Clean energy start-up companies could have greater access to investor funding after a White House effort that rounded up $4 billion in new private-sector commitments.
Announced this week, the money will come from pension funds and institutional investors such as the University of California, Goldman Sachs, and TIAA-CREF, a financial company that serves academic, research, and medical institutions. The funds would add to the $7.6 billion in federal spending on clean energy that President Barack Obama proposed in his 2016 budget request to Congress.
“By marrying executive leadership with private-sector commitments, we are seeing positive reinforcement of what the market has already decided: that there is real and growing demand for more renewable energy,” says Todd Foley, chief strategy officer at the American Council on Renewable Energy.
Brian Deese, a senior Obama Administration climate change aide, says past investments in start-ups led wind and solar costs to plummet.
But venture capitalists attending a June 16 White House clean energy summit acknowledged an 80% decline in investments in start-up clean energy firms since 2008. Investors have instead favored young companies that are further developed than start-ups and have products that are about to go to market.
In addition to the new private funding for start-ups, the Administration announced government actions designed to boost investments in renewable technology. In one, the Treasury Department for the first time will allow nonprofit foundations to invest in for-profit companies doing clean energy research as a “mission-related investment.”