In earning a spot among the world's leading technology pioneers, Israeli
companies were quick to learn that innovation rests at the core of any
successful business strategy. Yet bright ideas, without the proper economic
environment, remain just that – ideas.
For a concept to transform into a
thriving, tangible reality, the economic climate can often be as important as
the technology itself. Nowhere is this truer than in the renewable energy
sector, which was proudly on display last month at the 2012 Eilat-Eilot
Renewable Energy Conference. Eilat-Eilot is Israel's premier clean technology
event bringing together leading executives and experts from Israel and abroad,
for four days of discussions on the past, present and future of the
In years past, deliberations at the conference often focused on
the need to make advances that would allow clean technologies to compete with
fossil fuel-based alternatives. Clean technology developers recognized that to
bring sustainable solutions to market, they needed to provide customers with a
road map leading to competitive prices, if not a better deal from the start. To
this end, Israel helped push forward a range of innovations, from hybrid solar
capabilities to small-scale wind power production.
Therefore, the shift
in focus at this year’s conference was of particular significance. While major
technological innovations were still on display, this year’s event put
governmental support for promoting renewable technologies in the spotlight.
There is growing sentiment that a shift in financial considerations following a
lengthy global economic recession has pushed governments to support hasty
cost-cutting measures, including a serious abandonment of support for clean
technology. The resulting economic landscape has made effective competition with
fossil fuels significantly more difficult for renewable energy
There might be skeptics who see this as a complaint coming
from an industry incapable of competing on equal terms with fossil fuels.
Essentially, if clean technologies were good enough for use, they might say,
they’d be competitive on their own, making government handouts
The simplicity of this seemingly sound argument is belied by
reality. President Barack Obama stated on the 2012 campaign trail that oil
subsidies average over $4 billion each year in the US alone. This is
exponentially more than the benefits provided to clean technologies, and over
time, has provided the oil and gas industries with a massive head
Putting aside, for a moment, that clean technologies offer
humanity the ability to continue developing without destroying the planet, they
also hold the potential to be more economically efficient in the longterm,
present a lower over-all cost to society, and are a proven method of creating
jobs domestically. In addition, these technologies have the ability to provide
sustainable, off-grid solutions to the developing world, yield greater
industrial productivity in rural areas, significantly raise quality of life, and
curb harmful urbanization trends and pollution.
So where is the
government support? Many countries have been forced to cut funding and subsidies
to clean energy projects as a result of the aforementioned economic crisis. This
penny-wise and pound-foolish scenario plays itself out to an even greater degree
in Israel. Here, subsidies have not been forthcoming, prices often make the
domestic market unappealing to Israeli companies, and jumping through the
endless host of bureaucratic hoops can leave even the most energetic
entrepreneur feeling lethargic and beaten. This is rather ironic when one
considers the high level of domestic innovation and the potential value this
innovation has for a resourcepoor country craving energy
Recently, there have been signs that the situation in Israel
may be improving. The government has committed to providing more than 1.5 GW of
power via renewable energy sources by the end of 2014. Additionally, the Israel
Electric Corporation has approved the provision of private power generation via
the main electric grid. This bureaucratic victory should provide several Israeli
clean technology providers with the ability to more effectively reach consumers.
While these steps are significant, they must become part of a wider
To help clean technologies take hold, the government needs to
make the conscious choice to make investment in this sector a priority. This
will require a commitment to maintaining feed-in tariffs and quota levels over a
long enough period that financiers and investors can provide capital with
greater confidence of a reward. It will mean adjusting prices paid to producers
to make providing clean power an attractive business proposition.
energy offers national governments the chance to improve their economies,
develop energy security and drastically alter their environmental footprint. For
a green revolution to truly take place it will take more than just innovative
technology, it will require an economic context that allows these technologies
to sprout, thrive and spread.
Israel, long a hub for the development of
renewable energy solutions, has become notorious for the gap between the
country’s immense innovation and its minuscule implementation. Yet, it appears
that the tide might be turning, with the government starting to recognize the
value of prioritizing investments in renewable energy. Let’s hope these positive
indications gain momentum and signal a bright future for Israel’s renewable
energy sector.The writer is the CEO of AORA Solar.
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