Wednesday, July 28, 2010

Pricing out solar

When people hear I'm involved in the solar industry, they always ask whether they should put solar panels on their house. I don't actually know the answer to that -- I deal with the manufacturing side of things, which is far removed from what retail customers actually see. But a friend of a friend recently installed panels, so I jumped at the chance to find out more.

This particular installation used SolarBlend roofing, with panels by SunTech and installation by Eagle Roofing. It cost about $22,000 for a 4 KW installation. That's about $5.50 per watt, installed, before a 30% federal tax rebate. That's pretty good, and a substantial improvement from just a few years ago.

For the homeowner, though, the key question is how much electricity the array will generate, and how quickly the energy savings will pay back the cost. That's a hard one, because it depends on the climate. It's easy to see that western Washington gets less sunshine than southern Nevada, but even driving a few miles within western Washington will put you in a different microclimate. Fortunately, there's a very helpful resource, Gaisma, which merges astronomical and weather data to give solar insolation charts for many locations around the world. The installation I'm discussing here is located in Pahrump, NV.

Insolation is measured in kilowatt-hours per square meter, per day. That's the amount of light actually hitting a solar panel. Multiply by the area and conversion efficiency of the panel to get the amount of electricity generated:

Generated electricity = Insolation x Area x Conversion Efficiency

Suntech's Just Roof panels claim to produce 125 peak watts per square meter at 1000 Watts/square meter irradiance. So a 4KW installation will include 32 square meters of panels, and the panels are about 12.5% efficient. Plugging all of that into a spreadsheet, we get about 7150 kilowatt-hours per year from this installation. (Probably a bit less in practice, as panels are less efficient in hot weather.) That's probably more than an average household needs, especially if people aren't home during the sunniest part of the day. Which is why net metering -- the ability to sell power back to the grid -- is so important for residential solar installations. Let's assume that all the electricity generated by this array is either used on site or sold back to the grid.

The next step is to figure out how much the electricity is worth. That's difficult because many companies use tiered pricing: the more electricity you use, the more each incremental kilowatt costs. There is a push to implement time-sensitive pricing as well, reducing the cost for electricity use during off-peak hours. All of this is discussed in more detail here. For purposes of this discussion, I'm going to say the electricity generated is worth $0.15 per kilowatt-hour, for a total of $1072 per year, but that's just a back-of-the envelope calculation.

Without the 30% federal rebate, payback time for a $22,000 roof that generates $1072 worth of electricity per year is 20 years. With it, it's 14 years. The warranted panel life is 25 years. (This assumes that all of the $22,000 is for the array. Subtract any costs that would also be incurred by a conventional roof.)

For the sake of simplicity, I'm ignoring both the cost of money for the installation and the likely inflation in electricity costs over its useful life. I'm also ignoring any value that the installation adds to the overall value of the home. If we assume that electricity costs are going to go up over the next 20 years, then the combination of these effects should make a solar array more attractive, reducing the actual payback time.

Just for grins, I ran the same calculation for an installation in Bothell, WA. The relative lack of sun cuts the expected electricity generation to about 4850 kilowatt-hours per year. That's $727 per year at the same $0.15/kilowatt-hour rate.

Disclaimer: These values are estimates, and may not be applicable to any specific installation. If you are considering a solar roof, ask your installer to supply accurate cost and efficiency metrics.

Update: Michael Bluejay, author of the article on electricity costs linked above, emailed a link to the solar installation calculator on his site.

Thursday, June 24, 2010

Yes, I'm still here

Most of my long form writing has been for clients lately, hence the lack of updates here. Short snippets and such can be found in my Tumblr blog, simply because the software over there is more friendly to snippeting.

Wednesday, May 12, 2010

After Deepwater Horizon, we still need drilling

Like just about everyone else who comments on energy, I was mildly embarrassed when one of the worst oil spills in history happened less than a month after this post on offshore drilling. As the Economist points out, though, the spill changes the politics of drilling, but not the underlying dynamics. Exporting drilling to countries with less environmental oversight doesn't help the environment or the long term energy picture.

