"It is exciting to know that our politicians have finally recognized the importance of maintaining our infrastructure, but is "smart grid" a real improvement or is it just a new buzz word with no substance"
-Frank from Villa Park, IL-
To understand smart grid, let us first discuss what "the grid" means. We use electricity every day in our homes, our cars, our places of work. In most cases, this electricity originates as another form of energy (coal, oil, natural gas, nuclear) which is converted into electricity through the act of burning or releasing energy to drive a rotating shaft. The places and equipment that transform these raw forms of energy into electrical energy - known as generators - create noise and air pollution (among other issues) and generally do not get built close to the customers they serve. The series of cables (to allow flow from one point to another), transformers (to match the right potential to the right situation), switches and relays (to regulate what energy can flow when) that connect these sources of electrical energy to our homes, offices, etc. are what make up "the grid".
For those that want a more detailed history of how our current grid infrastructure came into existence, the Edison Tech Center has a straightforward review of the topic. For over one hundred years, the grid has functioned to transmit electrical energy in one direction, from a small series of point-sources of power to a vast number of individual users. Relays and switches protected the system from damage, and transformers allowed for the transmission of high voltage power across long distances which could then be "transformed" to lower voltage power at the building level. All of these devices maintained a steady flow of electricity from the source to the user.
The water references, abundant in electricity transmission, may confuse the issue a bit, as they suggest that systems can store electricity - like water - and use when needed. The great limitation of electrical energy comes from the fact that the generators can only supply what the users need at any one time. Unlike natural gas or oil, any excess generation goes to waste (at best) or oversupplies a system (at worst), so managing the grid requires a delicate balance to match generation to load (or need for electricity).
With this as a backdrop, the concept of a "smart grid" sounds simple enough: add "intelligence" to all the devices in the system and share information about real-time activity. That does not tell the whole story, however. Most leading researchers in the arena of "smart grid" (who, by the way, are gathered in Chicago this week for an international workshop that will help shape the next wave of research into smart grid) actually refer to them as "micro grids" preferring to focus on the size, scale and functionality rather than solely on the additional intelligence - of which they have plenty. Micro grids have several key components that define them:
1. The grid operators have more information about the distribution of energy at all levels through digital meters and sensors strategically placed throughout the system.
2. End users have much more information about how much energy they use, at what time, and for what duration.
3. As the name implies, the micro grid represents a finite subset of infrastructure at a particular scale. The functionality that flows from this decision allows for more local generation (mostly renewably created), more specific matching of power quality to load need, and a greater amount of reliability by decreasing the need for large sources of power far away.
4. Multidirectional (although not simultaneously so) flow of electricity within and around the grid.
The increased metering, increased flow of information, and decreased reliance on "far away" generation resources changes the relationship between generator and user, creates a scenario in which greater accuracy of generation matches the load, and establishes more sources of electricity within a particular area. With the increased monitoring, the grid can allow energy flows in multiple directions enabling flexibility for more sources local to the users. Traditionally one-way electricity flow yields to more "loop" structures that provide greater resilience by allowing a single load to be served from multiple points in the grid. Electricity storage in large battery systems, coupled with the intelligent information and response systems, provide more reliability about the flow of electricity, and better backup in case of failures.
The addition of information systems, replacement of old switches with new devices, and deployment of generation sources all require investment. In Illinois, some of those costs have been built into the costs that utilities charge us in order to accelerate upgrades. What do we get for that investment? We get greater reliability of service, decreased waste, and improved management of resources. This does not count the currently unquantified benefits that come from implementation of a new technology. Although dealing with public and private utilities generally requires a heavy dose of skepticism, "smart grid" or micro grid is the real deal, and we need to take smart, significant steps toward increasing the number of areas that upgrade to the newer, more resilient infrastructure.
Monday, July 30, 2012
Friday, July 27, 2012
Friday Five: July 27, 2012
How corporate partners can "drive" a push to more humane, sustainable practices.
Food mega-wholesaler Sysco pledges to liberate pigs from crates
"In a statement to the Humane Society of the U.S. (HSUS), the company wrote: 'Sysco is committed to working with its suppliers to create a gestation crate-free supply system, for the good of all. Like many of our customers, we’re going to work with our pork suppliers to develop a timeline to achieve this goal.'"
Innovation in closing the loop within processes to eliminate the concept of waste.
Microbes Treat Waste and Produce Power
"Once scaled up and further optimized, Reguera sees this research allowing farmers to process their agricultural wastes into ethanol and hydrogen, which can be stored and used as a household or transportation fuel."
A clarification on a previously shared article that hits the point.
What I left out when I wrote about lowball renewable energy projections
"Why were projections of renewable energy growth from 2000 so woefully off the mark? The main answer, which I passed over in my post, is policy."
With a projection for what is to come.
Wind Power Will Grow by 100 TWh per Year, Says IEA
"By 2017, wind power (onshore and offshore) should make the largest contribution to global renewable electricity generation after hydro at 16.7%. Between 2011 and 2017, wind power should grow on average by 100 TWh per year — an increase of 15.6%, says the IEA. Onshore wind power will account for 90% of this growth, as its capacity rises from 230 GW to over 460 GW."
And simply because I love baseball!
MLB takes part in White House sustainability forum
"Nutting and the Pirates have exemplified that green impact, as the owner spearheaded the "Let's Go Bucs. Let's Go Green." initiative at PNC Park in 2008, shortly after assuming control. The program focuses on the three key elements of recycling, conservation and awareness. The results have been remarkable, as the Pirates now divert nearly 70 percent of all waste from PNC Park out of the waste stream through recycling and composting efforts. That number has increased steadily each year from 27 percent in 2009, 36 percent in 2009, 40 percent in 2010 and 61 percent last year."
Happy Friday!
Food mega-wholesaler Sysco pledges to liberate pigs from crates
"In a statement to the Humane Society of the U.S. (HSUS), the company wrote: 'Sysco is committed to working with its suppliers to create a gestation crate-free supply system, for the good of all. Like many of our customers, we’re going to work with our pork suppliers to develop a timeline to achieve this goal.'"
Innovation in closing the loop within processes to eliminate the concept of waste.
Microbes Treat Waste and Produce Power
"Once scaled up and further optimized, Reguera sees this research allowing farmers to process their agricultural wastes into ethanol and hydrogen, which can be stored and used as a household or transportation fuel."
A clarification on a previously shared article that hits the point.
What I left out when I wrote about lowball renewable energy projections
"Why were projections of renewable energy growth from 2000 so woefully off the mark? The main answer, which I passed over in my post, is policy."
With a projection for what is to come.
