Earlier this month, Arlington-based Positive Energy raised $14 million in a second round of venture funding. Positive Energy has developed a software analytics platform that it sells to electric power companies implementing demand-response programs to encourage energy conservation and loading shifting. As the company web site explains, it’s one thing to adopt time-of-use pricing and similar peak-demand initiatives, it’s quite another to persuade consumers to use them. The company contends that its solutions can bridge the gap between economic theory and marketplace reality.
Positive Energy is expanding — it is currently trying to fill 13 positions in IT, sales, finance and product development.
Does Gov. Timothy M. Kaine, who touted his “green jobs” initiative in his state of the Commonwealth speech, understand where green jobs come from? Does he understand the role played by entrepreneurs, angel capital, venture capital and the entrepreneurial support network?
I’m not sure he does. If he does, it’s not apparent in his speech. While Kaine advanced some good ideas like retrofitting state buildings to green energy standards (See “Kaine’s ‘Green Jobs’ Initiative“), he resorted to a pretty stale package of proposals on the economic development front.
University research. Kaine has created an “interagency task force” for energy project recruitment to “build the case” for renewable energy-related businesses to invest in Virginia. “Virginia has a tremendous natural advantage in this area through the research being done at Virginia colleges and universities,” Kaine explained. “Every institution in Virginia is working on innovative new energy projects—transportation fuel cells at Virginia Tech, energy-efficient buildings at UVA, algae-based biodiesel at ODU, and new energy crops at Virginia State University.”
Terrific. How do we take advantage of all that research? Says Kaine: “Technology-based economic development organizations” (does that mean the Center for Innovative Technology?) will build a single Internet portal where investors can access information about the research. Wow. Back off, California, Virginia’s building a web site!
Tax incentives. No economic development program would be complete without grants, tax incentives and regulations. These include:
- Expand an existing incentive for solar manufacturers to include new plants that make other alternative energy equipment and products.
- Enact a requirement that biodiesel should comprise 2% of diesel fuel sold in Virginia.
- Enact an income tax credit of up to $8,000 on solar photovoltaic, solar thermal, and wind-power electric generators installed in homes or businesses in Virginia.
Unfortunately, the Kaine package doesn’t do anything to promote companies like Positive Energy. Silicon Valley venture capital is transforming the economics of renewable energy, electric vehicles and energy conservation by underwriting a wave of technologies, some of which are already entering the marketplace. (More on that in a week or two.) The Washington-area venture capital network isn’t as deep as Silicon Valley’s, but it’s one of the strongest on the East Coast. And it’s well positioned geographically near the seat of national government, where all manner of “green” boodle and pork will soon begin flowing. If Virginia is to develop an economically sustainable “green” industry, critical financial support and human capital will come out of NoVa.
There’s nothing wrong with pursuing green industry (other than the fact that every other state in the country is vying for the same market). But it’s going to take a lot more than a web site and a smattering of tax incentives lacking strategic focus to do so.
If the governor wants to do something useful during his last year in office, he should convene a “green industry” summit that brings the established energy/environmental companies, would-be entrepreneurs, financiers, university researchers, intellectual property attorneys and other supporting professionals into the same place at the same time so they can begin networking and deal making. Ultimately, it’s all about putting the right people together.