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Clean-Energy Technologies aren't "Cute," but Critical to our Energy Future

When Microsoft founder and chairman Bill Gates told a Wired business conference crowd in New York City this May that solar PV, energy efficiency, and other currently available clean-technologies were "cute," and not enough to solve the world's energy and climate crisis, he joined an increasingly vocal collection of people arguing that we can only invent our way to a clean-energy future. To some degree, Gates is right. The clean-energy economy of the future must include more technologies than those on the table today, whether advances in energy storage technologies, new electrified transport systems, or perhaps even modular next-generation nuclear power. But by downplaying the importance of already commercialized clean technologies, he's perpetuating a myth that a choice must be made between R&D and technology deployment.
 
If the goal is innovation - as those belittling efficiency and current renewables claim - then technology deployment deserves as much attention as we can afford to give it. Research labs may be the source of early-stage breakthroughs, but even the best technologies will face unforeseen challenges on the road to adoption, and these can only be overcome through real-world experience. In this sense, technology deployment is arguably one of the greatest drivers of innovation.
 
One clean-tech sector that has greatly benefitted from deployment-driven advancement is solar. Accelerating solar PV installations have continually forced expansions of manufacturing and supply-chain capacity, which drives down prices and allows PV to break into new markets. This cycle of deployment, increased production capacity, price declines, and increased deployment has allowed the global PV market to skyrocket from $2.5 billion in 2000 to $71.2 billion in 2010, according to our Clean Energy Trends 2011 report. We expect PV to continue this growth trajectory into the future, expanding to more than $113 billion by 2020.
 
Distributed solar admittedly still makes up only a fraction of the total energy market, but "cute" is the wrong adjective to describe the burgeoning sector. To use an analogy very familiar to Gates, envision solar on building rooftops like personal computers in every home. In the U.S. alone, more than 100,000 people are employed in the solar industry, exceeding the number of workers in U.S. steel production, according to the Solar Energy Industries Association. And the last time I heard someone describe the steel industry as "cute" was...well, I think it's safe to assume the word cute has never been used in reference to U.S. Steel or its industry sector.
 
Wind energy can't be written off as a niche sector, either. In March, wind became Spain's main source of electricity for the first time - meeting 21 percent of the country's demand for the month and beating out other sources like nuclear (19 percent) and hydro (17 percent), according to grid operator Red Electrica. In the U.S., several states have made wind a significant chunk of electricity production as well. Leading the charge is Iowa, with wind energy accounting for more than 25 percent of the state's peak capacity, according to data compiled for our U.S. Clean Energy Leadership Index. Clean Edge research sizes the global wind market at $60.5 billion in 2010, up from a mere $4 billion in 2000. We project that the global wind market will grow to more than $120 billion by the end of the decade.
 
As for energy efficiency, the cleanest, cheapest type of energy is the energy you never have to produce. Efficiency will be essential to any strategy aiming to avoid soaring energy costs and decrease greenhouse gas emissions. It won't get you all the way there, but efficiency has the potential to be a sizeable first step. In 2009, the Rocky Mountain Institute think tank researched the electric productivity of U.S. states, in terms of dollars of GDP per kWh consumed, and found that if the least efficient states were to match the efficiency of top-performing states, the country could reduce electricity use by 30 percent. Research from McKinsey has also found that comprehensive implementation of energy efficiency can be an effective way to reduce carbon emissions while simultaneously saving billions for the U.S. economy.
 
As someone who grew up in Seattle during the rise of Microsoft, I am quick to jump to the defense of Bill Gates. But on this point - his dismissal of today's clean technologies - he is mistaken. My point isn't to argue for technology deployment over R&D. Early-stage research will continue to be the backbone of clean tech. Whether it comes from government or private funding, research labs need access to capital if the clean-tech industry hopes to produce world-saving solutions. But we cannot afford to wait for the next great invention. Technologies exist today that have the ability to make an enormous impact, and deploying them at full scale will significantly hasten the world's transition to a clean, low-carbon future. ---------- Trevor Winnie is Clean Edge's senior research analyst. He is involved in a range of activities, including preparation of reports, subscription products, and consulting projects. E-mail him at winnie[at]cleanedge[dot]com