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Yesterday I asked what role the government should have in fostering alternative energy breakthroughs. The people who think the government can help a lot with this sort of thing often cite two examples:

1. Kennedy's race to the moon

2. The Manhattan Project to build a nuclear bomb

What do those two efforts have in common? Answer: no profit.

That's entirely different from the energy situation. Whoever figures out a way to cheaply turn seawater into fuel is going to be very rich. I would be surprised if there are any good ideas in the energy field going unfunded at the moment. My guess is that the energy investment environment has already become like the Dotcom era where venture capitalists were (figuratively) randomly knocking on dorm rooms and asking if anyone had any Internet ideas.

Someone said government can help remove red tape, or twist the arms of big companies where that needs to happen. But isn't that the reverse of how our system works? It seems to me that big companies are twisting the arms of government. So while we might wish it were the other way, reality is stubborn. And realistically, can we expect government to remove red tape?

Every now and then I have hunches about the future that feel both real and inevitable. My current hunch is that individual homes will become their own energy sources. This won't require any help from the government. All you need are three components that seem like they are creeping up on us:


1. More efficient solar cells (breakthroughs are coming daily)

2. Energy storage technology for the home, perhaps based on this:

     http://web.mit.edu/newsoffice/2008/oxygen-0731.html

3. Financing for solar cell installations


If you finance your installation of solar cells with a loan that costs you $300 a month, and save $400 a month in energy costs, you are cash positive on day one. At that point it also makes sense to have an electric car. There won't be much red tape to worry about in this model because every house is an island, and private companies can manufacture all of the parts.

I don't see the government having much of a role in creating that new world.

 
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+1 Rank Up Rank Down
Sep 3, 2008
Quote from mkjhc:
I think most things the government does works out ok. Sure there is a giant laundry list of screwups and many things could be much better, but all the important things are being taken care of. By important, I mean defense, banking system, capital management (stock market), utilities, infrastructure like roads, bridges and rivers, etc. These are not all run by the government but are regulated.
End Quote

Are you serious? Defense - ever heard of 9/11, Afghanistan, Iraq, Vietnam? Banking system - ever heard of the home mortgage and banking crisis or the savings and loan bailout? Utilities - how about the major blackout a few years ago over the entire northeastern US? Infrastructure - remember anything about a major bridge collapsing in Minneapolis? Is there anyone who lives in areas with toll roads who feel like they are getting their value out of paying the tolls? I'm sure that others who are older than me can think of plenty more examples over the past 50 years.
 
 
Sep 3, 2008

[Why did we need a $1,000 tax rebate to encourage buying a car that was in such short supply you had to wait months? Seems to me that was a waste of my tax money. -- Scott]

Because we WANTED it to be in short supply!

A short supply because of high demand will cause the market to naturally shift to increase supply. Increased supply produces (a) efficiencies which lower cost and (b) increased buzz which encourages adoption by the masses.

That's the rationale, anyway. Whether that's good policy or not is debatable, as I said. But it's the sort of change that policy THEORETICALLY can make.

And remember that it was a tax CREDIT, so it was really only ~$350 in lost tax revenue. There are worse things to spend tax money on. (And yes, I would have bought it anyway, without the credit. But it did weigh into the decision.)

Let me flip it to you, Scott. You've blogged that "having solar energy was a condition for getting the building permits from your local gov't." Why did THEY care?
 
 
Sep 3, 2008
What you actually need is an evil genius to create such a devise for his nefarious plans and...OK, this is all nice, but business is about profit, and when it makes good economic sense for business to use alt energy, then they will.
 
 
Sep 3, 2008
And I'm spending $200 to $300 (NG and Electricity) a month to heat/coll my house. A 1200 sqft bungalow built in 1939. Even if it was 10% of that, I'd happily spend $300 on a fuel cell that would give me a 100% ROI in under a year. That's what we call money well spent.
 
 
Sep 3, 2008
I agree that the government doesn't need to incent the private sector to seek profit. I suspect anyone who thinks otherwise will respond to that statement in crayon or from an institution to which they have been committed for their safety and the safety of those around them.

And the solar cell breakthrough from MIT looks pretty promising. Not that I expect you Scott to have an answer, but I have some questions regarding the fuel cells they could power; specifically how much power do they store? Obviously enough to get a house through the night. And probably a cloudy day or three.

But I live in a place where my roof con very easily be covered with snow for a week or two at a time. Longer if the winter is somewhat harsh. Will I have to have defrosters on my solar panels like I do on the back window of my car? How much will that drain my fuel cell? Will it be more than I would be able to make up during the day?

Just asking.
 
 
Sep 3, 2008
How big is your house that you pay $400/month in energy costs? I pay about a tenth of that.
 
 
Sep 3, 2008
Seems to me there at least one thing our government could do to help promote steady progress on implementation of alternative-to-fossil-fuels adoption:

Pursue a subtle foreign policy aimed at destabilizing (without toppling completely) the main oil producing nations thus ensuring that oil prices stay high and the potential profit in alternatives research remains tempting.
 
 
-2 Rank Up Rank Down
Sep 3, 2008
I think most things the government does works out ok. Sure there is a giant laundry list of screwups and many things could be much better, but all the important things are being taken care of. By important, I mean defense, banking system, capital management (stock market), utilities, infrastructure like roads, bridges and rivers, etc. These are not all run by the government but are regulated.

