Comments

1. SEIA Solar April 8, 2008 at 6:23 PM

   Today there was a Solar Investment Tax Credit (ITC) Teleconference involving
   business executives from Morgan Stanley, HSH Nordbank, and Lazard Capital
   Markets. Taking the opportunity to voice their support for Solar energy and
   the ITC, they strongly encouraged Congress to pass this critical tax credit
   to ensure the Solar industry’s future growth. This teleconference was in
   preparation for the Senate’s upcoming vote on the ITC in the next couple of
   days.

   In addition to the support of Wall Street and investment executives, a group
   of over 240 signatory companies have composed a letter in support of an
   extension of the ITC. These include Best Buy, GE, Home Depot, Edison
   Electric Institute, John Deere, JP Morgan Chase, Target, Whirlpool and
   others. The letter itself can be found at -
   http://www.seia.org/ITC_Letter_4-3-08.pdf. More information can be found by
   simply browsing seia.org.

   Passing the Word,

   Brian Willis
   703.302.8386

   —— NEWS RELEASE ——

   For Immediate Release
   Tuesday, April 8, 2008
   Contacts: Monique Hanis, 202-682-0556, ext. 4, mhanis@seia.org
   Mark Sokolove, 703-302-8382, mark@tigercomm.us

   Financial Executives Call on Congress to
   Extend Pending Solar Tax Credits

   Wall Street and Venture Capital firms report on growth of solar market and
   stress importance of Tax Credit for Investor Confidence and Industry Growth

   WASHINGTON, DC - Today, a group of bankers and analysts from Wall Street
   investment firms and venture capitalist firms called on Congress to pass an
   eight-year extension of the solar Investment Tax Credit (ITC), that is set
   to expire at the end of 2008, stressing its importance in building investor
   confidence and stimulating industry growth.

   The U.S. Senate is expected to vote on legislation to provide for a
   long-term extension of the ITC (S. 2821, the Clean Energy Stimulus Act of
   2008) as early as this week.

   Since the solar ITC was established as part of the 2005 energy bill, the
   solar energy industry has grown at a rate of more than 40 percent per year.
   Utilities and solar energy companies have announced plans for numerous
   projects to provide utility-scale solar power to states from Florida to
   Nevada. On the commercial and residential side, energy users from military
   bases, retail stores and homeowners have added solar energy generation to
   their land and buildings. But investors are worried that if the ITC is
   allowed to expire at the end of 2008, rapid progress made within the
   industry could slow to a halt.

   “We believe solar projects will become cost effective in the future without
   the federal tax credits,” said Edward Levin, vice president of global
   structure products at Morgan Stanley, “But the current federal tax
   incentives are still vital for industry growth and continued investor
   confidence. The tax incentives need to be extended to avoid a market
   interruption that could significantly set back U.S. solar development.”

   “The ITC is serving as an important building block for solar energy’s
   migration into mainstream electricity markets,” said Sanjay Shrestha,
   managing director of equity research in alternative energy at Lazard Capital
   Markets. “If extended, the ITC will accelerate project activity, helping the
   U.S. evolve into one of the most pivotal solar markets in the world.”

   The solar ITC has been scored to cost approximately $700 million over the
   course of ten years. This amounts to less than 1 percent of the $40 billion
   in subsidies that fossil fuels energy companies receive every year. On March
   25, CNN reported that with the proper investment incentives, renewable
   energy could stimulate as many as three million new jobs over the next two
   decades.

   Ed Sproull, senior vice president of energy at HSH Nordbank, predicted that
   “with an extension of the solar ITC, solar development will continue to
   accelerate because it makes economic sense to investors.”

   “Without [the ITC], we risk seeing the steady progression of investment
   grind to a halt, threatening job growth, tax revenue generation, and energy
   independence in the process,” said Nancy Pfund, managing partner, DBL
   Investors. “Most importantly, we need … to continue backing those that
   invest in solar improvements so that costs come down and financing products
   can be developed to make solar accessible to all.”

2. Tim Chapman April 11, 2008 at 8:35 AM

   That Independent story on the UK VC scene is a little overblown - 3i’s been doing next to nowt in the early-stage space for years, so their recent announcement just confirmed what everyone knew. Established firms move up-market - it’s always happened, and will continue to do so. Anyway, 3i’s not symptomatic of the UK market - they’re adamant they’re a global player, so the move should say as much about the global market as the domestic.

   The figures show an increase in seed and early-stage deals, at least up till 2006, for the UK and Europe. It’s not as active a market as in the US, but it’s still in relatively good shape. Interestingly, a fair few low-end investors I’ve spoken to say that the problem isn’t in VC supply, but in demand - there’s barely enough quality early-stage businesses to take the money that’s currently in the market. Maybe that says something about the appetite for risk, or quality of entrepreneurship, but I don’t think lack of VCs is the problem.