Review: The Tough Realities of Renewable Energy Businesses

Craig Shields of published a mini-guide. His guide, The Tough Realities of Renewable Energy Businesses: Why Investors and Entrepreneurs are Struggling to Profit in Clean Energy. Because the guide is somewhat vague I'll put it simply: the tough reality of the renewable energy business is that it is hard to make a profitable business. This guide is directed more for entrepreneurs prepping green business plans for venture capitalists.

It begins:

The good news: The world’s attention is riveted on clean energy solutions.The bad news: There are hundreds of mistakes that are easy for entrepreneurs and investors to make as they enter this space.

I've renamed the tips to correspond with the Tough Reality they are trying to imply. If you read the original document, it can get vague and diluted, but it helped produce my interpretation of The Ten Tough Realities of Renewable Energy Businesses:

- The renewable energy market is saturated by larger corporations. - If you want your renewable energy business to succeed find a less crowded market.

- Larger corporations, among the Fortune 25, are fighting for the green market and they are your competition.

- As a renewable energy entrepreneur, your resume better be impressive or you won't get funded.

-  Shields would rather see an A-team with a B-business plan. That is better than a B-team with an A-business plan.

  • The basics of marketing must be understood or else you won't get funded. - Instead of trying to "build it, so your customers will come" understand your product to know who will buy it. If the product is compelling you will get funding, but you must do your market research!
  • Understand the larger consequences of your product's necessary infrastructure or you won't get funding.
  • The Government may damage your business plan if it relies on future initiatives and legislation.
  • Funding requests for low technology readiness plans are unlikely to get funded.
  • There is corruption that may effect your renewable energy business. - An easy example is the corruption that took place in California that saw the complete dismemberment of electric vehicle infrastructure. In that situation car manufacturers sued California for passing a law to lower car emissions, which supported the electric car. The head of the CA Air Resources Board yielded and outlawed the legislation so there would not be an incentive to produce my electric cars. Corruption at its finest.
    Big names and big money players will get more attention and funding than any other renewable energy entrepreneur.
  • Investors will need to see attractive returns on investment or you won't get funded.
  • You will need to ask for help.

As a future renewable energy entrepreneur and a current employee of a renewable energy company, there are some tips that I wasn't made aware of that I found incredibly useful.

Reference: The Tough Realities of Renewable Energy Businesses: Why Investors and Entrepreneurs are Struggling to Profit in Clean Energy