The Market for US Cleantech Is Out There
One of many press releases I received this week highlighted the new
Clean Energy Export Principles developed by a "multi-industry coalition, which was coordinated by the National Foreign Trade Council, and U.S. government representatives." They recommend a significantly expanded and technology-neutral effort by the US government to promote exports of clean energy gear, including equipment for the smart grid, energy efficiency and energy storage. They also suggest the need to reduce trade barriers affecting such exports globally, not just to help US industry but to increase the effectiveness of efforts to mitigate climate change. I can only hope that the administration embraces these recommendations as enthusiastically as it has other aspects of its green agenda, because these principles are aimed squarely at the biggest opportunities for clean energy technology and emissions reduction, outside our borders.
It doesn't really matter whether these principles reflect the sensible recognition of trends in the global energy marketplace, or merely make a virtue of necessity at a time when government support for domestic clean energy deployment is approaching its
statutory and practical limits. However the current
debt ceiling crisis is resolved, the capacity for the federal government to continue providing generous incentives for cleantech deployment, either through the Treasury
renewable energy cash grants that have totaled nearly
$8 billion to date, or the Department of Energy Loan Guarantee program that has backed or
directly funded more than
$40 billion in loans for clean energy projects is likely to be far more constrained in the future.
Nor is this simply a question of money. The whole notion that we are in some kind of renewable energy deployment race with China or any other country ignores the big differences in our respective levels of economic development. If there were such a race we would be bound to lose, and not because we don't have the right policies or strict enough regulations, but because
US electricity demand is growing slowly and is backed by both ample
generating capacity and
ample supplies of relatively cheap and
low-emitting fuel. Meanwhile both
electricity demand and capacity in the developing world are
growing rapidly, and the indigenous generation fuel in good supply is mainly coal. That, together with the disparities in economic growth coming out of the global recession, is the underlying reason why investment in renewable energy in the developing world apparently
surged past that in the developed world last year.
With cleantech supply chains already substantially globalized, the leaders in this industry must be global in scope and focus. US manufacturers of cleantech equipment shouldn't ignore the US market, but they must be realistic about it. Even with growing opportunities in the smart grid and solar power, the US will account for only a small fraction of the global market for such goods and services, as growth shifts away from the mature markets of Europe and North America. The market share that counts, for competitive strength and economies of scale, is
global market share. And global sales will provide the volumes needed to drive down costs for both exports and domestic installations. There's a huge, growing market for cleantech, and it is mainly
out there.
Labels: clean energy, cleantech, export principles, grant, incentives, loan guarantees, manufacturing
