Top 10 Cleantech Subsidies and Policies (and the Biggest Losers) – Ranked By Impact

We all know energy is global, and as much policy driven as technology driven.

We have a quote, in energy, there are no disruptive technologies, just disruptive policies and economic shocks that make some technologies look disruptive after the fact.  In reality, there is disruptive technology in energy, it just takes a long long time.  And a lot of policy help.

We’ve ranked what we consider the seminal programs, policies and subsidies globally in cleantech that did the helping.  The industry makers.  We gave points for anchoring industries and market leading companies, points for catalyzing impact, points for “return on investment”, points for current market share, and causing fundamental shifts in scale, points for anchoring key technology development, points for industries that succeeded, points for industries with the brightest futures.  It ends heavy on solar, heavy on wind, heavy on ethanol.  No surprise, as that’s where the money’s come in.

1.  German PV Feed-in Tariff – More than anything else, allowed the scaling of the solar industry, built a home market and a home manufacturing base, and basically created the technology leader, First Solar.

2. Japanese Solar Rebate Program – The first big thing in solar, created the solar industry in the mid 90s, and anchored both the Japanese market, as well as the first generation of solar manufacturers.

3. California RPS – The anchor and pioneer renewable portfolio standard in the US, major driver of the first large scale, utility grade  wind and solar markets.

4. US Investment Tax Credit for Solar – Combined with the state renewable portfolio standards, created true grid scale solar.

5. Brazilian ethanol program – Do we really need to say why? Decades of concerted long term support created an industry, kept tens of billions in dollars domestic.  One half of the global biofuels industry.  And the cost leader.

6. US Corn ethanol combination of MTBE shift, blender’s, and import tariffs – Anchored the second largest global biofuels market, catalyzed the multi-billion explosion in venture capital into biofuels, and tens of billions into ethanol plants.  Obliterated the need for farm subsidies.  A cheap subsidy on a per unit basis compared to its impact holding down retail prices at the pump, and diverted billions of dollars from OPEC into the American heartland.

7. 11th 5 Year Plan  – Leads to Chinese leadership in global wind power production and solar manufacturing.  All we can say is, wow!  If we viewed these policies as having created more global technology leaders, or if success in solar was not so dominated by exports to markets created by other policies, and if wind was more pioneering and less fast follower, this rank could be an easy #1, so watch this space.

8. US Production Tax Credit – Anchored the US wind sector, the first major wind power market, and still #2.

9. California Solar Rebate Program & New Jersey SREC program – Taken together with the RPS’, two bulwarks of the only real solar markets created in the US yet.

10. EU Emission Trading Scheme and Kyoto Protocol Clean Development Mechanisms – Anchored finance for the Chinese wind sector, and $10s of Billions in investment in clean energy.  If the succeeding COPs had extended it, this would be an easy #1 or 2, as it is, barely makes the cut.


Honorable mention

Combination of US gas deregulations 20 years ago and US mineral rights ownership policy – as the only country where the citizens own the mineral rights under their land, there’s a reason fracking/directional drilling technology driving shale gas started here.  And a reason after 100 years the oil & gas industry still comes to the US for technology.  Shale gas in the US pays more in taxes than the US solar industry has in revenues.  But as old policies and with more indirect than direct causal effects, these fall to honorable mention.

Texas Power Deregulation – A huge anchor to wind power growth in the US.  There’s a reason Texas has so much wind power.  But without having catalyzed change in power across the nation, only makes honorable mention.

US DOE Solar Programs – A myriad of programs over decades, some that worked, some that didn’t.  Taken in aggregate, solar PV exists because of US government R&D support.

US CAFE standards – Still the major driver of automotive energy use globally, but most the shifts occurred before the “clean tech area”.

US Clean Air Act – Still the major driver of the environmental sector in industry, but most the shifts occurred before the “clean tech area”.

California product energy efficiency standards – Catalyzed massive shifts in product globally, but most the shifts occurred before the “clean tech area”.

Global lighting standards /regulations – Hard for us to highlight one, but as a group, just barely missed the cut, in part because lighting is a smaller portion of the energy bill than transport fuel or generation.


Biggest Flops

US Hydrogen Highway and myriad associated fuel cell R&D programs.  c. $1 Bil/year  in government R&D subsidies for lots of years,  and 10 years later maybe $500 mm / year worth of global product sales, and no profitable companies.

Italian, Greek, and Spanish Feed in Tariffs – Expensive me too copycats, made a lot of German, US, Japanese and Chinese and bankers rich, did not make a lasting impact on anything.

California AB-32 Cap and Trade – Late, slow, small underwhelming, instead of a lighthouse, an outlier.

