Posted: September 01, 2010
The race for global green
U.S. risks losing its position as the leader in cleantechBy Lisa Ryckman
The U.S. still leads the world in cleantech innovation, but other countries are investing more green in green and leaving the U.S. behind in a variety of important ways, industry experts say.
"The U.S. cannot expect to outspend our competitors - China, Europe and Brazil," says Trent Yang, director of Entrepreneurship and Business Development CU/NREL-Renewable and Sustainable Energy Institute (RASEI). "Many other countries are spending a significant amount of resources and capital toward developing their cleantech sector, especially China, which is outspending the U.S. in deployment, manufacturing and cleantech."
The American cleantech industry needs to shore up its strengths: research and development, startup culture and know-how, and a strong capital investment base, Yang says, noting that the U.S. still boasts some of the top publicly traded cleantech companies in the world, including First Solar, SunPower, Tesla and A123 Batteries.
"Because of the significant U.S. R&D base and culture from the last 30 years, we are still providing the best innovations to the market," he says.
But other countries have moved out in front in specific cleantech categories. Germany is the clear leader in the development of solar power technologies, and Denmark continues to be a global leader in wind generation equipment and application, says Dale Eisler, consul general with the Canadian Consulate in Denver.
"Advanced training and education is extremely important, especially since we are talking about a relatively new sector with technologies that will revolutionize the way certain businesses operate in the green economy," Eisler says.
Canada has one of the most advanced R&D tax incentive programs among G-7 countries, Eisler says, and invested about $1.8 billion dollars toward renewable energy R&D in 2009. Canada is ranked directly behind Germany, Denmark, U.K., Switzerland and the U.S. for cleantech investment and development.
"Many believe the EU is leading the cleantech movement as a result of key investments made in infrastructure projects that enable European businesses and homes to sell unused power back to the electric grid for redistribution," Eisler says.
The U.S. should think about emulating the cleantech technical training and education other countries have in place, says Matt Cheroutes, spokesman for the Colorado Office of Economic Development and International Trade.
"Not only is it something our higher education institutions need to embrace, but we need to see a broad spectrum of educational systems, including technical and vocational institutions of learning," he says. "It can't just be academic - it needs to be people on the ground, working."
Cheroutes says after trips with Gov. Bill Ritter to look at cleantech in China, Canada, Japan and Spain, "We've returned home as confident as ever that we truly are a world leader in this field.
"We have the brains, we have the talent, we have the research capability and the technology, and we have the natural resources," he says.
We also have some political barriers that other countries have either overcome or didn't have in the first place, Cheroutes says.
"For the U.S., it's about unwinding old habits and getting a unified, cohesive strategy that everyone can get behind," he says.
Europe consumes nearly 80 percent of the total solar in the world, while the U.S. uses less than 10 percent, says Ascent Solar Senior Vice President Ashutosh Misra. He sums up the problem with one word: demand.
"They are incentivizing people," he says. "You try to tell somebody here we're going to increase your electricity rate by 2 to 3 percent and give that money to solar, and you'd have people calling their politicians and protesting in the street."
Misra points to Germany as a country where solar is working, despite the odds.
"The last place in the world you'd want to put solar is Germany - it's all clouds," he says. "In Germany, people are paying 10 to15 percent more (for their power). The people are subsidizing solar. They believe in it."
Part of the problem getting consumer buy-in is the low cost of energy in the U.S., Misra says. "It becomes very tough to compete initially. Renewables are forced to compete with fossil fuels, and you can never catch up with respect to cost. Somebody has to step forward to build critical mass, and then you'll see the prices start to come down."
"Local utility companies need to provide incentives for the public to become more energy efficient by rewarding those homes and businesses that take the initiative to replace traditional forms of energy with renewable energy sources," he says. "Going green may have a feel-good effect, but to ensure a greater buy-in, there must also be financial compensation for making investments in cleantech products and services."
Cleantech is perhaps having the most dramatic impact on the lives of people in developing countries, Misra says. Places where no traditional fossil fuel infrastructure exists and most of the population lives without electricity will benefit to the greatest extent from the next generation of cutting-edge cleantech.
"Solar falls on every part of the Earth - you just have to figure out how to harvest it," he says. "It's like a village well - people go and pull water out of the well, and it's the same with electricity. It can change people's lives, and it already is doing that in India and Africa. You have to be there to feel it."
Lisa Ryckman is the online editor at cobizmag.com.