If there is a silver lining, it is that the spill may help restate the case for clean energy, which has been battered by the combined effects of the recession and falling oil prices. And it will be a long time before anyone dares suggest that safety measures like remotely operated blowout valves are "too expensive." (Although, in fairness, it's not clear that a remote switch would have helped in this case.) If more intense regulation drives up the price of oil, that's one step toward making the price reflect its cost.

Friday, May 7, 2010

Fair winds and following seas

I was saddened to learn that Jean LeMoin, founder and president of MCA public relations, passed away early this week. She's been a fixture for as long as I've been in the semiconductor industry, dispensing good humor and wise counsel in equal proportions. I'll miss hearing her laughter from across the room, but also her quiet suggestions.

Traces of her most visible mentoring, of PR folks, can be found in the many marketing departments that are populated with MCA alumni. Just as important though, was her gentle guidance of multitudes of journalists and executives, myself included. She never asked journalists for more than a fair hearing and an open mind, and she always made sure her clients had something useful to say. She worked tirelessly to cultivate an environment where mutual respect is more important than spin. She'll be missed.

My sympathies are with my many friends on the MCA team, who are carrying on as Jean would have expected through what has surely been an impossible week. They've asked that memorial donations be made to the Jean LeMoin Women in PR Scholarship Fund, in care of the agency. Their announcement is after the jump:

Jean LeMoin
1956 - 2010

Dear Colleagues and Friends,
It is with great regret that we announce the loss of MCA's founder and president Jean LeMoin, who passed away suddenly on May 3, 2010. A true trailblazer in the communications field, Jean founded MCA in 1983 as a one-woman shop and grew it into a highly respected boutique agency specializing in the global semiconductor, flat-panel display and microelectronics industries.
Jean launched MCA with an initial focus on semiconductor equipment and materials - one of the first agencies to do so - drawing on her marketing communications experience in the industry to build her client base. Over nearly three decades, Jean and MCA have influenced the industry outlook on many important subjects, launching game-changing technologies and creating new opportunities for outreach and dialogue. In 1994, VLSI Research Inc named her to its Chip Industry Hall of Fame for "pioneering the concept that a PR agency is a mechanism for managing a company's image across a broad front... creating an image that is cohesive with the media, customers, and the financial community." This vision remains a hallmark of MCA's approach.
A believer in giving back to the community, Jean sat on the boards of several industry associations, as well as such non-profits as Ronald McDonald House, the Support Network for Battered Women and Rubicon - organizations to which she also donated agency time in order to help reach those in need.
Those of us who knew and worked with Jean will remember many things about her - her keen mind and technology savvy, her love of the arts and good books, her affinity for Oprah and chocolate, her humorous stories about her exploits with best friend and life partner Kevin McCoy, how she always drank Diet Coke from a wine glass and never put croutons on her salad... Jean was a unique and fascinating personality, and the mark she has left on the communications profession, and our lives, is indelible.
To honor her memory, the Jean LeMoin Women in PR Scholarship has been created to enable a deserving student seeking a career in public relations or communications to pursue her dream. As a respected mentor to young PR professionals throughout her career, Jean's wish was for this effort to continue on. If you are interested in making a donation, please send your contribution, payable to The Jean LeMoin Women in PR Scholarship Fund, to MCA, 2119 Landings Drive, Mountain View, CA 94043.
From the MCA Team

Tuesday, April 27, 2010

Where are we?

Eek! I just realized that the new template doesn't include a link to the contact page. Better fix that soonest!

In the interim, you can find it at

So you want to hire a writer...

I've been chatting with a number of new potential clients lately, and realized I'm having very similar conversations with all of them. So this is something of an FAQ for people who think an outside writer might be able to support their efforts. While you don't need to have the answers to these questions before you contact me, it will save us both some time if you've started to think about them.

1. What's the audience? What do you want to accomplish with this? An article for an industry journal serves a different function than a press release or a brochure.

