Alternative Energy Supplies - Should They Be the Rule Instead of the Exception?

Is America being leap-frogged once again in the high stakes world of technology? It is already happening with communications services, with entire nations foregoing expensive installations of cables and poles and going straight to the heart of the matter - which is providing universal coverage via cellular in a decentralized system. Similar advances are taking place in internet coverage in nations such as India, China and Indonesia. Now it's happening in electrical generation.

For a dozen years, a company in India has found a model for installing and providing solar power systems - at a profit. And not by installing them in enormous complexes with centralized power generation and storage, but by installing individual solar panel arrays and off-the-shelf battery systems to individual homes in remote areas of India.

Solar Electric Light Company (SELCO) was founded in 1995 with funds from the Solar Electric Fund (SELF) and the Rockefeller Brothers Fund. The mission of the company - install solar home systems (SHS), concentrating on marketing and servicing SHS in the rural Indian market.

Within two years of its founding, SELCO had 500 customers. Which may not seem like many, but according to SELF, the potential market worldwide for similar systems is 2 billion people who don't live "on the grid." Now their customer base is in the tens of thousands and the company's name is becoming synonymous with solar home systems to the average Indian living in the rural countryside.

The system installed by SELCO uses off the shelf components - solar modules from Tata-BP Solar based in Bangalore, batteries produced in India, along with two components made by SELCO - compact fluorescent lights and power controllers. The typical installation will power two to six compact fluorescent lights for several hours, as well as a radio, black-and-white television, or a small fan.

That may not sound like much power to a Westerner used to profligate usage and universal electrical service, until you consider that the typical units being installed are only generating between 22 to 35 watts of power, in a solar array only about 1 square meter in size. The initial installation is guaranteed free of defects for the first year, with routine maintenance checks made free of charge during that year.

Compare that to the smallest solar array available in the United States from Sharp, the largest manufacturer of solar residential systems in the country, which start at 72 watts and go up to a whopping 216 watt system but is only 2 square meters in size.

The government of India is backing the effort by guaranteeing loans for up to 75% of the installation cost at a lower interest rate to qualifying homeowners. The World Bank is also behind the effort, providing low cost financing via SELCO to customers, and SELCO also has received backing from the fifth largest bank in India to be the only source for SHS for which they will lend money.

Similar programs are under way in China, Cambodia, and Indonesia.

The closest model to this in the United States on a national level are income tax breaks that amount to about 30 cents on the dollar for the amount invested by installing such home systems. Nothing remotely like this exists in the arena of financing - if you don't have the cash for the investment, you pay a consumer rate for the money. There is no concerted effort in place to abandon the model of centralized power generation for home usage, most of which comes from burning coal and releasing massive loads of particulate matter, sulfur dioxide, and carbon dioxide into the atmosphere.

Tack on top of the environmental costs of the current model the cost to the consumer for delivering electricity to their homes. That cost varies, from around 10% to as high as 30% of the bill the consumer pays. That cost may not disappear, not if we want to tap into a decentralized generation scheme to reduce our addiction to massive amounts of electricity.

Industrial supply of electricity requires massive amounts of electricity to operate, and massive generation capacity. The current model of a matrix of interconnected conventional power plants serves many industrial purposes well. But is it truly the only viable model?

Future needs of industry might be better served if the grid was being fed any excess power generated by decentralized generating systems, located at both homes, businesses and at the industrial sites themselves.

Such an industrial project exists in Massachusetts, with the retrofit in 2007 of a former Western Electric manufacturing facility. The building is generating roughly 138 MWh of its own electricity annually, and houses a diverse range of commercial and municipal tenants from a hi-tech chip manufacturers to landscape architects; North Andover Town Offices to Northern Essex Community College. The 20,000 square foot array cost $490,000, and is expected to see a 19% return on investment for the owners of the facility.

How can the rest of corporate America ignore such results? Shouldn't industries be asked, or even forced, to be responsible for generating at least a portion of their own electricity via renewable sources?

Some state governments within the United States have grasped the concept and recognized the benefits for decentralizing power generation. These states have created incentive programs for property owners to install electrical generation systems in which the utility companies are required to buy back any excess electricity being created at the site. Meters in those states literally run in reverse, with the homeowner, and sometimes the business owner, receiving a check at the end of the month, instead of a bill. Forty-one states require net metering, but not all require the utility company to purchase the power.

But why isn't net metering with power-buy-back from all electricity producers a universal program, throughout all 50 states?

Can America afford to continue to ignore decentralizing its energy generating systems, or will its leadership continue to stick to the model more appropriate for the beginning of the 20^th Century at the dawn of the Industrial Revolution?

Sources: Solar Electric Fund, Tata-BP Solar, Massachusetts Technology Initiative, Internal Revenue Service, Renewable Energy Access