Newest Solar Development in May Change the Game

If you’re keen into reading about new technologies, it’s easy to notice developments all around the world taking place by the day, if not by the hour.  The renewable energy sector has been no exception â€" New gadgets and unique ways to harness energy are making the wildest dreams of today become the legitimate possibilities of tomorrow.

Despite most recent technological advances, if you’re familiar with solar energy it’s easy to find articles validating that the greatest vice of the industry is its inability to compete with the costs and efficiencies of energy mainstays like oil, coal, and natural gas.

With that said, V3Solar is claiming to have created a new solar device that will not only compete with big energy, but the levelized costs of energy (LCOE) will be “two-thirds the price of retail electricity and over 3 times cheaper than current solar technology’.  This is a “conservative” estimate, as independent consultant Bill Rever confidently puts it, but tests show the new device is achieving 8 cents per kilowatt hour of generation.  On a larger scale, if 8 cents per kWh becomes attainable for solar energy, it would silence the pundits who express discontent about the sector receiving a substantial amount of tax breaks and exemptions that currently aid solar companies.

Because it’s dubbed the ‘Spin Cell,’ most can probably guess one part of what makes the new device so special.  The rotating motion of the device works to keep it cool, much like a summer breeze hitting our skin to prevent us from overheating.  As a result, its performance is impossible for a regular panel to match.  In fact, one photovoltaic (PV) cell can handle a concentration of energy equal to 30 suns, improving the efficiency of the PV by 20% over most standard panels.  As V3Solar’s informational video says, “we make the photons dance!”

The Spin Cell also has one more trick up its sleeve â€" it’s not a flat panel.  Their report states, “For too long, the world believed solar was flat…[but] using specialized lensing and a rotating, conical shape, the Spin Cell can concentrate the sunlight…with no head degradation.”  In other words, a huge advantage the Spin Cell has over its flat counterparts is its “additive effect of sunlight,” or the ability of the sun to hit the panels from infinite angles, creating a multiplier effect that results in better performance.  In comparison, most standard panels are limited by their angle, missing out on the time the sun doesn’t directly face it. (Unless the panels have tracking systems, which are very expensive)

Another huge factor in the Spin Cell’s favor is that the sun can ‘hit’ part of the solar cone practically anytime it shines.  Its three-dimensional design eliminates idle time when the sun isn’t hitting an angled panel, further augmenting its effectiveness.

Truth be told, they simply look very attractive too; see for yourselves below.   Just imagine the aesthetic possibilities of these. Being only a meter across in size, cities could place one atop every street light, making them self-sufficient, for example.

If the performance calculations hold up under real world settings and if they can make the cones fast enough, it appears V3Solar could be on the verge of something unprecedented.  “We simply put a new spin on solar to bring light to the world,” V3Solar’s informational video concludes, and as of now that’s a tough point to contend.

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Kris Settle

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Top Solar Power States vs Top Solar Power Countries (CleanTechnica Exclusive)

I think you all are going to love this one. But before getting into the numbers and charts, here’s one quick caveat on the ranking below: my solar power installation data for the countries was for the end of 2011, whereas my solar power installation data for the states (courtesy of GTM Research, via Scott Burger) was for the end of Q3 2012. So, basically, the states had a 9-month advantage (which can be rather significant when it comes to solar â€" the fastest growing energy industry).

With that out of the way, let’s take a look out how the top solar power countries in the world (per capita) compare to the top solar power states (per capita):

Below’s a longer list. But it’s a bit more difficult to read in this post, so click here view the image in full size:

Here are the actual numbers:

There are many factors that go into making a state or country a solar power leader â€" policy, solar insolation, electricity rates, etc. â€" but I think the list above shows that the strongest factor today is policy. With strong feed-in tariff policies, Germany, Italy, the Czech Republic, and Belgium have a strong lead (even with a 9-month disadvantage compared to the American states). An EU-wide cap and trade system that puts a price on fossil fuel pollution is also a help.

In the US, Arizona and New Jersey have had strong net metering policies as well as Renewable Portfolio Standards (RPS) that have encouraged solar adoption. New Jersey’s RPS includes a specific requirement for solar, which it has aimed to achieve through the use of Solar Renewable Energy Certificates (SRECs). Arizona dropped its solar requirement in its RPS years ago, but it has a distributed generation requirement, which has led it to encourage home solar power through net metering (mentioned above), tax credits, and rebates. Meanwhile, Hawaii, with very high electricity prices (the highest in the US) and good solar insolation, has become the first state in the US to hit solar grid parity. Hawaii has also implemented solar tax credits, a feed-in tariff, and net metering. However, as SEIA notes, “interconnection continues to be an issue as Hawaiian utilities have imposed restrictions to avoid solar generators exceeding 15% of load on their systems.” So, you can see that, even in leading solar power states, there are big hurdles to overcome.

// ]]>

Of course, there are other ways to calculate relative leadership in solar power. Instead of comparing solar power capacity to population, we could compare it to GDP, electricity production, or other factors. If you want to help me create more solar power rankings, drop a comment below!

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Scaling Solar and Wind: A Hard Look At Innovation Priorities

Despite recent explosive growth rates, the wind and solar power industries must overcome key innovation challenges before they can contribute a substantial share of national or global energy supplies, a panel of leading technology experts said today in Washington DC. 

Speaking at the Energy Innovation 2013 Conference organized by the Information Technology and Innovation Foundation and the Breakthrough Institute, Armond Cohen of Clean Air Task Force, Fort Felker of the National Renewable Energy Laboratory (NREL), and Minh Le of the Department of Energy's SunShot Program each stressed that taking solar and wind to scale starts with taking a "cold, hard look" at the real innovation challenges facing the growing renewable energy industries.

Scale, scale, scale

Wind energy has experienced "explosive growth" in America over the last 15 years, said Felker, who directs NREL's National Wind Technology Center. With double digit annual growth rates, wind has contributed 35 percent of all new generating capacity built in the United States over the last five years, second only to natural gas-fired power plants.

Solar power has experienced even more rapid growth rates in recent years, although it lags behind wind in total installed capacity.

Despite recent growth however, wind power provided only about 3.5 percent of U.S. electricity in 2012, while solar photovoltaic and thermal power technologies contributed just 0.1 percent. The panelists each agreed that these renewable energy technologies must reach orders-of-magnitude larger scale before they can contribute substantially to the national energy supply.

To date, the U.S. has built more than 40,000 wind turbines, for example, but Armond Cohen noted that it would take 300,000 1 megawatt wind turbines to equal the capacity of the current U.S. coal fleet. (The always astute Robert Wilson notes on Twitter that taking differing capacity factors into account, it would take roughly twice that number of turbines to equal the energy output of the U.S. coal fleet). 

Felker pointed to a 2008 Department of Energy report, which outlined what it would take to bring wind energy to 20 percent of the nation's electricity supply by 2030. At that scale, wind would provide a similar share of the national electricity mix as nuclear energy provides today.

For now, the wind industry is on track. While the DOE plan was originally viewed as overly ambitious, Felker noted that recent wind industry growth rates have actually exceeded the pace necessary to reach 20 percent by 2030.

Solar would likely continue to lag behind wind in the United States, the panelists noted, but could ultimately rise to a similar scale.

If wind and solar have long-term ambitions of displacing fossil fuels as the dominant energy sources in America or the world, fundamental innovation challenges remain, the panelists stressed. Getting beyond 10, 20 or 25 percent shares for wind and solar though will require continued innovations to further reduce costs and address the challenges associated with the intermittent or variable nature of wind and solar energy output.

Moving goal posts on cost

For years, NREL targeted cost reductions in wind turbine construction and operation that would bring wind to cost parity with coal-fired power, said Felker. Working alongside industry, these efforts succeeded in yielding steady cost reductions. Even without subsidies, real costs for 20 year power purchase contracts now fall in the 5-8 cents per kilowatt-hour range, according to Felker, comparable to coal.

