Signal 3: Breaking through the Barriers for Developing Cleantech Innovations
Renewable energy has become an increasingly important topic on the tables of governors, CEOs, and investors. Living in a record-breaking climate change background, promoting cleantech technologies is of great urgent. Yet there are still barriers and gaps from different sectors that need our awareness and effort to counter as urban scientists and data analysts.
In this linked journal above, some basic capital and technological barriers to cleantech are presented. One of the most common barriers is the high fixed costs for setting up solar or wind farms — — on average two to three times that of a natural gas plant. “ Higher construction costs might make financial institutions more likely to perceive renewables as risky, lending money at higher rates and making it harder for utilities or developers to justify the investment (Union of Concerned Scientists, 2017)”. But wind and solar projects can be the least expensive among all energy generating projects in per megawatt hour over a lifespan accounting. Lack of existing infrastructures for siting and transmission also prevents new renewables projects from landing and going into operation. Another obstacle, especially for cleantech startups, is the high barrier to market entry because of mature market share dominated by major players in coal, nuclear, and natural gas. These big players have strong connection with the congress, policymakers, and investors which allows them to get favorable policies and push out new players easily. Lastly, the reliability of renewable energy sources has long been undermined by investors and potential users. But the development of grid technologies has substantially improve the reliability performance of renewables.
Given these knowledge of renewable energy, we can help make a difference in multiple sectors. We can install solar panels, rechargeable batteries, or smart grid system in residence to sell back extra electricity and manage home power use more efficiently. We can support cleantech market by financial products. We can also support or propose policies that subsidize renewable energy like tax credits, net metering, feed-in tariffs, and higher renewable energy portfolio standards.
I attached a visualization found in a US DOE case study to show the capital gaps of developing a cleantech innovation and how those gaps can be filled in by financial supports from different fields. The full case study is in this link:
Roberts, Michael J., Joseph B. Lassiter III, and Ramana Nanda. U.S. Department of Energy & Recovery Act Funding: Bridging the “Valley of Death”. Harvard Business School Case 810–144, June 2010. (Revised June 2011.)
