The Climatex Lifecycle case illustrates the importance of waste equals food and cradle-to-cradle, not cradle to grave. Another one of the pluses articulated by Hawken and McDonough involves running off current solar income--or, as The Natural Step puts it, "substances from the Earth’s crust must not systematically increase in the biosphere." Climatex Lifecycle does not fulfill this principle; its manufacture produces no waste and due to the increased efficiencey of new equipment, Kaelin’s mill uses less energy across the board than it did a few years ago. Bu t Climatex Lifecycle would be even more intelligent if it were run off current solar power.
Conservation is one way to achieve the "run off current solar" goal and technology can help this process, via development of new energy-efficiency power generators, creation of new insulation materials and other important designs .
Another, complementary way is to tap into alternate energy sources like wind, biomass and the source of solar income. In the following sections, we will consider the tale of two inventor/entrepreneurs in the solar energy area, neither of them inspired directly by McDonough’s framework or The Natural Step, but both seeking to tap the sun’s energy in different ways for different markets.
While writing this morning, I was interrupted by a gurgling sound in the hall behind my office. It was my attempt to work from current solar income--a solar water heater, sold to me by an inventor/entrepreneur who seemed to me to have Campbellian qualities. I met A.C. Rich when he came to fix the installation of this solar water heater in our home. My wife and I had two children, and were concerned about the impact of our growing family on the environment, particularly as we were using cloth diapers and washing them ourselves. We will return to the installation and gurgling problems later, because they are important parts of building the network necessary for successful environmentally sustainable technologies.
Rich had an original design for a solar water heater that looked like it might help alleviate our concerns about the possibility of a global greenhouse effect. As a brochure from his company, American Solar Network, Ltd., said:
The average home water heater emits over a ton of hydrocarbon pollutants into the atmosphere each year, as much as the average car! A solar water heater can prevent over 1,400 lbs. of these pollutants from being emitted.
Rich also claimed, "If 50 percent of the homes in the United States had a solar collector, it would eliminate 12 large nuclear, coal, and oil generating plants."
Rich's salesman was careful to point out that statistics in brochures are not a sound basis for estimating the effects of a solar heating unit in a particular climate. In our part of Virginia, we might realize 50% of the gains that one would get in a climate with more sunlight. Still, we felt it was bound to reduce the amount of energy we consumed. The payback period, in terms of savings, would be five or six years; we were happy about that, but more concerned about the environmental benefits.
Our motive illustrates a fundamental problem with many environmentally beneficial technologies. The initial cost of Rich's system, with installation, was very high--around $2000 for the high-capacity system we bought. Most families could not afford this without a loan, and if they got a loan, they would have to be certain that the monthly savings on energy would equal or exceed their loan payments. There were obviously no guarantees.
So for us, and I suspect others who bought this system, it was an ethical decision, more than an economic one. But how many people are willing or can afford to invest in the environment in this way? To have a major environmental impact, systems like Rich's need to be on thousands of homes.
To put it in other terms, Rich could probably sell to a small, ‘green’ market, but the competition would be tough: catalogues like Real Goods are full of other solar designs. Like Lyons, Rich wanted to reach people who wouldn’t ordinarily have considered solar.
Rich called his system a 'Solar Skylite' because it looked like a skylight--it would not detract from the appearance of the house. Furthermore, the panels were made of plastic, not glass, which meant it was very light and relatively easy to install and remove. It also appeared to be low maintenance--all we had to do was add water once in a while.
Water sat in black plastic tubing on our roof, which had a good southern exposure, until it was warm enough to trigger a sensor that started a pump, which circulated the hot water around a tank that held the water coming into our house. The water in Rich's Skylite never came in contact with the water we used to wash diapers or take showers. The system worked on the exchange of heat between water on our roof and water coming in from the city, with the pump operating only when the water in the collector was significantly warmer than the water in the house. This is called a 'closed-loop' system.
His innovative design included two inventions. He had patented a 'floating valve manifold' which allowed the water to fall into the drainback tank whenever the pump was not operating, thereby preventing the water from freezing. When the pump started up again, a floating ball rose and closed an L-shaped joint which prevented water from falling into the drainback tank, instead forcing it into the solar collector.
He also patented vents in the solar panel which released steam when the water became too hot. In other words, Rich's system could use water and not anti-freeze, and the only thing we had to do was add a little water every now and then to replace what had vented.
Rich had a team of local contractors install our system. Plastic tubing ran down from the roof to our basement, where it went into a separate hot water tank. The water from the city came into this tank, where it was pre-heated by the water from the roof before it ran into our regular tank. The man who installed our system made a mistake--the pump that circulated the water on our roof began overheating almost immediately, and we had to turn it off. Rich came down personally to solve it, which he did by moving the pump from the top of the water tank to the side. His installer had followed a script that did not work for our situation.
I took this as an opportunity to ask Rich a few questions about how he came to be an inventor and marketer of solar heating systems. What emerged was a kind of Campbellian hero's tale, characteristic of many passionate inventors who are obsessed with their work. When asked about his motivations for entering the field of solar power, Al Rich answered, "As a young boy, I was aware that what I was 'going to do when I grew up' wasn't invented yet." But, he added, "I didn't know that I was going to invent it."
