Clean Tech funding goes both directions
Living in San Francisco, plenty of days are filled with news of increased venture funding for clean tech companies and products. And rightfully so. VC funding in North American clean tech companies in Q3 2006 hit $934 million according to the Cleantech Venture Network.
Luckily there’s good reminders, such as Kevin Bullis’ recent article in Technology Review, Alternative-Energy Spending Fizzles Out, showing that there’s another side to the story. Or we can look back at the success (or lack of) with Prop 87. Highlights from Bullis:
Although Bush proposed a fiscal-year 2007 budget that would have increased funding for some renewable-energy resources, including solar and biomass, as well as for research into hydrogen fuel-cell vehicles, the budget was not passed. Instead, Congress passed a stop-gap continuing resolution that will keep the budget at 2006 levels, which, because of inflation, amounts to a cut in funding, and it specifically decreases funding in some cases.
“We’ve lulled ourselves into thinking we’re the leading country in renewable-energy technology because we were the early leader,” Eckhart says. “But we’ve gotten old, and soft, and underfunded. We are simply not competitive in the world market anymore.” Indeed, he says that countries like Germany, Japan, China, and India are now the primary manufacturers of technologies that were originally developed with U.S. funding. “Of the largest ten wind-turbine manufacturers, the only U.S. company is GE,” Eckhart says. “Nine of the ten are non-U.S. companies. Of the largest ten solar-cell manufacturers in the world, none are U.S. companies.”
Perhaps more important in the short term than funding energy research is changing government policy, say some experts. Technology exists today that can reduce emissions from power plants and cut petroleum use, but it is not being put to use. If a price were put on carbon emissions, Moniz says, “that would be a huge influence almost immediately in terms of what existing technologies industry deploys.”
Can venture investing, research organizations and private sector innovation take clean tech where it needs to go if things don’t change at the federal level?