Joel Makower is a widely respected writer and consultant on issues of sustainable business, clean technology and green markets. He writes occasional essays on environmental business and technology for WorldChanging. Take it away, Joel:
If you could pay an extra five or ten bucks a month to help reduce global warming, childhood asthma, rolling brownouts, the national debt, and the threats of Al-Qaeda, would you bother? Im guessing youd think that a no-brainer.
So, why arent you buying clean energy?
The question has been befuddling everyone from environmental activists to utility executives. Nearly every American, it seems, understands that generating electricity from the sun, the wind, the earth's heat, or gases generated by rotting waste is good news for everyone -- the planet, peoples health, national security, and the economy.
So, whats the problem? They just dont think clean energy works.
Thats the finding of a remarkable nonprofit campaign that stands the best chance Ive seen of changing Americans minds about the virtues and value of clean energy and, in the process, accelerating their market uptake.
The goal of Connecticut-based SmartPower is to have 20% of U.S. energy supply come from clean, renewable sources by 2010. To do that, the organization has engaged in a market research and advertising campaign of Madison Avenue proportions.
Armed with nearly $2 million in pooled funding from five foundations, SmartPower partnered with the Clean Energy States Alliance three years ago to better understand public attitudes about clean energy. Thats no mean feat. For the past half-dozen years or so, a succession of opinion polls have consistently demonstrated Americans desire for cleaner fuel sources (here's one recent example), but the gap with actual clean-energy purchases has remained gargantuan.
Working with Gardner Nelson & Partners, a New York ad agency that represents Southwest Airlines, Chase, and other blue-chip clients, SmartPower conducted focus groups and other research around the U.S. For starters, We wanted to know what people really think about coal and oil, SmartPowers president, Brian Keane, told me recently. We, like a lot of other people, start with the notion that coal and oil are bad.
That's not how most others see fossil fuels, as Keane's group learned from an obituary exercise they conduced. Explains Keane: If you want to know what someone thinks about something, take it away from them." So, even before the focus groups actually met, while the participants were still in the waiting room, they were told "Fossil fuels have died. Write the obituary."
What resulted was an eye-opener, to say the least. Wrote one:
It is with great sadness and regret that we announce the demise of fossil fuel. After hundreds of years of supplying the population of earth, the resource had been depleted. It will be remembered for the warmth, comfort and pleasure it provided to living things. There will be a great void that needs to be filled perhaps through wind and solar power. It will be sorely missed by all beings that depended on it to warm them, supply their transportation, power their equipment and support all the resources necessary for a safe and comfortable life. (Emphasis added.)
Fossil Fuel died after a long, slow illness called greed. Fossil has left the family of the Middle Eastern nations and former President George W. Bush and his cabinet members. Currently, the world is adjusting from heating by oil and illuminating by electricity to solar and wind mill sources. There are several kinks to be worked out and roadblocks to conquer. Will we ever be warm again? Miss you fossil fuel.
In obituary after obituary, what kept coming through was that fossil fuel has kept this country warm and strong and that there was nothing to take its place, says Keane. And that solar and wind were not ready for prime time. They said that fossil fuels were a necessary evil.
It wasnt all bad news. Every single respondent knew exactly what clean energy is, and they absolutely want it to work. They could discuss it confidently, without hesitation. Many had heard of fuel cells. They believed it would be a better world if we developed more clean energy. They believed it would be better for their health and their environment.
But the misconceptions or misinformation turned out to be rampant. The researchers found that while most people understood clean energys benefits, they thought it would require them to have windmills on their houses, or that the power would go on and off on cloudy or windless days, or that it was ultimately all about trade-offs, like using less heat or air conditioning.
No ones talking about it on television, was another comment Keane recalls hearing. They could actually live with the fact that no one in their neighborhood has a solar panel. But if they saw it was on TV, they could understand its potential. TV is the great validator of the day.