Wind Power Will Grow by 100 TWh per Year, Says IEA
"By 2017, wind power (onshore and offshore) should make the largest contribution to global renewable electricity generation after hydro at 16.7%. Between 2011 and 2017, wind power should grow on average by 100 TWh per year — an increase of 15.6%, says the IEA. Onshore wind power will account for 90% of this growth, as its capacity rises from 230 GW to over 460 GW."
And simply because I love baseball!
MLB takes part in White House sustainability forum
"Nutting and the Pirates have exemplified that green impact, as the owner spearheaded the "Let's Go Bucs. Let's Go Green." initiative at PNC Park in 2008, shortly after assuming control. The program focuses on the three key elements of recycling, conservation and awareness. The results have been remarkable, as the Pirates now divert nearly 70 percent of all waste from PNC Park out of the waste stream through recycling and composting efforts. That number has increased steadily each year from 27 percent in 2009, 36 percent in 2009, 40 percent in 2010 and 61 percent last year."
Happy Friday!
Monday, July 23, 2012
Request Monday (07/23/2012): Is it easy being green?
"We are working on using less energy for our home, but I would also like to make sure my energy doesn't come from fossil fuels if that is possible. How can I do that at my home?"
-Cara from Homewood, IL-
Your question is an important one, because the only two ways that renewable energy will ever take hold and become cost effective are if either governments require suppliers to produce energy from renewable sources, or if consumers are willing to pay the cost of energy from renewable sources. Thankfully, both options are available.
First of all, in most states (Illinois included) suppliers are required by law to supply a certain percentage of your electricity from renewable sources. These renewable portfolio standards (RPS) provide the supply market a clear signal that a guaranteed amount of renewable energy will be bought (helpful to the companies investing in the generation) and provide guidelines but no firm direction on one form or another. This allows the most cost effective solution to work its way to the forefront. So, in Illinois, for example, all electricity generation in 2012 includes 7% coming from renewable sources, including 0.0035% coming from solar, meaning you are already buying renewable electricity in your home.
Second, as for buying additional "green" power for the remaining 93% in 2012, the Department of Energy has a great website to help you understand the details, but the long and the short of it are that many different options exist. Of these, the two best are:
1. If you have a choice of supplier (and in Illinois you do), and haven't already done so, you can shop for electricity suppliers that include renewable energy in their offering. That same DOE website has a map of suppliers that do this.
2. If you do not have a choice of supplier, or are in a program already that does not contain additional renewable energy generation, you can separately purchase renewable energy certificates (REC) for the portion of the electricity that does not get generated from a renewable source. A REC represents the "environmentally preferred portion" of any generated unit of electrical energy. They work like this (prices given are for example only):
* a supplier of electricity in Arizona generates solar powered electricity for $0.10 per kWh (kilowatt-hour, the standard measure of electrical energy), but can only sell it to the local community at the local rate (in competition with nuclear or natural gas) of $0.05 per kWh. They get paid as if they are generating from a non-renewable resource even though the local customer receives electricity from the renewable resource.
* a customer in Homewood wants to purchase electricity that is generated renewably, but the local offerings include mostly coal and nuclear for which they pay $0.05 per kWh.
* if the customer in Homewood enters into a contract with the supplier in Arizona, and pays them the $0.05 per kWh difference, then the supplier will certify that the Homewood customer purchased solar energy at the full price (including the environmental benefit) and the Arizona customer only purchased the equivalent of nuclear or natural gas, and therefore, none of the environmental benefit.
REC allow renewable energy suppliers to build a plant in the most advantageous location without worrying whether the local population will pay the full price for the generated electricity. Anyone across the country can buy a REC, and help that supplier stay in business. I should note that REC are beholden to a marketplace as well, and the cost of a REC can be influenced by many factors....mostly the supply of available REC and the demand for them. Right now we are in a high supply, low demand market, meaning the price is very low....too low to support "new" investment in renewable energy. At the present price, suppliers can only afford to maintain present investments, and maybe not even then. The only way to change that market is for large purchasers to enter the mix (such as when a state increases its RPS like NJ has done), or when a consumer chooses to purchase "new" REC, which are more expensive but actually cover the additional cost of generation.
One last note on REC: You'll want to make sure that if you choose to go that route, that you purchase green-e certified REC. Although it is only a voluntary standard, it helps to assure you that the supplier is not playing games with the REC.
Lastly, we have not discussed how to handle the source of energy you use for heating your home. Assuming you do not use electricity, but as most in your area, natural gas, it is a tougher proposition. You cannot switch fuels very easily to a biofuel for example, and switching to electric heat might be cost prohibitive (and less reliable). If you are worried about the environmental impact of your heating (which for natural gas is significantly less than coal or oil), you can look at carbon offset programs such as Carbonfund.org which allow consumers to pay for reductions in carbon emissions equal to the emissions associated with some aspect of their life. Similarly to REC, they are not better than switching your fuel source directly, but they provide an excellent alternative.
-Cara from Homewood, IL-
Your question is an important one, because the only two ways that renewable energy will ever take hold and become cost effective are if either governments require suppliers to produce energy from renewable sources, or if consumers are willing to pay the cost of energy from renewable sources. Thankfully, both options are available.
First of all, in most states (Illinois included) suppliers are required by law to supply a certain percentage of your electricity from renewable sources. These renewable portfolio standards (RPS) provide the supply market a clear signal that a guaranteed amount of renewable energy will be bought (helpful to the companies investing in the generation) and provide guidelines but no firm direction on one form or another. This allows the most cost effective solution to work its way to the forefront. So, in Illinois, for example, all electricity generation in 2012 includes 7% coming from renewable sources, including 0.0035% coming from solar, meaning you are already buying renewable electricity in your home.
Second, as for buying additional "green" power for the remaining 93% in 2012, the Department of Energy has a great website to help you understand the details, but the long and the short of it are that many different options exist. Of these, the two best are:
1. If you have a choice of supplier (and in Illinois you do), and haven't already done so, you can shop for electricity suppliers that include renewable energy in their offering. That same DOE website has a map of suppliers that do this.
2. If you do not have a choice of supplier, or are in a program already that does not contain additional renewable energy generation, you can separately purchase renewable energy certificates (REC) for the portion of the electricity that does not get generated from a renewable source. A REC represents the "environmentally preferred portion" of any generated unit of electrical energy. They work like this (prices given are for example only):
* a supplier of electricity in Arizona generates solar powered electricity for $0.10 per kWh (kilowatt-hour, the standard measure of electrical energy), but can only sell it to the local community at the local rate (in competition with nuclear or natural gas) of $0.05 per kWh. They get paid as if they are generating from a non-renewable resource even though the local customer receives electricity from the renewable resource.
