Green Business and Cleantech Find Common Purpose: The State of Green Business 2010

Green Business and Cleantech Find Common Purpose: The State of Green Business 2010

Editor's Note: To celebrate the launch of the third annual State of Green Business report, we will be highlighting over the next two weeks the 10 big trends that are shaping the future of the greening of mainstream business. You can download the report for free here, and read all 10 trends on GreenBiz.com.

For most of the past decade, the worlds of clean technology and green business seemed like a Venn diagram that was yet to be -- that is, two circles trying to overlap. The world of cleantech was seen as early-stage, comprised of VC- backed startups or garage-lab science projects that weren't ready for prime time, at least not at affordable prices. Green business activity was seen as too process-oriented, more about changing management practices and engaging suppliers, customers and employees than about embedding smart new technologies into business operations.

At last, the circles are overlapping, big time. Clean technology in its many forms is entering the marketplace -- occasionally in the form of goods and services that are visible to consumers (think electric cars and solar panels), but more often embedded in materials, manufacturing systems, public infrastructure, information technology and industrial processes. Most of this is hidden from public view or knowledge, placing the much-anticipated green economy behind a curtain of business-to-business activity.
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The convergence of green business and cleantech can be seen in the emergence of the so-called smart grid, the confluence of the electricity grid with information technology, vehicles, consumer products and the built environment. The smart grid embeds intelligence into the electricity infrastructure, enabling homes and businesses to lower their power use during peak demand; appliances and lighting to be controlled remotely; real-time pricing of energy; storage of electricity in electric-car batteries in a way that can be sold back to the grid if necessary; the integration of wind and solar energy into the grid; and many other things. The smart grid will eventually become visible to everyday consumers -- in the form of electric car charging stations, for example -- but much of it will remain behind the scenes, much like the technologies behind our cell phone or broadband infrastructure.

The opportunity is huge -- 1,000 times as large as the Internet, according to one Cisco executive. That's a big (and vague) number, to be sure, but you can be sure it has at least nine zeroes behind it.

Which is why Cisco and nearly every other information technology company views the smart grid as an emerging cash cow. Cisco, for its part, is making the switches and routers that will help control all this information, much as it does for the Internet. IBM has already proven through a pilot test that it can cut energy use of homes and businesses by an average of 15 percent and as much as 40 percent in some homes. Siemens is expecting $8 billion in new orders for green technology due to government stimulus programs from around the world, much of it for smart-grid technology. In October, the federal government committed $3.4 billion to invest in smart-grid companies, which it hopes will unleash $4.1 billion more from the private sector.

With all this money at stake, it's not just IT companies drawn to the confluence of green business and clean technology. In 2009, Wells Fargo launched a commercial banking group dedicated to supporting cleantech firms, following on the $600 million it committed to companies developing renewable energy technologies, energy and resource efficiency solutions and smart grid applications. Ford, and pretty much every other major auto company, tested vehicle-to-grid communications systems, which are expected to be widely deployed in coming years. Smart-grid technologies were visible along the miles of aisles of the 2009 Greenbuild expo, such as building automation systems that "talk" to the grid while they manage one or more facilities' energy use. Among them was appliance giant Whirlpool, which committed to having 1 million clothes dryers that can receive and transmit signals to the electricity grid hit the market by late 2011, and to have all of its electronically controlled appliances smart-grid compatible by 2015.

Finally, there's Best Buy. The retail purveyor of car stereos, camcorders and CD players plans to be a leader in bringing smart-grid technologies to the masses. The company has aspirations to become consumers' go-to resource for a range of green products and services, from e-vehicles to solar panels to a myriad of gizmos designed to help households plug into the smart grid in the coming years. It has designs not just on selling the products, but deploying technicians to help customers set them up in their homes and businesses. The company's thinking, along with its initial efforts, suggests that the mainstreaming of next- gen green products is within view.