Shepherd Advisors - Latest Blog Entries

Michigan Manufacturers Win Federal Clean Energy Tax Credits - Shepherd Assists Merrill Technologies Group

Thu, 28 Jan 2010 09:59:00 -0600

On January 8 President Obama announced the award of $2.3 billion in Recovery Act Advanced Energy Manufacturing Tax Credits for clean energy manufacturing projects across the country. Overall, 183 manufacturing projects in 43 states received awards.

The tax credits, worth up to 30% of each planned project, correspond to total company investments of nearly $7.7 billion in high tech, clean energy manufacturing. In total, the projects are expected to create more than 17,000 jobs.

Based on the program's success, The White House has proposed expanding the tax credit program by $5 billion. Senior administration officials expect to move the proposal through Congress quickly.

Thirteen Michigan manufacturers received tax credits totaling more than $240 million, representing over 10% of the national total, with individual awards ranging from $300,000 to $142 million. Among these projects, tax credits for solar and wind accounted for 88% and 12%, respectively. Awardees included:

Company, Tax Credit ($ mil), Clean Energy Manufacturing Area
Dow Chemical (two projects), $20.0, Solar-PV
Dow Corning -- Solar Silane, $27.3, Solar-PV
Energetx Composites, $2.0, Wind Turbines
Flame Metals Processing, $1.4, Wind Turbines
Great Lakes Industry, $1.3, Wind Turbines
Guardian Industries (two projects), $3.6, Solar-Concentrated
Hemlock Semiconductor, $141.9, Solar Components/Materials
ilumisys, $1.3, Buildings
Kaydon, $1.8, Wind Turbines
Merrill Technologies Group, $22.0, Wind Turbines
Rogers Foam Automotive, $0.3, Battery
Stirling Energy Systems, $9.8, Solar-Concentrating
United Solar Ovonic, $13.3, Solar-PV

Shepherd Advisors provided assistance to Merrill Technologies Group, based in Saginaw, MI, in securing the tax credit. In addition, Shepherd worked with several other manufacturers to assess feasibility of applying for the credit.

Selection Process
The winning projects were selected through a rigorous merit review process. The program was oversubscribed by a ratio of more than 3 to 1; over 500 applications were received with tax credit requests totaling over $8 billion.

Qualifying manufacturing facilities will produce:

Solar, wind, geothermal or other renewable energy equipment
Electric grids and storage for renewables
Fuel cells and microturbines
Energy storage systems for electric or hybrid vehicles
Carbon dioxide capture and sequestration equipment
Equipment for refining or blending renewable fuels
Equipment for energy conservation, including lighting and smart grid technologies
Plug-in electric vehicles or their components
Advanced energy property designed to reduce greenhouse gas emissions

The statutorily specified review criteria included:

Greatest domestic job creation (direct and indirect)
Greatest net impact in avoiding or reducing air pollutants or emissions of greenhouse gases; lowest levelized cost of energy
Greatest potential for technological innovation and commercial deployment
Shortest project time from certification to completion

Projects selected for the tax credit generally must be placed in service by 2014.

For the award announcement, including access to the full list of selections, please visit:
http://www.whitehouse.gov/the-press-office/president-obama-awards-23-billion-new-clean-tech-manufacturing-jobs

A fact sheet related to the announcement can be found at:
http://www.whitehouse.gov/the-press-office/fact-sheet-23-billion-new-clean-energy-manufacturing-tax-credits

For additional information regarding the clean energy manufacturing tax credits, please contact Tim Kumbier at 734-975-0333 or tim@shepherdadvisors.com.

U.S. Utility Wind Supply Chain Growth is Still in Slow Mo'

Thu, 03 Dec 2009 07:21:00 -0600

At the Supply Chain Workshop of the AWEA Small and Community Wind Conference in Detroit last month, there was quite a bit of discussion about the current pace -- or lack thereof -- of growth in the US large wind turbine manufacturing sector. Supply chain managers from several established European OEMs (Vestas, Nordex, and Nordic Windpower) said that building their US supply chains are a priority. Yet, it's clear that the current pace of domestic supply chain expansion in the US is very slow.

