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You Go Pope!

The Pope wow'ed just about everyone this week with some very stark comments on the responsibility of humanity to be stewards of the planet, and the reality that...and I quote, "The Earth, our home, is beginning to look more and more like an immense pile of filth."  Here is some news coverage of the comments from CNN, and from the Economist if you are interested.

This is very significant for at least three main reasons.  First, the Pope is the official spiritual leader of 1.2 BILLION people.  That means his comments have a direct communication waterfall to an aggregate number of people which basically challenges the population of the largest country in the world.

Second, the deeply religious people of the world tend not to be in the same groups as those already deeply concerned and on the front lines of climate change.  Traditionally, there has not been a lot of overlap in Venn Diagram of the deeply religious and the deeply environmentally conscious.  Put another way, this is a 1.2 billion person audience for which most have not "seen the movie" when it comes to climate change.  These are "fresh minds" when it comes to the conversation and global coordination that will be needed to work against it.  These are new voices to the table... and perhaps upwards of 1 BILLION new voices.

Lastly, even if you are not Catholic, the Pope has historically been a very powerful global voice which was usually to the "right" of the political conversation on a topic.  Well, consider that expectation SERIOUSLY disrupted, at least on the environment / climate change.  The starting shortstop from the away team just sauntered on over and sat at our bench?!? You Go POPE!  Now lets play ball!
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Fisker Automotive IS BACK, engineering in the OC with Moreno Valley manufacturing plans

Back in Feb, 2014 it looked as if the Orange County, CA presence of well know luxury hybrid car designer and manufacturer Fisker Automotive was all but done.  The distressed assets of the OC headquartered firm were sold to the Chinese firm Wanxiang for $149 million in a bidding war, leaving the future of the firm uncertain despite a renewed interest in luxury electric / hybrid performance vehicles clearly lead by Tesla's Model S.

But it appears things have been happening at Fisker and this week came some big news for the company, Orange County and SoCal in general.  It looks like the OC may have its hybrid car company back?!

As announced in several OC news outlets this week, including this in the OC Register, the company has a new headquarters in Costa Mesa with 200 employees.  A quick check of the careers portion of the Fisker website shows an additional 122 open positions.  It looks like the company is preparing for a major presence again in the heart of Orange County, CA.

In addition, the company announced intentions to open a Moreno Valley, CA manufacturing plant, it what seems to be a not-to-subtle copy of the Engineering in Palo Alto / Manufacturing in Fremont set up of Tesla in NorCal.

A few years ago if you would've predicted anyone would be manufacturing cars in SoCal or NorCal you would have been chased out of town with a 10 foot clown pole!  Now it seems things are lining up to have the two "coolest" + "greenest" car companies on the planet lined up to have engineering and manufacturing in the Golden State.

It will be interesting to see how the Fisker Automotive 2.0 plans develop.  The large, established balance sheet of Wanxiang standing behind the firm does bode well for any plans announced publicly, so this will be one to keep an eye on!
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PV Module Manufacturers: The working poor of renewable energy

If you don't work in the renewable energy industry, it would be normal to think that the companies making the meat and potatoes of solar, like PV modules, would be raking the cash at the moment.  Renewable energy, especially PV solar in rooftops / commercial industrial and utility, continues to grow at an impressive clip.  This is doubly true given the ITC expiration at the end of 2016, so developers and customers alike are rushing to get their solar projects in the ground to capture the ITC benefits.

But this simply is not the case.  In fact, the world's second largest module seller of 2014, Yingli, announced recently as part of their annual report that their ability to continue operations given their current financials is in serious jeopardy.  They lost over $200 million last year alone, the third straight year of losses for the firm.

For perspective, lets glance at the financials of the world's largest module seller, Trina.  The Q4 2014 net income at Trina on $700 million in revenue was $10 million dollars, a whopping 1.5%.  So basically a run-of-the-mill CD has a better return than owning a solar module company for a lot less work.  So while Trina is "profitable", it is barely profitable and a quick move in the market for modules could very easily destroy the business model and therefore the business.

Solar module companies are what I call the "working poor" of renewable energy.  They all make nearly the same identical product (except First Solar, and to a certain degree SunPower) and then they all race to the bottom on price.  Another way to think of it, they represent the guy who has a high paying job, a fancy car, but also the alimony, child support, home equity loan and all the other financial obligations which leave him virtually living paycheck to paycheck.  His cash flow is, well, less than ideal.

Its all part of the fundamental problem in making and selling products which ultimately generate a commodity, energy, is that the product itself is commoditized.  This has happened in solar modules, it just recently happen in solar electronics (DC optimizers, inverters, ect), and it will happen in energy storage.  For the consumer (and perhaps the planet) this is all good stuff.  It is driving the price of renewable energy down, which widens market opportunities and speeds adoption.  But for the lowly product company, it is tough tough business.

