Revolutionary or Evolutionary Change? The Transition from Dinosaurs to Smart Mammals and Smart Grids

I recently was lost in the Gobi Desert of China’s Inner Mongolia. We eventually found a road that brought us out through the Valley of the Dinosaurs, where archeologists are making newsworthy discoveries about reptiles that have, rightly or wrongly, become a metaphor for life-forms that were swept away in the tides of historical and climactic change because of their inability to adapt. Within hours, I was driving down a newly paved road counting giant windmills on the horizon in the neighboring Ningxia Province. This contrast epitomizes China’s, and the world’s, dilemma: can we make the leap from dinosaur-scaled and maladaptive social and technological modes of living to sustainable twenty-first-century technology and social forms quickly enough?

The answer, and a bit of hope, can also be found in China. Despite an outdated reputation for not being technically innovative, and continuing real concerns about being socially and politically ossified, China’s entrepreneurs in the alternative energy sector are demonstrating why mammals have had a competitive edge in evolution. They/we are agile thinkers and toolmakers. We do not require millennia for our physiognomy and brains to accumulate and test-drive small and accidental genetic mutations so that we can adapt to threatening conditions. We can “evolve” almost instantaneously. We can wake up one morning and begin to act like another species. And that is exactly what some of the leaders in China’s alternative business sector have done.

The founder of Himin Solar Co. Ltd., Huang Ming, is a case in point. He was a petroleum engineer who in the mid-1990s transformed a small workshop making rooftop solar water heaters into what is today the world’s largest solar water heater company. Huang Ming’s sudden transformation emerged from the birth of his child and a deep sense of guilt about the fossil fuel-dependent world he was leaving as a legacy. Today, Himin Solar Co. is headquartered in the world’s largest solar-heated building, in Dezhou City, also known as China’s Solar Valley, site of the Fourth International Solar Cities Congress in 2010.

Another Chinese solar energy company, Suntech, is the world’s leading manufacturer of photovoltaics. Its headquarters lays claim to housing the world’s largest photovoltaic curtain wall. Inside is a giant energy museum and education center similar to that found at Himin’s headquarters. Both Suntech and Himin are committed to environmental education on a large scale. Both embrace the notion that they must educate their customers, not just “market” their products. Himin actually spent several years educating its potential customer base before launching its product line. This act of social responsibility reflects the truly profound news beneath a technology innovation story.

Himin and Suntech model corporate social responsibility on a scale and to a depth equal to the awesome proportions of their monumental headquarters. Technological achievement is not happening at the expense of social, environmental, and labor externalities. These companies are striving to become world models of sustainability and good corporate practices.

China has recently made headlines by announcing, actually reconfirming, its commitment to instituting a feed-in tariff for alternative energy, virtually guaranteeing that the state grid will buy all power that is produced. Skeptics have pointed out that the state grid has not yet linked up with many existing wind energy producers. But here, too, China is moving quickly as it seeks to become a world leader in developing a smart grid that will better match user demand and use with supply. This commitment is backed by $46 billion directed toward smart grid technologies and efficiency. Beijing policymakers know too well that China’s economic miracle is in a race against time and that environmental externalities associated with coal dependency could ultimately undermine growth and prosperity.

It is for this reason that Chinese leaders have committed significant resources to funding alternative energy innovation. Almost doubling U.S. investment, China poured $34.6 billion into clean energy in 2009. They got the message about technological innovation early, as journalist Evan Osnos documented in a series of New Yorker articles in 2009. Osnos described how four weapons scientists sent a private letter to Deng Xiaoping in March 1986, explaining that China had to shift its scientific and technological focus away from an exclusive military focus and join the West’s technological revolution. Deng Xiaoping wrote “Action must be taken now” on the letter and launched a massive state investment in technological innovation that was unofficially named for the date of the letter, “The 863 Program.” As Osnos documented in his articles, this program developed a specific focus on alternative energy in the first years of the twenty-first century. And unlike U.S. alternative energy funding, which has been off-and-on-again, China’s financial support has been continual and increasing. The success of China’s solar energy giants can be directly traced to the funding stream. Renewables now account for 52 gigawatts of energy—almost 5 percent of the country’s total—while portfolio standards promise an additional 46 gigawatts by 2020.

We need to understand more about China’s alternative energy enabling environment; billions in economic stimulus financing is only the tip of the iceberg. As we dig for answers we will discover that a huge part of the solution is unleashing the entrepreneurial spirit of innovators. This will not be a tale of self-seeking frontier capitalists. As noted above, the deeper story is one of a new alternative Chinese business model, one that is rooted in the personal moral commitment of a new breed of corporate leaders.