
Venture Capitalists Back Away from Clean Energy - olalonde
http://www.technologyreview.com/energy/38295/?p1=A1
======
mathattack
The headline is a little more downbeat than the story, no?

As I read it, they say that private VC investment is moving from research to
development. This is consistent with the nature of VC funds - they usually
have to pay back investor money within 7-10 years. The research cycle in
physical sciences is frequently long enough that adding development pushes the
idea beyond 10 years. As such, VCs are more interested in bringing already
researched ideas (or incremental ideas) to market.

There are 2.5 antidotes to this:

1) The government can fund more basic research, similar to biology.

2) The government can put a revenue neutral tax on unclear energy. (Carbon
taxing) They can use to revenue to fund #1, or give it back in the form of
lower taxes. Even the latter will create financial incentives to fund
alternatives.

2.5) Fund longer term (10-15 year time horizon?) VC style investments with
public funds, either through pensions or other dedicated funds. This would be
similar to Singapore.

I am fairly confident that #1 will help, as it benefits other areas in
science. There is potential for waste, but lots of residual benefits. I am
very confident that #2 will work, as it lines up everyone's incentives to
solve the problems. I am only slightly confident that #2.5 will work, as it is
not a business model that has worked in many other places.

------
kragen
This is surprising to me. Photovoltaic installations are doubling about every
two years. Photovoltaic costs are dropping precipitously, to the point that
they're becoming competitive with fossil fuels without subsidies, and of
course fossil fuels are becoming more expensive. (Liquids, anyway.) The total
amount of solar energy available on Earth is something like 100 000 times the
current world marketed energy consumption, which includes all of our current
fossil fuel consumption plus nuclear, existing renewables, etc.

So it's a _really big deal_ who supplies the equipment for solar energy
harvesting over the next couple of decades.

Maybe the US-based VCs profiled here have just given up and figured that China
already has the market sewn up?

------
blackboxxx
I've noticed that the YC funded startups this year are particularly
derivative. I guess the safe(r) money in this glum economy is in iterative
also rans.

It's depressing though. There is no vision, courage or leadership from
investor groups like YC. There's no "art" in these startups.