Contributing factors include:

The decline of new orders for turbines in the US has been pronounced, from nearly 8500 MW of new capacity in 2008 to an estimated 5800 MW through 3Q09. The slower US market has lowered OEM production forecasts compared to a year ago.
The wind market has declined globally, creating excess production capacity in Europe.
European OEMs are in a very conservative stance right now, driving to get better pricing and more fully utilizing current (mostly European) supplier capacity. OEM attention is now focused more on improving current production systems, and less on future expansion.
In addition, some OEMs are digging through a financial squeeze caused by customer pressure for lower prices and high costs for steel that OEMs locked-in a year or two ago.

All of the OEMs presenting at the conference asked suppliers to nonetheless contact them, to be persistent, and not to be discouraged if OEMs do not call back in a timely manner. They just don't have much offer right now.

While it was not stated as such, it looks like most established utility wind OEMs will not be adding too many new US suppliers until financing becomes easier and there is clear evidence of a solid rebound in the US wind turbine market.

There are encouraging signs to be sure. For instance, Nordex broke ground on its Jonesboro, Arkansas assembly facility in September, with production scheduled to begin in mid-2010. In October, Mitsubishi announced its intention to build a wind turbine manufacturing facility near Ft. Smith, Arkansas, with construction scheduled to begin in early 2011.

This speaks well for the long term. Yet, it's probably safe to assume that it may be not be till 2Q10 or later before most OEMs start to return the phone calls.

Community Wind—Ready for Take-Off?

Sun, 29 Nov 2009 19:35:00 -0600

Community Wind is still nascent compared to large wind. As of early 2009, approximately 1 GW of community wind had been installed in the U.S., compared to more than 25 GW of large wind. However, with the increase in favorable State and Federal policies and incentives, this market is poised for dramatic growth. In 2008, DOE's National Renewable Energy Lab (NREL) conducted a study that indicated substantial market potential exists for mid-sized (100 kW to 1 MW) wind turbines. Barriers to achieving that potential have included diseconomies of scale for smaller projects, comparatively high fixed costs of construction, and financing challenges unique to community projects. One significant barrier, in particular, has been a lack of commercially available turbines in the mid-size range. In response, NREL launched the Mid-Size Turbine Development Project to facilitate the development and commercialization of mid-size turbines.

If conference attendance is any indication, interest in community wind is coming on strong. In its first "solo appearance," the AWEA Small and Community Wind conference drew nearly 1700 attendees, some 40% more than anticipated. The community wind workshop track was well attended. Following the three day AWEA conference, 175 registrants stayed for NREL's half-day Mid-Size Wind Turbine Development Workshop. The workshop kicked off the NREL development project, bringing together project developers, OEMs, component suppliers, and wind turbine consultants. Highlights of the workshop are captured here.
*******************************************************
Community Wind Background
According to Windustry, a leading community wind advocacy group, the U.S. community wind installed base is small relative to utility-scale wind -- 1089 MW versus 25,317 MW through April 2009. Of that more than 1000 MW was concentrated in five states (MN, WA, CA, NE, IA) and nearly half in MN.

In the right situation, community wind can yield significant benefits:

Opportunity for local ownership and control
Keep economic benefits local
Greater self-sufficiency -- "power to the people"
Risk mitigation against high energy cost, especially in remote/isolated locations (e.g. high diesel fuel costs for diesel generators)

Active, passionate community involvement is key to driving projects forward and overcoming obstacles that impact community wind, in particular:

Diseconomies of scale inherent in smaller projects
Relatively high fixed installation costs (e.g. crane mobilization)
Insufficient policy and financial incentives targeted to community wind
Financing challenges beyond those faced by utility-scale projects
Presence of relatively few OEMs limits turbine availability and competition

Community wind is more about ownership philosophy and application characteristics, than specific turbine and project sizes. That said, typical project sizes range from 100 kW to 20 MW, though some developers promote "utility-scale community wind" with project sizes reaching 80 MW plus. "Mid-size" turbines of 100 kW to 1 MW are often associated with community wind, however, plenty of 1.5 MW (and even some 2 MW+) turbines being used in community wind applications.

