Sep 10, 2008

solar & kurzweil

I attend business conferences as a usual activity in my line of work. Today I attended Cowen's Renewable Energy Conference because the disruptive effects of solar always keep it on my radar screen.

It's hard for me to not get absolutely jazzed up at these conferences. I am extremely bullish on solar for reasons I've outlined previously. The main point being cost per Watt comes down linearly on a logarithmic scale. It seems inevitable to me that in 10 years solar panels will be everywhere. (note just because I am bullish on solar does not mean I am bullish on solar stocks)

But there is a lot of research going into many adjacent technologies having to do with power grids, batteries, auto drive trains, etc. I'm halfway through Kurzweil's book, 'The Singularity is Near'. The main drive of this book is that many technological advancements follow this exponential increase in performance per cost that solar follows and that we generally overlook this exponential growth because on a short time scale (say 5 years) these things look linear. It's hard not to be wildly optimistic about the problems we have around food and energy getting solved.

The combination of reading this book and going to this conference make me think that energy and pollution issues are probably completely solved within the next 10-20 years. By that time solar will be the cheapest way to produce energy and all our fossil fuel use (autos, electrical generation, etc.) will slowly be geared to that fact.

It struck me that in that time frame driving a V8 car driven off of gasoline will seem as backward and archaic as cooking on a log burning stove.

There's a book review in the NY Times today talking about Friedman's new book 'Hot Flat & Crowded'. I generally disagree with what is outlined about the book in the article. Basically Friedman is arguing the US needs to take a greater political role in pushing for renewable energy. My viewpoint is that economics always dictate the best allocation of capital.

Take Germany which has rich subsidies on the production of solar energy. They effectively are funding large profits in largely foreign companies. Largely Chinese to be exact. The US is smart in many ways to wait. Spending $15,000 on a solar array today doesn't make a lot of sense if you can purchase the same array for $1,000 in 4 years time. There is no reason to subsidize renewables. They are coming whether we like it or not.

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