Solar Saves Lives

Although this blog is focused on value and money, there is nothing more valuable than human life. That's why I am pleased to write about a nifty gadget that uses solar energy and plastic to bring clean drinking water to the poorest of the world.

Both Gizmag.com and ecofriend.org have articles about the Solaqua, an inexpensive device that uses the sun to purify water. Water Barrels and Storage

It was designed by "...Jason Lam, a student at the University of New South Wales in Australia. It was runner-up in the student division of the 2009 Australian Design Award - James Dyson Award announced on May 29."

Simply, the device has a central funnel with a filter, that then distributes the water to 5, two liter bottles. The bottles have black bottoms to concentrate the rays of the sun, and the plastic is designed to reflect the UV rays of the sun. This method is known as SODIS (Solar Water Disinfection) and is recommended by the World Health Organization. Discover Top Rated Mighty Leaf Herbal Tea. Tea lovers love our delicious herbal tea blends. You will too. Save 25% on your first order!

As an American, I am used to clean drinking water from the tap. However, having traveled to China, Vietnam, Thailand, and other countries without clean drinking water, I know just how blessed we American's are. Water borne pathogens kill millions of people each year, with children and the elderly hardest hit. A simple system such as Solaqua can help prevent many of these deaths, cheaply and easily.

The true value of any innovation is how much it helps promote human life. To Jason Lam and SODIS.ch, I salute you and encourage you in your work! I also encourage my readers to take active steps to promote clean drinking water to the poorest among us.

Solar Does Make Sense, For Small Applications

Although I am critical of solar energy for power plants, I do believe it is efficient for low voltage applications.

To that end, Sharp has released the "industry's thinnest" solar module. Measuring .8mm thick, this module is currently being used to power its Solar Ketai, a solar-powered, waterproof cell phone.

What I like about this story is that solar is being used to power low voltage-requiring applications. While this has been done with calculators for years, it is finding new applications to power, like attic fans (which I have in my house and it works great).

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Were I an investor in solar companies, I would focus on these types of applications, as they quick wins. Additionally, they incrementally remove devices from the grid as the technology improves. However, I still believe the use of solar for large-scale electrical generation is nowhere near ready for prime time.

When one calculates the cost of producing the photovoltaic cells, mirrors, and associated equipment, then batteries, transformers, and storage, it is staggering. Then, one has to use vast tracts of desert, which can be environmentally sensitive, to deliver a limited amount of power during a limited period of time to an insufficient grid.

For more on the specifics, read "Nuclear, American Style," and the other 7 articles on this topic I have written. The keyword is nuclear.

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But good for Sharp! I am excited to see more and more devices efficiently using solar power.

Windmills and Solar Fail to Reduce Carbon Emissions

In what can be seen and judged as a triumph for the free market and an epic failure for government interference, Der Spiegel reports the following headline:

Wind Turbines in Europe Do Nothing for Emissions-Reduction Goals

The story, authored by Anselm Waldermann, explains that the "greening" of German electricity, "Roughly 15 percent of the country's electricity comes from solar, wind or biomass facilities, almost 250,000 jobs have been created and the net worth of the business is €35 billion per year." Ok, not bad, but what's the catch?

It turns out the that carbon credit trading scheme hasn't accounted for any reduction in carbon emissions, and Waldermann places the blame on the EU-wide emissions trading system. As it turns out, the system determines the total amount of carbon output. However, it hasn't reduced that amount as new alternative energy plants are built. In other words, carbon credits are oversupplied. Cheap? No. 100% Free. Trade stocks for free on Zecco.com. The Free Trading Community. www.zecco.com

So, now what, cries German climate-sensitive folks. Well, like most things bureaucrats design, they don't consider human nature. Companies aren't going to run and spend millions of share holders dollars to build windmills when they build a new coal plant cheaper. Mountain House Freeze-Dried Food

This story does have a happy ending! The German Green Party recognized that the best way to make this system work is to spend the money more efficiently. And here is the "A-HA!" moment:

"When reduction of CO2 emissions is more cheaply achieved through insulating a building than using a wind turbine, that is where we should concentrate our support."

