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  • Beyond Moore’s law, Beyond Silicone Chips

    Beyond Moore’s law, Beyond Silicone Chips

    Beyond Moore’s law (by Dr Ed Jordan)

    After almost 60 years, Moore’s law, related to the doubling of computing power every year-and-a-half-ish, still holds. At the current exponential speed, there is a brick wall looming in the foreground: the physical limitations of silicon chips. The most straightforward example of how that might impact a company is to look at Intel Corp. But first more on Moore’s law and the more general idea of learning curves.

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  • Earth Day 2020, 50 years of Hind sight

    It is the 50th Earth Day and the world is generally locked down while we deal with the Coronavirus pandemic — and how best to ramp back up the world economy.

    50th Earth Day. April 22 2020

    The pandemic is a serious and sobering aspect to the fun and excitement to an otherwise interesting and informative day of rallies, speeches waterway cleanups and more…

    Worldwide we are going on 3M positive COVID19 cases and nearing 200,000 deaths. The US, never to be outdone in anything that seems competitive, has 32% of the cases and more than 25% of the deaths. Deaths in New York and New Jersey just passed 15,000 and 5,000 respectively. New England deaths exceed all other countries. It is hard to imagine this given that the virus had to cross the Pacific (to the west coast) or travel to Europe and then cross the pond to New England. The US has only 4.2% of the world’s population, yet 25% of the worlds deaths, and rising. How can that be?

    COVID19 Positive Cases and Deaths

               As of April 22, 2020
           Cases  %/World
    World 2,621,436 100.0%
     deaths 182,989 7.0%
    7.0%   %/World
    US 837,719 32.0%
     deaths 46,771 25.6%
    Deaths% 5.6%

    COVID has had a big toll on health and live and a wicked toll on the world’s economies. There some linings, and some of them silver, from this
    pandemic – currently and on the other side of it. Let’s think of a couple while
    we address what the other side of COVID might look like. First, if you think
    that we will ever get back to “normal”, you probably haven’t thought it through
    a lot.

    Pollution. The massive slowdown in the world economy has
    allowed the earth to take a breather. There are wonderful satellite views of
    China, Europe and the US, before and after pictures. Business as usual shows
    clouds of pollution followed by a few weeks of complete economic shutdown, and
    pristine-looking skies. Wow! There are similar pictures everywhere. Denver. LA, New York. The clear
    canals of Venice with fish and dolphin. 
    Pollution contributes to hundreds of millions of ailments every year, and to millions and millions of deaths. Let’s say 6 to 10 million people die each year because of air pollution. (See for example, this Forbes article in 2018.) Note that the infographic shows about 2.1M in the USA. Maybe the slowdown in the first quarter of 2020 will result in 1M people saved related to air pollution? 
    Once people get a taste of clean air, they tend not to want to return to smog and pollution.
    A Whole New Economy. The world economy will never be the same. For several reasons. First, what we came to think of as “normal” was never normal. We have undertaken to consume all the world’s fossil fuels in a few short centuries. We are fully beginning to realize the full costs of non-sustainable systems, the business-as-usual economy was never normal.
    Earth Overshoot day is a concept that is especially relevant to the first Earth Day in 1970. The resources we took and consumed from the earth — although maybe not sustainable and renewable — were fully supplied by the 1 planet we inhabit. That is, the 3.7B world population in 1970, staying with the same consumption patters, could live on the earth without depleting her resources. Think of this earth carrying capacity like you do a annual budget, it would be nice if the annual income lasted all year. But the population has more than doubled to 7.7B, and overall consumption has nearly doubled. Right now, the carrying capacity of Earth is exhausted about the end of July, only 57% of the way through the year! That’s 43% deficit spending for the rest of the year. To consume 43% more than the earth’s annual carrying capacity, we deplete resources like trees, fish and more.
    But, in 2020, the earth has gotten a bit of a breather. Overshoot day will improve dramatically!
    The economy will change. There will never be a “new normal”. People have gotten a taste of teleworking. It’s going to be hard to force people back into the offices that require an hour commute each way. Travel will take some time to come back, and business travel will never be the same. Stadium events will take some time to come back. Students have fully embraced online learning, and they will never fully go back.
    Consumption of fossil fuels are down at least 30% during the closed economy, but consumption may only bounce back half when the economy slowly starts to churn back.
    This might be the jump start that we all needed to step up a move toward sustainability. Assuming a 15% jump back, we would need to reduce our carbon footprint by 3% each and every year to have a 40% (overall) reduction by 2030, a 66% reduction by 2040, and near zero by 2050. Good news, we can easily move to 100% renewables by that time. (See Stanford Roadmap to 100% Renewable Energy by 2050 by country and also by major city.) And we can profitably move to 100% renewables if we include the health and death costs of fossil fuels.
    Hind sight is 2020. Every year since the turn of century as been in the hottest 20 some years, with many years breaking all time records. In fact, many months have hit monthly record highs, especially since 2015 (an El Nino year). January 2020 was hottest on record, and the oceans have never been hotter. Remember that carbon dioxide (CO2) persists in the environment for about 100 years from the time we introduce it by burning fossil fuels. As CO2 zooms from about 320ppm a hundred years ago to 415ppm now, the green house gasses will result in atmospheric heating for a century!
    Our linear economy was never “normal”, for this reason, and many others no one should consider using the term “new normal” on the other side of the COVID recession. Hopefully, with 2020, we will have a new respect for science and scientists.
    Let’s leverage this tragedy of COVID to make a real difference in our trajectory of the future.
    May every day be an Earth Day.

