Cleantech Groundswell Exploring Financing Models to Accelerate and Scale Innovation
Cleantech Group Webinar
September 23, 2010
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Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
Sponsored by
• Welcome
• Brief introduction to Cleantech Group
• Introduction to our panel
• Trends in cleantech innovation financing
• Closing the gap on clean technology – Andrew Shapiro,
GreenOrder
• Case study: GE‟s Ecomagination Challenge – Tore Land, GE
• Successful escape from the Valley of Death – Phil Schneider,
Deloitte
• Panel discussion
• Q&A
• Cleantech Forum New York
• Autodesk Clean Tech Partner Program – Paul Cousens, Autodesk
• Wrap up
Agenda
Sheeraz Haji
President
Cleantech Group
Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
Sponsored by
Submit Your Questions
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Submit your questions at any time during the presentation through the chat
window to staff and we‟ll answer as many as we can at the end.
Cleantech Group: Experts on Global Cleantech Innovation
We deliver industry leading market research, provide critical insight
advisory services and convene thought leaders at global events.
EVENTS
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since 2002 in San Francisco,
Boston, New York, Toronto,
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Shanghai, Beijing, Delhi, Mumbai
RESEARCH
Industry’s most extensive and
widely cited data on cleantech
venture investments and news
locks us onto the pulse of
innovation
ADVISORY
Skilled team of advisors helps
global enterprises decipher the
cleantech landscape and
capitalize on business
opportunities
Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
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Meet the Panel
Andrew Shapiro
Founder and President
Tore Land
Director of
Ecomagination EMEA
Phil Schneider
Principal
Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
Sponsored by
Andrew Shapiro Founder and President
GreenOrder, an LRN
Company
Featured Speaker
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Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
Sponsored by
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Public sector
• Federal grants (e.g., ARPA-E)
• Federal loan guarantees
• Tax incentives (PTC, ITC, Treasury
grant in-lieu)
• New investors, actors, products
• Innovative partnerships
• Competitions
Private sector
Financing challenges
• 1H2010 global investment (~$4bn*) has been strong but uncertainty remains
due to weakened debt and IPO markets and unpredictable government policies
• Government policies and programs affect venture capital activity, investor
confidence, and project economics
Cleantech financing faces challenges; public and private sectors need respond with innovation
Responses
• Lacking a carbon price, leveraging public incentives and developing new private
sector initiatives is essential to driving scalable change
* Source: Cleantech Group
Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
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• The US Partnership for Renewable Energy Finance (US PREF) is an educational program that
provides market-based analysis for renewable energy finance and investment policies.
• The goal is not to determine which government policy is adopted; only that the policy adopted is as
efficient and effective as possible.
• US PREF explains how policies affect the market.
US PREF Members
US PREF is engaging the government on implications of policies and programs
Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
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What‟s the role of corporate strategic partners?
Technology
Management
Investment
Market Access
Challenges for
cleantech companies
• Access to capital
• Scalability
• Credibility
• Incumbency
Ingredients for
success
Wide-scale
adoption and
greater
sustainability
Corporations have a unique role to play in helping cleantech companies
cross the “valley of death”
Proven results
Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
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There are a number of recent examples of this approach:
Strategic investment
“Alstom announced it is investing up to US $55 million in BrightSource Energy Inc.,
with an equity stake that positions Alstom as one of the main shareholders in the
company.“ – Renewable Energy World , May 21, 2010
Joint-technology development
“Bright Automotive and General Motors Co. announced Tuesday they have agreed
to pursue a strategic relationship and that GM has provided funding to the Indiana
automaker” – GM News, August 3, 2010
Acquisition
“France-based Areva, best known for its work in nuclear power, said on Monday it
has acquired concentrating solar-power start-up Ausra for an undisclosed price” –
CNET, February 8, 2010
Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
Sponsored by
Tore Land Director of Ecomagination
EMEA
GE
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Featured Speaker
Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
Sponsored by
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What it is:
• GE is partnering with leading VC firms, Emerald Technology Ventures, Foundation
Capital, Kleiner Perkins Caufield & Byer, and RockPort Capital, to launch the “GE
Ecomagination Challenge: Powering the Grid”
• This is a $200 million financial commitment to accelerate innovation by working with
businesses, entrepreneurs, innovators and others to build the next-generation power
grid
How it works:
• Entries can be submitted at ecomagination.com for until Sept. 30th.