Keanes group tested a series of messages, reflecting patriotism, security, jobs, and other themes. The one that overwhelmingly migrated to the top was the one that featured an image of the skyline of Chicago. The caption:
America already produces enough clean energy to supply all of Chicagos power requirements. Not to mention New York, L.A., Boston, Philadelphia, Phoenix, San Diego, Dallas, and San Antonio, too. Lets make more.
That did the trick. People responded, I had no idea. Is that true?" If clean energy already makes enough to power big cities like Chicago, with all the lights and technology they require, then it must be a lot closer than people think. We should be doing more of that!
Keane's group realized they had hit a nerve. People dont really understand or appreciate that clean energy is here, and that it works.
The result was a series of slick and powerful print ads and billboards, along with TV and radio spots featuring strong, authoritative voices. You can view them yourself on the SmartPower Web site.
In the end, it turned out that everything we experts thought we knew about clean energy was wrong. According to SmartPower:
All survey research indicates virtually every American agrees the environment is important. In the past, clean energy advertising has leaned on the environment. It hasnt been effective but not because people think its not important. The problem? Its old news, and no longer very motivating. The environmental story is already well understood. It will take a new message to break through.
So, its not the environment, stupid. Says Keane: We talked to a lot of environmental groups and learned that pushing this as an environmental issue is not even winning over the environmentalists. They know clean energy is good to the core. They just dont think it works.
Keane & Co. have validated their findings through a campaign called SmartPower 20% by 2010, which they launched in Connecticut. The campaign challenges cities and towns, faith communities, educational institutions and businesses to start choosing clean energy -- up to 20% by the end of the decade.
The campaigns tone, like nearly everything else SmartPower is doing, makes perfect sense. By asking participants to gradually ramp up their use to a reasonable level over a reasonable period of time, theyre acknowledging the realities of long-term budgeting and gradual but steady organizational change. Along the way, local clean-energy suppliers can ramp up gradually, too, creating the sustained, orderly market growth that will allow them to survive and thrive over the long term.
So far, 15 cities and towns have made the pledge, and another 50 are lining up, says Keane. So have more than 4,000 residences that signed up in the campaigns first four months. In the world of McDonalds and Coca-Cola, 4,000 is a joke," says Keane. "But in the clean-energy world, thats phenomenal. And the campaign is now rolling beyond Connecticut, to Rhode Island, Massachusetts, Maine, Pennsylvania, New Jersey, New Mexico -- and the biggest prize of all, California.
Its a promising start, and a rare success story in the green marketplace. And it helps explain all those surveys showing that Americans overwhelmingly want environmentally responsible goods and services, but never seem to buy them.
It turns out, they just dont think they work.
Unfortunately, the 'don't think it works' outlook is enforced by simple 'back of the envelope' calculations on existing commercial offerings.
For example, my local (Australian) utility company recently advertised a rooftop solar power system. For a mere $5000, I could have my own 450W power generator!
Hmmm. Optimistically assuming that I averaged 450W for 10 hours/day, or ~4 KwHr/ day, and given that the company charges $0.13/KwHr, that would take 5000/4*0.13 ~ 10000 days (ie 30 years) to pay off the installation costs.
I think it might be a better option to wait a while for something a little more economic ('cos it doesn't work :-(
It's not that I think that alternative clean energy doesn't work. It is that I don't have the money to install solar on my roof or to buy an electric car. The only way for me to aquire these things right now is to put myself into debt for a very long time. Life long debt is not what I would call sustainable even if it is a common lifestyle choice in the US.
When air conditioning (A/C) systems first came out, they were custom designed and installed much the same way roof top solar is today. (My grandfather installed the first A/C systems in Decatur, Alabama so I have heard a lot about it.) Prices were high when he had to design a custom installations. Once A/C units were assembled, ready for installation, the prices came down. Today, almost everyone in that town has A/C in their homes. The hotter areas of the US would be considered unlivable without it. Central heat and cooling is standard in new homes.
