Clean Energy: Why Is China Ahead of the U.S.?

Solar Start-Up in New Jersey Said China Gave Them a Deal They Couldn't Refuse

By KI MAE HEUSSNER

June 16, 2010—

Chuck Provini, a former Marine with no fewer than 19 military decorations, considers himself a "good American and a patriot."

He graduated from the U.S. Naval Academy, served as a Marine Corps captain in the Vietnam War and has lived his whole life in the United States. But now that he's the president of a growing solar technology start-up, he's finding himself in a difficult position: He must leave the United States behind.

His company, Natcore Technology, based in Red Bank, N.J., holds the license to technology that makes solar panels cheaper, more efficient and less toxic to the environment. He said he tried to commercialize the technology domestically, but while bureaucracy and red tape stalled talks with state and federal officials, conversations with Chinese officials sped ahead.

"The Chinese have a major, aggressive movement to increase the technology in the photovoltaic area," he said. "They picked up the phone and called us and said, 'What do you do?'"

At the time of this story's publication, he's in Zhuzhou city in China's Hunan province, on the verge of signing a deal that will commercialize the technology overseas, giving the Chinese economy a boost and Chinese workers more jobs.

Obama: China Is Investing in Clean Energy Jobs That Should Be in the U.S.

"We wanted to do business in the United States and we went to different agencies and we said, 'Here's what we have going on in China. Can you help us replicate this?'" he said. "And, frankly, we kind of rang on deaf ears."

In his address from the Oval Office Tuesday night, President Obama used the backdrop of the massive BP oil spill to push a clean energy agenda.

"The consequences of our inaction are now in plain sight. Countries like China are investing in clean energy jobs and industries that should be right here in America," he said.

But what is China doing that the United States isn't? And what do we need to do to keep up?

Provini, whose company licenses technology developed at Houston's Rice University, said that for about a year, he went back and forth with representatives at the Ohio Department of Development. He said he also worked with a major Washington, D.C., law firm and was told that a $750,000 application fee was necessary just to apply for a specific federal program.

Solar Energy Company: We Didn't Call China, They Called Us

When he tried to work with elected officials for guidance on how to grow his business, he said he rarely got past staff members.

Lisa Patt-McDaniel, director of the Ohio Department of Development, said she couldn't comment directly on Natcore, but said that her office supports hundreds of new technology ventures each year.

Provini said, "The Chinese were just so aggressive. We didn't contact them, they contacted us."

Officials responsible for developing China's clean and alternative energy program in the Hunan province learned about Natcore through a mutual contact at the University of Wales and placed a call, he said.

Then they flew Provini to China and helped him find a production partner that will provide capital and manufacturing capabilities. In the next three to six months, he said, they could move into the manufacturing phase, which could create 250-400 jobs.

"They've cut through the red tape to be responsive," he said. "It's almost embarrassing that whatever you ask for, they deliver it."

Clean Energy Sector to Reach $200 Billion in 2010

Since 2005, investments in the clean energy sector have grown 230 percent, according to the Pew Environment Group Climate and Energy Program. In 2009, $162 billion was invested in clean energy globally and analysts forecast that investments will climb 25 percent to $200 billion in 2010.

But despite the opportunities in the fast-growing industry, experts say the United States continues to lag behind countries such as China, Brazil, the United Kingdom, Germany and Spain.

"The U.S. is missing the boat," said Phyllis Cuttino, director of the Pew Environment Group Climate and Energy Program in Washington. In 2009, she said, China attracted $34.6 billion in clean energy investments, more than any other country. The United States attracted $18.6 billion, about half of China's total, she said.

When you look at the winners in this race, Cuttino said, they all have one key feature in common: a national clean energy policy.

The countries dominating the clean energy landscape have national policies to reduce global warming pollution and provide incentives for companies to use renewable energy, such as solar and wind power, but she said the United States only had a "patchwork" of state policies.

State Development Agencies Promote Small Clean Energy Start-Ups

"We have a well-educated [population], a manufacturing base," she said. "We basically have all of the necessary ingredients to capitalize on a clean energy policy, but we need a policy."

The Ohio Department of Development's Patt-McDaniel said that with investments ranging from $50,000 to as much as $1 million, the Ohio Third Frontier program funds clean energy, biomedical, polymer and other high-tech projects to help them eventually commercialize and create jobs.

"Our partner organizations at the local level ... take these kinds of entrepreneurial companies and match them to potential partner investors," she said. She said development officials could also help small companies find production partners that could take the venture to the next level.

Real Progress Needs Federal Action, Experts Say

But though state development agencies across the country may support small business following Obama's mandate to develop clean energy, experts say real progress will only come from federal action.

"The clean technology sector is the fastest growing business sector in the global economy and the U.S. cannot afford to lose our competitive edge with China and other countries when it comes to the fastest growing sector in the global economy," said Howard Learner, president and executive director of the Environmental Law & Policy Center in Chicago.

While one small business doesn't necessarily prove a trend, he said the bottom line is that the United States is running the risk of missing out on the next economic driver.

"Clean energy and climate legislation before Congress would put us on the right track, but it's been mired in both Republican political opposition and opposition from old economy industries," he said.

Obama's decision to enact a series of renewable energy tax credits in 2009 was a good start, he said, but they all expire by the end of this year and should be extended.

He also said that while 30 states have renewable energy standards requiring utilities to purchase an increased percentage of power from renewable sources, Learner, like Pew's Cuttino, said a national standard is critical.

U.S. Companies Want 'T.L.C.'

It would not only expand the market across all states and make a level playing field, it would make the market more predictable and reliable over the long-term, which would spur development, he said.

Learner also said that putting a price on carbon is key to driving the market for renewable investment, manufacturing and deployment.

But in the absence of a market created by a carbon cap and other national policies, more and more companies like Provini's are looking to other shores for opportunity.

"There's a whole long list of American companies that have gone to China," Cuttino said. "[And] lots of companies sitting on the sidelines in the U.S. They're waiting for what they call T.L.C. -- transparency, longevity and consistency."

ABC News' Dan Harris and Judy Isikow contributed to this report.