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.

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.

Old Rules Dictated by Wall Street and the Financial Markets

New Rules Driven by the Desire to Create a More Secure Future

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.

Follow the Money on the Global Warming Politics

I like to go after “low hanging” fruit - that is those opportunities that are easy to grab. I’ve been evaluating where is the best location for me to use wind power and here is what I have found so far:

Interesting Wind Mill Design that Can Handle High Gusts and Wind Coming from All Directions.

1. You can do “small” (very small”) wind applications in residential developments IF you can make it look like it’s a hobby.  The restrictions are:

• It can’t disturb your neighbors - think barking dog here from a nuisance perspective.
• It can’t exceed 30 feet in height - think TV antenna here.
• You may not be able to tie it into the electrical grid.
• This will limit the amount of electricity you can generate from wind power - most likely less than 1 kw.

2.  On larger lots (over 5 acres) you may be able to put up a residential wind mill,  but you have to:

• Comply with all local zoning laws (this mean getting the proper permits).
• Make sure you site the windmill in a location that gets the most consistent wind.  (I am on my way to a property in Alaska to put up a web-based weather station to evaluate the consistency of the wind speed over several months).
• Evaluate the stability of the ground where you will be mounting the wind mill structure.
• You will likely be able to generate most if not all of your electrical power from a windmill if you have a good consistent wind flow and it may be up to 1/2 the cost of doing a solar array that would put out the same power.

Of the three property locations I manage,  I am considering wind power on two properties that are consistently windy - one in Nevada and one in Alaska.   The property in Connecticut is unsuitable for wind power as is not windy there - it is Connecticut after all - peaceful tranquil, bucolic.

In Nevada, my primary concern is the permitting process as no one in my neighborhood yet has a wind mill and it is a pretty tight home owners association to contend with.

In Alaska, several of my neighbors already have wind mills.   My main concern is large wind gusts.  The lot routinely sees gusts over 50 MPH.   I have to get a fairly robust wind mill to withstand large gusts.   Additionally, the electrical company up there does not do net metering yet.   So I will have to have a battery back up system.

Because of the gusting wind issue, I found the Helix Windspire 5 KW system may work for the property in Alaska.   They offered to do a site assessment for $1500.  From preliminary conversations that did not include putting up the weather station.    Prior to comitting to their “remote” site assessment, I wanted to collect my own wind data with a web-based weather station.

I did find a very good resource for a summary of small residential wind mills - http://www.allsmallwindturbines.com/. Having earned my first engineering degree in Aerospace Engineering, I tend to prefer the more high tech designs. But there are some inexpensive “DIY” designs as well for those that like to tinker - check out www.earth4energy.com if you are interested in a do it yourself application.

Gas Fireplace Insert uses half the natural gas of the open hearth and stopped heat loss up the chimney

I was inspired to become more energy self-sufficient after experiencing one 20% price increase after another with my local utility company, living through $5 per gallon gas prices, watching the tundra around my brother’s house in Fairbanks, Alaska turn to swampland because of warming global temperatures and watching my retirement savings take a nose dive in late 2008. Just from the financial perspective alone, I figure if I can reduce my recurring expenses then I can live on far less income in my “golden” years. PLUS, it makes far more sense to me to invest in things that will give me a solid return on investment than investing in a very volatile securities industry. Additionally with the prospect of looming inflation because of the US Treasury having less than 1% of assets in reserve vs. what they are loaning out, I figure the more I can reduce my monthly bills, the more resistant I will be to economic instability.

To get started, I first evaluated all my options (see blog post below). Next I created my first project plan, and then started by reducing the energy needed to heat the house and the water. I am eventually going to be creating my own electricity with solar and maybe wind power, but I learned that for every dollar I could save in energy usage, that was $5 less I’d have to spend with creating my own energy to power and heat my home. So I figured I would start with reducing my energy usage first.

Tankless Hot Water Heater Uses Half the Natural Gas as the Old Water Heater and 75% of the Natural Gas of a New Water Heater.

I started with the heavy hitters first - the natural gas I was using to heat the house and the water. I had a very old natural gas water heater and with my travel schedule, I was paying to keep a lot of water hot that I was never around to use. I also had this open natural gas fireplace that used 40,000 BTUs of natural gas and let a lot of heat out through the chimney. I replaced the water heater with an instant on tankless water heater that uses half the natural gas of my old water heater and 75% of the natural gas of a new hot water heater. But with my travel schedule, it just made no sense for me to keep a tank of water, no matter how well insulated, heated. For the fire place, that is easier, I installed a natural gas fireplace insert that uses half the BTUs, and is rated to heat the entire space of my house. Plus the insert is very well insulated so I won’t have the heat rushing up the chimney when it’s not on. By my back of the envelope estimates, I cut my natural gas use by at least 50%. This means I am saving $70 per month. I’ll have the upgrades paid back in less than five years. Click here to see the pay back analysis for making these improvements. payback-analysis-for-tankless-water-heater1

For more information on energy efficient appliances - visit - http://www1.eere.energy.gov/femp/procurement/eep_gas_waterheaters.html

Next I am making warm window shades to reduce the heat loss through my windows, improving the insulation under the house, and swapping out light bulbs with LED bulbs as they burn out.