One issue hampering community wind has been the relatively few turbine manufacturers in the "mid-size" range of 100 kW to 1 MW; some size ranges have just one or two competitors. To support larger wind farms and achieve scale economies, many OEMs have "migrated up" to larger sizes, leaving a void in the mid-size range.
While development of any wind project is a complex undertaking, community wind projects are especially difficult to execute. Non-profits such as municipalities are unable to directly use Federal tax incentives, leading to projects that incorporate a "patchwork" of financing tools, creative ownership structures, etc. Project feasibility is highly dependent on state-specific policy and incentives. In short, "when you've seen one community wind project, you've seen one community wind project."

If you are interested in pursuing community wind opportunities, call Tim at Shepherd Advisors to learn more, 734-975-0333.

Advanced Energy Manufacturing Tax Credit (48C)

Wed, 09 Sep 2009 15:54:00 -0500

Advanced Energy Manufacturing Tax Credit (48C)
Shepherd Advisors can assist manufacturers in receiving a 30% tax credit for qualifying investments in advanced energy projects, under a program jointly administered by the U.S. Department of Energy (DOE) and the U.S. Department of Treasury.

Background

The American Reinvestment and Recovery Act of 2009 (ARRA) authorizes the Department of Treasury to award $2.3 billion in tax credits for qualified investments in advanced energy projects, to support new, expanded, or re-equipped domestic manufacturing facilities. The Advanced Energy Manufacturing Tax Credit (MTC) provides a 30% credit for qualifying investments.

The application process consists of two submissions -- a Preliminary Application due September 16, and a Final Application due October 16.

The DOE and Internal Revenue Service (IRS) will review and make determinations of the eligibility and merit of MTC applications. Applicants will receive tax credits based on the expected commercial viability of their project and the ranking of their project relative to other projects. Rankings will be based on: expected job creation, reduction of air pollutants and greenhouse gas emissions, technological innovation, and ability to have the project up and running quickly. The four evaluation criteria are equally weighted. Technology, geographic and project size diversity, and regional economic development will also be considered when rating projects. Projects must be completed within 4 years of their tax credit acceptance. Eligible investment credits cover future expenditures and do not award past investment.

Why Work with Shepherd?

The application requirements are comprehensive and complex. They involve extensive data collection (from both internal and external sources), data interpretation and manipulation, quantitative data analysis/modeling, and substantial narrative creation (e.g. business plan).

Shepherd will help manufacturers streamline the application process and submit high quality applications. We will work with you to confirm eligibility, collect and synthesize required data, perform required quantitative analyses, and draft narratives. Shepherd will support your navigation through the process, ensuring that your submissions are delivered on time and according to specification.

Timeline

9/16/2009	Applicant submission of Preliminary Application to USDOE
10/16/2009	Applicant submission of Final Application to DOE and Application for §48C Certification to IRS
12/16/2009	DOE completion of merit review of Final Applications; recommendation to IRS
1/15/2010	By this date IRS accepts or rejects Application for §48C Certification and notifies applicant, by letter, of its decision. If application is accepted, date of this letter will be treated as the "acceptance date."
3/15/2010	Applicant must execute a project agreement with IRS
4/16/2010	IRS executes and returns agreement to applicant
Within one year of Acceptance Date	Applicant must provide evidence to IRS that certification requirements have been met. IRS will then decide whether or not to certify the project and notify the applicant, by letter, of that decision. If the IRS certifies the project, the date of this letter is the "date of issuance of certification."
Within three years of Date of Issuance of Certification	Applicant must place project in service

Eligibility

A qualified investment for any taxable year is the basis of eligible property that is placed in service by the taxpayer during such taxable year and is part of a qualifying advanced energy project.

