Alternative and Not So Alternative Energy

[michaelskis]

*Disclaimer* This is not a political discussion, but one about energy and a NEED to not only be energy independent, and the need to increase the use of alternative energy in North America to make that happen.

Good. Now that I have said that, there are a ton of energy options out there for several different applications. I don’t understand many of them, but I know that there are ways to get energy from tidal changes, wind, water, nuclear, solar, coal, natural gas, oil, geo thermal, bio fuels, hydrogen, and several other ways.

But how practical are some of the alternative energy fuels? I would love to fill up a on something other than traditional gas from oil, but there are so few options out there. My car does not run on E-85 and I hear that it is not as good as regular gas because it causes build up in the combustion chamber and lowers my mpg and increases the price of corn.

I would also be in full support of installing solar panels on my house and changing to a geo-thermal heating and cooling system, but both are so damn expensive. If I pay for them out of pocket it would likely not be cost effective because I would have to conduct serious maintenance or replacement of parts of the system before I am able to recoup my upfront costs.

I don’t like the idea of continuing to use oil for everything, but with modern refinement processes and extraction practice we have more than enough, but we still have record high gas prices. I also hear that there are ways to liquefy natural gas to be used the same way that we use regular gasoline today. But what kind of cost would it be?

What are your thoughts on alternative energy? Do you use alternative energy in your day to day lives? Do you have any ideas on how to make alternative energy more competitive with the oil market? Do you have any ideas on how to get it so that the costs low enough for the value to be worth it?

[Maister]

*Disclaimer* This is not a political discussion, but one about energy and a NEED to not only be energy independent, and the need to increase the use of alternative energy in North America to make that happen.

Good. Now that I have said that.....

[mod hat not quite on] Color me unconvinced that a thread intended to discuss energy policy is somehow NOT political in nature. I guess we'll see how it goes, but don't be surprised when it ends up getting merged into the political thread.

[michaelskis]

[mod hat not quite on] Color me unconvinced that a thread intended to discuss energy policy is somehow NOT political in nature. I guess we'll see how it goes, but don't be surprised when it ends up getting merged into the political thread.

Yea... leave it up to the libritarian to promote alternative energy.

[btrage]

Yea... leave it up to the libritarian to promote alternative energy.

What do librarians have to do with alternative energy?

[wahday]

What do librarians have to do with alternative energy?

Everything. Isn't t obvious?

M'skis, you hit on some interesting and potentially divisive issues there. We'll see how this progresses...

I think the future of energy is going to entail a rich mixture of different and diverse production methods. Which is ultimately a safer and more stable approach. Not putting all your eggs in one proverbial basket as it were.

The challenges as I see it are both cost (the solar issue you noted for example) and how to get and store the energy in forms that can be used more interchangeably (for vehicles, electricity, heating/cooling, etc.) and not require the production of entirely new products just to use new energy sources. An example of this working well is solar. You can be entirely independent and store your produced energy in a battery array, covert that fridge to a DC system (along with lights and other appliances to make it feasible to run off solar battery power), install an inverter, etc. But you can also tie in your production to the grid and thereby contribute your energy to the entire system (and as its meter tied, you will be compensated for your production should it exceed use).

As for the affordability concept, I read an article some time back about Berkeley’s efforts to help homeowners pay for solar units. They created a lending product that is akin to a mortgage (30 or 15 years, competitive rates, often even below what banks can offer through home equity lines of credit). A homeowner that goes this route can have their payment added to the mortgage payment (paid monthly together into escrow and then disbursed to the specific lender and the City). I think this is a smart way to finance such expensive improvements especially as it amounts to a substantial investment/upgrade of one’s home. It also puts it in the range of more interested homeowners.

Solar energy is unlikely to be affordable any time soon unless, it can scale up to competitive levels of production. We have seen some of that since the 70s but its very slow going. A mechanism like the solar mortgage could speed that process up.

[Gotta Speakup]

For a year or so, we opted in to our electric company's wind generated energy program. But it was 25% more expensive than regular energy which is primarily natural gas generated anyways, so we went back to regular electricity.

Our building uses cogeneration of heating/cooling and hot water. Keeping our condo warm enough to grow banana plants in January in Boston, we pay about $75 for heat in January.

