This speech was given today at the D.A.R. Constitutional Hall
Ladies and gentlemen:
There are times in the history of our nation when our very way of life depends upon dispelling illusions and awakening to the challenge of a present danger. In such moments, we are called upon to move quickly and boldly to shake off complacency, throw aside old habits and rise, clear-eyed and alert, to the necessity of big changes. Those who, for whatever reason, refuse to do their part must either be persuaded to join the effort or asked to step aside. This is such a moment. The survival of the United States of America as we know it is at risk. And even more -- if more should be required -- the future of human civilization is at stake.
I don't remember a time in our country when so many things seemed to be going so wrong simultaneously. Our economy is in terrible shape and getting worse, gasoline prices are increasing dramatically, and so are electricity rates. Jobs are being outsourced. Home mortgages are in trouble. Banks, automobile companies and other institutions we depend upon are under growing pressure. Distinguished senior business leaders are telling us that this is just the beginning unless we find the courage to make some major changes quickly.
The climate crisis, in particular, is getting a lot worse -- much more quickly than predicted. Scientists with access to data from Navy submarines traversing underneath the North polar ice cap have warned that there is now a 75 percent chance that within five years the entire ice cap will completely disappear during the summer months. This will further increase the melting pressure on Greenland. According to experts, the Jakobshavn glacier, one of Greenland's largest, is moving at a faster rate than ever before, losing 20 million tons of ice every day, equivalent to the amount of water used every year by the residents of New York City.
Two major studies from military intelligence experts have warned our leaders about the dangerous national security implications of the climate crisis, including the possibility of hundreds of millions of climate refugees destabilizing nations around the world.
Just two days ago, 27 senior statesmen and retired military leaders warned of the national security threat from an "energy tsunami" that would be triggered by a loss of our access to foreign oil. Meanwhile, the war in Iraq continues, and now the war in Afghanistan appears to be getting worse.
And by the way, our weather sure is getting strange, isn't it? There seem to be more tornadoes than in living memory, longer droughts, bigger downpours and record floods. Unprecedented fires are burning in California and elsewhere in the American West. Higher temperatures lead to drier vegetation that makes kindling for mega-fires of the kind that have been raging in Canada, Greece, Russia, China, South America, Australia and Africa. Scientists in the Department of Geophysics and Planetary Science at Tel Aviv University tell us that for every one degree increase in temperature, lightning strikes will go up another 10 percent. And it is lightning, after all, that is principally responsible for igniting the conflagration in California today.
Like a lot of people, it seems to me that all these problems are bigger than any of the solutions that have thus far been proposed for them, and that's been worrying me.
I'm convinced that one reason we've seemed paralyzed in the face of these crises is our tendency to offer old solutions to each crisis separately -- without taking the others into account. And these outdated proposals have not only been ineffective - they almost always make the other crises even worse.
Yet when we look at all three of these seemingly intractable challenges at the same time, we can see the common thread running through them, deeply ironic in its simplicity: our dangerous over-reliance on carbon-based fuels is at the core of all three of these challenges -- the economic, environmental and national security crises.
We're borrowing money from China to buy oil from the Persian Gulf to burn it in ways that destroy the planet. Every bit of that's got to change.
But if we grab hold of that common thread and pull it hard, all of these complex problems begin to unravel and we will find that we're holding the answer to all of them right in our hand.
The answer is to end our reliance on carbon-based fuels.
In my search for genuinely effective answers to the climate crisis, I have held a series of "solutions summits" with engineers, scientists, and CEOs. In those discussions, one thing has become abundantly clear: when you connect the dots, it turns out that the real solutions to the climate crisis are the very same measures needed to renew our economy and escape the trap of ever-rising energy prices. Moreover, they are also the very same solutions we need to guarantee our national security without having to go to war in the Persian Gulf.
What if we could use fuels that are not expensive, don't cause pollution and are abundantly available right here at home?
