If price had been no object, I probably would have gone for Waterfurnace’s (TSX:WFI/OTC:WFIFF) Series 7 or Climatemaster’s Trilogy ground source heat pumps,  but my home’s existing heating is an oil boiler and radiators, and the Series 7 would require installing air ducts throughout the house.  The mini splits have the advantage that the refrigerant lines can run up the outside of the house, making them much easier to retrofit.

The geothermal systems I was quoted would have cost $50,000 to $60,000 (minus a $500 rebate from my utility), while the mini-splits cost $15,500 (minus a $2000 rebate.)

Because I’m also doing extensive insulation and air sealing, my heating bill is only about $2000 a year, even using oil at over $4 a gallon.  After using the air source heat pumps for two months, I expect these mini splits will approximately halve that.  The geothermal system would have done better, but even if it cut my heating bill by an impossible 100%, it would have taken 25 years to pay back my investment.  The mini-splits will have an estimated payback of about 13 years, which is not great, but both they and the geothermal system have the added advantage of giving me efficient air conditioning in a home that did not previously have it.  In New York’s Hudson Valley where I live, A/C is only useful for about 1 month a year, but it’s sure nice to have during that hot and sticky month!

In any case, I’m happy with the mini splits except for one thing: they have very limited programability, something I did not realize before I had them installed.  The best you can do with the included remote controller is set them to turn on and off once each during a given 24 hour period, and you have to manually set this up every day to use them that way.

There is an available programmable thermostat (Mitsubishi kit MHK1), but it is intended to be installed with the heat pumps, not after the fact.  My HVAC contractor offered to install them anyway, but he wanted $350 each, or a total of $1,400 for all four.  That’s not unreasonable, since the MHK1 retails for  $243, but it was more than I was ready to pay.

Since he told me he would have to figure out how to do the install from the documentation, and I had seen him struggling with the translated-from-Japanese when he was trying to figure out what was wrong with one of the units when it was first installed.  (It turns out two of the wires were reversed.)   I’m decent at that sort of thing, and I found a cheap MHK1 on eBay, so I decided to give it a go myself.

There was one point where the documentation was completely unhelpful.  I figured it out eventually, but the rest of this post should save you a lot of trouble if you’re trying to do the same thing.

Installing Mitsubishi Programmable Thermostat Kit MHK1 on Mr. Slim Heat Pumps

• Tools needed: Phillips screwdriver
• Time required: 15 min (experienced) to 1 hour (first time).

Not only does the manual say to install the data cable before the heat pump is installed, there is no information about where the “CN105″ connector on the control board is to be found, or even where the control board is.  None of the documentation I found online was any more helpful.  Eventually, I figured out where the control board and CN105 connector were, and how to get to them.  Here’s how:

Turn off the power to your heat pump at the circuit breaker.

Remove the horizontal vanes

remove screw covers

Covers removed… screw locations circled

After 2 screws holding the unit cover are in place, the cover can be removed by pressing in around the edges, and popping it off.

When the cover is removed, the bar containing the i-See and indicator lights may swing down.

Don’t panic, just hang it back on the two plastic hooks like the one shown here

Now remove the Emergency Operation switch by pressing on the tab shown here

You can now remove the screw that holds the control board cover and remove the cover to access the board.

You’ll need to disconnect this wire to slide out the control board.

This wire, too.

Now you can gently slide out the control board and connect the control wire to the CN105 port, shown here, circled.  It’s located in the bottom back corner of the control board.

You’ll want to snake the control wire through the unit so that it’s hidden when everything is installed.   Make sure you’ve left plenty of slack on the control wire, so it does not pull off when you put the control board back.

Now you can reverse the above process to put everything back where you found it.

You can now connect the wireless receiver, and proceed as described in the installation guide.

The rest of the manual was no harder to follow than these things usually are.

It took me a few hours to figure this out… hope I can save a few readers the aggravation.

I paid for an energy audit of my home before I moved in, but was not able to get a free one… my utility required having an established account, and the current home owners had moved out a year before and were in bankruptcy.  The audits are inexpensive anyway… the most useful part for me was the infrared audit, although you should note that such audits work best when the house is being heated in winter or air conditioned in summer.

Walking through a house a few times while you’re thinking about making an offer on it will give you an idea of how much you like the house, but not an accurate estimate regarding its energy usage. You might notice the occasional drafty door or a window that needs sealing, but there’s no way to tell just how well-insulated or efficient a home is during a walkthrough. Have no fear! There is a way to eliminate unpleasant surprises regarding efficiency before it’s too late: get a free energy assessment on the home before you take the plunge into buying it.

