EDITOR’S NOTE: This is the first in a seven-part series examining the industries that drive the region’s economy. This month we take a look at Orange County’s clean-tech industry.
NEXT MONTH: Orange County’s apparel industry
Inflation, job losses and company downsizing have been a way of life for so long, it’s hard to remember a different time. But there is one small niche in Orange County that has defied the odds by providing a steady stream of income, job growth and a secure future – if anything like that still exists.
The niche: clean tech.
“Clean technology refers to all services that make better use of our environment and create renewable, cleaner and more efficient uses of energy,” says Mike Levin, co-founder of Clean Tech OC, the industry’s local trade organization. “It involves more solar, wind, electric vehicles and energy-efficient lighting.”
Orange County was among the first areas in the country to develop this industry sector and is now home to some 300 clean-tech companies that employ about 20,000 people. This industry is worth more than a billion dollars in revenue and investments to the region, and it’s growing at a pace that’s 10 times faster than the rest of the economy.
SAIL Venture Partners, the second-largest national investor in clean technology, has invested about half of its $150 million portfolio in O.C. companies, says Levin.
“Given the oil price increases and the expectation of continued high oil prices, I think it’s important for alternative energy technology to develop,” says Anil Puri, dean of Cal State Fullerton’s Mihaylo College of Business and Economics. “As unfortunate as the oil crisis is, it’s helpful to the development of alternative energy sources.”
Orange County is the center of the universe for this type of industry, because it has a great work force, is progressive and is home to numerous Fortune 500 companies that can make a substantial investment.
According to the research and advisory firm Clean Edge Inc., the global revenue for clean tech in 2010 was $188.1 billion, a 35 percent increase over the year before. Seeing that clean tech could wield a substantial return, investors pumped $5.1 billion into the industry last year, an increase of 46 percent.
Venture capital accounted for 23 percent nationally last year, Clean Edge reported.
None of this is a surprise to Levin, who founded Clean Tech OC last year to bring the various companies together.
“It really started to pick up in Orange County five to 10 years ago because the private-equity firms are here, plus the investment capital,” Levin says. “We have the venture capital, investment banks, engineering talent and history in the high-tech industry. California is still a very environmentally progressive state where renewable-energy tech tends to do very well.”
Puri says there is now more of an academic focus to obtain jobs in the sector, which would require a background in engineering, chemistry and marketing. With the phenomenal growth of the industry, it’s a job hunter’s dream.
“These companies are getting more traction now, especially with the help of the Obama administration,” Puri says.
Orange County Success Stories
Everyone loves rags-to-riches stories, and nowhere are they more prevalent than in Orange County’s clean-tech industry.
Example: Clean Energy Fuels, headquartered in Seal Beach. The company launched in 1997 with three employees and has expanded into a global network with 715 employees (84 in Orange County) and $211 million in revenue. It is one of the industry’s largest local companies.
Clean Energy Fuels compresses natural gas into a source of fuel for vehicles powered by clean natural gas – or CNG. The cars gas up at filling stations that charge about $1 a gallon less than conventional gas.
“It’s cleaner, it’s cheaper, it’s domestic and there is a whole lot of gas – we’re finding more (natural) gas all the time in the U.S.,” says Clean Energy Fuels spokesman Bruce Russell. “Natural gas is a domestic resource; it’s as simple as that. A lot of people in Washington believe in it strongly.”
Russell says the U.S. imports only 15 percent of its natural gas, compared to 66 percent of petroleum. The company is thriving, as GM manufactures 20 models of CNG vehicles abroad with an estimated 12 million on the road worldwide.
Irvine-based ecoSolargy Inc. had a similar start. The solar-panel manufacturer started with four employees just three years ago and now has 20. Company officials expect that number to double or triple during the next year.
“The solar industry is moving quite rapidly,” says Ray Nhieu, ecoSolargy’s marketing director. “Companies such as ours have created a lot of jobs. What attracts people is that we are going green and helping with our current environment situation.”
The company is so successful that it has outgrown its current facility and will be opening an assembly plant in Texas. It sells to distributors nationwide and develops large solar farms that provide energy to utility companies.
Another innovative company is FlexEnergy in Irvine, which converts methane gas into electricity with near-zero emissions. The methane is obtained from landfills, wastewater treatment facilities and other sources. Until now, methane was combusted to create energy, and it set off a host of pollutants. California has a mandate requiring one-third of all energy to come from renewable sources by 2020.
FlexEnergy started working on its technology a decade ago with federal and state government funding. It developed breakthrough technology in 2008, and two venture capital firms invested. Currently 100 people are employed there, and the work force is expected to double in the next 18 months, with jobs in sales, administration and engineering, says Levin of Clean Tech OC, who is also FlexEnergy’s government affairs director
The industry is made up of a range of niche manufacturers. Here’s a sampling:
• Fisker Automotive, of Irvine – hybrid electric sports cars
• Quantum Technology Inc., of Irvine – solar panels
• T3 Motion Inc., of Costa Mesa – three-wheel electric vehicles
• QuantumSphere Inc., of Santa Ana – components for longer-lasting batteries
• Cool-N-Save, of Huntington Beach – reverse osmosis
Looking at Jobs
According to Clean Edge, the types of businesses that will really take off in the years to come will be in the areas of LED lighting, natural-gas advances, and solar, wind and biofuels. And that’s right on track with Orange County’s business sector.
The solar panel industry, in particular, expanded globally from $2.5 billion in 2000 to $71.2 billion in 2010. It is expected to reach heights of $113.6 billion by 2020.
As unemployment hovers around 9 percent in Orange County and 13 percent statewide, this will provide welcome relief to the job market.
In a 2010 annual report, Clean Edge provided a sampling of what clean-tech jobs pay. Starting salaries for entry-level jobs such as installers and technicians, which don’t require a degree, range from $33,600 to $48,300. Mid-level jobs requiring a bachelor’s degree include consultants at $92,000 and business managers at $93,300. The list tops out at $112,000 for a senior-level power-plant manager.
Now is the time to get into this industry, while it’s still on the ground floor, Levin says.
“If you would have asked 20 years ago how big the dot-com industry would be, no one would’ve had a concrete answer,” he says. “Now it’s so commonplace, we take it for granted. This is a trend that is just going to continue to grow.”
Tori Richards is a Huntington Beach-based journalist who writes for AOL news and has written for the New York Times and other publications.
GO HERE TO READ THE CURRENT ISSUE OF
OC METRO MAGAZINE ONLINE