• Entries will be reviewed for potential commercial relationships, or for a $100,000
innovation challenge award.
• Our independent panel will evaluate the candidates, and the general public will be
able to review, evaluate and comment on the entries.
• We will announce the results and awards in a timely fashion.
GE Ecomagination Challenge: Powering the Grid
Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
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GE and GE‟s VC partners plan to engage with businesses,
entrepreneurs, and innovators in a few different ways
• Selected challenge entrants will be offered the opportunity to develop a commercial
relationship with GE and its VC partners.
• GE will provide the elements of the commercial relationship (listed below) based on the
idea and type or relationship identified by the entrant, which could also comprise an
equity investment, while the VCs will focus exclusively on strategic investments.
– Investment: the $200 million capital pledge of GE and its partners will be invested
globally into promising start-ups and ideas
– Validation: evaluation of entrant‟s business strategy through in-depth discussions
with GE„s and its partners‟ technical and commercial teams
– Distribution: exploration of partnership opportunities with GE to scale a business
and create global reach
– Development: leveraging of GE„s technical infrastructure and GE Global Research
Centers to accelerate technology and product development
– Growth: exploration of opportunities for utilizing existing GE customer relationships
for a go-to-market strategy
Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
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The results of the eco Challenge have been impressive
Stats:
• Over 2,400 ideas
• Almost 50,000 comments
• Over 100,000 votes
• Nearly 50,000 users
• Global presence
Ideas focus on:
• Solar
• Wind
• Distributed power generation
• Data integration
• Solutions for individual power consumption
Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
Sponsored by
Phil Schneider Principal
Deloitte Consulting LLP
Featured Speaker
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Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
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Federal and state incentives for clean tech investment have had a positive impact on plant
investment, though not without challenges and questions around program sustainability
Positive Trends Examples
More finance-focused incentives at both Federal and state levels
- DOE loan programs for production - Some state grant and low interest loan programs for production - State industrial revenue bonds applied to clean tech production projects
Increased number of Federal programs and allocations for broader clean tech growth
- U.S. Treasury renewable electricity grants - New markets tax credit (NMTC) program - Smart grid investment grant program - Industrial energy efficiency grants
Enhanced clean tech industry focus at all government levels
- Advanced Energy Manufacturing Tax Credit (48C) - State Renewable Portfolio Standards (RPS) - State and local incentives targeted specifically on clean technology production
Challenges Examples
Complex and high cost application process for Federal programs
- DOE Loan Application often a lengthy and costly process requiring outside expertise than has run hundreds of thousands of dollars in some cases, with no clear view of success probability
Closed or expiring Federal Programs - Many Federal programs are closed for applications or set to expire without clear view of extension or renewal probability: Manufacturing Tax Credit, DOE Loan Guarantee Program, US Grant programs
Budget crisis at the state level - Heavily strained state budgets and budgetary shortfalls jeopardizing the ability of many states to offer meaningful incentives or even meet current obligations
Declining opportunities for significant loans or cash grants
- Budget crisis turning focus away from direct cash and towards tax credits and other “pay as you go” programs. While still positive, they do not relieve start-up costs and are less valuable to entrepreneurial and start-up companies
Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
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Example
Oregon
- Grants: for qualified
energy generation
- Loans for clean tech
related installations
- Tax Credits: Range of
clean tech tax credits
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• The 2009 ARRA included more than $70 billion in grants, loan guarantees, and tax credits for clean-energy and transportation programs:
• The Clean Energy DOE Loan Guarantee program committed $23 billion to 18 projects as of September 2010
• The DOE Advanced Research Projects Agency-Energy (ARPA-E) program awarded $349 million to 117 projects
• The Clean Energy Treasury Grant Program provided cash grants in lieu of tax credits for renewable energy projects through 2010
• The Manufacturing Tax Credits program for new alternative energy manufacturing operations (180 projects in 40 states) has already reached the
originally $2.3 billion cap – In July 2009, President Obama requested that Congress approve another $5 billion in tax credits (pending)
• An 8-year extension of the Bush-era Investment Tax Credits for solar, and 3-year extension for wind production projects was approved
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T Tax Exemptions, Credits, or Abatements
Performance-based incentives (cash payments for renewable energy generated)
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Source: www.dsireusa.org, September, 2010.
