Financial barriers to future technologies

Up to now, there have been relatively few studies focussing explicitly on the conditions in Germany for the financing of clean technology and renewable energy enterprises by private equity (particularly during the start-up phase). The analyses that do exist show that the problem is a multi-faceted one. A wide range of factors, some of which unfortunately work to reinforce one another, combine to have an adverse effect on the situation as a whole. Obstacles are also created by the overall legal framework and diverse market factors, as well as the insufficient conditions laid down by suppliers and problems associated with those requesting their services.

In addition to the basic barriers that affect the PE market in Germany as a whole, certain issues specific to the financing of clean technology and renewable energy enterprises can also be identified. On the one hand, the development of technology in these sectors is protracted and relatively costly compared to software industry start-ups, for instance, which means such investments necessitate a long holding period. On the other hand, the performance of these investments is perceived as unsatisfactory.

The primary objective of this brief study was to look at these aspects in more detail and to establish which issues required further research as regards financial barriers. A range of specific research areas were identified as being relevant, for example, investigations into the profitability of renewable energy investments, an evaluation of the role of state capital as a substitute for, and in some cases a complement to, private investments, or work on designing a holistic approach consisting not only of financing, but also management advice for start-up companies.