  • COVID in the US

    We talked about how scenario planning would and should have help see this pandemic, and have early warning signs for continuing plans.

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  • SolarInvest2020: Residential Quick Take on Doing Good

    Residential Solar can be a good investment. Good Savings.
     
    [UPDATE: 30% Investment Tax Credit on renewables in the IRA Act. See our Blog post here. This makes all the financial discussions below much more profitable. Also, higher inflation and higher power inflation.]
    Anyone thinking of putting solar on a residential property will obviously
    be friendly to doing a good deed for the environment, but would also like to
    understand the financial implications. There are subtleties to the analysis
    that are critical to appreciate the full benefits of setting up a solar power
    system to replace your residential utility power. We have become accustomed to
    renting power as a way of life. There’s a paradigm shift needed to appreciate
    owning your own power system and saving on a monthly power bill. Hall has a
    detailed article     Residential Solar is
    Good, but Commercial Solar can be Crazy Profitable!     that you will want to
    read as you think further about the financial analysis for a specific solar
    project, especially a business project. Here are the key points for a
    residential solar system.
    Profitable. Solar can be profitable for a
    homeowner to purchase, but there are additional considerations that usually
    make the decision even better than it might appear at first glance.
    Solar Investment Tax Credit (ITC). The ITC reduces
    income taxes by 26% of the system price, so you only pay 84% of the price of
    the system. This ITC goes down to zero (0%) by 2022.
    Easy Loan Option. A homeowner will usually have
    several loan options available, including using a home equity line of credit
    (HELOC) or financing affiliated with the solar company. (Lease options are also
    available from some installers, and may be a good option for a homeowner with
    lower credit and low house equity.)
    Positive Cash Flows. Household budget should be
    cash positive compared to power bills. Frequently, loan options include
    interest-only for a year until the ITC is realized (and applied to the loan).
    What would have gone to the IRS in taxes is applied to the solar system, and
    what would have gone to the power company goes to pay off the loan for the
    power system you own.
    Annual Return. The savings each year could
    easily be 7% return each year on the net investment.
    Avoid Utility Power Price Increases. If the
    power company increased rates by 1% (or 2%) a year, the real savings from the
    solar system could be 8% (or 9%).
    Sunk Operating Costs. This is not a normal
    financial analysis, so different perspective is helpful. If the residence is
    being used, then the electricity to operate it is needed. The money is already
    being committed to rent a little bit of the power plant from the utility power
    indefinitely. Or, you could buy your own power system. You could pay less in
    loan payments than what the power bill would have been and then have free power
    for decades thereafter. Committed, or sunk operating costs, is one aspect of
    the buy-solar decision that takes a little perspective adjustment to fully appreciate,
    but savings is another.