REGGI – See AB 32

US DOE Loan Guarantee Program – Billion dollar boondoggle.  If it was about focusing investment to creating market leading companies, it didn’t.  If it was about creating jobs, the price per job is, well, it’s horrendous.

US Nuclear Energy Policy/Program – Decades, massive chunks of the DOE budget and no real technology advances so far in my lifetime?  Come on people.  Underperforming since the Berlin Wall fell at the least!


David Anthony’s Last Question – Can We Power the US Solely off of Solar?

By Tao Zheng, with David Anthony, an active cleantech venture capitalist, who passed away in April 2012.

 The sun is the champion of all energy sources, in terms of capacity and environmental impact. The sun provides earth with 120,000 terawatt (TW) energy, compared to technical potential energy capacity of single digit TWs from other renewable sources, such as wind, geothermal, biomass and hydroelectric. More energy from the sun hits the earth in one hour than all of the energy consumed on our planet in entire year. In the last blog, we estimated that the technical potential of electricity generation from rooftop photovoltaics (PV) can take over 1/3 of U.S. electricity consumption demand. The next question is: can we power the U.S. solely by solar energy, technically? The answer will rely on development of utility-scale solar farms and energy storage solutions.

Assuming the rest 2/3 of U.S. electricity demand can be fulfilled by utility-scale PV solar farms, we can estimate how much land required to install such solar farm systems. The total U.S. electricity demand in 2009 was 3,953 TWh with 1% annual growth projection in next 25 years. Two third of U.S. electricity demand is about 2,635 TWh. The PV power density is calculated with a weight-averaged module efficiency using market share for the three most prevalent PV technologies today: crystalline silicon, cadmium telluride, and CIGS. The resulting PV power density is 13.7 MW/million ft2, assuming an average module efficiency of 18.5% in 2015. If we assume 10 hours/day and 200 days/year with sunshine, the annual available sunshine time is 2,000 hours. The total land required for solar farms to generate 2,635 TWh, can be calculated as:

Total Land Required = Total Energy Generated / PV power density / Annual available sunshine time

                                 = 2,635,000/13.7/2000 = 96.2 ×109 ft2 = 8,937 km2 @ 100 × 100 km

Therefore, to generate energy equivalent to 2/3 of U.S. electricity demand, we need to install solar panels in a tract of land with size of 100 by 100 km, the area about 0.1% of U.S. land. Technically, to provide electricity for entire U.S. demand, we only need to cover PV-accessible residential and commercial rooftop with solar panels and install solar farms in desert area equivalent to 0.1% U.S land. In addition to rooftop and desert, there are many opportunities for installing PV on underused real estate, such as parking structure, airports, and freeway margins. PV can virtually eliminate carbon emissions from the electric power sector.

In comparison, Nathan Lewis, professor at Caltech, predicted a solar farm with land size of 400 by 400 km to generate 3 TW energy to power entire America. The represented area is about 1.7% of U.S. land size, comparable to the land devoted to the nation’s numbered highways. As shown in Figure 1, the red square represents the amount of land need for a solar farm to match the 3 TW of power demand in the U.S. Of the 3 TW energy, only 10% represents electricity demand, and the rest represents other energy needs, such as heating and automobile. Thus, Lewis’ calculation is consistent with our estimation: 10,000 km2 solar farms can generate enough electricity to fulfill 2/3 U.S. demand.

Figure 1. Solar Land Area Requirement for 3 TW Solar Energy Capacity to Power Entire U.S. Energy Demand. (Source: Prof. Nathan Lewis group at Caltech).

One of big challenges using solar to power U.S. grid is intermittency of sunlight. Solar energy is not available at night, and the variable output of solar generation causes voltage and frequency fluctuations on power network. Energy storage technology can smooth the output to meet electricity demand pattern. There are many grid energy storage technologies, from stationary battery to mechanical storage methods. Pumped hydro technology is clearly a better choice for solar energy storage, due to its high energy capacity, low cost, and public safety assurance.

For solar to have a dominant role in the electric power generation mix, in addition to power storage infrastructure, upgrading America’s transmission grid is required. In contrast to traditional electricity generation, solar power collections are distributed across numerous rooftops or centralized in utility-scale farms. Distributed solar requires grid operators to install smart grid technology to monitor power supply and demand and balance thousands of individual generators with central power plants. The current century-old transmission grid needs to be upgraded with high-voltage lines to carry electricity from remote solar farms to consumers. The American Recovery and Reinvestment Act (ARRA), signed into law by President Obama in 2009, has directed $40 billion to accelerate the grid infrastructure transformation.

