The green revolution, once relegated to the environmental fringe, is real and gaining momentum as oil prices remain persistently high in the face of growing worldwide demand. Global warming, now widely accepted as science fact instead of fiction, is also contributing to the growth of green technologies. But do small businesses fit in?
As it turns out, they do, in a big way, both directly and indirectly. Like most other emerging industries, small businesses are playing an integral part in the green revolution. And, opportunities are not just limited to exotic, high-tech firms. What’s surprising is the number of traditional businesses — from machining and manufacturing firms to electrical contractors, engineering firms and even plumbing, heating and air conditioning firms — that are finding new markets for their services.
“Although we also have a number of big companies like General Electric and BP, most of our more than 1,500 members are small businesses,” says Gregory Wetstone, a Washington lobbyist for the American Wind Energy Association. “These companies produce critical wind turbine components like gears, bearings and electrical parts. They make composites for blades, and provide maintenance for wind turbines. They’re in the shipping and transportation business and they work construction as wind farms go up around the country.”
Wetstone was one of several green industry executives who testified recently before the House Small Business Committee. The hearing provided some insights into how green technologies tied to environmentalism and energy conservation are creating new opportunities for small businesses. In fact, the wind power industry is a case study of the potential the green revolution holds for economic growth and development.
Once considered a “boutique power source,” wind energy is now being viewed as a critical alternative to traditional coal and other fossil fuel electrical plants. The domestic wind power industry currently generates more than 18,000 megawatts of electrical power in 34 states, enough to power more than 5 million homes. Over the past three years, wind has been second only to natural gas as a source of new electrical capacity.
The rate of industry growth has escalated dramatically since 2007, when new installations more than doubled and wind provided 35 percent of the nation’s new electrical capacity.
During that time, 28 new wind industry manufacturing plants opened or were announced in Arkansas, California, Colorado, Idaho, Illinois, Iowa, Michigan, Montana, Nebraska, New York, North Carolina, Oklahoma, South Dakota, Texas and Wisconsin.
A recent study by the U.S. Energy Department of Energy (DOE) concluded that it is feasible for the wind industry to provide 20 percent of U.S. electricity needs by the year 2030. So far the industry has attracted more than $9 billion in investment. An expansion on that scale would create 500,000 American jobs, according to the report.
“A wind turbine has some 8,000 parts, and a turbine assembly plant can be expected to rely on some 400 sub-suppliers, many of which are typically small businesses,” says Wetstone. For example, small manufacturing and machining companies that used to supply automotive and other heavy-equipment industries — such as steel providers, foundries, and fabricators — are now providing the raw materials, metal castings and machining for wind turbines, he said.