I would like to briefly talk about building a business in the renewable energy sector in this month's director's cut. The energy sector as a whole is among the largest traded sectors in the world. The value of global fuel exports and imports totaling just over $4.7 trillion was more than twice that of food commodities in 2010 according to data from the World Trade Organization. The enormity of this sector combined with the basic requirement for energy supplies to run the global economy leads one to believe that this is the road to riches for the independent entrepreneur. In reality, however, building a business in the energy sector has many challenges that, ironically, include the sheer size of the market and the scale required to be competitive in it. You can read more about the industry scale in this month's exclusive interview with Dr. Charles Grayson, who shared his insights about the energy and chemicals industry spanning almost 40 years.

The net profit margins in this business can also be very challenging. A frequently cited data set from New York University (NYU) that analyzes 6,177 publicly traded companies across 99 industries showed that 100 companies categorized under the "power" sector had a combined net margin of -2.28 percent. Many firms included in this sector have highly recognizable names in the renewable energy business. Companies with the highest net operating margins are electric utilities on the east coast (10.87 percent) and oilfield services and equipment companies (11.41 percent). These values represent analysis done by NYU researchers using data from the January 2013 Value Line Database. As a general rule, a detailed market analysis is very important when entrepreneurs set out to build a business in any given sector: you have to understand not just who your direct competitors are, but which technologies may solve the same problem you are trying to address. For example, if you are in the solar PV panel installation business, you competitor is not only another company in town who is also marketing their services, but the utility selling electricity to the home-owner or commercial customer is also your competitor because you are both trying to sell the same product: electrons, and they are colorless. Most customers today will make their choice whether to install a PV system based on how much "green" they can save. Selecting the appropriate vendor will be a secondary decision.

If you would like to learn more about Renewable Energy Venture Development, I encourage you to visit our website at www.biomass.ms to read about this topic and let us show you how we can help your early stage business. We will be presenting a full day workshop on this topic in Washington, D.C., in conjunction with the RETECH 2013 conference. I will also be moderating a session and giving a presentation on how to "convince a buyer to choose renewables over their current product." We have a great line-up of speakers on this panel that cover utility solar, residential solar and biomass.

In other news, Strategic Biomass Solutions has executed a formal agreement with the American Council on Renewable Energy (ACORE) to serve as supporting organizations for each other's events that are of mutual interest. We will be working with ACORE in the coming months to expand our outreach efforts. We are honored to have ACORE as a supporting organization for the 12th Annual  Southern BioProducts and Renewable Energy Conference coming up in Tunica, Mississippi, next month. We have a great line-up of speakers for this conference which includes a keynote from Lillian Salerno, administrator for USDA-Rural Business Cooperative Service, Rural Development. The conference also features the very first "listening session" in the Southeast that will allow all attendees to give feedback directly to USDA-Agricultural Research Service officials on biomass feedstock issues.  I am grateful for all the companies and organizations who are serving as  sponsors and supporting organizations for this conference as this event will not be possible without their generous support.

Finally, I am sad to say that Claire Sojourner, SBS outreach intern, decided to move to New Orleans this month to seek other employment opportunities. Claire has been a valuable member of the SBS team and I am glad that she has agreed to continue assisting us with our social media efforts in a limited capacity. I encourage you to follow us on Twitter at @SBS_Renewable or me personally at @DrSumeshArora.

We always want to hear from you about your success stories or challenges you may be facing, so please contact me at sarora@innovate.ms or 601-960-3659 and let us help you get the word out or get connected with the right resources such as the Innovation Concourse in Florida.

A total of 127 countries have enacted policies to encourage the development of renewable energy projects this year, as reported by the Worldwatch Institute's latest Vital Signs Online report.  According to the Worldwatch Institute, support policies for renewable energy technologies have increased dramatically over the last decade. Starting in the mid-2000s, policies focused on deployment of renewable energy technologies have been enacted at a rapid pace, growing from 48 countries in mid-2005 to 127 as of early 2013.

How "Start-Stop" Policies Hamper Renewable Energy Growth 

"Stop-Start" renewable energy policies have stifled consistent growth and frustrated investors, according to the American Council on Renewable Energy.

These policies, which chart the course for development, currently exist in the form of a series of repeated extensions and expirations that create a series of unnecessary hurdles. Like most on-again, off-again relationships, the renewable energy industry is now demanding a more serious commitment from the federal government.

USDA Offers Surplus Sugar to Biofuels Industry 

The Commodity Credit Corp. recently announced a plan to allow biofuel producers to purchase sugar under the Feedstock Flexibility Program.  The resources include approximately 198.75 million pounds of sugar, including 138.75 million pounds of cane sugar stored in Louisiana, 15 million pounds of beet sugar stored in Nebraska, and 45 million pounds of beet sugar stored in North Dakota.   

The Sunshine State has long been a solar energy laggard, trailing such gray-sky locales as Massachusetts and New Jersey. That might be about to change.  Changes in solar business models, federal tax credits and plummeting equipment prices are opening a new market that some believe will bring a sea of sun-absorbing solar panels to Florida.

There's a proposal in the works to store and recycle nuclear waste in Mississippi. The Mississippi Energy Institute gave a presentation Monday to the Senate Economic Development Committee.  The energy institute is proposing the state use an above-ground interim storage facility like those being used at Grand Gulf. They say they're not interested in underground sites like the Richton salt domes that prompted fights in the 1980s.

North American Wood Pellet Exports Reached New Record in Q1

North American wood pellet exports reached a new record of over 1 million tons in the first quarter of 2013, according to the North American Wood Fiber Review. There has been a steady growth in shipments from both the United States and Canada the past few years, mainly as a result of the continued increase in demand for pellets in the United Kingdom.