* a customer in Homewood wants to purchase electricity that is generated renewably, but the local offerings include mostly coal and nuclear for which they pay $0.05 per kWh.
* if the customer in Homewood enters into a contract with the supplier in Arizona, and pays them the $0.05 per kWh difference, then the supplier will certify that the Homewood customer purchased solar energy at the full price (including the environmental benefit) and the Arizona customer only purchased the equivalent of nuclear or natural gas, and therefore, none of the environmental benefit.
REC allow renewable energy suppliers to build a plant in the most advantageous location without worrying whether the local population will pay the full price for the generated electricity. Anyone across the country can buy a REC, and help that supplier stay in business. I should note that REC are beholden to a marketplace as well, and the cost of a REC can be influenced by many factors....mostly the supply of available REC and the demand for them. Right now we are in a high supply, low demand market, meaning the price is very low....too low to support "new" investment in renewable energy. At the present price, suppliers can only afford to maintain present investments, and maybe not even then. The only way to change that market is for large purchasers to enter the mix (such as when a state increases its RPS like NJ has done), or when a consumer chooses to purchase "new" REC, which are more expensive but actually cover the additional cost of generation.
One last note on REC: You'll want to make sure that if you choose to go that route, that you purchase green-e certified REC. Although it is only a voluntary standard, it helps to assure you that the supplier is not playing games with the REC.
Lastly, we have not discussed how to handle the source of energy you use for heating your home. Assuming you do not use electricity, but as most in your area, natural gas, it is a tougher proposition. You cannot switch fuels very easily to a biofuel for example, and switching to electric heat might be cost prohibitive (and less reliable). If you are worried about the environmental impact of your heating (which for natural gas is significantly less than coal or oil), you can look at carbon offset programs such as Carbonfund.org which allow consumers to pay for reductions in carbon emissions equal to the emissions associated with some aspect of their life. Similarly to REC, they are not better than switching your fuel source directly, but they provide an excellent alternative.
Friday, July 20, 2012
Friday Five: July 20, 2012
Do we really need apocalyptic consequences to take action?
Wildfires ignite debate on global warming
"For some, climate change will become a fact only when its effects hit close to home. For this reason, perhaps we should expect an awareness of the need to adapt to climate change to precede a wider commitment to mitigating climate change itself. If that is the case, reporters are, finally, asking the right questions."
Do so few of us really care that we threaten our future with inaction?
Why Do Generation X Americans Not Care About Climate Change?
"Sociologist Jon Miller, the study's author, sees this as a sign of victory for the climate disinformation campaign. "I was optimistic beacuse this group of people is more scientifically literate; they've grown up in an era of of science and quantitative discussion, unlike their grandparents," Miller says. But the complexity of climate science, the long time scale it takes to play out, and seeds of doubt sown on the nightly news have caused many Gen Xers to simply tune it out."
The fact is: we can develop an energy system with no harmful emissions that is 100% renewably based within 20 years, and reach a 50% level in 10....while growing our economy.
Why do ‘experts’ always lowball clean-energy projections?
"Every time there’s a new air or water regulation proposed, industry predicts a level-10 economic apocalypse. EPA counters by saying it will only be a level-5 economic apocalypse. Invariably, it’s a level-0 economic apocalypse — low costs, lots of lives saved. Yet the political class approaches each new regulation with a peculiar Zen-like no-mind, as though it is the first such argument and all perspectives are equally supported by past experience. Same with projections of energy efficiency and renewables."
It will take some policy level decisions....
Illinois Net Metering Law Helps Grow Residential and Small Business Solar Energy Systems
“The net metering law Governor Quinn signed leads the way to more solar energy development in Illinois,” said Howard Learner, Executive Director of the Environmental Law & Policy Center (ELPC). “It provides a common-sense, economic incentive for businesses and homeowners to invest in solar and small-scale wind power systems.”
And some simple choices at home.
Cooking On The Sunny Side: How Solar Chefs Put Food On The Table
"McArdle lost power at her home in Arlington, Va., for four days during the infamous 'Snowpocalypse' that hit the Northeast in 2010. Fortunately, the retired Foreign Service officer had multiple solar cookers in her house from training sessions she had done in Afghanistan and the U.S."
Happy Friday!
Wildfires ignite debate on global warming
"For some, climate change will become a fact only when its effects hit close to home. For this reason, perhaps we should expect an awareness of the need to adapt to climate change to precede a wider commitment to mitigating climate change itself. If that is the case, reporters are, finally, asking the right questions."
Do so few of us really care that we threaten our future with inaction?
Why Do Generation X Americans Not Care About Climate Change?
"Sociologist Jon Miller, the study's author, sees this as a sign of victory for the climate disinformation campaign. "I was optimistic beacuse this group of people is more scientifically literate; they've grown up in an era of of science and quantitative discussion, unlike their grandparents," Miller says. But the complexity of climate science, the long time scale it takes to play out, and seeds of doubt sown on the nightly news have caused many Gen Xers to simply tune it out."
The fact is: we can develop an energy system with no harmful emissions that is 100% renewably based within 20 years, and reach a 50% level in 10....while growing our economy.
Why do ‘experts’ always lowball clean-energy projections?
"Every time there’s a new air or water regulation proposed, industry predicts a level-10 economic apocalypse. EPA counters by saying it will only be a level-5 economic apocalypse. Invariably, it’s a level-0 economic apocalypse — low costs, lots of lives saved. Yet the political class approaches each new regulation with a peculiar Zen-like no-mind, as though it is the first such argument and all perspectives are equally supported by past experience. Same with projections of energy efficiency and renewables."
It will take some policy level decisions....
Illinois Net Metering Law Helps Grow Residential and Small Business Solar Energy Systems
“The net metering law Governor Quinn signed leads the way to more solar energy development in Illinois,” said Howard Learner, Executive Director of the Environmental Law & Policy Center (ELPC). “It provides a common-sense, economic incentive for businesses and homeowners to invest in solar and small-scale wind power systems.”
And some simple choices at home.
Cooking On The Sunny Side: How Solar Chefs Put Food On The Table
"McArdle lost power at her home in Arlington, Va., for four days during the infamous 'Snowpocalypse' that hit the Northeast in 2010. Fortunately, the retired Foreign Service officer had multiple solar cookers in her house from training sessions she had done in Afghanistan and the U.S."
Happy Friday!
Tuesday, July 17, 2012
Request Monday-$2 short edition (07/18/2012)
"Ignoring the crazy temperature effects from the carbon pollution associated with fossil fuels...which is really hard to do this summer...aren't we about to run out of them? When will this happen? What will we do?"
- Annemarie, Wheaton, IL
I hate to give the "engineer's answer" to this question, but the real answer is....
It depends.