Yet the recent sharp decline in natural gas prices brought about by the surge in U.S. shale gas production has moved the goal posts for wind power.

"Now we have a new goal: beat gas," Felker said.

Minh Le heads the DOE's SunShot initiative, which similarly aims to bring down the costs of installed solar photovoltaic systems to under $1 per watt as rapidly as possible. That would make solar independent of subsidies and cost competitive in most electricity markets. To get there, the SunShot program targets cost reductions across the entire value chain, from more efficient and lower cost panels and modules to important reductions in the "soft costs" of marketing, installation, permitting, and financing.

The panelists all agreed that continued cost reductions to free wind and solar of subsidy dependence would be critical to bringing either renewable energy source to a larger scale.

"Current subsidies for renewables aren't scalable," said Le. According to Le, If the United States tried to drive solar energy deployment with the kind of subsidies responsible for solar's rapid growth in Germany, "it would bankrupt us."

Felker agreed, noting that NREL is now working to help the industry cut wind energy costs in half again. To get there, NREL envisions new wind turbine architectures and is helping industry develop truly massive wind turbines in the 10 or even 20 megawatt range, Felker said.

Driving these deep cost reductions may require re-prioritizing investments in renewable energy. According to Armond Cohen, public and private sectors spent about $250 billion globally to deploy commercially available wind and solar technologies in 2012. In contrast, Cohen estimates that R&D investments across all clean energy technologies totalled just $12.5 billion last year. "Something might be out of whack here," stressed Cohen.

The integration challenge

While unit costs are falling as the wind and solar industries scale up, the system-wide costs of integrating these variable renewable energy sources into the electricity grid is rising, Cohen also cautioned.

Wind and solar generation varies as the weather changes, meaning that flexible power plants must be on stand-by to ramp up or down as the renewable output rises or falls. Alternatively, large power customers such as factories can be paid to curtail energy demand if wind or solar output falls off suddenly. 

These so-called "integration" costs are relatively minor today, the panelists said, but can mount quickly as the penetration of wind and solar on a regional electricity grid rises past a key threshold. 

"At low-levels of variable renewables penetration, you can ride on the back of the stable grid," said Cohen. But a variety of studies estimate that after wind or solar penetration rises above 20 to 40 percent of the electricity system, integration costs rise steeply.

Tackling this integration challenge will thus be key to taking wind and solar to scale in the longer-term. That will require changes in the way the grid currently operates, including different compensation for providers of flexible backup power and expanded ability to modulate demand as wind and solar output changes.

In the long-term, new grid-scale energy storage technologies may be essential to achieving high penetrations of wind energy, although panelists differed on the feasibility of these technologies, a variety of which are in development. 

For now, the surge in U.S. natural gas generation may be both a challenge and a blessing for wind and solar. While it has moved the cost goal post, cheap and flexible gas plants are a great match to the variable output of wind and solar, according to NREL's Felker. 

The increase in natural gas in the U.S. is "a great story," because the added flexibility of gas plants "plays really well" with wind and solar, Felker said. Natural gas "buys us time to solve the intermittency challenge," he noted.

Jesse Jenkins is reporting for the Energy Collective from the Energy Innovation 2013 conference in Washington D.C. Check the @EnergyCollectiv timeline or hashtag #EI13 for live tweets and stay tuned here for more posts soon.

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Speeches of Hermann Scheer Series, Speech 1: “Lipservice, Excuses, And The Lack of Courage”

Last week, President Obamas took a few moments during his inauguration speech to address climate change and the need for the US to show leadership in the transition to clean energy. Since the President made some refreshingly clear statements about the most important issues of our time, I am happy that they got alot of attention throughout the media. However, they were vague, and we still have to see to what political action they lead.

To give a better understanding of what meaningful action requires, I want to start sharing some excerpts from speeches given by Hermann Scheer during the past decade.

In case you don’t know who Hermann Scheer is, here’s a little Introduction:

Until his sudden death in 2010 at age 66, Hermann Scheer was one of the leading global voices for a transition to a 100% renewable energy supply. Time Magazine once called him “Hero of the Green Century,” and a German newspaper once labeled him an “uncompromising renewable energy hawk.” As a member of the German parliament, he was a driving force behind most of the country’s renewable energy policies & initiatives since the late 1980s. Among others, this legacy includes the 1999 “100,000 Rooftop Program,” the German Renewable Energy Act of 2000, and the initiative to create the International Renewable Energy Agency (IRENA) between 2008-2009.

But now, here’s a transcript of one of his speeches from 2005 (the remainder of this article, except the last line and the picture, is an extended quote):

---

The famous philosopher Schopenhauer identified three stages in the implementation of a new solution. At first it is ignored. Secondly, there is strong opposition against it. In the end, former opponents and skeptics turn into supporters of the new initiative.

The state of Renewable Energy development does not confirm this view: nowadays, everybody speaks in favor of Renewable Energies. But at the same time, too many fossil fuel supporters continue their blockades. There are too many lip services paid and too little concrete action.

This situation shows: renewable energies are not really accepted as a priority by a majority of decision-makers in politics and economics.

Numerous excuses are on the table: the expenses will be too high, the technologies aren’t ready, the market won’t accept renewables; and a lack of consensus does exist.

However, all these so called “arguments” only portray a lack of leadership and a lack of courage to set the right priorities. Forceful, speeding developments require driving forces. No one will become a driving force without courage, consistent concepts, and new alliances.

The reasons of the German success were the following:

1. The Right Concept

The German feed-in-law gave space for independent power supplies, protected them from the interferences of the conventional energy suppliers by creating a special market framework for renewables outside the conventional energy “market” rules. And it was based on guaranteed access to the grid and on guaranteed feed-in-prices. It offered investment security for renewables.

Wherever this concept was introduced, the targeted renewable energies gained momentum. In contrast, wherever an RPS-system was introduced, there was much slower development and â€" by the way â€" less cost decline / effectiveness.

The reasons are very obvious: the costs of a project, let’s say a wind mill, are not only the costs for the technology, but include the expenses for getting the permissions for installations. Only a few can shoulder these expenses without an investment security, which means without a guarantee for implementation. That means no one can calculate these real costs when he participates in a call for tender. And that is the reason why many projects within a RPS-system are not realized.

2. The Courage To Overrule The Conventional Energy Interests

Conventional energy interests exist everywhere, and are deeply mixed with governments. The initiatives in Germany came from within the Parliament, based on its constitutional duty and legitimacy to act for the common interest and not for special interest.

3. The Mobilization Of The Common People

The general public is the best ally for renewable energies, as soon as the public has recognized that renewable energies work. Therefore, it is a must to enlighten the people about the possibilities and the benefits of renewable energies, and to challenge the will of the people to be responsible for our common future â€" and to do so by offering an economic incentive in order to overcome social barriers.

We have to promote renewables by creating public confidence in renewables, and by referring to the two main values of the people:

• individual freedom, by getting energy independency for everybody and not only for a few; and
• social commitment, which means access to energy without damaging the quality of life of others. This is only possible with renewables.

4. The Establishment Of A New Socio-Economic Alliance

Two strong campaigns against our feed-in tariff law were waged in Germany. We countered these campaigns with two actions in front of the Parliament, carried out not only by the renewable energy associations and the renewable energy protagonists in the Parliament, but also by the economic interest groups who see their own future combined with that of renewables: the farmers associations, the association of small and medium enterprises, the association of machine manufacturers, and the Union of the Workers in the Machine, Electrical Equipment, and Buildings Construction Industry. There never existed such an alliance of different groups in all of history.

- Hermann Scheer on April 23rd 2005 at a WTO Symposium titled “Rethinking the Energy Paradigm”

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Firefly belly inspires way to enhance LED brightness by 55 per cent

A fond memory of my family’s annual camping weekend at Sandbanks Provincial Park is the late-night walk to the comfort station just before hitting the tents.

With the sound of crickets haunting the evening and smell of campfire smoke on their hoodies, my daughters carefully scan the darkness in search of fireflies, or in their world fairies with magic dust.

