Tuesday, April 10, 2012

Green Energy's bottom Line

Green Energy’s Bottom Line

It goes without saying: If you want to start an argument, bring up the issue of green (renewable) energy. Exactly how many different opinions there are is uncertain, but it’s clearly more than the total number of solar panels and windmills. In spite of the growing number of green energy startups and government programs supporting them (recently failed Solyndra being the current hot topic), there’s little agreement on when, or if, green energy will play the majority role in world energy production. Just how far have we come, and where are we now?
The green energy movement has been around for longer than most people think. Although part of the larger environmental movement, which has long historical roots, the green energy movement can be traced back to the late 1800s, when science first began to suspect that increased CO2 levels, caused by human activities, could eventually result in increased world temperatures. In 1896, Swedish researcher Svante Arrhenius became the first scientist to propose that carbon dioxide, already established as a greenhouse gas, could increase atmospheric temperature over the entire Earth, later suggesting that human-generated CO2 could potentially warm the Earth enough to reduce the chances of another ice age. Arrhenius, of course, could not predict the degree of worldwide industrialization, or the ubiquitous nature of the internal combustion engine, and assumed that any such change would take thousands of years.
Almost nobody paid attention to his idea, but scientists continued collecting data and tweaking mathematical models, eventually developing computer simulations. It wasn’t until the 1970s that the potential for near-term climate change began to gain traction, though nobody was sure just what the change would be or what it would mean. By the beginning of the 21st century, enough scientists had signed on to the notion of civilization as a driver of global warming that both the public and private sector began developing programs to advance alternatives to fossil fuels.
So where are we now? According to the U.S. Energy Information Administration, the major energy sources for the U.S., including energy used for transportation, are (figures rounded):
  • Petroleum – 35%
  • Natural Gas – 23%
  • Coal – 20%
  • Renewables – 8%
  • Nuclear – 8%
  • Other – 6%
The biggest part of this total energy pie (over 38%) goes for the generation of electricity, with the second biggest piece (27%) going to transportation. The figures above set renewables as representing 8% of total U.S. energy sources, but much of that is hydroelectric.
Looking at electrical generation sourcing exclusively, we get the following breakdown, providing a better idea of the still limited role played by non-hydro renewables:
  • Coal – 45%
  • Natural Gas – 23%
  • Nuclear – 20%
  • Hydroelectric – 7%
  • Other Renewables – 4%
  • Other – 1%
Of the 4% listed as Other Renewables (non-hydroelectric) we get the following breakdown:
  • Wind – 55%
  • Biomass – 35%
  • Geothermal – 9%
  • Solar – 1%
It’s clear that green energy continues to play little more than a supporting role in America’s overall energy picture, making it easy to forget that 4% of all the electricity generated in the United States is no small number. More importantly, non-hydro renewables represent by far the country’s fastest growing energy source, with wind power, the biggest component, leading the growth.
In spite of powerful industrial opposition, and significant remaining technical challenges, green energy continues to build market share. Critics are quick to point to the ongoing support of government programs as the only thing keeping non-hydro renewables alive, but supporters insist that this misses an important point. Historically, one of the few things government does right is to spur the type of speculative research that private industry is reluctant to fund, spinning off technologies that companies can then economically develop and apply to consumer needs.
The space race is a classic example. Its formal justification was never industrial spinoffs, but rather a highly visible affirmation (to ourselves as much as to the rest of the world) of the free market system’s technological superiority (something of an irony considering that it was a program of big government, though obviously based upon the strength of free-market engineering). In any event, it resulted in a long-term dividend, a world of diverse products, big and small, including CAT and MRI scanning, cordless power tools, freeze-dried foods, scratch-resistant lenses, LEDs, artificial limbs, and other inventions the U.S. went on to sell around the world.
Regardless of what side you come down on, competitive green energy research has led to continued technological improvements in the field, and a corresponding reduction in price per energy output of renewables. Any developing technology typically eats up money in research and development, the benefits of which show up later in the business cycle. (Think back to the first home computer you purchased, how much it cost, and how little it could do.)
But conventional wind power, currently considered by many the most cost-effective renewable energy source next to hydro power, is already closing in on coal in cost efficiency, having passed nuclear power, with geothermal and biomass close behind. Solar remains the most expensive alternative, though significant improvements are occurring there as well. As the cost efficiency of wind power and other renewable sources improves, the comparison with traditional fossil fuels becomes more compelling, and it’s a trend that shows no sign of letting up. From this perspective, the bottom line for green energy seems inevitable: continued decreasing costs and increasing efficiencies can be expected to fuel continued growth.
However, even if you support the rising role played by renewable energy, finding a specific investment in green energy with significant upside potential is a separate issue. Below are some particular analyst favorites for the remainder of 2011 and into 2012:
Broadwind Energy (BWEN) – Broadwind supplies customized products and services to the U.S. wind industry.
SatCon Technology (SATC) – SatCon delivers power conversion systems for renewable energy plants.
GT Advanced Technologies (GTAT) – GT (previously GT Solar) is a global provider of advanced materials and production technologies for the solar industry.
SunPower Corp. (SPWRA) – SunPower designs and produces high-performance solar power technologies.
Also worth serious consideration are the following recommended clean energy funds:
  • Gabelli SRI Green Fund (SRIGX)
  • Powershares Cleantech Portfolio (PZD)
  • Winslow Green Growth (WGGFX)
Purchasing funds can reduce the risk of investing, though keep in mind that buying a basket of securities also reduces your potential reward. Regardless of your feelings about green energy, it’s clearly here to stay, and current projections point to ongoing growth for the foreseeable future.
There hasn’t been a better time to get started in alternate energy projects for your home or business. With your free energy audit, our professionals will: calculate your average daily amount of sunlight and wind speed, determine what energy system is best for you, estimate the cost of your energy system, as well as, inform you how federal, state, local, and utility companies can provide substantial rebates towards your total cost. Act now and call today! For more information, discounts and FREE Energy Audits – Call 602-456-9532 or Email us at Info@CleanGreenSolarWind.com
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Sunday, April 1, 2012

Which Green Energy Has The Quickest Payback Options?