Plenty of factors go into determining the total amount of fossil fuel left in the earth...otherwise known as "reserves". There are three levels of reserves:
Proven reserves (subdivided into developed and undeveloped) - these represent known, accessible, and developable reserves that require nothing more than current equipment and strategy.
Probable reserves - unproven reserves that have a 50% probability of being developed at some time.
Possible reserves - unproven reserves that have a 10% probability of being developed at some time.
You can add to this unknown reserves, which would cover those reserves for which we cannot classify probability.
The best way to keep track of the remaining reserves is to know the following:
1. The current proven reserves.
2. The amount of new reserves that will be discovered.
3. The rate of usage.
Organizations like the International Energy Agency and the US Energy Information Administration do regular analysis on reserves to aid nations in planning. The information comes from energy companies and agencies that do surveys. This is helpful to both establish 1. above, and to get a good handle on 2. We can never perfectly plan how much new reserves we will find in any period of time, but historically, we can trend and come up with a good estimate.
The rate of usage proves most difficult to nail down. The simplest method to use takes the trend of current world energy use and extrapolates forward. According to the World Bank's World Development Indicators, total world energy use has increased slowly over the past decades. The following graph shows world energy use per capita as well as the energy use per capita for several countries.
However, the developing world is looking to move quickly toward the developed quality of life, and with that comes more energy use. One of the questions we must ask is whether we want that development to match our energy use. Do we want to see energy use per capita more like that of the UK, or do we think it should be more like Qatar? I have looked at three scenarios to determine the best guess as to how much available fossil fuels remain and how long we will have them available to us. This analysis has the following assumptions:
1. That new reserves are found at a rate equivalent to 23% of the energy used. This held true for 2001-2010, so we can reasonably assume it fits. Assuming this way also ties the finding of reserves to the usage and transitively the cost. As usage goes up, costs go up, and money available for exploration goes up - making it easier to increase reserves. As usage goes down, the scenario reverses.
2. That countries use fossil fuels at a rate of about 80% of total energy use. The World Bank's World Development Indicators shows this to be a fairly consistent trend over the years. If fossil fuel prices become so high that nations switch to other forms, then that could shift the analysis, but for our purposes, it is a reasonable place to start.
3. The dates resulting from the analysis show a calculated timeframe when proven reserves would be tapped based upon current patterns. It does not prognosticate when those reserves would be tapped.
4. World population continues to increase according to US Census Bureau projections leveling off sometime after 2050, but reaching a little over 9 billion people by then.
5. The use of a specific fuel for a specific activity is left out of the analysis. We assume that as one dries up, we will switch seamlessly to another to perform the same task. In this way we can look at the total usage of fuel instead of performing analysis by fuel. This will actually result in a slightly shorter timeframe of availability, but a more stable one. If we run out of petroleum and have no way to switch to liquid forms of coal or natural gas, then that would create a catastrophic event, which this analysis ignores.
The following shows the trend of reserves and calculations from 2000-2010:
Using the energy use data from the World Bank, multiplying it by the population trends, and extrapolating under three different scenarios, we get the following:
If world energy use continues on its current path, and we find reserves at the same rate we have over the last decade, current reserves will last us until 2082. If world energy use reaches levels in the UK (per capita) today, then we have until 2066. If the world increases its usage rate to that of the US, then we have until 2048. This ignores the environmental consequences of burning that much energy in that period of time.
One final note on US energy use, as the following bar chart shows, our average is not homogenous. As a country that contains within it several of the world's largest economies, we still have not settled on a national policy for energy use. The number used in the assessment above reflects the average usage, but we can still sway towards that of Texas (40-50% higher than average) or towards California and New York (30-40% lower than current average). As the world's largest energy user, we have a big choice to make.
- Annemarie, Wheaton, IL
I hate to give the "engineer's answer" to this question, but the real answer is....
It depends.
Plenty of factors go into determining the total amount of fossil fuel left in the earth...otherwise known as "reserves". There are three levels of reserves:
Proven reserves (subdivided into developed and undeveloped) - these represent known, accessible, and developable reserves that require nothing more than current equipment and strategy.
Probable reserves - unproven reserves that have a 50% probability of being developed at some time.
Possible reserves - unproven reserves that have a 10% probability of being developed at some time.
You can add to this unknown reserves, which would cover those reserves for which we cannot classify probability.
The best way to keep track of the remaining reserves is to know the following:
1. The current proven reserves.
2. The amount of new reserves that will be discovered.
3. The rate of usage.
Organizations like the International Energy Agency and the US Energy Information Administration do regular analysis on reserves to aid nations in planning. The information comes from energy companies and agencies that do surveys. This is helpful to both establish 1. above, and to get a good handle on 2. We can never perfectly plan how much new reserves we will find in any period of time, but historically, we can trend and come up with a good estimate.
The rate of usage proves most difficult to nail down. The simplest method to use takes the trend of current world energy use and extrapolates forward. According to the World Bank's World Development Indicators, total world energy use has increased slowly over the past decades. The following graph shows world energy use per capita as well as the energy use per capita for several countries.
However, the developing world is looking to move quickly toward the developed quality of life, and with that comes more energy use. One of the questions we must ask is whether we want that development to match our energy use. Do we want to see energy use per capita more like that of the UK, or do we think it should be more like Qatar? I have looked at three scenarios to determine the best guess as to how much available fossil fuels remain and how long we will have them available to us. This analysis has the following assumptions:
1. That new reserves are found at a rate equivalent to 23% of the energy used. This held true for 2001-2010, so we can reasonably assume it fits. Assuming this way also ties the finding of reserves to the usage and transitively the cost. As usage goes up, costs go up, and money available for exploration goes up - making it easier to increase reserves. As usage goes down, the scenario reverses.
2. That countries use fossil fuels at a rate of about 80% of total energy use. The World Bank's World Development Indicators shows this to be a fairly consistent trend over the years. If fossil fuel prices become so high that nations switch to other forms, then that could shift the analysis, but for our purposes, it is a reasonable place to start.
3. The dates resulting from the analysis show a calculated timeframe when proven reserves would be tapped based upon current patterns. It does not prognosticate when those reserves would be tapped.
4. World population continues to increase according to US Census Bureau projections leveling off sometime after 2050, but reaching a little over 9 billion people by then.
5. The use of a specific fuel for a specific activity is left out of the analysis. We assume that as one dries up, we will switch seamlessly to another to perform the same task. In this way we can look at the total usage of fuel instead of performing analysis by fuel. This will actually result in a slightly shorter timeframe of availability, but a more stable one. If we run out of petroleum and have no way to switch to liquid forms of coal or natural gas, then that would create a catastrophic event, which this analysis ignores.
