US Dominance in Alternative Energy and Energy Efficient Technologies


20 years ago there were very few people who would have thought that international competitiveness to be number one would involve much of anything outside military, aerospace or, computer technologies. The last thing anyone probably expected would be a race to be the top producer of the most efficient and environmentally safe technologies on earth. Yet that is precisely what is taking place right now among countries such as the United States, China, India, and Taiwan. Global concerns about climate change, limited energy production, meeting the energy demands of growing populations in developing countries, and the fear engendered by the latest international economic slump have all coalesced into a concerted determination among competing nations to develop new sustainable energy technologies and improve the efficiency and practicality of existing technologies. This new focus on efficiency has at its core more than a simple desire to better the planet for future generations. National leaders and energy industry experts have rightly identified this push for energy efficient technology as one of the new, if not THE new dominant form of economic growth and international supremacy.


  Underscoring the reality of this determination to be leaders in green technologies are the record levels of government involvements with funding such development. In the United States, the Department of Energy has been steadily speeding the funding of LED production in order to remain competitive with Asian countries which have been quickly grabbing the lion’s share of the LED market. Countries such as China and Korea have been aggressively increasing their investments in LED lighting technologies over the past few years and are now among the main suppliers for the international LED markets. As of right now, the United States DOE is actively seeking applications for funding of research and development of LED lighting technologies, which it will be doing until December 15 of this year as part of its efforts to combat this and maintain US competitiveness. This is the third such round of funding efforts geared towards the US development of LEDs and improvements in production, and offers 10 million dollars for qualifying applicants to apply to research and production. Overall, funding of LED manufacturing, research, and development in the US has been spurred by millions in recovery act funding, 28 million in federal funding, and an additional 36 million in private sector funding as well over the past few years.


 While this may seem a fairly positive direction for the US to take, countries such as China and South Korea have been pouring massive resources into LED development and instituting comprehensive lighting regulations geared towards spurring demand for efficient lighting under a clear determination to achieve full dominance in the field. China has already achieved a leading role in the production of LEDs and incandescent lighting and is aggressively developing its capability to corner the LED markets as well. With China already holding the majority of the rare earth metals critical to the development and production of LEDs, and leveraging this supply to increase its value and thus its cost, it has already been able to directly reduce the effectiveness of competing efforts in other countries. In the last year, the prices of rare earth minerals from China have seen a wild upswing with increases of up to 1,000% percent having been noted. This has served to slow the improved affordability of LED lighting technology and keep domestic demand in competing countries low. The result has been slower growth in LED development outside of China, with some manufacturers actually cutting production by up to 50% in the hopes of a decrease in the costs of rare earth metals in the near future.


 The problem for the US is that its goals for energy efficiency are more closely aligned with reducing dependence on foreign energy sources such as fossil fuels rather than becoming the dominant developer of energy efficient technologies. While the availability of cheap LED lighting from countries such as China would serve to accelerate the attainment of these goals, it is also a double edged sword. Although the US would stand to benefit from cheap energy efficient lighting technology without the initial costs of funding an all out development war, the losses from failing to achieve dominance would be staggering. The economic growth and potential trade strength associated with control of alternative energy and efficiency technologies represents the chance to not only free ourselves from the grip of dependence on foreign energy sources, but to reverse this role and become a supplier of energy and efficiency technologies instead.


This is an opportunity that the United States simply cannot ignore or allow to slip away. Despite this critical importance, current efforts in Congress appear to be geared towards allowing just that to happen. With the current Republican focus on cutting spending and their efforts to shift focus from alternative energy technologies to increasing development of fossil fuel technology, Congress is poised to deal a major setback to the US in this race for leadership in energy efficiency. While reduced spending at this time is certainly a laudable goal, such reductions must take into account the future position of the US on the world stage and the consequences of allowing that position to become weakend.  Other legislative problems include a push to repeal or delay new lighting standards which would serve to further suppress and delay development of LED technology, and attempts to attach amendments to spending bills that would directly shift funds already allocated for development of alternative energy technologies to fossil fuel production research.

If such efforts in Congress are successful, the US will cede its position as a world technology leader to countries such as China and once again find itself dependent on foreign supplies for meeting its energy demands. The potential losses from reduced economic growth and job creation alone should serve as ample warning, and the long term effects for the US could mean a sustained period of depressed expansion or even contraction as other countries continue to gain ground. Although many may feel that the United States cannot afford to continue aggressively funding alternative energy and efficiency technology, the simple truth is that we cannot afford not to, and should in fact increase this funding many fold in order to ensure the future economic and diplomatic strength of the United States.

Customer comments

  1. By Ram Shrivastava on

    I fully support the main theme of this article. The best long term investment is in energy efficiency and conservation market. We can pay for the improvements from the savings and reduce our dependence on nonrenewable energy sources. Ram Shrivastava

  2. By Paul Novak on

    Thank you for taking the time to read our entry Ram. You are absolutely right in that this is an investment with a fast ROI potential. Although producing enough affordable energy without causing serious long term environmental problems appears as though it is a problem requiring an expensive solution, we believe that those with a forward looking focus will recognize it as a potential avenue of explosive economic growth.