Water heating is bigger than ever

A lot has changed in energy since the 70's, but we still use a lot of it.

We do have a bit of good news on the residential energy efficiency front.  The average American home uses just about the same amount of total energy as it did 30 years ago despite a rising standard of living and more plug-in creature comforts than ever before.  It's actually trending down on a per household basis.

I see two problems with this however.  First of all, we have a whole lot more homes today than in 1978.  We're around 115 million households today where we were only at 68 million in the 1970s.  While flat or even slightly declining per household energy consumption is great, 47 million new households means that we're using a lot more energy on the whole than ever before.

Where we use energy in our homes--1978 and today.

The second problem I see with this data is highlighted in the two pie charts above.  Where we use energy has shifted rather dramatically.  Due to key improvements in building technology and code, space heating accounts for much less of our homes' energy budget.  Air sealing, insulation, and mechanical system efficiency enhancements have worked.  This was low hanging fruit though and further total efficiency gains are going to be harder to achieve.

Take a look at the water heating portion of the chart.  20% of our residential energy goes to heating up water for showers, cooking, and cleaning.  This is a very predictable energy load that is completely unrelated to any other mechanical system in the house or to the quality of the building envelope.  As we look to make further cuts in per capita and total energy consumption, the water heating load is an excellent place to focus.

Germany has far less sun & far more solar than the US.  No one thinks the Germans are flaky environmental nuts either.

This is where solar water heating can make a big impact.  We have more than enough sun anywhere in the US to offset the water heating energy requirement with existing solar collector technologies commercially available today. Despite the cyclical ups and downs on the prices of specific types of energy, energy efficiency strategies enacted today will pay for themselves over the long run.

The answer to our energy problems rises every morning.

Solar panels are more than energy generation

Solar electric vehicle charging station at the OMSI in Portland, OR--shelter & power!

Electricity and thermal storage from the sun is pretty awesome, but solar panels can really offer so much more.  In certain parts of the world, covered outside areas are the norm to shelter people, animals, cars, or other equipment from the sun or rain.  Why not incorporate solar panels into the design to replace other building materials?  The structure is already budgeted and the incremental cost adder for the solar panels over the dumb panels would easily pay for itself from the locally generated clean energy.  As the weather continues to warm across the country and here in the Midwest, shading structures will continue to grow as a building design concept.  What a great way to add solar too! 

Chicago Botanical Garden Rice Center green roof with PV panels

Another example of the energy from solar panels being only one facet of its benefit to a building owner is with LEED projects.  Solar panels on a roof reduce the amount of roof space the project manager would need to dedicate to a green roof in order to achieve green roof credits.  Green roofs reduce water runoff, filter this runoff water, reduce building energy consumption, and the local heat island effect which effects the entire community.  Solar panels mixed with greenery are a win-win on all these accounts plus you get local energy production (EA credit 2) to boot.

Reducing expensive roofing materials with solar panels can pay for itself even before any energy generation 

One more example of solar being more than the sum of its energy production value is with slate and cedar roofs or other expensive roofing materials.  With these roof types, the installed cost per area of a roof integrated solar water heating collector could actually be less than the cost of the roofing material that is displaced--even before any energy savings are accrued.  I know that this is true for skylights with the daylighting and natural ventilation benefit being only a fraction of the total energy savings a building project with higher end roofing can see.

The more you look at solar, the more benefits you see, and the harder it becomes to justify sticking with old, polluting technologies.

Change Happens Faster Than You Think

Maybe not the father of solar energy but a tremendously influential and critical thinker .

“There are decades where nothing happens; and there are weeks where decades happen.”

- Vladimir Ilyich Lenin

I came across this quote today while watching a TED talk about the speed of change we are now seeing in human biology from both intentional and unintentional sources.  A case can be made that we may be an entirely different species of animal than we are today in only a few generations.  It's a fascinating lecture about evolutionary biology, and it sparked a connection in my brain to the state of solar today.

Solar energy development appears to be following this dictum.  Massive changes are happening in the business almost on a daily basis.  The speed of change is so fast that it makes it difficult to comprehend it or make accurate predictions or plans for the future.  In all probability, we will have an entirely new energy infrastructure in less than a couple of decades.  How this might happen or what shape this new energy system will take is still far from certain.

In the face of uncertainty, don't lose hope--focus on the basics. Work to continually improve your general health and intellect.  Study your industry and market.  Engage with customers and suppliers.  Think about the major issues you face on a daily basis and try new things.  Solar energy will win because it's the energy source that got us to where we are today. It's now the time for us to become more a little more sophisticated about how we harness it and much more intentional about how we apply it.

