Friday, June 27, 2008

U.S. Freezes Solar Energy Projects

I read this article and I shook my head... The BLM (Bureau of Land Management) the agency that brought us raging wildfires from decades of fuel accumulation, has put the cabash on the future prosperity of the nation. No long diatribe today, it's Friday afterall.

But there is an alternative. Companies can put their solar power plant on their roof.

I think it's insane to not develop the desert south west, but it will take time, and it does little for the rest of the country. From Maine, to Florida, and all points west the Distributed Generation (DG) model of Concentrating Solar Power (CSP) can continue to proceed uninterrupted by government foolishness.

As long as you own your roof, the BLM really can't say anything.

So here's the deal, consider your roof. For every 10,000 sq ft you can add about 25kW of electrical generation capacity. (I'm obviously addressing business owners here) Even at a measily $0.10 per kWh ( good luck finding power that cheap in another few years) that's worth more than $7,000 per year; before incentives!

Will it change the world? Eventually, probably not overnight, but at least it's agood start.

Until regular people decide that it's time to take charge of their situation, it's good to know that there are mechanisms in place that'll hamper and interfere with innovation & progress (BLM).

If your needs are more modest than a square mile (640 acres) of solar generation, give Solar & Thermal Systems a chance to help you out.

The Light is Green!

Sunday, June 15, 2008

Solar Energy boosts the bottom line every time

Businesses that use electricity, and it's rumored that there are quite a few these days, can benefit by generating some or all of their own electricity from sunlight. There are two widely recognized methods for capturing and converting sunlight into more valuable forms of energy.

The most recognized and most expensive is called photovoltaics or PV. Based on the photo-electric effect, these crystalline devices silently convert sunshine into electricity. And when combined with a small rack of electronic components, produce power at our wall outlets. The only real disadvantage to PV is the cost. It currently costs about 3-4x more for a kWh of PV energy than any other commercial source. Without subsidies that means 20+ years for payback, and this post is about the bottom line.

The other technology for capturing sunshine is broadly called solar-thermal, because the sunlight is simply used to make something hot. Everyone is familiar with the effect, a car seat too hot to sit on, a wrench or a tool that's too hot to handle, a sidewalk or sand that's too hot to cross in bare feet. And of course, the childhood favorite, burning leaves, twigs & sometimes bugs with a magnifying glass. How do nuisances and childhood pranks improve the bottom line?

Sunlight is high quality energy. It's plentiful, ubiquitous, and spread out; it's also easily concentratable. When we concentrate sunlight we have the ability to heat things to very high temperatures, which is exactly why we burn coal, oil, and gas to power engines that turn generators. Every power engineer knows that the hotter we can make a 'fluid' the more electricity we can produce. Hotter is better. Focused sunlight could in theory heat an object to the temperature of the sun... far too hot to be controlled today. Fortunately, we don't need things even remotely that hot to make a tidy profit.

We use concentrated sunlight to boil a working fluid under pressure. This is the same process or phenomenon as occurs with water/steam from the hot gasses and flame in a boiler or the heat energy from fissioning uranium or the heat and pressure from a geothermal well does.

Because the power of a boiler or reactor goes up as the cube of it's size there has been great economy to make them as large as possible. A 1GW boiler is 1000x as powerful as a 1MW but only 10x as big in any direction L x W x H

Solar power goes as the square of the distance, so going bigger pays off slower. The same factor of 1000x power requires building 31.6x in length and 31.6x width. But this can be used advantageously when scaling down. We can go from 10MW to 100kW with only 1% of the material, and 1% of the footprint. Small enough to fit on a commercial rooftop. Affordable enough to fully pay for itself in 6-7 years, and that's the bottom line.

The Light is Green!

FairTax 'absurdity' author wasn't hiding; just clueless

Back to the $1 loaf of bread...

The grocer can lower the price by the embedded tax, so can the baker, so can the flour mill and the yeast factory, the farmer, and the seed company also drop their prices by the embedded taxes. Oh and all the transportation steps from farm to mill to bakery to store, these also cut prices by their respective slice of the embedded tax. And what else the electricity for lights & ovens & grinders & silos & conveyors... they drop by the embedded tax too.

What I'm trying to convey only partially is called fan-out. Each step in the process from store, to bakery, to flour mill, to wheat farm, to grain seed has suppliers that also have suppliers.

Every supplier in this chain pays taxes on their labor and their profits. The mathematicians have developed a simple way to tally up all the contributions from a single point in the chain; calculus comes to our aid allowing us to sum all the contributions from a long and expanding supply chain.

Believe it or not, this stuff is taught in every Econ 101 class; it's up to the student to learn it.

So Mark did get it partially correct on the 1st step. The grocer saves the 6% soc sec contribution match. But then his public school education failed him... The grocer's cost of labor just dropped 6%.