A qualifying advanced energy project is one that re-equips, expands, or establishes a manufacturing facility for the production of specified advanced energy property (SAEP), or property that after further manufacture will become SAEP. SAEP includes:

Property designed for use in the production of energy from the sun, wind, geothermal deposits, or other renewable resources;
Fuel cells, microturbines, or an energy storage system for use with electric or hybrid-electric motor vehicles;
Electric grids to support the transmission of intermittent sources of renewable energy, including property for the storage of such energy;
Property designed to capture and sequester carbon dioxide and sequester carbon dioxide emissions;
Property designed to refine or blend renewable fuels (but not fossil fuels) or to produce energy conservation technologies (including energy-conserving lighting technologies and smart grid technologies);
New plug-in electric drive motor vehicles, qualified plug-in electric vehicles, or components that are designed specifically for use with such vehicles, including electric motors, generators,, and power control units or;
Other property designed to reduce greenhouse gas emissions as may be determined by the IRS.

Eligible property is property necessary for the production of SAEP and is tangible personal property or other tangible property used as an integral part of the qualifying advanced energy project (e.g. manufacturing equipment). NOTE: A building or its structural components are NOT eligible property.

Placed in service means placed in a condition or state of readiness and availability for the intended purpose.

Deliverables

Preliminary Application for DOE Recommendation (9/16/2009). Brief, straightforward document providing basic applicant information and summary level project information.

Final Application for DOE Recommendation (10/16/2009). Comprehensive document including:

Executive Summary
Demonstration of Eligibility

Advanced Energy Project Qualification
Commercial Viability

Business Plan
Financial Plan

Performance against Evaluation Criteria (including underlying calculations/quantitative analysis)

Domestic Job Creation
Impact on Air Pollution and Emissions of Greenhouse Gases
Technological Innovation and Cost Reduction
Project Schedule and Time to Completion

Supporting Documents/Appendices
Applicant Data Input Spreadsheet

Application for 48C Certification (10/16/2009)

Taxpayer information
Contact person information
One electronic version (CD) of Final Application

Requirements for Certification (within one year of IRS acceptance for certification)

Taxpayer has received all federal, state, and local permits, including environmental authorization or reviews necessary to commence construction of the project
Taxpayer has completed all the steps that must be accomplished during the one-year period beginning on the "acceptance date" in order for for the project to be placed in service within three years of the "date of issuance of certification."
Taxpayer must comply with signature and declaration requirements

Alternative Energy Opportunities for Metalformers

Tue, 14 Jul 2009 11:56:00 -0500

Metalforming Magazine Interviews Loch McCabe about Wind and Solar Energy Manufacturing Opportunities for Metalformers

In a special online issue of Metalforming Magazine, published July 2009, Editor Brad Kuvin interviewed Loch McCabe. Click here and flip to page 12.

The five page article covers the emerging large-wind, small-wind, and concentrated solar power (CSP) components manufacturing needs that metalformers can meet.

Alternative Energy Interview with Loch McCabe

Thu, 28 May 2009 15:31:00 -0500

- Loch McCabe Interview featured on MLive.com ...

Alternative energy takes center stage at Mackinac Policy Conference

by Nathan Bomey | Michigan Business Review

Tuesday May 26, 2009, 3:56 PM

Michigan's hopes of transitioning its manufacturing industry to capitalize on production of renewable energy technologies is contingent on executives' ability to develop the appropriate mindset for shifting gears, an alternative energy expert said.

As Michigan's alternative energy takes center stage this week at the Mackinac Policy Conference, the state's efforts to create a battery supply chain and pursue wind and solar companies are gaining attention.

Loch McCabe, founder of Ann Arbor-based Shepherd Advisors, one of the state's oldest renewable energy consulting firms, said his firm is spending an increasing portion of its time advising established manufacturers seeking to diversify. He said it's critical that they embrace a new mindset devoted to embracing entrepreneurialism and changing culture.

