By Real Goods Founder John Schaeffer from The Solar Living Sourcebook
As I look back 30 years to our humble beginnings at Real Goods in 1978, I am struck by how isolated we in the environmental movement really were. Our clientele at Real Goods was a cadre of young and idealistic hippies living in the woods of Mendocino County, California, having just fled the major urban centers of America for a simpler and more meaningful existence in the hills.
Most of our customers got their light from kerosene, their heat from wood, their food from the garden, and their entertainment from books. Back then, there were no computers, and the Internet, Google, YouTube, and cell phones did not exist. Jimmy Carter was president, Jerry Brown was governor, and everyone was optimistic that, with the strength of our back-to-the-land movement, we could eventually overcome the misguided ways of our over-logging, over-consuming, shortsighted polluting peers. Global warming was not yet even a whisper, and there seemed to be plenty of time left to deal with oil depletion.
I wrote an editorial in 1979 that declared: "According to the U.S. Congress's own Office of Technology Assessment, all known oil reserves will be exhausted by 2037." That was almost 60 years away, and if we could put a human on the Moon in only 10 years, fixing our fossil fuel habit sounded like a piece of cake - if we could only find the will to do it.
Today, 30 of those 60 years are gone, and we have made few, if any, major steps toward becoming fossil fuel-free. 2007 marked the first year when nearly all scientists, and even oil company executives, acknowledged that we have reached peak oil - or that we will reach it - within just a few years. Coincidentally, consensus about the reality of global climate change also finally coalesced in 2007, and it will probably be looked back on as the year when that consciousness reached the tipping point.
From countless magazine covers to An Inconvenient Truth and hundreds of newspaper articles and media news clips, most of us now accept the reality that global warming is here to stay. California Governor Arnold Schwarzenegger, representing the sixth-biggest economy on the planet, has brought climate change to the forefront of politics, and he is partnering with many other governors and heads of state to take action despite the official U.S. position of denial. Across the world, we're beginning to realize that if we're to have any chance of mitigating global warming, we must lower our fossil fuel consumption (and the resulting carbon dioxide emissions) between 80% and 90% from today's levels as soon as 2030, or at the latest by 2050.
There is simply no time left to begin acting decisively if humanity - and all other life on Planet Earth - is to have a chance to avoid implosion by the middle of the 21st century. Since 1980, we've had the warmest years on record (with 2006 and 2005 now ranking #1 and #2) since scientists began recording average annual temperatures in 1866. Parts-per-million carbon dioxide levels have increased from 280 ppm (for centuries) to 360 ppm today and are forecast to hit 560 ppm by 2050.
Modern society's addiction to fossil fuels has brought us to peak oil. Marion King Hubbert (the concept of peak oil), geologist Colin Campbell, and Richard Heinberg (author of The Party's Over: Oil, War, and the Fate of Industrial Societies; Power Down; and The Oil Depletion Protocol) have done exhaustive work to demonstrate that the "oil peak" (the point in time when 50% of all known oil reserves have been consumed) is upon us. Even the CEOs of Exxon-Mobil and Royal Dutch Shell, the world's largest oil companies, concur. The world currently uses about 80 million barrels of oil per day and is expected to need 120 million barrels per day in 2020. However, while 13 megaprojects (more than 500 million barrels of oil) were discovered in 2000, only two were found in 2002, and none since.
Geologists believe we'll never find another one. The "age of oil," in the geologic history of the world, will prove to be only a small blip - from the time that Edwin L. Drake drilled the very first oil well in northwestern Pennsylvania in 1859 until that last drop is consumed sometime in the mid-21st century.
We will all be profoundly affected by peak oil, particularly in the industrialized countries where we've become accustomed (and addicted) to exponential energy growth.
The first and most obvious consequence, which we've already begun to experience, is skyrocketing oil and gasoline prices. It is unlikely that these prices will ever again decline significantly from today's rates of $65/barrel and at least $3/gallon. Indeed, soon those prices may sound very cheap. Because fossil fuels permeate all sectors of our world economy, decreasing supplies and rising prices will lead to economic contractions.