The following shows the trend of reserves and calculations from 2000-2010:
Using the energy use data from the World Bank, multiplying it by the population trends, and extrapolating under three different scenarios, we get the following:
If world energy use continues on its current path, and we find reserves at the same rate we have over the last decade, current reserves will last us until 2082. If world energy use reaches levels in the UK (per capita) today, then we have until 2066. If the world increases its usage rate to that of the US, then we have until 2048. This ignores the environmental consequences of burning that much energy in that period of time.
One final note on US energy use, as the following bar chart shows, our average is not homogenous. As a country that contains within it several of the world's largest economies, we still have not settled on a national policy for energy use. The number used in the assessment above reflects the average usage, but we can still sway towards that of Texas (40-50% higher than average) or towards California and New York (30-40% lower than current average). As the world's largest energy user, we have a big choice to make.
Friday, July 13, 2012
Friday Five: July 13, 2012
Start with the positive: Refocusing our attention on another segment of the economy does not create job loss, but job shifting....in the “green economy” case, when practiced right, from low job density industries to high job density industries.
Another view: Economy, environment can benefit each other
“The best news is that environmental progress is being achieved together with the growing green economy and it’s helping drive Iowa’s and the nation’s economic recovery. Energy-efficient equipment and appliances, wind and solar energy development, cleaner more fuel-efficient cars and modern high-performance rail development are good for job creation, good for economic growth and good for the environment.”
Move to the disappointing: If a business or school had drops in performance equal to our nation's drops in health and well-being, we would close that school or business, no questions asked. Although we cannot “close” the country, we have to find the courage to face reality.
To make America great again, we need to leave the country
“New statistical evidence of this appears almost weekly. When it comes to student performance in mathematics, we are now 25th among the 34 advanced economies, and behind many developing countries as well. In college attendance, our previous preeminence has long faded; we are now 9th in percentage of younger workers with two-year or four-year degrees, and 12th in college graduation rate. In health, we are 37th in infant mortality and equally low in life expectancy. In environmental performance, we are 61st. In the percentage of people below the poverty line, we are 21st. Even when it comes to the "pursuit of happiness," enshrined in our Declaration of Independence as one of the noble goals of government, our citizens are only the 15th most satisfied with their lives.”
Pause at the absurd: It's not only smokers who get insurance subsidies to cover the damage they do to themselves.
Will the Farm bill prop up doomed crops in this extreme climate?
“Tom Philpott at Mother Jones observed that for all Big Ag’s talk of technological solutions to managing extreme weather, research shows that the most promising strategies come from organic practices, which focus on building soil health and resiliency, even in the face of drought.”
Linger in disbelief: I am less intrigued by the obviously partisan title, than by the fact that given the choice between the more conservative and more risky approach, the conservatives chose the riskier one. Sounds like a “bail-out” to me.
Relax Outer Banks: NC state legislature outlaws sea level rise
“Kelly Henderson quotes Tom Thompson, chair of a coastal development group that supported the legislation, as saying that a sea level rise of one meter (this was before the latest study predicting a higher rise) would mean “you could lose millions of dollars in development and 2,000 square miles would be condemned as a flood zone.” Thompson, whose organization obviously has a financial interest in the outcome, argues that it would be unwise to delay investment while a new study is conducted.”
And end on a high note: We take the easy way out when we import energy into our communities and export garbage...if you had to deal personally with the consequences of your waste and energy generation, what different choices would you make?
Brazil's attempt at Distributed Generation: Will net metering work?
“Importantly, the latter possibility would allow net metering program participants to distribute/transfer credits among multiple electric service accounts, for instance, on a multi-tenant commercial property. It would also encourage the development of “community” renewable energy installations, which has been well-accepted in other countries, particularly in the United States and Germany.”
Happy Friday!
Another view: Economy, environment can benefit each other
“The best news is that environmental progress is being achieved together with the growing green economy and it’s helping drive Iowa’s and the nation’s economic recovery. Energy-efficient equipment and appliances, wind and solar energy development, cleaner more fuel-efficient cars and modern high-performance rail development are good for job creation, good for economic growth and good for the environment.”
Move to the disappointing: If a business or school had drops in performance equal to our nation's drops in health and well-being, we would close that school or business, no questions asked. Although we cannot “close” the country, we have to find the courage to face reality.
To make America great again, we need to leave the country
“New statistical evidence of this appears almost weekly. When it comes to student performance in mathematics, we are now 25th among the 34 advanced economies, and behind many developing countries as well. In college attendance, our previous preeminence has long faded; we are now 9th in percentage of younger workers with two-year or four-year degrees, and 12th in college graduation rate. In health, we are 37th in infant mortality and equally low in life expectancy. In environmental performance, we are 61st. In the percentage of people below the poverty line, we are 21st. Even when it comes to the "pursuit of happiness," enshrined in our Declaration of Independence as one of the noble goals of government, our citizens are only the 15th most satisfied with their lives.”
Pause at the absurd: It's not only smokers who get insurance subsidies to cover the damage they do to themselves.
Will the Farm bill prop up doomed crops in this extreme climate?
“Tom Philpott at Mother Jones observed that for all Big Ag’s talk of technological solutions to managing extreme weather, research shows that the most promising strategies come from organic practices, which focus on building soil health and resiliency, even in the face of drought.”
Linger in disbelief: I am less intrigued by the obviously partisan title, than by the fact that given the choice between the more conservative and more risky approach, the conservatives chose the riskier one. Sounds like a “bail-out” to me.
Relax Outer Banks: NC state legislature outlaws sea level rise
“Kelly Henderson quotes Tom Thompson, chair of a coastal development group that supported the legislation, as saying that a sea level rise of one meter (this was before the latest study predicting a higher rise) would mean “you could lose millions of dollars in development and 2,000 square miles would be condemned as a flood zone.” Thompson, whose organization obviously has a financial interest in the outcome, argues that it would be unwise to delay investment while a new study is conducted.”
And end on a high note: We take the easy way out when we import energy into our communities and export garbage...if you had to deal personally with the consequences of your waste and energy generation, what different choices would you make?
Brazil's attempt at Distributed Generation: Will net metering work?
“Importantly, the latter possibility would allow net metering program participants to distribute/transfer credits among multiple electric service accounts, for instance, on a multi-tenant commercial property. It would also encourage the development of “community” renewable energy installations, which has been well-accepted in other countries, particularly in the United States and Germany.”
Happy Friday!
Monday, July 9, 2012
Request Monday (07/09/2012): You are what you...
"I see so many labels for different types of food, and so many suspect companies using them, that I don't know what to pick. Which of these matter, and how can I tell if I'm getting something of value?"