Born in 1950, Rich spent part of his youth as an auto mechanic. He liked to re-tool cars for speed and drag race them. In July of 1977, he took a job at a summer camp in Colorado, where he was asked to help install a solar water heater for the camp pool. He said he 'lit up' at the thought of doing this. He saw solar technology as a way of combining his love of tinkering with an emerging awareness of global ecological problems. During his college years, he became active in the environmental movement, organizing and participating in senior seminars and conferences. His exposure to environmental issues at school, as well as the mid-70's oil crisis, further developed his interest in solar power and the environment.
After graduation in 1979, Rich started selling a solar water heating system designed by his father-in-law. Rich was dissatisfied with the design, but his father-in-law didn't want to improve it, so he and Rich parted ways. Here we see the classic inventor, who is impatient with what is, looking always for what ought to be.
Recall that Bell also had differences with his father-in-law, Gardiner Hubbard; the former wanted to focus on the transmission of speech, while the latter argued that multiple telegraphy was the real opportunity. Bell eventually managed to convince Hubbard that speaking telegraphy was worth supporting, and Hubbard's support was critical to Bell's success. In contrast, Rich was not able to convince his father-in-law to support a novel design.
It was at about this time that the U.S. Government implemented the Energy Efficiency Tax Credit that encouraged energy conservation and the development of alternative energy sources. The 1973 energy crisis made the United States realize its dependence on natural resources, particularly fossil fuels. The OPEC oil embargo led to gas lines and huge increases in the price of oil, forcing Americans to conserve. In 1978, the U.S. Government and many states decided to implement tax credits for anyone who installed a solar water heater prior to January 1, 1985. Federal income taxes allowed a credit of 40% off the entire solar domestic water heater expenditure, up to a maximum credit of $4000. (A tax credit is a reduction in the total amount of taxes owed to the IRS. It generally saves more than a deduction, which is applied only to the taxable income, not the total amount owed.) A combination of increased energy awareness and the government tax credit led to a surge of growth in the solar industry. including the installation of approximately 950,000 active solar systems and 200,000 passive solar systems were installed during this period of remarkable growth in the solar industry. An active system requires electricity to run the pump that circulates the water; a passive system needs no energy other than the sun. Al Rich saw the tax credit as an opportunity to capitalize on his expertise; he founded his own solar services company, A.C. Rich and Sun, in July 1979. He also worked as a consultant and trainer for companies entering the solar market, and he installed the first two solar systems used by the United States Navy.
In 1981, Rich became the district manager for Sears Solar at
the Herndon, Virginia branch. The fact that Sears entered the
solar heating market is an indication of the expanded business
made possible by the Energy
Efficiency Tax Credit. Over the next four years, Rich succeeded
in making the Herndon office the top producing sales branch of
the company in the United States, selling a volume of $2.5
million annually. He was in charge of the management and training
of 53 employees from all areas of the company, ranging from sales
to installation. In 1985, however, the tax credit that had given
such a boost to the solar industry expired, causing Sears Solar
to be one of over 5,000 companies to close its doors.
After the end of the era of federal tax credits, American consumers on the whole were disenchanted with the high-priced, unattractive solar water heaters that were available. The poor reliability and prohibitive cost of these systems, coupled with rapidly declining fuel prices, spelled the demise of a vast majority of companies selling solar water heaters. Fuel prices had dropped from those experienced in the mid-70's, and the country became apathetic to matters concerning the conservation of natural resources.
Rich kept his company alive during this difficult period by taking out a second mortgage on his home, scrambling for backers, and obtaining grants from states like New Hampshire, which provided him a $14,900 grant under its Appropriate Technology Project in 1991. Although still based in Virginia, he installed his solar water heating system in several homes in New Hampshire as part of a model project and documented that it saved on heating bills. He was clearly committed to his invention and has sunk most of his own resources into it. He had an ambitious goal: "Henry Ford had a vision of an automobile for every family, and I have a vision of a solar water heater for every family." Here was an inventor who wanted to ‘do well by doing good’.
A.C. Rich and Sun continued to operate; it was one of the remaining four percent of solar companies to stay in business after the tax incentives were removed. Rich started servicing the solar water heating systems that were installed during the tax credit era. Over 1 million of these systems had been placed in homes between 1978 and 1985. This work made him acutely aware of the problems with existing solar water heaters; they were over-priced, unattractive, and cumbersome.
In 1987, Al Rich decided to use his expertise to design and market a new domestic solar water heater, one that would be less expensive and pleasing to the eye. Actual work began on the "Skylite" water heater in 1988. Al Rich created another company to further the development and manufacture of the "Skylite" system: American Solar Network, Ltd. (ASN), which was incorporated on February 2, 1989. This meant he could seek investors in his new product.
A customer’s needs are not given or discovered, but must be created. (Bucciarelli, 1994 p. 149)
When Al Rich decided to design his own solar water heater, he asked himself, "What do people want?" as well as "Is there a need?" In Rich's opinion, the answer to the second question was "Yes." For evidence, he cited words of one of his satisfied Skylite customers who said, "I had always liked the idea of solar water heaters because they could save my family a lot of money. My main objection to them is that, to me, they were ugly and far too expensive." Rich did not do a market survey to determine whether his invention was needed; instead, he set out to create a need.
