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 California
Greening
January
19, 2004
By David Pierotti
The federal
government has decreased support for alternative energy technologies,
but many states including California are moving ahead with their
own programs to encourage alternate energy sources.
It's well known
that California tends to start trends that eventually spread across
the country. From cosmetic surgery to fruit smoothies, whatever
the latest fad is, it probably started in California. One trend
that didn't catch on as well was solar power. During the 1970s,
when skyrocketing oil prices made 'going green' fashionable and
economical, California was at the forefront. But the cheap oil of
the 80s and twelve years of presidential administrations hostile
to alternative energy made things tough for the emerging green industry.
The "Go Solar" bumper stickers faded and frayed, and became
as hip as an 8-track player.
The current
executive administration has even less regard for alternative energy,
but many states including California are moving ahead with their
own programs to encourage a new wave of alternate energy sources.
These generally focus on tax rebates for a wide variety of technologies
and conservation methods. However, many of these incentives have
been in place for years without the kind of widespread acceptance
that spurs major investment. This can be expected to continue in
the current economic climate, which means green power will remain
a minor factor in the California economy. This is a common reevaluation
from a couple of years ago when deregulation and a booming economy
had many thinking green power had finally arrived.
Deregulation
was a mixed blessing for the green industry in California. It began
successfully as customers switched over, slowly but steadily fulfilling
the promise of market choice for utilities. After a year of furious
competition, only six energy service providers remained standing;
all six offered green power. Customers discovered the wonders of
net metering; that is, a house with solar panels generating excess
power could send this back into the grid causing their meter to
run backwards. But the energy crisis devastated this momentum. In
what seems to be a very expensive panic attack, Governor Davis signed
$43 billion in closed-door power deals to eliminate the rolling
blackouts afflicting the state. Out of these massive contracts,
lasting through 2010, only 1.2% is from renewables. This was an
incredible opportunity not only for California to lead the nation
into a cleaner century but also to stimulate the potentially important
economic sector of green power.
Present setbacks
aside, green power continues to make inroads. In June, Pasadena
Water & Power began a new program to allow all of its customers
the option to purchase electricity generated from PacifiCorp Power
Marketing's new High Winds project in Solano County. PacifiCorp
boasts over 22,000 customers for its renewable energy program, which
placed it third in customer participation in the Department of Energy's
ranking of green energy providers.
Another success
story is 3 Phases Energy. With offices in San Francisco, Manhattan
Beach and Venice, 3Phases is an alternative energy companies that
entered the market through deregulation and managed to weather the
storm of the energy crisis to emerge stronger, wiser and better
positioned for future growth. They recently signed an agreement
to supply 4.4 million kilowatt hours per year to Sacramento-based
companies.
An affordable
housing complex at Colorado Court in Santa Monica is an exciting
example of what may become the green industry's most promising application.
This may seem an unlikely place for cutting edge technologies and
design, but it illustrates the powerful economic incentives that
bode well for the future of the environment sector. Besides the
state of the art heating and cooling systems, which rely on natural
ventilation instead of air conditioners, the facility is equipped
with eye-catching deep blue solar panels on the side of the building.
The net result of all this green technology is an estimated savings
of $10,000 a year. The success and popularity of the building has
prompted a steady stream of students, architects and developers
to tour the facility. With this level of interest, and the Community
Corporation already planning to adapt their other buildings to a
green design, prospects look bright for the architecture firm of
Pugh, Scarpa, Kodama and all the other California companies that
contributed to Colorado Court's success.
In fact, many
are optimistic about green technology's economic future. Clean Edge,
a San Francisco-based research and consulting firm for the green
sector, predicts the clean energy market will grow from $7 billion
in 2001 to $89 billion by 2012. Venture capitalists are taking notice
by increasing the percentage of clean energy VC activity from .07%
to 2.3% of total VC investment in just three years. And while the
current administration has shown little interest in establishing
a Renewable Portfolio Standard, (RPS), other nations and even many
states are slowly mandating minimum standards for their energy requirements.
For instance, the European Union is aiming for 20% renewable energy
use by 2010, which presents a tremendous growth opportunity for
the green sector.
Although California's
energy crisis certainly delivered a harsh blow to the state's emerging
green power industry, signs point to its long-term success. All
things being equal, people tend to choose clean electricity over
pollution-intensive sources. As costs decline and availability rises,
the demand for alternative power will certainly increase. In addition,
green architecture and development is gaining more attention as
businesses realize the economic benefits and marketing opportunities
of conservation. The wild card is governmental cooperation. Green
industry requires the commitment of elected leaders at the local,
state and federal level. So far, that support is capricious at best
and obstructionist at worst. When you consider that coal and nuclear
power are still receiving massive federal subsidies, it's not hard
to see the difficulties green power faces. But with rising energy
costs and ever-increasing environmental awareness, that "Go
Solar" bumper sticker may again have its day in the sun.
Read Green
Technology: Froth or Foundation? from the June 2, 2003 issue
of Larta VOX.
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