[michaelskis]

Everything. Isn't t obvious?

M'skis, you hit on some interesting and potentially divisive issues there. We'll see how this progresses...

I think the future of energy is going to entail a rich mixture of different and diverse production methods. Which is ultimately a safer and more stable approach. Not putting all your eggs in one proverbial basket as it were.

The challenges as I see it are both cost (the solar issue you noted for example) and how to get and store the energy in forms that can be used more interchangeably (for vehicles, electricity, heating/cooling, etc.) and not require the production of entirely new products just to use new energy sources. An example of this working well is solar. You can be entirely independent and store your produced energy in a battery array, covert that fridge to a DC system (along with lights and other appliances to make it feasible to run off solar battery power), install an inverter, etc. But you can also tie in your production to the grid and thereby contribute your energy to the entire system (and as its meter tied, you will be compensated for your production should it exceed use).

As for the affordability concept, I read an article some time back about Berkeley’s efforts to help homeowners pay for solar units. They created a lending product that is akin to a mortgage (30 or 15 years, competitive rates, often even below what banks can offer through home equity lines of credit). A homeowner that goes this route can have their payment added to the mortgage payment (paid monthly together into escrow and then disbursed to the specific lender and the City). I think this is a smart way to finance such expensive improvements especially as it amounts to a substantial investment/upgrade of one’s home. It also puts it in the range of more interested homeowners.

Solar energy is unlikely to be affordable any time soon unless, it can scale up to competitive levels of production. We have seen some of that since the 70s but its very slow going. A mechanism like the solar mortgage could speed that process up.

I agree your thoughts on everything other than the mortgage idea. If you finance it with any interest you actually pay more for something that you are likely to repair or replace before it is paid off.

I also wonder if there is a social perception that is finally changing. I remember as a child going to the Henry Ford Museum and commenting to my uncle that someday I want a house that can generate its own power. He actually laughed and said that it would not be possible in my life time. It was 20 plus year ago and his comments were based on the technology at the time. But there are still negative perceptions about it in some places and many regulations against it.

For me, the only reason that I have not installed solar panels and geo-thermal in my home is the cost to return ratio. If they could get the efficiency up and the cost down, I think it would be far more marketable.

[DetroitPlanner]

I'm with M'ski's here, if you amortize the improvement over 15-30 years, then it substantially adds to the cost, even at today's meager interest rates, it adds up over time.

Another issue is that the shelf life of the product has to be considered, a home it made to last for more than the duration of a mortgage. Some of the energy solutions may need a substantial upgrade in the future, making you pay for stuff that is either outdated technology or broken/replaced long before the loan is done.

e-85 is a good tool to make us energy independent, However, it may lead to higher crop prices and lowers fuel economy so it is not a perfect solution. Ideally the perfect solution would be a long range electric car that gets its energy off of hydro-power, but that is not possible everywhere, nor is the technology fully developed.

I see this as an exciting time where technology is advancing rapidly. We are also stuck with the irony that the technology needs a market to advance, and that the market can't move very well because currently it costs a lot to invest in this stuff up front, and a few years from now that technology may be surpassed with something much more efficient.

I've been upgrading slowly. LEDs and CFL lighting while expensive for lighting pays off dividends in terms of cost and extends life cycles immediately over traditional bulbs. Those are no-brainers to invest in right now. The more folks buy stuff like that, the more technology will advance. Yes it does not mean the cost of sinking a geo-thermal well will go down, but its a start. It makes a difference, particularly if all do it.

The most ironic thing I find is that in spite of all of these advances, the cost of energy will continue to rise because the cost of keeping such a huge complicated infrastructure is expensive. Say you replace you toilets and install a low flow shower head and you can cut your water usage by 50%. Eventually more people will do this and the water company will need to raise rates because they still have tons of pipes to maintain and poop to treat. It is however still worth your while to invest in the new toilets when your old ones need replacement because it will be a hedge against future costs.

[michaelskis]

The most ironic thing I find is that in spite of all of these advances, the cost of energy will continue to rise because the cost of keeping such a huge complicated infrastructure is expensive. Say you replace you toilets and install a low flow shower head and you can cut your water usage by 50%. Eventually more people will do this and the water company will need to raise rates because they still have tons of pipes to maintain and poop to treat. It is however still worth your while to invest in the new toilets when your old ones need replacement because it will be a hedge against future costs.