I suspect most average people in the US cannot afford a custom designed solar system right now. And I expect to see roof top solar follow a similar pattern to the one A/C followed. Until there is a standard, out of the box installation for roof top solar systems, the price may remain out of reach for the average homeowner.
I am eagerly awaiting the day when sustainable energy is cheaper as well as cleaner.
Prices are falling- they have been following the same type of trends as any other technology, IIRC prices drop 15-20% for each doubling in production. Production for solar and wind has been increasing ~30% a year. Price projections by 2010 and 2020 would make wind the cheapest energy source we know of.
In fact, wind is cost-competitive now, and unlike oil its cost will be predictable (I don't think it's possible to buy 15 year options on oil). That's one reason I don't want to pay extra to my electric monopoly for putting up a few token windmills; I think they should be mandated to produce a certain percentage of their energy through renewables if they can't do it themselves.
On a kWh price comparison alone, home solar PV still doesn't make sense. It makes great sense in off-grid situations, or where you need high reliability. For now, I'm happy different governments are subsidizing installations.
FreedomMoore, you make a good point about the cost of custom orders. But where I live (Vancouver) and I'm sure in many other cities, there are Vancouver [insert city name] specials where many of the houses in the city were built according to a template.
These houses may not be pretty (on my block, only 3 houses aren't of this template) but I would assume that it would bring the cost down if someone made a kit for this particular configuration of house.
It's revealing the posts above talk about clean energy as installations, rather than in terms of switching providers. The question has been around awhile: if it's a simple process to switch suppliers & it costs no more, why don't more people do it?
I suspect people really don't understand how it 'works', and not just in the US, because they think the actual electricity coming into their house will come solely from an unreliable, small source.
Revisiting the message is useful too: what do people want to buy? It's particularly difficult for utilities as they have odd product features, eg no distinct physical boundaries that you can package and label 'clean energy inside'. What is the tangible consumer benefit in green or clean energy? The current energy supply doesn't seem dirty, they just want convenient energy. Guilt-free perhaps. Communication techniques to make the benefits personal & tangible is a challenge for green energy providers, eg: "100% effective electricity", it's "warmer & safer than other energy sources"!
Or for Eng-Poet's sake, how about the "Green Accelerating Joules Co."? "Our energy is the fastest in town. Buy your kW/h from us and save time!"
We're writing these "obituaries" while still in the grip of "Stockholm Syndrome" - the period we spend emotionally bonded with our kidnappers. Those who've lived with renewable energy for a while would write a different "obituary".
What our household has done so far:
First and foremost, a concerted effort at efficiency. We get an annual return of about 25%, tax-and-risk-free, for each compact fluorescent light we've bought. Every energy-consuming product we own, cars, appliances, monitors, lights, water heater, is the most efficient model we can reasonably find and afford. The financial has been spectacular, except for the cars, where the return has been acceptable.
Our house looks conventional enough, but I designed and built it to use less than half the heating energy of a typical new home in our area. We did that without the house costing extra - what we spent on insulation we offset in mechanical system costs. About 30 to 40 percent of our space heating needs comes from sunshine; most of the rest comes from firewood; the last comes from LP gas.
We are buying green power. We buy "Green Tags." These are renewable energy certificates covering the cost of electricity produced from wind, small hydro, landfill methane, and similar sources. There is finally a decent renewable power offer available in Maine. We may switch to that soon - the additional monthly cost will be about the same as 2 cappucinos.
We think about the energy we consume. Just doing that is powerful medicine. Try spending a month or two documenting the energy you use, what you used it for, and how you feel about that. Read your electric and fuel bills; make a chart of them over time. (Some of you will recognize the strategies of "Your Money or Your Life", applied to energy.)
Our next steps will be to incorporate more renewable energy. We use a small PV system to irrigate our garden from a small nearby pond. I'm currently building a three-season "batch" style solar water heater from junk I culled from the local dump - I expect it to cost me about $125 when done. We've built a simple greenhouse in which we grow a surprising amount of fresh green stuff through the cold Maine winter. It replaces trucking from elsewhere and lots of refrigeration.
