The Leading Edge - Winter 2010 - PFK - 5

cover A new energy Alternatives open up markets for business technology, green transportation, electric motors, green chemistry, lighting and other energy-efficient appliances. Nick Elliott, managing editor of Dow Jones Financial Services’ Clean Technology Insight online news engine, says analysts found an uptick in financing for clean-tech investments in late 2009. “The effects of the credit crisis and recession have faded, signaling a return to all kinds of clean-tech financing,” he says. T By ann M. gynn and Stephanie Skernivitz he new gold rush in America centers on alternative energy and all its possibilities. That’s how Greg Lawrence, a partner in the energy and derivatives markets group at McDermott Will & Emery LLP, describes the wide-open opportunities in the energy market. Federal and state incentives are driving the rush. Although interest in renewable energy and ways to reduce dependence on fossil fuels has existed for years, the last few years have been revolutionary. In last year’s federal stimulus act, renewable energy interest combined with the push to create jobs resulting in $3.4 billion earmarked for energy projects. “The incentives are incredibly potent for businesses,” Lawrence says. In addition to the available dollars, the federal government is mandating the use of renewable resources by 2020. Regulations are now requiring 30 states and Washington, D.C., to have at least 20 percent of their electrical consumption come from renewable energy by 2020. Investor interest is piqued by the possibilities. In the third quarter of 2009, 20 percent of venture capital dollars invested in the United States went to cleantech companies, according to Dow Jones VentureSource data. Clean-tech includes renewable energy such as wind, solar, biomass, hydro and biofuel power, information tax credits, bonds and more The American Recovery and Reinvestment Act of 2009 permits two types of tax credits for renewable energy—production and investment. Lawrence explains that the production tax credit is available for renewable energy entities who are actually producing energy. Investment tax credits are for the investment of capital today and have the federal government taking the role that investment banks played a few years ago—monetizing the tax credit right away. Eligible developers can take the investment tax credit and receive a cash grant upfront from the federal government for as much as 30 percent of the total facility constructing costs. The key is the construction of the facility must have begun in 2009 or begin in 2010 and be completed by 2013 for wind, 2014 for nonwind/non-solar renewable technologies and Continued on page 6

The Leading Edge - Winter 2010 - PFK

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