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March 21, 2011
Markets for Clean Technologies Continue to Grow
    by Robert Kropp

A report from Clean Edge compares the 2010 performance of clean-tech companies to its projections in 2001, and finds increased growth in revenues and venture capital investment.

Ten years ago, Clean Edge, a research and advisory firm devoted to the clean-tech sector, published Clean Tech: Profits and Potential, a report which estimated that "the markets for clean energy technologies growing from less than US$7 billion today to US$82 billion by 2010."

Now, in a tenth-anniversary report entitled Clean Energy Trends 2011, Clean Edge has surveyed the past 10 years of clean-energy activity in the US and abroad, and found that since 2009, revenues of the three benchmark technologies of biofuels, wind power, and solar photovoltaics have grown by 35.2% to $188.1 billion.

Furthermore, the report continued, "US-based venture capital investments in clean technologies increased from $3.5 billion in 2009 to $5.1 billion in 2010, an increase of 45.7 percent, according to data provided by the Cleantech Group." The Cleantech Group provided market research and advisory services for the cleantech industry.

"While falling short of 2008's record-breaking $6.1 billion total, 2010ís more than $5 billion represented nearly a quarter of all VC activity in the country last year, a new record," the report stated. "In addition, the more than 370 deals in 2010 represent the largest number of financings recorded in a one-year period."

In 2010, Clean Edge found, revenues for biofuels reached $56.4 billion, and it projects that revenues will reach $112.8 billion by 2020.

According to the report, new wind power installations in the US have continued to decline, as "a tight project finance market, uncertainty around project grants until late in 2010, and the lack of a federal RPS (Renewable Portfolio Standard)" led to the installation of only 5 GW in 2010, less than half that of 2009. The report also found that in 2010, for the first time, China surpassed the US as global leader of cumulative wind power installations.

Decreases in the cost of solar photovoltaics led to revenues of $71.2 billion in 2010, and Clean Edge projected that revenues will reach $113.6 billion by 2020.

Clean Edge also produces three stock indexes that benchmark the clean-tech sector, and in 2010, the report revealed, their performances were mixed. The NASDAQ Clean Edge Green Energy (CELS) index, which tracks US-listed clean-energy companies, rose two percent. The NASDAQ OMX Clean Edge Global Wind Energy Index (QWND), which tracks global wind power companies, fell 35%. The NASDAQ OMX Clean Edge Smart Grid Infrastructure Index (QGRD), which tracks smart grid and grid infrastructure companies, stayed flat in 2010.

According to the report, "The U.S Department of Energy recently estimated that clean energy products now account for roughly 20 percent of global consumption of critical materials." Of particular concern, the report continued, is the fact that 95% of the world's supply of rare earth metals are currently produced in China. Currently used "in a variety of clean-tech applications including hybrid and electric-drive vehicles," as well as "hard drives, smart phones, and weapons guidance systems," rare earth metals and their resource sensitivity have challenged the "environmental stewardship" of cleantech companies.

Technological advances that reduce the use of rare earth metals in permanent magnets and electric motors, as well as breakthroughs in nanotechnology, could help manage risks associated with rare earth metals, the report projected.


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