Well, you get the picture. Quit worrying about what other people think, or what the ultimate system costs. Just keep picking the fruit within reach and you'll be amazed what you can do.
Janelle, I think you hit the nail on the head with this passage.
"Revisiting the message is useful too: what do people want to buy? It's particularly difficult for utilities as they have odd product features, eg no distinct physical boundaries that you can package and label 'clean energy inside'. What is the tangible consumer benefit in green or clean energy? The current energy supply doesn't seem dirty, they just want convenient energy. Guilt-free perhaps. Communication techniques to make the benefits personal & tangible is a challenge for green energy providers, eg: "100% effective electricity", it's "warmer & safer than other energy sources"!"
I think the question was why people are not spending a few dollars more to have their utility company buy "green" energy, or switching to a green energy provider in areas where that is an option. The lack of tangibility seems to be a definite issue. We would like to be able to see, touch, or at least measure the things we buy in some way. I know my utility gave the impression that if you bought clean energy from them they would ensure that all of the electrons entering your house were generated using clean sources, as if they were going to individually route each electron to or away from your house depending on source. Hmm...maybe using Cisco routers. ;)
The lack of tangibility combines with a classic free rider problem and it seems that there is no wonder that we have under investment in green energy. It is the underlying cost structure of fossil fuels that needs to be changed if we are to see appropriate investment in alternative energy. If the full environmental costs of using coal, oil, and gas as an energy source were internalized we would start to see a dramatic shift away from these fuels as an energy source.
I was involved in the push last year for my school to become the first public university in the U.S. to commit to buying 100% of its energy from green sources and I support the SmartPower initiative, every step we can take to move lower on the cost curve for renewable energy seems like a step in the right direction. But it would be nice to hear about the battle to reform pricing issues for once instead of yet another push to educate and raise awareness. We do not need to convince people that green energy is ready for prime time, if things are priced right they will figure it out on their own.
Payback period is a financing problem. Most people can't afford houses with payment up front either. But there are 30-year mortgages that allow people to own homes. And there's a secondary market for mortgages as a financial instrument.
It sounds like there is a financial opportunity for instruments that let people acquire energy-saving technology with an n-year payback period.
here are a couple reasons i think there's a gap between caring and acting. they're both about being a 'responsible' consumer in a world of shady business.
in switching providers, i think it's more than tangibility... there's a level of (earned) distrust in the companies themselves. as a consumer, it feels like your simply giving more money for the same service and there's no way to know whether the provider is actually buying green power or pulling the wool over your eyes. energy companies don't have an image of honesty.
also, it would seem that wind power should be cheaper since the generation costs are so much lower. yes, we understand the upfront cost and the permitting process drives up cost and the cheaper existing infrastructure and all, but just from a consumer perspective: why should i pay this company more money for something that should (and eventually will) cost them less?
I strongly suspect that most of the "clean energy" that they refer to in the article--lighting up Chicago and the other cities--is hydroelectic power. A wonderful quantity, but not one that has any significant growth left in it. Solar photovoltaic power, as has been previously mentioned, is wonderfully cheap to use and terribly expensive to acquire, so much so that 30 years will transpire before you recover your initial investment. No, energy sources of the future, in order to replace fossil fuels, must model their advantages. Cheap, abundant, and energy-dense. Uniformly distributed across the globe would help too. Wind and solar are wonderful and will find great application in niche markets (like home cogeneration), but will not displace coal, oil, and gas for planetary power...they're simply too variable and too sparse. Only one option comes to mind, thorium burned in molten-salt reactors.
