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BBC News - China's Grime Belt Air Pollution Extreme - Time 2:55

BBC News Article on Environmental Issues

GORE: On Coal and a New Power Grid - Time 2:42

Former VP Al Gore speaks to Congress on his view of coal power plants and creating a new kind of power grid in the United States (Mar. 21, 2007)

[Channel 4 News] Environment:
China coal fires in spotlight - 5:47

Lindsey Hilsum reports on the problem of unchecked coal seam fires in Northern China and explains how these alone may be responsible for up to 3 percent of global CO2 emissions. Report of 2007.12.09

Hitting the emergency stop button on coal - Time 0:30

Find out why 15 Greenpeace activists occupied and took peaceful direct action to shut down a coal-fired power plant on the NSW Central Coast. One of our activists at plant, John Hepburn, explains why we are there.

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Venture capitalist Vinod Khosla discusses marketplace solutions to global
warming at the Sierra Club Energy Solutions Forum, featuring Vice-President Al Gore.
For more information: Run Time: 2:45

Click Image To View Complete .pdf Article

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Climate Change:
Procter & Gamble - Clean-cut ideas on green products.

Peter White, Procter & Gamble's head of sustainability, has a clear understanding of what consumers expect from green products.

Consumer goods giant Procter & Gamble has claimed success in tackling climate change with its Ariel washing powder's "Turn to 30" campaign. For Peter White, the company's head of sustainability, Ariel's experience holds lessons about how to make green marketing campaigns work.

In 2006, Ariel started its Turn to 30 campaign to persuade UK consumers to wash clothes in cooler water to save energy. The planning for the campaign started at the design stage, White says. "You've got to have a product that actually works at 30 degrees … If it doesn't work, they won't buy it again," he says.

P&G's Tide Cold Water washing detergent in the US is also designed to work at low temperatures. Both campaigns have a simple proposition, White says: "Wash at 30 degrees as you normally would and expect the same results."

As well as receiving praise, Ariel's claims to wash clothes clean at 30 degrees had to be defended in the press. In May 2007, P&G disputed the medical charity Allergy UK's claims that washing at low temperatures was insufficient to get rid of allergens in clothes and bed linen.
Small is big

P&G is embracing the new marketing trend for selling more concentrated products in smaller bottles. The products require "less transport, less packaging, less water in the production, and it's easier for the consumer - it's a win-win", says White.

The company's answer to rival brand Persil's concentrated washing detergent, "Small and Mighty", is its fabric softener, Lenor Concentrate. White says P&G communicates the green idea behind the product to consumers by quoting the number of trucks saved from reducing the volume of packaging.

"Over the next five years we are going to develop a market, $20 billion worth, of what we call sustainable innovation products," White says. Sustainable innovation, according to P&G, means a 10 per cent improvement over the whole life-cycle of a product in one of six environmental categories, compared with alternative or previous products. The categories are energy consumption, water consumption, packaging use, total materials used, waste generation and transport.

P&G's approach mirrors that of electronics firm Philips, which selects one out of many sustainability concerns to address in new products. But why not address all the environmental criteria in the same product, instead of just one at a time? "It depends on where the main impacts are," says White. "If you look at a detergent … the big impact in terms of energy use or CO2 emissions comes from the use phase. The biggest thing you can do in that product category is low temperature washing."
White adds: "The biggest issue with Pampers is the amount of material that's used. If you look over the last 20 years … the weight of one nappy has gone down 40 per cent and packaging has decreased by 80 per cent."

While improving performance in one of the categories, no decrease in standards is allowed in any of the other five, White maintains.

Minimised packaging is not new territory for P&G. But the company learned the hard way that consumers put convenience first, White says, when they decided to strip down bottles to plastic refills.

"We pioneered the use of refills back in the 1990s. We put liquid detergents in pouches so [consumers] could fill their bottles at home … Consumers at the time didn't want that. It was less convenient. The stores didn't like it because the pouches didn't sit right on the shelf".

So what do consumers want from a green product? "They want products that are packaged efficiently. They don't want excess packaging. They want packaging that can be recycled. They like the idea that it's made of recycled material. But they also want convenience."

As for zero-packaging ideas, such as consumers refilling their bottles in store, White says: "It makes a lot of mess and it takes much longer to do your shopping … it doesn't work."

Recycling trade-off

According to White, P&G has developed the technology to incorporate up to 50 per cent recycled plastic in its bottles by sandwiching recycled plastic between two sheets of white virgin plastic.