William McDonough likes to remind his lecture audiences that design typically involves three components: cost, performance and aesthetics. This quote from a customer emphasized cost and aesthetics. Performance was also an obvious factor. To these components, McDonough wanted to add the kind of environmental intelligence exemplified by the Climatex Lifecycle fabric. Although Rich knew nothing about McDonough’s framework, he obviously hoped he was creating an environmentally intelligent product.
Rich’s experience suggested that most consumers thought of solar water heaters as expensive and unattractive, based in part on the fact that the tax credits had led to a proliferation of inferior systems which also failed on the performance criterion. Rich felt that if he could design and market an inexpensive, aesthetically pleasing, solar water heater, the customers would emerge. As he worked on his design, it occurred to Rich that his ideas might be patentable. On June 16, 1989, Al Rich submitted an application for his first patent. After almost a year of revisions and debates about the uniqueness of his designs, Rich was awarded his first patent, #4930492, on June 5, 1990. In 1993, Rich was awarded a second patent that detailed further improvements to his original Skylite product.
Let's take a closer look at Rich's system (see Figure 19). The water on the roof is heated in trhe Skylight solar collector, made of light, plastic panels containing tubes made of black rubber. When the water on the roof is warmer than the water in the’ Solar Tank’, a differential triggers a pump which circulates the heated water around the tank. Inside the tank is the water the household uses to wash dishes, take showers, etc.; this household water is transferred to the regular hot water tank, where it can be heated to the desired household temperature. Rich's system included a timer and a drainback tank so that water could be drained out of the system at night and during the winter.
Figure 19: Schematic for A.C. Rich’s Solar Skylite system.
Rich's goal was to make the system cheap and easy to maintain. He used plastic instead of glass on the panels to make them easy to install and remove, even though plastic reduces the amount of the sun’s energy that reaches the water on the roof. He used EPDM rubber in his collectors because this material was light, flexible and could withstand freezing. Rich also designed the solar panels to look like skylights, so they would enhance the appearance of a house on which they were mounted.
The system on my roof has worked reasonably well for about six years now. The Solar Skylite is designed to vent steam when the water on the roof gets too hot, and so the water level needs constant monitoring. So far as we can tell, the system has not leaked, though it made it hard to put in a new roof--we had to find a creative roofer who could work around our Solar Skylite, in effect sealing it into our roof. This means it would be very difficult to remove if we ever sold the house. We have also had to pay for repair of the drainback tank, which developed a leak and whose fittings rusted and had to be replaced. These are the sorts of repairs many homeowners could make themselves, especially if the inventor were nearby to consult.
Al Rich’s original plan had been to mass produce the Solar Skylite, driving its costs below $1000 a system. He had a production facility set to go in Herndon, Virginia and a small pool of investors. Unfortunately, he never got the sales in Virginia, and we lost the benefit of local service and support.
One of the things Rich had tried to do to secure financial support was work with utilities in Virginia. Paradoxically, utilities have a strong interest in promoting technology’s like Rich’s that reduce power consumption. What utilities typically want to avoid is the construction of new power plants--the initial investment is high, and the payback long and uncertain. So utilities often encourage consumers to adopt technologies that will conserve energy, especially at times of peak demand for power.
In 1991, while struggling in Virginia, Rich heard about a Solar Domestic Water Heating Program, sponsored by the Sacramento, California Municipal Utility District (SMUD) which offered rebates and low-interest financing to customers with the goal of encouraging the use of solar water heaters. Consider an example. The cost of one of Al Rich’s systems in Sacramento, fully installed, would be $2850. The rebate to the customer would lower the cost to approximately $850 to $2,000 which SMUD would finance to the customer for ten years at $25 a month, or about what the customer would save in electricity. ASN would get paid up front for the full cost of the system.
As a result, Al Rich moved his company to Sacramento, California, in 1992 to participate as a contractor in the SMUD program. In addition to the financial incentives, the climate in Sacramento was perfect for solar collection.
Collaboration with SMUD spurred an increase in ASN's sales and revenues, even though ASN was in competition with other solar heating companies. Unfortunately, the program was shut down twice--once in 1992 for restructuring and again in 1993 to train the energy auditors sent out by SMUD. It was these auditors who provided the leads on which Rich and other solar contractors depended. Rich estimated that ASN lost over $150,000 as a consequence of these shutdowns. Furthermore, sales were far lower than he had hoped--an average of 1.5 per week, which was insufficient to maintain ASN. He was forced to sell an 80 percent stake in his other company, AC-Rich and Sun (ACRS), to pay off $25,000 in debts.
On February 15, 1995, a more serious problem emerged. The manager of the SMUD program accused ACRS of serious ethical abuses. ACRS installed and repaired a number of different types of solar heating system, not just those sold by ASN. One of ACRS's salespeople had recommended the replacement of at least two systems that were functioning well. The SMUD program provided insurance for faulty systems, and that replacement policy had allowed ACRS to file a claim with SMUD for replacing the systems.
