In just a few days President-elect Obama will be President Obama.The economy remains the main agenda item, but this does not mean that environmental initiatives are being left behind.With just a few days left before he takes office Obama took time on Friday to visit the Cardinal Fastener & Specialty Company in Ohio that makes parts for wind turbines and give a speech there. The choice of this plant was no accident of course.In Obama’s speech there he pushed his economic stimulus package, talking about the 3-4 million jobs he hopes to save or create, many of which are tied to the production of renewable energy.By including large new investments in renewable energy and energy efficiency, Obama is working to help both the economy and the environment at the same time.
The $850 billion economic stimulus plan, known as the American Recovery and Reinvestment Plan, includes support for renewable energy, and investment in green buildings.The details of the plan being unveiled include $20 billion in incentives for a variety of forms of renewable energy, and $54 billion to improve the grid and to invest in energy efficiency in buildings, the electrical grid, and transportation.In addition to solar and wind, the plan includes incentives for a broad range of other forms of renewable energy such as waste to energy, methane from landfills, and geothermal energy.
“That's why, as part of our Recovery and Reinvestment plan, we're committing to double the production of renewable energy in the next three years, and to modernize more than 75% of federal buildings and improve the energy efficiency of two million American homes.
In the process, we'll put nearly half a million people to work building wind turbines and solar panels; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to new jobs, more savings, and a cleaner, safer planet in the bargain.”
Wow.I don’t know about you, but that sounds great to me, not just a step in the right direction, but a pretty big leap.
It’s about time.We have some leaping to do.
We’ve had a great deal of grass roots action on the green front, with people, local and state governments taking the lead in the absence of environmental leadership at the US Government level.This might be changing.While the grass roots efforts are a wonderful start, an effective response to the really large problems we face requires a coordinated effort at the highest level, with strong leadership.Many businesses these days are hiring Chief Sustainability Officers, the Chief Green.Obama might just be our next Chief Green for the US, providing national leadership on both economic and environmental recovery.
During the presidential campaign (remember the campaign?), Thomas Friedman remarked that he was less concerned if we have the first black president, or the first woman president, than if we have the first green president.The show’s not over yet, but the previews look good.Let’s keep the green grass roots growing, and do what we can to support this kind of bold national action that moves us forward toward a brighter future.
As more businesses work to do a better job at reducing their environmental impact, they are looking at the impact of meetings that they hold, including the venues like hotels that are used for offsite meetings and travel.More and more hotels are actively seeking to reduce their environmental impact, to save money, do the right thing, and attract business.Kit Cassingham writes and consults about the hows and whys of greening of the hospitality industry, helping businesses do a better job at being environmentally sensitive.She has been involved in the hospitality industry since 1985, and the environmental arena since 1972. She founded Sage Blossom Consulting in 1989 to consult with the bed and breakfast industry and in 2004 she actively merged her environmental conservation and hospitality backgrounds.
To help people find eco-friendly venues and places to stay during travel, a great starting point is a resource that Cassingham has created at Environmentally Friendly Hotels.Her database includes over 3000 hotels that are ranked according to a variety of parameters, including their efforts to conserve energy and water, use renewable energy, reduce waste, serve organic food products, and to use eco-friendly products.
Many hotels don’t actively promote green efforts, so you might have to do some asking to find out about the efforts sites are making behind the scenes.To narrow down your list when you are looking for a hotel, Cassingham suggests a checklist of the green issues that matter to you so you can ask questions about environmental practices such as: - Do you use only durable serving items; plates, cups/glasses, flatware, linens, etc? - Is your food locally sourced and organic? - Do you compost? - Do your recycle, and if so, what? - How much of your electricity is from renewable energy? - Do you have a sheet and towel reuse program? - Do you have bulk amenity dispensers in the guestrooms? - Can your attendees opt out of having a newspaper delivered? - Do you recycle, and if so are their recycling bins in the guestrooms? - Do you donate to charity? - Are you sheets and towels made of cotton or other natural fibers (as opposed to polyester blends)?
“Leave smaller footprints when you travel. Be conserving away from home too,” Cassingham advises.Many small steps like these can add up to make a big difference.