He says there is necessary trade-off between what's green and what's acceptable to consumers. "Recycled plastic is dirty grey, and consumers expect products to look pristine and clean. If you put a product in a 100 per cent recycled plastic bottle, the consumer wouldn't buy it".

In some brands, P&G uses the full 50 per cent recycled plastic and in other brands it uses less. White says: "One of the problems is actually getting hold of enough recycled plastic."

Greener plastic is simply more expensive, he adds. "Plastic is high volume, and relatively low value," he says. "In many cases recycled costs more than virgin, and so all the recycled goes to where they're going to pay for it, which is China. Recycled at reasonable cost is not often available."

Wholly "green" products are still a niche market, seen as undesirable or overly expensive to most people, according to White. Companies have to couple green claims with practical benefits in order to win over the average consumer. For example, P&G's greener, more concentrated products are designed to be lighter and easier to carry, while the energy-saving washing campaign saves customers money.

White says: "There are some people who will buy green because that's one of their core consumer needs. Then there's a mainstream that will behave in a sustainable way if you make it easy for them and don't ask them to make compromises."

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Selling green

Peter White's advice on green marketing is: "It's not what you say, it's what you deliver."

He says: "The worst thing you can do for a bad product is advertise it well. If you have lots of advertising for a lousy product, people will buy it, have high expectations, be disappointed and never go back to that product again".

Climate Change:
Renewable energy - Investors ride the new energy wave
Big names including Google and BT are starting to generate their own renewable energy, and it's set to become big business, says Emily Farnworth
When wind turbines have been used for generating electricity for more than 150 years and for pumping water for millennia, it seems odd that it has taken so long for renewables - in the modern sense - to be appreciated as a desirable, affordable and necessary part of the world's low-carbon energy mix.

In the face of rising demand for - and price of - fossil fuels, a series of positive announcements last year suggest that 2008 might spell a new coming of age for renewables as a viable and popular mass energy source for the 21st century.

In November, Google announced a new initiative to develop electricity from renewable energy sources that will be cheaper than electricity produced from coal. The newly created initiative, branded RE<C, will focus initially on advanced solar thermal power, wind power, enhanced geothermal systems and other potential breakthrough technologies. Google co-founder Larry Page proclaimed: "Our goal is to produce one gigawatt of renewable energy capacity that is cheaper than coal. We are optimistic this can be done in years, not decades."

Although one gigawatt can power a city the size of San Francisco, it is the financial implication of Google's ambition that makes the announcement so important - that clean green energy can be cheaper than coal will remove a long-standing market barrier. For an industry with growing energy demands, mainly due to increased data centre capacity, it is not surprising that the organisation wants to secure a sustainable source of power.
BT has announced major plans to develop 250 megawatts of wind energy in the UK by 2016 as part of a £250 million wind power project in Scotland and Cornwall - enough to power a city the size of Coventry, or a quarter of BT's requirements.

Google and BT are not the only companies making a business case for renewable energy. A coalition of European companies - the Green Power Market Development Group - has already completed more than 100MW of green power projects and purchases since 2005, providing more than 50 corporate facilities in 16 European countries with green power. The coalition's more established US counterpart has developed more than 700MW of renewable energy since 2000 and is on its way to meet the goal of 1,000MW of cost-competitive green power.

Signs of competition

Stock market flotations and mergers are other important indicators that renewable energy is beginning to compete. In December, Iberdrola Renovables completed the world's fourth largest flotation of 2007, raising $6.6 billion. According to some, it single-handedly boosted the global clean energy's share of total funds raised by the energy industry on the public markets in 2007 to about 17 per cent.

Germany and the UK are taking big strides to bolster renewable energy demand. Germany's new climate change package includes plans to provide 25-30 per cent of the country's energy needs from renewables (up from the current 12 per cent), while the UK has backed a major expansion of offshore wind power that aims to bring 33GW of offshore capacity online by 2020 - potentially meeting about a fifth of the UK's electricity needs. China has committed to doubling its renewable energy targets to 20 per week by 2020, while in the US, renewable targets are increasingly being set at state level.

While the sector is repeatedly beating all forecasts, the scale of the challenge is certainly not for the faint-hearted. Barriers to faster deployment include a poor understanding of the business case (companies often dismiss renewables as being too costly despite evidence to the contrary), lack of resources and technical understanding of renewable energy technologies, and a tendency to conduct "business as usual".

