* Access to capital cited as top challenge for industry
* Battery storage seen as most promising investment area
* Cleantech investment anticipated to grow overall
Oct 12 Most investors and entrepreneurs in
cleantech expect interest and financial backing in the sector will
grow over the long term, even as they see short-term challenges
ahead, according to a survey released by law firm Cooley LLP.
The results come as the cleantech industry is buffeted by poor
investment returns, heavy competition from China, a struggling
economy, and several high-profile failures.
Solar company Solyndra announced in August it was filing
for bankruptcy liquidation after receiving hundreds of millions
in investments, including a $535 million loan from the U.S.
government. Evergreen Solar filed for bankruptcy
reorganization earlier in August, and Norwegian
electric-carmaker Think Global filed for bankruptcy in June.
Some 74 percent of respondents believed interest and
investment would increase over the next five years, even as
they anticipated significant hurdles to overcome before
companies reach near- to mid-term growth and profitability.
Cooley conducted the survey of 128 cleantech investors and
entrepreneurs last week.
Respondents cited access to capital as the top challenge in
the sector, followed by weak economic conditions and the need
for stronger public policy and incentives to support cleantech
in the United States.
About 42 percent of respondents believed the federal
government's role would would remain relatively unchanged, while
40 percent said it would shrink. Only 18 percent of the group said
it would expand.
But almost three-quarters of respondents said that for the
U.S. to remain competitive in cleantech, the government needed
to provide more tax credits and incentives. While such programs
are coming under fire in Washington, supporters argue that
China achieved dominance in solar-panel manufacturing in large
part because of heavy industry support by Beijing.
The single biggest factor driving more investment would be
more successful exits for companies, including initial public
offerings and acquisitions, respondents said. A separate report
released last week covering all investment sectors showed that
just five companies held IPOs last quarter.