We are witnessing the maturation of an industry and the adoption of proven management practices. Successful cleantech companies are making their offerings competitive by focusing on excellence in operations, marketing, sales, and distribution. The principles that apply to any manufacturing business, such as reducing procurement costs and improving productivity through lean manufacturing, are increasingly important for clean technologies as well.
The cleantech space is diverse; it cannot be painted with a broad brush. We looked at 16 important clean technologies and found that while every single one has made progress over the past decade, some are moving much faster than others. Just over half of them—advanced building technologies, advanced agriculture, food life-cycle optimization, grid analytics, grid-scale storage, intelligent transport, next-generation vehicles, solar PVs (photovoltaics), unconventional natural gas, and water treatment—could become truly disruptive to the incumbent industries. The others have enormous potential and could well succeed, but without disrupting the status quo.
Total installed costs that US residential consumers pay for solar PV have also been falling fast, from 
Four critical elements—cost, access to capital, the go-to-market approach (broadly defined), and regulation—typically must come together to create successful cleantech businesses.
As the industry matures, the relative importance of these factors is changing: regulation is becoming irrelevant in many cases as clean technologies find their competitive footing. LED lighting is one example: in 2013, LED light sources accounted for the majority of the sales of several large lighting manufacturers, even in markets where incandescent bulbs are still widely available. That figure could rise to more than 80 percent by 2015.
Trends can accelerate, slow down, or even reverse. But it’s unlikely that all these technologies will fail, and many are now at the stage where management practices, and not regulation or subsidies, are the defining factor for success. Those that do succeed could be highly disruptive to incumbents, even (or especially) well-entrenched ones. Big changes in resource use and business models are just around the corner.
To be sure, some cleantech companies will go bust, and some technologies will not make the cut. But these ups and downs are simply the nature of business—part of progress. Notwithstanding the failures of individual companies, cleantech is not going away, either on the ground or as an investment opportunity. And that’s no myth.
Comments