Moreover, setbacks caused by public opposition to renewable energy projects, a not-in-my-back-yard attitude, and a fragmented regulatory framework are making it difficult to get more renewable energy development in the pipeline. Although global investment in clean energy rose by 35 per cent last year to $117 billion, this is countered by IEA World Energy Outlook's estimate that a massive $22 trillion of investment is needed in energy infrastructure by 2030 if rises in energy demand are to be met.

This low-carbon challenge will require a new level of international leadership and collaboration between governments and companies. What we can celebrate now is that clean green energy is attracting new champions to evidence and lead the economic case.

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Emily Farnworth is director of the corporate leadership programme at The Climate Group.

The bottom line: Greening your supply chain is not an act of sentimentality. It is pure good business.
It's good for the environment. Good for operational efficiency. Good for customer satisfaction. And great for the bottom line. No wonder leading companies are going green at virtually every stage of their supply chains.

Achieving a green supply chain isn't simply about measuring your carbon footprint and reducing emissions, it's also about water and energy efficiency, and management of toxic chemicals.
This is a one stop shop event for supply chain and procurement professionals concerned about finding a holistic approach to supply chain management and getting the right balance between your social and environmental agenda.

"Scheer Nonsense" -- The Damage Idealistic Environmentalists Can Do…

Recently, I was on a panel with Dr. Herman Scheer, a member of the German parliament and the president of EUROSOLAR (The European Association for Renewable Energy) and a much honored "environmentalist". Suffice it to say that there was great commonality of goals but significant disagreement about "how". From my admittedly biased point of view, his views sounded great but were ineffective and inefficient ways to reduce carbon emission and achieve sustainability. In fact, some ideas were downright harmful to the environment. This difference became vivid to me as we debated the role of PV technology versus that of solar thermal energy, the effectiveness of wind power, charging your cell phones with solar panels, on idealized distributed self contained homes and centralized power services and more. It did bring to mind a problem that has reared itself many times in renewably energy - the role of the idealist or dogmentalist versus that of the pragmatist.
Dr. Scheer has been a pioneer in his advocacy of renewable energy and sustainability goals. I agree with him on most of the goals and admire his early insights

Environmentalists vs Pragmentalists

First, it is worth reviewing the situation we find ourselves in. Electric power worldwide is over 40% of total global carbon dioxide releases, and it is the fastest growing portion (in terms of human-released greenhouse gases). India, China, and other countries are rapidly industrializing and bringing basic electric power services to their peoples. Their development, like US electric power, follows least-cost options. Our least-cost electric power options - coal-fired power plants - are by far our most destructive and dangerous ones. Coal burning directly kills hundreds of thousands of people worldwide in particulate, sulfate and mercury releases, thousands of tons of radioactive emission yearly and emits over twice as much CO2 per KWH as any other form of power generation. The coming costs from worsening droughts from Africa to Indiana, intensified storms, and rising sea levels will bring misery to billions. Nevertheless, US utilities and their banking partners are planning to build about 150 new coal-fired power plants in the US over the next 5 years, and China is building roughly 60 large plants every year ( the recent TXU settlement is a step in the right direction but will probably not make a dent). Electric power is an engine of economic growth, bringing light, cooling, and communication to billions, but every coal-fired power plant is a ticking slow bomb. Knowing this, we need solutions that work - now.

As such, we must address some basic rules: For any energy scheme to be viable, it must be cost effective, and it must be scalable. If solutions don't get adopted in India and China global warming control efforts are futile. To scale, they must make economic sense in China and India. The EIA projects that from 2003-2030, non OECD-Asia's (including India and China) energy consumption will grow at 3.7% - faster than anywhere else in the world. India and China are also the home of more than one-third of the world's population and are likely to continue to grow furiously in the near future, using lowest cost energy. If we allocate the same carbon emission per person worldwide (an equal right to pollute for every human) we are toast at anywhere near current levels of US emissions or even at levels of carbon emission in Europe. It is reasonable to assume that when India and China are part of a global carbon emissions pact, they will demand the same per capita emission rights for their people as we have in the west. This will require huge transfers (the President of the World Bank recently suggested over a hundred billion dollars a year!) of "quota purchases" UNLESS the new lower carbon emission approach to power generation is cheaper than coal (or nuclear - do we want hundreds of nuclear plants in India and China?) based power generation.