One of Thomas Friedman’s messages in his latest book, “Hot, Flat, and Crowded” is that the green economy is not having a real impact yet on the huge problems like climate change that we face.In his chapter “205 Easy Ways to Save the Earth” he says that there is no green revolution yet on the scale needed to solve things, but more of a “green party”, with consumers looking for quick and easy solutions.Friedman is an astute observer, and I agree with most of what he writes.I’d like to make a distinction here though that I think might be important.
“We are trying to change the climate system - to avoid the unmanageable and manage the unavoidable!” Friedman writes, expressing the scale of the problem and his frustration with the lack of coordinated global action.It is true that we have yet to take significant action at the national level on climate change or replacing fossil fuels with renewable energy.Despite state and regional efforts like the RGGI, there is still no national price on carbon in the US, and we are a long way from success in the next international climate agreement, one which needs to include the US, China, and India.These are big steps, and necessary ones to get where we need to go.So far the CO2 levels in the atmosphere just keep on rising, with no evidence of any slowing.
Government action on a scale this large is not likely to be easy.Friedman is right about this also I think.There are entrenched interests who are not excited about putting a price on carbon to fight climate change.They will fight it using every weapon in their arsenal, including lobbyists, money and media.
The good news is that many businesses are realizing the need for action on climate change and pressing for change.Still, Friedman argues that we will not see the US Government put a price on carbon until people demand it, marching on Washington and making the alternative, continuing with the status quo, politically untenable.He views the green economy as a distraction that distracts us from this larger goal.
Here’s where I’m not so sure if Friedman has really nailed it.I don’t know if we will soon see people marching on Washington demanding a gas tax or a carbon tax.People seldom march in favor of taxes or complicated policy initiatives such as a national renewable energy portfolio standard.But there are growing signs of the green movement in actions both large and small and there are many ways that people can get involved.Whether or not people march on Washington, politicians are hearing from them in many ways.The growth of the green economy is one of these signs of movement in the right direction.
Friedman is overall pretty cynical about the “green revolution” happening among consumers and businesses, suggesting that it’s all a party that makes us feel good without changing anything meaningful.I don’t think most people buying green goods do so under the belief that the easy steps are the only steps.I think most people know it’s only a start, that we have a long way to go, and that some steps won’t be easy.But you can’t blame people for realizing that green products that sell are those that compete at a good price, for a great product, and one that also happens to be green.
The growth of the green consumer economy is a sign that people are putting their money where their mouth is.They are laying the foundation for greater things to come.It’s not the end, and it’s not the only step, but it is a step in the right direction.The small steps are leading up to the big ones, as longs as we keep going in the right direction.
New Years resolutions are not enough these days.Rather than just make New Years resolutions for 2009 to change my own bad habits, I’m making New Years revolutions to encourage personal green revolutions among entrepreneurs, starting today.
The green revolution is not a sales job, or an ad campaign that convinces us to change our color for a time until the world moves on to the next fad.The revolution is a trend propelled by the basic logic of building a sustainable economy, one that wastes less and accomplishes more.Going green is not a fashion trend, but a force pulling the world in a different direction, like gravity pulling water downhill.The move toward green business may be inevitable in the long term, like water flowing downhill, but its flow can be blocked by assumptions and bad information. Changing these assumptions is like removing a dam to keep the revolution moving forward, unleashing the inherent power of an idea whose time has come.
The power of the green revolution is not that it’s quick, easy money, but that it’s driven by deep long-term trends.This revolution has been a long time coming, and its got a long way to go still.Whatever the economy is doing, it still makes sense for businesses and homes to waste less energy and other resources.Oil will not stay cheap forever, and it seems likely that oil will increase again significantly in price this year.A growing number of governments are realizing that just as we cannot run our economy on debt forever, we cannot run at a debt with the natural world forever.Our debts are coming due.
This revolution will not happen overnight.Really, for all of its progress, it has just barely begun.You can wait for someday when things are better, or you can start today on a different path.Here are five personal revolutions if you want to join the broader revolution, the inevitable transition to a greener and more sustainable economy of the future, with a green business of your own.
1.I Am Starting Small (if I Have to)
The times might seem awful, but for some starting when times are tough can turn out well.The founders of Method, the green home products company, started in the midst of the dotcom bust and despite having a hard time they managed to learn quickly, work through their way through it, and come out on top. Still, if times are tough and money is tight, you may need to start small and keep your day job while you get things going.Maybe you need to avoid buying equipment or office space, or pick up used equipment.Maybe you can barter for what you need rather than spending money.Starting out small and testing the water may put you ahead of the game once things do turn around.Its times like these that help you focus in on the bare bones, what you really, really need.
