Investing in clean technology

Experts talk about investment opportunities in "technology that will provide clean, renewable and efficient energy solutions for individuals, corporations and governments."

Last week, I checked out the Wharton Business Technology Conference in Philadelphia. I wrote yesterday about its opening keynote speaker, MC Hammer .

I also attended the panel "Clean Tech: Picking Winners — Investing Opportunities in Clean Technology." Here's the panel description:

The global "greening" of political agendas and the increased cost of some fossil fuels has inspired the next wave of technology that will provide clean, renewable and efficient energy solutions for individuals, corporations and governments. The top players in the private equity and venture capital firms, as well as key players in government agencies are the main forces driving this innovation with their capital allocation choices. How do these players decide what technologies will be the next big thing in clean technology? How do they navigate through the regulatory changes and the account for all the risks? This panel hopes to uncover the evaluation process undertaken by capital funders when presented with an investment opportunity in a nascent technology.

The panelists were Timothy S. Howell, managing director of power and renewable energy for GE Energy Financial Services, and Kassia Yanosek, vice president of Hudson Clean Energy Partners. The moderator, James Balaschak, principal in Deloitte Consulting's U.S. Energy and Resources practice, asked the questions.

Why invest in clean tech?

Movement in the regulatory and political sectors, Yanosek said, showed her about five years ago that clean tech was a good market in which to invest. Her firm, she said, is solely focused on renewables and only invests when technologies make sense according to government policies in place.

What are the clean tech sectors of the future?

Solar energy presents a great opportunity as costs go down, Yanosek said. She added that large-scale concentrated solar power is a growth area, as well as energy efficiency, from smart grids to buildings with specific technologies. Howell said his company is looking not just at solar panels, but at specific technologies within the panels. The electrification of the transportation sector is "potentially in our reach," he added, so GE is investing in the electric car and in batteries for electrifying transportation.

Talk about the government role in the clean tech sector.

The government has to be involved in the sector because without subsidies and other initiatives, Yanosek said, an investor would rather put money into traditional energies. Howell agreed, adding that some projects only make sense with incentives.

What are the threats facing clean tech?

The biggest risk began with the credit crisis and continued from there, Howell said. And from a tax perspective, he added, incentives are dysfunctional. "We need a different way to incentivize renewables versus tax incentive after tax incentive," Howell said. Clean tech companies need to bring costs down and to commercialize their products to see if the technology is proven, Yanosek said.

An audience member asked for the panelists' thoughts on nuclear energy.

It takes about 10 years for a nuclear plant to open, Howell said. He's a supporter of nuclear energy and thinks the government should play a role. If we really want to see diversified energy and a reduction in carbon emissions, Yanosek said, the world should be more focused on nuclear energy.

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