While the traditional focus of discussions surrounding cleantech uptake have been largely market driven. That, for renewable energies to compete with fossil fuels, the price per KwH had to be below the going rate for fossil, regardless of what the negative economic, environmental, or political externalities were.   It was what seemed to me an unreasonable hurdle, see Should Cleantech be Socialized?, as cleantech (and improving the environmental conditions in general) were supposed to be for the benefit of citizens at the end of the day. that is was NOT about more power, but about cleaner power. Cleaner power that would reduce air emissions (SOX, NOX, and CO2) from coal power facilities, as well as the various other emissions that have a negative impact on the health of water sources, farm land, and human bodies.

With this in mind, I saw an opportunity for a new model.  A model where governments would begin funding R&D of solutions, and where the private sector would then bring the solutions to market.

A step I believe China’s sovereign wealth fund has just taken:

China’s biggest producer of polysilicon announced Thursday that China Investment Corporation (CIC), the nation’s sovereign wealth fund, will spend HK$5.5 billion to buy 20 percent of the company.

Without making too much of this investment, where I see this fitting into the new model I mentioned is simply that this funding is going to provide a large amount of capital to a firm producing what is perhaps the most crucial piece of the cost puzzle for solar firms.

In taking this step, the funding will surely lead to that firm realizing lower costs of development as this money is from a government agency, will not require payback, and surely comes with a number of other goodies (having the CIC as a 20% shareholder will have its benefits long term).

It is a step that will alter the economics of this firm, and as the CIC (and other state-linked funds) enter the market, China could end of radically altering the economic equations that investments are made on.