HOW TO PROFIT: THE EIGHT MAJOR CLEAN TECHNOLOGIES

In The Clean Tech Revolution we show how clean technologies offer entrepreneurs, individual investors, recent college and business school graduates, corporate executives, policymakers, and others the opportunity to profit financially while providing solutions to some of the greatest issues facing humankind. Our book will help you spot the winners among technologies, companies, and regions likely to reap the greatest benefits from clean tech—and show you why the time to act is now.

In the following chapters we highlight the eight major clean technologies that we believe offer investors the best opportunity. In narrowing down the list, we needed to exclude some emerging clean technologies, but we believe the following list offers the greatest near- to midterm opportunity. These are the top eight technologies and sectors that we'll cover in detail:

•Solar energy. The solar-power market offers perhaps one of the greatest opportunities among its clean-tech peers. Not only is the worldwide solar market growing by 30% to 50% per year, but the same technologies that enabled the semiconductor and computer revolution are now being leveraged in the solar market. Savvy venture capitalists, companies, and industry experts believe that solar power will be cost-competitive with conventional retail electricity rates before 2020. The solar industry, we believe, will be dominated by those that can significantly lower costs for solar PV modules, drive down installation costs, and integrate solar PV into everything from building rooftops to utility infrastructure.

•Wind power. Wind energy has been expanding rapidly since the mid1990s—right up there with solar. From 1995 to 2006, global cumulative installed wind-power capacity expanded fifteenfold, from less than 5,000 MW to more than 74,000 MW. While investing in some of the current wind giants such as GE, Denmark's Vestas Wind Systems, and Spain's Gamesa could offer lucrative opportunities, there are other emerging avenues for entrepreneurs. The advent of smaller-scale community wind projects could enable local farmers, developers, and financiers to reap profits. And the market for new materials for turbines and control systems for wind farms is still relatively untapped. As nations such as Germany and Denmark get upward of 15% of their electricity from wind, and other nations and regions push to reach similar targets, the wind industry is the current champion of new renewables.

•Biofuels and biomaterials. Today, Brazil gets more than 30% of its automobile fuels from sugar cane–based ethanol. In the United States, ethanol is nearly a 5-billion-gallon-a-year industry, on target to reach 7.5 billion gallons (about 5% of total gasoline consumption) around 2010. One of the greatest opportunities will lie in distilling fuels and creating materials from cellulosic non-food crops such as switchgrass and jatropha. Entrepreneurs and companies that can crack the cellulosic ethanol code, along with those that develop new methods of refining and distributing biofuels, are poised to profit from the mass adoption of biofuels and biomaterials.

• Green buildings. Today's green buildings use some 30% less energy than their comparably sized non-green counterparts (some save much more), and they're generally brighter, healthier, and more aesthetically pleasing. Often built with little or no additional up-front cost, green offices, for instance, pay back not only in energy savings but also in greater employee retention, attendance, and productivity. Green buildings of all stripes, including houses, apartment buildings, schools, and condominiums, are using advanced lighting, new building materials, efficient appliances, and energy-management systems to reinvent the buildings we call home.

•Personal transportation. Clean transportation is changing the means of mobility for consumers and workers across the globe. It includes today's HEVs as well as plug-in hybrids and the revival of electric-vehicle technology in high-powered, innovative, and even sexy designs. Imagine a car that can get the equivalent of 100 miles per gallon (mpg) from a gallon of conventional gasoline. The technologies to make this a reality already exist—and offer individuals, forward-thinking companies, and entrepreneurs unprecedented opportunity. And we're not talking just about cars but also about more efficient and less polluting motorcycles, scooters, and mopeds.

•Smart grid. In the future our electric grid, which is woefully outdated, will start to look a lot more like the Internet. Homes and businesses will no longer be just energy consumers but also energy producers. This two-way flow of electrons will transform the electric utility industry. Already, some companies such as Itron are deploying smart meters that enable utilities to better track and monitor consumption and performance, and companies such as CURRENT Communications are working to communicate, monitor, and manage the flow of electrons. New interconnect standards—regulations that guide how utilities access, quantify, and pay for distributed-energy sources—are also changing the utility landscape. The smart grid, while still a relatively new concept, offers one of the brightest opportunities in the clean-tech marketplace as it works to transform decades-old utility infrastructure.

•Mobile applications. The need for portable, lightweight, long-lasting sources of power spans four huge areas: consumer devices for today's untethered masses; the military; remote, rural villages in developing nations; and disaster recovery zones, from the U.S. Gulf Coast to the Indian Ocean. Often overlooked by casual observers of clean tech, these areas represent huge opportunities for the deployment and growth of high-efficiency solar panels, portable fuel cells, nanotechnology-based advancements in batteries, and many other clean technologies. In many areas the U.S. military is at the leading edge of investing in and deploying a range of these technologies. The Pentagon's vast funding arsenal clearly spells big business opportunities in mobile clean tech.

• Water filtration. Although the earth has plenty of water, clean and potable water is becoming increasingly scarce. And while energy security is currently capturing the media's attention and attracting significant pools of capital, water will not be far behind. In places such as Israel and Singapore, new forms of desalination technology are converting saltwater to tap water. Nanotechnologies are being used to filter and purify water once deemed unusable. Although water technologies are the traditional domain of big business such as GE and Siemens, a number of smaller players are also competing in the effort to provide the world with clean water. With an estimated 1 billion people on the planet without access to clean water and the increasing threat of "water shocks"—abrupt water shortages due to pollution, rapid water-table depletion, or natural disasters—the ability to deploy clean technologies to enable water filtration and purification is likely to expand considerably in the coming decades.

After our review of the top eight clean technologies, we follow with a chapter titled "Create Your Own Silicon Valley" that examines the paths that city and regional governments around the globe can take toward the payoffs from clean-tech leadership: business development, job growth, and improved quality of life. We wrap up the book with a chapter that highlights successful clean-tech marketing examples and looks at both the hurdles and opportunities in moving clean tech into a mass market embraced by millions of mainstream consumers worldwide.

In each technology chapter, we also provide a list of 10 companies or organizations that are likely to be at the forefront of clean-tech activities, as well as Clean-Tech Consumer sidebars that present brief snapshots of particular products and services most likely to show up in your home, office, or car now or in coming years. Throughout the book, we also highlight breakthrough technology and business-model opportunities for entrepreneurs and "intrapreneurs" (those leading entrepreneurial initiatives within large companies).

Excerpted from The Clean Tech Revolution: The Next Big Growth and Investment Opportunity by Ron Pernick and Clint Wilder (Collins 2007).