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Starting a Business

Green Bubble or Green Opportunity?

Editor-in-Chief Amy Cosper talks about how going green can be a game-changer for all sectors.
Magazine Contributor
Editor in Chief/VP
3 min read

This story appears in the April 2010 issue of Entrepreneur. Subscribe »

The amount of money flowing into alternative energy is mind-blowing. Last year, VCs dropped $4.9 billion into the sector. Add to that the $79 billion allocated by the federal government's stimulus plan and . well, you get the picture.

The problem is that the sector is flush with greenbacks and tax credits but shy on profit and margin. Whether it's solar, wind, biofuel or geothermal technology, the question looms: Is the business of sustainable energy a sustainable business?

In this issue, we tackle that paradox by examining the business models of several alternative energy and cleantech companies. These well-funded companies are not only raking in the cash, they also are creating a new supply chain--which is where many entrepreneurs are finding real and profitable opportunities. (Be sure to read Julie Bennett's piece on the green bubble question.)

One of the challenges with the green movement is that no matter how trendy it is from a consumer perspective, it's expensive. That explains why the solar energy sector lost $12 billion last year. But leave it to the innovative minds of entrepreneurs to figure out how to actually make money in money-losing industries.

Take SunRun, the solar panel developer featured in this month's "Start It Up" department. The company decided that instead of trying to sell $40,000 solar panels, it would lease them to homeowners who pay a maximum $1,000 installation fee and a fixed monthly amount for 20 years. Consumers, it seems, may not be willing to plunk down thousands of dollars to purchase solar panels in a down economy, but they will sign more affordable leases if it means saving 10 percent to 20 percent on their energy bills.

The greening of business can be found in the most surprising places--such as the electric motorcycle niche. Long mocked by the traditional biker crowd, electric motorcycles seem to be gaining traction and respect. They can reach high speeds (up to 150 mph) and travel as far as 150 miles. They don't pollute and they don't make any noise. (Curiously--and this is the part I love most--these electric bikes are sold and serviced at Best Buy and delivered via UPS.) Here again, innovative 'treps are leading the greening of this sector--so much so that old-line manufacturers such as Yamaha and Honda will be unveiling their own versions of e-bikes.

These disparate examples prove that going green certainly can be a game-changer for all sectors. Whether or not that translates to a sustainable business model depends on the level of innovation applied.

Amy C. Cosper,
Follow me on Twitter, @ EntMagazineAmy

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