about how customers of clean energy solutions can fund these purchases, and the following advice was given on that front:

• If you’ve created enough of a robust solution where customers want it, and need help paying for it, it’s a good problem to have! But remember that you must partner with your customers so that they can pay for the solution in order to build traction for your company.
• The biggest barrier to adoption of clean energy solutions is the cost, and entrepreneurs must work with their customers so that they can assume that cost, particularly if it’s not a need-to-have solution, and if it costs more than the existing solution in the short term.
• Consider federal and local grant programs which would help homeowners fund clean energy solutions, particularly when grants and loans and subsidies are involved. However, don’t build your business plan relying on these types of programs, as your product or service must be sustainable on its own merits for the long term.
• Partners who can help with performance guarantees can incentivize customers to make a purchasing decision.
• Long-term loans, perhaps tied to property taxes which may transfer to new owners, may motivate customers to take the plunge and invest in your company’s product or service.

The panel added the following advice to entrepreneurs:
• The clean energy industry is garnering international attention, and stakeholders from around the world are motivated to drive the industry forward. The market potential is huge as the stakes are high, the demand keeps growing, and collaboration between stakeholders becomes key.
• Although you must factor in incentives and how they will impact your short-term revenue goals, be as market-driven as possible and create a sustainable business to your customers, and be as flexible and nimble as possible in responding to the changing needs of customers and markets.
• Drive to grid parity, where your clean energy product or service costs about the same as more traditional energy options including coal and oil and electricity, but until you get there, leverage subsidies, partnerships and incentives to help customers make a purchase decision in your direction.
• When working with policy-makers either financing your own company or helping customers to finance your solution, remember that each local, state and federal entity is different, with different policies, requirements, and standards for different reasons.
• Take a systemic view of the industry, rather than focusing on any single element. For example, look not at where we are limited in a natural resource such as lithium, but instead focus on how the lithium supply chain can be streamlined so that we can cost-efficiently deliver attractive grid-parity battery options for everything from automobiles to electronics.
• The clean energy industry is a feel-good industry – people want to make a difference and select clean green products and services. Leverage this inherent advantage as part of your strategy for securing funding for your company and financing options for your customers.
o Note that because it’s a feel-good industry, sometimes emotions can overly taint the perspective of entrepreneurs, policy-makers and investors alike, and bad business decisions may result.

The panel concluded by remarking on the overall size of the industry – and the huge market potential in so many clean energy sub-industries. With such a huge market, and so many stakeholders working at collaborating to advance the industry, there will be a lot of winners in each sub-category. It is the resourceful, collaborative, persistent entrepreneurs who will reap the benefits for this booming industry, and their customers who will also benefit from the product and service offerings.

Resources:
• For more information about incentives and policies for renewables and efficiency within the state of California, visit http://www.dsireusa.org/incentives/index.cfm?re=1&ee=1&spv=0&st=0&srp=1&state=CA.
• For more information about the Property Assessed Clean Energy PACE Bonds: Innovative Funding to Accelerate the Retrofitting of America’s Buildings for Energy Independence, visit http://www.pacenow.org.
• For more information about the City of San Jose’s green vision goals, visit http://www.sanjoseca.gov/mayor/goals/environment/GreenVision/GreenVision.asp.
• For more information about Focal Point Energy, visit http://focalpointenergy.com.
• For more information about Goodwin Procter’s clean energy publications and reports, visit http://www.goodwinprocter.com/Practices/Tech-Companies-and-Life-Sciences/Clean-Tech.aspx?tab=publications&pa={BD7EEF90-E784-440C-BD51-EF900B57AC6D}.
• For more information about Green Vehicles, visit http://www.greenvehicles.com.
• For more information about KPMG’s Living Green Annual Report, visit http://www.kpmgcampus.com/gonotes/2008livinggreen_annual_report.pdf.
• For more information about Tioga Energy, visit http://www.tiogaenergy.com.

Stimulating Conversation, Building Community, Nurturing Industry
At FountainBlue, we support transformative leadership, one conversation, one leader, one organization at a time. We hope that these particular notes stimulate conversation on a topic of common interest, build a community of connected stakeholders, and in general, advance business opportunities in this area.

Our notes are copyrighted by FountainBlue for 2006-2010. We welcome you to forward our notes to interested groups, provided that you copy us on your distribution, and that you provide acknowledgment to FountainBlue and our sponsors and speakers.

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One Response to “FountainBlue’s Clean Energy Entrepreneurs’ Forum”

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