It’s not surprising that a company liked Greenhouse Holdings, which builds eco-friendly infrastructure, would have a thriving California-based operation.  But as John Galt, the company’s executive chairman and founder, told Renewable Energy World magazine, the company is not just focusing on wealthy enclaves to grow its business. Greenhouse Holdings sees opportunity in poor countries, where little energy infrastructure exists, and is entering these markets ahead of the competition.  “We’ve found a niche,” he said.

A recent paper by Clean Energy Group shows that nations like Africa and India serve not only as strong niche markets, but also as incubators to drive down technology costs. Once the prices come down, the technologies can expand into the developed world, opening the way for green energy to at last be fully cost competitive against the entrenched energy infrastructure.

Clean Energy Group explains that this is “reverse innovation,” a term coined by Jeffrey Immelt, General Electric’s CEO and Tuck Business School at Dartmouth in a Harvard Business Review article. It describes the path of not only energy technologies, but other advanced products as well.

“This trend is far removed from purely academic theory. Rather, it is an operating strategy for major global corporations doing business in the developing world, with implications for how climate technology could develop. Put simply, reverse innovation means designing, creating, and manufacturing a product in a developing country. The product may initially be designed to meet developing world demands for lower cost, but  global companies now use this ‘bottom of the pyramid’ market strategy to create products that are later exported to the developed world,” said the CEG paper, Moving Climate Innovation into the 21st Century: Emerging Lessons f...e.

GE’s cheap ($15,000) PC-based ultrasound machine is cited as an example. The company developed the medical device for use in China’s rural outposts where there was no conventional hospital ultrasound. Now the cheaper alternative has made its way to the developed world.

It may seem counter-intuitive but the conditions are often better for scaling up new technologies in poor countries than in rich nations, says the paper.  Here’s why: there is no competition.  Clean tech innovators in the third world are not, for example, trying to make inroads against cheap coal-fired electricity. They are simply providing electricity where there is none; they are filling a market need.

This fits in with the way disruptive technologies often emerge, according to Harvard Business School Professor Clayton Christensen. In the paper, Winning and Losing Bets on Green Technologies, he and co-authors say: “In contrast to wealthy nations where consumption of electricity and gasoline is ubiquitous, developing nations are an ideal place to commercialize green energy technologies. In these countries, there is so much non-consumption that green technologies need only be better than the alternative: nothing.”

In emerging economies, clean energy helps people better accomplish a job they are trying to do. For example, in Africa it’s better to charge your cell phone from a solar panel in your village than be forced to travel hours to the nearest city. In the West, this convenience is readily available through a vast, cheap and easily accessible grid, which is why government intervention is needed to integrate green energy into wealthy countries, the paper says.

The Obama administration is increasing support to US companies that want to export into these emerging niche markets. More details are here.

Elisa Wood has been writing about energy for more than 20 years. See more of her work at www.RealEnergyWriters.com.

Views: 42

Comment

You need to be a member of Home Energy Pros to add comments!

Join Home Energy Pros

Featured Forum Discussions

Too many BTU's. Too much horsepower?

Started by Steve in General Forum. Last reply by Eric Kjelshus on Saturday. 4 Replies

Stack/wind pressure and flow networks.

Started by Daniel James Grundy in Training. Last reply by Daniel James Grundy on Thursday. 5 Replies

BDT with vermiculite in hollow CMU walls?

Started by Brad Cook in General Forum. Last reply by John Nicholas on Thursday. 2 Replies

Strange IR Image

Started by Larry Nissman in General Forum. Last reply by Brad Cook Mar 9. 7 Replies

Videos

  • Add Videos
  • View All

Latest Activity

Mike Rogers replied to Quinn Korzeniecki's discussion Don MacOdrum Receives BPI's 2017 Tony Woods Award and Four Others Inducted in to Hall of Fame in the group Building Performance Institute (BPI)
"Congratulations to Don! A deep thanks for the honor--and even more thanks to the many who've…"
10 hours ago
Mike Rogers joined Building Performance Institute's group
Thumbnail

Building Performance Institute (BPI)

BPI is the nation's premier standards development, quality assurance and credentialing organization…See More
10 hours ago
Horace Douglas Hunt, Jr. replied to eric anderson's discussion Energy auditing equipment for sale in the group Energy Auditing Equipment for Sale, Trade or to Purchase
"Have you sold this or still interested in sales of this equipment?"
13 hours ago
Charles Maier is now a member of Home Energy Pros
22 hours ago
Derrick Brodanex joined allen p tanner's group
Thumbnail

Energy Auditing Equipment for Sale, Trade or to Purchase

Discuss the pros and cons of the equipment you are interested in prior to purchase. Post equipment…See More
yesterday
Eric Kjelshus replied to Steve's discussion Too many BTU's. Too much horsepower?
"Its more about run time with high RH removing, than to large over sized AC unit, in houses.  …"
Saturday
Sarah OConnell posted a blog post

Crowdsourcing for Innovation

Share Your Ideas!Novel Building Envelope Design for Increased Thermal PerformanceIn 2014, more than…See More
Friday
Colin de Paor is now a member of Home Energy Pros
Friday

Home Energy Pros

Welcome to Home Energy Pros – the unique digital community by and for those who work in the home energy performance arena.

Home Energy Pros was founded by the developers of Home Energy Saver Pro (supported by the U.S. Department of Energy) and brought to you in partnership with Home Energy magazine.  Home Energy Pros is sponsored by the Better Buildings Residential Network. Please honor our Guidelines

© 2017   Created by Lawrence Berkeley National Laboratory.   Powered by

Badges  |  Report an Issue  |  Terms of Service