"Diversification is challenging, and it's especially challenging to companies that have not had to do that before or at least had to do that in significant ways," McCabe said. "It takes time, it takes a willingness to commit resources and it also takes a growth mentality, a willingness to not only get into a new industry but to grow with the industry."

Shepherd Advisors, which recently attracted some 300 people to a renewable energy conference co-hosted with NextEnergy [SA.com note: Conference was, in fact, hosted by SVSU, sponsored by NextEnergy, and promoted by Shepherd Advisors], has nine employees in Ann Arbor. The firm was founded in 2000.

McCabe recently spoke with Michigan Business Review's Nathan Bomey.

More ...

Wind Manufacturing Follows Demand

Thu, 16 Apr 2009 10:21:00 -0500

With Michigan’s suppliers facing automotive losses, they should pursue new opportunities in wind, because wind manufacturing co-locates near wind generation, which is taking off in Michigan.

In a recent article emphasizing the importance of diversification, the Kalamazoo Gazette suggested that hundreds of Michigan automotive suppliers are “stuck in neutral” as they encounter economic challenges. It went on to cite a survey by the Original Equipment Suppliers Association, indicating that “thirty-three percent of top executives in the automotive supplier business....reported that they were significantly more pessimistic about the future of their businesses over the next year than they were at the beginning of the year.” (1)

Wind power generation and the wind manufacturing industry, on the other hand, are growing in the United States, by leaps and bounds. Consider some of the key data presented in the American Wind Energy Association Annual Wind Industry Report (2):

In 2008, the U.S. added 8,545 megawatts (MW) of new wind capacity, representing growth of 62% over the 5,249 MW installed in 2007. With a cumulative total of 25,369 MW at year-end 2008, the U.S. surpassed Germany as the country with the largest wind power installed base.
This growth has driven significant expansion in U.S. wind turbine manufacturing. During 2007 and 2008, more than 70 manufacturing facilities were opened, expanded or announced in the U.S. In 2008 alone, 10 new facilities were opened, 17 facilities were expanded, and 30 were announced. Once fully online, these manufacturing facilities represent 13,000 new direct jobs and nearly $2 billion in investment. The U.S. is approaching 50% in domestic component production today, up from 30% in 2005.
Overall, the wind industry added 35,000 jobs in 2008, bringing the total to about 85,000.

Because of the large size and high transport cost of utility-scale wind turbine components, regional manufacturing makes good sense. And while Michigan has just scratched the surface of its potential, it is beginning to gain traction. For instance, according to AWEA (2):

In 2008, Michigan increased its installed wind capacity from 3MW to 129MW, and was ranked 22nd in existing capacity among the 50 states at year-end. Michigan ranked #2 in terms of relative increase in 2008. Granted this increase is measured against a very small base, but at least Michigan is now “on the map.” In terms of potential capacity, AWEA ranks Michigan 14th at 7,460 MW.
Of the ten new U.S. wind manufacturing facilities opened in 2008, two were in Michigan: ATI Casting Services (castings) and E-T-M Enterprises (composite structures).
Of the seventeen facilities expanded in 2008, three were in Michigan: Danotek (generators), Genzink Steel (frames), and K&M Machine Fabricating (hubs and gearbox housings).

Beyond the AWEA list of new and expanded facilities, more than three dozen Michigan manufacturers already supply some product or service to the wind industry. And some 1,000 people attended the Michigan Wind Energy Conference held in Detroit in early March (an estimated half of these representing manufacturing), far surpassing expectations. (3) (4)

What comes now? The credit freeze has dampened wind project development, and manufacturers have had to scale back operations and/or delay implementation of expansion. But the American Recovery and Reinvestment Act of 2009 includes numerous provisions expected to significantly boost the wind industry, and the long-term industry drivers are favorable. Further, Michigan wind manufacturing is supported by the state’s Renewable Portfolio Standard, enacted in October 2008. The RPS requires utilities in the state to generate 10% of their electricity from renewable sources by 2015. Michigan joins 26 other states that have instituted RPS requirements.

