Sharon and Blake Rowe's 86-year-old home doesn't look any different from their neighbors' houses on their quiet suburban street. As dusk deepens into darkness, lights glow invitingly from their downstairs windows. Just inside the front door, a roaring fire greets guests.
But the fire is no ordinary blaze. Set within the traditional fireplace is a high-tech, high-efficiency stove. Blake Rowe proudly opens a trapdoor on top where he feeds in the fuel. “People usually say it looks like rabbit feed,” Rowe says, describing the little brown pellets that fill the stove and feed the fire below.
The pellets are made from compressed, recycled sawdust, and, Rowe explains, “are considered carbon neutral, because the wood generated oxygen back when it was part of a living tree.” That, he says, balances out the greenhouse gas emitted when you burn the pellets. And they create heat much more efficiently than burning plain wood.
The pellet stove, which heats the entire downstairs of Rowe's house, is just one of many renovations he and his wife have made to their home to make it “green,” lowering their impact on the environment. They have 30 solar panels on the roof to produce their own electricity. They have a pellet grill, a solar oven and, starting this spring, a vegetable garden—fertilized with their home compost.
The couple—who 20 years ago started Ecobags, one of the first American businesses to manufacture and sell reusable cloth grocery bags—says environmental issues are paramount for them. “I am a premium green geek,” Rowe says, “I will do it even if it costs more.”
The renovations to their home were extremely costly—the solar panel installation alone cost more than $50,000 (although a government program subsidized about half). But over the long term, Rowe thinks their renovations could end up saving them money, as they produce their own electricity and reduce their reliance on fossil fuels.
It's a calculation a lot of people are making these days, and not just families. February's stimulus package includes several important provisions for investment in and development of renewable energy. In his speech to Congress, President Obama said, “We know the country that harnesses the power of clean, renewable energy will lead the 21st century.”
Developing home grown green technology
Obama listed more economic than environmental reasons for the importance of renewable energy. “We will put Americans to work,” he said, “making our homes and buildings more efficient so that we can save billions of dollars on our energy bills.”
It's not the first time the U.S. has looked beyond fossils fuels to alternative energy sources. “There was a tremendous investment in renewable energy in the 1970s when the oil crisis hit,” says Rod Larkins, associate director of the Initiative for Renewable Energy and the Environment. Back in 1973, OPEC, the coalition of oil-producing countries, cut oil production and declared an embargo on oil shipped to the West. Within months, the price of oil in America had quadrupled.
Last summer's record high oil prices fueled another surge of interest in alternative energy sources.
But when oil prices go back down, the sense of urgency can fade. This, Larkins says, is exactly what happened in the 1980s: “We went forward and continued our addiction to fossil fuels. The technology languished and that was when all this technology went offshore.”
Now Obama and others aim to revitalize the green energy industry in America. Some call it the “green collar economy.” They say, as more so-called “blue collar” manufacturing jobs end up overseas, America needs to innovate to create new jobs—and, in the 21st century, the new demand will be for environmentally friendly products, like clean energy.
Transitioning from the old economy to the green economy
Max Perilstein and his family are counting on it. His family owns Arch Aluminum and Glass, with 33 locations and more than 2,400 employees in the United States. They have been making glass in the U.S. since 1898, when Perilstein's great-grandfather arrived in New York with $34 and a glass cutter in his pocket. Just recently, they began manufacturing solar panels.
Faced with declining sales from their three mirror factories, the family had to make some tough decisions. They closed one plant. But Perilstein says his cousin, Leon Silverstein, the company's president and CEO, saw an opportunity.
“He's a true blue environmentalist,” says Perilstein, who serves as the company's vice-president of marketing. “He was always ahead of the curve.”
“He said, ‘we have these mirror facilities, and solar power works off mirrors,’” Perilstein recalls. Last year, they retooled the factory and retrained—and retained—all their workers.
A significant part of the transition still remains, Perilstein says, as they continue to court an entirely new customer base. But, he says, “We're growing and want to continue to grow. We're excited and hopeful that things will continue to bounce our way.”
Right now, the market for solar panels and other green energy products remains a small niche in the construction industry. One estimate, from the McGraw Hill Green Building report in 2006, estimated that by 2010, only approximately 10% of commercial construction starts were expected to be green.
Part of the reason for the low numbers is the steep initial costs. Not everyone has tens of thousands of dollars to invest in solar panels, the way the Rowes did. This is where, some analysts say, government involvement, like the provisions from the stimulus bill, is crucial.
Tom Henderson, an environmental and public works executive with more than three decades of experience, says new technology is always expensive at first. “When I was a young man and got out of school,” Henderson remembers, “the first pocket calculators came out. All they did was add, subtract, multiply and divide, and they were like $500. Now people give those away.”
Coal and natural gas fired power plants are a mature technology, Henderson says, and that's part of why they're so cheap. If we develop the technology for green energy, the costs can go way down.
But before private companies are willing to invest the money to improve the technology—and mass produce the equipment—they want to know there will be demand. Henderson says one problem with previous government efforts to encourage investment in green energy was that they weren't long-term.
For instance, the renewable energy production tax credit has been around since 1993. The tax credit is for businesses and homeowners with solar panels or other sources of renewable energy to help offset the costs of installing the technology.
In the past, the tax credit was only approved in one- or two-year intervals. That meant anybody calculating the cost of using renewable energy couldn't be sure that three or four years down the line, they would still be receiving the tax credit. Therefore, Henderson says, they were less likely to take the risk.
Likewise, a company thinking of producing solar panel or wind energy equipment didn't know if the government incentives for their customers would disappear in a year or two, drying up their demand.
In the stimulus package, Congress has extended the solar energy production tax credit to 2013, Henderson says, and to 2012 for wind installations. He wants to see them extended even further—to 2025 or beyond.
He also wants the government to phase in programs, like a carbon emissions tax, that reflect the true costs of energy. “Is the total cost to society,” he asks, “really captured by just calculating how much it costs to get the electricity out of the coal?”
If the environmental costs were added to the bottom line, Henderson says clean energy sources would start to seem more financially attractive.
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