A part-time business idea for the entrepreneurially-minded individual

Students often come to me and ask "how can I start my own business that can be part-time, earn me money, and accommodate my fractured time schedule?" Ten years ago I suggested installing wireless routers in homes in Rancho Sante Fe as wireless became popular; the average charge was $1,000 for less than 4 hours of effort and word-of-mouth grew the business. Most good ideas in this category have a lifetime of a few years, and sell themselves because they are need-driven.

Which brings us to today. SDG&E is installing smart meters throughout San Diego County, and will be done by 2011. Once that is completed, you'll see Time-Of-Use (TOU) pricing (we already have tiered pricing) likely put in place (PUC-willing) which means customers will be paying much more during peak-usage times and consumers will be shocked by the bill increases, sort of what is happening on a smaller scale today with water usage.

Consumers are clueless today and its going to get much, much worse. (see here for an earlier note on consumer knowledge). They'll be looking for help and I've used all of SDG&E's energy monitors and trust me, they're clueless. Just try reading your bill. Seriously. If your brain is not scrambled trying to understand your bill, read their proposed TOU schedule.

So here's the idea: Offer to do a whole house electric energy audit for, say, $250-500 if you can't wait for the moola or, better yet, for $100 plus 50% of the cost savings for the first year. Schedule a time to spend about 60 minutes capturing the meter reading, last month's bill, and installing usage monitors at critical points of the home (see here for a sample monitor that costs less than $20). Come back 24 hours later, pick up your readings and monitors, do a quick Excel spreadsheet and auto-generate a report from within Excel, with recommendations. There's lots more details I won't go into here, as well as many more sophisticated options, but you can start this business with 10 monitors for less than $250, business cards included. Of course, it will open doors to things like installing solar panels (a reference sell, get paid $500 for every installed referral, etc.). See here. What you learn will be priceless. And for those of you that want a political affiliation with my good buddy Al (of green-washing fame), you'll be a hero.

So what are you waiting for?

The demise of the earth #2: Two lies and a truth

From President Obama's State of the Union Speech, January 2010:
"...overwhelming scientific evidence on climate change..." [see below]
"...it means passing a comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America..."

"We urge the United States government to reject the global warming agreement...there is no convincing evidence that human release of carbon dioxide, methane, or greenhouse gases is causing or will, in the foreseeable future, cause catastrophic heating of the Earth's atmosphere and disruption of the earth's climate. Moreover, there is substantial scientific evidence that increases in atmospheric carbon dioxide produce many beneficial effects upon the natural plant and animal environments of the earth."
Petition signed by Dr. Edward Teller, Ph.D. Physics, 9,000 other Ph.D.'s and over 31,000 American scientists.

Climate change advocates are regrettably alienating the general population, causing misdirected debate on the climate when the root cause - our energy policies - get less attention or economically distorted solutions such as cap and trade, the Waxman-Markey Bill (H.R. 2454), and policy dis-incentives such as the California Solar initiative.

In the meanwhile, private market efforts for the creation of new energy generation initiatives suffer from federal and state dis-incentives to discover and develop non-carbon-based energy solutions.

Jim Hamerly
member, Board of Directors, cleanventure.org
http://cleanventure.org/board.html

Primer on solar power options and costs for your home

Quite a few people have asked me about solar power for the home, and what it costs. Here is a very introductory description of options available to you, from least expensive (zero cost) to most expensive (maximum long term benefit). I assume that you will hire a company to install solar panels on your roof (or yard or wherever) and that you will give excess generated electricity back to your utility company - the best alternative for most. At the end, I'll touch on non-grid connected systems.

OPTION 1: ZERO SYSTEM COST: The solar company installs your solar panels at zero cost to you. Absolutely zero. They own and maintain the solar power equipment at no cost to you. The company borrows to pay for the installation, and reaps most of the financial benefit -- the benefit to you is a lower and never increasing electric bill. They guarantee that your electric bill will never exceed a certain fixed amount (typically in the range of $50-$100/month based on your historical usage) for 30 years. Say its $60 - it will never go above $60 even if electric rates skyrocket, which they eventually will do.



OPTION 2: LEASE SYSTEM: The solar company installs your solar panels for a lease cost per month, just like an automobile lease. You decide how much power you want to generate (the more power the higher the lease cost) but you can go all the way to having a zero cost electric bill, just the lease cost. If electric rates skyrocket, which they eventually will do, your lease price is fixed and your electric bill is still zero.

OPTION 3: BUY SYSTEM: The solar company installs your solar panels and you pay for installation and materials, anywhere from about $10,000 and up. Most people finance the system purchase using a home equity loan. You decide how much power you want to generate (the more power the higher the cost) but you can go all the way to having a zero cost electric bill, just the original system cost. If electric rates skyrocket, which they eventually will do, your electric bill is still zero.

