As you may have read recently, the U.S. lags behind China in the clean energy technology race. The U.S. does have a strong market share in wind technology, but is still in fourth place. China continues to lead the global clean energy technology manufacturing race, according to a new report commissioned by World Wildlife Fund. Though the U.S. ranks second to China in total sales value of clean energy technology, relative to the size of its economy the U.S. is well behind leading countries including Denmark, China, Germany and Brazil. We hope that the U.S. provides more incentives to acquire clean energy technology equipment, and that companies invest in such equipment. A recent report finds that the U.S:
• Sales of total clean technology manufacturing increased 17% from 2010 to 2011, a pace that has slowed from recent years (28% from 2008-2010).
•Has the largest global market share in bioethanol (61%), largely because of strong federal incentives and a renewable fuels standard. In solar PV, U.S. production rose 16%, capturing 16% of the global market.
•Has a strong market share in wind technology, but is still in fourth place with an 11% market share (a slight increase over last year’s 9%), behind China, Germany and Denmark, who together have more than 60% of the global market.
•Is a strong player in the global clean energy technology race, but compared to other leading countries, the U.S. is currently under-investing in clean technology and there is a great deal of policy uncertainty, meaning it will likely lose market share in the long term.
By 2015, the clean tech sector is expected to rival the oil and gas equipment market. Countries that gain a strong position in clean technology manufacturing today have the best prospects to capitalize on the expected strong growth in the future.
TEQlease has experienced an increase in applications from SMB companies for clean energy technology equipment leases, and has approved equipment lease terms ranging from 7 to 10 years. However, almost without exception, the lease transaction failed not on the basis of the credit profile, but simply because the underlying economics required a 15 year term to have positive cash flow. 15 year terms for equipment lease finance generally are not available to SMB borrowers because lenders aren’t prepared yet for this kind of lease structures.
So what is the fix? Either tax incentives must increase to make clean energy technology equipment more affordable, or lenders must extend terms that allow for positive cash flow, or borrowers have to be able to fund negative cash flow in the early years of the clean energy technology project.
Are there other ways to fix this problem? Let us know and we’ll publish your responses.