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VC dollars are becoming clean again. Finally, the change is here?
- It's only by looking at the present that investors can make sense of what happened with clean energy investments years ago.
- Venture capitalists invest in startups where there are established exit mechanisms; but when the exit pathways in clean energy weren't there, funds dried up in the sector.
- Clean energy investments have much lower returns and are quite capital intensive.
- VCs have poured money into the space and corporate venture capital firms also have skin in the game as climate change awareness increases.
- However, VCs are focused on putting money into energy efficiency software and lighting rather than renewables such as wind farms.
- If clean energy is to compete with dirty energy, there needs to be massive investment to encourage innovation in this space.
- Policy measures must fuel the demand for clean energy and established exit mechanisms must be in place for startups who champion innovations.
- Unless there is a change in the way people view climate change, there won’t be drastic changes in VCs investments.
- We might just have gotten on the trajectory of the clean energy future.
- Investments in clean energy have increased significantly lately, but greater investments are needed to encourage innovation in the industry.
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