We never grow bored of these amazing little creatures, which through an oxygen-induced chemical reaction that takes place in their lower abdomen can cause their bellies to light up. The process is called bioluminescence, and it has earned these small flying beetles the nickname “lightning bugs.”

Human observation of fireflies throughout history has led to some useful products, such as emergency glow sticks, which offer the benefit of not needing batteries. But researchers have struggled to achieve the kind of efficiencies studied in fireflies.

One answer to the puzzle, it seems, has nothing to do with chemical reactions. Earlier this month, in two research papers published in the journal Optics Express, scientists from Belgium, Canada and France revealed that the design of a firefly’s abdomen plays an important role in enhancing the bug’s trademark glow.

In fact, they were able to replicate the outside structure of the firefly’s “lanterns” â€" the organs within the insect’s abdomen â€" to create a coating that, when applied to the surface of a light-emitting diode (LED), boosted light efficiency by roughly 55 per cent.

It’s a classic example of biomimicry in action. “There are many things in nature that can be adapted for many fields,” said nanotechnology specialist Ali Belarouci, a senior research scientist at the University of Sherbrooke in Quebec. “With the equipment we have today we’re able to see phenomena (in nature) we couldn’t see before.”

Belarouci said Belgian researchers were studying firefly lanterns with an electron microscope when they noticed a pattern of irregular scales with sharp edges and protruding tips. Using computer simulations, they looked at how these scales might affect the transmission of light out of the abdomen.

What was interesting is that the scales, which they described as having the shape of a factory roof, could be viewed at the micrometer level â€" that is, each scale tip was positioned about 10 micrometres apart, or about one-tenth the width of a human hair.

Small to us, a micrometre is massive in the world that defines nanotechnology, and this is where previous research on fireflies and other insects had largely focused. But at that level, the structures were observed to have a small impact on efficiency â€" a few per cent increase at most.

The Belgian team was quite surprised to find much larger efficiency gains at the larger micro-level, and this encouraged them to take their research to the next level.

That’s when Belarouci and his research colleagues in Sherbrooke entered the picture. Their role in the collaboration was to replicate the jagged scale structure of a firefly’s lantern and adapt it to an LED device. They did this using a photolithographic process. It involved coating the top of an LED with a light-sensitive material, in this case a type of polymer, and using a laser to create the factory-roof profile.

“We can do this with most LEDs,” said Belarouci, emphasizing the simplicity of the process. “The advantage is that you can add the coating to an existing LED. You don’t have to redesign the whole thing.”

That they have demonstrated the ability to boost LED efficiency by more than 50 per cent has major implications for a market that’s just finding its stride and a technology already known for being 85 per cent more efficient than conventional incandescent bulbs.

Never mind that LED bulbs last more than 20 times longer and don’t contain mercury, one of the biggest criticisms of compact fluorescent bulbs.

As the New York Times reported this week, prices for LED lights are falling and growth is picking up. It cited the fact that LED technology, despite higher retail prices, accounted for 20 per cent of lighting revenues at Philips last year, and that LEDs are expected to outsell incandescent lights in Canada and the United States in 2014, according to technology research firm IMS Research.

By 2016, IMS predicts shipment of LED bulbs for use in standard residential sockets will hit 370 million units. That’s more than 10 times the shipments reported in 2012.

As for the firefly-inspired coating, the researchers figure that modifying existing LED manufacturing techniques to incorporate the light-boosting layer are achievable and could lead to even better energy savings from LED lights within the next few years.

Has the research caught the attention of industry? “So far we haven’t been contacted,” Belarouci said.

It’s only a matter of time.

And it’s not just LEDs that could benefit from this discovery. “You could use the same kind of concept to improve photovoltaic cells,” he said. In other words, solar cells with the coating could potentially absorb more sunlight and produce more electricity per cell.

It’s something to think about the next time you spot a firefly, or, if you prefer, fairies with magic dust.

Tyler Hamilton, author of Mad Like Tesla, writes weekly about green energy and clean technologies.

Tags: bioluminescence, firefly, LED

This entry was posted on Monday, January 28th, 2013 at 7:05 pm and is filed under conservation, efficiency. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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We’re On Target For Catastrophe, But Clean Energy Technology Is Growing Fast & Ready For Massive Deployment,… But We’re Still On Target For Catastrophe

A group of international energy leaders were recently on a panel for “Sustainable Energy for All,” a major UN initiative aimed at making “sustainable energy” available for all people or the world by 2030, at the recent World Future Energy Summit (part of Abu Dhabi Sustainability Week). The panel was a bit more controversial than most. And, beyond the diversity of perspectives on the panel, just following the panel there was a keynote speech by Jeffrey Sachs that essentially continued the conversation but emphasized an angle that wasn’t discussed much in the panel’s conversation.

Early on in the discussion, Adnan Z. Amin, Director General of the International Renewable Energy Agency (IRENA) and occasional contributor to CleanTechnica, gave us some uplifting figures regarding rapid global renewable energy growth in recent years â€" something I’m sure all of our CleanTechnica readers having a good sense of. (Unfortunately, I was just arriving from another panel or interview, so I didn’t jot down the exciting stats he cited.)

Following Mr Amin’s positive notes, moderator Kandeh Yumkella â€" Director-General of the United Nations Industrial Development Organization, Special Representative for Sustainable Energy for All, and chief executive of the Sustainable Energy for All initiative â€" posed the following question to Achim Steiner of Germany, Executive Director of of the United Nations Environment Program (UNEP): On the current track, we’re on pace for 4 degrees of warming (some leading climate scientists would emphasize that’s a low estimate, due to various climate feedbacks) â€" is current progress enough?

Achim Steiner contended that there’s plenty of reason to be positive. We’re not on track to stop global warming, he agreed, but things are changing very fast, fast growth is occurring. There is hope that it can speed up enough to adequately tackle the problem at hand. But the key is that we’ve got a lot of work to do in order to make that happen, he added. Meanwhile, we’ve got billions of people who don’t have grid electricity or don’t have reliable grid electricity. As these places gain this basic good, Mr Steiner emphasized that we need to find ways to make sure that electricity is coming from clean energy resources.

Here’s more from Mr Steiner (paraphrased) when prodded on the challenge of this clean energy revolution, and why it’s currently not happening hast enough:

Everything boils down to economics. Coal/oil were cheap (ignoring externalities). Additionally, people entrenched in these sectors, from their educational training and decades-long professions, have a difficult time shifting â€" such a large shift takes time.

However, getting back to his optimism, Mr Steiner noted that, 30 years ago, people were saying: an energy transformation in our lifetime is impossible for technological reasons; 20 years ago, an energy transformation in our lifetime was considered impossible for economic reasons; and, today, almost everyone is saying, “we can’t not do this!”

Mr Steiner thinks pretty much everyone in the UN deeply believes in the “energy for all” goal, that it really is possible, but he also believes in something else: that we cannot achieve access to energy for those who don’t have it by using the old systems, out-of-date systems. Technology today makes decentralized energy (off-grid and microgrid development) more practical than the systems on which the US and Europe were built.

Furthermore, he noted that a fundamental issue to address in the Sustainable Energy for All initiative is financing. There is too much bureaucracy, too much difficulty getting financing from investors and banks (for projects in Africa, in particular). I also heard this emphasized later in the week by a pioneering microgrid entrepreneur.

Dr Robert Ichord, Deputy Assistant Secretary for Energy Transformation in the US, also on the panel, chimed in that we need to develop innovative clean energy financing mechanisms to achieve this goal.

Adnan Z. Amin of Kenya also emphasized that we need a new way of doing things. He added, a little more specifically, that we need an investment-focused approach rather than a top-down approach, which he says simply won’t work.