We have such fuels. Scientists have confirmed that enough solar energy falls on the surface of the earth every 40 minutes to meet 100 percent of the entire world's energy needs for a full year. Tapping just a small portion of this solar energy could provide all of the electricity America uses.
And enough wind power blows through the Midwest corridor every day to also meet 100 percent of US electricity demand. Geothermal energy, similarly, is capable of providing enormous supplies of electricity for America.
The quickest, cheapest and best way to start using all this renewable energy is in the production of electricity. In fact, we can start right now using solar power, wind power and geothermal power to make electricity for our homes and businesses.
But to make this exciting potential a reality, and truly solve our nation's problems, we need a new start.
That's why I'm proposing today a strategic initiative designed to free us from the crises that are holding us down and to regain control of our own destiny. It's not the only thing we need to do. But this strategic challenge is the lynchpin of a bold new strategy needed to re-power America.
Today I challenge our nation to commit to producing 100 percent of our electricity from renewable energy and truly clean carbon-free sources within 10 years.
This goal is achievable, affordable and transformative. It represents a challenge to all Americans -- in every walk of life: to our political leaders, entrepreneurs, innovators, engineers, and to every citizen.
A few years ago, it would not have been possible to issue such a challenge. But here's what's changed: the sharp cost reductions now beginning to take place in solar, wind, and geothermal power - coupled with the recent dramatic price increases for oil and coal -- have radically changed the economics of energy.
When I first went to Congress 32 years ago, I listened to experts testify that if oil ever got to $35 a barrel, then renewable sources of energy would become competitive. Well, today, the price of oil is over $135 per barrel. And sure enough, billions of dollars of new investment are flowing into the development of concentrated solar thermal, photovoltaics, windmills, geothermal plants, and a variety of ingenious new ways to improve our efficiency and conserve presently wasted energy.
And as the demand for renewable energy grows, the costs will continue to fall. Let me give you one revealing example: the price of the specialized silicon used to make solar cells was recently as high as $300 per kilogram. But the newest contracts have prices as low as $50 a kilogram.
You know, the same thing happened with computer chips -- also made out of silicon. The price paid for the same performance came down by 50 percent every 18 months -- year after year, and that's what's happened for 40 years in a row.
To those who argue that we do not yet have the technology to accomplish these results with renewable energy: I ask them to come with me to meet the entrepreneurs who will drive this revolution. I've seen what they are doing and I have no doubt that we can meet this challenge.
To those who say the costs are still too high: I ask them to consider whether the costs of oil and coal will ever stop increasing if we keep relying on quickly depleting energy sources to feed a rapidly growing demand all around the world. When demand for oil and coal increases, their price goes up. When demand for solar cells increases, the price often comes down.
When we send money to foreign countries to buy nearly 70 percent of the oil we use every day, they build new skyscrapers and we lose jobs. When we spend that money building solar arrays and windmills, we build competitive industries and gain jobs here at home.
Of course there are those who will tell us this can't be done. Some of the voices we hear are the defenders of the status quo -- the ones with a vested interest in perpetuating the current system, no matter how high a price the rest of us will have to pay. But even those who reap the profits of the carbon age have to recognize the inevitability of its demise. As one OPEC oil minister observed, "The Stone Age didn't end because of a shortage of stones."
To those who say 10 years is not enough time, I respectfully ask them to consider what the world's scientists are telling us about the risks we face if we don't act in 10 years. The leading experts predict that we have less than 10 years to make dramatic changes in our global warming pollution lest we lose our ability to ever recover from this environmental crisis. When the use of oil and coal goes up, pollution goes up. When the use of solar, wind and geothermal increases, pollution comes down.
To those who say the challenge is not politically viable: I suggest they go before the American people and try to defend the status quo. Then bear witness to the people's appetite for change.