Perhaps most significantly, as oil and natural gas become more scarce and costly, so will chemical fertilizers, which will have a huge impact on our ability to feed ourselves. In spite of the evidence, our government continues to subsidize fossil fuel technologies, and the energy playing field is not level. In 2003, the White House and Congress enacted incentives to give the owner of a 10-mpg Hummer a whopping tax deduction of $34,000 but the owner of a 50-mpg hybrid vehicle just $4,000. For every 100,000 SUVs sold this year, American taxpayers will pay a subsidy of $1 billion, which ironically is the same amount that the federal government spent in the 1990s to encourage American car companies to build a hybrid car, and about the same amount we're spending each week to keep our troops in Iraq.
After the first Gulf War in 1991, both the Japanese and American governments launched major initiatives to reduce their dependence upon Middle East oil as an urgent matter of national security. The Japanese government aggressively helped develop the Toyota Prius and the Honda Insight, assisting the automakers to sell vehicles below cost to get them out to the public. Today, hybrid vehicles are a major success story, and Toyota expects to sell nearly half a million Priuses by 2008. Meanwhile, the American automobile industry is far behind the curve - and losing tons of money. President Bush has embraced ethanol, but he has also refused to push for higher fuel-efficiency standards that are more than feasible with current technologies. The U.S. fleet average (miles per gallon of cars and trucks) remains worse than it was 25 years ago, due to ideological stubbornness, multimillion-dollar lobbying campaigns, and duplicity by the government and the car companies.
"We must face the prospect of changing our basic ways of living. This change will either be made on our own initiative in a planned way, or be forced on us with chaos and suffering by the inexorable laws of nature." - President Jimmy Carter, 1976
Back in the good old days (30 years ago), we approached environmentalism by educating as many people as possible as fast as possible about new renewable energy technologies and the wisdom of simple processes like recycling, composting, natural building, and resource conservation. Through the Real Goods catalog, website, and 12-acre Solar Living Center, I think we've done a pretty good job of achieving that goal.
When we opened our Solar Living Center in 1996, we aimed for 50,000 visitors a year within 10 years. We've greatly exceeded those projections and are now proud to host nearly 250,000 visitors annually and to be the largest tourist attraction north of San Francisco. But, as we celebrate our 30th anniversary, it's clear to me that there is so much more to do if we're going to make an impact on minimizing global climate change. We have to change human consciousness, thereby changing deeply ingrained habits. The two enormous challenges of our time (oil depletion and climate change) are inextricably connected and must be dealt with head on. This means addressing the systemic causes of these crises, not just the superficial symptoms.
Without a doubt, we're the most fortunate generation in the 2-million-year history of the genus Homo. And we may have it easier than any of the generations to come, given the sacrifices necessary on the horizon regarding energy and fossil fuel use. The abundance of new energy resources that became available during the last two centuries (primarily oil) sparked a population explosion (from 1.7 billion to 6.4 billion people during the 20th century), an awesome industrial revolution, and a level of mass prosperity never before imaginable (not to mention wars of a correspondingly horrific scale and scope).
Agriculture is perhaps the area of human endeavor that has been most profoundly transformed by fossil fuels, through the invention of synthetic fertilizers and motorized transportation. In the U.S., the number of farmers has fallen from 50% of the population in the 1890s to 1% today. The average piece of food on an American plate travels 1,500 miles to get to your table, and changes hands six times along the way. The Swedish Food Institute discovered that growing and distributing a pound of frozen peas requires 10 times more energy than the peas themselves contain. A head of iceberg lettuce grown in California and shipped to London consumes 127 times more calories than it provides to the person who eats it. Because the current industrial agricultural system is totally dependent on fossil fuels (from fertilizers to fueling tractors to gassing up trucks that drive foods across country), and because it takes 400 gallons of oil equivalents annually to feed each American, it is unlikely that we will be able to feed the 8+ billion of us forecast to be alive in 2050 using our current industrial agricultural system - it is unsustainable.