The Silver Tint of the Clouds of Doubt

There are dark clouds on the solar horizon.  Here are a few reasons why:

• All time low natural gas prices are driving down the cost of electricity and heating.
• Little public concern for climate change and zero political appetite for carbon mitigation legislation.
• Movement by utilities across the country to discourage solar PV interconnection.
• Economic depression with faint hope for the new construction market which is essential to a robust economy.
• Confusion in the public about the health of the solar industry due to high profile business failures like Solyndra.

This too shall pass as the famous proverb says because all material conditions, both positive and negative, are temporary.  All is not lost for solar.  We have a global energy market now and other parts of the world are adopting solar at such a clip that the US is going to benefit in the next phase of solar growth.

• The all time low natural gas prices hurt natgas producers and they are predicting rising prices due to production modifications and new markets for natgas like transportation.
• Solar provides a hedge against wild swings in energy prices--for many decades not just a few years.  Solar as a risk avoidance play is already viable around the world.
• Solar accounts for 4% of the electricity capacity in Germany but provides up to 50% of the load at key times during the year and day.  Germany has an inferior solar resource to anywhere in the continental United States.
• The cost of subsidized solar is rapidly approaching the cost of utility provided power.  Coupled with accelerating improvements in grid storage, utility barriers are becoming irrelevant.
• Solar of all types is very easy to install and requires very little training for professional contractors.  It will not take long to scale up solar once the market forces align.
• With nuclear energy on the decline, solar with grid storage is the only viable solution to provide stable power today and into the future.

When things go wrong, as they sometimes will,
When the funds are low and the debts are high,
And you want to smile, but you have to sigh,
When care is pressing you down a bit,
Rest, if you must, but don't you quit.
Life is queer with its twists and turns,
As every one of us sometimes learns,
And many a failure turns about,

When he might have won had he stuck it out;
Don't give up though the pace seems slow--
You may succeed with another blow.
Often the goal is nearer than,
It seems to a faint and faltering man, 

Often the struggler has given up, 

When he might have captured the victor's cup, 

And he learned too late when the night slipped down, 

How close he was to the golden crown.
Success is failure turned inside out--
The silver tint of the clouds of doubt, 

And you never can tell how close you are, 

It may be near when it seems so far, 

So stick to the fight when you're hardest hit-- 

It's when things seem worst that you must not quit.

- Author unknown

Solar doesn't care what utilities want

For any of you who haven't heard of Ray Kurzweil, I highly recommend reading up on his Singularity theory.  He's a fascinating guy and his ideas are even more so.  Pertinent to my interest in solar technology, one component of Kurzweil's Singularity ideas is that technology advances at an exponential rate which is profoundly disruptive to existing technology.  Just as with financial investments, past performance does not predict future returns.  People in the heart of the change often have trouble seeing that straight line forecasts often fail to capture the future impact of a particular technology. Such is the case in the solar business today.

Worth a read

Solar PV is a transformative technology that is already disrupting traditional utility delivered energy models. A recent McKinsey study sums up the current state of PV rather succinctly and charts a few forecasts into the next couple of decades.  In some market segments, PV already competes effectively on price per kWh delivered; in others, the expectation is that other generation technology will continue to dominate but not for much longer.

No one is "letting" distributed solar happen.  In fact, it's becoming adopted despite countless institutionalized roadblocks.  This interaction between Travis Bradford and Barry Cinnamon highlights a critical misunderstanding that many people have about how distributed solar will develop.  We aren't waiting for utilities to let people install systems (via interconnection & net metering policies), and we actually don't need more incentives from the federal government (maybe these have only inflated installation prices anyways).  While both these components have facilitated system installation in the short term, the greater driving trend is the narrowing gap between the retail rate for electricity and the installed cost of solar.

Net metering is serving a great purpose today in helping to grow solar but the electric utilities would like to see it go away because they lose money from it.  At a much larger solar penetration rate than we have today, they would have to raise rates to cover the lost production and distribution charge revenue.  At a TVA sponsored solar event last month, I heard multiple utility representatives talk about how this hypothetical problem should cause us to temper if not even retard current PV installations. Regardless of what happens to net metering, distributed solar is going to continue grow and because of the easily scalable nature of it, I'd bet it will be at an exponential rate as Ray Kurzweil's hypothesis would predict.  Here are three reasons why I think so:

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Solar is Easy to Install

and it's getting even easier to do so.  The only downside of solar right now is first cost.  Not only are installation prices falling and retail utility rates rising, there are many new financing options to minimize solar's first costs. There is really no reason that a person can't decide to go solar one day and have the system commissioned the next.  Any red tape would only come from utility interconnection and this is irrelevant in solar water heating or in the case of my next example.  When all the economic forces align, we will see neighborhoods transformed from zero roofs with solar to most of them in very short order.