SMUD put ACRS on probation without warning and based on what Al Rich felt were incorrect conclusions. Although ACRS was allowed to participate in the program, SMUD would pay for the next ten ACRS installations only if SMUD inspected and approved them. Furthermore, ACRS was not allowed to replace any damaged systems for six months. Competitors moved in to take advantage of this situation, and word spread that ACRS was not a reliable or ethical company. Because Al Rich’s reputation was tied up with both companies, the small trickle of leads for ASN systems dried up. Sales went from $108,509 in February to $55,169 in April, and the two companies shrank from 22 employees to 10.
At first, Rich was mortified and contrite--his reputation meant a great deal to him. But further investigation into the problem led him to conclude that the salesman had not acted unethically--he had simply made a mistake. This salesman had seen evidence of leaking and assumed it meant that the two systems were freeze-damaged. In fact, both of these systems used a drainback design similar to Rich's so when the temperature dropped, all the water was drained from the system. Therefore, they could not have sustained freeze damage.
Furthermore, the salesman was accused of wearing a homemade SMUD badge and representing himself as being affiliated with SMUD, rather than ACRS. But when Rich checked, he found out this was not true.
The opinion of Rich and his attorney was that the salesman had made honest mistakes for which ACRS and ASN should not be penalized. If the salesman’s bad advice had been heeded, and a new ASN system installed, then ASN and ACRS would have had to forfeit the cost of the system and installation. The SMUD manager should have held a conciliation conference before imposing penalties. Rich estimated his company lost approximately $50,000 from this incident alone. Eventually, he recovered $6000 in a settlement which recognized that he and his company had made a mistake, but not behaved unethically.
The problem here is somewhat reminiscent of the Paul Fluckinger case. The ASN salesperson (whose name, interestingly enough, was Joe Fleckinger) failed to follow the procedures outlined by Al Rich. Not only did he make a mistake on two systems, the paperwork calling for replacement of these systems was sent directly to SMUD without going through the usual internal checks at ASN. Like Kaelin, Rich had failed to communicate a complete understanding of the rationale for these procedures to every employee under him.
On June 6, 1996, Rich wrote to investors in his company, "Unfortunately, our major move across country has, for a number of reasons, not worked out. This last year and a half has been devastating, having gone from being Sacramento's 8th fastest growing company to virtual nonexistence, due to the effects of very serious SMUD errors...After installing about 500 systems in Sacramento, AC-Rich & Sun, was also a victim and had to go out of business in July of 1995."
But despite this devastating failure, Rich was ready to move on. He was constantly improving his design. New features included:
Rich hoped these new ideas, and others, would eventually help him reach a global market. Right now, he is barely scraping by. When my system gurgles in the background, I have to figure out why. Fortunately, the design is still holding up pretty well, but maintenance can be expensive if done by someone other than the installer, and all the local plumbers laugh at us.
This magnificent obsession is characteristic of inventors. They plow on, convinced that their idea is right, scraping by sometimes for years. Bell recognized the importance of his telephone before anyone else, Chester Carlson worked for ten years to find a backer for the process that became xerography , Whitcomb Judson and others labored for twenty years to create, manufacture and market what we now call the zipper . Perhaps all these inventors suffered from a kind of confirmation bias, from the failure to see the potential weaknesses in their vision for a new technology, but in their cases, this ‘bias’ turned out to be one of the keys to their eventual success.
The kind of confirmation heuristic these inventors employed might be labeled Lakatosian, after the philosopher Imre Lakatos, who argued that the ‘hard cores’ of scientific research programs that are protected by corollary assumptions. These assumptions can be modified in response to new evidence, but not the core ideas. All these inventors revised their technologies; for example, what we now call the zipper went through dozens of changes before it reached something like the form we are now familiar with. But all clung to their ‘hard core’ vision.
Similarly, both Al Rich and Albin Kaelin are constantly modifying and improving their technologies, but each has a core idea: in Rich’s case, that the sun should be used to heat water on the roofs of homes and in Kaelin’s, that fabrics should be compostable or completely recyclable.
Why was the former failing when the latter was succeeding? The markets for solar heaters and high-end furniture fabrics are entirely different, of course, so this is a problematic comparison. Nonetheless, I think in the end, regardless of the business, it comes down to networks. Lyons recruited McDonough and Kaelin who in turn recruited others into a powerful network that is constantly growing in surprising directions. Rich also tried to create a network, but he relied heavily on very small investors like us and when he found a larger potential backer in SMUD, he ran into difficulties--he still feels SMUD favored competitors over his company, and overreacted to any problems he was having.
Like Lyons and Kaelin, Rich wanted to reach beyond the ‘green niche’ market and sell to the kind of people who would not ordinarily put environmental concerns first. He knew he was addressing a real need, but he failed to consider all the energy-saving alternatives available for people that would be cheaper than his system--adding insulation, upgrading existing furnaces and appliances, and or replacing conventional hot water heaters with on-demand hot water heaters. Only a few romantics who were in love with the idea of getting power from the sun would take the risk and make the large initial investment in him and his system.