Let's look at his cost of a loaf... Since the baker also gained a 6% labor cost cut the price of the loafs also dropped by some portion too (hint: it's less than 6% so far, but be patient) So did all his other costs, like bags, twine, cash register tape, shopping cart wheels... *everything*

So the grocer's operating expenses have now taken a significant dip. If he's greedy he could try to keep his price the same and make more profit, but news spreads fast! Competition will force the prices down to the point where the profits are back to what they were. Plenty of data and precedent to support this.

Now the government isn't gonna let the world operate tax free, so in their own interest they're gonna slap a tax on tho keep their appetites satisfied. So they all but say, *WE* want the difference between what you saved and the old price of $1. So the price stays the same and the gumming gets their revenue. The point of collection is the retail vendor, the tax is buried in the retail price, still, but because it's all lumped in in one place it's really easy to identify. That's the supply chain part of the story...

Let's see what happens after all that supply chain dust settles...

The grocer also saves the income tax on his profit, let's say the grocer makes $0.10 profit and his income tax rate is 20%. Just like the supply chain for goods, the grocer is paying for the tax on the profits of his suppliers. It's another ripple back, each supplier has suppliers...

Again, there isn't much argument here as to whether or not the effects of a price put downstream will exist or not. We all seem to recognize they will. (there are a few who still don't get the "embedded vs. inclusive/exclusive" and think that the $1 loaf will cost a $1.30, but they're just too stupid to endure)

When we consider the income tax as just another $0.02 in the series of cost reductions, we see that the price of the $1.00 loaf of bread is still $1.00, it's just that we're starting to see how the gov takes it's cut.

Finally, let's look at the controversial issue of "keeping what you earn". First, if you think you do now, you're just plain foolish! Let's examine SocSec. 6% of what you "earn" is lifted from your paycheck. You don't get it! So we can move that from the Income tax policy to the FairTax policy without any argument. If you don't like it, fight the law today as it exists... write us from jail.

So in one paragraph we just decreased the nations labor cost by another 6%, and since most folks never reach the SocSec cap, arguing the point is moot.

Next item on the block for transfer from Income tax to FairTax: Medicare ~2% So between the first two social taxes we've knocked 14% off the cost of labor for every link in the chain.

The items identified thus far are what are referred to an non-controversial. You may not like the SocSec or Medicare taxes moving from the Income to the FairTax side via employers, but it really makes zero difference (unless you're already cheating on your taxes).

The linchpin issue for many opponents is the FICA. Employers withhold part of your earnings and send them to the IRS as a courtesy. (some courtesy, it's the law) You file taxes on what you earn on April 15. Depending on what your taxes really are you may see a change in your "wages" but since we've already shown those 'wages' to be fictional you should keep reading.

Let's look at the 'normal' worker, we'll come back and look at extraordinary & unusual situations later. Each week FICA withholds from 0% to 28% of your fictitious 'gross pay' we'll use 15% from now on... so every week you live on 71% of your gross pay or your "net pay".

The folks that had their withholding correct, well they're gonna see the same paycheck next week that they saw last week. For these folks the issue is a pass.

Now some folks count on that refund check every year, which means their net pay really should have been a little more than it was. Take last years 1040 to HR, and you get an instant raise in take home pay!

Other folks actually windup having to send Uncle Sam a check because they owe more than they had withheld. The upside for them is that they won't be paying those Income taxes any more, but in fairness the employer might feel that they're some room for redress. Some folks claim 20 exemptions and they really shouldn't. These folks might get called into HR and have their wages audited to correct or offset their withholding to the proper level. Before you get all angry, it's not the employers responsibility to absorb the tax liability the guy had for other income. He's paying a wage for work. It's a negotiation at this point. The employer was incurring all the costs for compliance in the past and is now fighting to reduce his cost of labor in a new competitive market. The worker was under-withholding in one place to offset another. The workers change in tax & pay goes away. While I'm not real fond of this outcome it doesn't effect many people, in fact it probably only effects those with considerable assets that generate taxable income. (That should make wealth envier's happy.)

Finally regarding salaries... If' you've been paying attention to this point, the two taxes SocSec & Medicare cut the labor rate by 14% -- I'll look ahead a bit to try to help those without calculus. Our target is 23% that means the employer & the workers could split the difference, we said the FICA was 15%, so the employer could give the average worker a 6% take home pay raise and still meet the 23% reduction of labor costs.

Now whether the worker got a pass/push, a raise, or an offset, they're also gonna get the Prebate under the FairTax, so they'll have some extra $$$ in their checkbook every month. And I hope no one lost tract of the fact that the price of goods (as exemplified buy the loaf of bread) hasn't changed.

There's one more item in the supply chain that helps to reduce costs, all those B2B suppliers that have tax-accounting divisions, can shed that overhead. That's hundreds of billions of dollars of wasted effort that can be redirected into productive efforts instead of useless compliance.

