I have two friends - Bob and Jane. They met soon after college, married, settled in his home town, and started a family. Bob had a good job in the town’s finance department. Jane ran a small catering business with a nice local client base. Bob saw his friends from college climb the corporate ladder, move out of town, purchase big McMansions in the outlying country. Bob wanted more out of life. Jane was happy where she was. Bob wanted a divorce. Jane decided to keep peace in the family, she would help Bob get what he wanted. Jane gave up her catering business and went to work full time for a large insurance company Now she works over 60 hours a week just to make sure she can keep her job. Bob started up a company but it didn’t work out as well as he thought it would so he took an entry level job in a company where he has to commute 100 miles to work and back each day. They did all this so they could afford their own McMansion way out in the country. Lets look at the “quality” of their life now:

1. To heat their McMansion in the winter costs over $1500 per month.
2. Their electric bills are twice what it costs most families - why - Bob needs to keep that old fridge in the garage for when his “friends” come over for a beer.
3. To keep up appearances for their “lifestyle” they have amassed over $20,000 in credit card debt.
4. They both pay over $500 per month payments for gas guzzling cars where they owe more on the car then they are worth. These two cars use over $300 each in gas per month since they have to drive so far for everything now.
5. Their kids go to a high school where over 50% of the kids have drug and alcohol problems. Nice schwanky neighborhood that is.

Their kids are growing up and will be heading off to college soon. They have not saved a penny for the kids college education and their retirement accounts are pretty lean.

The odd thing is they don’t want to replace all the light bulbs in their house to low wattage bulbs because the cost of the bulbs are too high.

We need to create a “new” American Dream:

1. Live in a house you can pay off in at least 15 years. Public schools are what you make them, ANYWHERE.
2. Drive a car that you can afford to drive without payments. Live close to the services you use routinely so you can walk or ride your bike.
3. Reduce your monthly expenses to where it’s a pay as you go lifestyle instead of creating long term recurring expenses (like for utilities).
4. Save at least 20% of what you make for a “rainy” day. This way you don’t have to take or stay in a job you can’t stand.

Here is a diagram of the new American dream.

At times, I wonder if pursuing my own agenda of becoming energy self-sufficient is a selfish thing to be considering. Shouldn’t I be concerned with the greater good and be putting my time and talent to helping all of us become energy self-sufficient? Well the answer to that question is - YES I am very concerned about the greater good and I KNOW that because of the wide variety of folks that government has to please that very little in the way of actually becoming energy self-sufficient will happen very quickly. The BEST way to drive wide scale energy self-sufficiency is to demonstrate how each of us as individuals can become energy self-sufficient WITHOUT relying on huge projects by the government.

I am reading a book right now called The Gridlock Economy by Michael Heller. What Heller shows is that when too many people own a small part of the whole, nothing ever gets done because consensus is required and can be blocked by one person. This concept was reiterated by the Former New York Gov. George Pataki. He was one of the few Republicans at the government energy conference February 24th headlined by Gore and Clinton. For a republican, this is odd, he said the federal government must get more involved in establishing power transmission lines. Pataki’s reasoning is similar to what is expressed in Heller’s book The Gridlock Economy - “If you try to run a wire through someone’s community that becomes about as contentious as you get,” said Pataki, and if that power is going through a state “you don’t have to take a poll, no one is going to be for it.”

This is the reason why I am pursuing energy self-sufficiency as an individual. I am not going to wait for the government to solve the gridlock problems with alternative energy. Not when the technology exists for me to become energy self-sufficient and there is appropriate legislation in place NOW that enables me to do just that.

Mother Jones May/June 2008 Magazine had an article called the “Seven Myths of Energy Independence.” Reading this convinced me more than ever of the need to pursue individual energy self-sufficiency. Based on their seven myths, here are the reasons to become energy self-sufficient.

Myth 1 - Energy Independence is Good. Summary of the Article: the point in this section is we need to focus on energy security rather than on energy independence. To build the new energy infrastructure we have to use the old energy infrastructure to do so and it will take a long time and be a lot more expensive.

Individual Energy Self-Sufficiency - if you purchase a house on an empty lot and you want to have landscaping of mature trees, you can either purchase the mature trees and take care of them so they transplant well, you can plant trees that get to maturity fast, or you can plant slow growing trees and plan to stay in that home long enough to enjoy them when they get to maturity. Becoming energy self-sufficient is the EXACT same thing. YES, it will cost a lot of you try to achieve energy independence all at once, but if you set it out as a long term goal and keep working at it, you will eventually create a lifestyle that is far more energy self-sufficient. AND you will also have energy security if you can create all the energy you need to run your life.

Myth 2 - Ethanol Will Set us Free - Summary of Article - States that there is no other fuel that offers the same combination of massive energy density and ease of handling as oil. It also points out the geopolitical issue of using biofuels created elsewhere.