Lyons assembled a high profile network that included internationally-known figures like William McDonough, under whose name the product would be sold. DesignTex had a long track record of success with this sort of marketing strategy.
Invention is not just about devices; it is about networks that include technology. Part of the networking involves creating a need. Who needs a compostable fabric? Who needs a solar water heater? If it is only a few ‘green niche’ consumers, then there will be minimal environmental benefits. The Aramis system studied by Latour was primarily needed by the engineers; they kept its technologically pure original form and did not negotiate enough with those who wanted to turn a mental model into an actual system . Rich built a system, but even that important step is only one of the first in a long series of negotiations, if one wants to put the technology on most homes in America.
Rich's current plan is to go global. The greatest potential market for solar may be in those developing countries where thousands of people are 'off the grid'. A model of how to do this is provided by the Solar Electric Light Fund, which also provides a model of how you help customers with the steep initial cost of this new technology--a problem Rich will have to solve if he is going to market in countries poorer than ours, where many people are ‘off the grid’ and the need for power is consequently greater.
Neville Williams, founder of the Solar Electric Light Fund (SELF), understood that the important question is not whether the developing world will be electrified, but in what manner? Williams noted that "even if they [the developing world] could afford to run the wires out from power plants, which is not economically feasible--we would pollute the world beyond imagination." Although Williams was not explicitly using the Natural Step nor the Hawken/McDonough principles, his efforts were consistent with running on current solar income ideal. He set out to demonstrate that technological change, improved standards of living and environmental respect are realizable and consistent goals, not merely utopian ideals. By using photovoltaic technology (PV) which harnesses the sun’s rays and converts them into energy, Williams was attempting to avoid the mistakes that the West encountered from its technological revolution: "If the Third World develops in the way we did, the world would be a wreck. The biggest threat to global warming and to greenhouse gases in the future is the unbridled development of the Third World because 70 to 80 percent of the people in developing countries don’t even have electricity."
Williams, who promoted renewable energy technologies for the Carter Administration, has traveled to over 50 developing countries. On such trips, Williams noticed how introducing electricity to developing nations drastically changes lives. However, at the same time, he was aware of the environmental damage done by previous conventional electrification efforts. For example, in 1990, carbon emission from fossil fuel burning in China was 661 million tons, or more than eleven percent of the world’s total. From 1950 to 1990, world aggregate nitrogen emissions from fossil fuel burning have increased from 6.8 to 26.5 million tons, and sulfur emissions from 30.1 to 68.7 million tons.
Williams concluded that individuals living in developing nations "don’t care about the environment," and only "care about getting electricity any way they can." This gets back to the fourth Natural Step systems principle: we ought to aim for fair and efficient use of resources with respect to human needs. The notion of fairness implies that people in developing nations have a right to the same kind of energy and amenities possessed by developed countries, and that it would be hypocritical to demand, strictly on moral grounds, that they use more environmentally intelligent sources of energy than industrialized nations. This is one of the divisive elements of the rain forest debate: developed countries that have already slashed and burned much of their forests demand that less developed countries save their forests to avoid global warming. Certainly it is in everyone’s interest to avoid global warming, but why should Brazil be expected to make up for some of the ‘sins’ of the developed nations? As we noted in a previous section, one solution is to have power companies like AES buy stretches of rain forest, in order to preserve them
For Neville Williams, the challenge was to show people in developing countries that it was in their own local interest to use solar power. To this end, in 1990 he founded the Solar Electric Light Fund (SELF), a non-profit, Washington, DC based company whose goal was to help provide persons in developing countries with an environmentally friendly power source. SELF’s mission statement states that we must "address the issue of how 70 percent of the people in the Third World are going to get electricity without doing additional damage to the planet. Two billion people attempting to emerge from centuries of darkness into an electrically lighted future will be one of the critical issues of the 21st century."
Williams’ first goal was to provide environmentally safe electricity to China, a country where some 200 million persons had no reliable source of power. Despite economic growth in China during the 1980s of approximately 10 to 14 percent annually, energy growth was significantly lower, at 4 to 6 percent. The gap between energy supply and energy demand has been growing at an astronomical pace, and by the year 2000, sources predicted that there could be an energy shortage as high as 700 megatons (coal equivalent).
The growing gap between China’s energy supply and energy demand can be attributed to at least four key factors:
Despite relatively high energy costs, China still relied heavily on traditional fossil fuels. According to the 1994 Trade and Environmental Database :
[W]ith the rapid exploitation and high dependency of coal productivity, China is damaging not only the physical environment, but China is also creating health problems for Chinese people, and people in surrounding countries.
Since approximately 70 percent of China’s energy consumption comes from the burning of coal, it is not surprising that China’s energy use has posed large-scale environmental problems to the entire world and severe health risks to Chinese citizens. Increased emissions of sulfur dioxide (SO2) from the burning of fossil fuel have resulted in large amounts of air pollution. This pollution has been far from negligible. In 1988, chronic obstructive pulmonary disease, an ailment caused primarily by SO2 (and cigarette smoking) accounted for 26 percent of all deaths in China. Additionally, lung cancer deaths have drastically increased.