Now at this point, unless you have some calculus, you will simply fail to comprehend the rest. The effect of all these cuts in expenses down the chain add up. Guess what they add up to??? Yup 23% After all that, the new cost of a loaf of bread will be $0.77, the new price of the loaf will be the same as the old price $1.00 What opponents fail to understand is that in the deepest way a car is no different from a loaf, just bigger. Every part from windshield wiper vane, to air conditioner belt, has a supply chain, and each and every one of those components is going to be 23% cheaper! And since they're being sold to businesses, there's none of that silly VAT like our EU competitors have to comply with.

Anyone that's seen my writings (in other fora) knows how opposed to gummint controls I am. The under-withholders issue was painful for me to acknowledge, but it represents a necessary albeit slight evil. And if the difference is less than the 6% window, I can live guilt-free with that.

When I was first introduced to the notion of a 23% 'sales tax', I was incredulous. I thought it was the most foolish thing I'd heard in a long time. As I came to understand it, to research it, I came to realize that with proper execution it would transform the economy in wonderful ways. It's important to realize that 50 years ago the critics would have been correct! Trying to implement the FairTax with 'books' would be impossible; with 'computers' it becomes trivial.

So I make another call to action. Learn people! Try to understand. Put prejudice behind you and study the FairTax on its merit. We live in the 21st century, stop thinking like 19th century farmers.

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Despite attempts to engage the boy, Mark, continues his clueless ramblings against the FairTax. Why? The only logical conclusion is that he has an agenda... but that conclusion supposes that there is some comprehension, some intelligence. Sadly, that seems to be lacking.

Why the ad hominum attack? Sorry, but sometimes you just *want* to shoot the messenger!

When logic fails and there is simply no point in arguing, the person that continues to spout nonsensical positions becomes a source of annoyance.

I'm sure Mark was educated in the public schools by teachers that continuously told him that his opinions were valuable and that despite being wrong he should continue to express them. It was good for his self esteem.

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Friday, June 13, 2008

Energy Storage - More sleight-of-hand

With oil prices rising, the misdirection that's been getting lots of attention lately is the notion of storing energy from renewable sources. On it's surface this seems reasonable. On closer inspection it seems ludicrous.

Proponents of wind energy are among the most vocal advocates of Compressed Air Storage. I suppose this is to establish a paradigm, you know moving air turns the propeller, and compresses nothing but clean air into a storage reservoir. Hey I like the fact that they're consistent in message.

More later...

Wednesday, June 11, 2008

Mark from FairTax Absurdity is a coward!

Mark, post my comments!

Last week he was hiding behind a 'no public read' wall.

Now he's hiding behind comment moderation.

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Saturday, June 07, 2008

Bob Brinker host of MoneyTalk blasts FairTax with bad info

So this caller was talking about energy and ethanol, and the energy equivalence of electricity to fuel, and the Fischer-Tropsch process host is saying that it doesn't matter... I didn't catch enough but needless to say he feels that 'sunbeams' and 'windmill tipping' can't make a difference. He feels that natural gas needs to be diverted from electricity to transportation, and nuclear power used to make up the electricity shortfall... (at least we agree on that part) But I say sunlight can bridge the gap faster & cheaper!

Then the caller says: "What do you think about the FairTax?' And naturally the host of a money show with a tax consultancy bashes it... Big surprise! What annoyed me was that he bashed the FairTax with bad data. In the immortal words of Jarjar Binks "How Rude."

It seems that even certain radio hosts that claim to be helping the public can be misinformed when it suites them to be. No big surprise, I've been listening to the man for quite a while, he tends to get impatient with callers...

Friday, June 06, 2008

Oil approaches $140 and no one is paying attention

Whether this new plateau is a bubble or not is irrelevant. Someday it'll be a new floor price.

A little quick math: 1 bbloe = 6.119 GJ = 1.699 MWh

At $140/bbl a 100% efficient plant could sell electricity for $82.40 /MWh...

But since power plants are ~ 50% efficient, and there are capital and O&M expenses, we can see that oil fired electricity will cost $100/MWh or more.

Why not lock in 20 year solar electricity at $90/MWh today.

FairTax 'absurdity' author hides behind ignorance

Apparently the author of the blog at http://fairtaxabsurdity.blogspot.com/ has decided he can't take the heat.

We all know how he has railed against his 'interpretation' of the FairTax, because he simply fails to comprehend, or is unwilling to accept the facts.

I'd say we the supporters are sad to see him go... [NOT] Perhaps he saw the light... We can only hope.

See ya!

Sunday, June 01, 2008

What is it about Solar Energy that frightens folks?

I've frequently pondered what it is that makes people drift between fascination and fear when confronting solar technology. I think it goes back to being an 8-year old kid that 'borrowed' dad's magnifying glass on a summer day to burn some leaves.

Here in hand was a powerful and magical piece of glass that would make paper and twigs and bugs burst into flames. Powerful mojo when you're eight. Combine that memory with the fear of being caught by mom when she catches a whiff of smoke in the yard and then sends your friends home and greets you at the door with a wooden spoon.

Even though they are now adults, they remember themselves as kids in the yard toiling covertly, fascinated by the power of sunshine and fearful of being caught manipulating a power of the universe.