And here is the chart that goes with the proverbial light bulb:

The Costs of CO2 Reduction
To reduce CO2 emissions by one ton, it costs (in euros):
Building Renovations (90% of cases) <0>100
Modernizing an old black-coal power plant 20
Reductions in industrial CO2 emissions >20
Replacing black coal with natural gas 28
Brown-coal power plant with carbon capture technology >30
Modernizing a new black-coal power plant 50
Replacing brown coal with natural gas 50
Black-coal power plant with carbon capture technology >50
Biomass >50
Biofuel >50
Wind Energy 50-60
Geothermal Energy >100
Solar Energy (Photovoltaic) 300-500
* A value less than zero indicates that the measure is actually profitable.
Sources: McKinsey, RWE, German Renewable Energy Federation

As one can clearly see, it doesn't make sense to spend tons of money to reduce carbon, rather, making simple changes is considerably more profitable. That is what business is all about. When a company can reduce costs and still deliver a high quality product, they will make a profit and share holders will be happy. In the words of Nelson Muntz, "HA-HA!"

The Free Market Strikes Yet Again!

What started off to be a piece gently mocking the heavily subsidized alternative energy disciples has actually left me somewhat humbled.

In an article from the "New York Times" titled "Dark Days for Green Energy," there was much wailing, moaning and gnashing of teeth around wind, solar and geothermal suffering from the credit crisis. Smugly, I was going to point that in peoples' faces and remind them that cheap and plentiful coal, as well as clean, renewable nuclear power were the way to go.

However, when I started looking into the big 3 solar stocks, SunPower (SPWRA), Suntech Power Holdings (STP), and First Solar (FSLR), I found something quite surprising. They are all pretty decent stocks that are doing well. While they are below there 52 week high, it seems the solar market is actually hanging in there, despite what the New York Times says. Surprised, aren't you? I didn't think so.

It turns out that these companies are locked into some pretty sweet deals with major power companies to install solar plants and that is driving the share price. While we can successfully argue the merits of solar, you can't argue that the stocks have done well. So yes, I made a snap judgement that was wrong.

However, about this I am right, neither solar, nor wind are currently profitable in the free and open market and require tremendous subsidies, that is, American tax payers are making up the difference. Further, wind and solar don't produce reliable power like coal, natural gas, or nuclear.

In short, I was taken in by the New York Times. What I thought was going to be an article bemoaning the crumbling of the alternative energy market actually turned out to be desperate plea to increase "green" funding in the stimulus bill. How could I have been some dumb?

***I am not a licensed financial adviser/planner/etc. This article doesn't constitute financial advice. If you buy the stocks listed in this article, you are on your own. You have been warned.***

Solar Doesn't Make Sense in Dubai

Of all the places in the world for solar to work well, the U.A.E would come to mind. Gulf states have very little rain fall, uninhabited tracks of land, modern infrastructure and plenty of cash.

Dubai, the most well-known of the Emirates, has a "green" building code and is pushing ahead with environmentally friendly buildings.

However..., in a recent article in Arabianbusiness.com, Nakheel, the Dubai real estate development company found, "The use of solar power in construction is not economically justifiable right now..."

It turns out that the costs to store solar energy are just too expensive. Additionally, the technology is still too novel to make it profitable. From the article, ""We had a case recently where I wanted solar panels to be used in one of our projects, but after looking into it we discovered that this would have added US $3 million (AED11 million) to our project costs," he said. From a business perspective, we can't justify using solar power right now."

While I think or would have thought that solar would be a no-brainer for Dubai, it just isn't. Additionally, the technology won't make it economically efficient for some time. What bothers me more, however, is the following quote: "People are realising that economics isn't going to be the only driving force for green technology," he said. "The focus on sustainability will actually drive this market."

