Solar Power and the Power of Numbers

Homelessness and Renewable Energy
169, 164, 5, 10, 2, 25, 19, 30, 0.

The above series of numbers has real significance in a lot of lives, and I think they are the keys to the answers to broad questions about homelessness, the economy, and the environment.

In my home state of CT, there are 169 cities, towns, and municipalities combined. 5, New Haven, New London, Waterbury, Bridgeport, and Hartford have the state mandated amount of affordable housing of 10% of all current housing stock. The other 164 have, on average, 2% affordable. There is opportunity right there.

After doing a bunch of research on the internet, I found out an amazing fact: 25% of all evictions come from people who paid their rent, but couldn't pay their utility bills. The cost of energy put them on the street. What is the community cost for this problem? Other than having people living in alley ways and cardboard boxes, city streets are less safe with large amounts of homeless about. Because those cities are less safe, people with money are less likely to spend it in commercial areas of that city. Because there is less commerce, the local, and by assumption, the national economy suffers. Less jobs result. More unemployment. More unemployment results in greater homelessness, and on and on we go.

So, for argument's sake, let's just address that 25% of the homeless who can't pay their energy bills, because if you had a way of curing 25% of all homelessness, you would lauded a national hero. Now, if all affordable housing were constructed in such a way that the units all had an R-value (meaning, the rate at which heating and cooling escapes from a dwelling) of at least 19, the cost of fueling these homes would decrease dramatically. If you were to build these dwellings with exterior wall integrity, and an interior wall within which you could put all your plumbing and electric, you could achieve an R-value of 30, nearly twice the energy savings. On top of that, if you were to put into place solar panels on the rooves of these housing complexes, with a fuel cell back-up and a geo-thermal HVAC system, you could well nigh get energy costs down to zero (0). Theoretically, 25% of all homelessness would disappear as a result of this renewable energy source design of affordable housing.

OK, so now you, as a landlord of affordable housing and local hero for decreasing homelessness by 25%, let us say, you now have an additional 5 percent of revenues because folks don't get evicted for not paying their electric bill or because they don't have to choose between paying rent or paying for heat. Also, because tenants don't have to pay any utilities you can charge an extra 50, 100, 200 dollars per unit, and because tenants and housing authorities take these additional savings into account, thus you are making substantially more in general income. Fewer surprises, fewer disaster scenarios. More settled tenancy. Less stressed landlord. We are talking better conditions for everybody all the way around. The question before us then is what is that worth?

If you look at it mathematically, it is worth a whole hell of a lot. Take a housing complex with 100 units. Say you would normally charge 600 dollars per month per unit, and utility costs per unit are 100 dollars per month per unit. Under that set of circumstances, you figure the value of a unit is approximately 100 times more than the monthly rent. So these above described units are worth 60,000 dollars a piece, and thus the entire complex is worth 6 million dollars. Not too far off from reality. So your pro forma gross income would be 720,000 per year. Take off 40% for traditional costs, insurance, heat and hot water, water and sewer, hallway electric, etc... and your net is 432,000. You have a cap rate of 7.2%. Fairly nice deal.

However, let's say you invested in building this thing with solar, fuel cell, geo-thermal. Let's try to figure out what the value of those energy sources mean to you. OK, now, by conservative logic applied above, you prevent 5% on your vacancy rates. That's worth 36,000/year. Similarly, you can now charge an additional 50 dollars per unit. That's 60,000/year. You have no heat and hot water costs to speak of. You have no common area electric bill. Let us say you would save 50 dollars/ unit/month, which again is a very conservative estimate, but we will use it. That equals another 60,000. So total extra money in the landlord's pocket is 156,000 per year. If we were to extrapolate, using the above 7.2 cap rate, the additional income would embue your project with another $2,166,666.67 worth of resale value. The issue becomes, would that utilization of renewable energy sources in building 100 units cost you over two million dollars above and beyond what you would spend on HVAC and electric systems in conventional construction. The answer is most definitely not! No way. You have units that cost you 60,000 apiece. Now they wouldn't cost you 81,666 per unit. What exactly it would cost would depend on a myriad of circumstances, but the point being made is building affordable housing with renewable energy systems seems to be the only way that makes sense. Love to hear a strong arguement against the above. I can't find one myself.

