Venture Capital Investment in the Clean Energy Sector
Shikhar Ghosh () and
Ramana Nanda ()
Additional contact information
Shikhar Ghosh: Harvard Business School, Entrepreneurial Management Unit
No 11-020, Harvard Business School Working Papers from Harvard Business School
We examine the extent to which venture capital is adequately positioned for the rapid commercialization of clean energy technologies in the United States. While there are several startups in clean energy that are well-suited to the traditional venture capital investment model, our analysis highlights a number of structural challenges related to VC investment in the sector that are particularly acute for startups involved in the production of clean energy. One of key bottlenecks threatening innovation in energy production is the inability of VCs to exit their investments at the appropriate time. This hurdle did exist in industries such as biotechnology and communications networking that faced a similar problem when they first emerged, but was ultimately overcome by changes in the innovation ecosystem. However, incumbents in the oil and power sector are different in two respects. First, they are producing a commodity and hence face little end-user pressure to adopt new technologies. Second, they do not tend to feel as threatened by potential competition from clean energy startups, given the market structure and regulatory environment in the energy sector. We highlight that the problem is unlikely to get solved without the active involvement of the government. Even if it does, historical experience suggests it may take several years.
New Economics Papers: this item is included in nep-ene and nep-ent
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (9) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:hbs:wpaper:11-020
Access Statistics for this paper
More papers in Harvard Business School Working Papers from Harvard Business School Contact information at EDIRC.
Series data maintained by Soebagio Notosoehardjo ().