City hopes to cash in on clean-tech
By: John Upton
December 4, 2008
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| Pat Cadam, right, owner of Pat's Garage, and Nick Rothman, lead technician, stands beside a few cars that they have converted into plug-in hybrid vehicles. (Cindy Chew/The Examiner) |
SAN FRANCISCO — Buried among the hoopla, superlatives and expletives that filled the streets and airwaves following President-elect Barack Obama’s Nov. 4 victory was a 10-word statement that could foreshadow an economic bonanza for an industry that’s beginning to emerge in The City.
Eight minutes into Obama’s victory speech, he unwound his momentarily clasped hands: “There’s new energy to harness,” he said, shaking his fingers up and down. “New jobs to be created.”
Local officials have a unique chance to position San Francisco — long a pastureland of grass-roots environmental entrepreneurialism and activism — to cash in on a green economy, if Obama’s energy policies burst into bureaucratic reality, experts say.
The City in recent years has attracted more than 100 so-called clean-tech firms that, although diverse, base their business models on meeting a shared demand: arresting and healing the environmental harms wrought by wastefulness, pollution and climate change.
These environmentally focused startup companies, mature businesses and nonprofits — covering everything from legal firms to green construction consultants to carbon offset traders to solar panel installers — are the seedlings of an emerging clean-tech industry.
Clean-tech firms and other companies accounted for 750,000 green jobs nationwide in 2006, including nearly 14,000 in San Francisco, according to an October report prepared for the U.S. Conference of Mayors. The firms employ a diverse group of workers, including machinists, scientists and businesspeople.
The City is working to create office and laboratory space for the industry in eastern neighborhoods, including a large incubator facility planned at the redeveloped Hunters Point Naval Shipyard, said Michael Cohen, chief economic adviser to Mayor Gavin Newsom.
“We recognized fairly early on that San Francisco was a rather natural fit to be a leader in the green or clean-tech industry,” Cohen said. “It’s that confluence of financial savvy, technological savvy, creativity and the public good which is quintessentially San Franciscan.”
San Francisco has worked to attract the industry to The City by offering payroll tax exemptions for particular types of clean-tech companies with between 10 and 100 employees, according to Cohen, but figures show just two companies claimed the exemption last year. A Board of Supervisors committee Wednesday recommended expanding the type and size of firms that qualify for the exemption.
San Francisco’s strict environmental laws, including nation-leading packaging and green-construction requirements, provide San Francisco-based clean-tech companies with a local test market for their products, according to Cohen.
More than two-thirds of the clean-tech firms in the Bay Area are working on projects that could help tackle climate change, according to figures in a September report by the San Francisco Planning and Urban Research Association. Areas of high interest include creating non- or low-carbon-emitting power, developing ways of using less energy, and sucking airborne carbon back into the earth.
Of the 425 Bay Area clean-tech firms identified in SPUR’s report, 119 were based in San Francisco.
“Companies in this industry are emerging and dying on a daily basis,” said report author Egon Terplan, a policy director for SPUR.
If city officials play their cards right, San Francisco could become the hub of a high-growth, high-employment clean-tech industry — but if they fail, that mantle could go to another Bay Area city, just as Silicon Valley dragged the technology industry’s center of gravity south to the Peninsula, according to Terplan.
The local clean-tech industry is expected to receive a major boost from a plan for a cap-and-trade program designed to slow climate change, outlined by Obama during his campaign and reiterated in statements following his election.
Under Obama’s plan, the federal government would auction off the right to emit a limited amount of climate-changing
carbon. Money raised annually, $15 billion, would be loaned or given to alternative energy and energy conservation entrepreneurs, and used for other energy initiatives such as green-collar job training and home insulation.
Alternative energy would become increasingly competitive under Obama’s system, because it would be subsidized by increases in the price of fossil fuels, which most Americans currently rely on, according to Keith Schneider, spokesman for the San Francisco-based Apollo Alliance, a clean-energy policy group co-founded by Obama campaign adviser Dan Carol.
The alliance, however, is pushing for a $50 billion a year investment in clean energy — more than three times the amount pledged by Obama — but it is nonetheless supportive of the president-elect’s plan.
“In this country, we’ve talked for years about a balance between the economy and the environment,” Schneider said. “Obama said, ‘No, we’re tilting our economic development strategy towards the environment.’ That’s huge.”
Promised training academy still without home in The City
SolarCity’s plans to create a solar panel work force training academy in the Bayview district are languishing, five months after the Board of Supervisors approved a solar subsidy program demanded by the company.
In April, amid intense lobbying of supervisors by The City’s solar power industry, SolarCity Chief Executive Lindon Rive issued an ultimatum: Unless a solar subsidy program proposed by Mayor Gavin Newsom in late 2007 was quickly approved, the company would shift a planned training academy from the Bayview to another Bay Area city.
The academy would train at least 30 solar panel installers every two months for $1,000 apiece, with graduates offered jobs paying $15 to $25 per hour, Rive said.
In June, supervisors approved a $3 million subsidy program worth up to $6,000 per home.
The incentive program has helped SolarCity sell panel arrays to 74 homes under a zero-down financing plan, but the company hasn’t identified a location for its proposed academy, according to Rive, who said the board’s feet-dragging caused the delay.
“We will need a training academy, but moving into a new facility takes months,” Rive said.
Supervisor Jake McGoldrick, who opposed the subsidy program because it would drain money from city-owned renewable power projects, downplayed the importance of the academy and said it should be called an apprenticeship program.
“They want to get themselves some cheap labor,” McGoldrick said.
Working for the environment
Green jobs could be found across the country in 2006.
United States
751,051
New York
25,021
Washington, D.C.
24,287
Houston
21,250
Los Angeles
20,136
Boston
19,799
Chicago
16,120
Philadelphia
14,379
San Francisco
13,848
San Diego
11,663
Pittsburgh
9,627
Source: U.S. Conference of Mayors
Job concentration
Clean-tech firms based in San Francisco:
31: Finance
27: Green building and design
18: Energy and environmental consulting
16: Energy generation
7: Clean transportation
6: Air, water and environment
6: Trading offsets
3: Energy efficiency
2: Recycling and waste
1: Energy infrastructure and storage
Source: San Francisco Planning and Urban Research Association
