Wake Up and Smell the Fumes, Mr. Trump: Renewable Energy is the New Growth Industry!
The Republican Party swept into the White House and both Houses of Congress with a populist theme of bringing back archaic industries, cutting imports and finding ways to open shuttered, rust-belt factories.
As the President keeps talking about bringing back coal jobs, he seems to have missed the key point when it comes to energy: RENEWAL ENERGY IS THE GROWTH INDUSTRY!
What is a “growth industry?” The online Business Dictionary defines a growth industry: “An “Expanding sector of an economy, or one growing faster than the overall economy; opposite of mature industry. Also called sunrise industry.”
Theodore Levitt’s Marketing Myopia gives examples of famous past growth industries: the development of the railroads, the creation of electricity and the continuing uses of energy from petroleum.
We easily could add to this list: wired telecommunications, cellular telecommunications and computerization. When a growth industry emerges, the extent of its eventual growth is almost unimaginable when the technology first emerges. That’s what we have with renewable energy and the evidence is apparent.
Smart Money on Clean Energy
Joe Ryan, Chris Martin and Brian Eckhouse of Bloomberg write in an article entitled, Clean Energy is Trouncing Oil, Gas, and Coal in Trump Era:
“President Donald Trump took office vowing to revive the coal industry’s fortunes. So far, the smart money has been on clean energy,” according to Bloomberg. “An index of 40 publicly-traded solar companies, wind-turbine component makers and others that benefit from reduced fossil fuel consumption is up 20 percent this year. That’s more than double the S&P 500’s 9.8 percent gain. And better than the 8.3 percent rise by an index of leading coal companies.”
The Bloomberg team goes on to write that investors have pumped nearly $15 billion in the wind and solar industries in 3rd quarter 2017, up 51 percent from the previous quarter. Quoting David Richardson, executive director at Impex Asset Management—a firm with $8.7 billion under management, “We are seeing catalysts for these markets driven by the fact that people increasingly realize clean industry is more profitable than conventional energy,”
A Cottage Industry No Longer
In June, 2013, Forbes in a guest post in Forbes by Mateo Chaskel, vice president of operations at Urban Green Energy (UGE), wrote: “The distributed renewable energy (DRE) industry has gone through significant changes in the last five years, as the industry grew from a cottage industry to one with worldwide revenues of $100 billion and rising.”
Chaskel goes on to write that the industry has settled down from the euphoria of 2005 to 2009 when investor bets on renewable energy technology “went sour” to a point where “profitable business models and clear leaders have emerged, and along have come opportunities. Successful IPO’s have countered a lackluster clean tech investment environment, showing that there is success to be had for companies with a winning formula.”
He gives as an example SolarCity (SCTV) calling it a “stellar example” that took “a pretty simple piece of technology—rooftop solar panels—and became the leading solar installer in the U.S. by revolutionizing the financial vehicles that allow customers to receive a system with no money down, at less cost than their current electricity rate, and without having to go through all the paperwork necessary to monetize government incentives.” He writes that “Financing provided by SolarCity is much more than a revenue growth accelerator, it’s at the core of the business model itself.”
He pointed out that SolarCity insightfully focused solely on states offering government incentives, which is a relatively small market. Using this intelligent business model, “Shares in SolarCity are up more than 200% since their IPO in late-2012. Delving beyond their annual revenues, SolarCity has surpassed $1 billion in solar energy systems…”
Germany a World Leader
FORTUNE’s Jeffrey Bell, in a March (2017) article, “Germany’s High Priced Energy Revolution” writes: “Germany has launched a renewable-energy revolution, and it’s paying a fortune to achieve it. In the past decade its green-minded politicians, backed by green-minded voters, have undertaken an extraordinary energy transition known in German as the Energiewende.
At the center of the transformation has been a slate of renewable-energy subsidies that have dramatically scaled up once-niche solar and wind technologies, and in the process have slashed their cost, making them competitive in some cases with fossil fuels. Thanks to Germany’s lavish first-mover spending, a raft of second-mover countries, from the U.S. to China to India, are now installing solar and wind power on a staggering scale. If renewable energy ends up significantly helping curb climate change, then history may judge the Energiewende as a remarkable example of global leadership.