2.I Am Thinking Big
Starting small does not mean you have to stay that way.Green businesses are part of something larger, each contributing in its way to the larger goal of creating a more sustainable world for the future.Remembering that can help you to remember your way when pressures of the moment threaten to push you off course.
Being small is not an inherent part of going green with your business.One of the ideas people have about green businesses is that staying small is essential for them to stay true to helping the planet.For green businesses to really help the planet though they have to break out of their niche and compete on the mainstream.They have to provide great products at a competitive price that just happen to also be green.There are plenty of opportunities though for green entrepreneurs to work with major retailers, as Terracycle is doing.
3.I Am Greening My Business Inside and Out
I think that the successful green businesses, those that make it in the long run, will be those that have environmentally sound products and services that reflect their own core beliefs in the cause.They will consider not just the end product, but how it is made, where it comes from, where it is sold, and how it is used.Thinking through your overall environmental impact is not going to happen overnight, but having good information about where you stand is a great starting point for future green efforts, helping you measure the progress you make.
4.I Am Making Money (It’s Okay to Make Money)
Okay, this one may seem obvious, but I find a surprising number of people who struggle with this.They are attracted to green because they care so much about the planet, but are reticent about making money.It’s all about the cause, for them, and for some making money by selling things makes them part of the problem.To survive and prosper though, and have the impact they want, they need to provide great products and services, and make money in the process.If they don’t sell, and don’t make money, their business will not exist for long.
5.I Am Getting Started Today
Some will put off starting a business, waiting for better times.It’s hard getting started I know, scary.Starting today in some way though, taking that first step, can change your whole perspective.Your thinking changes from “I don’t know if I can”, to “Let’s figure out how I can”.If you know what you want to do, take at least a small step to begin with, one that gets you started in the right direction.Everything else flows from there.
Up until now I’ve avoided talking about a Green Christmas, but I can’t resist.It struck me today that “Green Christmas” is more than a clever turn of phrase, a variation on a theme.The holiday season is many things to many people, but one thing it represents for almost everyone is hope and belief in good things to come.This is not just about presents and sugar plums.It is also about the hope and belief in a better future, and for many of us a better future is a greener one.
My youngest is waiting eagerly for Christmas, full of belief.She still believes fully and deeply in Santa, and knows he is coming soon.Her palpable excitement and hope are inspiring.Many people are full of doubt and fear, and could use such strong belief in a brighter future.The challenges in the economy weigh heavily, and our environmental challenges remain urgent.
If I could give everyone a Christmas gift, it would be the gift of hope to take with them and carry forward through difficult times.For all of the great challenges we are faced with, I would give them the deep rock-solid belief in the future that a child feels at Christmas, the excitement about the great things that are coming our way.
There is good reason to feel this way.It can be hard to feel good about the future when things look bad, but our problems will not last forever.Someone asked me the other day where I thought the economy will be two or five years from now.I had to think for a second - I’m not sure where exactly the economy will be, but one thing I do know is that it sure as heck won’t be at the same low point it is today.Things will get better.As bad as things look for many people, the recession will pass and we will move on.I believe the same can be said of our environmental challenges.I believe we will take on these challenges and turn things around, building a more sustainable future for ourselves and our children.
Hope is not easy to wrap up and put in a box, but perhaps this is a gift that we each can give to ourselves, allowing ourselves to believe.So whatever you are faced with, I hope that you have a green Christmas, full of belief in the bright future we are all going to create together.
Engineers and designers are always searching for innovative solutions to the problems they face.Are there more efficient, less polluting ways to make things?How can cars be stronger, lighter and more fuel efficient, all at the same time?Humans in the business world are increasingly looking to nature for solutions to these and many other problems.
Life on earth has been evolving solutions for billions of years, innovating every step of the way.Growing on land, plants and animals need to conserve water to avoid drying out.Aquatic species have evolved a variety of strategies and forms to move efficiently through water.Plants take the energy of the sun, and produce useful energy in the form of sugar, all without any emissions, and actually removing carbon dioxide from the atmosphere.
