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Before embarking on any sort of business venture, due diligence is very important. That’s Business 101, but it is particularly true when considering entry into the emerging green industry, often hailed as the key to solving America’s economic woes. Just last week, President Barack Obama announced $2.3 billion in Recovery Act Advanced Energy Manufacturing tax credits for 183 clean energy manufacturing facilities in 43 states.
Despite the fact that the federal government is still formulating a comprehensive energy policy, to some it may seem that it’s just giving money away, making it very tempting for anyone of an entrepreneurial mindset to jump right in.
But look before you leap, warned Rod West, president and CEO of Entergy New Orleans Inc., at the Black Enterprise “Conversation on Energy” forum Tuesday that focused on energy policy and business and employment opportunities.
“The same way we want our consumers to be smart and responsive to price signals and conserving energy and weatherizing their homes, we don’t want people going into business thinking this is the latest, greatest hot thing if it’s not sustainable and unless we truly understand the costs associated with going down this path,” said West.
Budding entrepreneurs should certainly take advantage of government tax subsidies and incentives, but they must also be sure they’re making a fully educated decision and understand the true cost of starting and, even more important, sustaining a green energy business.
“Because [otherwise] you’re talking about a transaction: you want to make money off the influx of dollars from the Recovery Act and as soon as your contract or subsidy ends, you’re out because you weren’t engaged in a sustainable business model; you were just trying to get in on some cash,” said West.
So, where are the employment and business opportunities?
“If you can solve an issue on the scientific and entrepreneurial side, that’s where the real money is,” said West.
Lynton Scotland, vice president, operational excellence, NRG Energy, advised entrepreneurs to consider renewable forms of energy, such as solar, wind, and biomass. And as the government develops its energy policy, he said, it should consider providing incentives to companies that work with university research departments. He also strongly recommended nuclear energy, saying that it’s one of the cleanest sources of energy and is used very successfully by other nations, such as France. Unfortunately in the U.S., people hear nuclear and think of the 1979 accident at Three Mile Island.
“People don’t like to hear that, but we cannot be focused on solving climate issues or reducing greenhouse gases and be against nuclear energy,” Scotland said.
“The real critical thing is understanding the market because people won’t buy goods and services that they don’t need so there’s a notion of understanding and finding a market,” said Gaurdie Banister, Jr., president and CEO of Aera Energy LLC. “Then the second thing is access to capital. It’s obviously very, very difficult, but there are venture capital firms out there that are willing to invest in green technologies and take some of that risk. So if you can find the market, get access to that capital, that’s the key.”
But what if you’re not technically or scientifically inclined?
At an energy conglomerate like Shell, which operates worldwide, employment opportunities are wide-ranging. People who have an expertise in the science, technology, engineering and math fields have a distinct advantage, but in addition to developing technological advances, employees are deeply involved in developing philosophy and policy.
“We have engineers who’ve changed professions, like I have, we have accountants, biologists, policymakers, and so if there’s no other message I can leave you with today, it’s that this green jobs thing is much more than just technical. There’s space for a lot of different groups to play in,” said Richard Williams, president of Shell WindEnergy Inc.