I for one do not believe our country can withstand 10 more years of the status quo. Our families cannot stand 10 more years of gas price increases. Our workers cannot stand 10 more years of job losses and outsourcing of factories. Our economy cannot stand 10 more years of sending $2 billion every 24 hours to foreign countries for oil. And our soldiers and their families cannot take another 10 years of repeated troop deployments to dangerous regions that just happen to have large oil supplies.
What could we do instead for the next 10 years? What should we do during the next 10 years? Some of our greatest accomplishments as a nation have resulted from commitments to reach a goal that fell well beyond the next election: the Marshall Plan, Social Security, the interstate highway system. But a political promise to do something 40 years from now is universally ignored because everyone knows that it's meaningless. Ten years is about the maximum time that we as a nation can hold a steady aim and hit our target.
When President John F. Kennedy challenged our nation to land a man on the moon and bring him back safely in 10 years, many people doubted we could accomplish that goal. But 8 years and 2 months later, Neil Armstrong and Buzz Aldrin walked on the surface of the moon.
To be sure, reaching the goal of 100 percent renewable and truly clean electricity within 10 years will require us to overcome many obstacles. At present, for example, we do not have a unified national grid that is sufficiently advanced to link the areas where the sun shines and the wind blows to the cities in the East and the West that need the electricity. Our national electric grid is critical infrastructure, as vital to the health and security of our economy as our highways and telecommunication networks. Today, our grids are antiquated, fragile, and vulnerable to cascading failure. Power outages and defects in the current grid system cost US businesses more than $120 billion dollars a year. It has to be upgraded anyway.
We could further increase the value and efficiency of a Unified National Grid by helping our struggling auto giants switch to the manufacture of plug-in electric cars. An electric vehicle fleet would sharply reduce the cost of driving a car, reduce pollution, and increase the flexibility of our electricity grid.
At the same time, of course, we need to greatly improve our commitment to efficiency and conservation. That's the best investment we can make.
America's transition to renewable energy sources must also include adequate provisions to assist those Americans who would unfairly face hardship. For example, we must recognize those who have toiled in dangerous conditions to bring us our present energy supply. We should guarantee good jobs in the fresh air and sunshine for any coal miner displaced by impacts on the coal industry. Every single one of them.
Of course, we could and should speed up this transition by insisting that the price of carbon-based energy include the costs of the environmental damage it causes. I have long supported a sharp reduction in payroll taxes with the difference made up in CO2 taxes. We should tax what we burn, not what we earn. This is the single most important policy change we can make.
In order to foster international cooperation, it is also essential that the United States rejoin the global community and lead efforts to secure an international treaty at Copenhagen in December of next year that includes a cap on CO2 emissions and a global partnership that recognizes the necessity of addressing the threats of extreme poverty and disease as part of the world's agenda for solving the climate crisis.
Of course the greatest obstacle to meeting the challenge of 100 percent renewable electricity in 10 years may be the deep dysfunction of our politics and our self-governing system as it exists today. In recent years, our politics has tended toward incremental proposals made up of small policies designed to avoid offending special interests, alternating with occasional baby steps in the right direction. Our democracy has become sclerotic at a time when these crises require boldness.
It is only a truly dysfunctional system that would buy into the perverse logic that the short-term answer to high gasoline prices is drilling for more oil ten years from now.
Am I the only one who finds it strange that our government so often adopts a so-called solution that has absolutely nothing to do with the problem it is supposed to address? When people rightly complain about higher gasoline prices, we propose to give more money to the oil companies and pretend that they're going to bring gasoline prices down. It will do nothing of the sort, and everyone knows it. If we keep going back to the same policies that have never ever worked in the past and have served only to produce the highest gasoline prices in history alongside the greatest oil company profits in history, nobody should be surprised if we get the same result over and over again. But the Congress may be poised to move in that direction anyway because some of them are being stampeded by lobbyists for special interests that know how to make the system work for them instead of the American people.
