Wednesday, March 19, 2014

You say you want a revolution?

One of the subjects that has fascinated me my whole life is the question, "How do you really effect social change?"  Growing up in a Lutheran parsonage, the first "answer" I was exposed to was the belief that the first order of business was to change people's hearts.  Better, more ethical people produced better societies, I was taught.  And while the Protestant Reformation actually did lead to better societies, it was a long and very messy process.  Europeans were still killing each other over the ramifications of the Reformation 300 years after it happened.

The second motor of social change was, of course, political revolutions.  Growing up in a country born in a Revolution, this notion was always present even though the idea of revolutions being a good idea was so thoroughly watered down by the mid 20th century as to be almost meaningless.  I once visited the home of Thomas Jefferson and on a tour lasting 1.5 hours, the fact that Jefferson was a revolutionary who supported violent change in governments was never mentioned.  Social orders tend to be so conservative that they even whitewash the revolutionary tendencies of their revolutionary founding fathers.

Expecting social change from religion and politics is almost certainly guaranteed to disappoint.  Both are Leisure Class practices and as such, tend to enhance the power of the status quo.  And yet as boy growing up in the USA Midwest, I knew that social order had been dramatically altered and arguably improved from say, 200 years ago.  And if the Leisure Classes were not responsible, who was?  In the Midwest you didn't have to look far for an answer—life had improved for the great masses because of the inventors and the person who really changed everything was Henry Ford.  His invention wasn't the automobile—it was the affordable automobile.  And if putting so much technology into the hands of the ordinary folk wasn't enough, he instituted his even more revolutionary belief that his workers should be paid well.

Since every inventor only succeeds if his new idea displaces some older one, inventors—by definition—must be revolutionaries.  Some actually understand this and look on it as one of the great perks of their profession.  And the extra-smart ones understand that surest way for their revolution to succeed is to hijack the most ubiquitous characteristic of the Leisure Classes—status emulation.  If an invention somehow becomes cool, it wins—"simple" as that.

While Elon Musk is obviously an almost perfect example of a Producer Class revolutionary, I am not sure he actually deserves all the credit he gets these days for his contributions to solar—as in the article below.  There are thousands of people who actually did the real heavy lifting of making solar affordable.  But making solar "cool" is a terrific accomplishment so I will tolerate some of the hyperbole thrown his way.

GOLDMAN: Solar Is On The Way To Dominating The Electricity Market, And The World Has Elon Musk To Thank

ROB WILE MAR. 18, 2014,

Goldman Sachs has set an estimated date for when they believe residential solar power becomes competitive with existing electric across the U.S.

It's relatively soon.

And it's mostly thanks to Elon Musk.

Here's the timeline from Cleantech analysts Brian Lee and Thomas Daniels, included in Goldman's latest note on Tesla:
  • First, assuming the Gigafactory — the giant manufacturing facility that will soon begin pumping out lithium ion batteries to be used in both Tesla vehicles and renewable energy storage units — reaches its potential, the cost of said batteries should drop to $125/KWh by 2020, from a current price of more than $200/KWh, and dropping 3% each year thereafter. 
  • The cost of solar panels continues to fall. Goldman says we can expect an average reduction of 3% annually here as well. That is extremely ambitious — cost reductions have stalled a bit of late — but it does jibe with this famous chart. 
  • Finally, if electricity prices continue to climb in-line with historical increases — something that assumes a steadier economic recovery — prices for existing forms of electricity will increase 3% annually
"This puts LCOE at $0.20 by 2033 which would be at parity with the US grid price," Goldman says.

And this could happen even sooner in New York, California, and Hawaii, where electricity is more expensive and especially in places like Hawaii where costs are $0.36 per KWh, the note.

What's more, Goldman says this will all go down even without credits:
While the ITC runs only through 2016, our Clean Energy team believes the number of households hitting grid parity will continue to grow as the cost of the systems comes down...SolarCity has seen a 40% decline in the per watt cost of PV panels since the second quarter of 2013 driven by improved scale which is expected to continue. This has been true for Tesla’s battery costs as well, which have declined from of $500/KWh in 2008 to $250/KWh for the Model S to potentially $125/KWh at the gigafactory. As a result we should note that the quantitative grid parity and return calculations we show above are arrived at without any Federal or state credits.
They go on to invoke the two scariest words in the world for utilities: grid defection (people leaving the grid). And they lay out three reasons why, though nothing is imminent, we are heading in that direction.
Ultimately the holy grail of solar is to move to a situation where the customer is no longer tied to the grid at all. This may be far off, aside from entailing a much more expensive solar/battery system, this is also potentially out of people’s comfort zone entailing a 100% reliance on a new system for their electricity needs. That said, decreased reliability from an aging distribution infrastructure, a broadening desire to reduce the carbon footprint, and perhaps most importantly, the reduction of solar panel and battery costs could also work together to make grid independence a reality for many customers one day.
They conclude: "As this is a very high-level exercise, we do not quantify the addressable market in this report, but to us the conclusion is very clear – the potential for this application could be very large." more
Lest anyone think that Musk is somehow a lesser revolutionary because he is Producing Class, we see the following tribute.  This is the sort of thing usually reserved for the guys on horseback,  The following clip was produced by some young video artists who are trying to showcase their abilities to describe the effect of an electric car on a child's imagination.  John Wesley writing Protestant hymns would have loved to have had such sophisticated video tools.

1 comment:

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