Strattner Financial Group (SCNG)

[The Master of all]

Is Washington the New Wall Street for Cleantech?
By Jennifer Kho

June 22, 2009, 4:29 pm

In this economy, funding for clean technology is hard to come by. That explains why companies are turning increasingly to government — and less to venture capitalists and other private investors — for a financial lifeline.

Washington is becoming “the new Wall Street for green energy,” said Doug Faulkner, president of Chrysalis Energy Partners, a strategic consulting firm, and former acting assistant secretary for energy efficiency and renewable energy at the Department of Energy. The stimulus package signed by President Obama in February came loaded with provisions for clean energy, and more help could be coming if a major energy bill makes it through Congress.

In one sense, pursuit of government funding is no different than going after venture capital. Raising money usually becomes start-up companies’ primary focus, said Greg Chin, a partner with the emerging companies group at the law firm Latham & Watkins, adding that companies hire chief executives specifically to bring in money.

But Mr. Faulkner noted that government funding can change the decision-making process for companies. “It’s not better or worse,” he said, “but dealing with the government has its own set of dynamics,” which many companies will not have experienced before.

One important difference between government and the private sector is the objective: while venture capitalists set out to make money, the government has a broader range of goals, including reducing greenhouse-gas emissions and increasing jobs, said Steve McBee, chief executive of McBee Strategic, a consulting firm. So while it is “extremely important” to submit applications that highlight technological advances and financial security, it is equally important to explain how projects help meet political goals, he said.

Companies are honing their strategies to give themselves an edge, Mr. McBee said. They are forming partnerships, changing their business models and dedicating more time and energy to applying for the funding. A legion of consultants have cropped up to help. As an idea of the volume of paperwork that government applications involve, Mr. McBee said that his company submitted three three-ring-binders full of contracts for each of his clients’ federal loan-guarantee applications. “It’s a nontrivial amount of work,” he said.

And there are risks to relying on government: the Department of Energy has tentatively approved only one loan guarantee in several years, though Steven Chu, the energy secretary, has made speeding up the process a priority.




http://greeninc.blogs.nytimes.com/2009/06/22/is-washington-the-new-wall-street-for-cleantech/