As concerns over the recent economic malaise have combined with continuing concerns about climate change, many policy makers have held up a new generation of clean energy technologies as a way to address both problems at once. "We can hand over the jobs of the 21st century to our competitors, or we can confront what countries in Europe and Asia have already recognized as both a challenge and an opportunity: The nation that leads the world in creating new energy sources will be the nation that

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... ads the 21st-century global economy." President Obama, April 22, 2009 1 Private sector investors have been similarly enthusiastic, investing a total of $8.9B in clean energy companies in 2009 2 . Given the large sums being deployed in green energy, we should consider whether these technologies will provide a sufficient return on that investment. Billions of dollars were spent developing the market for ethanol before the consensus finally emerged that ethanol would not solve the economic and environmental problems it targeted. A similar story may be playing out in the solar cell industry, as evidenced by Massachusetts' experience with Evergreen Solar The state invested millions of dollars to entice the company to build a new plant near Boston. The plant did bring 800 manufacturing jobs, but the initial excitement over the deal eventually soured. As solar cell prices plummeted from late 2008 onward, Evergreen faced mounting losses and has seen its stock price crater from $15 to $1.50. As Evergreen's prospects deteriorated, Massachusetts was placed in the awkward position of having to approve an additional $5M loan to the company in spite of the state investment authority's analysis that the company's cash flows would be inadequate to repay the loan 3 . This experience should serve as a cautionary tale about investing in green energy. If governments bluntly pour large subsidies into green technologies, they run the risk of backing technologies that, like ethanol, are fundamentally flawed. As we will discuss in this paper, solar power is a similarly flawed technology if it is deployed in competition with the existing power grid. However, we believe a better way to evaluate, invest in, and deploy green energy technology exists. Our research into the drivers of successful innovation has yielded a set of predictable rules that govern the success or failure of new technologies. We have seen that technologies deployed according to these rules stand a much greater chance of success in the competitive marketplace. Accordingly, we have also developed a set of predictable factors that lead to the failure of a new technology. Our view is that green energy technologies, just like those in personal computers, mobile phones, and software, must follow the rules of innovation and avoid its pitfalls in order to fulfill their promise.