In developing countries everywhere in the world, he noted that the results of a recent report show that renewable energy options are cheaper than fossil fuels. The challenge is no longer to bring their costs down, but to break down barriers that make it difficult to access financing, get project approval, and get the cheaper technology in the ground and on people’s roofs. Again, this was a focus of a lot of discussion at a panel on microgrids that I attended later in the week, but nobody seemed to have a clear idea as to how to solve the problem, just that it needed to be solved â€" hopefully that will soon lead to many innovative solutions and a faster rush of clean energy deployment.

Suleiman Al Herbish of Saudi Arabia, current Director-General and Chief Executive Officer of the Vienna-based OPEC Fund for International Development, came into the discussion on a positive note, stating that Saudi Arabia takes its role as a reliable source of oil for the global economy very seriously. It recently announced a renewable energy or low-carbon target of 100%. Mr Al Herbish stated that the country is aimed at the sustainability of that responsibility, as well as environmental sustainability. He added that the country doesn’t just want to acquire solar or other renewable energy from other countries, but wants to develop its own renewable energy industry (including solar energy R&D and its supply chain) â€" this is similar to Masdar’s cleantech goals, and it is a topic I’ll get into in more depth in a future article.

Notably, Saudi Arabia is investing about $109 billion for solar power, and wants to be 33% powered by solar by 2032. And it recently launched a 3.5MW solar power project within its borders.

However, everyone knows that Saudi Arabia is oil rich, and it wants to cash in on that oil. A bit of a heated discussion between Mr Al Herbish and Mr Amin got going when Mr Al Herbish became quite defensive over Mr Amin’s statement about clean energy being more competitive than fossil fuels everywhere in the world. And there seemed to be a bit of a history of such discussions between those two.

Jeffrey Sachs followed the Sustainable Energy for All panel with his keynote address, which I wrote a post on last week. I’ll just paraphrase that speech once more:

Dr Sachs was watching the above panel while waiting to give his speech, and when he got up to the podium, one of the first things he noted was that the early statements from Mr Amin regarding clean energy growth around the world were nice, but that the growth was far less than adequate (compared to what the world needs to avoid considerable climate change catastrophe).

He noted that we used to think about climate change as a problem of the future, a problem we won’t be subject to. But we’re already experiencing extreme natural disasters related to climate change (disasters which really shouldn’t be considered natural any more). We will continue to face these catastrophes, and our children will face them. This year alone offered a few warning signs. First, the continental US experienced its hottest year on record, breaking 362 all-time heat records and no cold records. Secondly, drought crept across over 60% of the nation, making prices soar for several staple crops in the US and globally, and costing the US billions of dollars. Thirdly, we got slammed with superstorm Sandy. Despite previous warnings, from the Earth Policy Institute that the increased sea levels and greater risk of hurricanes or other large storms resulting from global warming had made serious flooding a key risk New York City, no work was done to make NYC more prepared for such risks or more resilient to potential damage. The result? One of the richest and most advanced cities in the world faced tremendous suffering and a breakdown of its critical systems, with many people even going without power for weeks.

Here’s a (not very high quality) video of much of Dr Sachs’ speech:

// ]]>

All in all, the Sustainable Energy for All panel and Dr Sach’s follow-up keynote speech were very interesting. They provided a good picture of where we are today, where we are going, and how we need to get to the desired future. I hope I was able to convey the key points to you all.

Like this post or find it interesting? Share it with friends!

For more content from CleanTechnica’s trip to Abu Dhabi, check out our archive pages for Abu Dhabi Sustainability Week, the World Future Energy Summit, and/or the International Renewable Energy Conference.

Full Disclosure: my trip to Abu Dhabi Sustainability Week was funded by Masdar. That said, I was completely free to cover what I wanted throughout the week, and at no point did I feel under pressure to cover any specific events or Masdar in any particular way.

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Review: The Localization Reader, edited by Raymond De Young and Thomas Princen

Edited by Raymond De Young and Thomas Princen

346 pp. The MIT Press â€" Feb. 2012. $27.00.

For decades now, automobile driving has been one of our chief metaphors for progress, as if mastering great distances somehow made for greatness of character. But the evidence is mounting that, far from moving us along a path of progress, cars are most assuredly sealing our doom. It is their alarming accession over the past century that is primarily responsible for the peril in which we find our planet, and if their reign were to continue much longer, it could spell the end of life as know it. However, it can’t continue much longer, since the fuels on which it depends are rapidly depleting. In short, our society faces an imminent, unprecedented “downshift.”

That’s the term that Raymond De Young and Thomas Princen use to describe our inevitable transition from the present global industrial complex to a steady-state, localized way of life. De Young and Princen are professors at the University of Michigan's School of Natural Resources, and they’ve edited a newly released book titled The Localization Reader: Adapting to the Coming Downshift. It includes writings on energy, ecological sustainability, healthier living, alternative economics and other relevant subjects from leading thinkers like Wendell Berry, Joseph Tainter, Warren A. Johnson and the late M. King Hubbert. For general audiences and experts alike, this is an engaging, accessible reader that takes an affirmative social change approach to localization.

“Our audience includes people who see a looming cliff but also see a rare opportunity for meaningful change,” write the editors in their introduction. Indeed, one of their core tenets is that while a transition to localized communities is unavoidable, much of the disorder and hardship that would result from a poorly planned transition can be avoided. However, De Young and Princen emphasize that in order for that to happen, we must begin the shift now while surpluses of energy and other resources still exist. We also must recognize that it’s a waste of time to appeal to national governments and other large bodies, since they’re the antitheses of the local solutions we need. Rather, our efforts should be focused at the community level.

Localized communities come in a diversity of forms and functions, a few of the better known ones being ecovillages, Transition Towns and Post Carbon Cities. These and countless other initiatives are actively being pursued by innovators around the worldâ€"albeit mostly under the radarâ€"as mitigation measures against climate change, oil depletion and other ecological threats. They’re all grounded in a recognition that communities must begin to relocalize their food production, transportation, energy and other vital systems as quickly as possible. No single one of these movements holds the key to a successful transition to sustainability. Rather, as with the so-called replacements for oil, each is simply a piece of the bigger puzzle. And we need as many pieces as we can find.

There is a widespread misconception that localization is merely globalization in reverse, says De Young, who sees this as far too limited an ideal. True localization, he explains, is a systematic, intentional process of adaptation to our changing biophysical reality. It doesn't completely eschew the non-local. A localized community need not be totally self-reliant, producing all that it needs and doing no trade whatsoever with other communities. It just needs to be self-sufficient, or to exercise as much control over its own economy as is practicable. De Young sees the ultimate goals of localization as “increasing the long-term psychological well-being of people and societies while sustaining, even improving, the integrity and coherence of natural systems, especially those that directly provision our communities.”

Another myth that The Localization Reader refutes is the equation of “technology” with gadgets and global communications. Technology encompasses so much more than that. The late E.F. Schumacher, in his seminal 1973 book Small is Beautiful, broadened its definition to include what he called “intermediate technology.” This is technology that is scaled to the community level, is heedful of each community’s resource limitations and is compatible with the human need for meaningful work. Now also referred to as “appropriate technology,” this concept has gained a big following; and The Localization Reader includes a short entry by Schumacher in which he further elaborates on it. Unlike the dominant forms of technology today, Schumacher’s technologies take after natural systems in being “self-balancing, self-adjusting, [and] self-cleansing.” Schumacher points to chemical-free agriculture as a prime example, noting that it obtains excellent yields without damaging soil fertility and health.

Environmentally conscious people find themselves in a tough dilemma, striving toward a life of lower material consumption in a society that not only encourages, but compels, ever-greater consumption. De Young speaks to the resulting cognitive dissonance in a chapter titled “Motives for Living Lightly.” He also explores the types of appeals that tend to be most successful at motivating people to make ecologically friendly choices and reject the societal pressure to do the opposite. Drawing on a survey study that he conducted, he concludes, surprisingly, that people are not as averse to conservation and sacrifice as has been commonly assumed. Thus, it may be that the emphasis long placed on the themes of duty and necessity by environmentalists has been somewhat misplaced. The intrinsic benefits of a reduced-consumption lifestyle may not be as lost on the general population as people tend to think.