Moreover, these lower carbon emission generation technologies must be attractive not only to government planners, but also to private capital that cares only about economics and regulation- hundreds of billions if not trillions of which needs to become available. Simply put, government money will never be enough to reform the world's energy infrastructure. To achieve these goals, we must provide services that consumers want and prefer over their non-sustainable fossil competitors, while at the same time be profitable for business (unless it can politically be mandated worldwide thru policy which seems unlikely, especially in India and China). Applications that meet the engineering needs but fail to meet the commercial ones are doomed to failure, which provides one of the key reasons for my disagreements with Dr. Scheer.

The history of imprudent environmentalism is perhaps most visible in a technology that's regaining attention now - nuclear power, now touted as a solution to the problems with fossil fuels. A relatively old, stable, and cheap to operate (the NEI notes that the average electric product cost in 2005 for nuclear energy was 1.72 cents/ kwH, lower than coal (2.21 cents/kwH), oil (8.09 cents/kwH), and natural gas (7.51 cents/kwH), although nuclear capital costs are higher (to say nothing about the vast subsidies given to nuclear energy, something the NEI obviously does not note), and the EIA notes that nuclear power "makes no contribution to global warming through the emission of carbon dioxide." Nuclear power is responsible for only 15% of worldwide electricity production (about 20% in the US). A fair portion of this can be explained by the limited number of countries that have access to the technology - nonetheless, nuclear power is a viable alternative for any country in the developed world, where most power is used in the first place.

Despite the evidence in its favor, no new nuclear power plant has been approved in almost 30 years in the United States . The reason? Misguided environmentalism. The partial meltdown at Three Mile island lead to the cancelling of many nuclear plant orders and a political climate hostile to further nuclear expansion, despite its significantly cleaner profile than either coal or fossil fuels. To their credit, some environmentalists have started to come around the issue (Patrick Moore, one of the founders of Greenpeace as well as Stuart Brand of Whole Earth) but many are still hostile. This is not to say that some environmental problems do not exist with Nuclear Power. The predominant environmental issue for nuclear plants is spent fuel - radioactive waste. That being said, the lack of R&D into nuclear technology (primarily as a result of environmental backlash, but also due to the innate conservatism of energy companies) suggests that given time and money, technology could have solved or mitigated these issues. I would guess that had we continued on the nuclear trajectory in the 1970's we would have made substantial progress on the issues of nuclear waste and non-proliferation - problems that appear very amenable to a technology optimist like myself. How many millions of tons of carbon emissions do we have because nuclear plants have not been built? The irony of course, is that the typical coal plant spews tons of radioactive uranium and thorium into the air each year (more than their nuclear compatriots!) and we have hundreds of them! Today I suspect we don't have enough time to iterate through all the politics, legalities and technology development cycles of nuclear power generation (given typical 15 year innovation cycles compared to fifteen month innovation cycles for a technology like solar thermal power). In the short to medium term, it is probably too late for nuclear power to make a material difference in carbon emission in the next twenty years. By then it might be too late if we don't take action.

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The issue at hand: Sustainable power generation

Politicians/True Believers (like Dr. Scheer) have a tendency to paint idealistic scenarios - especially because they have the ability to promise them with government funding. Moreover, enough people are always ready for a government handout (which are sometimes necessary because they get the right trajectory started and at other times are just subsides that lead to little multiplicative benefit to society over the longer term - in other words are poor public investments). Personally I'm focused on what is pragmatic given political and economic realities in the US, India, and China, and where I can make the most difference. I've backed my beliefs with my own, private capital while Dr. Scheer gets to spend taxpayer money irrespective of the economics. I spend time looking at likely technology and business trajectories. While anything is possible, I focus on the ones I think are most likely while keeping an eye out for others that might happen - and I always hope that other like minded people catch the ones I miss. I would prefer we all agreed to pay the much higher electricity rates they pay in Germany or Japan for solar power and allocate huge subsidies for distributed solar power in Germany (at least for a period to get these alternatives started - that is a very useful purpose that Germany has served). That being said, a solution that works for middle/upper class homeowners in a rich country like Germany, who can spend a hundred thousand dollars per house (to be independent costs have to include batteries) doesn't solve the world's problem. It happens on such a small scale that it's a minor adjustment to the total cost of electricity, so it doesn't burden the economy, and it creates a nice small industry making and installing the systems. Solar PV is a good idea, a good investment (we have investments in this area) but is it likely to replace 30-50-80% of our coal powered generation? By all accounts, it seems unlikely as things stand today ( or is likely to look in the next ten or twenty years). Are we likely to convince the over 200 million homeowners with self built homes in India that can barely afford a toilet to pay extra for solar roofs?

