Venture firms tend to be leery of government involvement in clean energy, but also recognize the role it plays as a potential customer and funder of research, said a panel of venture investors speaking at The Clean Energy Venture Summit Wednesday. They included Venrock, Arch Venture Partners, Kleiner Perkins Caufield & Byers, Sevin Rosen Funds and Applied Ventures, the venture arm of chip equipment maker Applied Materials Inc.

All seemed to be trying to determine how state and federal governments and regulations will affect their investments in the sector, and what roles they should play. While they agreed on the benefits of government investment in basic research, David Wells, with Kleiner Perkins’ Greentech group, expressed concern about the notion of government favoring particular technologies.

He worried that venture firms might feel compelled to lobby federal and state government to favor their portfolio companies, and that's something none of the panelists wanted.

That said, many of the panelist said incentives were necessary for getting some forms of clean energy--especially biofuels—to cost parity with existing fuels, yet none of them wanted to invest in a company that relied on incentives. The underlying fundamentals of the business tend to be more important, the panelists said.

That’s a sensible approach, but it sure seems like investors are still working to figure out exactly what role they want government to play in the growth of clean tech.—Stacey Higginbotham

See Dec. 15 story from The Deal