Many of the authors in this volume have firsthand experience with localized community building, and the book profits greatly from their expertise. Rob Hopkins, a UK permaculture instructor and founder of the Transition movement, is one of these experts. He describes how we can prepare for an arc of possible scenarios through a process of deliberate relocalization that he calls “planfull shrinkage.” Another fascinating perspective comes by way of landscape architect and scholar Robert Thayer. Thayer’s research has turned up the unexpected finding that, even in this halcyon age of cities, a trend has begun that focuses on bioregions inhabited by small bands of people.

The classic 1972 report The Limits to Growth receives a well-deserved revisiting in this book. Its authors, MIT scientists Donella H. Meadows, Dennis L. Meadows and Jorgen Randers, build on their original work with an examination of five tools to help us through the transition. Described as “essential characteristics for any society that hopes to survive over the long term,” these tools are visioning, networking, truth-telling, learning and loving. The authors’ thoughts on truth-telling seem especially salient in this era of rampant denialism about environmental crises. “The more you can counter misinformation,” they write, “the more manageable our society will become.”

Environmental psychologists Rachel and Stephen Kaplan contribute another compelling chapter. The Kaplans are renowned for coming up with the Attention Restoration Theory (ART), which says that time spent in nature or looking at scenes of nature improves one’s ability to mentally concentrate. Here they propose that the apathy among the general public over humankind’s crisis is due to a “lack of adequate mental models.” The conflicting, highly technical reports on environmental issues aired by the news media seem like mere abstractions to many people, with no connection to everyday life. The Kaplans urge involvement in meaningful environmental activism that puts one close to nature, as well as further research into whether such involvement improves one’s general outlook.

The one part of the book that doesn’t quite jell for me is its parting chapter, written by De Young and Princen. In spite of having spent a significant portion of the book describing all the forces at work in this predicament that are beyond human control, here they insist that “we can choose our path, we can decide to make it peaceful, democratic, just, and resilient, or not.” I beg to differ in favor of Richard Heinberg’s assessment in The Party’s Over. Heinberg argues that it’s probably too late to avoid a painful discontinuity, but that it will never be too late for efforts that “make the future better than it would otherwise be.”*

* Richard Heinberg, The Party’s Over: Oil, War and the Fate of Industrial Societies (Gabriola Island, B.C.: New Society Publishers, 2005).

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Keystone XL Pipeline – Will President Obama Violate His Own Inaugural Promises?

On January 21^st, our nation listened as President Obama made his second inaugural speech. Thousands were in attendance as he made references to a variety of topics including immigration reform, gun violence, equal pay for women, and of course, climate change.

President Obama emphasized the importance of our country’s actions in order to reduce climate change.  “We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations,” Obama firmly declared to the nation during his inaugural speech.  “We cannot cede to other nations the technology that will power new jobs and new industries â€" we must claim promise.  This is how we will maintain our economic vitality and our national treasure â€" our forests and waterways; our croplands and snowcapped peaks.”

But what about the Keystone XL pipeline? Where does that fit in the plan? Earlier this week, Nebraska Governor Dave Heineman officially approved the new route for the infamous pipeline, which will transport synthetic crude oil from Canada to the Gulf Coast. Now, Obama is faced with an epic decision. Will he approve this project and work toward his goal of new job creation and U.S. energy independence? Or will he reject the pipeline in support of his promise to protect our environment and prevent any further climate change?

To make Obama’s decision even harder, 53 senators are now pushing him to approve. One day after Heineman expressed his support for the $7 billion project, a congressional letter was written directly to the president himself.  “The factors supporting the national interest determination in 2009 are just as relevant today,” the senators stated in the letter.  “Because (Keystone XL) has gone through the most exhaustive environmental scrutiny of any pipeline in the history of this country and you already determined that oil from Canada is in the national interest, there is no reason to deny or further delay this long-studied project.”

The senators also took a second approach and stated that the Keystone XL pipeline will create “thousands of good-paying union jobs and millions of dollars in economic development for our country as a whole, none of which cost any taxpayer money.”

But pressure is coming from the opposite direction as well.  Environmentalists are claiming that this is Obama’s greatest opportunity to keep his inaugural promise to fight climate change.  May Boeve, executive director of the group 350.org, shared her attitude toward the situation, “This decision is now firmly on President Obama’s desk.  Approving the Keystone XL would make a mockery of the commitment he made at the inauguration to take action on climate change.”

Fear of damage to nearby wetlands, groundwater, plants and animals is the major reason why President Obama is so hesitant to approve.  If he does show his support, what will happen to “our forests and waterways?”  Or our “croplands and snowcapped peaks?”  But then again, if he does not approve, what will become of our nation’s unemployment rate and reliance on foreign energy sources?  Both defenders and opponents to the pipeline are closely watching, anticipating President Obama’s final decision on this drawn-out subject.  Many experts, including a former Clinton administration official, are in fact, predicting that the pipeline will receive presidential approval.  What do you think the final verdict will be?  Leave your thoughts in the comments section below.

Image: Natural Gas Pipeline via Shutterstock

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New method of producing nanomagnets for information technology

Jan. 23, 2013 — An international team of researchers has found a new method of producing molecular magnets. Their thin layer systems made of cobalt and an organic material could pave the way for more powerful storage media as well as faster and more energy-efficient processors for information processing.  

In order to boost the performance of computers and reduce their energy requirements, processors and storage media have become smaller and smaller over the years. However, this strategy is about to reach the limits imposed by physics. Components that are too small are unstable, making them unsuitable for secure data storage and processing. One reason is that even one atom more or less can change the physical properties of electronic device components significantly that consist of only a few atoms. However, the exact number and arrangement of atoms can hardly be controlled in metals and semiconductors -- the materials that these components are made of today.

One way out of this dilemma could be so-called "molecular electronics," with nanometre-scale components made up of molecules. Molecules consist of a fixed number of atoms, can be designed specifically for various purposes, and can be produced cost-effectively in an identical form over and over again. If the magnetic moment of the electron -- the "spin" -- is also exploited in addition to its electric charge, it looks as though it may even be possible to implement entirely new functionalities, such as non-volatile RAM or quantum computers.

Molecules for such "molecular spintronics" must have specific magnetic properties. However, these properties are very sensitive and, so far, frequently become lost if the molecules are attached to inorganic materials, which are required for conducting electric current. This is why a team of researchers from Forschungszentrum Jülich, the University of Göttingen, Massachusetts Institute of Technology in the USA, RuÄ'er BoÅ¡ković Institute in Croatia and IISER Kolkata in India pursued a new strategy exploiting the unavoidable interactions between the molecules and their substrate in a targeted manner to produce a hybrid layer that exhibits molecular magnetism and has the desired properties.

The researchers grew a thin film of zinc methyl phenalenyl, or ZMP for short, a small metalorganic molecule which in itself is not magnetic, on a magnetic layer of cobalt. They showed that ZMP forms a magnetic "sandwich" only in combination with the cobalt surface and that it can be selectively switched back and forth between two magnetic states using magnetic fields. In this process, the electrical resistance of the layer system changes by more than 20 %. In order to produce these "magnetoresistive" effects necessary to store, process, and measure data in molecular systems, researchers often required temperatures well below -200 °C.

"Our system is highly magnetoresistive at a comparatively high temperature of -20 °C. This is a considerable step forward on the way to developing molecular data storage and logic elements that work at room temperature," says Jülich scientist Dr. Nicolae Atodiresei, a theoretical physicist at the Peter Grünberg Institute and the Institute for Advanced Simulation. He and his Jülich colleagues played a major role in developing a physical model that explains the properties of this material with the help of calculations on supercomputers at Forschungszentrum Jülich.