Scheer's folly of self contained homes with PV on their roofs is a great dream and he touted the benefits of not needing a grid and its associated costs. Maybe a small percentage of the environmentalist diehards will be willing to live without power when the sun is not shining or the wind is not blowing and enjoy the romance of sustainable living - or pay the thousands of dollar for battery storage locally ( or tens of thousands of dollars for the typical American home for that rainy weeks worth of standby power). Will the average person in Mississippi miss the NFL just because the Sun went down? In fact, despite the 4X or more greater capital cost of solar photovoltaic, we will still need the grid investment and we will still need what the utilities call "spinning reserve" power plants (and their associated capital investment which somebody will have to pay for) so that when a cloud passes overhead or we have a rainy day (or week) we don't miss out. Only when we meet utility grade power will green technologies start to replace fossil electricity at any scale. Along the same lines, we will only get to India and China when it meets these requirements and gets cheaper than fossil electricity - and only then will we start to make a real dent in the acceleration of global warming. The technologies I am personally interested in as greenhouse gas solutions are ones that have trajectory and scale to meet these criteria. Many more technologies are of interest to me as investments than are interesting as true scalable global economic solutions to carbon emissions.

Is PV likely in the USA, China and India at a big enough scale to matter? With all the solar talk around today, all the government subsidies and incentives, solar comprises less than 0.1% of worldwide electricity. Individual self-sufficiency and renewable energy being practical at small scale has been a dream pursued for many years. I agree with the basic belief that each community should be self contained, though that bears little resemblance to reality (especially for older communities) of what is likely to happen. Try telling a poor family in India that they should pay much more for power (maybe give up food in return?) or to rebuild their homes to be self sustaining. Should we do it with new communities? Absolutely, and wherever and whenever we can sell the idea and finance it. One of our investments, built the first LEEDS Platinum home on the United States. What "should be" is often different than what is doable pragmatically or "what can be." I am a pragmentalist not an idealist environmentalist. I prefer the "should be" to "what can be" but focus my time on the "what can be". I am a huge fan of Bill McDonough's efforts to design model sustainable buildings and cities and hope that his best ideas creep into all new cities we design or evolve. This is what "should be" and Bill's efforts in China will be role models and they will make a difference. But is the bulk of the world's evolution going to happen this way? I hope so but I doubt it. Sustainable cities are likely be a great investment area for some developers but it is unlikely that a significant portion of the worlds population will live in such cities in the next 25-50 years.

Is wind an alternative?

Wind is a wonderful technology and a great investment. It is very appropriate for certain locations and would benefit a lot from a national high voltage electric grid so it could be transported to where it is needed (as will all sources of electricity). It is a classic technology that started with high costs but was on a rapidly declining cost trajectory and is now cheaper than coal generation in some locations. The devil unfortunately, lies in the details. Power is only available when the wind blows and storage is difficult and expensive. Additionally, most utilities don't need power in the middle of the night but are forced to take it today. It is off and on power generation in highly variable ways though it can be averaged across multiple locations. It is unlikely to scale beyond about 10% (20% optimistically) of our grid electricity needs partly because of its high variability and party because of other technical issues. That is a big help, but not enough in weaning the global power generation system away from coal.

What about Geothermal, Biomass and other alternatives? These are good alternatives and should be developed further. Geothermal can provide another 10% and because of built in heat storage it can meet many utility requirements if it can be produced cost effectively. Biomass is also appropriate for certain locations (like rural India) but in my view biomass should be reserved for making cellulosic biofuels for transportation. Oil is a problem to which cellulosic biofuels are a good solution, and maybe the only solution (when we have a clean grid electricity source maybe we can move to electric cars, assuming they don't cost an extra $20,000 per car for the 400 mile range most consumers demand).