The fact that payback period is a critical component in deciding whether or not to purchase solar, wind, etc... makes it unattractive to most consumers. But the reality that we are now facing (gas prices have doubled and continue to rise) should make people consider to get ahead of the depletion curve. Fossil energy is going to get more expensive (no question about that) maybe reframing it in the constext of pay a little now or a lot later for not "converting" to renewables might get the ball rolling. As for storage technology...there is a whole lot under the rock. Hopefully it will get attention soon...
it could be considered a marketing failure that people look ahead at thirty years of paying their monthly utility bill, which will undoubtedly climb faster than inflation for the same services, and don't blink...
and then look at payments on a home solar system loan and think, "i cant live with that debt!" --even when inflation, rising centralized utilities costs, increased home resale value, and the resilience of a home system all weigh in favor of investing to produce one's own electricity
(for those folks doing the "back of the envelope" calcs please dont forget to include those variables before coming to your conclusion).
You need only two words to explain why there are so many solutions yet so little interest. IGNORANCE and APATHY. Or "I don't know", and "I don't care." BOTH attitudes must be reversed to "I do know" and "I do care", before people will change their behavior "I will act". I don't think the SmartPower's marketing message has the ooomph to reverse both entirely. A marketing effort must recognize that both attitudes are multi-faceted, as follows (I didn't have time to elaborate on this so don't get bent if they aren't detailed completely):
"I don't know" and "I don't care" facets:
That clean power works
That clean power is available
That fossil feuls are finite
That fossil feuls are polluting
That fossil feuls affect national security
SmartPower's message only deals with some of the "I don't know" facets (that Clean Power works), but sort of ignores the "I don't care" facet. You have to get people to care, especially to care enough to spend more than they would otherwise. You can see that segmentation in several posts above. Some people obviously care enough (to act), and others don't.
(for those folks doing the "back of the envelope" calcs please dont forget to include those variables before coming to your conclusion).
This is a great point. I design "green" buildings and we use this kind of analysis. Nobody ever writes one check to own and operate a building - there's a mortgage (or cost-of-money) check, a fuel check, an electric-bill check, etc. If I ask you to increase your mortgage check by $100 a month, but you'll reduce your fuel and electricity checks by $200 a month, then of course that makes sense.
Usually, we see the biggest returns from efficiency investments. Renewable energy investments are not so dazzling - about like bank CD's or Treasury bonds.
But gee, people, how can we talk about costs of this and that when we all know that in the present economic system costs are delusions? We only count part of them and ignore others.
I'm talking about the roads torn up by coal trucks, the sulphur and mercury in the air, the radioactive waste dumps hanging around in big tanks near rivers and cities and so on and on and on. Not to mention that elephant turd on the table-global warming.
Some people (and most teenagers) think that the cost of operating a car is the gas bill to fill up the tank. We are doing something almost as silly when we talk about the relative costs of wind and nuclear, etc. while not including all those huge unmentioned costs.
So I'm with you Reid, all the way. That makes two of us, as for the other odd six and a half billion, we have work to do.
Our utility charges extra to induce it to buy additional wind power to feed into the grid. Presumably, this cuts down on the amount of electricity generated by coal. Unfortunately, I "buy" this wind power as an act of faith. I will continue to do this and pay more than the vast majority of my neighbors for the same basic end product. They get a free ride by getting cleaner air while I pay the freight.
I agree they should voluntarily replace as much coal with as much wind power as possible or be forced to replace coal with wind. Any extra costs, if applicable should be charged to all the consumers of the utility, and arguably, to non consumers who benefit from these extra costs.
I continue to pay extra for my electricity, my light bulbs, my car, etc., knowing that it is a fruitless act if everyone, or most everyone, doesn't join in. This pisses me off, and makes me understand why most people don't both to try to save energy on their own.
The individual can't buy clean air or significantly less greenhouse emissions. But in this country, we don't believe in forcing people to do much of anything, or even creating a bit of inconvenience. And our leader reflects this attitude as he thinks the solution to all environmental problems lies in voluntary action.
