Wednesday, September 7, 2011

Green Jobs

Where are all the green jobs we were promised? What went wrong? We spent billions of tax dollars in subsidies that were supposed to jump start a green economy? From my perspective its very simple. First of all you can't realign an entire economy in the first half of the first term of a new presidency! What has happened so far is just testing the waters, making some mistakes and learning from them. As cynical as I am about political involvement in the economy, real progress has been made. Alternative energy has come to the forefront of our thinking. Solar electric technology, wind, biomass and others have been given a great demonstration and even an industry kick start. Some of the major players are now going bankrupt. What do you expect when you give a big company millions of dollars in subsidies to commercialize their technology? You not only create a business culture that depends on that subsidy and wastes it, you hurt that company's competitors who are trying to accomplish the same goals with all the real market forces to fight with. Governments picking winners and backing them seems to me like a desperate last resort effort to save a dying economy. I learned recently that one of my biggest competitors was given millions of dollars to develop a low cost solar hot water heater using unglazed solar panels. We already did just that in 1994. I'm jealous and bitter about this. I can't help thinking I missed out and I deserve some free money from the unsuspecting taxpayers but that's crazy. That flies in the face of everything we at Hot Sun have stood for from the beginning. None of this means to imply that "programs" are always a bad thing. The reality is that solar needs help. Fossil fuels are so cheap. The playing field needs to be leveled somehow. It just means we need to do better. We need to co-ordinate these programs so they all work together toward a common goal, in this case apparently, creating jobs. Or was it to get us off foreign oil? Or was it global warming we were concerned about? On one hand we closed the Chicago carbon exchange when congress quashed any idea that we might have any kind of cap and trade system for carbon. On the other hand we offer a subsidy of 30% in the form of a federal tax credit for qualifying solar technology. The qualifying technology is solar electric and solar hot water. Both those technologies have long payback periods. They aren't viable economically without the subsidies, at least not yet. The technology that doesn't qualify is our technology. Pool heating. Solar pool heating makes economic sense and we can see payback periods of as little as 2 years. Look at this monitored site in Kamloops British Columbia.

So why subsidize technology that is not as viable as other technology? Is it that pool heating isn't important? You don't have to heat your pool and pools are just for rich people. Or are they? Pools are actually for middle class families with children growing up, the pools that are used anyway.

But here's the good news. All this attention to these less viable technologies has created interest in doing what we can with solar energy. People woke up and said yes, let's solar power our future. The question is starting to become how? We're almost at the point in history where the public and the government purchasing agents have recognized that solar is great but its too expensive. Now that the economics questions are being asked we're slowly getting the attention of various potential clients who are just starting to understand that small scale solar hot water heating is kind of hopeless. You only spend $300 a year heating hot water for your house and a solar hot water heater is $8,000. We can do one with unglazed panels that won't produce as much as the glass covered beast that saves about $150/year. We can only save maybe $100 a year but we can do it for $2500. Even so there's no real market and no-one doing this wants to take a compromise on performance. When a buyer gets educated and still wants to do it she's not doing it for the short term payback anyway. She's investing in cool technology to improve her home and she is thinking long term. Large scale hot water heating is where the economics play a role. We'll soon finish an installation in Richmond BC on an Aquatic Center. We're preheating 16 showers with a 5000 gallon tank and 2000 sq ft of Powerstrip When you're heating hot water you're really heating cold water up to hot water and if the load is large you can put up a lot of solar and collect a lot of energy just heating water from 10 to 30C. That's all the roof space that is available so why put expensive solar panels on it that operate more efficiently at 60C when the highest the collectors will ever get is 30C? This project would never have gone ahead if the City of Richmond hadn't first decided they wanted solar heating. They took their time and didn't get caught up in the now expired grants in Canada. They hired an engineering firm to play judge and jury and ultimately designer and general contractor. We're just getting started with some smarter approaches. Ironically it only happened because the industry did get a boost from the subsidies and those benefits will take a long time to play their way thru the system. Its worth mentioning since it is so ironic and comical that we never took advantage of any of the subsidies to get to this stage as a technology developing company. The ones who did are mostly starving and close to bankruptcy now that the grants are gone. The exact same thing will happen in the US if and when the tax credit disappears. We need to learn from the tax credits. One thing the US could learn from Canada is that you have to cancel the tax credits to learn what their spin off benefits really are. With the grants in Canada we were stuck. Nobody was looking at anything but how to take their share of the free money. Our technology was overlooked.

In BC there is a carbon tax that increases over time. Its not going away. Very smart politically. It is why 30% of our sales are in BC this year. Last year our sales in BC were 3%. The subsidies in the US will not do anything if there isn't something long term like a carbon tax to motivate the market in the right direction. Nobody likes a new tax but if done right it can mean lower taxes elsewhere so its just a tax shift not a new tax. Without cap and trade or a carbon tax or carbon regulation there is no point in subsidizing solar energy in the US. Burning things to create energy will always be cheaper than trying to collect solar energy or even wind. We have to make the conscious decision as a society that we are going to reduce our dependence on fossil fuel. We were on the right track for a while but we got sidetracked with the bad economy. We need to keep our eye on the target and keep moving in the right direction. We've only just begun. People aren't even thinking carbon tax in the US yet. That attitude has to change before anything can begin because without a carbon tax we'll just burn oil and gas and when that is gone or if it gets more expensive we'll burn the forests and when they are all gone we can still burn each other's dead bodies. Without some kind of regulation you can't blame us for just burning the planet to keep ourselves warm. Its complicated and it'll take time so please don't give up on the alternative energy/ green movement before we've begun.