As media perception of clean technology sectors has hit the wall hard, a study from accounting and taxation company Grant Thornton suggests the future of clean technology and renewable energy remains bullish.
The 2012 report, entitled “Capturing Opportunity: Cleantech Business Booms Around The World,” suggests businesses within the clean technology sector in 2011 were more optimistic (37% net optimism) compared to 2010 (34%). Meanwhile, all other sectors were less optimistic in 2011 at 22%, compared to 24% in 2010.
“Companies once approached the cleantech sector — as buyers or sellers — because it was a good thing to do, a socially responsible corporate action,” said Randy Free, partner with Grant Thornton in the report.
“But today, around the world, cleantech means reducing costs and increasing profits,” he said.
The industry has grown leaps and bounds since the early 2000’s and significantly cut costs along the way. The solar photovoltaics industry has grown from $2.5 billion in 2000 to $91.6 billion in 2011, according to data from Clean Edge. The wind sector grew from $4 billion in 2000 to $71.5 billion in 2011.
As the sector became more bullish, 64% of cleantech businesses were expected to increase their profits in 2011, compared to 42% in 2010, the report said. That was more than other sectors, 40% of which were expected to increase their profits in 2011, up from 29% in 2010, the report said.
With the cleantech industry becoming bullish, the report also said there is further opportunity for mergers’ and acquisitions. The report also suggested that there were likely to have been more mergers and acquisitions 2011 than in 2010.
Increased returns, along with the increased likelihood of mergers and acquisitions, shows the strength of the industry and also means increased potential for new employment opportunities. Of cleantech businesses surveyed, 42% suggested in 2011 they expected to do more hiring, compared to only 28% of respondents in other sectors.
“I’m quite convinced that in terms of employment, this sector will be one of the very important sectors within the German economy,” said Kai Bartels, a senior partner with Grant Thornton in Germany.
However, despite some of the upside for the cleantech sector, some challenges remain, according to the report. Perhaps some of the biggest challenges cleantech business face are: red tape and regulations, the need for more trained workers.
The Grant Thornton report supports the idea that this sector is primed for continued growth and a serious force in the global economy this century.
Photo Credit: Solar Knowledge
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