Contact the Local Utility Company

The local utility company probably gives free assessments to its customers, or at least an average usage for the last calendar year or so. Though you are not their customer yet, the people currently living in the house are and will have access to that information. You would need to set up a time with the current owners for the assessment anyway, so you may as well see if they would be willing to speak with the utility company to have a free assessment done. From there they can share the results or allow you to be part of the process.

Schedule an Assessment with Energy Service Corps

Energy Service Corps is a group that has an overall goal of saving energy, saving the environment and saving you money. This is a great free option because they not only come out and assess the energy efficiency of your home, but they’ll also seal cracks around windows and doors to block drafts, change out your older bulbs for energy-saving models and make other small adjustments that will lower the cost of your utilities right away. As part of the assessment, they will give suggestions on other changes you should make to see greater improvements in energy efficiency. However, you should be aware they are limited in where they can go to provide their services.

Do It Yourself

You can do some informal assessments yourself. Ask the current homeowner about their energy usage, or call their utility company for an average use from the previous year. Keep in mind, this method will not tell you what areas of the house need updating or changing in order to create a more energy-efficient environment. Some ways you can assess the energy levels yourself is to feel along the walls for cool patches to determine where more insulation is needed. Along those same lines, feel along the windows and door frames and note where leaks are. Another thing you can do is peek into the attic to see about the state of the insulation. If it’s on the skimpy side, put that on a list of things that would need updating. If the basement is unfinished, check to see if the ceiling has any insulation which will impede the coolness of the basement from seeping up through the floors of your main level rooms. After your self-assessment is finished, you can determine if you need to hire a professional to determine if there are larger issues or be satisfied with your findings.

[ED note: Also see my own checklist for a DIY Energy Audit]

Know Why an Energy Assessment is a Good Idea

Before you move into a home, you’ll want to get an energy assessment so you can either know what improvements you’d like the owners to make as part of your offer on the house, or so you know what changes you’ll want to make once you do move in. Some things that are more serious, such as needing to replace windows and siding, may be more convenient if they’re completed before you start moving. Other, less pressing items such as caulking your windows or adding insulation to your attic, can probably wait until after you’ve purchased the house and moved in. Updating your home in small ways can lower your electric bills year round and impact the environment by lowering it’s carbon footprint.

Learn What Assessors Will Look For

Some assessors do tests to see how air-tight your home is. They mark where air leaks through, and can tell you the best way to eliminate those leaks. Others may do what is called a thermographic inspection that will measure the temperature levels along the walls of your home. This can be done indoors or outdoors depending, depending upon the season.

The most important thing to keep in mind is that, in order to increase the efficiency of the home and lower your energy bills, you must make the changes suggested by the assessor. Most changes that can be made to lower bills are relatively affordable and easy to do on your own. Don’t consider a house to be a lost cause just because it is not currently living up to it’s full potential in terms of efficiency, as you may be able to make small adjustments that have a big impact overall.

Resources:
http://www.energystar.gov/index.cfm?c=home_improvement.hm_improvement_au…
http://environment.about.com/od/greenlivinginyourhome/a/energy_audit.htm

While the high winds around me last night were causing power outages and worse damage, I was going around with a screwdriver and outlet cover gaskets to stop the air leaks which I could easily feel with my bare hands.

It was also a good way to keep my mind off the storm.

Sealing electrical outlets and switchplates  is one of the cheapest and most effective measures you can take to improve your home’s energy efficiency, as cost-effective as CFLs, with the added bonus that it makes your house less drafty.

Sure, it’s better to simply have the whole house spray foamed, as I recently did in my basement (see pic) , but that is a big job, and usually requires existing insulation to be removed.

These walls have been foamed, and the workers are in the process of shaving off the excess that extends beyond the studs.

My house, which was built in 1930, has an old urea-formaldehyde based foam insulation in the walls which was probably installed in the 60s or 70s.  The product was banned in 1982.

Over time, that foam shrunk and now does little to prevent air movement in the walls, and I can only replace it by tearing the walls open.

Formaldehyde based foam revealed during bathroom renovation

Hence, I’m taking smaller steps with air sealing.