So do me a favor, next time you talk with you friendly neighborhood solar product company employee, give them a big hug, tell them its going to be OK and that the solar installer business is going great and will likely only get better between here at 2050.. so they'll always have a home ... on the roof at least!
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Energy Storage: Reminding Utility Companies the Future may not need them

Unless you live under a rock, the end of April brought a big announcement in the world of cleantech / renewable energy, which was the introduction of the much anticipated Tesla "energy storage" products, most notably the Powerwall aimed at residential users.  The announcement was picked up by the industry press and general press alike, speaking more to the marketing prowess of Tesla than to the actual revolutionary nature of the product.

Of most interest to the pundits was the price, which falls within the range of $250 - $350/kWhr, a pleasant surprise to most who follow the trajectory in lithium ion pricing.  The market leader in stationary energy storage is still lead-acid products, which have long been the workhorse of off-grid applications due to their low price (~$80/kWh) and simple maintenance, although they suffer great weaknesses in weight, depth-of-discharge (DoD) and total number of life cycles.

As with any flashy new product launch, you will eventually ask yourself, "Gee, should I get one of these things?!"  In fact, I had a local SoCal resident reach out to me to ask that very question, about how to best work storage into his home, which already has grid tied solar panels installed.  I asked him if he was getting credit for energy generated but not used from his utility, widely known as Net Metering, and he said yes.  "Well sir," I said, "The good news is you wont need to purchase a fancy Tesla battery, because the grid is already acting as your battery, and its doing a much better job than a in-home battery could ever do."

When your grid-tied solar system generates more energy than it can use in your home micro-grid, then that extra energy goes back into the local grid (meter running backwards), where it is used by your neighbor down the street.  When you have a Net Metering agreement with your utility, that means you are getting credit for that extra energy, which you can then trade for energy back from the grid when the sun is down.  Basically, the grid is acting as your battery, effectively storing you over generation for future use.

But what if you had a naughty utility which decided it wasn't going to give you any credit for your extra energy?  Well, then you would be throwing your extra energy away.  This is the time you may want to buy a battery, store your extra energy and use it when the sun goes down so its not going to waste because of an uncooperative utility company.

But in the case of home batteries, the utility company who does not net meter is taking a huge risk, because a once customer of the utility is now completely self sufficient with their solar + storage set up and no longer has a need for the utility (or a far reduced one).  They've lost a customer, which is a big big deal.

So what is the most likely long term outcome from all this change in a consumers "energy options"?  Option one, the utilities screw up net metering, forcing millions of customer to defect from the grid, which ultimately destroys their entire business.  Option two, the utilities manage to keep net metering and install their own suite of storage + generation to effectively continue the "grid as a battery" model, thereby evolving their business and surviving.  Option three, the utility owns the Tesla-like battery in your house, and you continue to "pay per kWh" much like a lease on a car, thereby evolving their business and surviving.

While the vision of solar panels + battery storage + all electric loads sounds like modern household utopia, it will be interesting to see how this actually plays out.  For now it is likely more of a deterrent against entrenched business practices than anything else.  Utilities can no longer sit around and tell the solar people, "You'll be back!  You need us when the sun goes down!" because solar people will soon have the ability to store sunshine.  The next move is yours Mr. Utility.  Choose wisely!
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No April fools, Gov Brown ramps up water restrictions due to drought

Yesterday was no April Fools, Governor Brown is finally starting to get serious about regulations in the midst of California's dire water situation.  The flurry of press activity yesterday, including this detailed article in the NY Times outlines the now mandatory restrictions against excessive water use in California.  The question now becomes, is this action too little too late?

OCR has long been critical of water policy in CA, with limited / no restrictions on ground water usage and lax enforcement of existing water use policies in a state where 70% of water usage is for landscaping.  Yes, you heard it right, LANDSCAPING!  This older OCR blog post from last year explores this issue deeper.  

For residents of Orange County, you should be on the look out for several things.  First, the local government is going to want to pay you to take out your lawn.  Riverside already has "cash for grass" programs in place, and I would expect this model to go statewide.

Second, I would expect water wasting enforcement to go up.  This means citations for those who refuse to learn how their sprinkler systems work and let them go off in the late morning / early afternoon hours when most of the water then just evaporates (and when local government workers are on the beat).  Ignorance will no longer be bliss in the "how to operate your sprinkler system" department.  

Last, since the main mode of communication to the public about their water usage is their monthly water bill, I would expect the rhetoric about the state's water situation to get ramped up in your monthly mailer.  You may start to see more charts comparing your usage to your neighbors in an attempt to shame you into a more conservative water user.  If that doesn't work, the we may start seeing tiered pricing for water to penalize overuse.  Some cities, like Santa Monica, are already talking about personal water restrictions, as reflected in this recent YouTube video.  Outright price increase will likely be a last resort, as increasing the price of water can have a disproportionate class effect, with the poorer water users suffering disproportionately to the richer water users. 

It will certainly be interesting to see how this situation develops as we get into the dry months, and certainly if the upcoming winter is another dry one.


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