[email protected] / 203 376 7958 / 1 Investment Drivers in Energy and Clean Tech.

[email protected] / 203 376 7958 / www.enhancedcapital.com 1

Investment Drivers in Energy and Clean Tech


NEESC• NEESC provides support for fuel cell and

hydrogen companies for technical, marketing and financial growth

• Liddy Karter focuses on strategic planning and financing

• Provide information on financing sources• Review business plans• Make introductions


Clean Tech and Energy Investing


Clean Tech and Crude Oil


CleanTech Energy 15x Under Invested

• Relative to underlying industry size, the venture capital industry has underinvested in energy/cleantech (by approximately 15x)

Five Year VC Funding $B

Industry Size $B

Funding as a Percentage of Industry Size

Energy 10.5 1545 0.68%

Telecom/IT 57.8 551 10.49%Ratio: Energy as a Percent of IT

18.2% 280.4% 6.5%


Small $ compared with VC $


Minor Correlation with VC $


Low, Irregular Returns for Clean Tech


Innovation and Implementation• Energy Innovation has limited upside• Capital requirements are high• Implementation $ are volatile• Venture Model fails for clean tech


Enough Regulatory Incentives?• ARPA-E and SBIR• Investment Tax Credit • ITCs for Renewable Energy Investment• Advanced Energy Manufacturing Credit • Accelerated Depreciation• Feed in tariffs, RECs, renewable portfolio stds, biofuel

incentives• Regional and state tax incentives• Federal or state loan guarantee programs – DOE, USDA, SBA • Over $100 BILLION Incentives available in 2012.


Wind More Stable than Incentives“The ideal state will have high average KWh electricity costs, high annual wind speeds and attractive state incentives. Annual average windspeeds and average electricity costs are relatively constant. However, state incentives are constantly changing. As a result, XXXXXXX’s team is committed to regularly tracking the available state incentives and will adjust its marketing strategy accordingly.” Funding memo for wind developer


Incentives are GravyHow FundX Selects Projects

Partnership Deal Flow Baseload Projects Local Fuel/Local Load Contractual Balance Competitive IRR BEFORE Incentives Evident Exit Options Technological Advantage

» Fund description in investor memorandum


Who Gets the Funding? Ability to do $10MM+ projects Use proven technology Project developers who derisk

» Supply contracts in place» Put up 40% equity» Get Power purchase agreements


Summary• Market drivers trump incentives• Public sector as best customer• Combine regional incentives and demand• Standardize and Simplify


Thank you

Liddy Karter Managing Director, Enhanced Capital

Executive Director, Crossroads Venture Group 203 376 7958


Resource Links• www.pwcmoneytree.com• www.nvca.org• www.cvg.org• www.enhancedcapital.com

http://www.pwcmoneytree.com/

http://www.nvca.org/

http://www.cvg.org/

http://www.enhancedcapital.com/

[email protected] / 203 376 7958 / 1 Investment Drivers in Energy and Clean Tech.

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