Click here to see the project plan for becoming energy self-sufficient with this house. project_plan_energy-improvements-house-carson-city

To evaluate which options are best for you with becoming energy self-sufficient, it helps if you define what success in being energy self-sufficient looks like to you. Here are my success criteria:

1. Long Term Sustainability - the solution doesn’t take much effort on my part to sustain after it is implemented.
2. Long term reliability - the solution lasts for a long time.
3. Easy to Maintain
4. Initial Cost that gives me a good return on investment over the life of the solution.
5. Easy to implement the solution
6. Quick to implement the solution

Next I come up with how important each of these success criteria are. I divide them equally into three categories - most important, medium important, lower importance. For my list above the first two are most important, the second two are medium important and the last two are the least important.

Then I assign a measurement to these criteria so when I’m evaluating options, I can make an assessment of how probable it will be that each option will meet each criteria.

1. Long Term Sustainability – measure by recurring cost (includes cost of personal labor at $10 per hour) (Less than 100 per year – 5, less than 500 per year - 3, more than 1000 per year – 1). Weight - 3
2. Long term reliability (lasts for 20 years or more – 5, lasts 10 – 20 years 3, lasts less than 10 years – 1). Weight - 3
3. Maintainability (one year or less system maintenance – 5, bi-yearly maintenance – 3, monthly maintenance – 1). Weight – 1.5
4. Initial Cost (under 5k – 5, under 20k – 3, over 20k – 1). Weight – 1.5
5. Ease of Implementation (can do on own– 5, can easily find others to do in less than 3 months – 3, need specialized, hard to find people to do– 1). Weight - 1
6. Time to Implement – (less than week – 5, less than 3 months – 3, more than a year – 1). Weight – 1

I then list all my options and rank how probable each option will meet each of my success criteria, using the measurements created above. Using the weighting, I multiply each ranking times the importance of the success criteria. So this means that the success criteria that are more important carry more weight than the ones that are less important when evaluating which options to pursue.

I’ve created a template that you can use to rank how well your energy self-sufficiency options meet your success criteria. Click Here to use the template.

The easy answer is - “it depends.”   Overall, I’m pursuing energy self-sufficiency for three reason:

1. As a hedge against inflation and world instability.  The less I have to pay to utility company’s and for foreign oil to power my life, the more I can weather any future economic and/or political turmoil.

2. As a way to generate a better and lower risk return on investment than I can currently get in any other investment vehicle.

3. As a way to learn how to make long term decisions that will create improved security for all and give me more financial independence - this is especially important as I have to cover the cost of college for my children AND prepare for retirement.

But I realized as I got into this drive to become energy self-sufficient, that some efforts would generate much faster paybacks, far more savings, for a lot less effort and costs.   Not every action you can take to become energy self-sufficient creates an equal and opposite reaction   I developed a pay back analysis template to understand the benefits for pursuing one energy self-sufficient effort vs. another.

Click here to access the payback analysis template for energy self-sufficient investments.

What I discovered was that efforts to reduce my energy consumption gave me a much faster and larger return on investment than those to create my own energy.   I’m still pursuing the efforts to create my own energy on the multiple properties I manage in three states as my goal is energy self-sufficiency.   But before I install those systems, it makes more sense to reduce those properties need for energy first.   For every $1 saved in energy use, you save $5 in the cost of installing an alternative energy solution.

Special Note - sustainability is incredibly important in the pursuit of energy self-sufficiency. HOWEVER, I don’t pretend to have all the answers to save the planet from climate changes that are either part of a cycle or man made from fossil fuel pollution. Being “green” or being energy self-sufficient for economic reasons - the end result is the same - less fossil fuel pollution. For whatever reasons people have to motivate energy self-sufficiency, the reality is that this is not a hole that the government and/or big business are going to dig us out of any time soon. It’s is far safer, and a more sure bet for the individual to become energy self-sufficient and the economic reasons justify it. Yes the government and big business need to create their own sustainable energy infrastructure, but energy self-sufficiency is a highly desirable and attainable state for individuals. We need both to address the multi-faceted problems of being dependent on monopolistic utility companies AND foreign fossil fuels.