- Camille from Brooklyn, NY
As one of the three essentials of life, food represents the biggest challenge because we have so many options, and so much marketing and advertising trying to sway our choices, that it can seem daunting to make the right decision. I review some of the main labeling below, but more importantly, you and your family should take some time and talk about the importance of food, the ways in which we produce food, and the different needs food meets in our lives. Then, you should identify some priorities to help guide your purchasing decisions. Although not an inclusive list, some of these might include: taste, cost, ease of preparation, use of chemicals, availability, or socially just food. Setting some priorities will help you sift through the morass of labeling and make the best decision for your family.
The following list notes some of the most common food labels related to environmental attributes:
Organic - The most common and contested of the group of labels refers to the method of crop growth.
According to the US Department of Agriculture, food grown organically "has been produced through approved methods. These methods integrate cultural, biological, and mechanical practices that foster cycling of resources, promote ecological balance, and conserve biodiversity. Synthetic fertilizers, sewage sludge, irradiation, and genetic engineering may not be used." The USDA manages the review of products grown organically, and as you can imagine with any regulation program, groups on both sides of the issue have their concerns. Growers and retailers (especially Wal-Mart after making some commitments to organic produce) want the requirements as open as possible while consumer and environmental advocates want more stringent guidelines. Foods grown organically carry higher price tags most of the time for several reasons: 1. The demand for them is largely among more affluent people so retailers can charge more, 2. The USDA certification requirements add cost, 3. The market is smaller. Interestingly enough, if all US farmers grew crops organically, requiring no special certification, no cost difference would exist. As an interesting case, look to Cuba's transition in the 1990s to a mostly-organic farm economy because of the embargo.
Bottom line: Because of food industry influence, it is tough to police. Your best bet is to become familiar with the additives in food and the growing practices associated with the ingredients in each product you normally purchase. I know this is time consuming, but given our habitual purchasing practices, you should not have to do it very often.
Local - The most ambiguous of the labels refers to the distance traveled by the crop from farm to customer.
No set standard exists for defining food as local. For some it can mean grown within their state, within a certain radius of miles, or even by a specific type of grower (independent vs. corporate farm). The USDA has done some more exhaustive research, and there are ardent critics of an entirely local food movement, but supporters point toward lower energy and emissions due to less transportation, better transparency of growing practices, and stronger local economies as reasons to support local farmers.
Bottom line: I personally am not about to give up my bananas, so as with anything, this requires some moderation. Look at your family priorities, and source as much as you can within your local area. Go to your community farmer's market, purchase some of your produce from a CSA, and make informed choices. For almost all of us, a completely local diet is impossible, but supporting local farms has benefits beyond our dinner table.
Fair Trade - The least impactive label on the quality of the food tries to express the social justice associated with the growing and production of a product.
Fair trade labeling gained most of its fame from coffee and cocoa production, where for years activists have claimed that corporate influences have decreased the quality of life for the growers and processors of the crops. According to Fair Trade USA, a non-profit that certifies products, fair trade means that each point in the supply chain has "farmers and workers who are justly compensated". Although that sounds a bit nebulous, FLO-CERT, an independent organization established to develop and maintain standards, has produced an ISO-certified process for determining a product's compliance with fair trade standards.
Bottom line: It will not tell you anything about the quality or environmental impact of your menu, but our society should have moved well beyond the point where we should accept exploitation just to save a few bucks on dinner. If you buy a product that does not meet fair trade standards, ask the company why they do not....then judge them by the answer or the lack of response.
ANDI: Aggregate Nutrient Density Index - The least well known and possibly most important label provides guidance on the actual value of the food you purchase.
I often like to start discussions about food and environmentalism with the following rhetorical question: "I can purchase a soup and sandwich at Whole Foods (a notoriously expensive grocery chain for organic, local and environmentally benign products) for about $13. For that same amount of money, I can buy almost 20 packages of Hostess treats. I get so many more calories per dollar from the Hostess treats, and could easily meet my family's daily caloric intake for almost no cost. Why wouldn't I do that?" Although the answer is obvious, the quantification of food value remains elusive. Whole Foods (and other retailers) have tried to start answering this question by giving consumers (hopefully) unbiased indicators of the value of food to their well being. ANDI provides just such a measure "by evaluating an extensive range of micronutrients, including vitamins, minerals, phytochemicals and antioxidant capacities".
Bottom line: Probably the best potential guidance for the consumer, ANDI and similar systems have yet to become part of the standard lexicon...like say MPG has for car fuel efficiency or Better Housekeeping for household products. It is well worth the time to review ANDI and become familiar with its application.
Overall bottom line: Each of these labels helps draw attention to what goes into your food, where it was grown, how it was produced, where it comes from, and who handled it at every step of the way. Educate yourself and make informed decisions. Do not buy a product with an ingredient you do not know, and do not buy a product from a company that does not provide living wages at each step of production. For years, we have made decisions based on "brand loyalty" (another form of labeling) assuming that companies performed this due diligence for us. Now that we have information systems that make the attributes of food production readily available to us, it is time we lower the veil and make the most informed decision that is in line with our family's priorities and values....regardless of what else is on the label.
- Camille from Brooklyn, NY
As one of the three essentials of life, food represents the biggest challenge because we have so many options, and so much marketing and advertising trying to sway our choices, that it can seem daunting to make the right decision. I review some of the main labeling below, but more importantly, you and your family should take some time and talk about the importance of food, the ways in which we produce food, and the different needs food meets in our lives. Then, you should identify some priorities to help guide your purchasing decisions. Although not an inclusive list, some of these might include: taste, cost, ease of preparation, use of chemicals, availability, or socially just food. Setting some priorities will help you sift through the morass of labeling and make the best decision for your family.
The following list notes some of the most common food labels related to environmental attributes:
Organic - The most common and contested of the group of labels refers to the method of crop growth.
According to the US Department of Agriculture, food grown organically "has been produced through approved methods. These methods integrate cultural, biological, and mechanical practices that foster cycling of resources, promote ecological balance, and conserve biodiversity. Synthetic fertilizers, sewage sludge, irradiation, and genetic engineering may not be used." The USDA manages the review of products grown organically, and as you can imagine with any regulation program, groups on both sides of the issue have their concerns. Growers and retailers (especially Wal-Mart after making some commitments to organic produce) want the requirements as open as possible while consumer and environmental advocates want more stringent guidelines. Foods grown organically carry higher price tags most of the time for several reasons: 1. The demand for them is largely among more affluent people so retailers can charge more, 2. The USDA certification requirements add cost, 3. The market is smaller. Interestingly enough, if all US farmers grew crops organically, requiring no special certification, no cost difference would exist. As an interesting case, look to Cuba's transition in the 1990s to a mostly-organic farm economy because of the embargo.
