Fostering Entrepreneurship in Clean Tech
Congress must harness the job creation and breakthrough innovation potential of small business
According to the Kaufman Foundation, nearly all of the net job creation in the U.S. between 1980 and 2005 occurred in firms that were less than five years old. Kaufman also reports that two-thirds of America’s new jobs were created by young firms in 2007, the last pre-recession year.
Small firms also are the main source of breakthrough innovation in America. Small businesses produce five times as many patents per revenue dollar as large companies and 20 times as many as universities—and more small-business innovations are commercialized. According to SBA studies, small-entity patents cover more original and broader technologies than large patenting firms. Small businesses also are more likely to develop emerging technologies than large firms. NSBA urges Congress to develop a plan to harness this ability in the clean-tech arena.
Make the Research and Development Tax Credit Permanent: While the R&D tax credit consistently has been extended since the 1980s, it is not permanent. This is unacceptable. Business—especially startups in emerging fields—craves certainty. Congress immediately should grant this certainty to inventors, entrepreneurs, and their investors.
On-Bill Financing: Currently implemented in several states, on-bill financing programs have made thousands of loans to small businesses to invest in energy-efficiency with unparalleled success. According to an NSBA report, energy-efficiency programs can help the average small business save $4,932—and oftentimes more—every year on its energy bills. This also would reduce greenhouse gas emissions by 259 million tons. NSBA urges Congress to work to expand On-Bill Financing options around the country.
Building Star: The proposed Building Star Program would create a program within the U.S. Department of Energy, which would issue rebates to commercial-building owners who purchase energy-efficient products and materials. The program also would include a loan fund and guarantee program in the DOE, which would issue funds to state energy programs to create revolving loan funds and guarantee existing state loan programs. NSBA urges Congress to enact and fund this program.
Expand and Enhance Federal Procurement of Clean Tech/Green Products: As the largest consumer of goods and services in the world, the U.S. federal government should continue to expand contracting opportunities for innovative small businesses that produce traditional products in a more environmentally-friendly manner. The GreenGov Supply Chain Partnership promises to provide contracting incentives to companies that track and reduce their GHG emissions and the U.S. General Services Administration has a Green Procurement Program of “environmentally preferable” products available for agencies.
Micropower: While some small businesses are not in a position to produce energy on-site, many could produce much of their own electricity by installing on-site generation systems. In states with net-metering, companies also could sell electricity back into the grid and use this money to further defray their costs. On-site micropower production allows firms to control their costs and make long-term investments in their company instead of a utility. NSBA urges Congress to explore a small-business micropower pilot program.
Alternative-Fuel Vehicles: Alternative-fuel vehicles stand poised to lower fuel costs for small firms and reduce America’s need for imported oil. They also represent a new and emerging market that will be populated with small-business interests. NSBA urges Congress to provide loan guarantees and/or loan loss reserve funds for the purchase of alternative-fuel vehicles.