Individual Energy Self-Sufficiency - This is flat out false, as many other fuels offer better energy and handling characteristics - especially biofuels. The major premise of this myth is that ethanol is the be all end all. This is a crazy myth and I don’t think anyone abides by this myth. There are tremendous sources of biofuels and more ways of turning trash into cash are emerging every day - especially for the individual to create their own bio fuels. Basically with all the nonsense going on with the governments worldwide, I am NOT waiting for some government solution to the energy problems we face.

Myth 3 - Conservation is a “Personal Virtue” - Summary of Article - Conservation makes tremendous sense and is relatively easier to do by making more efficient cars, appliances, homes, businesses. Also, upgrading to hybrid electric cars can decrease american’s demand for oil by 1/3. Because the majority of the grid’s electrical power is not used during the day, recharging the cars at night when existing power demand is much lower.

Individual Energy Self-Sufficiency - I never started the pursuit of energy self-sufficiency as a personal virtue. My goal is to become a self-sufficient maximalist. Extolling people to conserve energy is akin to your doctor chastising your weight. Sure you might change your habits for the short term, but people naturally gravitate back to habits where they are the most comfortable. When becoming energy self-sufficient, what happens is you become more conscious of your energy usage and you become more aware how much your day to day choices are really costing you with respect to energy usage.

Myth #4 - We Can Go it Alone - Summary of Article - What we decrease in our usage of oil, other countries will just pick up. We have to slow global demand overall if we want to increase worldwide energy security.

Individual Energy Self-Sufficiency - this myth fails to recognize the power of innovation or game changing technological changes. Look at how fast the internet changed communication practices and global trade. Forty years ago, the internet did not exist. By individuals pursuing a path of energy self-sufficiency, we open multiple paths of innovation. Just like what the internet has done for communication. Becoming energy self-sufficient is NOT about going it alone. It is about individual leverage and responsibility.

Myth #5 - Some Geek in Silicon Valley Will Fix the Problem - Summary of Article - Energy innovation relies on vast investment dollars from venture capitalists and the government.

Individual Energy Self-Sufficiency - well in the internet model of the world, we need more geeks in silicon valley putting their creative talents to becoming energy self-sufficient and sharing what they are learning with others (the purpose of this blog by the way).

Myth #6 - Cut Demand and The Rest Will Follow - Summary of Article - tax the living daylights out of us to make us conserve energy to develop energy security.

Individual Energy Self-Sufficiency - my gosh if Mother Jones Magazine is proposing taxing us to get us to comply with this or that government energy initiative - I thank my lucky stars I have an engineering background to pursue energy self-sufficiency. I want to be cannonized as the saint of common sense technology after I ascend to the afterlife. Their solution to this myth is the NUMBER one reason to become energy self-sufficient - to reduce the long term risks of outrageous government taxation on energy.

Myth #7 - Once Bush is Gone, Change Will Come - Summary of Article - all the next leader has to do is offer platitudes, but doesn’t really have to do anything to keep the pollster’s happy. Asking American’s to make sacrifices and to think globally is too hard to do.

Individual Energy Self-Sufficiency - who ever said anything about sacrificing? Why does the change to a different way of powering our life have to be associated with losing anything? What we are losing is dependency on moronic policies created by people who know absolutely nothing about generating power. We need more engineers in elected positions - the issue is most are too smart to waste their time in politics.

I’ve been dreaming of having my own solar panels provide the electricity to run the electrolysis process to create hydrogen from water to power a fuel cell car. If I can pull this off, I can achieve energy independence in the transportation realm for my around town driving. I could do the same thing with a plan ‘ole electric engine as well. Is this a feasible dream for an individual or is it just in the domain of the big boys? There are folks already doing just that so it is technically feasible. But is it a viable consideration for an individual?

Sacramento Municipal Utility District (SMUD) is participating in the U.S. Department of Energy’s Controlled Hydrogen Fleet and Infrastructure Demonstration and Validation Project. Ford and Daimler-Chrysler — provided the prototype cars — and BP, installed and operate the hydrogen station refueling equipment. The Future Energy Solutions of Air Products and Chemicals performs maintenance on the station.

The solar panels make electricity, which is then used to convert water into hydrogen and oxygen. Hydrogen is produced by electrolysis - an electric current is used to split water into its components — hydrogen and oxygen. The hydrogen is then used to power the fuel cells that run the car. The attached picture shows the Ford Focus Fuel Cell car being used for the demonstration. Right now this is just for SMUD vehicles to test out.

