Introduction to Cleantech
While clean technology is not a new concept, it remains the most forward-looking option for preserving our way of life in the next generation. Necessity is the most important factor, "the mother", of invention, and clean technology is necessary for preventing overextension of the global supply of resources. But just because cleantech is a necessity for our future does not mean that it drives the public interest, nor does it necessarily make into a good business.
Companies survive and thrive on profit, the profit that can’t be made without providing a value that is tangible in the present. People live in “present necessities”, and for many reasons, they are not led to products that resolve next-generation issues.
Because of these issues, one can’t look in many store shelves (online or offline) and immediately find outliers: things we can physically use, like an appliance, energy source, a workplace tool, or a computer, that provides a remarkable “next-generation” improvement in energy efficiency while retaining a competitive price and “present value”.
To find these outliers, one needs to make an effort to make our “future necessity” into our “present necessity”, to be an early adopter and give something new a chance, and to look deeper into product impacts rather than product convenience. To help us as consumers to make that effort, let’s take a look into the issues in cleantech, followed by some innovative outlier solutions that can overcome them (in the next article).
Critical Limitations of Cleantech
The reason for the failure of many cleantech companies is that profit just isn’t there, for multiple reasons.
For one, people will not spend an arm and a leg for a product— regardless of how environmentally helpful it is— that has an unclear path to becoming a present necessity. When one buys a product, they compare its value among substitutes from the “most likely” perspective— what’s most likely going to be needed in the present and needed in the future. “Likeliness” excludes all of these cleantech products that don’t have certain goals— products that “might” do what they are needed and intended to do, to a certain extent that is possible, maybe. The cleantech on the shelves— whether it be "green" products made from renewable materials or alternative energy sources like solar, hydroelectric, and wind— just does not fit the bill for “most likely” affordability and scalable utility. That’s what rules it out from being the most likely solution to most people’s needs in the present and for the forseeable future.
Next is a valid criticism of the product itself: if the future benefits are meager at best, it is not necessary, and if these benefits cannot be properly proven, they will never sell. People don’t buy everyday things, things that are supposed to work and not waste money, based on a risky investment strategy.
Additionally, the “Wow” factor is a hard sell for cleantech. Since there is no publicly visible outlier-level innovation present, people don’t find it especially interesting. Without futuristic and persuasive products, cleantech is cannot convert on the clean advantage. In fact, the industry as a whole is very slow to innovate on the major categories of cleantech. Not many companies have proven that the slow-moving industry can also be as interesting as any other type of technology, but the few that have actually succeed have garnered both wide corporate and public interest as well as profit. I’ll point out some critically successful companies in the following article to demonstrate the power of the “wow” factor.
Another pervasive problem for cleantech is that the existing structures of the top world economies are too rigid to support mass adoption. How can the fossil fuels that produced 86.2% of the world’s energy from 2009 to 2018 be consistently replaced in the countries that used them the most? In developing countries, smaller countries, and rising economies, cleantech is easier to adopt because they don’t have many of the same energy practices as countries like the U.S. do. Solar energy might be the most efficient option in some sunny countries in central Africa, and the sparsely populated Iceland has used hydroelectric and geothermal renewables for the majority of its electricity needs since 2009. Even countries with highly polarized standards of living and invasive governments like China will have an easier time adopting cleantech than the U.S. because they are actively intervening in their economy to provide a path for clean businesses past the mire of the status quo structure. It’s a matter of image to them, more than anything else; and that’s not a bad thing. In the places where it matters most, big polluting countries like the U.S., we lack the flexibility of options necessary to replace fossil fuels., whether it’s the price, legal options, political pressure, or even pressure from fossil fuel unions. Because of this rigid structure, widespread adoption of cleantech will be hard.
Lastly, how can the most innovative products from companies be found and praised when the most visible ones— counterproductive, loud competitors— batter the image of cleantech by pretending their marginal “improvements” constitute real innovation? Companies that attempt to impress consumers with efficiency gains generally lack any substance. For example, the photovoltaic effect of “new and improved” solar cells continues to provide a variable and unimpressive fraction of electricity, dwarfed by the amount produced by fossil fuels. Why not attempt to fundamentally overhaul the solar cell itself, instead of marginally improving it? Food companies simply decrease the amount of plastic used in “sustainable packaging”, instead of making innovative research into viable materials or systemically collaborating with cleantech companies to make scalable solutions. That blunder is very important because packaging plastic is barely recycled, and when it is it still ends up in landfills. Big companies like General Electric purport themselves as cleantech companies while listing small efficiency gains from their high-polluting products like airplanes instead of putting a consortium together that encourages and standardizes higher gains.
As mentioned many times by writers and entrepreneurs alike (such as in the popular startup book Zero to One, written by PayPal founder and billionaire Peter Thiel): in order to bring actual results in place for any technology, a business needs to put behind an incremental viewpoint and breakthrough a head above the rest of the competitors. That fact applies to cleantech companies even more than any other industry.
Technologies that Overcome Limitations
When you look on the shelves— online or offline— for something that was designed to make an impact in clean technology, you may not find many good examples, but if you do you’ve found a rare outlier: a technology that overcame its inherent limitations.
The limitations I’ve mentioned before, “likely” rationality, product criticism, lack of a “wow” factor, economic rigidity, and “loud” competitors can stifle the innovation that puts cleantech on the map for next-generation technology. The next article is dedicated to the proprietary technologies of companies that follow winning strategies and make cleantech into very promising and usable products. Some of the companies I will include in the next article are on the selection of companies of the Global Cleantech 100, an informative program that predicts the most successful company cleantech innovators over the next 5-10 years. Of the companies on that selection, I am most interested in AMP Robotics U.S., Oxford PV, Proterra, AeroFarms, Mango Materials, and Ecobee for reasons I will expound upon later.
From these big private startups to smaller companies that are looking to make a difference in their home country, I will look at some that overcame most or all of the big hurdles of cleantech— big time.
Citations:
EC European Union -The Icelandic National Renewable Energy Action Plan https://ec.europa.eu/energy/sites/ener/files/documents/dir_2009_0028_action_plan_iceland__nreap.pdf
EarthDay.org - Landfills https://www.earthday.org/the-recycling-problem-a-feel-good-story-thats-too-good-to-be-true/
Global Cleantech 100 https://www.cleantech.com/the-global-cleantech-100/