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Real Time Consumption of Solar Production

No need for utility permission to buy less electricity by producing it locally

All commercial customers and many residential ones are on a Time of Use (TOU) or real-time pricing plan with their electric utility. This means they pay a variable rate for electricity over the course of a day depending on the wholesale rate (cheaper at night, more expensive during the day).  Since solar PV production correlates well to peak rate periods, you can size a cost effective system today to lop off real time demand from grid power without selling any excess energy back to the utility.  If the customer pays $0.25 or more during the middle of the day for electricity, a PV system sized to meet this midday load is cost effective today.  This behind the meter PV system would be invisible to the utility while saving the building owner money.  There is a huge amount of potential new solar work just for this application.

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Back Up Energy Systems

Many businesses and homes want or need back up generators to guarantee access to electricity during interruptions of grid service and they are willing to pay a premium above the retail rate for electricity to do so.  Brown outs, ice storms, lightening, squirrels, etc. knock out power on a rather regular basis in some areas.  For someone considering a generator, they'll need to figure in the cost of the fuel to power it, the transfer switch wiring in addition to generator itself.  The generator will also have to cycle regularly to keep in optimal performance shape and fuel costs could be significant depending on whether the building has access to natural gas or not.

Inverters offer energy arbitrage options in addition to battery backup functions

An alternative today is a grid tied PV system with battery backup.  This allows for the triple benefit of back up power, peak load rate shaving, and energy arbitrage (charging batteries with off peak rate electricity and using during peak times).  All this adds up to more benefit than a generator backup.  Battery technology has been improving in cost and performance just as PV technology has.  This is yet another way that a PV customer could have a cost effective system for their needs and never need to sell anything back to the utility or need any sort of special agreement to go solar.

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Thomas Friedman called it the democratization of energy and this is exactly what solar offers.  Individuals now have the option for the energy source of their own choosing.  Utilities have a stranglehold on options just as telephone companies did before the advent of cell phones.  How many of you even have a landline at your house anymore?  How many of you will be at the mercy of electric utilities for service in 10 years?  I think the numbers will be very similar.

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We are like tenant farmers chopping down the fence around our house for fuel when we should be using Nature's inexhaustible sources of energy — sun, wind and tide. ... I'd put my money on the sun and solar energy. What a source of power! I hope we don't have to wait until oil and coal run out before we tackle that.
         --Thomas Edison

Energy Factor and water heating technologies

A different sort of green home

According to the US Dept of Energy's website, energy factor (EF) indicates a water heater's overall energy efficiency based on the amount of hot water produced per unit of fuel consumed over a typical day. This rating applies to a variety of water heater equipment: tank-style (storage), tankless/on-demand, and heat pump water heaters (HPWH).


Solar water heating has a very similar rating called the Solar Energy Factor (SEF).  Solar equipment is evaluated for thermal performance efficiency by an organization called the Solar Rating & Certification Corporation (SRCC).  The federal tax incentives for the installation of solar equipment are contingent on the solar water heating equipment having been evaluated by the SRCC.  The SRCC developed the SEF for the purpose of comparing solar water heating systems to a standard 50 gallon residential water heater in an apples-to-apples sort of way. Many natural gas utilities use the industry standard EF rating system to award rebates for high performing water heating equipment.  Since SEF is the solar equivalent of EF for a standard water heater, my view is that solar water heating systems that meet EF ratings for high performance equipment should qualify at a minimum for the existing utility rebate programs.


So how do different water heating technologies measure up with respect to energy efficiency?


Tank storage water heaters

Bradford White 40 gallon gas water heater

Typical residential storage water heaters range in size between 40 and 80 gallons.  This volume of water is heated up to the desired temperature (120 degrees F); the heating element or burner cycles on and off as a thermostat in the top portion of the tank detects adequate heat or not.  This is usually the least expensive water heating technology to install but is also normally the most expensive to operate. Recovery of the heat in the tank during and after use can be slower than with other water heaters which leads to the cold showers in high use situations.


