Green Stimulus Lifts Small Businesses to Win Cleantech Race

Recently, American Energy Secretary Steven Chu stated that $37 million in funding from the Recovery Act will be available to qualified small businesses through the Department of Energy (DOE) Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. This funding report follows a sequence of numerous other green technology allocations from the Stimulus program, which are being announced on nearly a weekly basis. As part of the announcement, Secretary Chu connected job creation and innovation with small business funding initiatives, as a critical link to reducing greenhouse gas emissions and winning the cleantech race, which would generate sustained economic growth.

 

The DOE SBIR/STTR programs are geared towards U.S. companies with fewer than 500 employees. These grants are excellent opportunities for start-up companies of various sizes as well as new spin-off entities of larger companies with strong research capabilities in science or engineering, exploring the emerging cleantech sector. In specific, the clean energy and energy efficiency focus areas for which applications are being evaluated are listed as follows.

 

1. Advanced building air conditioning and refrigeration, thermal load shifting, and cool roofs
2. Water usage in electric power generation and industrial processes
3. Power plant cooling
4. Advanced gas turbines and materials
5. Sensors, controls, and wireless networks
6. Advanced water power technology development
7. Smart controllers for smart grid applications
8. Advanced solar technologies
9. Advanced industrial technologies development
10. Advanced manufacturing processes 

 

Most important, the deadline for submission of applications is September 4, 2009, at 8:00 p.m. EST. Moreover, $8.5 million is expected to be available for new Phase I awards, and approved applicants may receive up to $150,000 to demonstrate commercial potential over a six-month evaluation period. More information about the DOE SBIR and STTR cleantech programs are available at this reference site.

 

According to a recent straw poll of EE Times Europe readers, conducted during the month of August, funding initiatives of this nature are well-accepted, especially in regards to solar cell technology. The poll focused on comparing various options for generating the most return on capital for research and development (R&D) funding, and 24 percent of respondents' voted for solar technology. Second, was investing in sensor and control networks to reduce energy consumption in major plants and infrastructure, an option which garnered 21 percent of the vote.   

 

A number of other programs scored well. The results are as follows in descending order: developing energy harvesting technologies received 13 percent; improving the efficiency of batteries was 12 percent; improving the efficiency of power supplies got 11 percent; improving the efficiency of lighting garnered 10 percent; and taking steps to lower the power consumption of ICs was near the bottom at 9 percent.  

 

Even though solar technology runs high in U.S. public opinion as well and President Obama has proclaimed wanting the U.S. to be “the world’s leading exporter of renewable energy,” in his term in office thus far, China has accelerated efforts to become the dominant player in green energy, namely solar power, even with respect to the U.S. market. Chinese companies have been effective in lowering the price of solar panels by almost half over the last year, which has helped contribute to the enormous oversupply in the global market. Shi Zhengrong, the chief executive and founder of China’s biggest solar panel manufacturer, Suntech Power Holdings, stated recently that the company is selling solar panels on the American market for less than the cost of the materials, assembly, and shipping to build market share, along with other companies during the inventory glut.

 

The Chinese clean energy industry is heavily supported by the government, as in several other Asian countries such as South Korea. Interestingly enough, Chinese companies are already preparing to build plants to assemble their products in the U.S. to avoid any future competition litigation and/or cap-and-trade tariff penalties. Therefore, these companies may enter the U.S. and follow the trend of retrofitting former microchip or automobile plants for solar cell production. However, at least this will stimulate green job creation and help the country meet increasing greenhouse gas restrictions.

 

Even with a significant portion of the overall U.S. stimulus funding being dedicated to the cleantech sector, other pending legislation is vital for establishing sufficient end-user demand for Recovery Act R&D projects. In any case, many believe the U.S. will end up being more of a consumer as opposed to a producer of solar products, unless the country can establish sufficient domestic supply chains, amidst its second highest corporate tax rate for all major industrialized nations, equivalent to about 39 percent.

 

Since March, Chinese governments at the national, provincial and even local level have been competing with one another to offer solar companies ever more generous subsidies, including free land, and cash incentives for R&D. Also according to the New York Times, Chinese state-owned banks are flooding the industry with loans at considerably lower interest rates than available in Europe or the U.S. Suntech, based in Wuxi, China, is paced to pass Q-Cells of Germany this year, to become the world’s second-largest supplier of photovoltaic cells, after only First Solar, headquartered in Tempe, Arizona, but having its main manufacturing plants in Mainz, Germany and Perrysburg, Ohio. 

 

It has been a volatile last couple years for the solar industry, which enjoyed record sales growth in 2007. Shipments of solar power equipment grew by 81 percent in the second quarter of 2009 with respect to the first, according to data from the IMS Research (Wellingborough, UK), indicating the industry's downturn may finally be passing. The U.S. clean energy market overall, which contributed to this growth, is primarily being driven by cash-rich utilities that are announcing multi-megawatt investments on nearly a weekly basis. 

 

Even with over $61.3 billion of green energy stimulus funding, the U.S. will be aggressively challenged by China in the cleantech race. The U.S. has ranked well behind China over the last five years in terms of solar cell production, and it will take at least five years from now to judge the impact of the 2009 cleantech stimulus, catered to not only large corporations but small businesses as well, which has ultimately inspired a more serious green revolution in the U.S. and abroad.

 

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