Miller, David with John Sterman, "New Venture Commercialization of Clean Energy Technologies", 2007 July 29-2007 August 2

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Clean energy technologies lower harmful emissions associated with the generation and use of power and many of these technologies have been shown to be cost effective and to provide significant benefits to adopters. This paper examines why new ventures founded to commercialize these technologies have failed to achieve widespread adoption. Based on interviews with clean energy entrepreneurs and other stakeholders and on case studies of clean energy technology ventures, a new venture simulation model was developed that models the cash flow, labor force, market, competition, and product development for a prototypical clean energy technology venture. When the model is parameterized to correspond to a venture that starts with superior technology at an attractive price its behavior corresponds to the experience of many of the companies interviewed. The modeled venture takes many years to achieve profitability due to long sales cycles, limits to market growth, and the time needed to gain experience producing and selling its products, and therefore has a high probability of failure. Analysis of the model results in a set of guidelines for what these ventures, investors, and policy makers should do to increase their odds of success.

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  • 2007 July 29-2007 August 2
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