By Maggie Shiels
Technology reporter, BBC News, San Francisco
Slowing global economic growth may curb global energy demand
America's commitment to green energy may be too little too late, according to some in the industry.
Industry insiders said despite President Obama making renewable energy one of the main planks of investment, the "US is late to the game".
"While there's a good amount of money earmarked for the initiative, it's worth noting that other countries are ahead of the US," said Dallas Kachan of the Cleantech Group, which advises companies on green issues.
"The truth is the US has a lot of catching up to do," he told BBC News.
Mr Kachan made his remarks at the Cleantech Forum in San Francisco, a gathering of nearly 800 industry leaders representing about $3 trillion (£2.1 trillion) in capital.
He added that "while any stimulus money is welcomed by the sector, industry watchers believe the US hasn't been putting enough money to work seriously enough over the last few years".
Mr Kachan noted that countries like China, India, France and Spain were leading the way.
With the President pledging to look to clean, renewable energy to "truly transform our economy," Mr Kachan urged the government to focus not just on money but also on policy.
"The most effective way to accelerate cleantech products and services, and scale cleantech, is not to throw government money at the industry but more for the government to embrace its role as policy maker and setter of standards.
"There is no lack of capital to be brought to this industry. What it needs are long term assurances that there will be a continued market for cleantech," said Mr Kachan the managing director of the Cleantech Group which organised the forum.
The President is not alone in looking to the cleantech sector to provide some green shoots of recovery for the sagging economy.
But the strength of the industry has been closely tied to venture capital which is still spending despite the present downturn.
Wind and solar are the fastest growing alternative power sources in the US
"Our wallets are not shut tight but they are being held closer to our vests than they were previously," said Josh Green, a general partner with Mohr Davidow Ventures which has invested in about 15 different cleantech start-ups.
Investment in the fourth quarter of 2008 was down 44% from $1.7 billion (£1.21bn) in the third quarter. However 2008 was a banner year for cleantech with a record $4.7 billion (£3.35bn) in investments.
"The downward trend seen in the world just isn't reflected in cleantech," said Mr Kachan.
"The underlying drivers of cleantech are sound. We have global climate change followed by a resource scarcity where we are running out of the stuff we need to live and there is also the desire for energy independence around the world."
There was a word of warning for start-ups from Michael L. Goguen a general partner of Sequoia Capital.
"It's critical for the industry to view the stimulus package and all the helping hands as incredibly temporary.
"We don't want a company to depend on the government. It's easy to be deluded into thinking that you are in a sustainable business because you've got all this money coming from the stimulus package," said Mr Goguen.
"Real risk taking"
President Obama's commitment to "invest $15 billion a year to develop technologies like wind power and solar power, advanced biofuels, clean coal and more fuel-efficient cars and trucks," was welcome news to many at this conference.
Amyris Biotechnologies is working to produce a biofuel made out of sugar which it said will "burn much cleaner that normal diesel and will be cost competitive."
"We are running out of oil and we need to find a source of liquid transportation fuel that can displace the amount of oil we are using right now," said company co-founder Neil Renninger.
"Intelligent risk is needed to save the planet," said Peter Diamandis
"Our fuel will be commercial by 2011 and we will be growing to one billion gallons by the year 2014/2014."
He admitted it would just be one of a suite of solutions that will "reduce our reliability on petroleum sources".
Peter Diamandis, the founder of the X Prize whose mission is to create technology breakthroughs for humanity, said the need for bold answers was one he fears would find the government wanting.
"It's great that governments the world over have woken up to the need for finding new ways to generate energy and extract carbon from the atmosphere. The question is will they take the kind of risks needed because to have a fundamental breakthrough requires real risk taking.
"The day before something is really a breakthrough, it's a crazy idea."
Mr Diamandis told the BBC he believed a growing army of billionaire philanthropists might be best placed to make the big bets.
"There are more than 1,000 individual billionaires who all of a sudden have the power to change the world for the better.
"These are people trying to transition from success to significance and now they can use that capital to try and change the world," said Mr Diamandis.