Which renewable energy policy is a venture capitalist's best friend? Empirical evidence from a survey of international cleantech investors

Governments around the world have adopted ambitious targets to increase the share of renewable energy and reduce greenhouse gas emissions. They pursue a variety of policy approaches to achieve these targets. It has been a popular theme for contributions in Energy Policy to investigate the effectiveness of such policies, This article adds a new perspective to the debate, namely looking at the policy preferences of private investors in innovative clean energy technology firms. We surveyed 60 investment professionals from European and North American venture capital and private equity funds and asked them to assess the effectiveness of various policies, in terms of stimulating their interest to invest in innovative clean energy technologies. In addition to quantitative rankings, we use qualitative interview data to capture additional information on why investors prefer some policies over others. The combined analysis compensates for the inherent limitations of a quantitative ranking using generic policy types. The results of this exploratory analysis demonstrate that, all other things being equal, investors in our sample perceived feed-in tariffs to be the most effective renewable energy policy. The overall preference for feed-in tariffs is even more pronounced among investors based in Europe and with higher exposure to clean energy. (C) 2009 Elsevier Ltd. All rights reserved.