16 June 2008

Clean Tech: Simple Questions Require Simple Answers

Technology entrepreneur and strategy consultant Sramana Mitra asked some simple questions in a Forbes.com article last Friday:

"What would it take? What would it take for the U.S. to move to a 50% renewable energy economy by 2020? What would it take for India to become a 100% solar economy by 2050?

"The answer lies in aggressive innovation and entrepreneurship in all parts of the solar ecosystem coupled with resolute policy decisions. And please note that policy alone, without innovation and entrepreneurship, will not solve the problem.

"Take the United States. Building a 100- to 300-megawatt solar power plant costs $750 million to $1.5 billion. To really move the needle, hundreds and thousands of such plants need to pop up all over the country and funnel clean energy into power grids.

"The best outcome would be if technology obviates the need for solar subsidies. 'Eventually, it is a technology race,' says David Chen of Equilibrium Capital, a new sustainability fund and a long-term technology industry veteran. We've seen this for over 30 years in cycle after cycle, whether it is in integrated circuits or disk drives, LCDs or flat panels. Moore's Law, it is called. We will see it again in solar. But in the meantime, policy will need to intervene, and make it worthwhile for investors and entrepreneurs to play in the market.

"In India and China, a distributed power strategy would be ideal. But batteries, which store solar energy captured during the day and release it at night, are still too expensive to be used on a mass scale.

"Here's another question: What would it take to stimulate small businesses to build up solar farms and sell energy into utility grids? I suspect, again, both policy and entrepreneurship would need to go hand in hand."

Simple questions require simple answers.

But, thus far, the simple answers ellude us. What's required is, as Ms. Mitra suggests, for Senators Barack Obama and John McCain, and Indian prime minister Manmohan Singh to "sit down with entrepreneurs, business leaders and investors, and understand through candid exchanges what sort of policy is needed to unlock the enormous entrepreneurial energy that sits boiling amid the ocean of human potential."

These leaders and others would do well to heed Ms. Mitra's advice.