If you want to know the truth about gasoline prices, here it is: the exploding demand for oil, especially in places like China, is overwhelming the rate of new discoveries by so much that oil prices are almost certain to continue upward over time no matter what the oil companies promise. And politicians cannot bring gasoline prices down in the short term.
However, there actually is one extremely effective way to bring the costs of driving a car way down within a few short years. The way to bring gas prices down is to end our dependence on oil and use the renewable sources that can give us the equivalent of $1 per gallon gasoline.
Many Americans have begun to wonder whether or not we've simply lost our appetite for bold policy solutions. And folks who claim to know how our system works these days have told us we might as well forget about our political system doing anything bold, especially if it is contrary to the wishes of special interests. And I've got to admit, that sure seems to be the way things have been going. But I've begun to hear different voices in this country from people who are not only tired of baby steps and special interest politics, but are hungry for a new, different and bold approach.
We are on the eve of a presidential election. We are in the midst of an international climate treaty process that will conclude its work before the end of the first year of the new president's term. It is a great error to say that the United States must wait for others to join us in this matter. In fact, we must move first, because that is the key to getting others to follow; and because moving first is in our own national interest.
So I ask you to join with me to call on every candidate, at every level, to accept this challenge -- for America to be running on 100 percent zero-carbon electricity in 10 years. It's time for us to move beyond empty rhetoric. We need to act now.
This is a generational moment. A moment when we decide our own path and our collective fate. I'm asking you - each of you - to join me and build this future. Please join the WE campaign at wecansolveit.org. We need you. And we need you now. We're committed to changing not just light bulbs, but laws. And laws will only change with leadership.
On July 16, 1969, the United States of America was finally ready to meet President Kennedy's challenge of landing Americans on the moon. I will never forget standing beside my father a few miles from the launch site, waiting for the giant Saturn 5 rocket to lift Apollo 11 into the sky. I was a young man, 21 years old, who had graduated from college a month before and was enlisting in the United States Army three weeks later.
I will never forget the inspiration of those minutes. The power and the vibration of the giant rocket's engines shook my entire body. As I watched the rocket rise, slowly at first and then with great speed, the sound was deafening. We craned our necks to follow its path until we were looking straight up into the air. And then four days later, I watched along with hundreds of millions of others around the world as Neil Armstrong took one small step to the surface of the moon and changed the history of the human race.
We must now lift our nation to reach another goal that will change history. Our entire civilization depends upon us now embarking on a new journey of exploration and discovery. Our success depends on our willingness as a people to undertake this journey and to complete it within 10 years. Once again, we have an opportunity to take a giant leap for humankind.
Want to reply to a comment? Hint: Click "Reply" at the bottom of the comment; after being approved your comment will appear directly underneath the comment you replied to
C'mon Al, please help us regular folk to afford solar/wind retrofits to our homes. We have been waiting 3 mos. for our solar HW/fan/light parts to come in. If there were more/better incentives, we are all for installing solar/wind on our property & net metering to replace our electric use. We live in coal country, KY & are sick of mountaintop removal mining & increased electric cost! I believe our electric bill has increased 29% in past 3 yrs. We are using less & paying more!
Shift the subsides for oil coal and nukes to tax credits for rooftop solar installations.
Absolutely agree. Solar panels on every rooftop, for starters. It's a space we've already impacted, so why not?
Please illuminate. Exactly what subsidies are paid from the public treasury to any coal, oil or gas producer?
Huzzah, Mr. Gore, and kudos!
While I'll never forgive you for not running this year, your continued efforts on the issue of renewable energy certainly comes close to making up for it.
My concern about the ten-year-plan is that it may only just BARELY be enough time to actually get so many wind and solar plants up and running (and nuclear, too! what, no nuclear?). Coupled with the need to revamp our electric grid, update our rail lines, and encourage alternative forms of fuel for transportation, it strikes me as a significantly greater challenge than the moon landing or the Manhatten Project.
