China’s potential market for green technologies is large – it might be worth as much as US$500 billion to US$1 trillion a year. This was the conclusion reached by the China Greentech Initiative, a collaboration of Western and Chinese firms.
There are, however, barriers to making that projection a reality. One of those is letting firms and individuals know the technologies exist and what their benefits are.
"It’s where the information technology industry was in 1980," said Randall Hancock, one of the co-managing directors of the China Greentech Initiative. "The level of knowledge of what’s available and what the price points are is lagging."
The reality is that these technologies are not as expensive as people think. China is currently subsidizing many renewable energy sources such as solar and wind power to encourage more companies to adopt them, but those subsidies may soon come to an end.
Greentech companies are developing better materials and processes which drive down the cost of their products and this is encouraging their adoption. Take solar panels: Speaking at a conference hosted by the American Chamber of Commerce in Shanghai in September, Suntech CEO Dr Shi Zhengrong said it cost US$4 to produce a solar panel in the first half of 2009, but producing that same panel today costs about 50% less. The key to replicating this success in other areas is mass production. That requires capital, which is hard to obtain if your technology isn’t well known.
"We saw when solar was hot all the capital went into solar. In my view that’s not healthy for the long term," said Tina Ju, founding and managing partner of KPCB China. "There are so many sectors in the greentech field that require funding."
Hancock thinks this problem will resolve itself as the Chinese finance industry learns about the opportunities in greentech. "The market is a big one and they can enable it," he said.