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Solar Thermal - The Facts:
Solar thermal plants were fashionable in the early 1980's. The idea is to concentrate the sun's rays to heat a fluid to generate steam that can then run a regular steam turbine. In fact, some old coal power plants can be retrofitted to get their steam from "concentrated solar power" (often called CSP) and feed into existing turbines. Even natural gas plants which were built before gas prices doubled and are now sporadically used or idle (because of high cost)can be outfitted to be cost effective again. The great advantage is that in certain configurations the heat can be stored either as steam or hot water or in molten salt or hot oil and reused when the Sun's heat is not available (as in the evening). Doing this "storage" with batteries would be prohibitive in cost. Power can be delivered when utility customers demand it and not just when the sun is shining or the wind is blowing. In utility lingo "capacity factors" or the percentage of time the power plant can provide power, can reach their design goal ( 65% is often an ideal target for base load plants). The power becomes "dispatchable" to utilities - they can get it when their customers demand it often during peak load times.
For full disclosure, Khosla Ventures has invested in certain solar thermal technologies that we believe are far more cost effective than the generally used numbers for CSP costs. At 1 GW scale plants we believe these will start to be competitive with coal power plants in the US in the next few years even without carbon sequestration.

One argument made by Dr. Scheer against solar thermal technologies is the role of the grid - the idea that the grid was a big part of the cost in centralized solar power. Studies on the subject tend to show otherwise - (see the German DLR "TRANS-CSP" study, or the Western Governors' Association 2006 Clean Energy Transmission Report) they find that transmission is about 10% the cost of delivered electric power in North America and Europe today. The grid serves everyone, and keeps the lights on rain or shine, night and day. Realistically speaking how many people will accept power outages when the sun is not shining, or pay $100K or more per house for battery storage for the week of rains when they need power? It is easy for a politician (especially one who's own capital isn't at stake) to propose utilities paying for the grid and the electric plants, yet only have them generate revenue when homeowner are not generating their own, subsidized power. Similarly, it seems nonsensical to force the utility to buy electricity from rooftop solar whenever the homeowner does not need it, independent of the utility's own needs. This works politically at small scale but is untenable at any large scale. I am not suggesting we should not have these programs - they are very helpful in getting this new industry launched and get to scale, but they should be short term (5-7 year) programs that can work when solar rooftop electricity is a few percent of our electricity generation but not if they become 30-50% of our electricity. As stated before, capital investment in electrical generation capacity is many times higher because the consumer (even without batteries) spends 4 times as much per kilowatt and the utility is also forced to duplicate that capacity as "standby capacity" when the consumer needs it. Replacing the grid with electric storage in batteries will cause the consumer to spend more than ten times as much as today's requirement of capital. Capital inefficient technologies will never gain enough investment to matter. We need too large an investment in these new technologies for them to not make economic sense.

A second, slightly more ludicrous argument Dr. Scheer used is the idea that a large solar thermal grid in Africa is a likely nuclear target, putting energy supplies at risk. In practice, no one would build one electric plant to supply all of Europe, much as all of the American generation capacity would never be confined to one ZIP code. Nonetheless, the Morocco example I've cited (3% of Morrocco is enough to power all of Europe) is meant to illustrate that we have more than sufficient land to generate solar thermal power and to store the electricity cost effectively - rest assured, my preference is for more distributed, 1-2GW plants built across the US. Any argument can be twisted with unlikely scenarios if one wanted to critique it. One often sees this in extrapolations of corn ethanol. It would be like my twisting the wind power technology and saying if we produced all our electricity with wind 75% of the planet would be without electricity 75% of the time (or worse!). Wind is a great resource that we should harness, but it will probably not scale beyond 10% of our needs globally or solve the global carbon emission problem without huge breakthroughs in storage technologies that are possible but not visible on the horizon yet. I am a fan of more research in Compressed Air Energy Storage or CAES technologies..

Thermal energy storage is one of the key advantages of solar thermal power. Storing heat - as hot water, hot oil, hot rocks - is very cheap. Storing electric power today is hundreds to thousands of times more expensive. Costs of both thermal and electric storage are declining, which is good, but using today's thermal storage systems we can build plants that compete with gas and coal power, now - not 20 years from now. Meanwhile, the reality is that battery storage per kilowatt-hour is 100-1000 times more expensive today than would be cost effective - and, battery technology costs are not declining very rapidly. Battery technology is not showing a path to even a 5x improvement anytime soon, let alone the 100-1000 times that is necessary. From my own perspective, we have been looking for breakthrough battery investment for years without seeing a 5X technology. (We are invested in a very risky but significant technology change; if the technology works it will make for a very good investment but nothing on the horizon will make electric storage in batteries at home cost effective - I hope to keep looking at new approaches and prove myself wrong). Solar cell costs are clearly declining very rapidly and I can see how they decline with technology improvements. Unfortunately, they have become a minority part of the cost of a solar system so solar cell cost declines don't help the solar "system cost" as much as we would like. Again, the tendency (of Dr. Scheer and others ) is be non-specific and say technology will solve our problem and imply all technologies will decline in cost - the money being spent is that of the taxpayers and does not require objectivity. Only investors have to be truly objective if they don't want to lose their money.