Having said all that, if ever there was a challenge worth attempting, carbon independence DEFINATELY qualifies. Finally, a cause for post-boomer generations to rally 'round!
Yes, but the technology is already here for 80%. You can build a wind famr tommorrow and be getting immediate payback.
However thois needs to be a 150 billion per year project, not 150 Billion over ten years.
Just dont let the repugs run it.. look what they did with the money to rebuild iraq! LOL.
This money will be spent almost entirely in the U.S. That is a real stimulus package... unlike buying stuff made in China with the Chineses getting 60% of the benefit.. ands worse borrowing the money so we can stimulate their economy. Or the money spent in iraq and other military operations outside our borders.
Regards
"You can build a wind famr tommorrow and be getting immediate payback."...if this is so, why should the government pay for it? why not on your own nickel?
Vice President Gore;
As noble (or is it "Nobel"?) as your intentions are, I feel setting the bar this stratospherically high, this message will be dismissed by the vast majority of Americans out-of-hand.
It's similar to when you promoted the 10 year "Tipping Point" in your film/book. Even I...a devoted 'green'...heard that and thought "that CO2 reduction target is utterly untenable, why not just tell us there's no hope at all?"
This new challenge...brought out in the most dire economic climate in decades...is SO daunting & expensive that it will also create a "why bother...it ain't gonna happen" mentality among the vast majority of Americans...politicians included.
I'm not saying bold sacrifices aren't required...I just feel that in asking for "the moon", you/we are not going to get anything. I'm also concerned that the GOP will twist this challenge to their favor by saying "Look...these liberals are going to destroy our economy!".
Everything you say is right...but I think you're biting off more than our country can chew.
See A. Siegel's Profile
This challenge is technologically achievable, clearly so.
One of the world's top wind financiers, who used to be a financier of Russian oil & natural gas, has done an analysis of what would be required. His basic point: achievable. Take a look at Jerome a Paris' work: http://www.dailykos.com/story/2008/7/17/144426/316/203/553055
If this plan is as profitable and feasible as your correspondent claims, why do you suppose he proposes that US Taxpayer dollars and government force be used to implement it? Why is he not eagerly investing his own money in this scheme right now? If he is indeed one of the world's top finaciers, then why does he not secure the rights to some of the "ideal" territory located in the San Francisco Bay area, erect a wind farm on it, and begin raking in his cash selling power back to the grid?
for the planet, for millions of species including our own, for our children, we have to try and try soon.
Resistence will come more from special interests and the politicians beholden to them than from the American people, who are desperate for change, weary of high gas prices, and upset about outsourcing.
As A. Siegel points out, technology will not be the greatest hurdle of this challenge. As to the cost, funds can be raised by eliminating subsidies for oil companies. Further, growth in alternative energy industries will provide more job opportunities for Americans.
No doubt such a challenge WOULD be expensive--but far more to oil companies who are currently raking in record profits than to the average American taxpayer.
@poomplet:
This new challenge...brought out in the most dire economic climate in decades...is SO daunting & expensive that it will also create a "why bother...it ain't gonna happen" mentality among the vast majority of Americans...politicians included.
Why? This type of effort could be just the boost our economy needs, but it will take bold steps to make it happen. How many people could be put to work revamping our power grid, designing, manufacturing and installing wind, solar and solar and other sustainable power systems?
A push to develop a domestic electric auto industry could result in the rebirth of Detroit.
We can do this, but it will only come about if we stop being ruled by the short-term vision of corporate America and their lobbyists. Sadly, there isn't enough spine in Washington to stand up in a light breeze and it'll take some really strong leadership to make it happen. It can be done, we just have to believe and we've got to want it badly enough.
People are worrying if their banks are going under....were 3.5 months away from what will be a close election...we're struggling to achieve ANY level of carbon reduction.
