GREENtrepreneurs: The Challenge & The Opportunity (Part 2)

11/15/10

[Editor's Note: the first part of this guest post ran on Friday.]

Governments, Law and Regulations, Oh My! One of the hallmarks of the growth of the Internet was a lack of government regulation or involvement. While not the case for all green businesses, many of the larger opportunities and business sectors look to government actors as partners in their growth and long term positioning. Today’s GREENtrepreneur that isn’t thinking about the role government plays in the startup is probably missing tax credits, a grant opportunity, a key regulation or a contracting partner. Weaving a small company into and through the tangled web of government involvement is often a necessity, but may limit the ability to be agile and lean when growing the business. As I noted in Green Entrepreneur Handbook:

“The influence of government on green business cannot be understated. From grants, environmental small business loan programs, loan guarantees, tax credits, government contracts, regulations and general purchasing patterns, the federal and state governments of the United States have made support of green businesses a key priority. Outside of the U.S., governments throughout Europe and Asia have made environmental support key components of their own regulatory and spending programs.

Unlike technology sectors such as software, computers, biotechnology and medical devices, green business is heavily reliant on the involvement of the government to continue the growth of green businesses. For example, the combination of production tax credits (PTC) and renewable portfolio standards has been responsible for much of the growth of the wind industry. The threat of the expiration of the PTC led to changes in investment and development behavior. And the wind industry is not alone. Sectors from biofuels, solar, hybrid and alternative fuel vehicles have each seen their growth hinge on various aspects of government involvement in these industries.

Economist Lord Nicholas Stern estimates that almost $400 billion of the approximately $2.6 trillion in economic stimulus allocations announced so far by G20 nations are earmarked for clean technologies such as renewable energy, improved electrical grids and cleaner cars, with investments of over $52 billion being made by China and over $80 billion by the United States. At the start of 2010, cleantech grant experts Skipso has identified at least $26 billion in grant and other programs currently available for green businesses, and billions more appear to be on the way. With the wealth of funding available and to be made available in the coming years, understanding government funding is a must for any green business.”

Consumers still don’t quite “get it.” Walk down the street and ask … Next Page »

Eric Koester is co-founder and COO of Zaarly and an attorney, formerly with Cooley LLP. Follow @

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