Green Energy Solutions Face Challenging Market Dynamics

Taking green energy products and technologies to market has a unique set of challenges. Many companies have an unrealistic expectation of market penetration (build it and they will come). Yesterday I attended a symposium on entrepreneurial opportunities in the green market, sponsored by the Oregon Entrepreneurs Network. It was time well spent with Spencer Beebe, founder of EcoTrust, venture capitalists and the heads of local, sustainable businesses in the Portland area.

On the “What’s Investable?” panel were experts in alternative energy funding (Dave Chen from Equilibrium Capital, Mike Butler from Cascadia Capital, Steve Eichenlaub from Intel Capital and Wayne Ebree from Reference Capital). I asked them, from their experience, how the market dynamics for altrernative energy differed from traditional hightech market dynamics. There were some key differentiators.

Firstly, thedevelopment of solutions takes longer. They are seeing more incremental solutions than brand new technology deployments. Partly this is due to the intensve capital it takes to develop solutions, without the clarity of a sure ROI for investors.

Secondly, new solutions face a huge chasm of governmental regulations. In some cases these regulations at all levels of government can help speed up adoption of new technologies (e.g. ethanol). But more often, they slow down deployment due to overlapping and conflicting guidelines and rules. Most companies do not forsee how complex this barrier can be.

Like traditional high-tech olutions, new energy solutions must solve a real problem and fit into the existing infrastructure, and be able to rely upon a sustainable supply chain. Once adopted, however, the levers of deployment are huge. The trick is to understand what can cause your solution to fall into the cham, manage your capital and burn rate, and work with the existing energy infrastructures rather than try to re-invent the fundamentals.

More from the OEN Green Advantage symposium later on… 

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