I received this photo as part of a press release from Nexus Energyhomes,  which builds net zero homes, and is doing a groundbreaking on a community near Charleston, NC which will combine solar and geothermal to produce zero energy homes.

All well and good, but did they really have to go with a rendering of a home where both the house and a tree will be shading the solar panels on the garage for several hours in the morning?

Perhaps the graphic designers should spend a little more time talking to the architects.

The first stage of the proposal was a request for information about proposed generation and transmission from developers, utilities, and interest groups.  These responses are in, and are shown on these maps:

The Energy Highway taskforce will be taking comments from the public on these proposals until July 31, and issue an action plan based on all the information received sometime this fall.

More information is available at the NY Energy Highway website.

You can submit comments here.

I totally agree that pink slime is gross, but so is digging through your trash for recyclables, toilet-to-tap water recycling. But both are very green.

Likewise, industrial processes like CAFOs and pink slime are not all bad- the good and the bad have to be carefully weighed… we should not dismiss one side just because it is gross.

Grass-fed cows produce more methane per pound of beef than CAFO cattle (because the latter gain weight faster.)

And “pink slime” is a way to use parts of the cow which would otherwise be thrown away. If we use 15% pink slime as a filler in our hamburger, we reduce the environmental impact of that hamburger by approximately 15% (as something which would otherwise be waste, pink slime has no negative environmental impact, except for that caused by processing it, and has some positive impact because it’s not rotting and producing methane in a landfill somewhere.

Pink slime is an environmental innovation. It only started being gross when we started talking about it. So do the planet a favor, and stop worrying about what’s in your burger.

Unless you’re ready to give up the burger altogether.

SA has been republishing about 2/3 of my content since 2007 – a little over 300 articles so far, although I have not participated in the exclusive content program, for two reasons. First, because my other blogs (AltEnergyStocks.com and Forbes.com) pay more (although still not much) and they don’t say that I can’t republish elsewhere afterwards.

Part of the reason they pay more is because Seeking Alpha is set up to favor conventional, easy-to-categorize content: About two years ago, they changed their categorization system to only include the traditional industry groups: Utilities, Consumer Goods, Etc. In the process, they eliminated the category Alternative Energy. Now, writers who focus on one traditional sector such as IT tend to be featured more prominently on the website.

My articles, on the other hand, are about green investing, a cross-cutting theme if there ever was one. Much of the time, they do not get categorized at all.

To be fair, I’ve talked to Eli Hoffman, who owns the site, and several other employees about this several times over the last few years. They are aware of the problem, and agree that it needs to be fixed, but they certainly have not made it a priority. Which is weird, since the claim that the main purpose of their site is to help people be better investors.

Since when did promoting conventional thinking make anyone a better investor?

Interviewing his friends and family in the process of writing it was a great help in coming to terms with losing him, as was this shorter poem I read at his memorial ceremony:

Dad could be a little prickly and hard to know at times,
just like the cacti you see around you here,
at his favorite spot,
overlooking the Pacific ocean.

I love you, Dad.

I think this option has a lot going for it. The biggest barrier to cellulosic biofuels in my mind is the dispersed nature of the resource… it’s difficult to gather it op in one place to convert it efficiently into fuel. So if the conversion is done in the vehicle, the dispersed nature of (especially rural vehicles) is a much better match for the dispersed nature of the resource.

Gasification is not a good option for urban vehicles (since the resource is relatively scarce there, although much garbage works in these trucks), but it seems an elegant solution for utilizing the large volume of diverse biomass that would never be collected by commercial operations because it is both to dispersed and varied.

Watch the video below for a sample Art Benjamin’s unique mathemagic (and Colbert’s four-standard-deviation humor)… and don’t worry, there won’t be a pop quiz after the episode.

A appreciate the Gumshoe for his dry sense of humor and ability to deflate the hype newsletter promoters are always trying to drum up. Not that I mind when those propmoters are pushing a stock I already own a substantial chunk of!

PV started with sub-watt sized cells in solar powered calculators. Solar calculators may not seem to have much to do with today’s multiple hundreds of megawatt (MW) sized plants which can be a billion times larger than a solar calculator, but the manufacturing experience with those tiny cells allowed manufacturers to bring costs down to the point where kilowatt sized systems started to be used on off-grid homes, which in turn brought down the price enough to allow subsidies to make solar affordable for most homeowners, and 1-2 MW commercial plants, and now we’re seeing announcements of solar farms approaching a gigawatt.