What the government can do is create the environment where the move to sustainable energy will florish. They have and continue to do this with various laws and regulations like fuel standards, and the requirement that the power company must accept excess electricity generated by an individual. They need to do a lot more of this toward solar and wind power, as well as move our transportation system over to some other renewable transporation fuel.

For example, suppose the government wants to use less gasoline. They can do this by requireing more fuel efficient cars be made for the market. Or they can raise the price of gas and let the market create the more fuel efficient cars. For me the former is better because I have more money for other things when I do not have to spend it on gas.

Basically, the governement can move the nation proactively instead of letting market forces react to conditions after the fact. They only problem is deciding how to guide the nation without overcontroling or going in the wrong direction.
 
 
Sep 3, 2008
Right now my home electricity bill is $70 in the summer, $110 in the winter (electric furnace.) Delivered to my house, my electricity cost is 7.2 cents/ kwh. Not even the most optimistic views have solar or wind even approaching that level of efficiency with in 25 years. And that does not count the storage efficiency or cost for batteries. Nuclear reactors are much more cost effective compared to any alternative energy supply. Furthermore, their cost is 100% American labor and 100% American resources (uranium, steel, concrete, etc). A lot of the materials used in solar cells and batteries are mined in places like Brazil. There isn't any good reason not to use all nuclear. This would eliminate all problems, and when hot fusion is eventually feasible as a power plant or if some advance is made in cold fusion, we'll use that.

[Okay, we'll put one in your back yard. -- Scott]
 
 
Sep 3, 2008
Scott:

I think you are right, that people will want homes with self power generation, just like people today want homes with indoor plumbing and wired for electricity.

The government didn't do anything to make people want a well pump and a privy inside the house; market forces did that.

But the government DID help out, so some extent, with the electricity part. The TVA is the best example that I can thing of, off the top of my head. Yes, it was an infrastructure works program (the best kind, usually), but it also created a market for the product by wiring up regions that market forces were slow to reach. It didn't create the process, but it did accelerate it.

Another program that worked is the $1000 tax credit that I got when I bought my Prius a few years back. By rewarding me as an "early adopter", it helped get more Prius' on the road. Back then, there were few, now they are EVERYWHERE. We could debate as to whether that, in the long run, is a good thing (they still run on petrol, after all), but there are ways in which the governement can act to AUGMENT desired market forces.

The government voucher program to provide "converter boxes" for non-digital TVs is another semi-sensible market augmentation.

The governement can't and shouldn't CREATE market forces, but a visionary LEADER (as opposed to a "dealer" - same letters, different order) can encourage certain trends and discourage others.

Would GM deserve a bail-out because they own lots of jobs, or deserve to be left to die because they market the Hummer, and those jobs would just shift to Toyota factories naturally as market shares shift?

That's what a president can do.


[Why did we need a $1,000 tax rebate to encourage buying a car that was in such short supply you had to wait months? Seems to me that was a waste of my tax money. -- Scott]
 
 
0 Rank Up Rank Down
Sep 3, 2008
Hi Scott,

I have to disagree that no profit was turned by the Manhattan or moon landing projects. The moon race is a better example, but both efforts were assisted by companies just waiting to get their hands on the proprietary technology and long term support contracts. It is like saying that military spending produces no profits. The MIT example you include was funded in part by a private venture for $10M. Imagine how quickly this would come around if the government gave these scientists $2B in funding, we would already be at your described future and there would be some new company making billions in profit.

If the government could focus on a single technology and fund it, it will happen. The government backed corn fed gasohol, but that is now failing. There are still huge subsidies to that industry trying to make it work, and lots of profit being made. They chose poorly back then.

Your best hope is to find a military implication for a new energy source and the government will go crazy trying to fund it, as long as Republicans are around. Just mention a photosynthesis arms gap and billions will be spent to close it. That is the solution.

dsg
 
 
+1 Rank Up Rank Down
Sep 3, 2008
Muppet,
I live in the northeast. I had a condo that had solar power for hot water heat. It works even when it is cloudy or overcast; some energy still gets through. And these were early 80's panels. The technology keeps improving. The advantage to living in California or other sunny areas is that you can generate enough to use for yourself and send the excess into the "grid" Especially in California that is a plus, they need all the energy they can get.
 
 
+1 Rank Up Rank Down
Sep 3, 2008
Given how much revenue governments receive from all the various forms of fossil fuels we currently use, once the self powered home becomes a reality then there is going to be a major hole in their budgets. And by a hole I mean a gigantic chasm !

Makes you wonder how they are going to make that money up ?
 
 
+1 Rank Up Rank Down
Sep 3, 2008
"Every now and then I have hunches about the future that feel both real and inevitable. My current hunch is that individual homes will become their own energy sources. This won't require any help from the government. All you need are three components that seem like they are creeping up on us:"
I think you are becoming a libertarian! I love it. I happen to agree with you in the broad strokes. This is going to be something that is taken care of by the private sector. The government can only mess it up. Don't believe me? Think government housing (the projects), government healthcare, VA hospitals. government charity, rampant welfare fraud.....



 
 
 
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