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Local authorities are key actors for implementing innovative energy efficiency technologies (retrofitting) to reduce end-use energy demand and consequently reduce negative effects of high energy use such as climate change and public budget deficits. This paper reports the results of a large-scale survey of German municipalities assessing drivers and barriers for deploying LED street lighting as an example of innovative retrofits. The results indicate competencies and capacities, transparency of the underlying technology base, and a clear proposition of savings are crucial drivers for municipal retrofitting engagement. Most significant barriers include lack of experience, the tendency to wait for future improvements of innovative energy efficiency technologies, and existing contracts with energy suppliers, manufacturers, or other conventional retrofitting contractors. Investments in municipal competency building (both regarding technologies and procurement) as well as diffusing standard tendering criteria and (public) monitoring their effectiveness are highly recommended to accelerate the municipal modernisation process.

Energy efficiency retrofits are often impeded by high perceived investment risks, long payback periods and a lack of skills. At the municipal level these issues are particularly pronounced as procuring, implementing, and managing retrofits can exceed existing municipal governance capacities. The diffusion of municipal LED street lighting as a replacement for conventional lighting serves as an example. This paper argues that technological (e.g. complexity and maturity), economic (e.g. selling services vs. products and financing costs), institutional (e.g. property situation and contracts) and competency barriers to retrofitting (e.g. lack of measurement capacity and qualified facilitators) translate into transaction costs. We develop a taxonomy of appropriate modes of municipal retrofitting governance based on transaction costs economics. The findings indicate that more market-based solutions, energy performance contracts in particular, can facilitate the procurement of innovative energy efficiency retrofitting solutions and associated investments among municipalities if neutral tenders, open-book accounting, municipal ownership and intermediary organisations allow municipalities to choose appropriate governance structures for particular technologies and retrofits.

This research article explores the role of institutional innovation intermediaries in accelerating the commercialisation of (clean) technologies. Drawing on the finance and innovation intermediaries literatures, we show that financial barriers to eco-innovation can be partly overcome by particular functions of institutional innovation intermediaries; this in turn mobilises private finance along the innovation process. Therefore, we empirically evaluate the roles and instruments of institutional innovation intermediaries (innovation intermediation, policy support, public–private cooperation, financial instruments). Our contribution intersects both the finance and the innovation systems literature by exploring the finance mobilisation functions of institutional innovation intermediaries to address barriers to eco-innovation along the innovation process.

Municipalities aiming at mitigating climate change by implementing new energy efficiency technologies face budgetary and capacity constraints. Outsourcing through energy service contracting could provide a solution. This paper reports results from a survey of 1298 municipalities concerning barriers to retrofitting public street lighting and the possible role of energy service contracting to overcome these barriers. Using a logistic regression analysis, the authors investigate determinants of opting for energy service contracts in the specific context of LED retrofits. Results point to an advantage of outsourcing in a financially and capacity-constrained environment, which corresponds with the main reasons for engaging in contracting: minimising investments and financial risks. However, municipalities often do not fully grasp the risks associated with retrofitting especially using a novel technology such as LED. In relation to that they underestimate the risk reduction potential of energy performance contracts (EPC). Previous experience with outsourcing increases the probability to engage in servitization although certain existing partnerships, particularly with utilities, prevent municipalities from considering energy performance contracts. Interestingly, engaging an energy consultant has a negative propensity to use energy service contracts, while pre-negotiated standardised contracts for energy performance contracts have a positive influence.

The impact of venture capital (VC) investment on innovation and technology commercialization as well as the influence of market capacity on venture capital firm decision-making has been extensively covered by the existing literature. However, the interdependency between investment that drives technology and investment that drives market capacity has received relatively little attention. Whereas literature suggests that VC investment in technology companies strengthens technology and/or manufacturing efficiency, asset finance investment drives capacity growth and volume in certain technology sectors. We examine interdependencies in investment in technology and capacity by analyzing the relationship between VC investment in solar technology firms and asset finance investment in solar power infrastructure capacity in the US. We find that investment in solar technology drives investment in solar capacity; however, we find no evidence that market growth caused by solar capacity investment induced follow-on investment by solar technology venture capitalists in the US., http://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2501857_code382666.pdf?abstractid=2501857&mirid=3, Previous version nominated for Best Paper Award, G-Forum 2014, info:eu-repo/semantics/published

