|March 05, 2007|
Clean Energy Markets: Managing High-Tech Growth
|We've said it before. Clean energy markets are more akin to the computer, wireless, and Internet sector than traditional energy sectors like coal, natural gas, oil, and nuclear. Clean energy markets not only are growing on average by more than 30 percent per annum (much like the PC industry's two decade plus 28.5 percent annual growth rate), but they resemble many of their high-tech predecessors for their ability to scale-up with volume manufacturing while driving down costs. Case in point: just this past week German- based SolarWorld AG announced plans to acquire a shuttered U.S. semiconductor manufacturing facility to build the U.S.'s largest solar manufacturing facility at 500 MW. They plan to leverage a never opened computer chip facility to manufacture both silicon wafers and solar cells.
As our readers and subscribers know, Clean Edge has been tracking high-growth benchmark clean-energy sectors since 2000. At that time, the markets for solar photovoltaics (PV) and wind power, for example, represented annual global revenues of just $2.5 billion and $4 billion respectively. Six years later, these two industries combined equal more than $30 billion in annual revenues, a roughly fivefold increase.
Indeed, PV and wind have become big business. GE's wind division now sells around $3 billion in wind turbines annually (up from $2 billion in 2005) and Sharp, the world's leading manufacturer of solar PV modules, now racks up more than $1 billion annually in PV sales.
Clean energy markets continued their inexorable climb in 2006:
As usual, we also identify five noteworthy trends. For 2007, they are:
But with ramped up manufacturing, increased supply of new feedstocks, growing government support at the regional and federal level, increased investments, and the deployment of new technologies -- we believe that prices will stabilize and then begin to decrease -- much like the high-tech sector before it. It will be a delicate, carefully managed, balancing act, but we believe technology-focused startups and multinationals will find ways to lower prices and build competitive industries as these clean-energy sectors expand. And they have a lot at stake: Clean Edge projects that annual production of biofuels will increase over the next decade from around 13 billion gallons last year to 50 billion gallons, solar will jump from 2 GW of production to nearly 20 GW, and wind power will increase from 15 GW to 67 GW.
You can download this year's free report by, clicking here.