Coal burning has also heightened carbon dioxide (CO2) emissions, which has subsequently exacerbated global warming. Besides global warming, acid rain has been linked to fossil fuel burning in China, the effects of which are easily noticed in China’s urban areas:
When rain falls in metropolis cities in China, the pollution is clearly visible. Soot coats the pavement turning it into slippery muck, and turns the leaves a black-brown color . . . [Coal burning] has led to a rise in cancer and lung disease.
Even with such obvious health and environmental risks, little has been done to improve China’s energy problems. Plans for the construction of a new 2,640 mega-watt coal burning plant are underway.
Despite proof of toxic air pollutants and acid rain, China is making minimal efforts in converting coal burning plants to more environmentally safe methods.
Magiacha, a small village of about 200 families located in Tongwei County in Gansu, China, is situated about 1200 miles west of Beijing. In 1992, none of the 850 individuals living in the village had access to electric power. The villagers were not satisfied with their current power source. One villager observed:
We only had kerosene lamps, which gave us little light, like the stars do. It’s so difficult for us to do any work in the evening time. The most dangerous thing was when we got up in the morning, our noses and mouths were filled with black ashes . . . [Kerosene makes us feel] dizzy in the head and dim of sight.
Williams’ company found that for each photovoltaic user, over one quarter of a ton of carbon dioxide gas would have been produced by kerosene lamps supplying the same amount of light. In addition to the reduction of carbon dioxide emissions, finding an alternative to kerosene lamps will eliminate toxic, and potentially fatal fumes. In fact, 780 million women and children who are exposed to kerosene fumes inhale the equivalent of two packs of cigarettes a day.
He needed to act quickly. The task at hand for him was to be the first person to reach the non-electrified individuals in China because, as he notes "the first person to show up with electricity wins!" Williams thought that if he did not electrify these people first with an environmentally safe power supply, another group would reach them using conventional fossil fuel power, thereby augmenting a rapidly growing environmental disaster. While Williams might be the first person to introduce electricity, his clients were poor. He notes: "You’ve got to give these people a way to afford 20 years of technology, which is what a PV panel gives them . . . But the cost . . . is generally what these people make in a year."
PV technology is quite simple. Units harness the sun’s rays and convert them into energy. For the most part, the energy is environmentally friendly. However, since the unit requires a battery to store energy when the sun is down, disposal of batteries is an environmental hazard that would violate the principle that all waste ought to be recyclable.
Still, PVs seemed superior to other sources, in environmental terms. For example, on new source of power in China is the "Three Gorges Dam Project" located in central China, which will provide over 84 billion kilowatt-hours per year. The dam will operate by harnessing river currents, providing electricity without emitting pollution. The 1.2 mile dam will greatly contribute to China’s increasing electricity needs; however, various social and environmental costs would be incurred. Almost 2 million people will have to be relocated to complete the project, many of whom are farmers. Archeological sites will be covered with water, including almost all traces of the Ba, who date back 4000 years and are poorly understood; river wildlifewill be threatened, including endangered species like the Chinese sturgeion, the paddlefish and the Chinese river dolphin . The cost of the dam will exceed any other single construction project in history.
Williams also felt that PVs were superior to coal, in environmental terms-- even clean coal technology. Williams selected individual PV house units with a 20 Watt capacity. Solar energy can be produced in generating stations that serve multiple homes and villages; China was experimenting with this sort of technology in Tibet . But generating energy on the household level seemed like a good idea to Williams—expensive wiring and metering would not be needed, and each homeowner would be responsible for her or his own source of power.
Climatex Lifecycle was not only a product; it was also an ‘existence proof’, a demonstration of what was possible. Similarly, SELF’s PV units would be a demonstration--of the ‘benefits of clean, decentralized, renewable energy’. The days of the villagers would no longer end at sundown. This would allow children to have more time to read and become better educated. The units would provide energy for radios, a means of accessing information about the world. The villagers would become less dependent on oil or electricity brought in from outside, and more dependent on their own ability to maintain their PV units. Eventually, Williams hoped, maintenance, repair, improvement and even the construction of new units could be done by local industries.
But the $300 initial price, reasonable by Western standards, was equivalent to the villagers’ annual incomes. SELF could not, and did not want to be, a charitable organization--could not, because according to Williams, "there isn’t enough money in the world to give this stuff (photovoltaics) away" and would not because doling out electricity was inconsistent with SELF’s emphasis on individual responsibility.
The developing world is littered with charity technologies that were given to villagers and never used. A student of mine in the Peace Corps worked in a village in Zimbabwe where the villagers had to walk several miles to obtain water. There were at least two water tanks, installed by charitable organizations, rusting next to the village. No one had made the villagers responsible for this technology.
Part of responsibility is ownership--if I have made a significant investment of my own resources in a technology, I will take responsibility for it. SELF provides power only to individuals who have the financial means to purchase it. This philosophy encourages villagers both to conserve energy and to take care of their individual units. Additionally, ownership of property helps individuals in the developing world obtain a sense of pride. However,
No market structure yet exists to handle the required capital flows [for solar technology] . . . the emerging [solar] industry . . . has been plagued by poor access to capital. Only about 5 percent of rural households in developing countries have the ability to purchase a system outright with cash.