Yesterday, February 12, 2009 was a worldwide Twestival for Clean Drinking Water. This was where people who use Twitter to communicate with each other, got together in over 175 cities worldwide to raise money for clean drinking water initiatives. Cheetah Learning raised $2300 for Clean Drinking Water by donating 5% of revenues made for the day from their Twestival activities to teach people how to do project management for clean drinking water projects.

Obtaining clean drinking water requires power. It requires the power to get the water up from the ground and it requires power to make sure the drinking water is free from disease producing microorganisms. One of the ways to better insure that there is adequate clean drinking water is to adequately process waste water. This takes even more power. Yes you can use some low power methods to adequately process waste water, but modern day methods that insure far better processing for preserving clean water requires tremendous electricity.

The Hill Canyon Waste Water Treatment Facility in Thousand Oaks, CA uses solar power and methane to power it’s waste water treatment facility.

The solar power system cost $1.5 million to install and produces about 15% of the treatment centers power. The solar power system is owned by Renewable Ventures/MMA and sells electricity to Hill Canyon Wastewater Treatment Plant for 16.8 cents/kW. The methane system uses methane gas from the facility’s anaerobic digesters to power (2) 250 kW generators. This system cost $.5m (1/3 the cost of the solar system) and provides approximately 45% of the facility’s energy needs. This system is owned and operated by U.S. Energy. The Hill Canyon Wastewater Treatment Plant purchases this electricity at a rate of 6.4 cents/kW.

This is very interesting that the methane system cost 1/3 as much as the solar system and produces 3 times the electricity. What I love about this story is that it is the waste they are processing that creates the largest percentage of electricity to process that waste.

The inverse relationship between money spent on the system vs. the energy produced appears to be a universal truth as I have seen it in existence in many other realms. The engineers perpetual question is - how can I spend the least amount of money and get the maximum energy out. The engineers managing the Thousand Oaks facility are doing a fantastic job with answering this question.

There are some fascinating schemes out there to use solar power for your electrical needs with very little upfront investment - some appear more ready to go than others.   I was looking at CitizenRe’s approach over the weekend.    This is where they have set up an army of “ecopreneurs” to sign up home owners to have solar panels installed on their homes for a security deposit of $500 and then they have them pay a rental fee for their solar panels that is the same rate as what they are currently paying for electricity.   They get to lock in their electrical rates for the duration of their contract which can go up to 25 years.  Damn this looks like a very attractive offer.

HOWEVER, I didn’t see in their marketing material where  they have installed one solar system yet.   Now if you’re just getting into this concept,  you might think this is a new idea - but they have been around a LONG TIME - especially in terms of today’s technology time frames.

I was researching what others were saying about Citizenre and found this blog post written two years ago about Citizenre.    They were supposed to have their manufacturing facility up by September 2007.   Two years later, they are now claiming their manufacturing facility will be online by Jan. 2009.  I did not see any mention of it on their website and all their marketing material is still talking about not making any promises to people who you get signed up about an installation date.   So it appears they have missed this deadline as well.

One of the things they do emphasize in their marketing materials is that if people have the ability to put solar panels on their homes and pay the upfront costs, they should by all means do this.   They suggest people visit www.findsolar.com to find a solar installer in their area.

If you really want to do solar but you can’t afford the upfront costs, there are other ways to get into this for low cost - finance it with a home equity loan, or go with a long term lease that some of the larger solar installers offer.  They have it set up where you end up paying the same amount as you are for your electricity as well.   And at the end of the leasing period, you own the panels.  We are summarizing these plans in our March Newsletter.

If you want to go solar, I’d recommend you go with a company that can deliver on that arrangement today rather than waiting for a promise to deliver sometime in the future.  If Citizenre can deliver on what it promises, it will truly be a remarkable company.   I am hoping they succeed.   In the interim, I’m going to continue with the approach on designing and installing my own systems on my properties and figuring out my own creative ways to finance the installations.

For the past six weeks, I’ve been doing feasibility analyses for adopting solar power for properties in Nevada, Connecticut, and Alaska.  Here are some of the barriers I’ve discovered:

1. Reliability of Installers.   I have talked with no fewer than ten installers in two states.   All were very lax in returning my calls (they must be swamped).  For those that did return calls, they had convoluted return phone call systems where I never actually got to talk with a live person when I attempted to call back.  For the five I did actually meet in person to get bids to help me put solar panels on my property, NOT one, and I am not kidding, NOT ONE bothered to follow up with a bid.  Maybe a homeowner considering two systems for two properties - 3kw and 5kw is just not worth bothering with.   Anyone who wants to get involved in this industry who understands the basic of service delivery will clean up as the people I’ve met currently playing in this field are not customer focused.   