None of this is meant to indicate any sort of disparagement of PV technology as a whole. To the contrary, we are investing in such technologies and I've noted that PV is great for distributed needs. In rural India grid costs can be so high and reliability requirements low enough that solar PV and biomass based electric generation can make economic sense. On solar cells, I have suggested that the current direction of reducing cost by letting efficiency of solar cells decline is the wrong tradeoff. Many startups are pursing this path and only a few are pursuing the higher efficiency path. To reduce solar system level costs we need higher efficiency solar cells, even if they cost a bit more. This is our investing thesis, but we are constantly also examining alternative ideas like solar tiles for rooftops. Moreover, the idea that solar thermal needs clear blue skies (again, Dr. Scheer's barb) is even more accurate for rooftop solar. Additionally, it is harder to get people to live in the Mohave desert which is precisely why there is plenty of underutilized desert land with the necessary clear skies where solar thermal plants can be built. An immaterial fraction of the Mohave could provide all the additional power California needs for the next few decades! Using expensive solar cells where there is comparatively little sun ( and Germany has a fraction of the solar resource of the US) makes little sense. The same money could be used for technologies with better trajectories or in better locations.
A further example of "Scheer folly" is plain religious dogma. Dr. Scheer suggested in our debate that cell phones should use renewable power and should have solar chargers built into them. He did not pause to consider that given typical cell phone use patterns (even if we did not put them in our pocket) it would take many years (probably more than ten) to pay back the energy consumed in making the solar cell. Talk about a bad energy balance! Ardent do-gooders can do harm and set back real solutions. You can use more fossil energy just to look green. On the flip side you can accuse Khosla Ventures of being idealist in a different sense. We have seen good financial opportunities to invest in Biodiesel but despite its "green credentials" (better green house gas emissions than corn ethanol) its trajectory wont scale to solve the problem and more importantly its misuse is starting to cause significant damage in Indonesia and Malaysia. We have chosen to pass up on such "green" opportunities to make money.

Finally, I am a big believer in a very diverse set of technology bets (we have twenty five investments in our renewable portfolio - possibly the largest portfolio in the venture business) but in my mind there is a big difference between a solution to the global carbon emission problem and what makes a good investment for us (like wind or battery technology). Diversity is a good idea but history teaches us that every industry segments into a few major categories and then a big "other" category. I suspect wind will be in "other". The winning technology for low carbon power generation is likely to be solar thermal or clean coal (I would handicap solar thermal to win that battle but clean coal has many political allies) or a yet as unexpected surprise like fusion (maybe even cold fusion)! There is a big difference between what middle and upper class German's will pay for the privilege or luxury of being green and what convinces the poor in India and China to adopt green technologies. Without solutions that work for India and China (the latter of which is building coal plants at the rate of one a week) we will not solve the global warming problem. And in the long run, the only way to beat fossil fuels is on economics, and not simply good intentions.

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General Questions:

We understand that some questions can be raised about our views. Here are some of the common points that have been brought up:

Capitalism is a problem, not a solution.

· Firstly, the idea that capital (or capitalism at large) is an opponent rather than an ally is a problem that environmentalists need to get over. Present opportunities, and capital will follow.

Utility companies will buy up any additional supply that niche sources (such as PV and wind) generate - so niche sources (such as roof-installed PV's) are the solution

· The problem here is simple - why would the utility company be beholden to buying power from you, whenever you have excess power? From their perspective, they would be interested when they need it the most. Even now, they pay different rates for power depending on the TOD that it is available, the reliability of the power source, and so forth. Regarding the usage of wind and solar as niche sources, I think it's entirely likely that they could be 10-20% solutions - I just don't see them being 50% solutions. 10-20% is a huge market, no doubt (Solar is roughly 0.05% of power generation now, as per the Economist) - but alone, they will not replace coal as its utilized now, which is the major problem

Government involvement is necessary.

