A Bright Future for Clean Technology
Observers might be forgiven for thinking that clean technology's moment in the sun has passed. But the convulsions ravaging the sector are simply symptoms of a cycle that characterizes emerging technologies: excitement, inflated expectations, and consolidation – ultimately followed by stability and growth.
MUNICH – Observers might be forgiven for thinking that so-called clean technology's moment in the sun has passed. Over the last two years, many clean-tech equity indexes have performed poorly. In Europe, solar power took a hit after the European Commission decided to phase out subsidies for renewable energy by 2017. The installation of solar panels fell by nearly 60% in Germany in 2013, and by 70% in Italy. Meanwhile, in the United Kingdom, less than 30% of early-stage venture-capital-funded clean-tech deals were financed.
The truth is that we have been here before. The convulsions in the clean-tech sector are simply symptoms of a cycle that characterizes emerging technologies: excitement, inflated expectations, and consolidation – ultimately followed by stability and the resumption of growth. Indeed, underlying recent developments are signs of a much more significant transformation: clean tech is becoming commercially viable.
Confidence in the clean-tech sector's future is rooted in the need for sustainable solutions for a planet that is supporting an ever-wealthier population. Over the next 20 years, the number of middle-class consumers is expected to rise to some three billion, from 1.8 billion today. Their new lifestyles will require resources, including energy.