Hybrid of Public/Private Financing for Renewables
I wrote not too long ago about the huge, long-term role that the National Renewable Energy Laboratory (NREL), as part of the Department of Energy, plays in supporting the development of clean energy technologies. Their work with solar energy leader Solyndra is a perfect example of a case in which this public support made it possible for a private company to raise critically important addition capital, by preventing their initial private investors from getting scared away. At a certain point, new (very large) rounds of cash were required to get the company to its next level. As I recall, NREL supported this effort to the tune of over $700 million — and this robust commitment showed investors that they weren’t alone in their belief that the company was on the right track.
But not every company that asks for money receives any at all — let alone $700 million. So exactly how does this process work? How fair is it? What criteria are most important? What types of companies are favored over others, and why? Are more mature renewables technologies, like photovoltaics (in which Solyndra plays), favored over newer ideas? (Solyndra has a very well proven breakthrough in deployment of CIGS (copper indium gallium (di) selenide), generating a significant leap in PV efficiencies and reduction in costs).
Unfortunately, it’s not clear. I suppose it’s not supposed to be. Take solar thermal/CSP (concentrated solar power) as an example of a new technology. Technologies like PV and wind have a several-decade head-start over CSP. When I interviewed industry leader Ausra‘s founder Dr. David Mills for my book on renewables, he told me that Ausra had gotten to the second round in one of these mega-contests in which the DoE selects its favorites to back, but that they didn’t make the finals. When I asked if he resented their decision, he — perhaps simply out of good sportsmanship and professional courtesy — said that he didn’t, and told me that he’ll simply try again another time.
I can’t count all the people who have asked us for our insights at 2GreenEnergy on this matter — and I regret that all I can turn up are anecdotal incidents like these. I ask readers to share their own experiences with this process so that all my learn. Thanks.