Many of nature’s solutions were described in the visionary book Biomimicry: Innovation Inspired by Nature by Janine Benyus, first published in 1997.I was captivated by this fascinating book when I first read it, and I still am.Biomimicry relates the answers that nature holds to many of the challenges facing businesses.The stories are many, all incredible.Where chemists use extremes of heat and nasty solvents to cook up Kevlar, spiders create webs of as strong as steel (for the same weight) at whatever temperature they find themselves.While human ceramics produced with high heat remain relatively brittle, abalone hidden under coastal rocks produce shells that surpass human efforts, all without much ado.The list goes on.
Biomimicry is much more than a book today.When I was working on “75 Green Businesses” I had the good fortune to speak with Janine Benyus about the growing impact of biomimicry on the business world.Biomimicry is a way of “learning from, and then emulating a natural design, a blueprint from the natural world,” said Benyus.
This process of looking at nature and using what you learn is being adopted more and more broadly.Benyus opened the non-profit Biomimicry Institute and the Biomimicry Guild consultancy to work with businesses, bringing “biologists to the design table” to attack the problems that companies are grappling with.Looking for a new design for an impact resistant bumper?What kind of solutions has nature come up with that provide impact resistance, from craniums to walnut shells?Need to keep a surface clean?Look to the leaf of the lotus plant offer for inspiration, as have producers of glass, roofing tiles, and paints.
Benyus and her Biomimicry team have now created a database of nature’s solutions at Ask Nature, sponsored by Autodesk.A free, on-line searchable database, you can search Ask Nature by completing the phrase “How would nature...”.I queried the phrase ‘How would nature conserve water?’ for example and got back 430 results, reflecting the great variety of solutions that nature has come up with to this common problem faced in industry.
If you are scratching your head over a design problem, looking for innovative solutions, this is the place to start.Once you find something, you might need to bring in one of the biomimicry biologists to sit at your design problem with you and understand the solution that nature provides.
Joel Makower comments on the Ask Nature site on his blog, saying that while the database was not yet complete, “Like the vast world it covers, AskNature.org will grow and mature over time.”That’s the great thing about nature really - it does not rest on its laurels.Nature is always innovating, always finding new solutions.Maybe businesses can find nature’s secrets for this trait as well.
The vast majority of people want to do the right thing for the environment, but sometimes consumers and businesses are held back from going green by their concerns about cost and difficulty.People commonly think solar power is a great green move, but one that also costs a great deal.SolarCity (based in Foster City, California) is changing this, removing the barriers to going green by putting solar panels on rooftops with no upfront cost, helping residences and businesses save money from day one.
Most of us don’t really care if we own solar panels or not; it’s the electricity we want.For homes and businesses, putting their capital into solar panels can be hard to justify.The key is finding a way for customers to buy clean energy without the cost of buying solar panels.SolarCity has found a way.Like most solar power providers, SolarCity sells panels and installation services to homes or businesses, but it also offers an alternative to the cash purchase. With its residential lease option, SolarCity maintains ownership of the panels, but rents them to homeowners, who benefit from all the power they produce. For commercial customers, SolarCity also maintains ownership of the panels, and sells customers the power they produce on a per-kilowatt-hour basis in an arrangement called a power purchase agreement. In addition to installing the panels, SolarCity monitors and maintains the systems they install to ensure that they keep working.“If the panels don’t produce power, we don’t get paid,” said Lyndon Rive, founder and CEO of SolarCity, when I spoke with him recently.“We make our money from a system operating optimally.”
Their target business client is typically in owner-occupied buildings, with about 40% of business in the commercial side.“I personally feel there is a big need for small businesses to go solar,” said Rive.“This is a market that is underserved, and they see the value.”The clients SolarCity works with are not just green businesses; they include a broad spectrum of enterprises, as well as schools, churches, and other groups.“Often they are family-owned, successful businesses.They own their building, use a lot of power, and are looking for ways to save money.”
The power purchase agreements for businesses do not require any money upfront and can help businesses save some money immediately, and more money in the future.“The savings in commercial are not massive,” said Rive. “They are small savings, but if they have a choice of clean power versus dirty power, and save money as well, then people will sign up.”The locked-in rate can be lower than what customers pay their utility today, particularly in many states on the East Coast and California, and the utility rates are predicted to continue increasing 6% or more in the years ahead, while the rate with SolarCity increases only 3.5 or 3.9% annually, depending on the region.As time passes and the cost differential increases, the savings grow larger.
