FALMOUTH – Steve Musica and Laurenz Schmidt have developed a solar panel that produces heat and hot water. The Beltane Solar panel also can be modified to disinfect and desalinate drinking water — a useful feature in hot, sunny climates.

Beltane Solar, a startup in Topsham, has a prototype. What it needs is $4 million or so to bring it to commercial production.

That quest for early-stage investment led Musica and Schmidt to participate in a forum Wednesday called Clean Tech VC 101, a primer on how Maine companies with clean technology brainstorms can attract venture capital. It featured discussions with managers from Boston-area firms that invest millions in the field.

The session was informative for Schmidt, a former chief technology officer for Fairchild Semiconductor who now focuses on renewable energy solutions.

“I’m more at home in the tech sector,” he said. “To get an exposure to what motivates venture capitalists is very helpful.”

Helpful, but also a reality check. Maine is striving to develop renewable energy industries around wind, ocean and biomass power, but its small businesses face stiff challenges in attracting private investment, the experts said.

Among the reasons:

Clean technology investing is relatively young, and profit models are still being tested.

Investors are looking for breakthrough ideas with global applications, not incremental advances of local interest.

Clean tech, especially if it involves generation, is capital-intensive. The risk is multiplied by competing energy prices and shifting government regulations.

That said, organizers want to put Maine’s clean energy sector on the radar screen of investors in Boston, the center of New England’s venture capital funds.

“We want to show them who’s up here and show people here the models for success,” said Jeff Thaler, co-chairman of E2Tech the Environmental & Energy Technology Council of Maine.

E2Tech recently formed an alliance with the New England Clean Energy Council, which helped bring the primer to Maine.

Venture capital is private money that’s invested in small businesses that appear to have the potential for long-term growth. The investments carry high risk — and the prospect of high returns, if an idea takes off and a company goes public or is bought by a larger outfit.

Venture capital is a critical source of financing for technology companies, with the highest concentrations in California and Massachusetts. So Maine’s proximity to Boston offers promise.

But Maine is starting from a low point.

The state ranked 34th in venture capital investments in 2009, bringing in $8.1 million for five deals, none in the energy sector.

In New England, where firms invested $639 million in the first quarter of this year, much of the money went to biotechnology. Only one of the top 10 deals went for energy, although it was the biggest chunk: $51.7 million for a waste-to-energy startup in Massachusetts, according to the Money Tree Report.

Maine’s highest-profile energy firm that has drawn private venture capital is Portland-based Ocean Renewable Power Co. A Massachusetts fund, Patient Capital Collaborative ’07, put in an unspecified amount as part of a $20 million investor group supporting the company’s tidal turbine generator technology.

Maine has the framework to interest investors, said Jim Matheson, general partner at Flagship Ventures in Cambridge, Mass. It has strong ocean and biomass energy resources, active university research and an engaged public sector.

But investors are cautious about energy breakthroughs that depend on generation or infrastructure development, said Dennis Costello of Braemar Energy Ventures in Boston. Even the best fuel cell needs refueling and service investment, for example.

“It’s not like the Internet,” he said.

Asked about factors that guide an investment decision, Costello keyed in on the potential size of the market for the product or service. It has to be big enough to justify an investment ranging from $2 million to $20 million, with the potential to generate at least three times that much for investors.

Staff Writer Tux Turkel can be contacted at 791-6462 or at:

[email protected]