As my finance professor used to tell me — simply follow the money. A recent report from The Deutsch Bank Climate Change Advisors assessed that from 2000 to 2008 China had capital flows into clean energy in the amount of $41,196 M whereas the U.S. had 52,120M, India had 7,446M and Germany had 36,611M. From the numbers it is clear that the U.S. is still, so far, the most attractive environment for cleantech investment. But what is particularly notable for China is the large size of clean energy investment as a proportion of GDP in 2008. There is a political impetus for the development of green technology in China that is lacking in the U.S.
China already manufactures the cheapest solar panels in the world, and ranks in the top five for wind. According to this report, solar module prices are set to continue falling and the list of distressed solar companies needing to raise funds in the public market will only get longer. Indeed, competition has characterized the global solar PV market for some time now, and when supply catching up with demand the result is cheaper, more efficient solar panels. That can only be positive step towards the promotion of globally sustainable energy growth.
Perhaps there wasn’t much of a race to begin with. There are enough opportunities in the renewable energy value chain that it is possible for China to excel in manufacturing and the U.S. to excel in innovation (Apple?). To accelerate the uptake of renewable energy globally, we need both manufacturing expertise and cutting edge innovation. The U.S. should view China has a partner and not a threat in the development of greentech, given that each country features a different set of competitive advantages. It is time that the U.S., hopefully with appropriate incentives from the government, finds its niche in the industrialization of renewable energy; if not in manufacturing, then in the incubation of innovation and development of human capital.