2. What's it about? What do you want people to know after they've read it that they don't know now? What response do you want?

3. How long is it? A 100-word event listing is not the same as a 500-word news story or a 2000-word feature.

4. What's your budget? Your timeframe? These two questions define what is and isn't reasonable. If you have a ten hour budget, but need a twenty hour project done by next week, we probably don't have much to talk about. But if you're able to be flexible about delivery, small projects can often fit into scheduling gaps.

5. What's the best use of your time? Often, handing off a large project is more cost effective than handing off a small one. The reason is that any writing project has planning, information gathering, writing, and editing components. You'll need to be involved in the planning and information gathering pieces anyway, whether you delegate the project or not. The real time savings comes from handing off the writing and editing components, which are proportionally larger for longer projects. Those components are where I add the most value, too.

Sunday, April 4, 2010

Administrivia - Site Blog Software Upgraded

We've been seeing too much comment SPAM lately, so for the first time in too long a time (3 years), we've upgraded the Movable Type software which drives our blogs.

With Movable Type 5.01, we are now able to require commenters to sign-in order to reduce SPAM. We will not be collecting your login information, but rather relying on your choice of another web site (Google, Yahoo, AIM, Live Journal etc.) to verify you exist. (We won't see your password for that other site, they'll just us tell your name and maybe email address.)

The leap in software releases required us to change the look of the blogs; we're not done with Katherine's TFM blog yet. In addition, we MAY have broken some links.

Please notify of us any problems you have reading or commenting on the blogs.

Wednesday, March 31, 2010

Drilling into energy policy

Much of the coverage of Obama's announcement on offshore drilling focuses on the politics. Yes, this co-opts a major Republican talking point ahead of the potential debate on carbon regulation. Yes, this will cause much consternation among environmentalists and will make oil companies happy.

But politics aside, this is just plain smart.

The "energy problem" is really two problems in one. The first problem is climate change, and you address that by reducing consumption of fossil fuels: renewable energy, conservation, carbon regulation, etc. Offshore drilling doesn't help the climate change problem, but it doesn't hurt it either, because the economy as currently structured burns the same amount of oil regardless of where it comes from.

Which leads us to the second problem. Oil is an increasingly scarce commodity, and large amounts of the world's oil are controlled by autocracies with unfriendly governments. As oil prices rise -- which they will as the global economy recovers -- those countries gain power far out of proportion to their overall importance. To gain leverage over those countries, you reduce the importance of their oil. That means reducing consumption, but it also means developing alternative sources, particularly sources controlled by the US or by other friendly democracies.

In the long run, switching the world to a post-fossil fuel economy would address both problems. Climate change policy and energy security policy have the same ultimate goal. But even the most starry-eyed optimists agree that such a switch will take far longer than a single presidency, and in the short term the US economy would be crippled without a secure energy supply. Hence the importance of clean coal, offshore drilling, nuclear energy, etc.

Yes, it's good politics, but it's also good policy.

Environmentalists are appalled, and not entirely without reason. The impact of offshore drilling can be huge. But there's a certain amount of hypocrisy in protecting Virginia's beaches at the expense of Nigeria's coastal rainforest. Until oil exploration is eliminated altogether, rigorous oversight is the best way to minimize its environmental impact. Democracies are much better at accountability and oversight than other systems.

Friday, March 5, 2010

A note about comments

Recently I've had a spate of comments making innocuous but generic and not terribly relevant remarks, from people with names or web sites pointing to stock promoters, Viagra sales, and so forth. I've been deleting these as spam.

If you are a real person and your comment has been deleted in this way, I apologize. Make a substantive comment under an actual human name (ideally, but not necessarily, your own), and point to a link that is even remotely relevant, and your comment will get through. Behave like a spammer, and be treated like one.

Sunday, February 28, 2010

More about jobs and energy policy

In last week's post on energy policy, I skipped over the effect of manufacturing efficiencies. If an information-intensive technology can be manufactured in a way that reaps large economies of scale, then the know-how used to create it can still be very cheap on a per unit basis.