CSP, on the other hand, only starts to make sense at around 100 MW, so building each new plant represents a much bigger financial commitment than even a million calculators. Looked at this way, PV’s potential eclipse of CSP perhaps should have not been all that surprising. But hindsight is 20-20.

This also has implications for the advance of other energy technologies. Look for the modular technologies to gain ground at the expense of the industrial scale technologies.

Modular technologies

• PV
• Wind
• Gas Turbines
• Land Fill Gas
• Grid based battery storage
• Energy Efficiency
• Smart Grid / Demand Response
• Fuel Cells

Industrial Scale Technologies

• CSP
• Coal
• Nuclear
• Ocean Thermal Energy Conversion (OTEC)
• Geothermal Power (sometimes small scale, but limited places it can be built)
• Compressed Air energy Storage
• Pumped Hydro
• Flow Batteries

That’s just a few energy technologies off the top of my head, and I’m not trying to say that modular technologies will always win out over industrial scale technologies. But I am saying that price per kWh is not everything… sometimes small scale leading high prices per unit of energy but low prices for individual systems can allow a rapid evolution to lower prices per kWh. We’ve certainly seen that in Solar.

What’s next? LEDs were also able to develop rapidly because they were useful in a large number of specialized niches, such as indicator lights on electronics) despite the high initial cost per lumen.

http://api.tiles.mapbox.com/v2/npr.basemap-world,npr.hybrid-sales/mm/zoompan,tooltips,legend,share.html#4/36.65000000000001/-96.96999999999997

I thought it would be interesting to compare it to gasoline prices across the US. Here’s one from Gasbuddy.

I’m having trouble getting the frames to work, so you need to open two separate windows to view them side by side.

The correlation looks near perfect with the exception of the most rural parts of the mountain west and (MT, UT) and norther Great Plains (ND,SD). These states buy fewer hybrids than you would expect given their gas prices. My guess is that they see it as unmanly: at least that was the case with one of my sister’s ex-boyfriends, a farmer from Montana living in Wyoming.

The flip side is the desert southwest: Tucson and Albuquerque buy more hybrids than I would expect based solely on gas prices. Perhaps the fragile ecosystem makes them more environmentally conscious?

Equities… have low prices (and high expected returns) because their cash flows are discounted by society at high rates. The reason has to do with the anti-insurance aspect of equities: Their cash flows are highest in good states of nature whereby the value placed on the cash flows is low. In contrast, efforts to mitigate climate change by pricing carbon emissions will be most valuable to society if climate change turns out to have catastrophic consequences for society’s well-being. Because of this insurance aspect, society should be willing to pay higher prices for climate change mitigation.

FAJ Executive Editor Robert Litterman goes on to explain the mechanics behind carbon pricing models and their flaws, as well as why equity analysts are uniquely qualified to do these assessments.

I’ve long thought that financial market theory is uniquely applicable to understanding climate and the measures needed to mitigate climate change. what I don’t understand is why I hear so few analysts talking about it, so it was very refreshing to come across this article applying a deep understanding of economic pricing theory to what the greatest challenge the world will confront in the 21st century.

We agree that most of the debate is silly, but I see some interesting economics underlying green jobs. I explore those ideas in this article: The Microeconomics of Green Jobs.

The article also gave me the opportunity to explore a parallel between using fossil fuels and running up the deficit:

[I]f we spend too much borrowed money to create jobs today, the long-term drag on the economy caused by paying back the debt will leave everyone worse off.

Economic growth fueled by the extraction of non-renewable resources is very similar to economic growth fueled by debt. When we extract these resources and use them, we increase economic activity today, but their non-renewable nature means that we lose the opportunity to extract and use them tomorrow. Hence, the economic stimulus today comes at the cost of an economic drag tomorrow, and the future economic drag will generally be larger than today’s stimulus, since improving technology should allow us to get more benefit from each unit of resource in the future.

Using renewable resources to stimulate growth does not have this problem: Tapping the wind or the sun for energy today does nothing to diminish the wind or sun tomorrow.

In my mind, this is a deep contradiction in current Conservative politics: they don’t like debt (and I agree) but they do like fossil fuels.

I’d be a conservative, if being a conservative actually meant conserving things.

My study of chaos theory led to my conviction that knowing the limits of our ability to predict is much more important than the predictions themselves, a lesson I apply to both climate science and the financial markets.

