Each year, when writing the CE Views column immediately after the annual Clean-Tech Investor Summit (co-produced by International Business Forum and Clean Edge), I've been struck by how it always seems to coincide with a major event with deep implications for the clean-tech industry. Usually this has come on the political stage: President Obama's inauguration, the balance-tipping election of Massachusetts Republican Senator Scott Brown, or even former President George W. Bush's State of the Union assertion that we are "addicted to oil."
This year’s defining event, occurring one week before the seventh annual Summit in Palm Springs, California, came from the private sector. But it has clear policy and political implications, speaks volumes about current trends in the industry, and poses deep questions for the future of the U.S. clean-energy economy. It was the January 12 announcement of Evergreen Solar’s plan to shutter its Massachusetts solar PV plant and move production to China, costing the jobs of more than 800 U.S. employees.
The outsourcing of U.S. manufacturing jobs to China is obviously nothing new, but Evergreen’s move, coming from a U.S. solar industry pioneer that received generous state government incentives, has been widely viewed as a significant U.S. policy failure. And it speaks to a much larger issue: the lack of a long-term, comprehensive U.S. plan for energy supply, job creation, and global economic competitiveness.
This was the overarching theme of the 2011 Summit. Conference chairman and Technology Partners general partner Ira Ehrenpreis opened the Summit by immediately pointing to our nation’s lack of long-term energy planning and “disjointed, hodgepodge policies.” “If we continue along this path,” he said, “we will see more Evergreens.” Provocative first-day keynote speaker John Hofmeister, former Shell Oil president and author of Why We Hate the Oil Companies, was even more direct. “On energy, from Nixon to Obama, the governing system has failed this country,” he said. “By politicizing energy, we zigzag back and forth and don’t get it done.”
I strongly disagree with some of Hofmeister’s ideas, which (not surprisingly) sound an awful lot like “drill, baby, drill.” But I like his call for a permanent federal Energy Resources Board, modeled on the Federal Reserve, that would include public officials and corporate representatives of both energy providers and big energy users like banks, airlines, and FedEx/UPS (and I would nominate Google). The board would set parameters of energy supply and policy for periods of one to 10, 10 to 25, and 25 to 50 years. He noted that the Fed, established by President Woodrow Wilson in 1913 after a series of financial panics, helped remove monetary policy from the vagaries of our two- and four-year election cycles.
One who might agree with this concept is General Electric CEO Jeffrey Immelt, who was recently named to chair President Obama’s new Council on Jobs and Competitiveness. At the 2009 Clinton Global Initiative conference, Immelt said the U.S. has “a systems problem” and held up China’s series of five-year plans for energy as a good model. "If we want a clean-energy future, we're talking about 20- to 40-year investments,” he said.
Hofmeister also called the roughly $80 billion to date in ARPA-E loan guarantees to clean-energy companies “a frittering number.” Considering that a single Chinese company, Jinko Solar, received a five-year, $7.6 billion line of credit from the state-owned Bank of China in late January, he has a good point. Or as BrightSource CEO John Woolard noted, “The typical Chinese PV company can get a 3.5 percent interest loan. They’re not impressed with our loan-guarantee program.”
China is clearly on everyone’s mind these days in clean tech, and with good reason. Since China turned its turbo-charged, government-directed economic growth engine to clean tech a few years ago, it has surged to No. 1 in the world in installed wind energy (adding 16 new gigawatts of capacity in 2010, compared to 5 GW of new wind in the U.S.) and to No. 1 in solar PV production. In our 2007 book The Clean Tech Revolution, Clean Edge managing director Ron Pernick and I included China as one of the ‘six C’s’ driving clean-tech growth, along with Climate, Cost, Capital, Competition, and Consumers. In 2011, China would have to rank at the top of that list.
“We are in a race,” said Summit speaker Cathy Zoi, the DOE’s acting under-secretary for energy. “The Chinese are doing great things and getting them done quickly. We have the capability to do it here too, but we need a policy and we need some support.”
In his State of the Union address, President Obama said that the competitive challenges being posed by China, India, South Korea, and other nations should be “our generation’s Sputnik moment.” To meet that challenge, he called for an end to oil industry subsidies (I agree) and a target of 80 percent clean electricity for the U.S. by 2035 (a great goal, but tempered by the inclusion of clean coal, nuclear, and natural gas – see Pernick’s January CE Views column on this, “In an Age of Compromise, Will Clean Energy Become Dirty?”).
The original Sputnik moment in 1957, of course, led to the creation of NASA, the Apollo program, and the U.S. moon landing in 1969. The second day of the Summit, January 20, happened to coincide with the 50th anniversary of President John F. Kennedy’s 1961 inaugural challenge to do just that. Zoi pointed out that the average age of a NASA engineer in 1969 was 26, meaning that JFK inspired some of the nation’s best and brightest 18-year-olds to study engineering and rocket science and become part of this dream.
Can a call to make the U.S. No. 1 in clean tech be a similar inspiration? Zoi said that such nationwide missions need to be built on “a delicate balance between opportunity and threat,” and the Apollo program certainly had both – the aspirational opportunity to be first to the moon, and the real threat of Soviet advantage at the height of the Cold War.
Today’s threat is an economic one, as Evergreen Solar’s outsourcing of PV production and many other examples have shown. Obama played up both opportunity and threat in his next-day visit to high-efficiency lighting manufacturer Orion Energy Systems, which employs more than 250 factory workers in Manitowoc, Wisconsin – the town where a small chunk of a later Sputnik satellite actually crashed to earth in 1962.
Can the opportunity to be the world’s No. 1 clean-tech economy deliver the same inspiration as a moon landing? In a nation that’s much more politically divided (and different in countless other ways) than it was half a century ago, it’s a tall order. But our economic future, and our nation’s pride, may depend on it.
Wilder is Clean Edge's senior editor, co-author of The Clean Tech Revolution, and a blogger about clean-tech issues for the Green section of The Huffington Post. E-mail him at firstname.lastname@example.org and follow him on Twitter at Clint_Wilder.
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