NON-GRID CONNECTED/OFF-GRID SYSTEMS: You can take you home completely off the power grid, disconnect from your power utility but this is not a good option cost-wise. Neither the state rebates nor federal tax incentives are available, plus the system must store the power overnight (batteries, etc.). Finally, you must add more capacity, typically 50-100%, to be able to handle peak demands from your home. Not a good choice, unless your home is located where there is no power utility available.

I've done both Option 3 and Off-grid, for what its worth. My option 3 does indeed result in a monthly credit on my electric bill most months. Of course, option 3 has no electric bill since I am the utility. Coo-coo kachoo.

The demise of the earth: A fundamental error in logic

As I listen to world leaders from today's International Climate Summit, I am once again struck by a gross error in their logic.

Fundamental premise: It is unequivocal that use of non-renewable energy sources (primarily oil, natural gas, and coal) is ultimately catastrophic for earth, its only a matter of when, not if. The catastrophe could come from economic, political, or scientific bases, but it will come.
Arguable premise: It is debatable whether global warming/global cooling/climate change is the result of human activity, there are scientific data and scientists on both sides of this issue. If you accept this arguable premise as true, it is also unequivocal that such climate change is primarily a result of the use of non-renewable energy sources.

If we focus our efforts on renewable energy, we solve both the fundamental problem as well as the climate change problem if indeed it exists.

If we focus our efforts on climate change, we risk solving the wrong problem (or not a problem at all, depending on the outcome of that premise). More importantly, many of the methods being put in place to solve climate change are wrong or short-sighted at best (carbon sequestration, carbon tax trading, Waxman-Markey Climate Bill, etc.).

Regrettably these are politicians and self-serving individuals (not scientists) bringing much more attention to climate change than that of use of non-renewables. Will we look back 50 years from now and have missed the mark?

When good intentions go bad: The California Solar Initiative

Incentives from the California Solar Initiative reduce the installed cost of a solar system to homes, businesses and government/nonprofit buildings that are connected to the utility grid. This sounds like a fabulous idea...encourage people to install solar on their homes and businesses, make it more financially viable, encourage entrepreneurs to start solar installation businesses. This last point should result in electricians being cross-trained on solar, encourage new solar installers to enter the field, all helping to create a permanent new "green" economy.

The problem is that the solar incentives decline over the 12 month period, such that most of the installations happen in the first 3-6 months and, by the end of the year, companies are laying off solar sales people, installers, etc. Only to get kick started the following January, presuming that the incentives are renewed. That's what happened last year (2008), and it looks like its happening again this year (2009).

Why is this a problem? Would you open any kind of business if you knew in advance that that business would suffer serious decline in the last 6 months of the year? Or that year to year, your business activity is at the whim of a policy analyst? More importantly, would you pay for the training of employees to develop the skills to make that business successful? I wouldn't.

An alternative would be to offer a constant incentive all year long, resulting in a more permanent - and predictable -- business activity. Business owners can then plan - and train new employees - with the knowledge that their business is more predictable.

Are there reasons why its done the way it is? Yes. Are they any good? No.

We want a clean, green economy. We know that entrepreneurship is the economic engine that will fuel adoption of new energy sources. But we permit policy analysts that know little to nothing about running a business to legislate incentives that cause chaos in one of the most promising technologies available to us today.

Jim Hamerly
College of Business Administration, Cal State San Marcos
Board of Directors, cleanventure.org, a non-profit cleantech incubator
owner of one on-grid and one-off grid solar powered home

A thought experiment..please consider

Please seriously consider the following: Suppose you went food shopping 4-5 times per month (or whatever interval you normally shop) but only one thing was changed: None of the prices would be posted, and you only had a vague impression that steak was more expensive than hamburger; in fact, you wouldn't know the relative pricing of anything that you bought. At the end of the month, you would receive a bill from your grocery store that summarized your total spending for the month. You wouldn't know the percentage spent on meats, cheeses, milk, vegetables, fruits, bread, chips, salsa,...., anything! Nor would you care enough to change anything.

Sound absurd? Of course!

But that's almost EXACTLY what happens with your utility bill each month. The average utility spending per month is very roughly the same as the average grocery spending per month, but most consumers have no idea how much of it goes to lighting, heating, air conditioning, running a pool filter, powering the computers and TVs in the home, etc.

You probably know where to buy the cheapest gas in your neighborhood, you likely stay on top of the current gas pricing (within a few cents per gallon, or to about 1%). You probably know to 5% the cost of hamburger per pound, and that low fat hamburger is more expensive than high fat.

So we are essentially making bad economic decisions, based on little or no data, and poor consumer education. Think about it.