The U.S. photovoltaic market has been growing quickly in recent years. In 2010, the U.S. installed 887 megawatts (MW) of grid-connected PV, representing 104% growth over the 435 MW installed in 2009. Current trends indicate that a large number of utility-scale PV power plants are in the south and southwest areas, such as in the sunny deserts of California, Nevada and Arizona. For example, the Copper Mountain Solar Facility in Boulder City, Nevada, is one of the U.S. largest solar PV plants with 48 MW capacity, as shown in Figure 2.

Figure 2. One of the U.S. Largest Solar Plants, the Copper Mountain Solar Project with 48 MW photovoltaic in Boulder City, Nevada.

Historically, solar PV deployment has been limited by economic factors, since solar energy is too expensive to compete with traditional fossil fuels, due to lack of economies of scale. However, the cheapest solar cells are now being produced for as little as 70¢ per watt. They are selling for about $1.26 per watt, with prices expected to drop to $1.17 next year. Most anticipate the price of solar module, such as thin film, will hit 50¢ per watt within four or five years. First Solar, the world’s largest maker of thin-film solar panels, has told investors that production costs will range between 52¢ and 63¢ per watt by 2014. When companies can produce solar photovoltaic modules for less than 50¢ per watt, solar energy will reach grid parity. Grid parity refers to the point at which the cost of solar electricity rivals that of traditional energy sources, such as coal, oil, or nuclear. The solar module price drop is driven by cheaper manufacturing costs, lower costs for such crucial raw materials as silicon, and rapidly improving technology. A recent study even claims solar grid parity is already here today, based on a legitimate levelized cost of energy (LCOE), calculated the cost in $/kwh. The value of LCOE is determined by the choice of discount rate, average system price, financing method, average system lifetime and degradation of energy generation over the lifetime. Figure 3 illustrates the effect of initial installed cost and energy output on the LCOE value. For a PV system with production cost at $0.5/W, the initial installed system cost will be $1.5-$2/W, after considering labor cost and module margin. If we assume energy output is 1500 kWh/kW/yr, which is reasonable in south west area in the U.S., the LCOE value in Figure 3 will fall in the range between $0.06/kWh and $0.08/kWh, the lower side of grid parity value for the U.S. residential electricity rates range.

Figure 3. LCOE contours in $/kWh for solar PV systems for energy output versus initial cost of the system for a zero interest loan, discount rate of 4.5%, degradation rate of 0.5%/yr and 30 year lifetime (Courtesy of Prof. Joshua Pearce at Queen’s University)

Based on the analysis above, it is reasonable to believe we can power the U.S. electric grid solely by solar PV, technically and economically. Thomas Edison had a great quote on solar energy: “We are like tenant farmers chopping down the fence around our house for fuel when we should be using Natures inexhaustible sources of energy — sun, wind and tide. … I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.”


David Anthony was the Managing Director of 21Ventures, LLC, a VC management firm that has provided seed, growth, and bridge capital to over 40 technology ventures across the globe, mainly in the cleantech arena. David received his MBA from the Tuck School of Business at Dartmouth College in 1989 and a BA in economics from George Washington University in 1982. David passed away in April 2012. 

Tao Zheng is a material scientist in advanced materials and cleantech industry. He held 20+ patents and patent applications, and published many peer-reviewed papers in scientific journals. Tao Zheng received his B.S. degree in polymer materials sciences from Tsinghua University in China, and a Ph.D. degree in chemical engineering from University of Cincinnati. He obtained his MBA degree with distinction in finance and strategy from New York University, Stern School of Business, where he was designated as “Stern Scholar” and received “Harold Price Entrepreneurship Award”. 

14 Ways that Solar Power Costs will Decrease Sharply

Solar power continues to grow by over 30 percent annually. Solar panels cost 100 times less than in the 1970s. Solar is clean, often generated at or near where electricity is needed, and not at the mercy of fluctuating coal or uranium prices.

The timing for solar energy growth is excellent. Voters have lost their appetite for spending billions to try to make coal clean while carrying the burdens of health damage. Similarly, most voters do not want to pour billions into loan guarantees for expensive nuclear power in the wake of the disaster in Japan.

