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I love the idea of renewable energy.  It’s not because I’m a “green” sympathizer, because I’m not, really.  I do think we should be good stewards of God’s creation – but I also think a free market economy is the very best human way to do that.  I think being green for the sake of being green is a manifestation of arrogance and ultimately, idolotry.

But still – there are a number of reasons that renewable energy is appealing, assuming that it can sustain a market.  Good stewardship is one of them.  The potential to be completely off the grid is another.  There are some promising technologies on the horizon, including solar collection systems.

But…’s just not there yet.  The costs and return on investment time are not such that they can support a market yet.  They just aren’t cost effective.

Enter Power 4 Home, with dramatic claims:

  • Who else wants to create their own electricity and laugh at rising energy prices while saving the environment and having the electricity company pay you?
  • Practical method of generating your own electricity for less than $200
  • Slash your power bills by 80% or even eliminate them completely
  • I watched the power meter numbers turn backwards!

There are many more such claims.  Here is a good section that can serve as a summary:

You can build a very nice solar power system for as little as $125.  All the parts you’ll be using can be found at your local hardware store.

This electricity works to power up any appliance you have in your home including lights, computer, television, washing machine – you name it.

Knowing how to create a solar power system will give you the freedom to get off the grid if you want and say goodbye to electricity bills forever. If you prefer to stay connected you’ll be amazed as your power meter goes backwards and the electric company actually pays you!

Don’t forget the Power4Home kit comes with easy to read instructions and step-by-step video lessons to help you put together your first solar panel in just hours.

People, know that this is a scam.  You will not build a portable solar panel from scratch with $125, and you will not do it in 2 hours (not on a plane, not on a train; not at home, and not in a two hour: there’s nowhere to go to make your own power).

A good friend of mine and I went through all the gyrations of this for him to build just such a system at his house.  We struggled together over specs, prices, components, generation capacity, how to connect to the grid, regulations, utilities, and so on.  It was a long process – but you don’t care about all the details.  Let me just point out some of the claims that I think are bogus:

You can build a very nice solar power system for as little as $125. All the parts you’ll be using can be found at your local hardware store.

I think this is highly unlikely.  How many hardware stores carry photovoltaic panels that are capable of producing the kind of energy it would take to power a home (or even just your A/C)?  Even if they did, I remain extremely skeptical that a practical panel could be built with commodity hardware for $125 – a simple Google shopping search reveleals that panels as small  as 13″x15″ (a.k.a. not practical) can cost $125 and up.  The inverters you need to (a) make your system compatible with household electronics and to (b) tie into the grid are very, very expensive.  Thousands of dollars.  It’s also not something that would be very doable for a layman – it’s a real chore to find parts that are compatible with the utility-installed systems that tie you to your local grid.

Another plus is that you can take this system with you on the road or when you go camping because it is portable!

Systems like this are anything but portable.  It’s only portable in the sense that if you move to another home, you can take it down and move it – but it’s not something you can just throw in the back of your truck and haul around.  Photovoltaic cells are made of manufactured crystal and silicone.  That means it’s fragile.

Knowing how to create a solar power system will give you the freedom to get off the grid if you want and say goodbye to electricity bills forever. If you prefer to stay connected you’ll be amazed as your power meter goes backwards and the electric company actually pays you!

Again – I just don’t see how this can be true.  The first part about getting off the grid would require many, many solar panels.  You’d have to cover your entire roof and then some, and you’d have to have a lot of direct sunlight.  My friend’s panels are a few hundred square feet, and he is in an open area in Texas.  His peak generation is right at 1KW in the 100+ degree weather in Texas.  That peak lasts for about an hour or so, assuming no clouds.  We get about 14 hours of daylight in the summers.  On the very best days (14 full hours of direct sunlight in Texas in July/August – the only better place in the US is parts of Arizona) he might generate an average of a few hundred watts.

To really get off the grid, generation has to be higher than consumption.  His house is unusually efficient.  The average home in the US consumes somewhere between 5-10 KWh each day – his consumes somewhere in the 2 KWh ballpark.  During the very brief peak generation time (when the sun is highest overhead), his system might possibly keep up with demand if he turned off everything not essential (leaving pretty much A/C and refridgerator).  The bigger problem is the rest of the day – generation doesn’t even come close to keeping up with demand.  The A/C consumes more at 4-5pm here than it does at noon, but by that time in the afternoon, generation levels are way down because so much energy is being lost in the atmosphere (which is why it gets hot, by the way).  It only gets worse from there – generation is essentially zero at nighttime (you can actually generate trace amounts of energy from sunlight reflected on the moon), but consumption is not.  The refridgerator still runs, as does your A/C, ceiling fans and so on.

