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Investment Drivers in Energy and Clean Tech

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

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Investment Drivers in Energy and Clean Tech

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  1. Investment Drivers in Energy and Clean Tech

  2. 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

  3. Clean Tech and Energy Investing

  4. Clean Tech and Crude Oil

  5. CleanTech Energy 15x Under Invested • Relative to underlying industry size, the venture capital industry has underinvested in energy/cleantech (by approximately 15x)

  6. Small $ compared with VC $

  7. Minor Correlation with VC $

  8. Low, Irregular Returns for Clean Tech

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

  10. 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.

  11. 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 windspeedsand 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

  12. Incentives are Gravy How 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

  13. 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

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

  15. Thank you Liddy Karter Managing Director, Enhanced Capital Executive Director, Crossroads Venture Group 203 376 7958

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

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