EF rating for gas heated tank water heaters:

• Low efficiency -- < 0.62
• Medium efficiency -- 0.62 to 0.67
• High efficiency -- 0.67 to 0.82

EF rating for electric heated tank water heaters:

• Low efficiency -- <0.90
• High efficiency -- up to 0.95

Keep in mind that EF rating is only with respect to the energy efficiency of the appliance.  The electricity that heats the water in an electric tank model could be coming from sources with varying degrees of efficiency and environmental impact.

Tankless

Tankless water heater (top right) in conjunction with a solar water heater

Also called on-demand water heaters, these units heat water as it flows through the device.  They are capable of reducing water heating costs 10-20% due to the elimination of standby losses (constantly heating a tank of water even when no hot water is needed).  Tankless units come in electric, natural gas, and propane versions for different markets.  Not only are these a bit more energy efficient than tank style water heaters, they are also compact, wall mounted devices to save space in the mechanical room and they can provide almost unlimited amounts of hot water.


The EF rating for gas-fired tankless units ranges between 0.82 and 0.96. 


Heat Pump Water Heaters

From DOE

In a heat pump water heater, electricity is used to move heat from the air around the HPWH into the water tank versus directly heating the water with resistance coils.  Since the heat pump cycle can take a significant amount of time to heat or reheat a tank of water, electric resistance coils are included in HPWHs to augment the recovery of the water heating and thus minimize cold shower scenarios.  HPWHs can be very energy efficient and cost effective when the HPWH is operating in the heat pump mode; they revert to EF ratings of electric water heaters when the resistance coils kick in however.  Like with many things in the sustainable building world, efficient design is only part of the total picture.  How something is used in the real world effects its overall efficiency. 


EF ratings of HPWH in hybrid mode is 2.20 and fall off towards 0.93 in electric mode (average ~1.60).


Solar Water Heaters

In solar water heaters (SWH), the heat from the sun's radiation is transferred to drinking water during the day and stored in a tank of water for use throughout the day and night.  In homes where a 40 gallon tank water heater is appropriate, you'll find a 60 gallon solar storage tank. Because the amount of energy to move the heat from the solar collectors to the drinking water is minimal and the sun's energy is free, the operating costs of SWHs are the lowest of any water heating technology today. They are also the lowest carbon option when the system offsets fuel from gas appliances or electricity from coal-fired plants. SWHs have the highest upfront cost in the water heating space, but federal and state incentives exist to encourage their adoption since they provide a benefit to both the system owner and society as a whole.


Calculating EF from the SEF rating developed at the SRCC is done with the following equation: SEF x (1 - SF) = EF. SEF and SF (Solar Fraction) are calculations from the OG-300 report on each system found at www.solar-rating.org. EF ratings on SWHs range from 0.93 up to over 5.70 depending on the size of the system, location, and back up fuel option.


Summary
The less you pay upfront for a water heater, the more you pay over time.  As fuel prices of all sorts rise in the future, an investment in efficiency today will pay increasing dividends over time.

How to sell a solar water heater in a market with cheap natural gas

With the price of natural gas at a historically low point, selling a solar water heating system in natural gas water heater markets is a tough proposition. While we have to address return on investment as solar professionals, there are many other factors that go into a customer's decision making process about going solar. Solar water heating isn't for everyone so broad brush approaches won't work. The key is to target the right audience with the right message before you spend much time or money. The following is a guide to help you do this.

What to talk about

John Cole Cartoons

People are interested in distributed solar energy for a number of reasons.  Residential solar water heating continues to be an exceptional option in the portfolio of clean energy choices a homeowner has.  Energy cost savings is just one aspect of a clean energy purchase.  Make sure that you are talking about all the other reasons for pursuing solar.  Here are some good ones to start with and expand upon:

• Solar water heating (SWH) is a cost effective way to reduce home energy consumption by over 10%.
• Like electric vehicle purchases, SWH is a visible commitment to clean energy for a much lower sticker price than any car.
• When built into a new home, the net cost of a SWH is on par with the cost of a tankless water heater yet SWH outperforms tankless units in energy savings (EF of 0.82 for tankless vs 1.4 for SWH)
• While low now, the price of natural gas is set to rise with growing demand from electrical generation and transportation as well as with increasing scrutiny of hydraulic fracturing (fracking) practices. A SWH installed today is a hedge against rising fuel prices.
• Talk about the avoided costs & externalities of fossil fuels. Natural gas may be cleaner than coal, but it's hardly clean in comparison to solar water heating.
• Solar water heating creates local jobs--engineering, installation & service, sales & marketing, and distribution.

