Can Evergreen Solar Be Our Sputnik Moment?
Clint Wilder
Each year, when writing the CE Views column immediately after the
annual Clean-Tech Investor Summit (co-produced by International Business
Forum and Clean Edge), I’ve been struck by how it always seems to
coincide with a major event with deep implications for the clean-tech
industry. Usually this has come on the political stage: President
Obama’s inauguration, the balance-tipping election of Massachusetts
Republican Senator Scott Brown, or even former President George W.
Bush’s State of the Union assertion that we are “addicted to oil.”
This year’s defining event, occurring one week before the seventh annual
Summit in Palm Springs, California, came from the private sector. But it
has clear policy and political implications, speaks volumes about
current trends in the industry, and poses deep questions for the future
of the U.S. clean-energy economy. It was the January 12 announcement of
Evergreen Solar’s plan to shutter its Massachusetts solar PV plant and
move production to China, costing the jobs of more than 800 U.S.
employees.
The outsourcing of U.S. manufacturing jobs to China is obviously nothing
new, but Evergreen’s move, coming from a U.S. solar industry pioneer
that received generous state government incentives, has been widely
viewed as a significant U.S. policy failure. And it speaks to a much
larger issue: the lack of a long-term, comprehensive U.S. plan for
energy supply, job creation, and global economic competitiveness.
This was the overarching theme of the 2011 Summit. Conference chairman
and Technology Partners general partner Ira Ehrenpreis opened the Summit
by immediately pointing to our nation’s lack of long-term energy
planning and “disjointed, hodgepodge policies.” “If we continue along
this path,” he said, “we will see more Evergreens.” Provocative
first-day keynote speaker John Hofmeister, former Shell Oil president
and author of Why We Hate the Oil Companies, was even more
direct. “On energy, from Nixon to Obama, the governing system has failed
this country,” he said. “By politicizing energy, we zigzag back and
forth and don’t get it done.”
I strongly disagree with some of Hofmeister’s ideas, which (not
surprisingly) sound an awful lot like “drill, baby, drill.” But I like
his call for a permanent federal Energy Resources Board, modeled on the
Federal Reserve, that would include public officials and corporate
representatives of both energy providers and big energy users like
banks, airlines, and FedEx/UPS (and I would nominate Google). The board
would set parameters of energy supply and policy for periods of one to
10, 10 to 25, and 25 to 50 years. He noted that the Fed, established by
President Woodrow Wilson in 1913 after a series of financial panics,
helped remove monetary policy from the vagaries of our two- and
four-year election cycles.
One who might agree with this concept is General Electric CEO Jeffrey
Immelt, who was recently named to chair President Obama’s new Council on
Jobs and Competitiveness. At the 2009 Clinton Global Initiative
conference, Immelt said the U.S. has “a systems problem” and held up
China’s series of five-year plans for energy as a good model. "If we
want a clean-energy future, we're talking about 20- to 40-year
investments,” he said.
Hofmeister also called the roughly $80 billion to date in ARPA-E loan
guarantees to clean-energy companies “a frittering number.” Considering
that a single Chinese company, Jinko Solar, received a five-year, $7.6
billion line of credit from the state-owned Bank of China in late
January, he has a good point. Or as BrightSource CEO John Woolard noted,
“The typical Chinese PV company can get a 3.5 percent interest loan.
They’re not impressed with our loan-guarantee program.”
China is clearly on everyone’s mind these days in clean tech, and with
good reason. Since China turned its turbo-charged, government-directed
economic growth engine to clean tech a few years ago, it has surged to
No. 1 in the world in installed wind energy (adding 16 new gigawatts of
capacity in 2010, compared to 5 GW of new wind in the U.S.) and to No. 1
in solar PV production. In our 2007 book The Clean Tech Revolution,
Clean Edge managing director Ron Pernick and I included China as one of
the ‘six C’s’ driving clean-tech growth, along with Climate, Cost,
Capital, Competition, and Consumers. In 2011, China would have to rank
at the top of that list.
“We are in a race,” said Summit speaker Cathy Zoi, the DOE’s acting
under-secretary for energy. “The Chinese are doing great things and
getting them done quickly. We have the capability to do it here too, but
we need a policy and we need some support.”
In his State of the Union address, President Obama said that the
competitive challenges being posed by China, India, South Korea, and
other nations should be “our generation’s Sputnik moment.” To meet that
challenge, he called for an end to oil industry subsidies (I agree) and
a target of 80 percent clean electricity for the U.S. by 2035 (a great
goal, but tempered by the inclusion of clean coal, nuclear, and natural
gas – see Pernick’s January CE Views column on this,
“In an Age of
Compromise, Will Clean Energy Become Dirty?”).
The original Sputnik moment in 1957, of course, led to the creation of
NASA, the Apollo program, and the U.S. moon landing in 1969. The second
day of the Summit, January 20, happened to coincide with the 50th
anniversary of President John F. Kennedy’s 1961 inaugural challenge to
do just that. Zoi pointed out that the average age of a NASA engineer in
1969 was 26, meaning that JFK inspired some of the nation’s best and
brightest 18-year-olds to study engineering and rocket science and
become part of this dream.
Can a call to make the U.S. No. 1 in clean tech be a similar
inspiration? Zoi said that such nationwide missions need to be built on
“a delicate balance between opportunity and threat,” and the Apollo
program certainly had both – the aspirational opportunity to be first to
the moon, and the real threat of Soviet advantage at the height of the
Cold War.
Today’s threat is an economic one, as Evergreen Solar’s outsourcing of
PV production and many other examples have shown. Obama played up both
opportunity and threat in his next-day visit to high-efficiency lighting
manufacturer Orion Energy Systems, which employs more than 250 factory
workers in Manitowoc, Wisconsin – the town where
a small chunk of a
later Sputnik satellite actually crashed to earth in 1962.
Can the opportunity to be the world’s No. 1 clean-tech economy deliver
the same inspiration as a moon landing? In a nation that’s much more
politically divided (and different in countless other ways) than it was
half a century ago, it’s a tall order. But our economic future, and our
nation’s pride, may depend on it.
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Wilder is Clean Edge's senior editor, co-author of The Clean Tech
Revolution, and a blogger about clean-tech issues for the Green
section of The Huffington Post. E-mail him at
wilder@cleanedge.com and
follow him on Twitter at Clint_Wilder.
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