It has been said that the world’s present economic crisis will pale in comparison to what may be in store for the near future: an unparalleled energy crisis. Alternative, or green, energy has, of course, been around for decades, but only recently, with volatile oil prices, has consumer interest and government intervention factored into alternative energy efforts.
In his book, “Hot, Flat and Crowded,” Thomas Friedman posits the need for what he calls Geo-Greenism. This is a national strategy that will ensure a sustainable future for industrialized societies, while at the same time making America healthier, wealthier and more innovative.
Today, there are signs that the seeds of Friedman’s vision have taken root. Legislation in the United States and elsewhere has bolstered the alternative energy industry. The Obama administration has vowed to invest $150 billion during the next 10 years in private alternative energy efforts. The administration also aims to have 10% of America’s electricity produced by renewable sources by 2012, and 25% by 2025. Furthermore, it hopes to reduce greenhouse gas emissions 80% by 2050.
The president’s American Recovery and Reinvestment Act (ARRA) sets aside $39 billion for research, development and deployment of clean energy technologies and $20 billion in clean energy tax incentives. And at the end of March, the Obama administration announced plans to invest $3.2 billion in energy efficiency and conservation projects and $2.4 billion in the development of plug-in hybrid electric vehicles and the batteries that will power them.
Tangible examples of the private sector benefiting from government’s growing interest in alternative energy exist as well. Manufacturer of photovoltaic solar systems Solyndra Inc. (Fremont, CA) has secured a $535 million federal loan from the U.S. Department of Energy. This loan will ensure that the company can build a $733 million facility in California, which will result in thousands of temporary and hundreds of permanent jobs.
Alternative energy is garnering attention from local governments as well. The state government of Illinois, for instance, recently gave Chinese solar panel manufacturer Wanxiang Group (Hangzhou, China) $2 million in state aid for the construction of a facility in Rockford, IL, which has the potential to add up to 240 jobs. Another incentive for Wanxiang was the more than $1 million in tax breaks, up to 20 acres of free land and a pledge from the city that it will invest in the company’s solar panels for use on local facilities.
Ontario also has become a player in the alternative energy business, attracting U.S. companies by offering tax incentives. For example, solar power players First Solar Inc. (Tempe, AZ) and Recurrent Energy Inc. (San Francisco) have acquired and plan to develop solar projects there.
Foreign alternative energy companies are eyeing Ontario because of the policies of its Green Energy Act and a renewable-power purchase program that offers a premium for green power. The government will pay 80.2 cents for every kilowatt-hour of power that comes from a residential rooftop solar photovoltaic system for the next 20 years.
But Will It Work?Government efforts are definitely pushing alternative energy, but how do suppliers to the alternative energy industry view its viability? Quality Magazine asked a number of measurement, test and inspection, and quality-related software product and service providers how they view the industry. By all accounts, the demand for their products and services within the alternative energy industry exists, but there is an underpinning sentiment that the future of alternative energy-while promising-is as of yet very uncertain.
Greg Chatfield, sales manager and senior applications engineer for Micro-Vu (Windsor, CA), says that the company works with solar panel and fuel cell manufacturers in the United States and overseas. These companies use a variety of Micro-Vu’s solutions for measuring dimensions on solar panels, fuel cell components and related connector components.
“The decline of oil prices followed by the stock market crash took a bite out of alternative energy funding,” says Chatfield. “Some of the recent government spending is targeted at alternative energy, which has helped some companies, but I know of at least one California solar manufacturer that laid off its workforce and sold its assets.”
Espec (Hudsonville, MI) has been providing its temperature and humidity chambers to manufacturers of solar panels and fuel cells, as well as to the laboratories that test them. David Jung, marketing manager for Espec, expects business from more alternative energy manufacturers and says that the company has even changed the standard size of its products to accommodate the needs of the market.
“Certainly energy issues and government incentives are driving demand, thus driving innovation, which requires testing,” says Jung. “Our business thrives on changes within industries, as innovation needs to be proven as commercially acceptable.”
Jung says that the market for solar energy is bumpy right now, but he does not expect it to be a bubble, as the need for this type of power is real and becoming more and more viable.
For example, in February, First Solar reported that it had reduced the manufacturing cost for solar modules to 98 cents per watt. From 2004 through 2009, the company reported that its manufacturing costs have declined two-thirds from more than $3 per watt to less than a dollar.
Herb Schueneman, president of San Jose, CA-based Westpak Inc., a provider of research and development testing services to manufacturers of solar energy products, anticipates Central California leading not only the nation but the world in the development of solar technology.
“The level of innovation associated with solar technology and the Central California area appears to be stable or slightly increasing,” says Schueneman. “The reason for this perceived slight increase in the level has to do more with the innovative spirit of the area than any government program, availability of funding or other outside influence.”
While Schueneman sees solar as a growing and sustainable market, he has not noticed an increase in solar energy demand accompanying the volatility of fossil fuel energy prices.
A variety of alternative energy product manufacturers-including solar and wind, nuclear and fuel cell-use DataNet’s (Southfield, MI) statistical production validation and monitoring solutions. DataNet Chief Executive Officer Stephen Arnett says that he sees consumer interest in alternative energy and responsible manufacturing; however, he goes on to say that manufacturers of alternative energy products are caught between positive consumer sentiment and lack of actual demand.
“You have a lot of talk and PR and fund seeking,” says Arnett. “What is lacking is a key unit-demand that matches those.”
With that said, Arnett does feel that the alternative energy market is going to become stronger in the long term, as real demand begins to materialize. For the time being, Arnett says that companies that produce a commodity, such as energy itself, are sure of their success because energy will always be in demand. For example, a wind farm ramping up its size will always be able to find a market need for electricity. On the other hand, companies that are dependent on consumer spending, such as makers of solar panels and fuel cells, will have to wait to see the extent to which their technology will be adopted by industry.
Will consumer interest and government action be able to elevate America’s marginal use of alternative energy to the mainstream? While the future of alternative energy in the United States is still uncertain, it is likely that an interested public and government will ultimately affect the development of more efficient, more pervasive and cheaper alternative energy technologies. Q
Is There a Charging Station in Your Future?Solar power panels from Evergreen Solar Inc. (Marlboro, MA), a manufacturer of solar power products, are being used to provide electricity for an electric vehicle battery recharging station in a high-traffic area in Frankfurt, Germany. The solar fuel station provides free battery charging for small-scale electric vehicles, including Velotaxis, Segways, electric bikes and scooters.
The station contains six charging ports, all of which receive their power from the solar panels located on the building’s roof. The installation is located in a major shopping district, allowing people to power their vehicles while they shop. On a hot, sunny summer day the station will produce approximately 21 kilowatt hours of electricity and enough annually to power 115,000 kilometers of travel for the average e-scooter.