If you live in Tennesee (TVA), Washington, Arizona/Nevada/SoCal (Lakes Mead and Powell) or Canada (HydroQuebec), you're probably already getting clean power without asking for it. But for the rest of us, clean power is still expensive. I live in Texas, where I have my choice of 20 different retail power plans. (See http://www.powertochoose.org/) Sad to say, the two wind power plans are the most expensive of the lot, over 18% more expensive than the average rate.
Which is not to say that the market is stagnant. Every time I drive from Houston to Dallas, I pass at least one incredibly long semi-trailer carrying a 150-foot long wind turbine blade, apparently shipped in by boat and destined for West Texas, which has been called "The Middle East of Wind Power". Somebody has clearly concluded that there are enough people who are willing to pay the clean premium to justify putting in new wind capacity.
The last mass market solar device was the garden light and that was introduced about 20 years ago. The other mass market solar devices people are likely to be familiar with are solar calculators and solar watches. These devices are not really going to bolster your confidence that solar power is gonna be able to keep the TV, air conditioner, and refrigerator going during a hot August or keep you all warm and toasty in late January.
People don't see solar working in their daily lives. Ain't no signs saying "Solar power at work" on the PV panels keeping signals and monitoring equipment going on the MA Turnpike, for example. Adding those signs might be a simple advertising tweak that could make a little difference.
Took a look at the 15 second spots and they are pretty good.
I produced some solar PSAs back in the 1970s for the local solar energy association. One of them was "A south-facing window is already a solar collector. Learn how to use it. Call the local solar energy association at xxx-xxx-xxxx." They ran a couple of times in late night spots.
In the early 90s, I produced another set of solar PSAs but no station was interested in running them. They all had their own public service campaigns and weren't interested in outside PSAs.
I hope the costs fall fast enough because the fossil fuels will start causing problems soon and then there won't be enough sunlight getting through to make solar power generation effective.
Carbon Dioxide to overwhelm Earth Storage Capacity
A new generation of computer climate models indicates there are limits to the planet's ability to absorb increased emissions of carbon dioxide. The new computer model includes the effects of Earth's carbon cycle.
Alton, a few factors could explain that price difference. First, they can probably get away with charging more so they do. Their financing costs are usually higher than "conventional" producers, and the cost efficiency of wind farms goes up as they get bigger.
Those problems are going to go away, and wind energy costs will keep going down. Meanwhile fossil fuels aren't likely to fall in prices.
The price differential doesn't make much sense for an individual. For a utility it's a price insurance on 1-2% of their production, and a way to diversify their supply. It's also building expertise in building and bringing online these wind farms.
Although using green tag energy is a wonderful concept, the truth is that energy companies offering this option are also charging way too much for it. Living on a budget dictates a lot - and the dollar difference between being a conscientious user of "regular" energy verses using environmentally friendly (or green tag) energy is a no brainer to the pocketbook.
My question: why are energy companies making it so hard to use green tag energy? Why aren't the energy-hog makers making efforts to create green tag power for their customers? To me the answer appears simple: they like to talk the environmentally concerned walk, but the dollar sign actually drives them.
When the powerhouses who own these energy generating sources begin to really care more about our environment than they do the dollar signs, then we will see changes.
Let's not confuse on-site generation with programs that give electricty consumers the opportunity to force clean energy onto an electric grid. Solar installation on houses is expensive but for those who can afford it, great. What is important for the mainsream voluntary market is that we must demand through our purchasing power that utilities place larger and larger amounts of clean energy on the grid. And that only happens through market awareness and action.
The SmartPower message seems to do just that. Tell me it works and tell me I don't have to give anything up from my current lifestyle and I will buy this stuff. People already know that fossil fuels are finite, they already know that they harm the environment and our health. But they don't care about those factors more than they care about their present quality of life. That is why the message of "its real, its here, and its working" resonates. I can have my cake and eat it too!"
Once solar cells get cheap enough you should see alot more mass market packages develope. Right now the cell and the battery system simply are too weak and too spendy for anything other then a niche market.