One of the major hurdles impacting start-ups in Europe is permits. Despite the European Union implementing various policies to support the deployment of sustainable energy technologies across its member states, many start-ups are starting on the back foot when securing their permits.
Right now, the time it takes to receive a permit is on average 3-4 years; yet the global benchmark 6-9 months.
Given the complexity of the European Union, with each country controlling its own regulatory framework, local laws, regulations and permitting requirements, complexity is expected. But let’s learn from the countries with the most well defined, streamlined procedures and make it a priority to cut unnecessary bureaucracy so that we can fast-track our innovations.
The next issue is financing. Sustainable energy start-ups need financial muscle to support early-stage development. Unlike software developers, many of our start-ups are producing capital intensive technological solutions, also known as Tough Tech. However, most VC firms cannot meet their high capital needs and traditional banks, that could typically provide the level of financing needed, do not have the appetite for such risk. As a result, we have a huge gap between the financing required by these start-ups and what they can access. To bridge this, these high CAPEX early-stage companies require specific financing instruments, such as loans and equity investments, that will meet the required level of capital needed to support their large-ticket financing needs.
Public funding also has its limitations. In Europe we have been able to mobilise public funding for early-stage investment, but unfortunately applicants are expected to fit within certain criteria. As a result, many start-ups are missing out. We need to shake up this thinking and encourage new solutions to the growing complexities surrounding climate change. One size will never fit all, that is simply at odds with innovation.