Despite having written about financial markets and clean energy stocks regularly since 2006, I have never before explained in print what I meant by that.  This summer’s heat wave and stock market turbulence illustrate how my intuition about chaos theory informs both my understanding of the climate and the stock market.

Chaotic Systems and Feedback

The definition of a chaotic system I use is any system in which a tiny change in initial conditions can lead to a large change in results. 
Most chaotic systems are chaotic because they contain positive feedback.  Positive feedback tends to amplify trends over time, while negative feedback tends to reduce trends over time.  Complex systems such as climate and the financial markets have both positive and negative feedback. 

In the weather, we can see positive feedback when a series of hot, sunny days create a static high pressure system which keeps storms from moving in to cool things off.  When a storm does move in, you can get positive feedbacks cooling things off.  National Weather Service forecaster Daryl Williams said the following about a storm which broke the summer heat wave in Oklahoma: “It’s kind of feeding on itself, cloud cover and rainfall cools the air and the ground.” (italics mine.)

In stock markets, financial bubbles grow with the help of several types of positive feedback.  One such is “The specious association of money with intelligence,” as John Kenneth Galbraith described it in his short and very readable book on bubbles, A Short History of Financial Euphoria: Financial Genius is Before the Fall.  When we see others make money in a stock market rise, we tend to think they must have been smart to have known when to get in.  If we made money recently by buying stocks, we tend to think we are smart for having done so.  In both cases, we’re more likely to think that buying stocks is a smart thing to do, even if the profits were just dumb luck.  Collectively, this leads to more buying, which further raises prices.  Even if those price rises are justified in the beginning, the positive feedback can carry them up far beyond any level justifiable by the value of the underlying companies.  Many other positive feedbacks such as the wealth effect, relative valuation methods, and the increased ability to borrow against inflated asset prices operate in financial bubbles and bull markets.  In contrast, fundamental and value investors produce negative feedbacks by buying when prices have fallen and selling when prices have risen.

As with weather, external shocks to the system can reverse even these self-reinforcing trends, as we recently saw when the US’s political paralysis around the debt ceiling debate and Europe’s inability to effectively deal with their debt crisis recently ended the two year bull market in July.

 

Strange Attractors and Regime Change

Highly complex systems which have both positive and negative feedbacks tend not to be chaotic all the time, but rather exhibit chaotic behavior only some of the time.  The system will behave quite predictably in a deceptively regular fashion for a while, but then shift with little warning into another mode of behavior that is
also regular and predictable, but seems to follow a different set of rules.

Such behavior can be mapped with simple chaotic systems and often exhibits a pattern called a Strange Attractor, two of which are pictured with this article. 
As the system moves through such a strange attractor, it will often stay in one set of the rings curves shown for an extended period, before jumping to another set after an unpredictable period.

In the weather, we see this sort of behavior with extended heat waves, cold spells, or periods when it is hot in the morning followed by an afternoon thunderstorm.  Such patterns persist for days or weeks, but then quickly end to be replaced by a new pattern or a period of less predictable weather.

In the stock market, we have bull and bear markets.  In bull markets, good news is greeted with euphoria and strong stock buying, while bad news is discounted or ignored.  In bear markets, the opposite is true: good news is often ignored, while bad news leads to repeated bouts of selling.  In his excellent but somewhat
inaccessible book, The Alchemy of Finance, George Soros describes how he tries to spot such tipping points or regime changes as they happen.  Much theoretical work has been done to understand and model such changes, but the lesson I draw from chaos theory is that recognizing such changes in hindsight may be simple, but predicting them in advance is and will continue to be extremely difficult.  That’s probably why Soros did a much better job describing market regimes than explaining how to spot them. 

Nassim Taleb also addresses regime change in chaotic systems in his book The
Black Swanhttp://www.assoc-amazon.com/e/ir?t=&l=as2&o=1&a=081297381X&camp=217145&creative=399369″ alt=”" style=”border:none!important;margin:0!important;” border=”0″ height=”1″ width=”1″>.  His Black Swans are events which cannot be predicted solely by studying the past.  Such events occur, he says, because the rules we infer from the observation of events never contain the full range of possibilities.  He applies this lesson to societal events, personal experiences, and financial markets– all of which are chaotic systems.  There are also climatic Black Swans.

Global Weirding

If you accept that the world’s climate is a chaotic system
characterized by a strange attractor and a large number of climate regimes such as ice ages and warm periods, you should also accept that the relatively small changes we are making to the atmosphere have the potential to shift the world’s climate into a new regime where the weather patterns humanity is familiar with are replaced with a new set of patterns that we’ve never seen before in human
history. 