This is not the time to bring this proposal to the public. Again, I think it can/will be spun to paint the Democrats as environmental extremists. Do you really think Obama's gonna gain ground by adopting this proposal and saying "we're gonna spend $3 TRILLION tax-dollars in the next decade!"?? No...that would sink his chances altogether...and even now people will demand to know what he thinks about this, and he's in a no-win situation; tick off the hardcore left or scare away every moderate in the nation.
And A.Siegel...if you go to the end of that Kos link you give...he says
Al Gore doesn't support nuclear...which is another problem I have with this plan.
I'm afraid that your argument is akin to being in a leaky lifeboat, which is taking on 20 gallons per minute, and telling the passengers they need to bail 10 gallons per minute so they don't just give up.
The point is, given how much we have soiled our own nest, if we don't act now, we'll be at the bottom of the proverbial ocean.
In one speech, Al Gore provided more intelligence and inspiration than the man who "defeated" him in 2000 has given us in 7.5 years. That election becomes more and more tragic each passing day. Luckily, the American people now realize that Mr. Gore, not Mr. Bush, is the leader to be followed.
Or do they? Sometimes I doubt it. :-(
I'm all for bold, decisive action to bring about an end to this "Oil Age" however, I can't help but wonder what effect on climate, environment and the Earth diverting sunlight and wind to our own purposes will have.
It's not so much a matter of diverting sunlight and wind to our own purposes. For example, the wind in the Midwest corridor will continue to blow in whatever direction it will regardless of whether or not we have wind turbines in place to harness the energy. Low-level wind isn't a significant factor in a region's climate in any case, so even if the kinetic energy of wind is "drained" earlier by using turbines, there isn't any real off-set to another area; it's the upper atmosphere winds and higher-level winds which drive weather patterns (clouds, rain, etc). Sunlight might be an interesting case, however. If huge areas were suddenly covered with photovoltaic cells, then the albedo would be significantly altered. (Albedo is the % of sunlight reflected by a given surface). Since solar cells are intended to capture the sunlight to convert to energy, their albedo is as close to 0 as possible. Albedo does play a significant role in climate. In fact, albedo is the most significant issue with losing the Arctic ice cap. (Sea ice has a higher albedo - reflects more sunlight - than open ocean, therefore without sea ice, more sunlight is available to heat the water and further increase the overall temperature.)
There are always unintended consequences.
The area required is very small ( a couple hundred sq miles).. Much smaller than all the roofs and parking lots which do the same. Citi's in genreal raise the heat level. Either put solar cells on dark roofs.. that would be neutral... or ofset by requiringdark roofs to be painted with lighter colors.
Parking lots are an excellant starting place besides the dessert. And you keep the cars in the shade while you generate the power. No new land required. Covered walk ways in the rain and a distributed power source..
Regards
Agreed. We'd have an easier time damming off an ocean than actually "diverting" wind or solar. Wind is ultimately powered by the planet's rotation and solar obviously hits the planet anyway. As far as albedo is concerned, it certainly plays a major role in ice-covered areas, but the difference is marginal when you compare a normal roofttop to one covered in solar panels. Also, not all solar power systems rely on photovoltaics.
I'll wager that there's not much difference between the albedo effect of a solar panel and most roof-tops.
It hurts to know that Al should have been president.
Its refreshing to hear someone, anyone talk about energy conservation and renewable resources at a time when all you find in the news is "Drill Drill Drill Drill" sadly i wonder how much attention this will get in the MSM.
We love Al Gore!
His speech left out one thorny issue - electrical energy storage. Those wind turbines are sometimes stilled by lack of wind. Solar photovoltaic or thermal plants don't operate at night. On the other hand, sometimes the wind turbines or solar plants generate more power than the grid needs.
We need a technical solution to the storage problem. There are feasible ideas that could be implemented. One idea is to fill air-tight underground caverns with compressed air, pumped up when the solar/wind power exceeds demand or just to have power available for a rainy day. I've always wondered if those massive tunneling machines could be used to cut a cavern in the bedrock just for this purpose.