Bottom line: Because of food industry influence, it is tough to police. Your best bet is to become familiar with the additives in food and the growing practices associated with the ingredients in each product you normally purchase. I know this is time consuming, but given our habitual purchasing practices, you should not have to do it very often.
Local - The most ambiguous of the labels refers to the distance traveled by the crop from farm to customer.
No set standard exists for defining food as local. For some it can mean grown within their state, within a certain radius of miles, or even by a specific type of grower (independent vs. corporate farm). The USDA has done some more exhaustive research, and there are ardent critics of an entirely local food movement, but supporters point toward lower energy and emissions due to less transportation, better transparency of growing practices, and stronger local economies as reasons to support local farmers.
Bottom line: I personally am not about to give up my bananas, so as with anything, this requires some moderation. Look at your family priorities, and source as much as you can within your local area. Go to your community farmer's market, purchase some of your produce from a CSA, and make informed choices. For almost all of us, a completely local diet is impossible, but supporting local farms has benefits beyond our dinner table.
Fair Trade - The least impactive label on the quality of the food tries to express the social justice associated with the growing and production of a product.
Fair trade labeling gained most of its fame from coffee and cocoa production, where for years activists have claimed that corporate influences have decreased the quality of life for the growers and processors of the crops. According to Fair Trade USA, a non-profit that certifies products, fair trade means that each point in the supply chain has "farmers and workers who are justly compensated". Although that sounds a bit nebulous, FLO-CERT, an independent organization established to develop and maintain standards, has produced an ISO-certified process for determining a product's compliance with fair trade standards.
Bottom line: It will not tell you anything about the quality or environmental impact of your menu, but our society should have moved well beyond the point where we should accept exploitation just to save a few bucks on dinner. If you buy a product that does not meet fair trade standards, ask the company why they do not....then judge them by the answer or the lack of response.
ANDI: Aggregate Nutrient Density Index - The least well known and possibly most important label provides guidance on the actual value of the food you purchase.
I often like to start discussions about food and environmentalism with the following rhetorical question: "I can purchase a soup and sandwich at Whole Foods (a notoriously expensive grocery chain for organic, local and environmentally benign products) for about $13. For that same amount of money, I can buy almost 20 packages of Hostess treats. I get so many more calories per dollar from the Hostess treats, and could easily meet my family's daily caloric intake for almost no cost. Why wouldn't I do that?" Although the answer is obvious, the quantification of food value remains elusive. Whole Foods (and other retailers) have tried to start answering this question by giving consumers (hopefully) unbiased indicators of the value of food to their well being. ANDI provides just such a measure "by evaluating an extensive range of micronutrients, including vitamins, minerals, phytochemicals and antioxidant capacities".
Bottom line: Probably the best potential guidance for the consumer, ANDI and similar systems have yet to become part of the standard lexicon...like say MPG has for car fuel efficiency or Better Housekeeping for household products. It is well worth the time to review ANDI and become familiar with its application.
Overall bottom line: Each of these labels helps draw attention to what goes into your food, where it was grown, how it was produced, where it comes from, and who handled it at every step of the way. Educate yourself and make informed decisions. Do not buy a product with an ingredient you do not know, and do not buy a product from a company that does not provide living wages at each step of production. For years, we have made decisions based on "brand loyalty" (another form of labeling) assuming that companies performed this due diligence for us. Now that we have information systems that make the attributes of food production readily available to us, it is time we lower the veil and make the most informed decision that is in line with our family's priorities and values....regardless of what else is on the label.
Friday, July 6, 2012
Friday Five: July 6, 2012
Thankfully, from a resource efficiency point of view, we are returning to more density in our urban areas.
Central cities now growing faster than suburbs, confirming trends for walkable lifestyles, shorter commutes
"But the biggest change of all may be demographic: the portion of the housing market claimed by families with children, the prime market for suburban living, has been shrinking at the same time as the Millennial generation, which strongly favors walkable lifestyles and urban living, has been coming of age. Retiring baby boomers are also in many cases giving up large-lot living in favor of city life."
And as we find ways to provide quality food even in low income areas through creative social entrepreneurs....
Let them eat kale: In Harlem, a farm share for the people
"The folks behind Harlem-based Corbin Hill Farm don’t see sustainably grown local produce as a passing craze for the foodie elite; on the contrary, they’re figuring out a way to make it accessible to low-income communities on a large scale."
Hopefully we can understand how tenuously we currently organize our communities...
Another Way of Looking at the Blackouts
"In some ways, America is much richer and stronger relative to the rest of the world than most people think. But in lots of aspects, to a degree that many Americans really have a hard time imagining, the U.S. has become a backward place. (Roads are bad; cell phone coverage is really bad; internet access is slow compared with Japan or Korea; health-care system is a PITA.)"
And adopt solutions that make us stronger.
Utility Works to Unlock Smart-Grid Potential of Solar-Storage
"It's day six of the storm-induced power outage that has crippled much of the Eastern United States under unrelenting heat and painfully slow repairs. The unmistakable irony for more than 1 million people still without power on Thursday is that the sweltering sun that followed the brutal storms was tailor-made for rooftop PV with battery storage — a combination that keeps the lights on even in a blackout."
In honor of Independence Day, I admit that for all their negative impact, I love fireworks, and would welcome any change that makes them less damaging.
Green Fireworks-Environmentally Safe, That Is
"One rarely gives much thought to the toxic environmental pollution that accompanies a fireworks display. Amidst the choking black-powder smoke and sulfurous stench of a pyrotechnic Independence Day celebration, pounds of volatile compounds and heavy metals go up in smoke to make colorful explosions that pollute the air and contaminate ground water."
Happy Friday!
Central cities now growing faster than suburbs, confirming trends for walkable lifestyles, shorter commutes
"But the biggest change of all may be demographic: the portion of the housing market claimed by families with children, the prime market for suburban living, has been shrinking at the same time as the Millennial generation, which strongly favors walkable lifestyles and urban living, has been coming of age. Retiring baby boomers are also in many cases giving up large-lot living in favor of city life."
And as we find ways to provide quality food even in low income areas through creative social entrepreneurs....
Let them eat kale: In Harlem, a farm share for the people
"The folks behind Harlem-based Corbin Hill Farm don’t see sustainably grown local produce as a passing craze for the foodie elite; on the contrary, they’re figuring out a way to make it accessible to low-income communities on a large scale."
Hopefully we can understand how tenuously we currently organize our communities...
Another Way of Looking at the Blackouts
"In some ways, America is much richer and stronger relative to the rest of the world than most people think. But in lots of aspects, to a degree that many Americans really have a hard time imagining, the U.S. has become a backward place. (Roads are bad; cell phone coverage is really bad; internet access is slow compared with Japan or Korea; health-care system is a PITA.)"
