Sunday, April 08, 2007

Solar Easter

Happy Easter. It was a bright beautiful sunny day. I hope you spent your Easter outside enjoying it.

Speaking of the sun ... I've come across more and more debates on solar energy. There are several new technologies and manufacturing techniques on the horizon that look quite promising.

The deal with all energy technologies is that they not only need to make economic sense, they need to make environmental sense. The waste products and chemicals used to make the last generation of solar technology did not add up to a net positive. They did more harm than the fossil fuels saved. It looks like we are right on that cusp where the technology will work.

Unfortunately, the shrill debate about global warming has people demanding subsidies for the technology.

I wish people understood basic economics. We are on the cusp of solar becoming economically and enivornmentally cost effective. Subsidizing the roll out of solar before crossing the cusp costs a lot and does environmental damage. Once we are on the positive side of the curve ... you don't need subsidies because it is a cost effective investment.

In the aftermath of the oil embargo of the Carter years, there was a massive trillion dollar effort to push alternative fuels onto the market. By trying to push technologies on the market prematurely, the effort actually ended up collapsing and setting back the technologies.

The same thing happened with nuclear. The government went hog wild and pushed out a large number of reactors that produced waste problems we don't know how to handle.

Subsidies are generally the result of applying short term thinking to long term problems. The long term solution for alternative fuels is to let the market grow organically. Big government programs destroy that organic growth. They generally widen the gap in income and have a long history of magnifying the evil side effects of technology.

People demanding that the government should bumble over the market to subsidize solar should look at the history of the government bumbling over itself to build dams, nukes and subisidize big oil. The market does a better job of signaling when to go with a new technology.

In that regard ... I don't think this is the year to buy solar. In two to three years, there will be some really big things on the market.

This is the time to start researching solar. It may be a good time to buy gadgets and start preparing for an investment in solar down the line.

A Salt Lake store just opened a web site called Solar Home (solar home ad). This company sells solar products at a discount. The main solar products are at a point where it takes about 10-20 years to pay back the cost of the investment in energy savings (assuming that the labor to install and maintain the units has no value). In this regard, the most interesting products are the educational products and certain "off the grid" contraptions that can power things in remote locations on for portable power.

In the gadget area, I really like the solar powered fountains. Of course, buying a solar powered fountain or a solar night flower doesn't do anything for the environment. These products don't replace energy consumed from other resources. If you want outdoor lighting, you can get outdoor lighting, without having to wire up the garden.

I think energy efficient appliances is the best place to invest consumer dollars at this point.


Charles D said...

The government is subsidizing big oil through tax "incentives", sweetheart deals, and other means. That should stop immediately.

Many governments have invested in technologies that they felt would improve their competitive position and create needed jobs - Japan being a prime example. There is no evidence that government incentives to an industry "destroy that organic growth" in the marketplace. If that were true, the defense contractors and oil companies would be broke by now.

Look at what the marketplace is doing now (with some minimal government help): pushing ethanol and hydrogen fuel cell automobiles. Both those technologies are even more inefficient than our present fossil fuel addiction, but they clearly are in the interest of major energy corporations who want us to remain fixated on the automobile and tied to a costly distribution system.

Why not have the government push alternative energy technologies by funding research in universities? Why not have the government sponsor a study of our entire transportation system and then fund an approach that will be safer, more cost effective, and more sustainable than our current one?

Consumers and the marketplace cannot solve this problem. The market is dominated by huge corporate players who are spending millions to push their agenda through the Congress and practically own the Executive branch. It is not a "free market", and those who dominate it are not about to give up their dominant position. It is not serving our needs, so let's not stick with it just because we have a ideological preference for limited government.

y-intercept said...

In the case of solar, the free market is the best approach. A large number of the innovations that will cut the cost of solar panels to make them cost efficient is coming directly from the computer industry. A photovoltaics is a semiconductor usually made out of silicon ... like the computer chip. It is not that a new industry needs to be born and new physics created to produce PV.

Prices are dropping at a rapid pace. The break point where people should start investing heavily in solar is best determined by the market. At this point, you really don't need artificial incentives.

The roll out of solar industry is bound to be very labor intensive, and will require all sorts of bizarre contracts and arrangements with property owners. All of these things are better done on a small scale.

The one thing the government needs to do is assure that the grid is open to solar.