The other idea is ultra-capacitors. There's a company in Texas called EEStor that may be on the verge of a breakthrough ultracapacitor that can store huge amounts of energy with a quick charge time and millions of charge/discharge cycles. Banks of these could be set up at power plants to suck up all the excess from the solar/wind plants for use at night, etc.
Another problem is the transmission of this power. Again, modern semiconductor electronics comes to the rescue. It's now possible to build high voltage DC transmission lines using semiconductors called IGBTs acting as high voltage inverters. A DC transmission line has much lower losses than the transmission lines in use today. Siemens is already producing such systems.
Add these ideas to Al's list!
EEStor is most likely a scam. Or just the product of exuberant but unscientific projections of people who don't understand their physics. In any case, I wouldn't put my money in, if I were you. You are sure to lose it. Just a friendly advice from your local physicist.
The energy density they are proposing might be possible, but most likely not with barium titanate which is a rather conventional dielectric.
Thanks Al. I'm with you.
Mr. Vice-President:
You are my hero. You make me feel that all hope is not lost and there are tangible things that I, as an individual, can do to help heal our world. Your visionary understanding of the interconnectedness of these complex human and political issues is the beacon to which we all much look for guidance and a way out of this man-made mess.
I understand and respect your reasons to not run for political office. I know you're probably less constrained and more effective out of 1600 Pennsylvania Avenue. I just wish you were there for us now. We need you, as Americans. The Earth needs you at the helm, Mr. Gore.
You are my hero- thank you for all you've done and all you continue to do.
hey AL?
you better get on the ticket to make sure Obama wins or this aint never goin to happen!
Absolutely right, Al.
10 years 1 T$ funded by taking all the subsides to coal, oil nukes and oil and applying them to rooftop solar and offshore/rural wind and ecars. Here's the plan, numbers and links:
http://www.huffingtonpost.com/users/profile/research
You are still off by an order of magnitude, maybe two. Telling people they can have for cheap what they can't is not a good idea to build trust.
Please, show my the math and the links.
One other thing: We have stagnant job growth coupled with rising energy prices right now, a double whammy that no manipulation of the Federal Reserve is going to fix. Let's put folks to work building solar and wind energy producting systems and address both issues simultaneously. If keeping the world clean and cool is not incentive enough, the idea of saving our tails financially might provide that incentive.
Thank you, Al Gore.
Also, perfect location to make a new declaration of independence!
I have been very interested in selling and distributing solar collectors for the home market. The grid is vulnerable and wasteful, and I think I have a better grip on the small scale market. What has been troubling is that the emerging technology has been developed for utility-scale production almost exclusively.
I understand the need and the incentives for these companies to produce this type of equipment, but there is a vast untapped market for solar and wind at the residential level. If anyone could address this need, I would be most grateful.
Actually, much of the market in Europe is for small solar systems. The technology is exactly the same. The difference is simply that if you buy 10MW of panels, you get a price much closer to production cost of probably $2.50/W than if you buy 1kW worth, for which they will charge you $4.50/W or so. I got a detailed estimate from a guy a couple of years ago and the difference between small quantities and large scale orders was about a factor of two.
There is nothing unusual about that and it is the hallmark of a low margin business. In a business like mine where the margin is much, much higher, we will charge you x if you buy one and 0.9x if you want to buy one hundred of a product. We may reduce that to 0.85x if you buy a thousand. This may sound counter intuitive, but it isn't. Because if you don't buy the product from us, there is nowhere else where you can go to buy it. We are single source, which is why we have a large margin. And that we offer a price reduction is just a nice gesture of ours. In a low margin, multi player business like solar the price for large quantities is what makes or breaks the deal.
Solar panels are not that difficult to get at that scale, but I am talking about parabolic reflectors. I used to sell wholesale and understand the economy of scale well. But with parabolics, we need a product scaled down in size.
You must be logged in to comment. Log in or connect with