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GREEN BUSINESS

An Energy Policy for Entrepreneurs

To encourage investment in the clean-tech economy, officials in Washington need to pass legislation that sets the rules of the game.
An ideal bill would set a price on carbon emissions and mandate less-polluting energy sources, more efficient vehicles, and better mass transit.

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An ideal bill would set a price on carbon emissions and mandate less-polluting energy sources, more efficient vehicles, and better mass transit.

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Every day we go without a comprehensive federal energy plan is another day America's edge in the burgeoning clean-technology industry slips away. "The second-largest industry in the world is going through a decades-long transformation, and we know the innovation is happening here," says Nancy Floyd, founder and managing director of San Francisco VC firm Nth Power, which focuses on the clean-tech sector. Indeed, 80 percent of all venture capital going into clean-tech start-ups is going into U.S. companies. But although other countries have enacted stable policies that promote the clean-energy economy as an area of opportunity, American investors and entrepreneurs are still waiting to find out the rules of the game.

An ideal bill would set a price on carbon emissions and mandate less-polluting energy sources, more efficient vehicles, and better mass transit. Barack Obama the candidate, for example, called for the creation of a federal standard that would require 25 percent of American electricity to come from renewable sources by 2025. However, Floyd says, "It almost doesn't matter what the details are. What's important is that we get a cohesive and stable policy -- a time frame, say, 10 years, where companies can really make an investment in expansion and manufacturing."

Though the lack of federal policy hasn't necessarily affected the number of clean-energy start-ups, it makes it hard for them to find the capital they need to grow to a size at which they are creating a meaningful number of jobs. And there is little doubt, says Floyd, that "seeing more companies succeed would lead more entrepreneurs to focus on the sector."

Bottom Line Markets -- and investors and entrepreneurs -- abhor uncertainty. So let's get serious about the emerging energy economy by creating an actual energy policy.




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