This is where storage becomes a critical component of any system like this (and make no mistake – this is where it’s at.  The next billionaire wonderkind a la Bill Gates will be the inventor of a revolutionary energy storage system that can make all the renewable technology practical).  If you can store enough during the day to get you through the night, then you can get off the grid.

Finally, my friend and I did some calculations  on how long it would take for his savings from energy generation to catch up with the cost of the system (in other words, the ROI or Return time On Investment).  It turned out to be something like 27 years in a truly free market environment, which is abysmal.  After government subsidies and tax credits and so on, the number came down to about 15 years.  More efficient energy practices at home can bring the number down to about 12-13 years.  That didn’t include the cost of maintaining the system at all (any ideas about how much it costs to replace a panel when a hail storm hits?  What about simple corrosion or burnouts from surges on the grid?), which would almost certainly bring the number back up to around 20 years.  That’s not a practical investment – not many people currently live in homes they will still be in after two decades.  To be practical, I’d estimate that the ROI would have to be down about 3-5 years before market adoption really picks up.

To sum up  then, you have to meet three challenges: generate what you consume during the day plus enough excess to power your nighttime consumption, and be able to store all of it in a way that is retrievable for practical use, and do it for less than it costs to simply pay your utility company for the delivery of energy.

Regardless of what anyone might try to sell you, there are some bottom lines when it comes to this kind of technology, and right now it simply doesn’t pass the above three challenges.  My friend spent over $8000 on his system which was largely self-constructed.  He found all the individual parts and fit them together; he even welded his own rack for mounting them, bought the inverters and tied himself into his own grid connection.  His utility company told him that his meter would not run backward, and even if it did, he wouldn’t make a profit on any excess generation (which would be rare anyway).  Storage is prohibitively expensive and volumnious: even if you could get enough automotive batteries for free to do all your storage, they’d fill your garage before becoming very practical – not to mention that they would generate heat of their own.  Lithium ion batteries are more practical, but for what it would cost you to buy enough batteries like that to serve your needs, you could pay for your energy consumption for years and years.

If this weren’t the case, companies like Power4Home would be getting massive amounts of venture capital money and scaling production to make this stuff marketable – and for good reason.  They’d make a killing doing so.  I can point you to a small handful of VCs that I know about personally that would absolutely jump all over something like this if it were for real.  However, it’s not for real, VCs aren’t jumping on it, and guys like this who want to feel good about being green are stuck selling gimmick manuals that make promises that can’t be kept.  If you’re a hobbyist or like to feel good about yourself, then knock yourself out – but don’t kid yourself and buy this thinking it can be anything other than an expensive hobby.

I’ve been following the healthcare reform debate pretty closely (although I haven’t the time to do really hard-core analysis of all the various policy proposals like Jim Manzi does).  In another post on The Corner, James Capretta argues

At his press conference today, President Obama scrambled to “clarify” his promise to Americans on health care. It won’t work…For months now, going all the way back to the early days of the 2008 campaign, President Obama has been promising Americans that, if they like the insurance plan they have, they will get to keep it. He didn’t just mention this once or twice. It was a staple of his pitch, repeated over and over again.

The president’s “clarification” seems highly unlikely to be the final word on this. For starters, it doesn’t matter much to the voting public who pulls the trigger. They don’t want today’s stable, job-based coverage turned upside by “reform.” When they hear that tens of millions of people will get moved out of employer plans and into the “government option,” they will wonder if they themselves will have to switch insurance — and most don’t want to. The president’s comments today aren’t likely to put their fears to rest.

His main point aside, this sparked a new thought that hadn’t occurred to me before: why aren’t free-market advocates trying to make the case for interstate deregulation and decoupling the tax deduction of health expenses from employment on the grounds of job choice?

Consider: if you’re unhappy in your current job and want to find something else, what do you do?  You’re somewhat trapped in your current job until you have something else lined up with some certainty, unless you’re willing to pay months of Cobra premiums, which aren’t cheap even for people who have full incomes.  Getting that next job lined up can be a chore – getting the job you really want requires a lot of time invested in personal networking, which is hard to do if you’re still obligated to full-time work for the employer you don’t want anymore.

Then, imagine if any individual could take advantage of the same tax deductions for health premiums that employers currently enjoy – suddenly, the employers will find it advantageous to simply make contributions to your health premium costs, but no longer need benefits management companies to tailor plans for specific employers.  A tax-advantaged FSA could be set up, and then you would be perfectly capable of purchasing your own plans on the market – which now makes them portable.  You would no longer be bound to your job simply because your child has an illness that requires expensive treatment to manage.  Your employer would also have a greater incentive to make your job more desirable because there would be one less obstacle between you and the door.

There are alternative scenarios, but they all would mean it would be easier for you to leave your job and still have a good health insurance plan.