![\"\"](\"http:\/\/www.greenenergyreporter.com\/wp-content\/themes\/v1\/img\/cat\/cleantech.png\" "\\"Cleantech\\"")
![\"\"](\"http:\/\/www.greenenergyreporter.com\/wp-content\/themes\/v1\/img\/cat\/funding.png\" "\\"Funding\\"")
![\"\"](\"http:\/\/www.greenenergyreporter.com\/wp-content\/themes\/v1\/img\/cat\/policy.png\" "\\"Policy\\"")
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Week of May 17 – to – May 21, 2010<\/strong><\/span><\/p>\n Jonathan Nelson, CEO Providence Equity Partners on Charlie Rose this week defending his industry as Congress debate a plan to place higher taxes on partnerships involved in private equity, venture capital and real estate.<\/p>\n<\/div>\n Could the House help siphon off the venture capital dollars, which over the past few years have helped sustain cutting-edge renewable energy companies?\u00a0 As Congress pushed this week to pass legislation that would tax the gains partners at private equity and venture capital funds earn for their investors, also known as carried interest, the private capital industry was fighting back. Lobbyists in Washington warned that the tax hike would swamp growth of startups <\/a>developing much-needed technologies.\u00a0 As is carried interests are taxed at the low, 15 percent capital gains rate. Congress wants to change that (and it’s looking more and more like it will) and tax these profits at the higher 35 percent income tax rate.<\/p>\n On the specifics of the legislation being debated in Congress, PeHUB Editor Dan Primack notes that under the House bill 25 percent of carried interest would be taxed as capital gains<\/a> and the remaining 75 percent as ordinary income. The new tax regime would not go into effect until the beginning of 2013.<\/p>\n <\/span><\/p>\n Primack says the tax hike could push PE and VC firms to\u00a0 “accelerate their attempts to exit existing portfolio companies.” That would not be good for cleantech companies, which are largely dependent on venture capital these days to support their R&D. A recent PeHUB Top 10 ranking<\/a>, where five of the 10 largest VC investments were cleantech companies, underscored that reality. Cleantech companies are a long ways from being commercially viable and if anything requires more private financing rounds to turn their technologies from R&D wonders into viable businesses.<\/p>\n In terms of exit, a look at the performance of cleantech companies that have recently exited via IPOs is far from glowing. Shares of Battery maker A123 systems (NASDAQ: AONE), which issued shares last fall<\/a>, are currently trading far below their introductory price. Shares of second-generation biofuel maker Codexis (NASDAQ: CDXS) have flatlined since the company’s IPO<\/a> a month ago. Jinko Solar (NYSE: JKS), the Chinese PV maker that did an IPO last week<\/a>, is also trading below its $11 introductory price. There is a lot of buzz around cleantech<\/a> but that’s not enough to convince investors to buy the shares.<\/p>\n The steep capital-dependence of renewable energy companies was again highlighted this week with solar power plant developer BrightSource Energy\u2019s\u00a0Series D $150 million raise<\/a>. Stepping in, as equity holders were a couple of heavy weight investors, including the California State Teachers Retirement System and Alstom, the French power and transportation company. BrightSource says it will use the cash as equity to structure the\u00a0 financing to support the development of up 14 solar power plants in the U.S. Southwest. Earlier this year, BrightSource also received a $1.37 billion loan guarantee<\/a> from the Department of Energy. With the Series D the company has accumulated $300 million in equity financing.<\/p>\n BrightSource shareholder Google shared some more insight this week on its ever-evolving clean energy strategy. Besides North America, the company will also consider making investments in European renewable energy projects, said Google head of green business Ben Kott at a conference in London. The comments came a couple of weeks after the Mountain View, Calif., company announced a $39 million investment in a NextEra Energy Resources wind farm<\/a> in North Dakota.<\/p>\n As we report on Google’s cleantech developments we keep asking ourselves: “Is there a business strategy there?<\/a>” It’s hard to say. The company has definitely become a pivotal player in the industry. Put a Google executive on the dais at an industry conferences and you can bet you’ll have a packed room. But what is the company trying to do? Is it looking to repeat in clean energy what it did selling sponsored links? Or is Google just a renewable energy do-gooder that’s less concerned about generating profits and more focused on raising awareness about climate change issues. As is, right now,\u00a0it seems that for the time being, it’s a little of both.<\/p>\n VC and PE Watch <\/strong><\/p>\n Half of the deals listed in a Top 10 ranking of the year\u2019s largest venture capital deals involved cleantech companies. Better Place, the battery service provider, lead with $150 million raised<\/a>.<\/p>\n Infinis, the clean energy company backed by London private equity firm Terra Firma, announced its acquisition of Scottish and Southern Energy\u2019s (SSE) wholly-owned 30-megawatt Ardrossan Wind farm<\/a> for \u00a328.1m ($40.5 million) in cash and outstanding debt of \u00a325.7m.<\/p>\n Solar power plant developer BrightSource Energy tapped the deep pockets<\/a> of the California State Teachers Retirement System and French transport and power company Alstom, among others, for $150 million in equity financing.<\/p>\n Cleantech-focused PE firm Arborview Capital has completed a recapitalization of Paragon Airheater Technologies<\/a>, a provider of solutions that reduce fuel consumption and emissions of fossil fuel-fired power plants. No financial terms were disclosed.<\/p>\n Mid Europa Partners, a London-based private equity and buyout firm focused on Central and Eastern Europe, invested \u20ac60 million ($76.19 million) for an undisclosed stake<\/a> in Energy 21 a Czech developer and operator of PV-solar power plants. The investment marks Mid Europa’s entry into the cleantech business.<\/p>\n![\"\"](\"http:\/\/greenenergyreporter.com\/wp-content\/uploads\/2010\/05\/Picture-12.png\" "\\"Picture")
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