State-level Funding Programs for Renewable Energy Production Projects
Cash grants for renewable energy manufacturers 1
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P
P
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Example
Arizona
- Refundable Tax
Credits: renewable
energy tax credit
- Loan programs for
qualified projects
Example
Indiana
- Refundable Tax
Credits: renewable
energy tax credit
- State Energy
Program low
interest loans
Federal-level Renewable Energy Production Incentives Programs
Map Key
Source: US Department of Energy, September, 2010.
1 State-level grant and loan programs vary widely in size and scope and many are relatively small in scale
Targeted US Federal and state incentives policy have stimulated new plant activity, but many direct
loan and cash grant programs are winding down or facing constraints
Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
Sponsored by
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Recent Case Study: US-based Solar Manufacturer
Incentive Offered Overall Project Funding Impact
DOE Loan Guarantee • $400 million conditional commitment for a loan guarantee
State Low-interest loan • $5 million in low-interest loans
State Tax Credits • $10-12 million in tax credits
County-level Cash Grant • $13 million cash grant to support the purchase of an abandoned manufacturing building
Other State Financial Support • Income tax credit based on job creation, employee training grants, etc.
• The company developed a proprietary process enabling them to achieve cost advantages in thin-film solar panel production. The company had
a small pilot manufacturing plant to produce modules targeted for larger-scale commercial or utility installations.
• In the summer of 2010, the US offered a conditional commitment for a $400 million loan guarantee to increase panel production at both the
original pilot plant and a new plant to be located in a Great Lakes state.
• At full operations, the two plants are expected to invest over $450 million in new plant and equipment, employ nearly 1,500 workers, and
manufacture over 800 MW of solar panels annually.
Federal, State, and Local funding support, particularly the DOE loan guarantee, leverages other
private funding sources (commercial bank loans, private equity)
Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
Sponsored by
Panel Discussion
Andrew Shapiro
Founder and President
Tore Land
Director of
Ecomagination EMEA
Phil Schneider
Principal
Q&A
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Special Discount to Cleantech Forum New York
Don't Miss Cleantech
Forum New York:
October 11-13, 2010
Cleantech Forum New York is the flagship
East Coast event for the cleantech
community. Cleantech Group has been
gathering innovators and influencers for 8
years to define, debate and discuss
trends in clean technology.
For corporations, investors, entrepreneurs
and policy-makers involved in financing
cleantech innovation, this is the must-
attend event of the Fall.
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Register today and save $300 using
code WEBINAR at
http://events.cleantech.com/newyork
Phil Schneider
Principal
Welcome: A Sneak Peak at the
Future of Cleantech
A sneak peak at some of the game
changing financing trends and research
findings from Cleantech Group
Research Analysts along with topics to
be explored and debated during the
next two days.
Sheeraz Haji
President
Introduction: The Valley of Death - New
Approaches to Financing
Cleantech companies are now aligning
business strategies with location strategy to
better access markets and optimize
profits. An introduction into global location
optimization issues critical to lowering capital
costs and scaling cleantech more efficiently.
Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
Sponsored by
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Autodesk Clean Tech Partner Program
Autodesk supports early-stage Clean Tech companies by providing up to
$150,000 our Design, Visualization and Simulation software for only $50
Autodesk Digital Prototyping software helps get products to market faster
Apply now at www.autodesk.com/cleantech
Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
Sponsored by
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Engineering
Simulation
Visualization
Industrial
Design
Manufacturing
Autodesk Digital Prototyping
Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
Sponsored by
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Apply now at www.autodesk.com/cleantech
Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
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http://info.cleantech.com/Groundswell_Materials.html
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Cleantech Groundswell: Exploring Financing Models to Accelerate and Scale Innovation
Sponsored by
Sheeraz Haji
President
Cleantech Group
Andrew Shapiro
Founder and President
GreenOrder, an LRN Company
Contact Us Tore Land
Director of Ecomagination EMEA
GE
Phil Schneider
Principal
Deloitte Consulting LLP
Paul Cousens
National Sales Manager
Autodesk