The Green Polymath: Germany’s bid to dominate cleantech

Editor’s Note: This is the third installment of a new guest column: “The Green Polymath,” by Vinnie Mirchandani. Over the next few weeks, Vinnie will discuss how some of our most familiar enterprise corporations are leveraging an array of new technologies to solve not just their own daily issues, but also the “grand challenges” the world faces. You can read the first installment here and the second here.

This is the third in my guest column series excerpting from my upcoming book, The New Polymath. The book defines the term as an enterprise that excels in multiple technologies — infotech, cleantech, healthtech, biotech and other emerging areas — to create new medicine, new energy and new algorithms.

Over the last couple of weeks, we discussed the GE Net Zero concept and the Kleiner Perkins green portfolio. These represent two of the most promising U.S. entries in the burgeoning global cleantech industry.

If the U.S. can dominate cleantech as it traditionally has the IT industry (with hardware, software, outsourcing, etc.), it will create new investor value and jobs. But as we look at cleantech, plenty of countries around the world have been developing sophisticated capabilities — some for decades.

Examples of those nations include Brazil with biofuels and Denmark with wind technology. Israel can teach us plenty about creating a land of milk and honey from the desert it inhabits.

But two countries, in my opinion, bear watching in particular: Germany, which we discuss this week, and China, which we will cover next.

Every two years, the U.S. Department of Energy hosts what it calls “Solar Decathlon.” Twenty teams from selected universities take over the sprawling National Mall in Washington, D.C. for five days. The teams compete to design, build and operate the most attractive and energy efficient solar-powered house. They are judged on architecture, market viability, comfort and other factors.

The last two times — in 2007 and 2009 — Team Germany has won the contest.

A major reason for German team’s victory was that the team scored the maximum number of points in the “Net Metering” phase of the competition. Each house in the decathlon was connected to a power grid and equipped with a meter that measured both its consumption and production of energy. Team Germany’s meter showed a negative number, which means it had generated surplus energy.

Selling back to the grid may seem alien to most of us, but not to the German team. Back home, they are used to a “feed law” that encourages homeowners and farmers to do just that at attractive prices.

Now get this: most German cities, on average get two to three hours less sunlight each day than most U.S. cities. Yet Germany has the largest installed capacity of solar photovoltaic panels in the world — which, of course, would yield even more energy if the country could reposition itself a few degrees south.

If its solar industry is impressive, Germany’s wind energy sector is equally so. Germany has more than a third of the world’s installed capacity, and no other country has more wind turbines. Wind provides 5 percent of Germany’s total electricity consumption and ranks even higher than hydroelectric power, a traditional source of renewable energy.

Germany also has one of the most aggressive greenhouse gas emissions reduction targets under the 1997 Kyoto Protocol, which includes carbon dioxide and methane. In 2008, its greenhouse gas emissions were recorded at the lowest levels since 1990.

Given Germany’s leadership in so many sustainable initiatives, it is not surprising that its vendors do well on various “most sustainable” lists. The large German software company SAP has been rolling out sustainability accounting and reporting capabilities to many in its global customer base.

But the real excitement lies in Germany’s “Solar Valley” with companies such as Q-Cells, now one of the largest manufacturers of solar cells in the world, and Enercon, which has installed 15,000 wind turbines around the world. These companies and several other start-ups have revitalized portions of what was East Germany, which had languished for years after the reunification.

Of course, it has taken massive government investment and push in various sectors to become cleaner, by nurturing Solar Valley and in the “feed law” consumer subsidies.

But soon Team Germany won’t just be winning student competitions — it may well dominate cleantech markets, too.

Vinnie Mirchandani is the founder of Deal Architect, a site about technology trends and economics. He’s a former Gartner technology industry analyst, PwC outsourcing executive and entrepreneur.

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