There hasn’t been a better time to get started in alternate energy projects for your home or business. With your free energy audit, our professionals will: calculate your average daily amount of sunlight and wind speed, determine what energy system is best for you, estimate the cost of your energy system, as well as, inform you how federal, state, local, and utility companies can provide substantial rebates towards your total cost. Act now and call today! For more information, discounts and FREE Energy Audits – Call 602-456-9532 or go to www.CleanGreenSolarAndwind.com
Renewable Energy for Homes
The four most common options for residential renewable energy installations are solar photovoltaics, solar thermal, small wind and geothermal.
1) Solar photovoltaics (PV) are used to convert solar power into electricity, and thus can be used to reduce or eliminate your grid electricity needs.
2) Solar thermal systems capture the sun’s energy by heating liquid (i.e. water), which can then be used in various applications. In residences, these systems are typically used to heat domestic hot water, to heat pool water or for space heating (i.e. radiant floor heating). Depending on your current energy sources and the type of application, you could replace some of your natural gas, oil, or electricity needs with solar thermal.
3) Small wind turbines turbines harness wind energy to produce electricity for homes, farms and small businesses. Therefore, small wind installations can be used to reduce or eliminate grid electricity needs.
4) Geothermal systems use the nearly constant temperature of the Earth to heat (and cool) buildings. Therefore, geothermal could replace whichever fossil fuel you use to heat your home, whether it be oil, natural gas, electricity etc.
Which Has the Shortest Return on Investment?
The payback period, also known as the return on investment, is the time it takes to “repay” the amount of the original investment. With a renewable energy investment, the initial cost is repaid in energy savings.
It is difficult to choose one type of renewable energy that will have the shortest return on investment across the board. This is because a variety of factors affect the payback period of your renewable energy investment, including:
- the availability of the renewable resource in your area (sunlight, wind, ground source heat)
- the size and type of energy load that the renewable energy installation will replace
- the prices of the fossil fuels you are replacing
- local, state and federal incentives
For instance, when considering green energy options, you must keep in mind that each type of energy may only fulfill certain needs and that this might affect the payback period. Wind and PV systems typically replace electric loads, while solar thermal and geothermal typically replace heating loads. For example, if you have gas or oil heat, this would slow the payback period on a wind or PV installation, because the installations would not alleviate your heating load or detract from your gas or oil bill. Alternatively, if you have electric heat, the wind or PV installation would alleviate your heating load and have a much smaller payback period.
Incentives for Green Energy
One factor that affects the renewable energy payback period is availability of federal, state, local and utility incentives for renewable energy installments. For example, the IRS has a renewable energy tax credit that is applicable to solar PV, solar thermal, small wind and geothermal heat pump systems. The Database of State Incentives for Renewables and Efficiency (DSIRE) is a great tool for finding incentives based on your location and utility.
Solar PV vs. Solar Thermal
In general, solar thermal systems are more efficient than solar PV systems – with solar thermal systems converting over 50% of the solar energy into heat and PV systems converting less than 15% of the solar energy into electricity. This means that a solar thermal system would be smaller than a solar PV system, given that they produce equivalent energy outputs. Plus, solar thermal materials are typically cheaper than solar photovoltaic materials.
In general, this means that solar thermal systems have a smaller up-front cost and have a shorter payback period than solar PV.  However there are variables that could make solar PV the better option.
To estimate how much a solar PV or solar thermal system will cost based on your location and current energy usage, you can use this calculator. For a more accurate quote, contact your local solar contractor. Most will give you a detailed estimate for free.
Wind Turbines for Homes
A wind turbine rated between 5 and 15 kilowatts should meet an average home’s needs. According to NAHB, “initial costs (of wind turbines) can run between $40,000 and $50,000 for a 10-kW system, or a simple payback of approximately 21 years without factoring in tax or other incentives that may be available”. An average system will save up to $200 per month if the electricity costs are 10 cents per kilowatt. As you can see, the payback period of your small wind system will depend on your energy usage, electricity costs and available incentives.
To estimate how much a small wind system will cost based on your location and current energy usage, you can use this calculator.
Geothermal for Homes
As a general rule, installing a geothermal heat pump will cost about $3,000 more per ton than an air-to-air heat pump. According to the National Association of Homebuilders Research Center, “Overall, one could expect to pay between $4,000 and $11,000 more for a 3-ton GHP system than for an air source heat pump system”. An article in Scientific American states that geothermal systems are often “$7500 or more”. To estimate how much a geothermal system will cost based on your location and current energy usage, you can use this calculator.
According to the Environmental Protection Agency, geothermal heat pumps can save homeowners 30 to 70 percent on heating and 20 to 50 percent on cooling costs over conventional systems. According to the NAHB, “reports by builders who monitor their in-place systems indicate heating and cooling savings between $358 and $1,475 annually”.
This shows that the payback period of your geothermal system will vary greatly depending on the initial cost and your heating and cooling savings. Your best option is to find a geothermal installer who will give you a cost estimate based on your available resource, current energy usage, incentives, etc.
A great overview of geothermal for residential applications can be found at NAHB’s website.

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