We are already aware of a few positive feedback mechanisms with the potential to amplify the effects of climate change, such as the ability of a release of methane from arctic permafrost and clathrates to rapidly accelerate global warming, or the disruption of the North Atlantic current due to melting polar glaciers.  Such scenarios are chilling enough, but the knowledge that climate and weather are a chaotic system raises the possibility of yet unknown mechanisms that might create rapid climactic shifts.  In a chaotic system, the past is not always a reliable guide to the future.  Climactic past performance is
no guarantee of future climactic results.

“Global Warming” can sound somewhat comforting.  “Climate Change” can sound clinical and distant.  A better description is “Global Weirding:” the climate is not becoming a warmer version of what we’re used to, it’s becoming an entirely new system, with a new set of patterns that will surprise anyone expecting a version of the old climate regime.

Conclusion

There is only one climate, while there are hundreds if not thousands of financial markets operating at any one time.  Financial markets also operate on a much more compressed time scale, with bubbles and busts compressed into a few short years or decades.  Ice Ages, on the other hand, last tens of millions of years. 

This difference financial markets and climate in number and scale means that we know much more about the chaos of financial markets than the chaos of climate.  We’ve probably already seen most possible financial market regimes in at least one of the thousands of financial markets, from tulip bulbs to CDOs, that have operated
over the course of human history.  Although the rules of markets change with new technology and communication, the basic rules of human psychology which govern these regimes have not.  To paraphrase Mark Twain, financial history may not repeat itself, but it does rhyme. 

Climactic history may also rhyme, but we’ve not yet read a full line of the poem: We don’t know what it will rhyme with.  Ice ages and warm periods often last tens of millions of years.  Given the infrequency of shifts between one climactic regime and another, it’s quite likely that the new climactic regime we are heading into will be unlike anything that has prevailed during human history, and possibly unlike anything in the geologic record.

The benefit of the slow pace of climactic history is that we do have a few years or decades during which we will be able to influence the path of global weirding. 

In a chaotic system, a tiny change today can lead to a large change in future outcomes. 

What tiny change are you making?

Put simply, every study I’ve read uses the average electricity generation mix. But all good economists think at the margins: The electricity going into EVs will be marginal generation: that which is built (or runs for additional hours) to meet the new source of demand. Since few new coal plants are being built in the US, and those that are here do not have much extra capacity, the marginal new electricity that will be used to power EVs will be mostly Gas, Wind, and Solar, since these dominate the mix of new generation being built, and among existing plants, only Gas has the ability to increase existing capacity factors substantially.

Since all these sources of electricity are cleaner than the average mix, studies that focus on the average utility mix understate the emissions reduction benefits of EVs. The answer may be different in China, where they are still building coal (as well as nuclear and renewable) generation at a breakneck pace.

As I told the audience in my recent presentation at the Electric Vehicle Summit, I actually see this subject as one of very few bright spots happening in the world today. In particular, it appears that the divorce between Big Auto and Big Oil will be a messy and ugly affair, but one that will, in fact, culminate in the end of the Age of Oil. In this short piece, I’d like to provide my reasoning.

First, let us acknowledge the obvious: gas prices cannot go back up through the roof right now, as economic conditions would prohibit that. We also need to admit that politics and technology have conspired to create cars and trucks that are far more fuel-efficient than ever. While we’re at it, let’s throw in the concepts of range anxiety, and the inadequacy of the current charging infrastructure.

Yet I’m predicting a massive upheaval in transportation, in which EVs come to great prominence — not the slow and steady curve that the great industry analysts are calling for. At the risk of appearing rude, have you noticed that Deloitte, Bain, Accenture, Booz-Allen, etc. are almost never right in their long-term views? Who predicted there would be 5 billion cell phones? Was the Internet adoption smooth?

Here’s a laundry list of reasons that the EV sector will boom in the next 10 – 20 years, and that companies that have aggressive EV programs (e.g., Nissan) are better bets than those that don’t.

With very few exceptions, energy consumption is closely correlated to GDP, and, since we’re running out of cheap oil, we have no choice but to find a substitute; there are no other options. And there are no worthy competitors to electricity. Hydrogen, CNG, compressed air, etc. call for a fuel delivery infrastructure that does not – and will never – exist. Electricity, while not fully ubiquitous in the levels of power required today, is much closer than its would-be competitors.