In this decade, installed solar will drop to half its current cost. Such cost reductions will take more than lower costs of silicon panels and thin-film. Process and policy are now key areas for cost reduction. I recently attended the 3rd Annual Solar Leadership Summit hosted by SolarTech. With progress in these areas, solar costs will drop in half:

  1. Manufacturing scale
  2. Efficiency
  3. Balance of System
  4. Installation
  5. Right Size
  6. Right Place
  7. Improve Interconnect
  8. Markets not Monopolies
  9. Policy
  10. Process
  11. Financing
  12. Concentrate
  13. Hybrid Systems
  14. Storage

Manufacturing scale

Ten solar manufacturers in China produce over one gigawatt of solar panels. High manufacturing volumes, lower labor costs, and favorable government policy have helped lower costs. Morningstar estimates that China has a 20 to 30 percent manufacturing cost advantage and that Trina is producing crystalline silicon cells for 78 cents per watt.


China may be winning the c-Si cost battle, but First Solar uses thin-film innovation to lower cost. First Solar is increasing manufacturing capacity from 1.5 to 2.3GW per year, including manufacturing in low cost countries such as Vietnam. Last year it improved its CdTe module efficiency from 11.1 to 11.6 percent to deliver 75 cents per watt cost. GE announced 12.8 percent efficiency with its CdTe panels. In 2013 it will have a new 400 MW plant online. Honda is betting on CIGS thin film. Venture capitalists are betting on exciting emerging companies as the efficiency and cost battle intensifies.

Balance of System

Dr. Alex Levran, President of the RE Division of Power-One, asked the industry to measure system efficiency in harvesting energy, rather than just evaluate inverters efficiency with specific solar modules. He identified areas for cost savings including eliminating the grounding of inverters. This is not done in Europe and it lowers inverter efficiency. Europe uses 1,500-volt systems. In the U.S., 600 volts is common. Modular inverters are need for quick repair. He feels that a 10-cent/watt goal is feasible in 2 to 3 years with the right component costs.


Experienced conference participants agreed that a major variability in annual electricity generated from a solar project is how well it is installed. Square feet can be used optimally or poorly. The slope of panels needs to be ideal. The quality of wire and installation affect longevity and output. SolarTech is working with industry groups and community colleges to insure a growing pool of skilled labor.

Right Size

The highest U.S. growth will be in the middle market of 100 kW to 20 MW at locations near load centers. Urban commercial roofs, industrial yards, and parking structures are good examples. The price per watt benefits from economy of scale, flabor costs, shared balance of system. Installed solar is cheaper by the megawatt than kilowatt. These segments appeal to electric utilities that face RPS requirements in 30 states. Commercial distributed solar is often well matched with the location of electricity demand, minimizing transmission and distribution investment. For example, transit operators including LA Metro, New Jersey Transit, and MARTA are among the dozens of agencies heavily investing in solar in the 100kW to MW category. Public Transportation Renewable Energy Report

Right Place

My wife and I recently rode our bicycles to a 5 MW solar installation in the middle of San Francisco. The panels are mounted at ground level on the cement cover of a local water reservoir. Labor and construction costs are lower on the ground than on old roofs that may need to be upgraded to support the weight and maintenance of solar. Near ground, such as erecting steel grids to cover parking structures, can also be more cost effective than roof-mounted systems.

Improve Interconnect

A public utility can make it easy, difficult, or impossible to connect to their system. Follow the money. Some solar makes them money; some costs them. Some projects provide RPS credit; some do not.

Markets not Monopolies

I once shared lunch with a public transit manager who wanted to cover a transit line with megawatts of solar power and a water wholesaler who wanted to buy the power. It was a win-win and the numbers worked, except that they were legally required to put the local public utility in the middle. The utility wanted to build a new natural gas power plant. Somehow, the solar numbers no longer worked. Laws need to be changed, so that micro grids and markets can work without utility monopoly power.


Installation of solar power is complicated by having 21,500 local codes to deal with beyond the National Electric Code. Permitting can take weeks. Inspection outcomes and reworks are variable costs due to lack of one national code. Promising is DOE’s Solar America Board of Codes and Standards (Solar ABCs).


“The solar industry is at a critical turning point, where the technology is here, yet the overhead process costs keep prices high and force customers to navigate through a complicated process,” said Doug Payne, executive director of SolarTech.  “There is no reason that it should take three months for a customer to adopt solar, when it takes half that time to remodel your kitchen and only a few days to get a new water heater.  The Solar Challenge aims to make solar adoption easier and faster for customers, while simultaneously creating the local jobs and economic growth that follow. “


Solar financing needs to be as easy as getting a mortgage loan. Instead, many solar projects fail to get financed. Lenders need more certainty in the annual output expected from projects for 20 years. Standard spreadsheets and models would help. More certainty about government policy or an established carbon market would greatly help. Major players that could aggregate many projects would add diversity, certainty and simplify rating and securitizing large portfolios. In Europe, feed-in tarrifs have greatly simplified financing.


