How well is clean energy weathering the recession?

By Elisa Wood

March 5, 2009

The clean energy industry may not be popping the champagne cork, but it is at least holding the bottle in hand. While not unscathed by the recession, the industry sees growth in several sectors, according to recent reports.

For example, use of smart meters—a key technology for better energy management and efficiency – is increasing at a rapid clip. A study by ABI Research, “Advanced Metering Infrastructure (AMM and AMI),” forecasts that the number of smart meters installed worldwide will reach 76 million this year, up from 49 million in 2007. Smart meters will benefit from an estimated $4.5 billion that the US plans to spend on smart grid initiatives as part of the federal stimulus package.

“We don’t think that the economic crisis is having a significant effect,” says Sam Lucero, senior analyst for ABI Research. “Utilities’ smart metering deployments are typically multi-year plans developed in the context of regulated market environments, and not terribly susceptible to short-term economic fluctuations.”

Press reports indicate that two other energy-cutting products are poised for significant growth this year. Moneynews.com quotes analysts who say demand response companies are likely to see recovery in 2009 following a dramatic fall in stocks of some leading companies. Meanwhile, industry insiders say they expect continued expansion for combined heat and power, a resource that has won new federal tax incentives and state support. See my article in the January/February issue of Cogeneration and Onsite Power Production magazine for more details.

Not all the news is good though. Greentech Media and the Prometheus Institute for Sustainable Development project that the global market for photovoltaics will shrink 15% this year to $12 billion. This is solar energy’s poorest performance since 1994, according to the report. At the same time, Lux Research says this year’s solar shakeout – caused by oversupply of cell and module capacity – will push solar prices closer to grid parity and precipitate expansion.

Meanwhile, expect to read a lot more about the clean energy sector in the coming year. William Brent’s Search for Cleantech reports that members of the media foresee heightened coverage of the cleantech sector in 2009 (and it certainly wasn’t light coverage last year.) Seventy-five percent of bloggers, mainstream newspapers, magazines and broadcasters surveyed say readers and editors will demand more coverage of the sector. So while the champagne may not be flowing yet, the information certainly is.

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.