One of the challenges for installing photovoltaic systems and for making other green improvements in buildings where people rent is that the improvements to the building are typically attached to the building’s owner, the landlord, while the occupants pay the utility bill.Occupants can be reluctant to invest in energy efficiency or solar panels if the landlord will retain the improvements once they move on, while the owner may not have an incentive to invest in these measures if he is not paying for the power and not reaping the immediate benefits.With SolarCity’s power purchase agreement, one helpful measure is that the rate is paid with the utility is based on power consumed.If no tenant is in a building, and no power is consumed, the landlord can build a credit with the utility for those months.(One limitation to this, at least in California at present: the owner cannot over the course of a year get paid for a credit if more power is generated than used.)The market may ultimately provide one solution to this problem for green landlords and tenants.Green buildings command higher rent and have a lower vacancy rate, providing an economic incentive for landlords to green their buildings.“The way that you get landlords to invest in solar is that they do better at leasing if it’s a green building,” said Rive.
While the turmoil in the broader economy continues churning stomachs for many businesses, SolarCity is doing well.Very well.“We are still seeing strong demand,” said Rive.“Partially the reason is that solar is a true savings.Businesses look at this, and it might not be a lot of money now, but it’s a lot over time.”In addition to saving money, businesses are also looking at this arrangement as a way to reduce their risk, removing volatility for this component of their future expenses.
Such arrangements can also work out well for investors who supply capital for solar panels.There is a great deal of money sitting parked on the sidelines right now, with investors so spooked that they have at times recently bought government bonds for zero or even negative interest.By supplying capital for solar projects, investors can get a 10-15% after-tax rate of return, according to Rive, with a very low risk of investment; 60-80% of the return is subsidized by federal and local incentives.By investing in solar in this way investors can get the yield usually associated with medium or high risk investments, but with very low risk.This is an unparalleled investment opportunity.“We are reaching out to additional investors,” said Rive. “Most investors don’t even know about it, so it’s an educational process.Once they are educated the financial industry will see that this is a good investment for the money that is sitting on the sidelines.”
In addition to supplying solar panels, SolarCity is performing energy efficiency consulting.Solar power and energy efficiency are natural partners.If you are investing in clean energy from solar panels, it makes sense to take advantage of other opportunities to save money in your home such as weatherstripping, insulation, changing light bulbs, and fixing air ducts.These steps cost less than solar panels, and can provide a big money-savings bang for the investment made.In January SolarCity is launching a new kind of “power meter” to accompany its SolarGuard monitoring service, which will monitor hourly power consumption against production of power by their solar panels.Educating consumers with rapid feedback about consumption helps them to change behavior, use power more wisely (and ultimately, save more money).“It’s amazing what education can do,” said Rive. The power meter from SolarCity will have the ability to provide real time information about current consumption, and to compare usage patterns of similar periods in the previous week, month or year.SolarCity expects that this information combined with energy savings tips will help customers save between 5 - 15%.
Their business has been going so well that SolarCity is planning to expand significantly in 2009.Even with the economic situation weighing heavily on many businesses, SolarCity is expecting to double its business next year according to Rive.The $700 billion bailout bill passed in October included an 8 year extension of federal tax credits for investment in solar power installations and a removal of the $2000 cap for the tax credit on residential systems.“The East Coast is the area where we will expand next year,” said Rive, adding that three main factors they consider in making decisions about expansion are the cost of power in each area, the sun exposure, and the subsidies available beyond the federal level, which provide an extra financial boost in some states.
The success of SolarCity is another example of the power of green businesses even when things are tough, particularly when they help people go green and save money at the same time.Green businesses that can provide this winning combination should do well in any economy.
Energy efficiency is a global issue, and a global opportunity as well.One of the companies tackling this opportunity is Good For You, Good for the Planet (GFP-GYP), based in Madrid, Spain.GFY-GFP has a diverse set of products under development, including one tackling the problem of standby power drain.Standby power has been estimated to consume 10% of electricity in European homes, and as much as 26% of the electricity in Californian homes.One no-tech solution is for people to unplug devices they aren’t using, or to turn off power strips, but as is often the case such activities are hard for even the most well intentioned individuals to keep up for the long term.We need solutions that take care of themselves, eliminating the problem automatically without human intervention.GFY-GFP believes this is just what they have invented with their 100%Off product.