"We now know that it is necessary for the molecule to be practically flat," says Atodiresei. "Two molecules then form a stack and attach themselves closely to the cobalt surface. The cobalt and the lower molecule then form the magnetic sandwich, while the upper molecule serves as a 'spin filter' and allows primarily those electrons to pass whose spin is suitably oriented." The orientation can be controlled by means of a magnetic field, for example. On the basis of their findings, the researchers are now planning to further optimize their sandwich system and modify it in such a way that the filter effect can also be controlled by electrical fields or light pulses.

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The above story is reprinted from materials provided by Helmholtz Association of German Research Centres.

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Journal Reference:

1. Karthik V. Raman, Alexander M. Kamerbeek, Arup Mukherjee, Nicolae Atodiresei, Tamal K. Sen, Predrag Lazić, Vasile Caciuc, Reent Michel, Dietmar Stalke, Swadhin K. Mandal, Stefan Blügel, Markus Münzenberg, Jagadeesh S. Moodera. Interface-engineered templates for molecular spin memory devices. Nature, 2013; 493 (7433): 509 DOI: 10.1038/nature11719

Note: If no author is given, the source is cited instead.

Disclaimer: Views expressed in this article do not necessarily reflect those of ScienceDaily or its staff.

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The CapEx-OpEx Fallacy, Electric Cars, and Biofuels

Jim Lane

“Electric power is cheap”, and “cellulosic biofuel costs less than $1.00 per gallon”.

So why isn’t everyone buying a Chevy Volt? And why can you get lower interest rates on your Visa Card than next-gen biofuel developers face?

It’s the old capex-opex (Capital Expense vs. Operating Expense) fallacy.

Earlier this week, a new study from researchers at UC Santa Barbara determined photovoltaics to be much more efficient than biomass at turning sunlight into energy to fuel a car.

“Even the most land-use efficient biomass-based pathway,” the researchers wrote, “(i.e., switchgrass bioelectricity in U.S. counties with hypothetical crop yields of over 24 tonnes/ha) requires 29 times more land than the PV-based alternative in the same locations.”

Which raises two fundamental questions. First, why don’t all biofuels developers close shop and go home? Second, why for all that efficiency are the sales of battery-electric vehicles so low?

Time for a fresh look at the data.

Turns out that rational consumers â€" i.e. you â€" make choices not based on land use but on price and preference.

To cite an example, it takes more land to support a US football football team than an MLS soccer team, so why does anyone watch the Super Bowl? It takes far more land to produce a pound of hamburger than a pound of grass, so why doesn’t McDonalds sell grass? Yada yada yada.

But there’s something else in this analysis that is more important to look at.

The comparison â€" between biofuels-ICU engines and the solar-electric engine driving option â€" is actually a variation on the business model for selling razors and blades, or printers and inks.

You know how it goes, you buy a cheap printer for under $100, then spend a fortune on the ink.It’s the old capex-opex fallacy.

What is that? “Low operating expense doesn’t always lead to the best choice” â€" because the capex might be unaffordable, unfinancable, or so high that no operating efficiency will ever make up the difference.

Comparing the all-electric Chevrolet Volt to the comparably-sized Chevrolet Eco Cruze, the New York Times reported that (based on a workup from TrueCar), the payback period on a Volt was 26.6 years. After the article appeared, rebuttals surfaced placing the true break-even period at 8.7 years.

8.7 years!? 26 years?! Cars go vintage at 25.

The 8.7 year payback required the Volt owner to never drive more more than 38 miles in a single excursion, was based on a gasoline price of $3.85 per gallon (vs the current average price of $3.31), 15K miles driving per year (vs. the real-world average of 13.4K) and based on a $7,500 subsidy given to the Volt buyer.

And â€" oops â€" that all-electric subsidy that, by law, will sunset if Chevrolet’s all-electric sales ever climb above 200,000 cars in a single year. In short, if it helps the economics so much that you actually want to buy an all-electric, it goes away.

That’s like Mom saying “If you get a job this summer, you can can give us all the money you earn for extra rent.” Yes, Mom. Looking at the want ads right now, Mom.

We might add, the costs are based on a car without many of the trimmings â€" the MRSP of a fully-loaded Volt is $46,265 â€" and, surprise, you need to install a $490 charging system in your garage â€" if you have one â€" and it takes four hours to power up.

Cost, recharge time and range anxiety â€" that’s why the general public has not embraced the electric car.

Perhaps one day soon the economics will change. Sigh.

Turning to advanced biofuels

When it comes to biofuels as a system, too â€" beware of the capex-opex fallacy â€" that any system is a feasible system as long as the operating costs are low.

Or vice-versa. Just in case I can interest you â€" step right this way, sir and madam â€" in a FREE phone! …er, pay no attention to the man with the five year mobile contract with those debilitating prices.

One of the highly-touted advantages of all next-generation biofuels platforms is that it provides a work-around for a dependency on a single feedstock such as corn, sugarcane or soybeans â€" and prices for all those feedstocks have soared over the years, regardless of whether you think biofuels or other sector demands or input costs are to blame.

It was Coskata that first tipped a potential, roughly four years ago, for a fuel with an operating cost of $1.00 per gallon. The company picked up a tremendous amount of attention with that line of argument. So why has the company been unable to construct its first commercial plant, even more than a year after being “open for business” after the highly-successful conclusion of its pilot project?

In fact, the company has pivoted away from biomass and towards natural gas as a feedstock for its first commercial plant. Why is that, if it can produce fuel at $1.00 per gallon?

Ah, it’s the capex-opex problem, again.

Cellulosic fuels, for sure, have access to transformatively low-cost biomass. For example, a bushel of corn yields around 50,000 BTUs per dollar of corn, depending on how you value the co-products. By contrast, a dollar of $55 per ton biomass brings you 140,000 BTUs or so â€" if you use the Coskata yields of 100 gallons per ton.

So why is there so much corn ethanol and so little cellulosic ethanol?

The answer lies in the capex â€" because it costs less than $2 per gallon of installed corn ethanol capacity, vs somewhere between $6 and $12 per gallon for cellulosic ethanol capacity, depending on which technology you choose.

Given the cost of capital for high technology in these nefarious times we live in, that’s why there aren’t cellulosic ethanol plants cropping up everywhere, every day. And that’s why, if you ask advanced biofuels developers what they are working hardest on, it is knocking down the capital costs.

When the Congress passed the 2007 Energy Independence and Security Act, it probably seemed incomprehensible to lawmakers that credible technologists â€" backed by credible investors, with significant offtake contracts and low-cost inputs â€" could get lower financing costs for a shopping spree charged to a Visa Card than for their emission-busting, energy security-promoting and job-creating technologies.

Perhaps one day soon the financing economics will change. Sigh.

Here’s a thought. Maybe one of these days, someone is going to produce a car with a fuel nozzle that only accommodates, say, renewable diesel â€" and they are going to offer you “FREE FUEL FOREVER!” and simply load the projected lifetime cost of the renewable fuel into the cost of the car.

At an average of $3.30 per gallon, 30 mpg, and 13,000 miles per year for five years, it would add about $7,150 to the price of the car. Even if drivers doubled up on fuel consumption because of the all-inclusive effect, the difference would still be less than the premium paid, at this time, to drive an all-electric.

Hoo-boy, I wonder what people will write then. They probably will point out the capex-opex fallacy â€" and would be right in doing so. But I see an awful lot of low-cost printers flying off the shelves at my local Best Buy â€" don’t you?

Between now and then â€" beware of the free printers, phones, the cheap razors, $1 per gallon cellulosic ethanol, and buying an electric car in order to save money. Buy an electric car in order to do something positive and personal for the environment, or because you like the zippy acceleration or the low-noise. If you do, rock on with your Tesla (NASD:TSLA) and peace on you, my friend.

But leave off with the smug glance for your hard-pressed neighbor, just trying to pay the bills, who chooses the lower-cost route of embracing a biofuels-powered vehicle â€" and who ought to be getting your “awesome!” or your fist-bump, not your gentle shove under the bus.

And, we might add: beware of research papers that put some lipstick, for those who haven’t seen it before, on the old capex-opex fallacy.

