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Cleantech Groundswell Exploring Financing Models to Accelerate and Scale Innovation

Cleantech Group Webinar

September 23, 2010

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Sponsored by

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


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

27 Cleantech Forums® worldwide

since 2002 in San Francisco,

Boston, New York, Toronto,

Washington DC, Paris, London,

Frankfurt, Brussels, Copenhagen,

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


Sponsored by

Meet the Panel

Andrew Shapiro

Founder and President

Tore Land

Director of

Ecomagination EMEA

Phil Schneider

Principal


Sponsored by

Andrew Shapiro Founder and President

GreenOrder, an LRN

Company

Featured Speaker

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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


Sponsored by

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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


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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


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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


Sponsored by

Tore Land Director of Ecomagination

EMEA

GE

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Featured Speaker


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


Sponsored by

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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


Sponsored by

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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


Sponsored by

Phil Schneider Principal

Deloitte Consulting LLP

Featured Speaker

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Sponsored by

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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


Sponsored by

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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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


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)


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Panel Discussion

Andrew Shapiro


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.


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

http://www.autodesk.com/cleantech


Sponsored by

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Engineering

Simulation

Visualization

Industrial

Design

Manufacturing

Autodesk Digital Prototyping


Sponsored by

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Apply now at www.autodesk.com/cleantech

http://www.autodesk.com/cleantech


Sponsored by

http://info.cleantech.com/Groundswell_Materials.html

Slides and Recording Available

• Download today‟s slides

• Replay this webinar on-demand

(We‟ll email you when the materials are posted and include the link)


Sponsored by

Sheeraz Haji

President

Cleantech Group

[email protected]

Andrew Shapiro


GreenOrder, an LRN Company

[email protected]

Contact Us Tore Land

Director of Ecomagination EMEA

GE

[email protected]

Phil Schneider

Principal

Deloitte Consulting LLP

[email protected]

Paul Cousens

National Sales Manager

Autodesk

[email protected]

mailto:[email protected]




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