smokey

The Current State of the Solar Energy Sector

Good article, and Jack Yetiv's comment -- both well done.

One thought that always come back to my mind, but which doesn't particularly seem relevant in an immediate way to the stock market (but is, ultimately), is the very nature of what we dub "alternative energy." That is, the philosophy behind it, and why it has become so popular.

Well, as the saying goes, "first things first." One must remember that the threat of an "energy shortage," or an actual energy shortage, is artificial.

Case in point: refrigeration. Refrigerators, if you look back at their entire history, have never been particularly well designed, not because of some esoteric laws that the designers ignored, or because of some cost cutting measure that put them in hands of the proletariat who wouldn't otherwise have been able to get their hands on them. No, they have almost always been made with relatively little insulation and almost always with the compressor mounted either on the bottom (where it's heat would warm the cooling compartments), or on the back (where its heat still warms the cooling compartments, just not quite as much).

So, the simple, obvious answer? Put more insulation (thicker walls) on the fridge, and move the compressor to the top of the unit, as Sunfrost manufacturing first did in the mid-eighties, when they began manufacturing the world's most efficient refrigerator.

The only problem is that being a small company (a cottage, practically, and remaining one), the economies of scale have always made them prohibitively expensive to all but the most devout. (Example: my 16 cubic foot Sunfrost cost $2800.00 about four years ago, far above what is probably was an industry average of around $800.00 for a similarly sized fridge).

I repeat -- there is nothing inherently expensive (or subtle) about moving the compressor to the top of the unit, or making the unit with thick, more-insulating walls. But there is something very expensive about having a small "factory," and being unable to get enough of the population interested enough in saving energy to buy sufficient quantities of one's marvelous product to expand to a larger factory and thus reduce costs. The more business one has, and the more consistent it is, the more inevitable will be one's growth, and the better able one is to reduce one's prices.

This isn't a factor of ignorance, either, necessarily. When Mother Earth News had their explosion of creativity back in the very late seventies and the beginning of the eighties, they got a lot of press, including even the nightly news. They built a hybrid car that got over 100 mpg, a truck that ran on smoke from a wood fire, and many other incredible low-tech demonstrations of just what true Yankee ingenuity can -- and did -- accomplish. But did it have any real impact on the "average" fellow, whether rich or poor or middle class? No.

And why not? Because ironically, when something wonderful gets a lot of publicity, it has the effect of buttressing people's faith so much in the "rightness of things," that instead of inspiring similar feats of ingenuity, or political change for the better, or investment in
like-minded innovation, it instead tends to make people complacent. After being a little frightened by gas-rationing and rising energy costs and political instability in foreign places earlier etc., people began to believe that "everything is being taken -- or will be taken -- care of" -- and that any interest or effort on their part in helping
produce such change is gratuitous.

And thus began Ronald Reagan's tenure, followed by Bush Sr., followed by the not-so-stellar Clinton era, and now . . . well, you get the picture.

So what does this have to do with the alternative energy sector and the stock market? It is this: that as long has the people of earth have this laid-back attitude about changing to alternative sources of energy, and emulating Amory Lovins in adopting far more efficient designs of automobiles, refrigerators, houses, etc., then the true "alternative revolution" will still be short-lived, and far less than what it could and should be.

Simply airing programs like Invention Nation and the like, or talking about how many more wind-turbines there are than there were 5 years ago isn't even coming close to changing America's habitual "waste is wealth" philosophy.

It is easy to prove this to yourself. Simply drive to any big city in the USA, and go to the wealthiest section of town, and see how many of the houses have solar-thermal water heaters, or even photo voltaic panels on their roofs or yards. I've done this in the more ritzy sections of the sun-drenched state of Florida, among other places, where there is neither lack of sun nor a paucity of wealth, but one can do it anywhere.

Okay -- what do you see? Very, very little, if any of the above mentioned technologies are extant, even in states that have net-metering laws and state incentives, like California (where the payback is often only a few years).

So what does it prove? It proves that even when given plenty of reasons -- economic, environmental, even sociological reasons or imperatives to change -- most folks, no matter how rich, are almost completely hardened to changing for the better.

I'm not being cynical, just factual. I'm inspired by the relative progress of our European cousins in embracing alternative energy and conservation -- so it isn't really "the human condition" -- or "the fall of man" or whatever that makes Americans so incredibly stupid. It has to be something else -- and it is something that predates Dubya by a great many years.

Americans claim to care, but in reality they are willing to let things go for a very long time. What could have been a true energy-efficient/alter... energy renaissance in the late seventies (and jumped far ahead of Europe even), instead imploded into an era of ever more ridiculous "optimism," "psuedo-patriotism," and pseudo-prosperity. As always, except under the "whiplash of necessity," America waits and waits and waits until war, broiling summers and toasty springs and falls, before it starts to take something seriously. And even then, it still doesn't -- not really.

Solar Stocks Won't Stay Down for Long

I think Nick Hodge has solar energy appraised about right. While some are still skeptical about its growth here in the USA, the fact remains that much of Europe has been -- and continues to be -- very aggressive in adopting solar technologies, as well as wind and other "alternative" methods of energy production. Coupled with an aggresive efficiency ethos, Europe will undoubtedly continue to lead the US for awhile.

While Asia, particularly China, is aggresive in producing solar and wind products, their actual rapacious consumption is unfortunately eating up the burgeoning gain from their production (in regard to the environmental benefits). However, that might change in the next year or two. Not many are left that remain blind to the obvious fact that not only are we all in trouble in regard to the environmental concerns, but in addition the world is desparately in need of new, cleaner energy sources.

I only wish we had more enlightened voters and representatives. There is the true key to success -- or failure. But you can only get intelligent government when you have intelligent people -- people who are not only superficially smart, but who understand and are in tune with nature herself.