Those honestly concerned about national security, with the strength to stand up to the oil industry, will eventually decouple the survival of the US from oil. The US Army is one such group; they’re deploying electric vehicles in Iraq and Afghanistan as quickly as possible. Why? Security. Lives are at stake.

As far as the importance of the other externalities of oil are concerned, I make no prediction. Will we eventually lose our appetite for shelling out $250 billion per year to deal with the asthma, lung cancer, etc. caused by the aromatics of oil and coal? Will we decide that we really do need to do something about global climate change and ocean acidification? In all honesty, I don’t know. But for the reasons discussed above, it doesn’t matter.

Once the EV industry has offered the consumer an effective value proposition, the game is over. And that can happen in two ways:

The first and most important is savings. Peak oil has assured us that the price of gas cannot come down. At the same time, the cost-effectiveness of batteries (the gating factor in all of this) is just about to blow the game wide open. A company called Eos Energy Systems, headquartered in New York City with manufacturing facilities in Easton, PA is soon to release its rechargeable zinc-air solution at $165 per kilowatt-hour – about one-quarter of the current price for lithium ion. That, IMO, is the end of the line for the internal combustion engine.

Here’s something else to consider. There is a scenario in which consumers are motivated by things outside of their wallets. I remind the reader of what happened to the mink industry in the 1960s. At one point it was fashionable for ladies to wear mink coats and stoles. Within about a year, you couldn’t find a mink coat. The sensibilities of a modern generation had changed hard and fast, and the people of the day simply refused to countenance a practice of raising and slaughtering innocent animals for their fur. Bang! The industry died – virtually overnight.

Could this happen here? You bet it could. I can’t say when it will happen, any more than I predicted 5 billion cell phones. But it’s perfectly possible that people are going to wake up one day and say: you know what? Green is cool. And what’s not cool? Rape our Earth, ruining our oceans and skies, and destroying any chance for future generations to have a decent life.

And there are a host of other reasons why this will happen that have nothing to do with either of the above:

• By 2030, smart grid and energy storage will soon be very big industries. The fact that 200,000 EVs on the roads will provide 5 gigawatt-hours of storage for the grid will not go unnoticed.
• The utilities, that, for some reason have shown astonishingly little interest in and involvement with EVs will change their approach when they realize that with electric transportation, “it’s all good.” The surge of EVs means steady, long-term growth, as electricity replaces oil, and the sales of massive amounts of off-peak power, which presently has very little value. EVs also mean a considerable change to the nature and shape of load peaks – again a considerable bonus.
• There are 25 million multi-car households in single-family dwellings, with at least one car used for local commuting. That’s a lot of low-hanging fruit.

So here are my predictions:

From now until 2015, EVs will be consumed by early adopters, while sales to corporate fleets like FedEx, Verizon, and Frito Lay will show the rest of the world that EVs are ready to go.

In the five years that follow, you’ll see the pragmatists getting onboard, and hard-core evidence of a solid growth curve

From 2021 to 2030, we’ll experience rapid and smooth EV adoption, deployment of fast-charging, adequate range for virtually all driving needs, and features that consumers simply can’t live without – not unlike cool new apps for today’s smart phones.

A few years later, my grandkids will be asking me, “Grandpa, what’s a piston?”

In the spirit of offering a specific stock pick, readers may want to check out the Yulon Group out of Taiwan, traded on the Taiwan Stock Exchange. While Yulon is certainly not a pure-play EV company, I have friends at San Dimas, CA-based AC Propulsion who have been working on an EV project within Yulon’s LUXGEN brand for almost three years, and I believe the effort will become strategic to the company’s growth and profitability going forward. I’m not privy to the details of the project, but I consider it quite exciting.

– Craig Shields is editor of 2GreenEnergy.com, and author of Renewable Energy – Facts and Fantasies (Clean Energy Press, 2010)

Disclosure: The author owns no stock in any of the companies mentioned in this article.

It may be a cheatercycle, but especially on hot days like today, it’s very nice to be able to take advantage of the cooling breeze you get while you’re pedaling without having to pedal so hard you’re overheated anyway. If an electric motor gets me to take the bike when I would have been tempted to get into the car, it’s a good thing.

I couldn’t resist riding it to the DMV today to register my car. How’s that for irony? Of course it would be better if I could get by without the car at all, but I live a bit to rural for that.