Small-Scale Solar, Cleantech Funds Shine Brightly

As we head into February, some exciting new developments are afoot in the UK’s cleantech market. Firstly, the UK government seems to finally be putting its weight behind the development of a domestic, commercial micro-solar power market. A new scheme announced by the government’s Department for Energy and Climate Change (DECC) to support small-scale renewables generation includes feed-in tariffs, which can help stimulate domestic markets as well as renewables manufacturing firms. For example, Nao Nakanishi reports that Sharp, which manufactures solar panels in Wales, only installs around 1 per cent of the 5,000 panels it produces in the UK. The rest are exported to more developed renewables markets, such as Germany.

The announced feed-in tariffs will provide a boost to manufacturers through the creation of a domestic photovoltaic (PV) market: households will be able to sell the excess power they generate through their PV panels back to the grid. IMS Research has estimated that the domestic market for micro-solar at the PV level could reach 250MW of installed capacity in 2011, up from just 5MW in 2009. Indeed, PV installations of up to 5MW would receive Β£0.413 per kWh, which represents a positive incentive for installation.

One key question remaining, however, is whether the new tariffs will benefit the small-scale generation market and the residential market, but not the commercial building PV market. Indeed, as an executive at the Energy Saving Trust recently told me, ‘The difficulty in stimulating the installation of solar power in the commercial building sphere is due to property tenure: much of the UK’s commercial buildings are rented, so neither the current tenant businesses nor the landlords have a long-term interest in solar installation and the potential returns or savings they can make.’

These news come amid signs that interest in cleantech at the venture level is continuing to increase, albeit more cautiosly than during the ‘hot’ years before the crisis. The landscape for UK cleantech was one of VC uncertainty in 2009, with the largest declines in investment amounts since the tech bubble in 2000: in 2008, Β£1,001 million was invested in VC in the UK; this had dropped to Β£622 million by the end of 2009. While the VC funding picture remains largely unclear and uncertain, other types of investors are dipping their toes into the cleantech market in a big way these days.

Some of the good signs to have appeared over the past two weeks include the launch of the Β£125m Hermes Environmental Fund (HEF). The fund was jointly launched by Hermes Private Equity and the UK government’s UK Innovation Investment Fund (UKIIF), a governmental investment vehicle for high technology firms, technologies and innovation. It represents a welcome tie-up between private equity’s management experience and fund-raising capabilities, and strong government backing. Indeeed, Hermes will manage Β£75m in the fund of funds, while UKIIF will directly contribute Β£50m.

The fund will be invested by around 50 fund managers, and a minimum of 50% will be invested in the environmental sector. Around half of the fund is expected to be directly invested in Britain. The fund is allegedly expected to contribute to the creation of around one million new jobs in the low carbon economy: as Simon Havers, chairman of the British Venture Capital Association (BVCA) recently told the Wall Street Journal, ‘Today’s launch of the Environmental Investment Fund represents a positive step forward for clean tech financing in the UK’. Other firms are following suit: on 1 February, private equity firm HgCapital announced that its renewable energy investment arm, HgCapital Renewable Power Partners, had invested Β£260 million in three wind and solar power projects, including Scout Moor, the UK’s largest onshore wind farm.

Reporting by Federico Caprotti, writing for Skipso from London

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The Green Lighting Challenge Launched Today!

The Skipso team is excited to annouce the launch of a new Cleantech innovation challenge today: The Green Lighting Challenge.

GC Illumination is an Italian company specialised in the design, production and distribution of fixtures for exterior lighting.

GC supplies utilities, municipalities and installation companies in Italy and internationally.GC is looking for innovative solutions and products to enhance the performance of its LED-based product line and extend its functional application to a wider range of fittings.

G.C.'s Wing-Sun Product

Win $10,000 cash award for submitting solutions that will allow GC to meet the required illumination coefficients and to expand its Green Lighting fittings to motorways, urban areas, sports installations and other public areas.

$10,000 Cash Award!

Submit your solution today or refer a friend and win $1,000 if they solve the challenge!

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