And what has happened to our energy habits in the last half-century?
At the turn of the 21st century, the average American family owned twice as many cars, drove two and a half times farther, used 21 times more plastic, and traveled 25 times farther by air than did the average family in 1951. The size of new houses has doubled since 1970 while the average number of people living in each home has shrunk dramatically. Even with all the additional space, we've not only managed to fill it up but have created a new and booming storage locker industry to hold all the stuff we can't fit in our homes.
And finally, the enormous irony in our acquisition of all this material abundance (and the billions of barrels of oil and millions of acres of trees it took to create it) is that, according to numerous surveys, many Americans are not happy people. Something is very wrong if all this abundance can't make us happy. And with the "age of oil" rapidly coming to an end, it's now clear that our species cannot survive the continued loss of biodiversity, decimation of forests, shrinking ocean fisheries, falling water tables, foul water and air, and relentless increase in carbon dioxide emissions that is changing Earth's climate forever. Maybe it's time to finally change course?
That's always been the mission of Real Goods.
Renewable energy is the foundation of Real Goods. We made the very first retail sale in the world of a photovoltaic module in 1979. In the nearly 30 years since, we have solarized more than 60,000 homes and businesses. Worldwide, well over 1 million homes now get their electricity from solar cells. For the 1.7 billion people in the world still not connected to an electric grid, PV is by far the cheapest source of electricity: In the developing world, the monthly payment on a 3- to 5-year loan for a small PV system is less than what is typically spent on candles and kerosene for lamps.
Photovoltaic technology is totally reliable, and our solar industry is now fully mature. In what other industry can you find a 25-year warranty like the one that comes with almost every solar panel sold? Computers? Cars? I don't think so.
And when building a new home, you can easily wrap the cost of the solar system into your 30-year mortgage, making PV cost effective from day one. For a retrofit on an existing home, payback comes in 6-12 years (depending on incentives and electric rates), which translates into a return on investment of between 8% and 16% - far better than what you can earn in the stock, bond, or long-term CD markets. In the commercial sector, the numbers are even better. With federal tax incentives and accelerated depreciation, payback typically comes in 2-5 years, delivering a return on investment of between 20% and 40%.
Solar power substantially increases property value, too. According to the Appraisal Journal (October 1999) of the National Appraiser's Association, home value increases $20 for every $1 achieved in annual energy savings. This means that a 3kW system (the size of the average Real Goods sells) can increase your property value by $20,000, while costing you only $18,000 (with California rebates).
You're money ahead from day one.
More important, a PV system allows you to lock in utility rates of less than $0.14 per kWh for 30 years - and many expect that utility electric rates will skyrocket over next three decades.
Solar is growing by leaps and bounds. In 2002, 525 megawatts (MW) of PV power was produced worldwide, up 82% from 2000. In 2004, production doubled to 1,040MW. And by 2006, it doubled again to over 2,000MW. The photovoltaic industry has experienced a compound annual growth rate approaching 50% annually in the last few years. Unfortunately, the United States' share of solar power is dwindling. In 1997, the U.S. accounted for 42% of all the PV power in the world, Europe for 18%, and Japan for 25%. By 2006, the U.S. share declined to only 7%, while Europe increased to 29% and Japan doubled its share to 51% of PV production worldwide.
The good news is that the price of PV continues to tumble. Solar is following the same pattern as the computer, electronics, and cell phone industries: For every doubling of supply, the price declines about 20%. Forecasts call for worldwide production increases to over 10,000MW by 2010, up five times from 2006! America is way behind in the PV race because Japan and Germany have spent considerably more money than the U.S. on PV research and development, on generous tariffs for solar power fed into the grid, and on rebates and incentives for the installation of PV systems. As a result, the German PV market (even with sunshine equivalent to only the northeastern U.S.) grew from 100MW in 2001 to more than 500MW in 2006. The Japanese PV market has been even more impressive, growing from just 2MW of residential PV in 1994 to over 900MW by 2006. And the installed cost of PV in that country was reduced by 62% in seven years - during a period of very poor performance by the Japanese economy.
