Last night some of us here at Ze-gen attended BABCNE’s event titled “Public Capital for Cleantech in the U.S. and the U.K.: Untangling Public Capital and the Stimulus.” The panel, moderated by Forest Small, Director at Navigant Consulting, consisted of Nick d’Arbeloff, President of the New England Clean Energy Council, Rob Dietel, Vice Consul at UK Trade and Investment, and Vivek Mohta, Director of Energy Markets at the Massachusetts Department of Energy Resources, along with Ze-gen’s VP of Corporate Development, Gideon Gradman. The panelists offered their view of public funding for cleantech industries, where it is now, where they think is going, and where it should be going in the U.S. and the UK.  Additionally, panelists touched on differences and similarities between how the U.S. and the U.K. structures and allocates their funding.  The Panel discussion covered many aspects of energy and government funding policy and a number of interesting points were raised and discussed.  One of the most relevant to Ze-gen was the issue of how Federal funding tends to target specific energy technologies, such as Smart Grid and biofuels and favors awards to larger companies the present fewer risks to the government, leaving leave a number of companies, especially the smaller ones, facing an uphill battle in garnering government support.

What about the technologies that are facing the so-called “valley of death” (the phase after R&D but before full-scale commercialization) that do not fall into the preferred funding “buckets” of such as solar, wind, biofuels, and fuel cells?  Are there viable solutions to helping to support these companies in their quest to reach the critical commercialization stage?  Mr. d’Arbeloff emphasized the critical need for market signals, and the proposed Federal energy bill currently making its way through Congress as an example of how new policy mechanisms can help to send positive messages to the market.  Mr. Gradman talked about how small companies might consider strategic partnering with larger corporations to collectively compete for government funding and to successfully commercialize.  Partnerships not only allow for shared resources aimed at writing grants and doing critical market research, but also offer the smaller company the opportunity to tap into the established lobbying network of larger partners in Washington to press the case for government support.

As companies consider new ways to raise capital in a difficult funding environment, it was clear from the discussion that government still has a role to play.  The importance of government policy and grant programs that provide market rules that lead to clear pricing signals favoring clean energy will be most critical and will spur innovation across the board.  At the same time, emerging clean energy companies would be wise to focus their public funding efforts on grants targeting their sub-sector and seek out partners with whom to collaborate to attract much-sought-after dollars from Washington.