While the pain is real and severe, the good news is that wind power represents a tremendous diversification and growth opportunity for Michigan manufacturers. The Michigan Economic Development Corporation estimates that Michigan has “over 900 firms operating that could apply their capabilities to the wind industry” and that “the wind industry alone could support 24,000 jobs.” (5)

1. http://www.mlive.com/business/west-michigan/index.ssf/2009/04/diversification_key_to_future.html

2. http://www.awea.org/publications/reports/AWEA-Annual-Wind-Report-2009.pdf

3. http://blog.mlive.com/businessinnovation/2009/03/michigans_pursuit_of_wind_ener.html

4. http://www.mlive.com/businessreview/oakland/index.ssf/2009/03/manufacturers_swarm_wind_energ.html

5. http://ref.michiganadvantage.org/cm/attach/75473401-C887-4EAE-A816-EE0D4C4135C3/Diversification_WIND_factsheet_rev12MAR09.pdf

Energy Block Grants

Mon, 30 Mar 2009 09:27:00 -0500

Feds Allocate $76 Million for Local Energy Efficiency Improvements in Michigan in Addition to previous $325 Million for Weatherization and State Energy Program

The Obama Administration announced on March 26, 2009 that $76,601,500 has been allocated to Michigan counties, cities, and Indian tribes for energy efficiency and conservation projects. The program will distribute approximately $56 million directly to eligible cities, counties, and Indian tribes in Michigan (based on population, broken out in this press release, pages 2-4). Further, the State of Michigan will receive the remaining $20 million, and must pass at least 60% of it on to smaller (ineligible) cities, counties, and Indian tribes that apply to the state.

Called Energy Efficiency and Conservation Block Grants, this funding is available for each unit of government to:

Support energy audits and energy efficiency retrofits in residential and commercial buildings
Develop and implement advanced building codes and inspections
Create financial incentive programs for energy efficiency improvements
Support transportation programs that conserve energy
Develop projects to reduce and capture methane and other GHG emissions from landfills
Install renewable energy on government buildings
Install energy efficient traffic signals and street lights
Deploy combined heat and power (CHP) systems

Instructions and information on applying for Block Grants are published on this helpful resource page. To apply for their Block Grants, eligible Michigan communities must:

Conduct a three step registration process with the Federal government
Use the application found through FedConnect, searching under reference number DE-FOA-0000013
Submit applications beginning now through June 25, 2009

Smaller, ineligible communities will need to apply through the State of Michigan, and instructions are yet to be published (as of March 27, 2009).

This is in addition to the $325 million allocated to Michigan (announced March 12, 2009) for the Weatherization Assistance Program and for the State Energy Program.

The $243 million in Weatherization Assistance Program will:

Add insulation to homes and seal air leaks
Upgrade heating and cooling systems
Allow average investment of $6,500 per home
Be available to families who earn up to 200% of the poverty level ($44,000 for a family of four, for example)
Save hundreds of dollars per year per home in energy costs

The $82 million in State Energy Program funding is available for any of the following:

Rebates to consumers for home energy audits or other energy saving improvements
Development of renewable energy projects for clean electricity generation and alternative fuels
Promotion of Energy Star products
Efficiency upgrades for state and local government buildings
Other innovative state efforts to help save families money on their energy bills

MI Statewide Net Metering

Thu, 26 Mar 2009 12:01:00 -0500

Michigan Finally Upgrades Its Net Metering Rules –
Are We Ready Now?

On March 18, 2009, after years of effort by practitioners, advocates, and customers, we will soon have a net metering law that allows residential and business customers to "get credit for the energy they produce in excess of their needs - at the full retail rate," according to MPSC Chairman Orjiakor Isiogu.

Has Michigan finally arrived?

Other details include ...

