Clean-tech: a decade of explosive growth with more to come
What a difference a decade makes. Once shunned as an industry only a tree-hugger could love, clean-tech has blossomed into an economic heavyweight, according to a report from research firm Clean Edge Inc.
Companies working on green construction and the smart grid are proliferating, the study said. From less than 10,000 hybrid electric vehicles in 2000, now more than 1.4 million are speeding around U.S. roads.
The solar photovoltaics market grew an average of 40% each year over the past decade to $71.2 billion in 2010 from $2.5 billion in 2000. The average cost of installing a photovoltaic system back then was $9 per peak watt; it’s now $4.82. In related news, the solar industry has logged another record-breaking year with a market value of $6 billion in 2010.
The wind industry saw similar growth, jumping an average of 30% each year to $60.5 billion last year from $4.5 billion in 2000, the report concluded. Nearly a quarter of all venture capital in the U.S. goes into clean-tech ventures now, compared with less than 1% in 2000.
The upswing follows the same momentum that telephones, computers and the Internet rode, said Ron Pernick, managing director of Clean Edge.
“The markets are getting to a place where they’re not quite reaching maturation but have grown quite a bit off a very small foundation,” he said. “We’ll eventually see a cooling-off of sorts as the clean energy market reaches wide adoption and utility-scale deployment, but overall the markets have been astounding.”
Over the prior year, the combined global revenue for solar photovoltaics, wind power and biofuels surged 35.2%, up to $188.1 billion from $139.1 billion and is on track to reach $349.2 billion in 10 years.
Biofuels are expected to double to $112.8 billion by 2020. Solar photovoltaics will boom to $113.6 billion by 2020 from $71.2 billion in 2010, according to Clean Edge. Wind, which has struggled against difficult project financing and pressure from Chinese competition, is projected to also double to $122.9 billion by 2020.
As the industry adjusts to its growth, there will be more consolidation, Pernick said.
“In the end, it’s going to be a cost game,” he said. “Some companies are going to have a hard time surviving and others will be acquired.”
And moving forward, Clean Edge forecasts that cheap LED lights will become ubiquitous as less-efficient incandescent lights are phased out. Natural gas will be paired with wind and solar power generation technologies, researchers said.
Other predictions: The aviation industry will move increasingly into cleaner fuels such as algae while breakthroughs will help uncover alternatives to the rare earth elements that are in tight supply.
-- Tiffany Hsu
Photo: Power transmission lines near Goldendale, Wash. Credit: Gordon King/Associated Press/The Yakima Herald-Republic