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Clean-Up Hitters: High-Tech Cities Vie For New Tech

BY: | August 2007



San Jose has long been the capital of Silicon Valley, and Austin, the center of Silicon Hills, the Valley's clone. Lately, the two high-tech cities aren't fighting over microchips, software or dotcoms, but to become powerhouses for clean technology: solar panels, wind farms, fuel cells and biofuels.

San Jose not only has been offering tax breaks and investing in local tech firms but also stoking local demand. Currently, San Jose offers free downtown parking to hybrid-car drivers, requires all new municipal buildings to be water and energy-efficient and promotes clean fuel for buses and other forms of transportation. The city's biggest advantage may be the state: California's two giant public pension funds--CalPERS and CalSTRS--have formed a green initiative to invest $500 million in clean-tech companies.

Austin, too, can tout state investment: Texas has set aside $200 million for emerging technologies, and it exempts from the state's franchise tax businesses manufacturing, selling and installing solar energy devices. Austin itself is offering economic incentives and creating local demand for clean technologies. It is leading an initiative to recruit 50 cities to insist on mass production of plug- in hybrid vehicles. In addition, the city's public utility, Austin Energy, is partnering with the University of Texas to allow clean-tech companies to plug into different parts of the power grid to prove their technologies.

While the race is on, the huge growth in clean tech has some economists saying "bubble." Alternative energies have flourished during energy crises before, only to fall by the wayside when fossil- fuel prices drop and stabilize.


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Elizabeth Daigneau
Elizabeth Daigneau

Elizabeth Daigneau is GOVERNING's managing editor.

E-mail: edaigneau@governing.com
Twitter: @governing

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