And adopt solutions that make us stronger.
Utility Works to Unlock Smart-Grid Potential of Solar-Storage
"It's day six of the storm-induced power outage that has crippled much of the Eastern United States under unrelenting heat and painfully slow repairs. The unmistakable irony for more than 1 million people still without power on Thursday is that the sweltering sun that followed the brutal storms was tailor-made for rooftop PV with battery storage — a combination that keeps the lights on even in a blackout."
In honor of Independence Day, I admit that for all their negative impact, I love fireworks, and would welcome any change that makes them less damaging.
Green Fireworks-Environmentally Safe, That Is
"One rarely gives much thought to the toxic environmental pollution that accompanies a fireworks display. Amidst the choking black-powder smoke and sulfurous stench of a pyrotechnic Independence Day celebration, pounds of volatile compounds and heavy metals go up in smoke to make colorful explosions that pollute the air and contaminate ground water."
Happy Friday!
Monday, July 2, 2012
Request Monday (07/02/2012): Why should I pay for the government to pick winners?
"I notice that in order for projects to afford adding solar energy, they rely on tax credits. Is this my taxes paying for these projects, and if so, why do I want the government to be using my taxes to promote winners or losers?"
- Don from South Holland, IL
Governments use financial policy to incentivize business investment. In the US, this practice affects many industries, and takes many forms. The federal government provides direct grants for research and development, provides security or management of operations that support industries, implements regulation to provide clarity to the marketplace, or uses tax policy to improve the economics of various desirable projects.
Specifically related to the energy generation industry, the tax credits do not directly come from any of our individual tax dollars. Tax credits reduce the tax obligation of the organization that pursues the incentive...in this case, the organization that implements solar energy generation within their company or institution. In general, these credits have the effect of reducing federal tax revenues, but if applied properly the company can use the additional profit to either pay bonuses to employees, pay dividends to investors, or invest in their business. Any of these can result in the federal government collecting tax revenue from other sources, which can limit the effect of the credit. Even if the credit does reduce overall government revenues, the total effect would only slightly increase the burden on the individual taxpayer. Specifically speaking, we do not fund tax credits.
The larger question might ask whether any level of government should get involved in incentivizing industry. Energy underpins every part of our economy, and affects every aspect of our lives. Although having a cohesive energy policy would help provide a level of transparency to any incentive program, the government has an obligation to make sure that we have national security related to energy source, and that process of generating energy sources does little or no harm to our way of life. This largely takes the form of regulation - making sure that the marketplace has consistent guides to promote private investment. Sometimes this takes the form of using federal money as grants to support research and development that industry would not do under market circumstances.
We should recognize, at this point, that the government provides various forms of subsidies to all sectors of the energy industry...even those that we would deem mature: coal, oil, and natural gas. Not counting military support of fossil fuel supply lines, government support of healthcare externalities from burning fossil fuels, or even underpricing of land royalties, the US government subsidizes the fossil fuel industry at a level three times that of the renewable energy sector. Should we remove subsidies for renewable energy, we would justify removing all sources of energy subsidy. Within the renewable energy subsidies, there is generally no prescribed preference for one type of technology over another, but rather a desire to see the most effective solution reach market viability.
Given recent publicity of the failure of companies like Solyndra, I should address that most subsidies take the form of production credits...meaning that the credit goes to the entity that receives the produced energy, and not as a direct grant to the company that produces the panel. As mentioned previously, the government does issue grants to companies directly. In the case of Solyndra, the grants were issued under one market condition (i.e. a price of solar panels) and the company failed when the price dropped below the point where it could make money. I cannot guarantee that favoritism in some form did not come into play, it is much more likely that this was a failure of prognostication, not one of a political nature.
We will always need government to provide a reasonable marketplace in which business can act to support our quality of life. At no point in our nation's past has business ever, on its own, developed a technology that underpins our quality of life. The question is not whether or not we should, but rather how.
- Don from South Holland, IL
Governments use financial policy to incentivize business investment. In the US, this practice affects many industries, and takes many forms. The federal government provides direct grants for research and development, provides security or management of operations that support industries, implements regulation to provide clarity to the marketplace, or uses tax policy to improve the economics of various desirable projects.
Specifically related to the energy generation industry, the tax credits do not directly come from any of our individual tax dollars. Tax credits reduce the tax obligation of the organization that pursues the incentive...in this case, the organization that implements solar energy generation within their company or institution. In general, these credits have the effect of reducing federal tax revenues, but if applied properly the company can use the additional profit to either pay bonuses to employees, pay dividends to investors, or invest in their business. Any of these can result in the federal government collecting tax revenue from other sources, which can limit the effect of the credit. Even if the credit does reduce overall government revenues, the total effect would only slightly increase the burden on the individual taxpayer. Specifically speaking, we do not fund tax credits.
The larger question might ask whether any level of government should get involved in incentivizing industry. Energy underpins every part of our economy, and affects every aspect of our lives. Although having a cohesive energy policy would help provide a level of transparency to any incentive program, the government has an obligation to make sure that we have national security related to energy source, and that process of generating energy sources does little or no harm to our way of life. This largely takes the form of regulation - making sure that the marketplace has consistent guides to promote private investment. Sometimes this takes the form of using federal money as grants to support research and development that industry would not do under market circumstances.
We should recognize, at this point, that the government provides various forms of subsidies to all sectors of the energy industry...even those that we would deem mature: coal, oil, and natural gas. Not counting military support of fossil fuel supply lines, government support of healthcare externalities from burning fossil fuels, or even underpricing of land royalties, the US government subsidizes the fossil fuel industry at a level three times that of the renewable energy sector. Should we remove subsidies for renewable energy, we would justify removing all sources of energy subsidy. Within the renewable energy subsidies, there is generally no prescribed preference for one type of technology over another, but rather a desire to see the most effective solution reach market viability.
Given recent publicity of the failure of companies like Solyndra, I should address that most subsidies take the form of production credits...meaning that the credit goes to the entity that receives the produced energy, and not as a direct grant to the company that produces the panel. As mentioned previously, the government does issue grants to companies directly. In the case of Solyndra, the grants were issued under one market condition (i.e. a price of solar panels) and the company failed when the price dropped below the point where it could make money. I cannot guarantee that favoritism in some form did not come into play, it is much more likely that this was a failure of prognostication, not one of a political nature.
We will always need government to provide a reasonable marketplace in which business can act to support our quality of life. At no point in our nation's past has business ever, on its own, developed a technology that underpins our quality of life. The question is not whether or not we should, but rather how.
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