Magiacha was only a beginning for Williams; he hoped SELF would "sow solar seeds", facilitating initial purchases of PV units to begin the process of forming an independent solar market in China. One possibility would be to secure funding from the Chinese government which could be used to partially subsidize the PV units. Since the Chinese government already was subsidizing current grid extensions, it easily could direct some financial resources to purchasing PV units. Thus, instead of the Chinese government funding electrification projects that produce environmental problems, it could finance environmentally safe projects, that at the same time, would produce equivalent electrification results. In fact, since SELF argued that any extension of existing electric grid structures would require copper wiring at the cost of approximately $10,000/mile, subsidizing PV technology would also be cheaper, especially given the way in which villages like Magiacha are spread out. The Chinese government could do something similar to the Sacramento Municipal Utility District, providing down payments and low cost loans. But this would violate SELF’s concern with local responsibility--an especially important point, considering the Chines government’s human rights record in areas like Tibet.
Williams might also look to organizations throughout the world who spend millions of dollars to preserve the environment and promote humanity. SELF could first argue that all individuals are entitled to a decent standing of living, and that such a standard requires electric power. Thus, it would only be fair that Magiacha receive electricity. In fact, China had already electrified 85 percent of its citizens, mostly through electric grid extensions and out of fairness, some method of electrifying the rest of the country should be found. However, while most of China’s electricity comes from fossil fuel burning, as an alternative, SELF could push for private sector charitable funding of PV technology to preserve the environment. This would enable the village to be electrified in an environmentally safe manner and would take advantage of the millions of dollars donated to environmental and humanitarian organizations. SELF would simply act as a catalyst in securing funds to individuals willing to purchase PV units. The funding would cover only down payments, ensuring that the villagers would pay for their electricity on a monthly basis and subsequently allowing the villagers to take individual responsibility for their own electricity. SELF would provide zero interest loans for the difference between the subsidy and the unit cost. Still, this would leave individuals dependent in part on charity. It would be better to find another way.
Williams also considered securing working capital from environmental groups and governments to establish a "revolving credit fund" that provides zero interest loans to villagers who purchase individual PV units. SELF would use the initial capital to purchase units. SELF would then over the units to the villagers. SELF would collect a down payment on the units from the villagers, followed by monthly installments, thereby having the villagers pay for the entire cost of the unit. Payments would then be used to finance additional loans to other individuals wishing to acquire PV units. However, the villagers would need to pay back their loans in order for their neighbors to receive electricity and maintain the solvency of the revolving credit fund. In addition to providing more funding for other loans, the revolving credit fund also would promote borrowers to make timely, and sometimes early payments to allow others access to loans. The fund would grow as more people made their payments. Eventually, Williams hoped, SELF could exit China, leaving a growing solar industry behind.
Rich wanted every home in the U.S. to have a solar water heater. Similarly, Williams wanted every rural village in China to use photovoltaics. Both expected their goals to be achieved eventually by the free market. The difference is that SELF was a non-profit organization that wanted to ‘prime the pump’, getting the whole process started.
SELF completed a 1000 unit project in the GANSU region. It went very well and was capped off with a joint venture between SELF and the U.S. Department of Energy and the National Renewable Energy Laboratory for 600 units.
China is not the only place SELF is trying to transform. Despite the end of Apartheid, South Africa is a country still plagued by widespread social inequalities between its white minority and black majority. While 74 percent of South Africans have electricity, 3.7 million of its citizens have no reliable electricity source. In rural (and predominately black) areas, only fifteen percent have grid electricity. Most of the electrification disparity between white urban and black rural residents can be attributed to two factors:
Such factors led the Energy Economist to report that
Apartheid still haunts South Africa’s energy economy. The country’s emerging democracy has inherited two systems . . . The largely white affluent minority expect and receive electricity at the flip of a switch. 2/3 of its black citizens have no electricity at all. Most live in uninsulated shacks, sweating in 30 degree Celsius plus temperatures in summer, shivering in winter, and breathing unhealthy air year-round.
The rural electrification problem in South Africa is consistent with SELF’s long-term goal of introducing photovoltaic (PV) power into lesser developed countries (LDCs), hoping to stimulate long-term, sustainable, independent PV markets. Will Cawood, a project manager for SELF, was given the task of heading up the South African project. As in China, SELF needed to choose a specific area in South Africa for an initial pilot project. The pilot project would assess the feasibility of a country wide PV electrification program and would hopefully provide the groundwork for the formation of independent PV markets throughout South Africa.
The Maphephethe region appeared to be an ideal location for the pilot project. The community of approximately 20,000 residents is on the East coast of South Africa and is 80 km west of the city of Durban. The region’s landscape is very mountainous, making access to it difficult during the summer, especially when rainfall amounts reach their average of 1000 mm/pa. Not only does the community lack electricity, it also lacks an adequate communication system: no telephone wires or significant cellular phone coverage.