The role of technological innovation in mitigating and adapting to climate change has received growing interest in recent years. Scholars have used innovation system (IS) frameworks to grasp the interdependencies of innovation in such complex settings. However, this literature has somewhat neglected two IS features, namely: (1) the financial framework and (2) negative and unintended feedback mechanisms. Although financing innovation is usually mentioned, it rarely goes beyond venture capital (VC) as part of an entrepreneurial support network. In this paper, we emphasize the importance of these two understudied aspects of IS through an exploratory, qualitative study of private equity and VC in the clean technology (Cleantech, or CT) “industry” in the United States and Germany. Given our focus on clean technologies as well as private equity and VC, our sample includes the United States as the most sophisticated private equity and VC market and Germany as a lead market for environmental technologies. Our study makes one empirical and two theoretical contributions to the literature derived from a comprehensive analysis of policy-finance-innovation interdependencies: empirically, we find that in interdependent systemic relationships such as in the Cleantech sector, different policies neutralize or even overcompensate for one another, leading to a “waste” of economic resources. Theoretically, our model extends the classical IS model to more systematically include financial institutions and considers possible negative feedbacks. These findings lead us to further avenues for research, suggesting the investigation of other relationships for negative feedbacks for similar industry sectors that are asset heavy, such as biotechnology or nanotechnology., http://www.researchgate.net/publication/266201650_Private_Equity_in_Clean_Technology_An_Exploratory_Study_of_the_Finance-Innovation-Policy_Nexus, info:eu-repo/semantics/published

In this paper, we discuss capital commitments from different sources of finance that are used in several key countries worldwide to finance clean technologies (CT). In the course of our analysis, we first elaborate on findings from literature that address the importance and implications of different sources of corporate finance including venture capital, private equity, corporate debt, public equity markets, acquisition finance and government grants. Second, we provide data on the volume of capital that has been invested in firms operating in the CT sector from different sources of finance during the period from 2002-2012. In addition to corporate sources of finance, we also elaborate on CT asset finance used to fund infrastructure projects. We find that the business life cycle concept is in large parts transferable to the industry level. Moreover, the data suggest the presence of interdependencies between different types of corporate finance as well as between corporate finance and infrastructure finance. Our results have implications for firms in the CT sector seeking capital as well as for policy makers. We conclude with an interpretation of the capital flows regarding their impact on the CT sector as a whole and provide an outlook of futures avenues of research in this field., http://ecgi.ssrn.com/delivery.php?ID=624013110082094069011024028108095011052056061029027087091072076125103069125121067074053002099029105061121072066025065069079070039041082054021075087019122125069011100062032055071013072008099026125098076116092108066125126119120065084029120002095092111&EXT=pdf&TYPE=2, info:eu-repo/semantics/published

One of the key challenges of energy access in emerging markets and developing countries is how to reach households and communities that are unlikely to get a grid connection in the long term or those that are connected to the grid but suffer from regular blackouts or low voltage. By surveying entrepreneurs selling Solar Home Systems (SHSs) on a commercial basis in emerging and developing countries, this study is one of the first attempts to quantify the key elements of four potential Product Service Systems (PSSs): Cash, Credit, Leasing and Fee-for-Service. Whereas the Fee-for-Service approach was found to be suitable only under certain conditions, all PSSs share two key elements for successful market deployment: one or more years of maintenance, and customer support in financing these customers' new asset. Moreover, it appears that private sector companies are in principle able to deliver SHSs to households with incomes greater than USD 1000 per year. The implications for policy makers and development aid agencies are, first, to include maintenance services into public programmes or public-private partnerships and, second, to explicitly consider financial risks for entrepreneurs (e.g. customer commitment and repayment conditions). © 2012 Elsevier Ltd., info:eu-repo/semantics/published

Our research analyzes the role of private equity compared to other sources of capital with respect to its ability to cope with transitions in the economic and business environment as well as with transitions in the regulatory and policy framework during the early and expansion stages of a company life cycle. We investigate the role and impact of policy, regulation and regional differences on financing during individual life cycle stages and shed light on unintended consequences of policy measures. We provide insights on the demand for private equity in the renewable energy and environmental technology sector. The results of our research help identifying success factors and barriers in the collaboration between firms and different suppliers of capital, and policy makers. Moreover, they help deriving appropriate financing mechanisms for firms operating in the renewable energy and environmental technology space, http://druid8.sit.aau.dk/acc_papers/nf8vq5scakyy09cj7yiiv48ptjc2.pdf, info:eu-repo/semantics/nonPublished