Tell the story to the right people

You need to maximize the impact of your messaging by positioning them in front of the right audience. The right audience is one that is both receptive and responsive to your point of view. To encourage a conversation and spur interest in SWH, the best approach is a combination of Facebook and blogging. Articles that address your messaging can't be neutral. You have to make a point either with your own blog posts or with comments on articles written by others. Your opinions may alienate some people, but those people are probably not receptive or responsive to clean energy issues in the first place--your target customer is. There are people out there who are concerned, knowledgeable, angry, and ready to act if they find a leader in their community with a solution that resonates with them. Solar is part of the solution and you are that solution provider.  Don't make any assumptions about who a receptive and responsive customer might be; stirring up a conversation about the issues that got you into the solar business in the first place will bring them to you.

Where to tell the story

Web marketing is a hot topic with lots of nuance.  It is an essential part of modern business and is redefining the fields of public relations, promotion, sales, and general marketing.  In the interests of getting you started today, I suggest working with the steps below.  Expand and modify as you get more comfortable and learn more.

1. Find an article that resonates with you and your team.  Get your friends, family or co-workers to suggest an article to post and select one.
2. Post the article to your Facebook business page (make a Facebook business page if you don't have one and encourage people to "Like" it).
3. Make comments on this post that tell your target audience why this article is important to you. 
4. Get all your friends, family, and co-workers to "Like" the article so their network sees it too.
5. Directly ask people to read and comment on your post (via email, phone, twitter, FilterTweeps,  etc).  
6. Repeat every workday.

Once you get comfortable with this daily effort, you can branch out a bit by writing your own blog articles.  Post it to your company website or some other website (Tumblr, Blogger, etc).  Use this as your Facebook link of the day and encourage the comments as suggested above.  Also while Facebook is the current dominant player in social media, explore using other sites like Twitter, LinkedIn, Google+, or any of the other growing number of websites to expand the reach of your effort.

Keep at it

Cheap natural gas makes for a difficult sales process for solar water heating. Difficult but not impossible. Continually remind yourself why you got into this business in the first place and find creative ways to connect with like-minded people. Tell people about your company and its goals.  Keep people continuously aware of your projects to build on successes. Help people connect their daily behavior to greater social trends. Be consistent, be informative, and be real. You'll begin to find that the right people will find you.

Talking solar at the CCGT

I spoke for the second time at the Chicago Center for Green Technology last Tuesday night.  The first time was last September and it went well enough for them to invite me back for another go at it.  My presentation covered solar water heating technologies in a broad way and has been set up to be a continuing education course for AIA architects.  Despite it being Valentine's Day, we had a rather large turn out with over 40 people in the audience.  The CCGT has been seeing strong attendance with all the their courses in this winter session.  I feel the general awareness level of the public is continuing to grow with respect to sustainable building practices and with solar technologies in particular.  The questions from the audience were more technical and specifically focused for projects that people are seriously considering.  I have even had 2 subsequent site evaluations from my talk for solar projects in Chicago from people interested in solar for their particular buildings.

 
I speak all the time about solar water heating and solar technologies in general so feel free to reach out to me about arranging a talk with your group!

The Atlantic's The Most Important Graphs of 2011 (Energy)

From The Atlantic's The Most Important Graphs of 2011

4. ENERGY, ENERGY, ENERGY

Oil Profits v. Oil Prices

"Big oil companies make larger profits when oil and gasoline prices are high.  These revenues come from the pockets of everyday Americans.  The five biggest oil companies - BP, Chevron, ConocoPhillips, ExxonMobil and Shell - have already made $100 billion in profits during the first three quarters of 2011 due to high oil prices. Yet they and other big oil companies have fought tooth and nail this year to retain tax breaks worth $4 billion annually." -- Daniel J. Weiss, senior fellow, Center for American Progress

The Most Disastrous Year Ever

"The National Oceanic and Atmospheric Administration reports that the United States set a record with 12 separate billion dollar weather/climate disasters in 2011.  Total damages were approximately $52 billion.  NOAA Chief Jane Lubchenco noted that "what we are seeing this year is not just an anomalous year, but a harbinger of things to come for at least a subset of those extreme events that we are tallying."  She noted that some of the increase is driven by climate change." -- Dr. Joe Romm, Senior Fellow and Editor of Climate Progress

