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Big bills lead consumers to take another look at renewable power options

By Jeff McDonald

August 14, 2000

Here's one byproduct of the summerlong run-up in energy costs that might pay big dividends down the road: More and more businesses and homeowners are looking at alternative ways to light their offices, power their PCs and tune in their televisions.

Telephones have been ringing long and loud at retailers that stock solar electric panels, inverters and other components that can free consumers from the vagaries of their electric bills.

System installers are busier than ever lining up new customers. And research into the next generation of energy production has never been so fast and furious.

"My dealers with Web sites are getting 100 hits or more a day," said Larry Cooper, a sales manager at Kyocera Solar Inc., which manufactures solar panels at a plant in Kearny Mesa.

"They're having to hire (extra) people to answer the telephone."

Business also is booming at SeaWest WindPower, a San Diego company that develops turbine electricity plants, including those vast windmill farms dotting the deserts outside Tehachapi and Palm Springs.

By the end of next year, SeaWest WindPower will have completed its 42nd project worldwide, the company said.

"Wind power is the fastest growing sector in energy," SeaWest executive David C. Roberts said. "It's growing about 22 percent a year. It accounts for less than 1 percent of the energy used in California, but we're growing."

Fed up with power rates that for many have tripled under industry deregulation, San Diego Gas & Electric customers are looking toward renewable and so-called green energy sources that are fast becoming economically competitive with conventional power supplies.

In this southwest corner of California, where high temperatures and coastal breezes are as familiar as the San Diego skyline, that means solar energy and windmills are being tapped to power homes and businesses.

Kyocera has signed deals with three San Diego companies to install industrial solar-electric systems even larger than its own 50-kilowatt panels in Kearny Mesa. Cooper declined to identify his customers.

New housing tracts in Carlsbad and El Cajon are offering homes that can be equipped with solar-powered water heaters for an additional $2,600.

The housing developments are among the first locally to participate in a federal initiative to install 1 million rooftop solar water-heating systems across the country by 2010.

So far, there has been a lot of interest but no takers, said Shea Homes spokeswoman Teri Shusterman.

"What little extra our buyers have to spend beyond the price of their homes, they're spending on upgrades," Shusterman said.

Hot for relief

Even San Diego city school officials, who voted last week to withhold money owed to SDG&E beyond last year's rates, are sizing up the power of the sun.

Troy Strand, who owns Independent Energy Solutions of San Marcos, recently installed solar power systems at three San Diego campuses, each of which will produce enough energy for three portable classrooms.

"We're an immature industry," said Strand, who launched his company two years ago after California deregulated its energy industry. "We are mom-and-pop shops that are flying by the seat of our pants."

In Escondido, inventor Arnold Lund has crafted a prototype wind turbine he says will generate more than twice as much energy as a conventional windmill.

Lund spent the past several years perfecting his design and securing a patent. Now he is shopping for investors so he can develop large-scale models and put them to work.

Lund mounted a prototype of his invention in the bed of his pickup to test its energy production. The prototype will light up six 200-watt light bulbs when his truck travels 45 mph.

"It'll be much faster to do this than to produce new gas-fired or coal-fired power plants," said Lund, a mechanical engineer who holds patents on a handful of other inventions.

"It takes maybe five years to build conventional power plants and I can build mine in a year or two. We could have a wind farm in Boulevard next year."

Traditional power plants that use coal, oil or even natural gas to produce electricity are among the worst environmental polluters, spewing hundreds of tons of soot, smog and other toxins into California skies every day, the San Diego County Air Pollution Control District said.

Carolyn D. Chase, a director of the environmental watchdog group San Diego EarthWorks, embraced the escalating energy rates, if only because they may push people to investigate renewable power sources that do not dirty the skies.

"The price goes up, people change their behavior," Chase said. "That's one thing good about deregulation. People are starting to much more quickly identify what they're doing to waste energy."

Mother of innovation

Even before SDG&E ratepayers became the initial test subjects of an unregulated power market, Californians increasingly were turning to renewable sources.

According to the California Energy Commission, 12.2 percent of the state's net system power last year was generated by alternative means -- geothermal, biomass, solar, wind and small hydroelectric systems -- a 16 percent increase over the previous year.

In 1998, less than 10.5 percent of California's electricity was produced with renewable sources. A year before that, 10.23 percent of the state's energy supplies came from alternative systems.

"The whole purpose of deregulation was to spur innovation because our system is incredibly inefficient," Chase said. "We need to make investments in cleaner power."

Under deregulation, consumers are allowed for the first time to choose their own energy suppliers, although the new competition has not resulted in lower rates.

To date, some 200,000 customers across California have switched to new service providers -- and at the same time signed up for a state consumer credit program that pays a portion of their monthly bill.

But far fewer Californians so far have taken advantage of a state rebate that pays up to half the cost of renewable energy systems. Barely $8 million of $54 million set aside for such rebates has been tapped.

"Is there more to be done? Yes," energy commission spokeswoman Claudia Chandler said. "They're still a little high in terms of the price."

Breaking free

While solar, wind and other renewable energy systems produce tens of thousands of gigawatt hours every year, technology that emerges by later this decade is almost certain to make drastic changes in the way power is supplied -- much as the 1980s redefined personal computers and the 1990s saw an explosion of cellular phone subscriptions.

Investors this year will spend some $800 million developing products that could render conventional power delivery systems obsolete within 10 years, according to Nth Power, a San Francisco venture capitalist firm specializing in energy utilities. That represents a four-fold increase in two years.

Researchers already have developed fuel cells that combine hydrogen with oxygen from the air to create electricity. The technology could power not only vehicles, but homes and businesses.

In New York, a Central Park police station has operated entirely off energy supplied from fuel cells since May 1999. Also last year, a Nebraska bank turned to fuel cells to power its credit-card processing office.

Plug Power of Latham, N.Y., is testing dozens of refrigerator-sized fuel cell prototypes it eventually hopes to sell to home builders and homeowners all over the country.

Plug Power -- whose partners and investors include industry giants General Electric and Sempra Energy-owned Southern California Gas Co. -- plans to begin mass marketing its new systems as soon as 2002.

Before that can happen, the devices must be cost-efficient enough to make them attractive to retail consumers. But many researchers are confident that such design modifications are close at hand.

"It's hard for us to fathom what the new technology is bringing us in terms of power," said George Douglas of the National Renewable Energy Laboratory, a U.S. Department of Energy service that tracks energy research and development.

"Telecommunications was first," Douglas said. "The electrical utility industry is the next one that's going to be hit."

Tom and Leeanna Emery have no use for fuel cells or monthly SDG&E bills. Anchored in a quiet pocket of San Diego Bay, their 45-foot sailboat "Hillary Brooke" is powered entirely by solar energy.

"It makes me angry that people aren't smarter," said Tom Emery, a shipwright who has lived on the water for more than 20 years. "Anybody can put solar panels on their roof."

In the meantime, as energy bills continue to climb, business people like Kirk Stokes are seizing the moment.

"Deregulation is definitely having a positive impact on our business," said Stokes, president of Altair Energy of Escondido, which sells solar electricity systems.

"But we're not out to feed on people's fears. SDG&E is doing a pretty good job of feeding that fire themselves."


Updated: 2016/06/30

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