Yesterday I asked what role the government should have in fostering alternative energy breakthroughs. The people who think the government can help a lot with this sort of thing often cite two examples:
1. Kennedy’s race to the moon
2. The Manhattan Project to build a nuclear bomb
What do those two efforts have in common? Answer: no profit.
That’s entirely different from the energy situation. Whoever figures out a way to cheaply turn seawater into fuel is going to be very rich. I would be surprised if there are any good ideas in the energy field going unfunded at the moment. My guess is that the energy investment environment has already become like the Dotcom era where venture capitalists were (figuratively) randomly knocking on dorm rooms and asking if anyone had any Internet ideas.
Someone said government can help remove red tape, or twist the arms of big companies where that needs to happen. But isn’t that the reverse of how our system works? It seems to me that big companies are twisting the arms of government. So while we might wish it were the other way, reality is stubborn. And realistically, can we expect government to remove red tape?
Every now and then I have hunches about the future that feel both real and inevitable. My current hunch is that individual homes will become their own energy sources. This won’t require any help from the government. All you need are three components that seem like they are creeping up on us:
1. More efficient solar cells (breakthroughs are coming daily)
2. Energy storage technology for the home, perhaps based on this:
3. Financing for solar cell installations
If you finance your installation of solar cells with a loan that costs you $300 a month, and save $400 a month in energy costs, you are cash positive on day one. At that point it also makes sense to have an electric car. There won’t be much red tape to worry about in this model because every house is an island, and private companies can manufacture all of the parts.
I don’t see the government having much of a role in creating that new world.