Schools are out, graduations are taking place everywhere and many of us are probably busy making plans for summer travel.  The cost of energy is likely to figure into making those travel plans as consumers are becoming more sensitive to energy prices.  Who would have thought that $3.25 for a gallon of gasoline would be a welcome sight?  While we certainly feel the pain at the gas pump, most of us never think about how our energy gets to us in a form that we can use, whether it is liquid transportation fuels or electricity.  Most of us also want to be environmentally responsible also, but in a study released last year by the Natural Marketing Institute showed that only 16 percent of the population was willing to pay 20 percent more for products which are made in an environmentally friendly and sustainable way.  As a sign of the current economic times, almost 30 percent of the population was willing to pay more for such products in 2006 and 2007. 

Energy price sensitivity is reflected at the corporate level, also according to a very recent report (see below) by Ernst and Young.  This report found that capital investment flows in the clean energy sector in the first quarter of 2012 were the weakest since the depths of the financial crisis three years ago.  Even though 2011 was a record year for clean energy investments, policy support in the Western countries has gone down due to fiscal challenges, while developing countries are considering national energy strategies.  On the positive side, as more mature technologies move closer to achieving cost structures similar to those of conventional sources of energy the renewable energy sector will flourish in the long run.  Rich Sun, an investor we interviewed for this newsletter, had this opinion also despite the multiple challenges in the short term.  Our goal at Strategic Biomass Solutions is to help entrepreneurs, investors and economic developers build better business models, make better investment decisions and consider incentives that help the sector to grow in a meaningful way.  Our next course on Renewable Energy Venture Development Academy (REVDA) is scheduled for August 7, 2012, in Jackson, Mississippi.  Stay tuned for news on sessions that will be conducted in Washington, D.C. and Orlando, Florida, later this year.

Here is another reminder that the U.S. Department of Agriculture is accepting loan guarantee applications till June 29, 2012, under its Rural Energy America for America Program (REAP).  The REAP program has been a very popular and highly successful program for proliferation of renewable energy and energy efficiency projects of all types, and in all parts of the country.  Projects under the loan guarantee program can be worth several million dollars and will have a very high probability of success when combined with other types of private and public sector funding.  As we discuss in REVDA, layering funding from multiple sources is critical to getting renewable energy projects financed.

Finally, I encourage everyone to attend the upcoming quarterly meeting of the Mississippi Biomass and Renewable Energy Council (MBREC) June 7 in Hattiesburg, Mississippi.  There is no cost to attend the meeting and lunch will be provided, but you must RSVP by June 5.  Please see below for more information on the meeting or contact Joseph Linton directly at jlinton@mta.ms.

Sumesh Arora, Ph.D.