Meanwhile, net metering (where the utility has to buy power from your renewable gridintertie system for at least the same price as the power you buy from them) pokes along in the U.S., a hodgepodge of nice, but inadequate, incentives now available in 41 states and the District of Columbia; and the nuclear industry still claims the lion's share of our government's largesse. Programs to encourage the expansion of renewable energy in the U.S. would provide significant benefits: stimulating the economy by adding hundreds of thousands of jobs in manufacturing, sales, and installation of renewable energy systems; relieving pressure on our overtaxed electricity transmission grid; and reducing carbon emissions and pollution. Here's one concrete example: Our little company, Gaiam Real Goods, increased residential solar sales 15 times in one year (between 2002 and 2003), almost solely as a result of California Energy Commission incentives, and we almost doubled our workforce.
Just imagine what a well-thought-out national program could do.
When we opened our first Real Goods store in Willits, California, in June 1978, our mission was to demonstrate and provide renewable energy alternatives - and it still is. After 30 years, we are better positioned than ever to help you realize your dreams of transforming your lifestyle toward sustainability, whether your goal is to buy land and build a totally self-sufficient solar home, or simply to modestly reduce your carbon footprint by buying some energy-efficient light bulbs and figuring out the best alternative fuel for your next car.
Over the years, we've gathered an unbeatable team of renewable energy experts with more than 200 years of combined experience in solar - most of whom live with the products we sell.
Our Real Goods residential solar division specializes in residential renewable energy design and installation.
Our Real Goods catalog division produces two 100+ page color catalogs every year that feature the latest products for energy conservation, healthy living, renewable energy, and environmental education, as well as the most thorough sustainable living library on the planet.
We are headquartered at the Real Goods Solar Living Center in Hopland, California, our 12-acre permaculture oasis where all our products, ideas, and concepts come alive - not only in the interactive displays on site but in the 200,000 people who annually visit the site. The Solar Living Center is operated by the nonprofit Solar Living Institute, which nurtures the site and offers more than 1,500 class days per year on renewable energy, green building, permaculture, and other sustainable living workshops. The SLI's mission is providing inspirational environmental education.
Since the flood that devastated the Solar Living Center in the winter of 2006, the site has been re-created with a brand new Intern Village complete with green buildings, greywater systems, and a gorgeous shower house. The site has lots of improved educational signage, and many new interactive displays are in the works for the 2008 season. If you haven't visited northern California's #1 tourist attraction, we invite you to stop by and see the future of sustainability. The Solar Living Center is 100% solar powered, and educational opportunities abound.
I've been a passionate adventurer in the solar industry and the sustainability movement my whole life. I try hard to walk my talk. My wife and I live in a home built of recycled and green materials, powered by solar (passive and active) and hydroelectric energy, with gorgeous gardens that provide most of our food, a 15-acre biodynamic olive orchard, an 8-acre biodynamic vineyard, and a new beehive positioned next to our lavender labyrinth. Our tractor and VW Jettas run on biodiesel. I'm tremendously gratified to see the fruits of all our labors.
As the solar industry continues to grow and mature, and as our cultural consciousness continues to evolve, I remain hopeful that, once and for all, we will get things right in our homes, in our communities, in our country, and on our planet. Instead of forever being blamed for the excesses that put our planet on the dangerous path to destruction, we baby boomers can instead be viewed by our descendants as the generation that rose above our good fortune and decadence, finally saw the light, and embraced a vision that turned us all around while there was still a chance. We are indeed living on borrowed time. Let's turn it all around now, while we have this very last chance.
For the Earth,
John Schaeffer
Real Goods Founder and President