The size of the net metering generators must be limited to meet the applicant's needs.
No additional insurance is required for up to 150 kW, and the utility need not be named as an additional insured.
For systems larger than 150 kW, a general liability policy of $1 million will need to be held by the applicant.
The applicant is responsible for the cost of easements or rights-of- way required for interconnection.
Current net metering customers must be transferred to the new program within 30 days of the rules taking effect.
Net usage will be measured monthly for generators that are 20 kW or less, if the customer's existing meter is capable of measuring the flow of energy in both directions.

Further details are described in a posting on the MPSC website.

This is clearly a step forward, and effective net metering law in Michigan should help grow demand from local home owners and small businesses for solar and small wind.

MPSC Chairman Orjiakor Isiogu says that he expects "the number of net metering customers to skyrocket."

Will he be right? Is this the break we've been waiting for?

How will Michigan do in comparison to other states?

We're asking solar/wind practitioners and other interested parties in Michigan to share their thoughts, and we'd love to hear yours.

Please post a comment!

Renewable Energy Industry in West Michigan

Mon, 16 Mar 2009 10:58:00 -0500

A recent article was a great overview of activities in West Michigan that support renewable energy equipment manufacturing, including innovative wind turbines, solar PV systems, component manufacturing for wind turbines, and conversion of waste into biomass fuel.

The Grand Rapids Press published the article on March 15, 2009 entitled "Wind is at the back of West Michigan's fledgling renewable energy industry".

The following companies were mentioned, with descriptions about issues the manufacturers are facing as they pursue the opportunities to manufacture Clean Tech products for consumer use and as part of the supply chain of renewable energy production:

Burke Porter Machinery

Grand Valley State MAREC

Rockford Construction and Berge Logistica Energetica forming Rockford Berge

United Solar Ovonic

Zeeland Farm Services

Clean Energy 2009

Fri, 16 Jan 2009 12:47:00 -0600

Looking Ahead … Clean Energy Market Drivers In 2009

What’s coming for the clean energy market in 2009, with the overall economy facing such challenging dynamics?

Shepherd Advisors’ team recently reviewed Clean Technology market predictions for 2009 from five different sources (listed at the end) and, taken together, they offer a scenario that resonates with our own observations. What might 2009 bring? Let’s look.

Government will play a larger “grow the market” role as national and state policy makers create …

Pro-Clean Energy economic stimuli that reduce energy vulnerability, meet Renewable Portfolio Standards (RPS) laws, and, especially, foster “green jobs”
Legislation that tilts the playing field towards clean energy. A national RPS in 2009? Carbon cap-and-trade in 2010? Kyoto II in 2012? Odds are going up
Incentives that encourage clean energy purchasing (especially tax incentives) by businesses and homeowners

Overall clean energy market growth will be challenged as …

Economic contraction reduces everyone’s budgets
Oil prices remain modest, as global recession continues
Customers become much more savvy and cost-conscious about their clean energy choices
Government interest wanes in numerous “green programs” as budgets contract
Investment capital levels off and financing becomes harder to secure
Many more clean energy startups falter

The green that will really count will be the color of money, rewarding those who…

Make and sell clean energy products priced to compete head-on with fossil fuels
Keep costs low and lower through higher efficiencies, larger scale, continuous innovation, and expanding market share

Clean energy opportunities likely to make solid strides in 2009 include …

Energy efficiency – it's the fastest and cheapest way to lower the energy bill
Wind energy – as turbine prices stabilize and production grows, while demand-growth slows
Energy storage – as battery performance increases, costs go down, utilities want to better manage when they dispatch power, and the auto industry invests in electrified vehicles
IT-based energy products – as consumers buy energy options that are smarter

Clean energy segments likely to experience greater “headwinds” in 2009 include …

Biofuels – as gasoline and diesel prices remain low and feedstock costs moderately high
PV solar - as supply begins to exceed demand and local governments reduce incentives
Large capital projects – as financing constraints persist

How could these forces affect your opportunities? Do you want to better align with these dynamics? If so, how? Should be an interesting year!