Investing in Energy Innovation
In what Vice President Joe Biden is calling a “once in a generation energy transformation,” the Obama administration recently announced the Clean Energy Investment Initiative, a public private partnership that commits over $4 billion for clean energy innovation. As the result of an unprecedented collaboration between major philanthropic organizations, family offices, venture capitalists, universities and institutional investors, early stage clean energy technology will be better supported through the new initiative. An integrated investment ecosystem aims to turn the “valley of death” — the gap between initial capital investment and revenues from commercialization — into a valley of opportunity.
According to Jagdeep Singh Bachher, Chief Investment Officer at University of California Board of Regents and panelist at the White House Clean Energy Investment Summit, a three-pronged approach is the best overall strategy for changing investment. This approach involves forming partnerships between large and small investors, seeking out projects with the best prospects for success and exercising patience to give emerging technologies a fighting chance.
One such high-impact startup featured at the Summit was Will McLeod’s Smarter Shade, a film based optical technology that allows any window to transform from clear to dark with the touch of a button. Smarter Shade’s technology lasts five times longer than blinds or shades, and incorporates added efficiency benefits at a significantly lower price than similar products on the market. Stem, another efficiency technology introduced at the Summit, predicts the energy usage of commercial and industrial businesses over different time spans to determine when to charge or discharge batteries impacting their peak electricity usage. As a result, consumer electricity usage is reduced by a third and the utility provider is relieved of erratic demand.
In order to turn these small startups with big ideas into organizations with mass distribution, programs such as the Clean Energy Investment Center, Early Stage Small Business Investment Company program and CREO Syndicate are all pioneering to improve the innovation chain through a variety of techniques. These techniques include making energy experts and research data more accessible, paving the way for more long-term capital for high-growth firms without added costs to the taxpayer and creating a platform for family offices to better collaborate. Industry observers agree that the private sector has taken the Obama Administration’s cue for clean energy investments and responded with an equally devoted leap forward. The private and public sectors working together to enhance clean energy technology investment is a positive sign that an energy transformation is no longer just around the corner; it’s happening right now.