The problem with standby devices is that they continue to use electricity even when an appliance or other electrical device is off.To deal with this problem some governments are requiring that new devices use less energy when on standby, but this still does not reduce consumption to zero.The 100%Off device however can automatically switching devices completely off when it senses they are on standby mode.When appliances are plugged into the device, it analyzes their pattern of power consumption to detect if they have gone into standby mode.GFY-GFP is currently talking with global companies in Europe and Asia who are interested in commercializing the 100%Off device.“We believe a big company has to take this business to do it properly and turn it into a standard worldwide,” said Silvia García Alonso, Director of Business Development.
Improving energy efficiency will often pay for itself over time, and that should be the case with the 100%Off.“We expect a final price between €10-15, and the user will get the product repaid in less than 12 months,” said Alonso, although the final price will depend on the company that commercializes it worldwide.“With our technology we can have different configurations, as a power supply or a power strip.A range of products can be launched to fix all the needs around the standby for all kind of appliances, and in a pretty cheap way.”
GFY-GFP has a number of other products in various stages of development, including the Wicler, a gadget that fits on the handlebars of your bike providing radio, playing MP3s and Bluetooth access to your phone.Biking is a green alternative to using cars, and more cities worldwide are considering increased use of bike lanes to reduce pollution, traffic, and climate change.With its built in speaker, the Wicler can avoid the safety concern of bikers who might tune out their surroundings with earbuds, and it even comes with a built in light and a bell for an all-in-one bike appliance.The Wicler is already marketed in Europe, and GFY-GFP is talking with potential distributors in the US.
As well as developing their own products, GFP-GYP is also open to working with others to help them move their ideas forward.If you’re interested, take a look at their website, and perhaps you may see your product there in the future as well.
When you slice up the pie of greenhouse gas emissions, there are some obvious opportunities to reduce our carbon footprint and others that are less obvious.We all associate airplanes, cars and trucks with greenhouse gas emissions; their exhaust makes the connection clear for all to see.The same goes for coal-fired power plants on a much larger scale.Buildings are another biggie, with the burgeoning green building movement taking on this opportunity.The contribution of the internet however is less intuitively obvious.What impact do our computers and information technology have on climate change?When I check my email, am I contributing to climate change?
In a word, yes.When a person visits a website (any website), this has a real impact on the world.The PC you are using right now, the network, and the servers involved all consumer power, power that has to come from somewhere and generally involves burning fossil fuels.This is such a significant issue for internet companies that Google is devoted a great deal of effort, and money, to go carbon neutral by using more efficient servers, powering them with renewable energy, and using renewable energy certificates.
Information and communication systems are now responsible for 2% of global greenhouse gas emissions according to Enernetics, a Boston-based company working to reduce the impact of computing and the internet on climate change.Alexander Wissner-Gross is the co-founder and CTO of Enernetics, which has its website at www.CO2Stats.com.
The prototype of the site was launched in October 2007, and the business officially launched in August 2008.They already have over 3000 sites signed up, and are seeing growth of 30% month over month according to Wissner-Gross.The companies range from huge blue chips like IBM, to medium-sized companies like Segway, and a host of smaller businesses.Other organizations and city governments are also getting involved.For small businesses with fewer than 10,000 pages views a month the cost of a plan is less than $5 a month, and even sites with up to a million page views a month only pay a flat fee of $29.95 a month.
The first step in what CO2Stats does for websites that sign up is to look at where visitors are from, where servers are located, and feed this information into the analytics suite to check their database of power sources around the world.They can examine how long visitors stay and their screen size, allowing CO2Stats to measure the greenhouse gas emissions being created.“We identify where the greatest energy efficiency gains can be made,” said Wissner-Gross.“There are inefficiencies in both content and distribution.A lot more that can be done than might have been appreciated.”Surprisingly, most energy is consumed on the client and network side than by servers hosting a site.
Next, CO2Stats works with sites to reduce their energy usage, in part by making sites more efficient.More efficient sites also load more quickly, providing the added benefit of helping to retain site visitors longer, which often translates into spending more money.For the emissions that cannot be reduced, CO2Stats purchases Green-E certified renewable energy credits (RECs) such as from NativeEnergy.