WOW... you are Debby Downer today...

As a side note, I noticed that with smart phones. My wife and I are on a shared plan were we have unlimited minutes and unlimited texts, but they put a cap on our data use. Before we had a cap on our text and minutes, but unlimited data. It is all about ways to shift costs to where the demands are.

[wahday]

I agree your thoughts on everything other than the mortgage idea. If you finance it with any interest you actually pay more for something that you are likely to repair or replace before it is paid off..

I had this same question and I am certainly not an outright proponent of this approach as I don't really understand the details. But this issue of the system being a depreciating asset that will have to be upgraded is not different from using a home equity loan to,say, finance a bathroom or kitchen remodel or any other number of home improvements that increase the home's overall value. That stuff will wear out and require maintenance, upkeep and replacement of parts also. Same with major systems like roofing or siding or HVAC. They all have a limited lifespan and home equity loans (second mortgages) are a common way people pay for these. I think Berkeley was seeking to offer loans below what most can get through home equity lines and also be able to reach some people who may otherwise have had trouble accessing such loans (though I am sure there is due dilligence in qualifying since its public money). Also, improvements and upgrades would not cost nearly as much as the initial install as much of the system will require minimal replacement if at all (mounting brackets, for example, or wiring). Panels and inverters may be the main components that will wear out.

The main thing here is to think of the solar setup as an integrated system of the home that adds to its overall value (which either you will recoup upon resale or you can borrow against as leverage). In fact, in some places (and I believe it may include all of California) solar system installation increases property value but you don't pay more in property taxes. Its an incentive to get more households contributing to the grid.

[ColoGI]

I had this same question and I am certainly not an outright proponent of this approach as I don't really understand the details. But this issue of the system being a depreciating asset that will have to be upgraded is not different from using a home equity loan to,say, finance a bathroom or kitchen remodel or any other number of home improvements that increase the home's overall value. ...

The main thing here is to think of the solar setup as an integrated system of the home that adds to its overall value (which either you will recoup upon resale or you can borrow against as leverage). In fact, in some places (and I believe it may include all of California) solar system installation increases property value but you don't pay more in property taxes. Its an incentive to get more households contributing to the grid.

The issue here with purchasing is made more interesting because solar panels facing the street make the house more in demand and the sales price increases. Add an Energy Star suite of appliances and you could be talking 20% home value increase. Second, there is a business model that is popular here in the sunny states where a business leases your roof to generate power. You can enter into a Power Purchase Agreement with a number of options - this business model is related to part of my work right now. Also, too, depreciation isn't as high as on, say, a freezer, and amortization on historically low mortgage rates is doable and some states allow either a write down or tax credit, eliminating the depreciation/amort issue. Soon, though, leasing will catch on in many places and it will be a moot point.

[DetroitPlanner]

WOW... you are Debby Downer today...

All I am trying to say here is that we have diminishing use of our infrastructure and with every foot of additional pipe, road, electric line or transit line you add, the more expensive it is going to be to take care of the system. It does add a huge cost to providing the not so alternative energy and well as to some of the alternative energy. You mention cell phones. Smart phones are impacting how much the road system is being used. Everything from using them to find where the nearest location is of a service to the use of it to determine when the next bus is coming will decrease revenues from gas taxes and increase the use of highly subsidized transit (I say this because most transit is funded though gas taxes).

This will be one of the biggest planning issues in the near future. We must reduce the costs of providing infrastructure however we can, No longer will it be acceptable for the road agency to rebuild a road one year then have the sewer department come in a year or two later and tear up a section of that road. This will require closer coordination and a lot of work for planners. We also need to begin to addresss where we have added capacity and how to use it. Is it better to put in a road diet and provide bike lines or are rain gardens needed to reduce issues in areas with CSOs?

I don't see this as being a downer, but rather a shift that we need to prepare for. More and more of the cost of utilities is going to be increasing not just because of the cost of the energy source, but the cost of delivering that to the user. I am excited by the new technology coming on line that will improve things. The efficiency is coming, but there will be serious consequences if we do not address it correctly.