So, we are to substitute a nebulous concept known as "sustainability" for a known metric, economic efficiency. If anything makes people not buy in to the environmental agenda is that it just doesn't make sense. You may feel good about it, but it hurts you in the pocket. Yikes.

Nuclear, American Style

I have written about nuclear power on two occasions, "Build Wind, Drop Nuclear? Germany Loses its Mind!" and "Nuclear, Silver Bullet or Money Pit." While I generally have a positive outlook on nuclear power, I must agree with William Tucker, author of "Terrestrial Energy: How Nuclear Power Can Lead the Green Revolution and End America's Long Energy Odyssey," which is due out in September, as to how the US can do it better.

In the 7-12-2008 edition of The Wall Street Journal, Mr. Tucker writes an editorial titled, "Let's Have Some Love for Nuclear Power." He outlines the strengths and weaknesses of the current energy situation in the US, and points out how coal, while abundant and efficient, creates significant amounts of CO2 and other pollutants. He also clearly spells out the costs and inefficiencies of solar and wind.

What makes Mr. Tucker's discussion unique is that he points out the need to allow investors to decide whether to invest in nuclear, and not just rely on subsidies. As I mentioned in my "Silver Bullet" post, some companies have decided not to pursue new nuclear plants. For nuclear to be successful, a stable, regulatory environment must be in place, as well as re-allowing the recycling of spent nuclear fuel.

Government, yes I said government, can help out in both instances. Regarding regulation, the US government has improved and streamlined the process for building new plants. Now all it needs to do is overturn that genius president, Jimmy Carter's ban in fuel recycling. Tucker gives an easy to understand example. France, which has produced 80% of its electricity needs from nuclear over the past 30 years, recycles its spent fuel. The waste product fits in one small underground room. Imagine if the existing spent fuel could be recycled for fuel, as well as industrial and medical purposes, not only would nuclear power be even less costly, but actual waste would be reduced.

Let's here it for more clean nuclear power, as well as nuclear recycling!

Guess what?! I've got a fever, and the only prescription... is more cowbell!

Like Christopher Walken says in the Saturday Night Live sketch, leftists around the world say about taxes. However, it really goes something like this: "There is some made up crisis, and the only prescription is more taxes!" Or government control, but you get the picture.

In a previous post, "I'm the Taxman, Yeah the Taxman," I detailed how the United Kingdom is looking for more taxes to make the UK more "green." Not to be outdone, the wild man from Tennessee, Al Gore, according to CNN, "...has pushed for polices that would reduce the emission of carbon dioxide, such as greater energy conservation and the development of alternative energy sources like wind and solar energy. Gore has also advocated for governments to tax the emission of carbon dioxide."

Why is Al Gore promoting this? Because he is a big fan and shareholder in a carbon credit business, but I digress.

Green taxation, according to the Institute for Local Self-Reliance, has been around for 15 years. It seems that they want taxes to:

* to generate revenue to pay for damages created from past pollution and for measures to reduce future pollution

* to change behavior

* combine(s) a significant pollution tax with a major restructuring of the tax system to make the overall economy more efficient. This process is called "tax shifting."

While they recognize green taxes are regressive, that is they hurt poor people the most, and not folks like Ted Kennedy and Barbara Streisand, the ILSR states: "One way to deal with the inequities resulting from an across the board carbon tax would be to return a significant portion of the revenue to the low income community for energy efficiency."

Well look what we have here. It is all just another income redistribution scheme with a helping of Nanny State on top. So there you have it, the earth is falling apart! Tax everybody! Leftists have the answer! Do I need to put in a sarcasm tag?

Nuclear, Silver Bullet or Money Pit

When discussing the "energy crisis," one of main issues is electricity, including its generation and distribution. In the US, electricity is mainly generated by burning fossil fuels, however, nuclear power generates about 20% of nations electricity, with hydroelectric, and to a much smaller degree wind and solar rounding out the list (numbers, source EPA).

