Select your localized edition:

Close ×

More Ways to Connect

Discover one of our 28 local entrepreneurial communities »

Be the first to know as we launch in new countries and markets around the globe.

Interested in bringing MIT Technology Review to your local market?

MIT Technology ReviewMIT Technology Review - logo

 

Unsupported browser: Your browser does not meet modern web standards. See how it scores »

{ action.text }

However, a number of alternative-energy companies will not survive the downturn. This week, Pacific Ethanol’s four ethanol-producing subsidiaries filed for bankruptcy, as part of an ongoing shakeout in the ethanol-production business. Two weeks ago, GreenFuel Technologies in Cambridge, MA, which was trying to commercialize algae as a source for biofuels, was shut down by its venture backers. In March, Optisolar, a maker of solar panels that also planned to run solar power plants, began selling off its assets.

And observers caution that companies should not expect immediate relief from the federal stimulus package, which allocates some $60 billion to energy. “The stimulus bill is a one-time opportunity,” said Chuck McDermott, general partner of Rockport Capital Partners, speaking on a panel at Venture Summit East this week in Boston. “It’s not an ongoing program, it’s an event.”

Dennis Costello, managing director of Braemar Energy Ventures, a Boston-based venture firm, adds that venture capitalists have to discount the long-term impact of stimulus money. He says it is unclear how the money will be distributed. “Will it go to the best company? The best proposal writer? The ones with the best political connections? It’s very unpredictable,” he says.

Costello does believe that the Obama administration’s emphasis on solving the nation’s energy problems has helped keep the energy-investing market from being even worse. But project financing, including securing loans to help build manufacturing facilities, remains challenging, he says. Braemar has portfolio companies that will need project financing in the next two to four quarters, and Costello says that potential lenders are just now “poking their heads up.”

Despite the market problems, venture capitalists still seem attracted to green technology and energy, believing they represent a strong market in the long term. Dave Power, a partner at Fidelity Ventures, says his firm is shifting its focus away from information-technology investing and into clean-tech companies, particularly those that improve energy efficiency. “It’s a huge market,” he says.

1 comment. Share your thoughts »

Credit: Technology Review

Tagged: Business, venture capital, economy, investments, clean tech

Reprints and Permissions | Send feedback to the editor

From the Archives

Close

Introducing MIT Technology Review Insider.

Already a Magazine subscriber?

You're automatically an Insider. It's easy to activate or upgrade your account.

Activate Your Account

Become an Insider

It's the new way to subscribe. Get even more of the tech news, research, and discoveries you crave.

Sign Up

Learn More

Find out why MIT Technology Review Insider is for you and explore your options.

Show Me