Disclosure: None.
Jim Lane is editor and publisher  of Biofuels Digest and BioInvest Digest where this article was originally published. Biofuels Digest is the most widely read Biofuels daily read by 14,000+ organizations. Subscribe here.

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Cost Of Electricity From Rooftop Solar By Australian State — Super Competitive!

Mediocre Adelaide solar

Electricity from rooftop solar is now very cheap in Australia compared to grid power. But just how much solar electricity costs a household over the life of a system is not an easy question to answer, as it depends on location, the cost of capital, feed-in tariffs, and other factors. As a service to readers, and to keep my parole officer happy, I have spent a lot of time this week crunching numbers to determine the cost of electricity from new rooftop solar for households in the population center of each Australian state. I have intentionally avoided being optimistic in my calculations and locked my rose-tinted glasses away in order to determine the cost of electricity from a mediocre solar installation. That is, one that is far from perfect, but assumes that people aren’t stupid enough to do things such as install the solar panels in permanent shade or upside down.

In order to determine the cost of rooftop solar electricity, I took into account the factors detailed below. All costs are in Australian dollars, but if you prefer US dollars, don’t worry, the two are very similar. If you want the precise amount in greenbacks, just add 5%.

The Cost of Solar (Solar $/watt): I have used the latest available figures on the average cost of solar in each Australian state, which are from December, and I used the cost of three kilowatt systems, as they are currently the most commonly installed size. Their average installed cost was $2.06 a watt. Without our Goods and Services Tax and Renewable Energy Certificates, they would cost households about 15% more.

The Cost of Money: Generally speaking, someone who owns a house roof in Australia can borrow money at about 6.25% or less, so I will use that figure for the cost of capital. If someone wanted to pay for a system with a credit card, a basic one can have an interest rate of 11.8%.

The Cost of Grid Electricity (Grid cents/kWh): Australians now pay an average of about 27.5 cents a kilowatt-hour for electricity, with considerable variation between regions. Determining what people actually pay in an area is difficult, as electricity retailers can be deliberately confusing. Personally, I’ve had four different retailers tell me that they are the cheapest in my area. Obviously, at least three of them are lying. For comparison purposes, I’ve provided the cost of grid electricity in different regions, and because of the intentional confusion, it is possible the figures may be slightly too high, and so, unfair to electricity retailers, but as far as I am concerned, electricity retailers can bite my not at all shiny and only slightly metallic arse.

Insolation: The amount of sunshine in Australia varies depending on location. Checking out a solar map of Tasmania, I see the place is quite shady by Australian standards, while Queensland is of course the Sunshine State, and Western Australia is the world’s largest oven. I have used a figure that is typical for where the bulk of a state’s population lives, and not a sun-blasted outback location where clouds are so rare that young children flee from them in terror.

Efficiency: It’s quite common for people’s roofs to not be optimally aligned for collecting solar power. Usually, the easiest solution to this problem is to use a slightly larger system rather than attempt to rotate or tilt the house. Australian solar averages around 80% of what it would produce if the panels were perfectly aligned, so this is the figure I’ve used even though it is brought down by the occasional stupid installation, such as under trees or facing south in the southern hemisphere.

Electricity Export: Very few Australians use all the electricity produced by their solar systems and normally export some to the grid. Just how much is exported mostly depends on the size of a system compared to total electricity use and whether or not people are home during the day. For everyone except Tasmanians (because they’re special), the higher the portion of solar electricity exported, the higher the cost of rooftop solar. I have assumed that 50% of the electricity generated by rooftop solar is exported. Just how much this electricity is worth depends on the feed-in tariff.

Feed-in Tariffs (FiT cents/kWh): These have a huge effect on the cost of solar electricity and vary from state to state, and can also vary within states. Just to make things nice and confusing, it’s possible for neighbours to have different feed-in tariffs. In Tasmania, a kilowatt-hour exported is worth the same as a kilowatt-hour bought from the grid, while in other states, feed-in tariffs can range from over 23 cents per kilowatt-hour down to 8 cents a kilowatt-hour or less. For my calculations, I have used the lowest feed-in tariff that applies to a large portion of a state’s population.

System Life and Maintenance: Rooftop solar lasts a long time and doesn’t need much in the way of maintenance. A 10-year warranty for inverters and a 25-year warranty for solar panels is the industry standard. So, if something goes wrong in the first 10 years, the homeowner shouldn’t be out of pocket, and for at least the next 15 years after that, it’s only the inverter that might require money to replace. I’ve allowed $25 a year per kilowatt of capacity to cover inverter replacement and any other maintenance that might be required. I think this is too much given how cheap and reliable inverters are likely to become in the future, but I’ve decided to err on the side of depressing miserableness. I’ve assumed the lifespan of rooftop solar is 30 years. I think it can be relied upon to last longer than this, but 30 years is already longer than a considerable number of Australian houses will last, so it will do.

The cost of rooftop solar to households in cents per kilowatt-hour is shown below for the capital city of each state:

As can be seen, throughout Australia, rooftop solar is cheaper than grid electricity, and in four states, it is less than half the cost of grid power. Due to cloudy skies, a low feed-in tariff, and relatively low grid electricity prices, Melbourne’s solar electricity cost is only about 20% less than the price of grid power. Hobart has the second cheapest solar electricity despite being less sunny than Melbourne, thanks to a high feed-in tariff, while Adelaide is the runaway winner because of a high feed-in tariff, high electricity costs, and sunny dispositions all round.

Recently in Australia, games of Kick the Support for Solar have been popular in State Parliaments, and there have even been surprise rounds played at the Federal level. While I’m confident that South Australia’s and Tasmania’s feed-in tariffs are safe for now, if they were reduced to the low 8 cents a kilowatt-hour often seen in other states, the cost of solar electricity per kilowatt-hour would be 14.5 cents in Adelaide and 18.5 cents in Hobart.

I have assumed that the lifespan of rooftop solar is 30 years. However, some people may be considering putting solar on an older house that might not last that long or on a beach house that might only have a decade or two before the ocean eats it. For these people, I’ve worked out what the cost of solar would be per kilowatt-hour if the system only had a lifespan of 15 years:

So even with its lifespan cut in half, rooftop solar is still cheaper than grid electricity in most states, about the same in Brisbane, and only more expensive in Melbourne. In Adelaide, it is still below half the cost of grid electricity.

Although it has been a bone of contention for centuries now, many philosophers (some of them called Bruce) agree that Australians have free will and so are not bound to pay the average price of rooftop solar in their state, but are free to shop around and buy the cheapest available if they wish to do so. Looking at newspaper advertisements this month, I see that the cheapest systems are around one third less than the average cost. So, electricity from a low-cost installation that is two-thirds the average price would cost:

So, for a low-cost installation, solar electricity is around half the cost of grid electricity or less in all state capitals and astoundingly cheap in South Australia.

And for my final trick, I will determine the cost of solar electricity from a low-cost installation if it is bought by credit card:

So, even if it’s purchased by credit card, rooftop solar can still produce electricity at below the cost of grid power throughout Australia, and in Adelaide it is less than one third the cost of grid power. That’s pretty impressive.

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Alternative Energy Investing for 2013

By Harris Roen

2013 is poised to be an exciting year for alternative energy investors. Despite the conflagration solar had in 2012 we see opportunities there, as well as in wind and energy efficiency. This article also reveals why 2013 is shaping up to be a good year for the stock market in general, and alternative energy in particular.

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Solar

If 2011 was a bad year for solar, with the bankruptcy of Solyndra, tariff wars with China, and other damaging events, then 2012 was a disaster. The Ardour Solar Energy Index (SOLRX) lost 35% in 2012. This is on top of a blistering 66% loss in 2011!

The chart below shows the change in net profit margin from 2011 to 2012 for the largest solar companies. Performances were not stellar in 2011, only 12 out of the 13 companies turned a profit and the average net profit margin was just over $5 million. In 2012, however, only one of the companies posted a tiny profit, and companies averaged over $28 million in losses. I could throw up similarly downbeat charts for other measures of financial health, including earnings per share (EPS), price to book ratios, and sales growth.