A Century of Love for Oil and Gas

"Many conservatives have attacked the Obama administration's effort to invest in emerging clean energy technologies, including wind and solar electricity generation. Yet they defend longstanding tax breaks for the mature oil and gas (O&G), and nuclear industries. However, the federal government annually spends an average of thirteen times more money on the oil and gas industry compared to investments in renewable energy." -- Richard Caperton, Director of Clean Energy Investment, Center for American Progress

Our Competitors' Green Investments

"On the two-year anniversary of the American Recovery and Reinvestment Act, we should look back with satisfaction that we have seen the American clean energy industry through a rough period in the global economy. However, the United States risks ceding its gains and falling dangerously behind its competitors without continuing investment.  Many conservatives oppose such investments.   Without it, the United States will see an exodus of firms and capital to countries that  are growing their clean tech industries, particularly China and Germany. U.S. private-sector firms lament a lack of clear and consistent policy on clean energy. This stymies investment and slows job creation." -- Bracken Hendricks, Senior Fellow, Center for American Progress

Where the Green Jobs Are

"The failure of several clean energy companies that received loan guarantees have many conservatives increasing their opposition to such investments.  However, clean energy has been a bright spot in the sluggish economy.  The clean economy sector focused on clean energy--especially wind, solar, fuel cell, smart grid, biofuel, and battery companies--grew far more quickly than the economy as a whole. A Brookings Institution report found major job growth in clean energy between 2003 and 2010: Solar thermal and wind grew by 18.4 percent and 14.9 percent, respectively." -- Kate Gordon, Vice President for Energy Policy, Center for American Progress

Solar isn't a new idea

We are like tenant farmers chopping down the fence around our house for fuel when we should be using Nature's inexhaustible sources of energy — sun, wind and tide. ... I'd put my money on the sun and solar energy. What a source of power! I hope we don't have to wait until oil and coal run out before we tackle that.
                  - Thomas Edison

A little perspective about Solyndra

My summary of the Solyndra story:

• Company launched in 2005 to create a unique thin-film (CIGS) solar module to avoid using expensive (at the time) silicon as most other solar companies use.  They took a calculated business risk to create an innovative product to address a gap in the marketplace.

Solyndra's technology & value proposition

•  Prices of silicon collapse in 2009.
• Almost overnight, the business case that Solyndra was trying to make completely reverses.  More efficient panels are now the same price as Solyndra's less efficient panels.
• Solar panel manufacturing has been extremely turbulent from the beginning so Solyndra stays the course and attempts to weather the storm.
• On May 26, 2010, President Obama gives a speech at Solyndra headquarters to tout his commitment to American job and clean energy development. This was a company that both the Bush and Obama administrations wanted to associate with for political purposes.
• June 2010: Solyndra is producing 30MW of solar panels per year and is in a tie as the 10th largest thin film manufacturer. 
• November 2010: Solyndra gets a $535 million loan guarantee from the 1703 loan guarantee passed in 2005 by the Bush administration.
• Silicon prices continue to fall hitting a 6-year low in June 2011 (~$50/kg from ~$470/kg).

A solar cell nestled in raw polysilicon

• Solyndra tries to restructure its loans again in August 2011 but is refused and subsequently loses a contract with the US Navy.
• Bankruptcy--September 1, 2011

Solyndra was an innovative company in a dynamic market.  The founders took a big risk in a very risky business.  Like other companies in other industries, they lobbied the government for special consideration and like other companies in other industries, they got it.  Governments facilitate markets and companies participate in these markets.  My view is that clean energy companies should get special consideration because they promote technology and ideas that help society as a whole.  Special consideration doesn't mean direct investment however.

One lesson learned from this story is that governments are horrible venture capitalists.  This should be expected since unlike VCs, governmental decision makers are betting with someone else's money.  While market development is a solid roll for governments, picking specific winners like VCs try to do, should be left to private investors.

Solyndra couldn't keep up with John Boyd's OODA Loop

One lesson to not learn from this story is that solar energy can't compete with traditional energy and that solar is doomed to failure.  Solyndra failed in most part due to falling prices of solar components and a general inability to keep up with changing business assumptions.  While this was bad news for Solyndra, this is very good news to proponents of clean energy.  Solar energy is on pace to be the least expensive source of electricity for most of the world in a decade.  All this political theater over Solyndra will seem pretty silly when that happens.

