When the state launched its initiative in July to build Connecticut into a leader of the clean energy and technology industry, the criteria for the businesses leading the field fit STR perfectly.
The state wants profitable companies holding significant market share, investing heavily in research and development, leading the industry, creating jobs, and operating without the need for government handouts.
Although state officials are aware of the volatility of the clean tech industry, they want Connecticut to play a larger role, calling on companies such as STR to constantly innovate to stay ahead in the market.
“Who could imagine the backing of a solar cell could be so critical?” said Dan Esty, commissioner of the Connecticut Department of Energy & Environmental Protection. “It is inspiring to see how innovation plays out through a company like this.”
Esty became commissioner of the newly formed DEEP in 2011 as part of Gov. Dannel Malloy’s vision to turn Connecticut into a leader of the clean technology industry.
By joining the energy and environment initiatives of the state into one agency, Malloy and Esty hope to create an eco-friendly state centered on clean energy use. This plan includes using funding collected from utility ratepayers to finance clean energy projects and installation through the Connecticut Clean Energy Finance & Investment Authority, or CEFIA, which formed in July.
In creating a state embracing clean energy installations through government incentives and subsidies, Malloy and Esty’s plan calls for Connecticut companies and startups to further invest in clean technology. Eventually, the industry will learn to stand on its own without subsidies, and Connecticut will have an economy centered on the research, development, manufacture, installation and use of eco-friendly technologies.
Both Malloy and Esty have toured STR’s facilities, praising the company for its growth and strong role in the clean tech industry.
Esty is clear that the state shouldn’t pick winners in this endeavor, trying not to focus on one clean tech subsector such as transportation or electricity generation; or even types of clean tech such as electric cars vs. natural gas vehicles or fuel cells vs. wind vs. solar.
Despite the policy to not pick winners, solar has been the winner so far in Connecticut’s clean tech investment.
The predecessor to CEFIA, the Clean Energy Fund, awarded more than $90 million in incentives to more than 200 solar projects from 2000-2011, representing 95 percent of its funding for all types of renewable energy projects.
In December, DEEP solicited 21 proposals for zero greenhouse gas emission power projects to receive state backing; the two winners were solar farms.
Connecticut is increasing government incentives for solar. On March 2, CEFIA launched a $40 million program for residential solar installations. CEFIA will launch a zero-emissions and low-emissions program later this year that by 2017 will provide $70 million annually for clean energy projects.
To use these subsidies to grow the clean tech industry in Connecticut, CEFIA has provisions giving extra incentives for using products made in the state. If a solar installer using a solar panel with an STR encapsulant, the installer will receive up to 10 percent more in state subsidies.
“It encourages the use of STR products,” said David Goldberg, spokesman for CEFIA.
In its vision to turn Connecticut into a clean tech leader using subsidies and incentives like these, the state is well aware of the volatility that surrounds such a quickly growing and evolving industry, Esty said.
“When you are working in a development world of innovation, you have to realize it all isn’t going to work out,” Esty said. “That is why it is important to create that platform where new things can rise out of the ashes of the old.”
Connecticut and its clean tech industry need to constantly innovate to stay one step ahead of the competition and be the leaders in the market, like STR is trying to do by investing in research and development, Esty said.
“The cautionary tale of this company is something we have to address as a society,” Esty said. “There is always China out there to copy and bring down costs if we don’t do it first.”
In using subsidies to bolster the Connecticut clean tech market, the state wants to give these cornerstone companies a helping start; but eventually the companies will have to develop business models that don’t rely on government incentives, Goldberg said.
“Any company that is overly reliant on government subsidies will struggle in the long-term,” Goldberg said.