When considering what is the most efficient as well as "best" for the environment, nuclear seems to be a pretty good option. Its day to day generation of electricity doesn't produce any green house gases or other pollutants to global warming adherents fear. Were that not enough, the French produce 80% of their electricity through nuclear power. So why not more here in the US? Cheap? No. 100% Free. Trade stocks for free on Zecco.com. The Free Trading Community. www.zecco.com

In the July 7, 2008 print edition of "Business Week," there is an article titled, "Nuclear's Tangled Economics," (which is the source of all quotations in this post). It highlights presidential candidate John McCain's desire to have 100 new nuclear power plants. The article also highlights that current estimates put the cost at new plants at about $7 billion dollars. While that number is expected to grow as the cost of materials to build the plants grow, the question is whether it makes sense for power companies to build them.

One the first issues any such project is going to contend with is the cost of regulation. Fortunately, the US has standards for building new plants, as well as more efficient regulation. However, some power companies have decided to drop their projects. Most notably, MidAmerican Energy Holdings, "... a gas and electric utility owned by Warren Buffet's Berkshire Hathaway, shelved its own nuke plan earlier this year, saying it no longer made economic sense." Protect your Medical Identity with TrustedID. $1,000,000 Warranty & Great Customer Service

While Berkshire Hathaway shareholders should be grateful for the careful financial management of the company, they may also consider that NRG Energy, Dominion Resources, Duke Energy, and "...six other companies have already leaped to file applications to construct and operate new plants largely because of incentives Congress has put in place." The incentives are not just tax credits, but also $18.5 billion in loan guarantees. Considering the status of the credit markets, the loan guarantees can make all of the difference. eFax Annual Subscription

While nuclear energy is clearly one the best, proven, and clean technologies for electricity generation, it isn't without commercial risk. Each power company is going to have to review the risks, their capital positions, and the economic climate to determine is building a new, nuclear power plant is right for the share holders.

Is Solar just Blowing Sunshine?

When initially deciding the four topics to start off my blog, I included solar because of its popularity. Solar energy is a very broad topic and this post is not intended to cover all possible aspects and applications of solar. Instead, I will focus on photovalic applications and not other more sophisticated uses, as many are still in the research phase.

In simple terms, photovalic modules are used to collect solar energy which is then transformed into electricity. This electricity can either be AC or DC. In some instances, such as calculators, garden lighting, and other applications with very low electrical requirements.

However, when compared with traditionally generated electric power, solar is not economically efficient. The US Department of Energy states:

"The cost of larger PV systems (greater than 1 kW) is measured in "levelized" costs per kWh—the costs are spread out over the system lifetime and divided by kWh output. The levelized cost is now around 30 cents/kWh." http://www1.eere.energy.gov/solar/pv_quick_facts.html

As of January, 2008 the US average cost per kWh was 10.2 cents, well below the solar cost of 30 cents/kWh. Again, this figure comes from the US Department of Energy, http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.html



So, why is solar so popular? In many respects, it is the new, shiny toy. Also, there is the allure of "free" electricity. However, as the old adage states, "If its too good to be true, then it probably is." One has to recall that to convert one form of energy to another, there is loss. When one burns coal, heat is the main output, true also for any fuel that burns. What makes coal and fossil fuels in general, more efficient is that their combustion creates very high amounts of heat per unit. This heat is generally used to create steam, which then turns turbines (dynamos) to create electricity.

Solar has potential, but at today's cost points, it is only economically efficient in certain applications. Personally, I am renovating my home and looked into solar roofing shingles, as well as other PV collectors. In both cases, their cost well exceeded the benefits. However, a solar-powered attic fan may be just the thing.

Dollars and Sense Topics for Discussion

The list of topics to be analyzed has grown! The new ones are in red:

1. Using Corn and Sugar Cane to Create Ethanol Fuel
2. Carbon Offsets
3. Gasoline Hybrids
4. Solar
5. Reformulated Gasoline
6. Nuclear Power

In each of the above cases, without a government subsidy, these very popular topics may be economically inefficient and not born out by the market.