The Numbers Joke

A young comedian finally, after a series of successful stand-ups at the local nightclub, gets the invitation to join a bunch of comedians who get together every night at the local Friars Club to eat dinner and tell jokes. When he arrives at the Friars, he watches as comedians stand up in front of their compadres and start yelling out numbers, 11, 55, 1102, and such and the entire audience cracks up laughing after every single shouted number. The youngster leans over toward the comedian next to him and asks what's going on, and the elder answers, "We have been doing these dinners for so long, the jokes are such old hat, they now just call out the numbers of the jokes that we have at this point simply catalogued in our heads, and folks know what the joke is and they laugh."
The youngster thinks this is great, so with a little gumption and a few strong drinks under his belt, he makes his way up to the dais, and leans into the microphone, takes a deep breath, and says, "112!"
No response.
He tries again. "400!"
Nothing.
He looks around the room and sees dozens of comedians staring at him with straight, somber faces.
He takes another deep breath, and blurts, "2!"
Silence.
Defeated and stunned, he returns to his seat and sits down completely done in by his failure. He sits and stares dumbly for quite sometime, unable to gather his thoughts let alone say anything. Finally, the elder comedian next to him pats him on the back for consolation. With that the youngster asks, "Why didn't they laugh? I gave out numbers just like everybody else, and when they said numbers, people laughed like crazy. Why?"
The elder says with a sad grimace, "It's all in the delivery, kid."

Avalence II

After I met with Tom, the Chief Technical Officer, I went to see Debbie Moss and Steve Nagy, the principals in Avalence. Actually, Debbie came to find me, because Tom and I had been talking for an hour and forty-five minutes and folks were wondering what exactly happened to us for so long. We were back in the lunch room sitting down, both of us with pads of paper madly scribbling down figures to calculate the energy benefits for us. Actually, the benefits are rather limited. But, after talking with Steve and Debbie about the nature of technological development, we are still going to get one installed in our lobby.



The questions is: why?



The answer is not, believe it or not, to show what innovative thinkers we at Eco Building Tech are. Instead, it is the planting of a seed. One of the most significant acts we can accomplish as a company is to show the public what is possible. If we somehow can influence one or two folks to use a Hydrofiller for their own use, more funds will flow toward Avalence, either in the form of outright sales or development funds from private investors or governmental programs. Eventually, Avalence will develop something not in the Beta stage. Eventually, they will make a machine that turns water into fuel and fits in your basement and runs your house's entire energy needs from a fuel cell.



One might wonder why this machine then must sit in our show room. Good question. But I think we suffer from a syndrome called "the Jetsons syndrome." I just made that up, but it helps illustrate what I mean. The Jetsons syndrome is the popular belief that if we can imagine a new technology and someone can make a new technology, (household robots, for instance) then, poof, it will appear on our doorstep in ten years. Unfortunately, life and technology do not work like that. The missing ingredient in that equation is MONEY! Unless, Avalence gets sufficiently funded, they will no longer develop Hydrofillers. If they don't develop more Hydrofillers, and ones that are more efficient than the ones they have already developed, gas stations won't install Hydrofillers, because they will be too expensive. With no place to refuel, no one in their right mind would buy a hydrogen car, would they? (As an aside, in CA there are a nested bunch of hydrogen filling stations, and, guess what, more hydrogen cars are bought and sold in CA than anywhere else in the US.)



The point is public opinion about a technology makes or breaks a technology. Do you remember thirty five years ago, when computers were these huge boxes that spit out reams upon reams of paper will holes punched out? No one in their right mind would want one of those things in their house. It would be stupid, expensive, messy, and pointless. Today, almost everybody reading this has a home computer. Computers are now reasonably priced and an integral part of our culture. But back then, computer companies, such as IBM and Mac received funds and support from vague and mysterious sources, and it wasn't until many years down the line that they started to make money and Bill Gates became a household name.



However, between the time that those paper dots were all over the computer lab floor and now, someone had to say to someone else, "Check this out! We have this amazing machine that can take this data I'm punching in here," click, click, click, "and then it computes it all by itself and puts it out the answer over there. Just think, eventually every household will have one of these things!" I admit, I was one of those guys that looked at the computer geeky enthusiast and longed for the less intrusive slide rule version of geekdom. Time has shown me the error of my thinking.



So, the answer to the question above, "Why?," seems a lot clearer to me now. Someone has to be the geek enthusiast. Someone has to jump up and down with excitement over something others cannot yet see. This time around that may as well be me.

Innovators

I went to this building in Milford, CT, a grey industrial looking thing with tired blue trim. I'd heard about Avalence from my former partner, Steve, and he had come back from meeting with them hopping up and down with excitement. "These guys," bounce, bounce, "make fuel from water."