2. Availability of Panels.   Several installers told me that it was three to six months out to get the panels and forget about obtaining the high efficiency panels - the supply just can’t keep up with the demand.  I was ready to purchase a 3kw system from one company but when I went to call them back to place the order, their phone had been disconnected.   What is interesting about this, there was a NY Times Article Feb. 3, 2009 that said there was a glut of panels on the market.   Where is this glut?   Maybe with the lower efficiency panels - I can understand that.   I’m going to the North American Renewable Energy Conference in Vegas in March - I will try to find more reliable suppliers there.  If they are really hurting for money, you’d think these folks would be beating down my door.

3. Capability of existing designs.  This is a hot research field and people are discovering much more efficient and creative ways of converting the sun into electricity.   Solar dyes are one hot field where they can tint windows, wall coverings, shades, etc to collect solar energy.   

4. Availability of Grid Tie Systems - In Nevada and Connecticut you can tie into the grid and get credit so it makes it more cost effective to use solar panels.  In Alaska, you can tie into the grid, but you cannot get credits for the electricity you put back into the system.   

After doing my research and learning what is involved, my decision is do one installation on my own to learn more (and possibly see about creating a system for people to learn how to run the business of installing solar systems).  But before I make more investments on a wider scale on more properties, I am waiting until some of these new innovations are available commercially and the industry is more mature. 

According to: The program manager of the U.S. Department of Energy’s Solar Energy Technology Program for Energy Efficiency and Renewable Energy, John. Lushetsky, 

“To go from the 1 gigawatt of generation capacity that we have now [in the United States] to the 170 to 200 gigawatts called for by 2030 amounts to a 26 percent compounded annual growth rate over the next 20 years.  That’s a higher sustained growth rate than any industry has ever been asked to do before.”  

This was referenced in an article titled “Unprecedented Growth Seen for Solar Energy.”   The article should be titled, “Unprecedented Growth Required for Solar Energy.”

I recently completed a course for Cheetah Learning called - Capitalize on the Recession. One of the major tenants of the course is teaching people how to create value for others, FAST. The premise is that what people find of value today is different than what they were finding of value yesterday because the rules have changed. And to make a good living, you have to create value for others based on the rules of today (not yesterday).

I was reflecting on how the rules have changed for me over the past 20 years. I lost my job in 2000 and embarked on a path to create a more secure future for myself and my family. Relying on credit cards, bank loans, or investors was not the way for me to create a more secure future. I didn’t want to play by the conventional rules of the day - rules we have now seen have spun the world into an economic crises.

I became interested in being energy self-sufficient as part of what I call the “new rules” - this is the set of rules I’ve been playing by for almost a decade to create a more secure future for me and my family. There are two primary reasons I am becoming energy self-sufficient. The first is to reduce my risk by reducing or eliminating recurring expenses. The second is to make inflation resistant investments - investing in my own energy independence projects are the best investments I can make in these times.

Here are two mind maps that show the old rules and the new rules. Becoming energy self-sufficient is one of the new rules in the game of life.

On my last trip to Alaska, on both the way there and back, I sat next to people who worked in natural resources for the State of Alaska. Both were studying ways of using biomass to create biofuels. There is an amazing amount of research going on with biofuels of all types. This is the ultimate cash from trash crop. There is a lot of trash wood (aka biomass) in Alaska. For example, Alder - it is a weed tree and literally grows like a weed. Tremendous effort is spent to keep alder growth controlled. It’s a “biomass” product. Consider seaweed - this is a major nuisance for commercial fisherman who encounter mile long rafts of it. Another fantastic biomass contributor. Algae is not something that you would think would solve the world’s energy crises - but yes, that is also a fantastic biomass source. Algae produces 30 times more fuel than other crops and grows extremely fast (plus the food demand for algae isn’t quite as high as say, corn or soybeans. . And who would’ve thought that someday we’d want to harvest algae in the desert as some researchers at the University of Nevada are developing. Most of the folks I know creating biofuels at home today are doing it with used vegetable oil from local restaurants. Another trash item that even just ten years ago restaurants had to pay to dispose of. Now they can sell it.

This all reminds me of the movie “Back to the Future” where the mad scientist toss’s some garbage in the car’s engine and off they go at warp speed. Why are we paying to move our garbage sometimes thousands of miles away when it can be a fuel source?

I have had major gut dissonance over the global warming issue as a driving factor in becoming energy self-sufficient. And it is NOT because of the scientific basis of if global warming exists or not or based on the pros and cons of global warming. Becoming energy self-sufficient is an economic and a national security decision. It is not a decision to save the planet as I have no idea of the long term ramifications of present day alternative energy solutions I am considering. The “environmentalist” arguments are not made based on economics or defensible scientific data but on a policy of fear and manipulation that will drive significant economic gain for the ones promoting their agenda. This diagram from http://www.boingboing.net/2009/02/04/climatic-heresy-3.html outlines the politics of fear on global warming.