By: Clint Wilder
“First they ignore you, then they ridicule you, then they fight you, then you win.” –Mahatma Gandhi
As a new year begins for the clean tech industry, maturation is a theme that comes to mind. And if we think of clean tech not only as a growing global industry, but as a fundamental global transition – as so many of its leaders and participants do – we can chart its progress along Gandhi’s oft-cited dictum of other transitions in history. I’m not suggesting that the growth of clean tech is an exact analog to India’s struggle for independence from Great Britain; that would be quite presumptuous on many levels. But with renewable and distributed energy as a metaphorical threat to decades-old entrenched ways of doing things, there are parallels to be made.
The U.S. solar power industry, I think, offers the best example of Gandhi’s progression. It was virtually ignored for years, except among a small number of devotees, and perhaps rightfully so; for a long time, solar PV technology was relatively inefficient and prohibitively expensive. That brought ridicule too, but the real ridicule phase came much later, with the 2012 bankruptcy of Solyndra. I hesitated to even write that name, thinking that the distorted spin sparked by that very old news should be dead and buried by now, but 60 Minutes dragged it out again in its Jan. 5 segment called “The Cleantech Crash.”
Ridicule indeed. Ridiculous is a better label for the original Solyndra controversy, when an election-fueled political agenda disparaged the entire solar industry – and often all of clean tech – after the failure of one government-backed PV manufacturer. This conveniently ignored the game change within the solar industry, as prices fell 50 to 60 percent in less than three years, squeezing margins for panel makers but sparking the deployment boom that industry analysts (including ourselves) had long predicted. Plummeting prices, along with the solar leases and power purchase agreements pioneered by SunEdison, SolarCity, and others, made solar PV the affordable mainstream energy choice it is today.
Which brings us to 2013, and the “fight” stage. Utility-backed efforts to roll back or eliminate net metering laws sparked battles in a dozen U.S. states, some quite contentious. The nastiest one, in Arizona, even included attack ads from out-of-state political groups calling SolarCity and SunRun “the new Solyndras.” After this fight, did the solar industry win? Sort of. Arizona regulators in November voted to preserve net metering but added a 70 cent-per-kilowatt charge for rooftop solar users (utility Arizona Public Service had sought roughly an $8 charge).
Solar advocates don’t like the precedent-setting fixed charge for solar customers (Virginia-based utility Dominion also has one) and we will see this type of fight play out in a number of states in 2014. At GTM Research’s U.S. Solar Market Insight Conference last month in San Diego, Dominion VP David Shuford bluntly explained, “We make money when we build things.” And if solar rooftops generate enough juice to cut into the two percent load growth that Dominion needs in order to build things, the investor-owned utility needs to protect its bottom line. But just-departed Federal Energy Regulatory Commission chairman Jon Wellinghoff, on the same conference panel, countered that such fixed charges for distributed solar are “nonsensical” and “wouldn’t be sustained on appeal” in court.
Solar power’s maturation has clearly reached the “fight” stage; it’s big enough to be taken seriously. There’s a wealth of statistics to choose from to show solar’s growth in the boom year of 2013. In the first 10 months of the year, utility-scale solar accounted for 21 percent of all new generation capacity in the U.S.; in the month of October, it was 72 percent. And in an unprecedented court decision in the first week of 2014, a Minnesota judge ruled that utility-scale solar is a better investment for Xcel Energy’s expansion plan than new natural gas capacity.
Wind power, of course, has been big enough to be taken seriously for quite a while. The U.S. wind industry now finds itself in a new stage of its maturation: life without the federal production tax credit (PTC), which expired at the end of 2013. The industry has been there before, with disastrous results, but this time is different from the past boom-and-bust cycles of the 1990s and 2000s. I don’t think the PTC will ever return in its previous form; the industry will likely lobby for some type of tax subsidy as part of a more comprehensive federal tax reform package. Hopefully, that will include the long-overdue opening of master limited partnerships to investments in renewable energy projects, which would most likely be wind farms. Rather than its own PTC, that would allow wind power to enjoy at least some of the same treatment as fossil-fuel energy sources, which is just as it should be.
As noted above, I don’t view Gandhi’s struggles as an exact analog for clean tech. It’s not that clean tech will reach a “victory” stage over other energy sources; it’s part of a long-range transition away from coal and nuclear power to a future mostly fueled by natural gas, renewables, and efficiency.
One sign of an industry’s maturation is the movement away from venture capital and government funding. It’s easy to point to the losses of VC dollars in clean tech (Tesla and SolarCity’s successes notwithstanding) and declare the sector a failure – and 2014 may bring winning IPOs from Opower, Nest Labs, and others. But that misses the much bigger picture of an industry growing up. Up-and-down business cycles are part of that process; it is not a simple matter of a boom that went bust.
In 2014, clean tech is seriously challenging the centralized utility business model (be on the lookout for our U.S. Clean Energy Utility benchmarking report with Ceres later this year which is attempting to track this clean-energy shift). It has established the first new successful U.S. car manufacturer in more than half a century. It’s a critical part of any legitimate conversation about energy choices at the local, state, and national level in most of the world. Clean tech will still be ridiculed and fought, but its days of being ignored are long past.
Wilder is Clean Edge's senior editor, a blogger about clean-tech issues for the Green section of The Huffington Post, and co-author of Clean Tech Nation and The Clean Tech Revolution (both with Ron Pernick). E-mail him at email@example.com and follow him on Twitter at @Clint_Wilder.