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CLEAN ENERGY INNOVATION

‘The Challenge Is How To Deploy, Not Just Invent’

Ron Pernick On How America Can Lead In Cleantech

What did it feel like to publish a book on the future of cleantech in the U.S. just as the sector became a target in national politics?

“It was pretty tense there for a while. We were holding our breath,” says Ron Pernick, managing director of the market research firm Clean Edge and co-author of the new book, Cleantech Nation.

Forget about selling books. This is an industry that Pernick, along with his co-author and Clean Edge co-founder Clint Wilder, lives and breathes. And for people who’ve watched the industry grow from lab-scale tinkering to a full-on industrial powerhouse, the vicious attacks were, well, insulting.

“It was very disconcerting to all of us to watch the amount of money that came from entrenched interests and helped influence a very strong partisan line attacking and marginalizing the industry,” says Pernick. “But it backfired. It didn’t work.”

In 2007, about a year after I started covering this sector, Pernick and Wilder released their first book, Cleantech Revolution. It was one of the best resources out there on activity in the public and private sectors. At that time, cleantech was just becoming a mainstream term in investment circles. It was also right around the time when some of the biggest industrial companies started making strategic investments in renewables, smart grid technologies, and advanced transport.

Driven by concerns about climate and bi-partisan support for diversifying our energy mix, 2004 through 2011 was a period of incredible growth in cleantech. In 2004, global clean energy investments amounted to $53.5 billion. In 2011, global investments reached $260 billion — surpassing fossil fuel investments for the first time and marking the trillionth dollar put into the sector.

But in the last 18 months, the turbulence that has always defined the clean energy sector intensified: Countries have pulled back financial support due to economic struggles; venture capitalists have changed investment strategies after realizing the amount of capital required to scale; once-promising companies have fallen in dramatic fashion due to intensifying competition; and a new unconventional fossil fuel boom in the U.S. driven by fracking has deflated some of the bipartisan enthusiasm for renewables.

If Cleantech Revolution marked the first era of major growth, then Cleantech Nation marks the second: one filled with even greater political uncertainties and market risks, but even greater rewards as the sector continues to expand. For anyone who wants to understand the scope of investment activity underway in cleantech — along with the political imperative for encouraging growth in the sector — Cleantech Nation is a good read.

My biggest gripe with Pernick and Wilder’s new book is that it focuses almost entirely on the positive stories when there are so many important lessons to be learned from countries over-investing in certain sectors, companies being too optimistic in their technologies or market forecasts, and the realities of how political ideology can present enormous barriers. The authors touch on these a bit in the book, but mostly breeze over them in favor of success stories.

As a book designed to provide a forward-thinking framework for policy making and corporate planning, I suppose that makes sense. Indeed, it does provide a detailed look at the forces driving the sector — from CEOs, to mayors, to venture capitalists, to the biggest countries in the world — and wraps them together into an action plan for capturing the sector’s value in America.

Post-election, as we come out of an intense period defending the industry, it’s time for proponents to go on the offense. Cleantech Nation provides a blueprint for a potential game plan to get the job done.

I spoke with Ron Pernick about the post-election environment for cleantech and about what excites him about the next phase of growth. Below is an excerpt from our interview:

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Stephen Lacey: What have been the biggest market changes since you wrote your first book in 2006?

Ron Pernick: Back in 2006 when we were wrapping up the book — we came out with the book in 2007 — cleantech was just becoming part of the vernacular. By 2007 when our book came out, it was very clear that there were a lot of governments, a lot of investors, a lot corporates, and a lot entrepreneurs that were just starting to get pretty active.

Fast forward to today, a lot has changed. The industry actually did grow. You see a lot of the negative headlines, but they don’t often focus on the fact that we’ve doubled our energy production from renewables over that period of time, and venture capital has increased considerably over the last decade from 1% of total venture activity to 23% of total venture activity in 2011. So a lot of markers have changed.

Unfortunately, I think the big shift over the last five years or so was how it was framed nationally as a positive bipartisan activity to, in this most recent election cycle, being seen as a very partisan topic. That was really a huge shift from when we wrote our first book.

SL: What, in your opinion, has driven a lot of this partisan shift?

To read the rest of the interview check out the full article at our partner site Climate Progress.

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