The clean tech industry is growing up and like any other, maturity is not coming without growing pains. But in Austin, clean tech has helped keep the economy booming despite a global recession and is a solid contributer to the city’s growing reputation as a international hub of innovation. In this Green Line Series interview, clean tech expert, Iga Hallberg, gives us the run down on the industry’s next frontiers and the impact it is poised to make on global energy markets.
GoGreen Conference: The clean tech industry has seen its ups and downs of late. It’s been the darling of the green jobs movement and it’s been at the heart of several major controversies over taxes, subsidies and incentives, and international accusations of bad sportsmanship — despite all of that, what kind of real, progressive impact has clean tech made on the energy and tech industries as a whole in the past five years?
Iga Hallberg: I think we need to look at the clean tech industry as a system and consider both the generation and conservation of energy on assessing the impact of clean tech on our communities and economy. According to Bloomberg Energy Finance, over $1 trillion has been made in investments into renewable energy since 2004. The renewable energy generation industry has grown very rapidly in the past few years with global renewables power capacity (minus hydro) at over 300GW currently.
We have seen similar progress on the efficiency side and huge investments in technologies in smart lighting, thermostats, appliances, building materials and standards. It is fascinating to see the different types of programs that are being supported in different regions globally and as we would expect, those programs typically fit the resources available in those areas.
For example, we have utility scale solar plants being built in the Southwest, while rooftop systems are more prolific in urban areas in California and the Northeast. Likewise, many private homes and commercial customers have taken advantage of new more efficient lighting technology. Today, the German solar industry still employs hundreds of engineers and workers developing technology throughout the whole value chain despite the fact that much of the panel manufacturing has moved to China recently.
The industry is growing globally and continuing to invest even in a soft economy making renewable energy more cost effective and available to many more developing countries than even three years ago.
GG: Has the industry’s image been damaged by the controversies surrounding its growth? Do you see a reframing of the story as necessary to securing the industry’s future success in the States? If so, what is the story that needs to be told?
IH: This is a very young industry which will go through maturing cycles like any other. A lot of the policy and incentives have been offered to support initial growth and are designed to be reduced and ultimately taken away. The industry MUST learn to sustain itself through rapid scale and simultaneous cost reduction in order to be competitive on a global basis. That goes for solar power, as well as things like better insulating windows for homes. We have recently seen similar cycles in the semiconductor and display industry in the 1980s and 90s and the explosion of personal electronics in the past 10 years with rapid globalization of products and applications. Whole industries have been developed to support our use of our favorite communications devices.
We have also had a number of public failures and one wonders about motivations for their massive publicity, but those of us in the industry watching the rise and fall of certain technologies and services recognize that it is a natural process of industry maturity. We all can point to different technologies that have had great promise and have not been adapted by the market or were replaced by a more innovative or generally more useful idea. These patterns will continue to occur and we should expect to see more creative and better technologies as we move forward.
GG: Austin has put several decades into developing its clean tech sector. What’s the big picture ROI for the region? When clean tech does well, how does that affect the rest of the business community and citizens?
IH: We have a rich history of innovation in Austin and it has served the community here very well. The Austin Chamber of Commerce lists approximately 225 companies in the clean tech sector. These range from start-ups to mature companies employing thousands of workers. This innovative culture has helped rank Austin as the top city for “clean tech incubation” according to SustainLane Government.
The clean tech industry appeals to people in many ways, whether it’s an opportunity to work with leading-edge technologies, fast growing markets and innovative business models; or a deeper level of personal satisfaction for making our communities cleaner, more sustainable and healthier. Our city council has been responsive to Austinites’ desires for more progressive policy that is also environmentally friendly. I believe this aspect of our city is a key factor that has made Austin one of the fastest growing cities in our nation.
GG: What advancements in the industry really have you revved up right now? What do you think the next big thing will be?
IH: I think we have tremendous potential to make significant progress with energy efficiency measures. There are number of new products and solutions we are testing in the Pecan Street smart-grid community here in Austin, for example. I also think that there are innovative business models developing as a result of major breakthroughs in clean tech technologies that will impact very old and very inefficient industries such as agriculture. I am personally working with a vertical grower to help launch their business on this front.
GG: Much of your background is in solar. In Austin, that certainly makes sense as a primary player, but what other technology/innovations do you see as vital to the clean energy mix that will wean us off fossil fuels and into energy independence?
IH: We have a number of companies here in the clean tech industry in Austin that participate in the whole solar value chain such as HelioVolt, Solarbridge and SunEdison. We also have attracted lighting companies that are gaining real market traction such as Illumitex and Firefly LED and leverage many similarities of the semiconductor and solar industry. But we also have many software and services companies in Austin such as Incenergy, whose technology is used in commercial buildings to monitor and control energy usage, that serve that market along with iControl and Site Controls (acquired by Siemens). As a community, we have been active to attract battery and storage technology innovators and alternative fuel developers. It is a very dynamic and vibrant market!
GG: Do you feel its possible for the private sector to get to that tipping point without government playing a role? If not, what kind of role do you think government should play? Should we still be focused on incentives or are there other strategies to pursue that could be more effective with less risk of fallout?
IH: We have been fortunate to learn from the experiences of other countries like Japan and Germany who have tried and tested various incentives and government policy. The impact of those incentives has had a clear and direct influence on the rapid cost reduction of solar and wind power and therefore economic viability of those energy sources. The industry is well aware of the time limits of those incentives and has aggressive roadmaps across the board to achieve grid parity in all markets. The Department of Energy and our National Renewable Energy Labs have well documented goals to reach $1 per watt cost targets for solar panels, for example. We are also all looking to our policy makers to start changing the incentives non-renewables are receiving. The economics would be very different today if the comparisons of renewable vs. non-renewables technologies were completely stripped of all incentives.
GG: If we (as a nation) fail to invest rigorously in clean tech endeavors, do we risk our position as a world leader of innovation — and perhaps even as a true leading nation in general? What are the costs of not engaging in the pursuit with vigor, conviction and good ol’ fashioned American stubborness?
IH: I believe that the innovative culture in the United States will prevail. We seem to be reaching an economic tipping-point in many markets and across a number of technologies that will start to become mainstream in the next few years. As those develop, we will see related technologies and services continue to develop. We have seen this historically in other industries, like semiconductors and displays, and anticipate we will see this again in clean-tech.
GG: How does this translate for business owners and leaders? What can they do to get on board the clean tech train and support the industry?
IH: Fundamentally, almost every business has some aspect of their customer base or market that can be considered clean tech. I think we must be thoughtful about our value proposition as business leaders and understand where our customers stand on these issues. Opportunities to “green” our business will continue to evolve as technology shifts occur and market and policy changes push and pull us towards more significant “clean tech” participation in our personal and professional lives.
Iga Hallberg is the principal of PivotMKTG, and advisor to Incenergy & HelioVolt where she was formerly the Vice President for Business Development & Marketing. She will be speaking at GoGreen ’12 Austin, Wednesday, April 4 at Austin Music Hall on our 2012 Forecast: Top Innovations in Clean Tech panel session. Get tickets and learn more about the 2012 GoGreen ’12 Austin line up at www.austin.gogreenconference.net.