Exhibit A for this effect is the integrated circuit industry. Each individual transistor is a small masterpiece of engineering. The intellectual property contained in a few square inches of silicon is enormous, but the industry spreads out the cost by making billions of them. Thin film solar manufacturers believe that manufacturing efficiency will allow them to reach a competitive price point. That would be very good news for me, my clients, and the world as a whole.

But still not necessarily for job creation.

The disconnect between information content and job creation is explored in more detail in this recent post at, analyzing the decline of manufacturing jobs in the US economy. It isn't due to "evil corporations shipping American manufacturing overseas." Until the start of the recent recession, US manufacturing output was at an all time high. Rather, it's due to massive improvements in productivity, which in this context means replacing humans with automation of various kinds.

If solar becomes cost competitive it will be through massive productivity improvements, achieved in part by automating every step that can be automated.

Still, merely looking at the need for productivity improvements does undervalue the job creation opportunity. Even if the number of jobs per GW goes down -- which I think is not only likely, but necessary -- the total number of jobs will still go up as the market size increases. The current world solar market is about 6 GW per year, but the world's total electricity consumption is in excess of 17 trillion kWh. That's a whole lot of room for growth.

Unfortunately, that also leaves us back where we started. Promoting use of a product through subsidies is not usually a good way to make the manufacturing of that product more efficient. The government can improve manufacturing -- for example by investing in research and development through organizations like NIST and NREL -- or it can create jobs, but it isn't really good at doing both at once.

Disclaimer: Though my past and present clients may like this post better, my opinions are still mine alone.

Monday, February 22, 2010

For best policy, first define the goal

Is the goal of energy policy to reduce the costs energy imposes on the US economy and/or the planet, or to create jobs?

As one of my favorite energy-oriented sites points out, the two goals don't necessarily have much to do with each other.

Thin film solar technology, for example, contains a lot of intellectual property. Lots of engineering expertise is required to build the deposition systems, optimize the processes, and keep the whole operation running. Add the skilled electricians who actually build solar farms and connect them to the grid, and you get a lot of high-skill jobs. You also get electricity that is substantially more expensive than that generated by plain old boring low-tech fossil fuel plants.

But if your goal is to reduce the world's (or America's) consumption of fossil fuels and generation of greenhouse gases, whatever alternative technology you pick needs to be as inexpensive as possible. Ideally, it should be simple enough for illiterate subsistence farmers to implement using locally available materials, perhaps with guidance from a handful of engineers.

Not that there's anything wrong with green jobs. I have one myself, since most of my current clients are in the solar space. And certainly the emergence of a renewable energy sector will benefit the communities where those jobs reside.

But the assumption that clean energy will both prevent climate change and revitalize the US manufacturing sector doesn't stand up to close examination. Energy is a commodity product, and as such will always tend to migrate to the lowest cost technologies and least expensive producers. The fewer high-skill manufacturing jobs an energy technology requires, the more likely it is to actually succeed in shifting the world's energy mix.

Disclaimer: My opinions are my own, and do not necessarily represent the views of any particular past or present client.

Thursday, February 18, 2010

Let the good times roll?

How to decide if a blog entry is worth writing: you have more to say than will fit in a 140 character Twitter post. (For those interested, my Twitter ID is kewms.)

In this case, I'm celebrating the end of the recession. North American semiconductor equipment manufacturers booked more than a billion dollars in orders in January, for the first time since May, 2008. Though still a pretty weak number in historical terms, that probably does mean people are buying actual equipment, as opposed to consumables, service contracts, and so forth.

(In the depths of the recession, people joked that even a single package of O-rings would be enough to move the book-to-bill number.)

Equipment purchases are good news for a couple of reasons. First, they usually mean that the purchasing fab is running at 80-90% of capacity and the demand outlook is positive. Second, they mean that the customer is able to get financing on terms it considers reasonable.