As a benefit of participating, clients are able to post a “Green Certified Site” badge verifying to visitors that they are going carbon neutral with CO2Stats.This badge helps attract and retain business to a site.Wissner-Gross reports “we’ve found that when people see the badge, they stay longer, that their stickiness is increased when a site’s carbon footprint is being neutralized.”
Another benefit to clients is that CO2Stats also allows them to post their carbon footprint live.Too often the nature of “going green” is left vague and non-quantified, leading to distrust and uncertainty about these claims.Transparency is the solution to this problem. “A key benefit is that we provide a turnkey solution for environmental transparency,” said Wissner-Gross.
The scale of the opportunity may be analogous to what has happened in the internet revolution with the need for sites to certify their ability to handle secure transactions.Just as Verisign badges on sites have helped to pave the way for web commerce, CO2Stats trust marks on sites may allow businesses and visitors to engage in web commerce with less concern about climate change.The more the internet and its climate impact grow, the greater the need for approaches like CO2Stats.
There is a debate quietly raging about the future of the solar power industry in the months and years ahead. While some feel the current economic situation will impede the growth of solar, many believe that the eight year extension of investment tax credits for solar will create the incentives needed for solar energy to grow across the U.S., even in states where the industry has not been very active. Another big plus is the commitment of President-Elect Barack Obama to renewable energy. Obama wants 25% of U.S. energy to be from renewable energy by 2025 and he plans to invest $150 billion in renewable energy over 10 years to create 5 million new green jobs. Even in scenarios where some priorities are pushed off to a later date to deal with the economy first, tackling clean energy would stimulate the economy now as well as providing a lasting benefit for the future.
The solar boom is not just for big businesses. All of this also creates the opportunity for the creation of small entrepreneurial businesses that install solar systems or participate in the solar boom in other ways.
Solar photovoltaic panels will provide one component of the solar future, with companies like Suntech helping to make it happen. Suntech is one of the world’s largest solar companies, with production capacity steadily growing. As part of Suntech’s move into the U.S. market, industry veteran Roger Efird joined Suntech in 2006 as the President of Suntech America. Suntech has also opened a joint venture called Gemini Solar Development Company to focus on utility scale projects in the U.S., and is moving to greatly expand its share in the U.S. market for photovoltaic (PV) solar. I had the opportunity to speak with Roger Efird at the Solar Power International 2008 conference where we talked about the prospects for solar in the U.S. and the opportunities for solar entrepreneurs:
Glenn Croston (GC): How is Suntech doing?
Roger Efird (RE): We have pretty much been doubling our revenues and manufacturing capacity annually since being founded and as of about a year ago we became the world’s largest manufacturer of solar modules. They came to the U.S. and opened their first operations about 3 years ago and have both crystalline and thin film technologies, so they’re very active players in both traditional technologies and in what might be considered future trends of solar. I don’t think there’s a company better positioned to take advantage of the expected boom in solar energy.
GC: What kind of growth do you see ahead for solar?
RE: Solar in the U.S. has been growing at 30-35% a year, and with the investment tax credit passed, the optimistic view is for 60% growth. Navigant consulting is projecting 60% growth in 2009. There are a few things in this package that just passed that are going to spur the growth.
One is that the extension of the tax credits for eight years, long enough for companies like Suntech to invest in our infrastructure. One or two years is not long enough to make a heavy investment, but eight years is.
The second thing driving growth is that for the residential market, the cap on the credit at $2000 has been removed. For the average American home this makes the tax credit go from $2000 to $10000. That’s a big increase in the tax credit for residential and we have to believe the residential market will grow dramatically as a result of that.
GC: In the past the solar market was mostly concentrated in California. Will this now expand now across U.S.?
RE: There are a number of states that have an incentive program at the state level that was not large enough to stimulate solar growth, but with the new credit they will. North Carolina, Maryland, Pennsylvania, and maybe a dozen states will now have viable residential solar industries. The Mid-Atlantic region and the Northeast will see a big boost because most of those states have a solar program that has been up and running for a while, and this will boost those state programs to viability.
Even in states with practically no solar, where the word ‘solar’ has never been used in their legislature, the 30% tax credit will spur the early adopters who love high tech, have high income, want to make a statement, and want to go green.
The rule of thumb has been that if a system will not pay for itself in 10 years then you will not have the ability to build a viable market. For commercial systems the rule of thumb is a system needs to pay for itself in 7 years to be viable. Now a lot of states move inside that 10 year window.