Concentrated photovoltaics, in the lab, have demonstrated 41 percent efficiency; roughly double the c-Si being installed. Now what is needed is low cost manufacturing of CPV, 20-plus year reliability, and effectiveness over a range of light-source angles. Also, in the pipeline are gigawatts of concentrating solar-thermal utility scale plants. The big challenge for these plants is years of site approval and high-voltage lines to load centers.

Hybrid Systems

Mark Platshon, Vantage Point Venture Partners is optimistic that installed solar will reach $2 per watt. The magic dollar per watt would require PV to be reduced to 30 cents per watt. Hybrid systems could lower the total cost taking advantage of common infrastructure and interconnect with hybrid systems such as solar and natural gas, roof PV and BIPV, and solar on existing light and power poles. Victor Abate, GE’s VP of Renewable Energy Business, stated the GE has sold 60 megawatts of its thin-film solar to NextEra, an existing GE wind customer. Abate said, “We are an energy company and expect to supply full solutions.” He suggested that if ten percent of GE’s wind farms added hybrid solar, the new 400MW GE factory would be sold out for six years.


Solar power often delivers when electricity is most needed, such as hot summer days when air conditioning is blasting. Storage of off-peak solar for peak use would add to solar energy’s value. One approach is concentrating solar thermal with molten salt storage. For PV, utilities are piloting a variety of promising grid storage, some as large as 150MW using compressed air, advanced batteries, and even flywheels. In the next decade, major storage could come from electric vehicle to grid.

LDK Solar Announces Strategic Financing Agreement With China Development Bank For Up To RMB 60 Billion

XINYU CITY, China and SUNNYVALE, Calif., September 27, 2010 — LDK Solar Co., Ltd. (“LDK Solar”) (NYSE: LDK), a leading manufacturer of multicrystalline solar wafers and PV products, today announced that it has entered into a strategic financing agreement with China Development Bank Corporation (CDB), a joint stock banking corporation wholly owned by the state of China. Under terms of the agreement, CDB will provide up to RMB 60 Billion (or approximately US$8.9 Billion) of credit facilities to LDK Solar over a five-year period. The financings will support LDK Solar`s long-term growth initiatives and corporate development plans. Terms of the individual credit facilities and lending agreements will be subject to CDB`s internal risk management requirements and operational regulations.

“We are very pleased to enter into this strategic financing agreement with CDB which demonstrates their confidence in and support of LDK Solar,” stated Xiaofeng Peng, Chairman and CEO of LDK Solar. “Through our strong partnership with CDB, we will have an enhanced ability to pursue our long-term growth strategy and further strengthen our position within the PV industry market.”

About LDK Solar (NYSE: LDK)
LDK Solar Co., Ltd. (NYSE: LDK) is a leading vertically integrated manufacturer of photovoltaic (PV) products and the world’s largest producer of multicrystalline wafers. LDK Solar manufactures polysilicon, mono and multicrystalline ingots, wafers, modules, and engages in project development activities in selected segments of the PV market. Through its broad product offering of mono and multicrystalline solar wafers and modules, LDK Solar provides its customers with a full spectrum of solutions. LDK Solar’s headquarters and manufacturing facilities are located in Hi-Tech Industrial Park, Xinyu City, Jiangxi Province in the People’s Republic of China. LDK Solar’s office in the United States is located in Sunnyvale, California. For more information about our company and products, please visit

Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this press release are forward-looking statements, including but not limited to, LDK Solar’s ability to raise additional capital to finance its operating activities, the effectiveness, profitability and marketability of its products, the future trading of its securities, the ability of LDK Solar to operate as a public company, the period of time during which its current liquidity will enable LDK Solar to fund its operations, its ability to protect its proprietary information, the general economic and business environment and conditions, the volatility of LDK Solar’s operating results and financial condition, its ability to attract and retain qualified senior management personnel and research and development staff, its ability to timely and efficiently complete its ongoing construction projects, including its polysilicon plants, and other risks and uncertainties disclosed in LDK Solar’s filings with the Securities and Exchange Commission. These forward-looking statements involve known and unknown risks and uncertainties and are based on information available to LDK Solar’s management as of the date hereof and on its current expectations, assumptions, estimates and projections about LDK Solar and the solar industry. Actual results may differ materially from the anticipated results because of such and other risks and uncertainties. LDK Solar undertakes no obligation to update forward-looking statements to reflect subsequent events or circumstances, or changes in its expectations, assumptions, estimates and projections except as may be required by law.

For more information contact:
Lisa Laukkanen
The Blueshirt Group for LDK Solar

Jack Lai
Executive VP and CFO
LDK Solar Co., Ltd.
+1- 408-245-8801