To truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy.

Barack Obama, United States President

I’d be investing in clean, renewable energy. The big new fortunes of the future are going to be made by those who develop alternatives to burning fossil fuels.

Ted Turner, billionaire business man

This month I will briefly talk about solar energy as we have investments in that sector.  While I won't argue that global warming is or is not occuring, nor its causes if it is occuring, it should be clear to all that alternative energy sources are becoming more necessary every day for national security reasons, due to gradual depletion of fossil fuels and to preserve the quality of the air, water and soil.  This is a very simple background summary with some good links.  I encourage you to learn more, in particular if you plan to replace a roof anytime soon or are looking for a new career path.  

The Dream

Solar energy has been an idea that for years has been talked about as a potential source of cheap energy for the nation.  The dream is for clean energy, limitless, not owned by any corporation (except in Southpark) and with a low cost to harvest.  The problem with the dream, is that the final part has still never been realized.  Solar power, even with major breakthroughs is still not as inexpensive as natural gas or coal when externalities are excluded (i.e. clean up of environmental damage by fossil fuel extraction and burning not being included in the price), and hence runs into a major constraint to implementation, that is, people's budgets.  Recently however, there have been more advances in solar energy that put us on the verge of wide-scale implementation of solar power across not only the nation, but the world. 

The Sun 

The sun produces about 1350 Watts per square meter (called the solar constant) as it hits the planet.  In one day, enough solar energy hits the planet to provide all of the energy that all the people and industry in the world need for years at current conversion rates using only rooftops to do the collection of the energy.  That's right, even at today's efficiency levels for collecting solar energy, we have the ability, simply by installing solar on rooftops, to supply all of the electricity all of humanity uses. 

Where Has Solar Power Been

Interestingly, in the United States, we have been using solar water heaters since the 1890s (no typo).  Approximately 20% of homes used solar water heaters in the desert southwest during the early 1900s.  However, in the 1920s, large deposits of oil and natural gas were found.  Mass conversion to fossil fuels then essentially killed the solar industry for forty years.

By the 1970s solar began to make a comeback as the oil shocks rocked the nation.  However, the technology was far too expensive at the time to be worthwhile, especially after United States deals with Saudi Arabia drove oil prices back down.

In the late 1990s, after two decades of renewed research and development, solar energy started becoming feasible on a mass scale.  When the cost of clean up was included in fossil fuel energy production, the cost gap between fossil fuels and solar was recognized as not being as insurmountable as fossil fuel producers would have people believe.  

Solar Power Today

Gathering momentum in the 2000s due to technological breakthroughs and venture capital, solar power started reaching the efficiency levels necessary to begin a real debate on what energy policy should look like going forward.  Today, efficiency levels for solar power in the lab are almost equal to the anticipated cost of natural gas fueled power plants and the cost of coal fired power plants when clean up costs are included for the coming decade.  We are at least several years from mass production being able to deliver those products cost efficiently, however, it is clear that fossil fuels are about to have a cost competitive limitless clean energy alternative. 

One telling sign for the development of solar energy is that some of America's largest companies have increased research and development on solar technology.  Recently, IBM made a huge breakthrough in solar efficiency.  Historically, when America's largest companies commit research and development to an idea, that idea becomes a marketable reality.  I believe the massive ramp up of R&D the past fifteen years indicates that solar is much closer today than it has ever been to becoming a force in producing power for America.  

Further, the American government has shown a renewed interest in solar, as has the Chinese government.  There is massive positive momentum developing for solar.

Here are some interesting and in some cases, fun, links regarding solar power:

Solar For Kids

Solar Timeline

Solar Energy: New York Times reports

Solar Power News

Solar Power International Convention 2009

Local Solar News: Business Journal of Milwaukee

Local Solar News: Milwaukee Journal Sentinel

Next month I will have a few announcements about my practice. 

Cordially, your looking for a sunny future advisor,

Kirk Spano