"The trend is my friend."
-Old adage of market makers

Renewables face stiff competition in the energy PR war

Companies selling legacy energy products (oil, natgas, coal) are winning the public relations war over climate change.  This makes sense in a way since they have a lot more to lose than the clean energy companies have to gain.  Fossil fuel centered companies have an elaborate (and expensive) strategy to undercut the value proposition that solar & wind companies have been trying to make in the court of public opinion.  Front and center in this fight is to deny that humans have any impact on the climate and that any changes that might be occurring have nothing to do with burning carbon based fuels.

As you'll see in the chart produced by Riley Dunlap and Aaron McCright, two university sociologists, climate change denial is a well-organized, comprehensive affair.  Regardless of how you feel about this issue, I find it very interesting that so much money, human energy, and legislative time is being committed to refuting something that has an objective answer.  This tells me that the parties in the matrix below are more savvy to the fact that how we feel about an issue matters more in spurring action than whether the something is true or not. Deceptive messengers typically jaundice common sense people to the message however, and truth has a tendency of coming out in the end regardless of obfuscation efforts.

Nothing clean about coal

Coal has been a tremendous asset for the industrialization of the world over the last 200+ years.  Over half of our electricity is produced with coal and it is a major source of American jobs.  The spin doctors at the American Coalition for Clean Coal Electricity go too far, however, when they claim that carbon capture and sequestration will make coal "clean."  Even if carbon capture wasn't an implausible fantasy on the scale of Reagan's Star Wars program, coal is dirty throughout its journey from extraction, processing, transportation, smokestack and finally fly ash disposal.  Clean coal initiatives address none of those other yucky bits.

The folks at Funny or Die realize the power of satire and ridicule to move public opinion.  Check out their little ditty about the latest "energy drink" to hit the shelves:

Coal Energy Drink - watch more funny videos

- I drink [use] it everyday because it's really my only choice.

Getting past the blessing (curse) of vast fossil fuel reserves

Saudi Arabia--#1 oil exporting nation and wants to export solar energy as well

As an enthusiastic supporter of clean energy technology, I try to keep aware of the ongoing ebb and flow of renewable energy development in the US. In a previous post, I talked about how the US is both blessed and cursed by our vast fossil fuel reserves. Saudi Arabia is also blessed with vast fossil fuel reserves yet they seem to looking to the future more so than we are in the US.  They recently announced a $100 billion spending plan for renewable energy development.  Unlike in US where we see no societal benefit to significant clean energy infrastructure projects, the Saudis seem aware of the fact that finite energy wealth does not have the same long term economic benefits of sustainable energy sources. With respect to oil in particular, drill baby drill as a national energy plan makes much more sense in Saudi Arabia than here, but they are heading in the direction of innovation versus continued dependance on legacy technologies.

The US Southwest has vast solar potential but we have little national will to develop it

Clean energy has been plagued by up and down cycles for decades and today is no different.  With the new construction downturn, credit market paralysis, double-dip economic recession fears, outrage over misapplied federal stimulus dollars with Solyndra, and a political shift away from clean energy initiatives, it looks like renewable energy is in decline here. All these issues hurt wind & solar in the US in the short term, but I think the real headwinds for clean energy come from more structural and systemic issues.

Masdar City in Abu Dhabi -- a zero carbon, zero waste, car-free city in development

 We sit on vast reserves of coal, natgas, and even oil to a lesser degree but we haven't woken up to the truth that these won't last forever.  The global nature of the energy markets drive the price and availability of these resources no matter what fuel we consider or where that fuel happens to lie.  We are blessed and cursed with our abundance today because it has both created a fantastic quality of life for most Americans while it has also spoiled us to the virtues of thrift and frugality.

Saudi Arabia along with China, India, Abu Dhabi and a host of other developing nations with less plentiful energy inheritances are planning for the future and making concrete investments today.  Just as past wars have been started and decided over access to energy, the future of global events will be tied to control of energy resources.  By ceding the initiative to other countries, we risk future irrelevance in international affairs and will become dependent on the goodwill of those who have no goodwill towards us.  While we shouldn't be committing to any specific technology as the only long term solution, we need to be developing them all with the resources that we have today.  It is in our national interest to regain this initiative.

A good plan implemented today is better than a perfect plan implemented tomorrow.

— George Patton

Is satire the best tool to drive change?