Another action taken in this U.S. move was with the utilities. Since 1978 utilities have not been able to take a tax credit of any kind for the installation of photovoltaic systems, but now that has been changed. At the far end of the spectrum are the huge solar farms, the big multi-megawatt utility owned generating plant. This big solar farm business has been very slowly emerging. Now with this change in the law it will emerge rapidly.
GC: Is power from solar thermal, concentrated solar power, cheaper than from photovoltaic systems?
RE: Several people have asked me if I see us competing with CSP (Concentrated Solar Power) systems. And the answer is no. CSP takes some pretty large economies of scale. They are viable at a certain size, in terms of megawatts. We’re not going to compete -- there’s going to be a rule of thumb. Up to a certain size, photovoltaic will be the best alternative, but for larger systems, CSP will be. It’s going to be a matter of what the customer wants. If he wants more than 20 megawatts, maybe CSP, while smaller sites would be PV.
GC: And for distributed power?
RE: That’s where PV has no competition. You can’t put concentrated solar on someone’s roof. PV has no competition in distributed generation, comparing PV to the retail rate in this market. The only viable route on rooftops is PV. In terms of what technology has the most secure future, I think its PV. If the market goes to large solar farms, we’re in, and with residential systems we’re in.
GC: How will the credit crunch affect the solar market?
RE: The residential market for PV systems will probably not be affected. Early adopters are upper middle class who do not borrow, do not need home equity for the system. They have disposable income and spend it on solar
On the other side of the fence, for the large utility scale installations, there’s is a debate going on, because it will be harder getting money and getting financing. On one hand that’s true and on the other hand it’s not. There are two theories and one says we’ll be hurt and the other says we won’t. If you’re going to large financial institutions for money it’s going to be hard right now. A lot of the funding for these projects is from private financing though.
If you’re a private investor suddenly solar is going to look better than ever. Where before the returns on solar investments maybe did not look so great compared to other investments, suddenly we’re looking a whole lot better than everybody else. And the risk for investment in these projects is incredibly low. The jury is still out though.
GC: Even if you’re hurt, if you’re coming down from 60% annual growth to maybe 30-40% growth, it’s still pretty good.
RE: How many industries consider 25% growth a bad year? I’ve been in solar for 25 years, and I know historically it’s been somewhat economy proof, all over the world. Even if the economy is down, the solar business seems to be okay. Maybe it will see 15% growth instead of 30%.
GC: What is the long term impact of government incentives on the growth of the solar market?
RE: We need stable incentives. Germany has a solar market 8 times the size of the U.S. market, because they have a long term incentive program and stability, and that market has grown and grown. The U.S. has been different, with incentives going up and down and up and down.
We have something similar now, like Germany. The U.S. is by far the largest consumer of energy. Today about 10% of the solar business in the U.S., but we are going to be the biggest market for solar and the general feeling of the industry is that this rapid growth for solar begins immediately.
GC: What is the opportunity for entrepreneurs who want to get into the solar market?
RE: I think the residential business is going to explode fasting than the rest of the market. If I was going to start something, that’s where I would start it.
In my vision of the solar dealer I think of the guy who lives within a few miles of where you are, and he’s the Carrier air conditioning guy. He lives in your community and has as customer base of a few thousand people he has sold systems to and services them. He’s got experience with electrical work, and experience with mechanical engineering. He’s accustomed to getting up on a roof and he has a warehouse, tools, trucks, front office, secretary, and a database of customers who are happy with his work. And he has a son that is getting out of college and has a degree in environmental engineering.
That is the profile of someone who could be a dealer for solar systems, where it fits in with what he does now, covering thousands of homes. If I’m a homeowner and looking for a solar system, I want somebody I know, who will be around in the future, 5-10 years down the road. I would imagine just like that HVAC guy who sells you an annual maintenance agreement, he can do the same for solar. You can say the same thing about a small electrical contractor and maybe a roofing contractor if he brushes up electrical work.
Another thing about the solar industry is that it has so much potential in terms of job creation. It is estimated that just PV solar will create 450,000 jobs, and this does not even consider the removal of the cap on the tax credit. When Obama’s on the TV talking about the economy being driven by green jobs and businesses, I believe that’s absolutely true.
