Whittaker Associates: Giving Information Meaning">Whittaker

By Vidhan Rana

If you ask any real estate broker or a site selection consultant today where some of the green shoots in the economy are located, renewable energy sectors will be at the top of the list. As the economy comes out of the recession, many brokers are reporting that they are busy as ever. However, digging deeper reveals that most of the activity is generated due to consolidation efforts rather than growth. The solar energy industry, however, is one of the sectors where growth is taking place.

The first 10 months of 2009 recorded 17 projects in the United States, with a total investment of $2.3 billion, creating 5,500 jobs. In 2008, we saw 29 projects with a total investment of $2.2 billion, creating 5,500 jobs. So investment in the solar industry in 2009 is expected to outpace that of 2008. The figure below shows the number of direct jobs created by projects in the solar industry since 2003.

Most of the recent growth in the industry is attributed to the favorable policies towards the industry from various local and state governments and funding provided by the stimulus package passed earlier in the year.

In September 2009, an old Ford manufacturing plant in Wixom, Michigan, began its clean technology makeover, assisted by Xtreme Power Systems and Clairvoyant Energy. These two companies are expected to invest $725 million in converting the Ford plant, creating over 1,000 new jobs. The Wixom Assembly Plant was one of Ford’s largest and oldest manufacturing sites, producing 6.6 million vehicles during its 50 years of operation. It employed about 5,000 during its peak and was closed in 2007.

In July 2009, PowerFilm, Inc., an Ames, IA, based thin film solar product manufacturer, announced plans to expand its current facility with an investment of $33 million. The investment is expected to create around 80 jobs in the community.

Such investments are not only delivering hope to communities like Wixom, MI, devastated by the plight of the auto industry, but are also bringing great high-paying jobs to communities all across the nation. The map below shows the locations of the 17 projects recorded in 2009. The size of the bubble denotes the size of the investment of each of the projects.

By Vidhan Rana

With expected gross revenue of $25 billion in 2009, smart-grid systems manufacturers and solution providers are among the fastest growing companies in the GreenTech world. A recent study conducted by Deloitte estimated that smart-grid technology could potentially increase the efficiency of electricity transmission from 33 percent that is currently achieved by using legacy electricity grids to about 60 percent. Deploying smart-grid technologies could reduce our electricity consumption by about 30% and reduce the level of greenhouse gases in the atmosphere.

Broadly speaking, a smart-grid system adds computer intelligence and networking to what is otherwise a ‘dumb’ network. According to the Smart Grid Systems Report, published by the U.S. Department of Energy in July 2009, a smart-grid system is defined as a system that uses digital technology to improve reliability, security, and efficiency (both economic and energy) of the electric system from large generation, through the delivery systems to electricity consumers and a growing number of distributed-generation and storage resources.

Smart-grid technologies could be used to help a power generation company run cleaner power sources such as nuclear, hydro, solar or wind, at full output, 24-hours a day, while reducing the need to provide more carbon emitting gas, coal, or oil plants in a surge (usually for only a couple of hours per day), to meet peak demand. By reducing the variability in power, smart-grid systems can diminish the need for new power plants.

The increase in interest and the demand of electric vehicles, including plug-in hybrids, will not only lead to major changes in the nature of the transportation industry, but it will also have a tremendous impact on the way we use electricity. Today only 0.02% of light-duty vehicles are grid-connected, but forecasts estimate ultimate penetration of this market at 8-16%, with some aggressive estimates at 37%, by 2020. To support such a massive rise in demand for electricity, a bi-directional informational flow supported by a smart grid system is necessary.

According to the Department of Energy study, only 4.7% of all electric meters are smart meters. Approximately 52 million more meters are projected to be installed by 2012. As a result, companies with new smart-grid concepts and technologies are receiving significant injections of capital. Venture-capital funding of startups in the sector grew from $58.4 million in 2002 to $194.1 million in 2007, yielding an average annual rate increase of 27%.

The Deloitte study estimates that smart grid companies may generate revenues over $25 billion in 2009, representing the biggest and fastest growing sector in GreenTech. In late 2008, during the depth of the recession in the United States, smart-grid solutions providers were enjoying 50% revenue growth and an 80% increase in bookings.

Whittaker Associates identified 41 companies directly involved in smart-grid business with revenues totaling $5.6 billion in 2008. Like many other GreenTech sectors, California has the highest concentration of smart-grid businesses. However, the number of companies and their sizes are growing in states like Washington, Georgia, New Jersey, and Pennsylvania. The map below shows the location of these 41 companies in the United States.

The public sector is also slowly catching up with the private sector in the area of smart-grid investment. In April 2009, the National Institute of Standards and Technology, a measurement standards laboratory under the U.S. Department of Commerce, announced a three phase plan to expedite the development of key standards for a Smart Grid, a nationwide network that uses information technology to deliver electricity efficiently, reliably, and securely. Under the American Recovery and Reinvestment Act, the federal government plans to distribute more than $3.3 billion in smart-grid technology development grants and an additional $615 million for smart-grid storage, monitoring, and technology viability.

For further information please refer to these sources:

U.S. Department of Energy,”Smart Grid Systems Report”, July 2009
http://www.oe.energy.gov/DocumentsandMedia/SGSRMain_090707_lowres.pdf

Deloitte Touche Tohmatsu Global Technology, Media & Telecommunications Industry Group,”Technology Predictions: TMT Trends 2009″, December 2008
http://www.deloitte.co.uk/TMTpredictions/attachments/TMT-Predictions-technology.pdf

By Vidhan Rana

With 15.2 percent unemployment in June 2009, Michigan is the state hit hardest by the current economic hardship. In the last few years, nearly all the economic indicators in the state have been negative. The motor vehicle manufacturing sector has, perhaps, felt the biggest impact. The state lost approximately 92,000 jobs between June 2008 and June 2009 in the sector, or a decline of 46 percent. The manufacturing sector as a whole has declined in the state by 25 percent in the same period. For a state that was known for its cars and manufacturing history, it is a really troubling sign.

The graph below shows the level of employment in the motor vehicle manufacturing sector in Michigan from 1990 to 2009. The dramatic decline in employment in the sector is having a devastating impact on the economies of many Michigan cities.

Amid all the bad news, there are some glimmers of hope in the state, and it is coming in the form of green. In the first six months of 2009, the state has seen six project announcements in the wind and solar energy sector that has brought more than $1 billion in investment and 2,000 new jobs. While this may seem insignificant when compared to the job losses in the automotive sector, it is indeed a positive sign for the state’s economy. The chart below shows the level of investment in the clean energy sector in the state since 2004.

As one can see, while the investment dipped in 2008 after growing precipitously between 2004 and 2007, the fact that the state has seen such massive increases in investment in 2009 is a testament to the state’s legacy of manufacturing expertise.

Check out the map below to review the six announcements in Michigan and read more about each of the projects:

View Green Announcements in Michigan in a larger map