The Colbert Report
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Milwaukee Shining a Light on Solar

Milwaukee Shines

Last night, I went to the press conference in Milwaukee that announced the Milwaukee Shines Solar Financing program.  It was well attended by the mayor, city officials, and homeowners interested in participating in this new initiative.  Milwaukee is one of the 25 Solar America cities designated by the Department of Energy.  Milwaukee's Office of Environmental Sustainability is managing the grant money and publicity through the Milwaukee Shines organization.  After researching various factors that have been barriers to widespread solar adoption, the leadership of Milwaukee Shines decided to work on the upfront financing piece of a solar system that has prevented many homeowners from going solar.

In partnership with Summit Credit Union, city of Milwaukee residents can apply for loans up to $20,000 for solar water heating and solar electric (PV) systems.  All the costs of the solar installation can be built into the loan as long as the work is done by a Focus on Energy Residential Ally solar installer.  Additionally, the first 20 applicants get an additional $1,000 incentive off the cost of the installation.  This is above the 30% federal tax credit and the Focus on Energy incentive ($800 for a 1 panel system, $1200 for a 2 panel system).

Milwaukee is really making a tremendous effort to reshape the residential energy landscape to encourage clean, renewable energy; local jobs; and decreasing reliance on imported energy.

Idealism doesn't drive sustainable energy development

Northern Iowa Wind Farm - (Going Green In Orange)

A recent article on Renewable Energy World asks the question how did the US grow an energy consciousness.  I can't say that I agree with the implicit assumption the title makes.  I don't think most Americans really think about energy all that much or how important our current existence is on inexpensive, readily available, easily stored energy.  The United States is blessed (or cursed) with abundant natural resources.  This has clouded our collective long term thinking with respect to energy.  We are able to look at availability of energy on a very short term basis because we've had such a consistent supply of all forms of it for so long.  When was the last time anyone pulled into a gas station and found the filling tanks were empty?  How often do blackouts occur on the power grid? When either of these disruptions happen, big challenges ensue but fortunately they haven't occurred that often.  We get the power we want, when we want it, and it doesn't really cost us that much.

Compare this to energy situation of other countries around the world.  Island nations typically have very limited energy options. Their geographic separation from adjacent countries forces them to generate electricity locally and import petroleum via tanker ship--very costly and risky for their national security.  Japan, the world #2 for installed solar, has also resorted to massive reliance on nuclear which is now showing it's flaws in the most catastrophic way possible.  Faced with limited options, people take risks that they otherwise may not have taken.

Island of renewable energy (Michaelis Energy Island)

Germany is another story as well.  As the global leader in renewable energy development with 17% of its electric power capacity coming from renewables, outsiders may think that the Germans have a particularly strong commitment to clean energy.  While environmental reasons are now one of the arguments that Germans make for continuing their current energy policy, national security issues regarding supply of natural gas were the real spark for their dramatic shift towards wind and solar.  Since the fall of the Soviet Union, Russian natural gas companies have periodically played games with the supply of natural gas flowing to western Europe.  The spark that woke up the German populace was a disruption of gas during the peak heating season over the winter of 1992-93.  Cold homes in the winter are a strong motivating force for spending more on local energy.

The main message that Americans have heard regarding renewable energy is that it's good for the environment.  This is an idealistic message that has been both polarizing and lacking in teeth to drive tangible action by even those who believe the message.  Many people immediately think Quixotic farce when they hear anything about solar or wind development--overly idealistic and impractical.  Focusing on the environmental component to renewable energy makes this a political discussion where there are perceived good guys and bad guys.  We also get a lot less personal satisfaction from an effort to conserve energy while a neighbor continues to be profligate with his consumption and waste.  Our environmental savings are easily erased by people not of the same mindset.  None of this serves the purpose of a steady state energy system where we all have access to reasonably priced energy without the negative externalities of fossil fuels.

My read on the US energy situation is that we have about 10 years or so to make some dramatic changes in our mix of energy options to avoid disruption issues that other countries have already had.  10 years is a long time in the sense that we could (and probably will) chose to continue procrastinating on making the spending decisions that we need to make.  10 years is a short time in the sense that the capital improvements we need to make could take that much time or longer to actually complete.

The RE World article I reference above makes the case that governmental policy has been the most effective change mechanism in the US.  Maybe so but our current energy mix has very little renewable energy in it other than hydroelectric.  I honestly can't tell what the spark will be to awaken the sleeping giant once again and unite our efforts behind a common cause.  Hopefully, it will be something much less dramatic than Pearl Harbor was.

The worst kind of wake up call

- Let's use our brains people and get ahead of these very foreseeable future energy challenges.