One of the major problems in Magiacha was the large distance from the village to the grid. The nearest power-line was only 5 km away from Maphephethe. But neither ESKOM nor Durban Electricity, the utility companies responsible for conventional electricity in the region, had plans for extending the grid for at least five years, because the villagers could only afford, at most, 100 kWh of electricity per month. Grid extensions would therefore require ESKOM or Durban utility to incur large debts with a long payback period. SELF’s PV power seemed like a perfect solution to Maphephethe’s power problems.
The community’s leadership is vested in a young, progressive chief who has brought peace to the region after his father’s death. He has also been responsible for bringing fresh piped water to the community, thereby improving the standard of living in the community while simultaneously creating jobs for its citizens. The chief has also made his views on electrification clear, and has noted on several occasions that his goal is to see "electric lights shining forth from every kraal in his community." Since the cultural traditions of the community are strong, Cawood worked closely with the chief to establish a good relationship.
After working with the Chief, Cawood contracted with a group of researchers from the Energy & Development Research Centre at the University of Capetown to assess the receptiveness of the new technology from within the community. The team of researchers discovered that the Maphephethe residents were aware of the technological capability of harnessing the sun’s rays for energy. But most of the residents lacked specific knowledgeable of PV technology. Despite their limited awareness of PV technology, the researchers found that over 80 percent of the residents seemed eager to try the new technology.
To increase the community’s awareness of PV, Cawood obtained funding from South Africa’s Department of Mineral and Energy Affairs to install a 225Wp solar lighting system in the local courthouse, providing community members with a live presentation of how such power works. This demonstration gave Cawood a lesson in how technology has to become part of the local culture. The community center was relatively far from most residents, who did not like to travel at night--therefore, very few of them experienced the benefits of light after dark. Cawood realized in hindsight the funds would have been better spent on individual units.
He decided on an eventual goal of electrifying 75 homes in the village with 53Wp units costing around $550.00. While the 53Wp units provide less energy than a conventional grid extension, the PV units do support several lights and small appliances. The cost of each unit, $550.00, was a steep price for the community members, roughly equivalent to a year’s salary, but Cawood arranged for financing and loans through the KwaZulu Finance and Investment Corporation (KFC). KFC provided 3 or 4 year loans to PV purchasers at an interest rate of 16.5 percent, with a minimum 10 percent down payment. Loans for salaried workers were approved on the basis of their individual pay-slips, and such borrowers were encouraged to deduct loan payments directly from their salaries. For a non-salaried resident to acquire a loan, KFC needed to deploy a field staff to ascertain how a potential borrower intended to pay off the loan.
As more individuals secured loans and were able to afford PV, Cawood hoped that an independent PV market with financial support from an independent loan market would begin to develop. The next step then would be for SELF to leave the region, allowing loans to be presented to residents without external support. Cawood noted that "we hope this formula will . . . provide an answer for at least half of the 3.5 million South African families who have yet to receive electric service from the grid."
Results from the first six homes were encouraging. Before the introduction of PV, residents relied primarily on car batteries, which they needed to charge every 7 to 30 days. The charging stations were accessible only by bus, taxi or car and still required that the resident carry the 20kg battery on foot from the main road to his or her dwelling (usually between 100m to a few km away). Since most families only owned one battery and the process of charging took as long as a day, given the time for transportation and actual charging, a family could be without electricity as much as one day a week. PV provided a more steady and reliable source of power. Some households were using PV to allow their children to read and do homework at night. Two of the six households operated manual sewing machines at night with the help of PV light. PV held the promise of upward social mobility.
However, the new opportunities created by PV were not equally accessible to all: "in Maphephethe, it seems that the most powerful and influential people are empowered even further by the SHS brought into the community." The Mathew effect appeared to be in operation: individuals in positions of power such as the Chief and the tribal courthouse secretary and persons with permanent jobs such as shopkeepers and teachers were the purchasers of the PV units. Those who purchased a unit were saving energy expenses that other, poorer residents of Maphephethe incurred and also were able to improve their social standing by pursuing other projects at night. This solidified the position of the "upper" class in the community.
Electrification efforts in the Maphephethe community promised to decrease the social inequality between whites and the largely rural blacks. But they also threatened to increase social stratification within the community. The solution is to provide power for everyone, as soon as possible--partial subsidies, especially for those who do not have steady income.
The SELF cases illustrates how "run off current solar income" can be a strategy for rural areas in the developing world. Getting local people to own and take responsibility for the technology is integral to SELF’s philosophy. In this case, they do not have to buy into the sustainable schema--they just have to want power. It remains to be seen whether local industries will spring up to maintain these PV units, and even manufacture new ones. It also remains to be seen whether the PV units will continue to be used when the grid is eventually extended to areas like Magiacha and Maphephethe. Hopefully, the infrastructure will be present by then to keep solar power a viable supplement to the electronic grid, one that will give more independence to individuals and local governments as well as facilitating a more sustainable industrial revolution in the developing world.
Could Al Rich sell his technology in the developing world as well? The SELF cases is mostly about building networks of villagers, local governments and sources of financing--including organizations like the W. Alton Jones Foundation that fund SELF projects. Al Rich has had trouble building similar networks in this country--he would need to convince an organization like SELF to work with him.
This page was last edited: Wednesday, July 14, 1999