Clean Energy: Financial, market challenges ahead
The last year was a tough one for the alternative energy sector and 2013 could be just as challenging for many segments of this still-emerging industry.
High profile bankruptcies of government-backed companies such as battery maker A123 Systems of Waltham and energy storage firm Beacon Power of Tyngsborough have made investors reluctant to back young companies that might need years of capital infusions before becoming profitable. Cheap natural gas prices are making the new technologies less competitive. Government support is waning as Washington tries to bring ballooning budget deficits under control.
The wind energy sector, for example, is waiting for federal leaders to extend the production tax credit, which helps lower project costs and spurs development but expires at the end of the year. Each time it has been allowed to lapse in the past, wind projects have stalled.
The industry, however, encompasses a variety of energy technologies, and some are poised to advance in the next year. The solar and energy efficiency sector expect another year of double-digit jobs and revenue growth, driven by mandates calling for the increased use of both technologies. In Massachusetts, clean technology companies are expected to benefit from aggressive state policies to bolster the industry.
But whether that will be enough to combat competition from overseas, especially China, is in question. China has wooed several clean technology manufacturing operations from Massachusetts in recent years, while Chinese firms have stepped up clean-tech investments in the United States. If the state and the nation hope to remain leaders in clean technology, companies here must figure out how to push their technologies forward with modest funding. - Erin Ailworth