· I'm not arguing against some degree of government involvement - I've come out in support of that before, on everything from higher CAFE standards to carbon emission cap-and-trade schemes. In fact, I'd agree with the basic idea, only noting that eventually, a whole scale change has to provide opportunities that are attractive to private capital. Government thru policy can get markets started but there isn't enough money in government to scale to anything material. That has to come from investors.

Nuclear power produces radioactive waste, and is a long term problem - additionally, it requires grid storage as well!

· When the alternative is a power source (coal) that's contributing to global warming now, I'd say that nuclear is a lesser problem. Each coal plant, and there are hundreds of them emits tons of radioactive material in the air every year, year after year. They just don't get noticed or talked about because they are not "nuclear'. But they do cause lots of deaths, estimated at 24000 per year from coal alone. Moreover, I note above that a lot of these problems regarding nuclear energy could have been solved, given time previously - they weren't. Carlos Rubbia, a European physicist ahs proposed waste free and safe solutions but nobody wants to invest in nuclear given the opposition. I do feel like my views on nuclear energy are being misinterpreted. Given the long time frame associated with building a nuclear plant, its simply not a solution right now - my point when citing nuclear energy was that if the research had been done at that time, we would have limited our exposure to things such as coal, which is perhaps THE major polluter today.

China and India are part of the problem, but we need to do something here!

· China will be the world's 2nd largest economy by 2050 (and potentially the largest in PPP terms). India is on a similar path. If China and India even get to half the per capita emission we have in the west (and we do believe every human should have an equal right to dump carbon in the air) we are toast! The only way out is to make greener solutions cheaper or buy China and India's carbon quotas at a cost of hundreds of billions of dollars a year. The main point here is that China and India have 1/3rd of the world's population, and are growing rapidly - they will end up at Western standards sooner, rather than later. If we don't come up with a solution to meet their needs as well as those of the West, much of the environmental gains from the latter will be offset by the former. This doesn't mean do nothing - its one of the reason we propose solutions like ethanol that can help in the short run, to be replaced by better fuels in the long run. Of course we should start on our end, and we have solutions that will be useful in the short term - but in the long term, we need solutions that will meet everyone's needs, not just that of the West. We are huge fans of the US and Europe unilaterally adopting a carbon cap and trade system.

The government/industry doesn't care

· I'd say that both private industry and the U.S government are both waking up to these problems - note the US Climate Action Partnership ( and even the various utilities that have started calling for actions to combat global warming. If anything, I'd say that there's a general bipartisan belief that we need to address the problem. However our political favors based subsidy system is a major problem. I wish we could focus on the right solutions for the country, not just for individual interest groups. But I don't know how. We are in favor of a cap-and-trade system,

PV works for me - why wouldn't it work for everyone?

· And I applaud that. I'm glad you are willing to pay a very high price fro carbon offset. But till the solutions we have entice the average person in Mississippi to do carbon offset we won't reduce carbon emission materially. To reiterate, I'm not arguing against PV completely - I think it's entirely plausible that it will work as a solution for some (like yourself), and we have investments in the area ourselves (as noted above). It may even get competitive with coal someday (we are investing in speculative technologies to try and make that happen). But that does not look likely (including dispatchable power) in the next decade. It is also a great investment opportunity and a growing market. I simply don't believe it has the trajectory to completely replace coal.

Given limited resources, people should not be forced to purchase more expensive energy over cheaper sources (i.e., coal)

· We have many investments that are attempting to provide solutions both in the short and long-term. In the long run, India and China will be better served by these solutions as well - it's a win-win proposition. Global warming, if not managed, will affect the poor world far more than it will the rich one. From a self-interest perspective, Bangladesh and Mauritius have far more to fear from rising sea levels (to take one likely consequence) than Europe or the US.

Why not PV CSP technologies?

· We've looked at PV CSP technologies (this article is from 2005), and haven't been impressed (so far). We'll continue to look at other CSP solutions. That being said, we feel confident that Thermal CSP will be well below the $3/W threshold within the next few year.

What about battery solutions?

· Personally, we haven't seen any battery technologies (with the one exception noted above) that have genuine revolutionary capabilities, and I'd venture we're not the only ones. We're always happy to look at business plans that believe they can overcome the standard problems associated with lithium. Flywheels are too expensive per MWHr of storage by about 10,000X to be scalable solutions. They do have very useful niche applications.

There is a lot of wasted energy out there (industrial, home, cars)

· Again, I'm in favor of increased fuel efficiency standards
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