Even analysts’ projections for solar earnings have come way down. In 2011, the average EPS estimate for these large solar companies was a meager 0.57 one year out. In 2012, analyst EPS estimates dropped to a very negative average assessment of -1.72. Though depressing, this reality jived with my forecast at the beginning of 2012, where I predicted another year of rough sledding for solar stocks.

Despite the gloomy statistics, financial and energy analyst may look back at 2012 as the turnaround year for solar. Many individual companies (particularly the upstream photovoltaic (PV) manufacturers) are facing economic realities of oversupply and falling PV prices, which will ultimately lead to bankruptcies or mergers. According to IHS iSuppli Market Intelligence, the number of PV suppliers is expected to plunge by 70% in 2013. Those left standing, however, will profit immensely, since solar is a white-hat energy source that is likely only at the beginning of its long-term growth story.

It is very hard to pick winners and losers in this environment, so a broad collection of solar stocks is likely the best route for adventurous investors to take from here. One good option is a Mutual Fund (MF) or Exchange Traded Fund (ETF) concentrated in solar. For MFs, I currently like Guinness Atkinson Alternative Energy (GAAEX). Market Vectors Solar Energy ETF (KWT) also looks like a good value.

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Wind

One of the fastest growing clean energy sectors is wind. The chart below shows projected growth of installed wind power in the three largest marketsâ€"the EU, North America and China. In 10 years, the amount of installed wind could more than triple from current levels, and in 20 years it could grow by 8 times! Moreover, this chart does not even include other important growth regions around the world.

Another exciting and dynamic area in renewable energy is offshore wind, and the Obama administration is starting to move forward on this. According to the U.S. Department of Energy (DOE), the generating potential of offshore wind in areas with less than 100 feet of water equals the entire generating capacity of the U.S. electric system!

Bloomberg reports that at the beginning of January, the Bureau of Ocean Energy Management started to gage interest in offshore wind leases for 127 square miles off the coast of New York. Also, in 2013 the administration plans to conduct competitive lease auctions off the Massachusetts coast.

Since there are very few publically traded pure-play wind companies in the U.S., a good way to add wind to a portfolio is by investing in ETFs. Two good examples are First Trust ISE Global Wind Energy Index Fund (FAN), and PowerShares Global Wind Energy Portfolio ETF (PWND). Though these funds were down between 15% and 20% for 2012, they have bounced back nicely since their July lows. In fact, both funds are up in the 33% range since that time.

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Energy Efficiency

One of the most promising investment areas for 2013 may come from the area of energy efficiency. From an economic standpoint alone, smart efficiency measures that businesses and individuals can deploy have a short payback period, and many can bank immediate cost savings.

In 2012, Fidelity Investments featured energy efficiency as a “compelling investment opportunity.” According to Fidelity, global power needs are expected to rise 50% in the next 25 years, creating an increasing market for more efficiency lighting, engines and buildings.

Energy efficiency companies tracked by the Roen Financial Report have done extremely well in the past three months. Almost three quarters of stocks have been gainers, and 45 companies, or fully 20% of those energy efficiency businesses covered, have gained over 25% for the quarter.

Companies I like as long-term investments in energy efficiency include A. O. Smith Corp. (AOS) and Tetra Tech, Inc. (TTEK). AOS is in the commercial and residential water heating business, which has a strong balance sheet, excellent sales growth, reasonable debt levels, and its stock is considered undervalued in the high 60 to low 70 price range. TTEK is an engineering and management firm whose services include water resources, energy efficiency and carbon management. It is a very well-managed company with excellent free cash flow, but its stock is considered overvalued at current prices. If it dips to the mid to low 20’s, TTEK would merit a look.

I have no doubt that energy efficiency companies with good management and strong balance sheets will do well in 2013 and beyond.

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Oil Prices

Even though the Roen Financial Report does not follow big oil, we do track oil and natural gas prices very closely. As reported previously (Volume 3, Issue 12), the long-term prospects of solar, wind and other clean energy options are clearly tied into the cost of the prevailing dominant energy source, which are petrochemicals.

Until recently, oil was a commodity that traded principally on supply and demand, or on the perception of how supplies may be squeezed due to regional conflicts. In the past several years, however, oil prices have turned into a proxy for how traders believe the economy, and thus the stock market, will fare. The logic goes that the more economic activity occurs, the greater oil consumption will be. Since 2009, the price of a barrel of crude oil has been almost exactly correlated to the S&P 500 index.

Of course, other factors will contribute to the price of oil in 2013. New drilling technologies are on the rise, giving life to what were thought to be unproductive wells, which will increase supplies. This increased production efficiency, though, has associated environmental issues. Also, the increased production will be more than offset by increased consumption, particularly by developing countries. For example, according to the International Energy Agency, energy consumption in China is likely to double in 10 years from 2008 levels, and triple by 2025!

Since I believe increased consumption will continue to more than offset increased production, I envisage that oil prices will continue to be pegged to the stock market. Because of this, domestic crude oil prices should rise slightly to the $100/barrel range by year’s end, but may peak out at $115/barrel at some point in 2013.

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As Goes January…

Alternative energy stocks do not exist in a vacuum, so it is important to look at the prevailing stock market trajectory in 2013.

There is a saying on Wall Street “as goes January, so goes the rest of the year.”  Indeed, since 1950, the direction of the stock market in the month of January foretold the movement of the market for the rest of the year 70% of the time. Additionally, almost all Januarys that had over a 5% gain (11 out of 12) predicted a gain for the rest of the year. In fact, the average gain in those years was 17%, far exceeding historical averages.

So far the stock market, as measured by the S&P 500, is up 4.8% since the beginning of the year, and is on track to have continued gains for the month. Even more impressive, alternative energy stocks are up 9.2% so far for the year on average. Even if you take out volatile penny stocks, gains averaged 8.1%. Considering this I feel all stocks, including the alternative energy sector, will have a very positive 2013.

Another reason I believe stocks will do well in 2013 is that the economy is improving. Unlike the gloomy years of 2009-2011, where a continuum of bad economic news was the rule of the day, 2012 revealed some financial bright spots. These include improved business sentiment, a turnaround in housing, and healthy stock market returns.

Also, companies are still primed for business investment. S&P 500 companies in total have over $4.2 trillion in cash and short-term investments on hand, a 4.2% increase from the previous quarter, and 6.6% above levels of the same quarter last year.

Another positive is that inflation remains low. The chart below shows the annual change in the core rate of inflation over the past 50+ years. Though there was a 2.1% jump in the past 12 months, the graph clearly shows inflation is well below the long-term average. A low inflation rate has always been helpful for the economy.

I believe inflation will remain tame, despite unprecedented amounts of government spending. The “Velocity of Money’ (the rate at which money flows through the economy) is still very low, and actually dropped in 2012. Unless this indicator picks up, we do not see excessive inflation coming any time soon.

The bottom line is that low interest rates and plenty of corporate cash will be a strong driver of stocks in 2013, including the growth industries within alternative energy.

About the author

Harris Roen is Editor of the “ROEN FINANCIAL REPORT” by Swiftwood Press LLC, 82 Church Street, Suite 303, Burlington, VT 05401. © Copyright 2010 Swiftwood Press LLC. All rights reserved; reprinting by permission only. For reprints please contact us at cservice@swiftwood.com.

Disclosure

Individuals involved with the Roen Financial Report and Swiftwood Press LLC do not own or control shares of any companies mentioned in this article, but it is possible that individuals may own or control shares of one or more of the underlying securities contained in the Mutual Funds or Exchange Traded Funds mentioned in this article. Any advice and/or recommendations made in this article are of a general nature and are not to be considered specific investment advice. Individuals should seek advice from their investment professional before making any important financial decisions. See Terms of Use for more information.

Remember to always consult with your investment professional before making important financial decisions.

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