Debbie Moss, a principal in the company, she seemed extrememly pleasant and accomodating, so I honored my appointment which, as it turns out, was not to be with Debbie, but with Tom, the Chief Technical Officer. I walked in, introduced myself, "Miles Shapiro," and I was shown to a metal chair and a random set of old magazines.

I was told Tom would be with me shortly, and so he was. He took me through a room that had one of those lunch tables used in elementary schools in the South during the 1960's. The walls were grey. There was a water dispenser without water.

We meandered through a brief hallway and headed left into what can only be described as a very large garage. There were these huge boxes, about the size of those boxes you used to see on "Let's Make a Deal," you know, the one's "behind where Carol Merrill is standing." Big. And each one of these boxes, some with an outside covering in blue plastic and others with grey metal coverings, had a regularly positioned cluster of metal cylinders, four feet long and no more than 4-5 inches in diameter. Out of the top end of each of the cylinders (it turns out the machine I was looking at had 24) two metal tubes, maybe 1/4 inch in diameter, poked out and led to black hoses that snaked in an arc somewhere into the machine. From below, one of those black tubes ran into the cylinder. Then it all goes into this big box like on the game show, and in the box are these scuba-looking tanks, only twice as long and thicker round and black. Of course there were a slew of buttons and electrical connections with color-coded wires and panels which opened up to stuff I wouldn't even bother trying to describe. Needless to add, I was in water a tad too deep for me to know what was really going on, but Tom was an extremely patient man, and more importantly, he liked to talk about what it was he was doing.

He explained to me that in those cylinders were essentially two compartments separated by a thin membrane. In one compartment went the anode and in the other went the diode-- as an aside, I don't exactly know what those things are-- and from the bottom in comes water. Simple H2O, but rather pure or else all the other junk that might be in the water would sit on the bottom of the cylinder and build up and eventually short the entire thing out. So in short, you run two ends of energy through the water, which they refer to as electrolysis, which is not the removal of unsightly hair, but can be translated into shocking the crap out of the water, and the water molecules break into Hydrogen and Oxygen. So one of those tubes heading out of the top of the cylinder is the Hydrogen line and the other one is the Oxygen line.

The big aqua lung containers in the machine store the Hydrogen. You then tap into the hydrogen and use it as fuel, just like you do when you use propane gas. Sounds fundamentally simple. Shock water, catch the two resultant gases. Use one as fuel. Sell the other to hospitals that need pure oxygen. I get it.

However, the truly compelling element was more along my line of thinking, and that is the cost of the thing. Each little coupling on top of the cylinder, so there were two per cylinder and twenty four cylinders, each one of those was five dollars. Each one of the black hoses, carbon filtered tubing, cost 50 dollars. So you have 240 dollars in couplings, 2400 in tubes, and you haven't even gotten to the idea of welding the metal stuff together and correctly situating the anode and cathode and membrane for each cylinder. No wonder those things cost $200,000. Thus, the remainder of my discussion with Tom was about honing the designs of these machines for maximum production of hydrogen and then being able to reproduce each design without all of the difficulties in building a prototype. The idea of mass production of these things was beyond the ken. Tom was hoping to make maybe thirty to fifty of these machines of various sizes and capacities in a single year, because now they can only produce around ten, and each one is a one off.

But the truth is, the one missing component is money... funding. And although these Avalence guys are amazingly innovative and perhaps have the final answer to the global warming crisis, they don't have sufficient funds to move forward quickly enough to warrant switching over to hydrogen fuel instead of petroleum. Car companies have designed prototypes for hydrogen run fuel cell cars, and in California, New York City, Washington, D.C. and a few other random outposts, some variant of Tom's machine sits in a gas station for hydrogen fueled cars to fill 'er up. But until enough people have enough of these cars, it won't be cost effective for gas stations to pay $200,000 for one of Tom's machines to only sell 3 pounds of hydrogen at 5000 pounds/square inch per car fill up. Now these cars with those three pounds will travel for 150 to 200 miles, probably as much as one would with a normal tank of gas, but the cost is no bonanza for the driver or the gas station owner, and therein lies the problem.

It is about money folks! That is what it will always be about. And we can sit around and rub our hands together in worry until we make them chapped and bloody, but the global warming issue is not going to go away until somebody makes green=greed. I understand that sounds surgical and without conscience or feeling, but that is the real world. And the real world is going to get warmer and warmer until we find a way to make that hydrogen gas car a bargain for John Q. Public and me and you. But, you know what? After meeting Tom, and to a similar extent Debbie and Steve Nagy, another principal in this company of innovators, I believe they are going to sit in that ugly garage building and tinker and adapt and change and fix and fuss and finally, they are going to make it cheaper to be green. So there is hope.