Hi, I’m Chet Geschickter and this is my blog, Parity Point.
Parity Point is about the bottom line for cleantech including the emerging Smart Grid, Energy Efficiency and Renewable Power sources like Wind Energy, Solar and Biofuls.
Profitable businesses built on solid fundamentals may not seem like a Big Idea. It just so happens that in the world of cleantech, it is.
The big idea driving Parity Point is that, in order to succeed, renewable biotech-driven businesses – be they fuel, electric power, chemicals, plastics or other materials – need to be profitable. Profits need to be based on fundamentals, not subsidies. An industry living on subsidies is on life support, subject to expiration when the subsidy expires. A price on carbon certainly wouldn’t hurt, but Parity Point focuses on the spread between cleantech energy sources and their current commodity equivalents, be they coal, natural gas or oil. A positive spread is good, a negative spread is a business underwater. What about wind and solar? While the cost of production may be “free” the cost of capital isn’t. So “free” energy sources have a price too.
There’s a lot of promising technology on the horizon, in pilot, demonstration and in the lab. This is a good thing. Parity Point dives into the gap between what it will take to bring that technology to market, and then, to ultimately make it profitability.
Peter Drucker probably said it best:
Only if business learns how to convert the major social challenges facing developed societies today into novel and profitable business opportunities can we hope to surmount these challenges in the future.
and
It is the increasingly important responsibility (of management) to create the capital that alone can finance tomorrow’s jobs. In a modern economy the main source of capital formation is business profits.
This is the task at hand. Yes, we need to do a better job protecting the environment; yes the world needs a smaller carbon footprint; and yes, green jobs are good jobs. But in a capitalist world, it’s profitability that sustains business. And a business is not sustainable unless it is profitable.
Parity Point is about sustainable sustainability.
Quotes from: Peter F. Drucker, Frontiers of Management. New York; Truman Talley Books, 1968.,