    After-tax Savings. After-tax savings is a
    beautiful thing, especially if it is recurring every month. You pay the power
    bill in after-tax dollars. So every dollar saved on your budget for electricity
    is better than a dollar increase in your salary. Consider a 30% marginal income
    tax level. (Marginal tax rate is on the next $1 of income or savings, not the average
    income which have no taxes at the lowest levels.) At 30% marginal tax rate, you
    would need $1.30 to have an extra $1 to spend on your power bill if power costs
    went up next year by $1. There are other deductions, plus your employer has expenses
    and deductions, so costs to your employer would be $1.50 or more for you to
    have an extra $1 raise for your power bill, which would leave you with the same
    discretionary income as the past year. Savings related to power is pure
    discretionary income, spend it anywhere you want… You just got a raise!
    Net Metered. The usual way to go solar on
    residential is to connect to the utility power with net metering, a measured
    meter that takes your solar power as you produce it and gives you back the
    power when you need it. If you over produce at the end of the year, the power
    company typically rebates you – but usually at a rather paltry rate – for your
    extra power. Therefore, you would typically size the system to your
    (anticipated) needs, and not much more.
    Batteries. If you want to have your own power
    when the grid is down, you will want to get batteries. Battery prices and
    technology, like the Tesla PowerWall, is really starting to hit critical mass.
    Batteries can also be eligible for the 26% investment tax credit.
    Solar System is an Asset. The basic accounting
    for a solar paid for by a loan might look like this. Buy a $30,000 solar system
    (an asset) by borrowing $30,000 on your HELOC (a loan). If you didn’t think the
    system was worth $30,000 (because of the power it produces for decades), you
    probably wouldn’t have bought it. But, you get an investment tax credit of 26%
    in 2020 so the actual system cost (after eliminated income taxes of $7,800) is
    only $22,200. You can go on vacation with the $7,800 or apply it to the loan.
    However, this is a performing asset that produces power for decades, long after
    the loan is paid.
    What if You Sell the Home? With the home
    producing its own electricity, the operating costs are reduced by the power
    savings. The money that would have gone to the power company can now easy be
    applied to the purchase price of the home (and to a mortgage). The value of the
    house goes up, typically by the net cost of the solar system or more. Even when
    the solar loan is paid off, the value to property is the ongoing power savings
    being produced (maybe 10 to 20 times the annual power savings).
    What if You Rent the House? Renting the house
    is rather simple, simply include the value of the utility power in the rent.
    The renter should have been budgeting monthly operations (as should you in
    considering a tenant), so the money for power would be shifted into rent. The
    portion of rent associated with power might be lower than what the power bill
    would have been, and electric cost from the solar system might be fixed without
    matching the price increases that would have occurred from the utility.
    Win-win.
    Environmental Savings. The environmental
    savings are tied to the utility power you are replacing. Check your energy mix
    from your favorite (only) power utility. US-wide the 2019 electric mix was
    NatGas (38.4%), Coal (23.5%), nuclear (19.7%), hydro/thermal (6.6%) and wind
    7.3%. Solar was up from 1.8% to 2.6% of electricity power by the end of 2019. Fossil
    fuels produce huge pollution and greenhouse gases. Probably as important is the
    massive amounts of water used in operating fossil fuel and nuclear power plants.
    Doing Good. Most of the people who have gone
    solar did so for altruistic reasons, they simply wanted to be kinder to the
    planet and do their part to make things better. Lucky for us now, the
    technology has gotten much better and the prices have dropped to the point that
    solar is simply a good financial decision as well. Now we can do financially well
    by doing good.

    Strategic Business Planning Company website: SBPlan.com Blog: SustainZine.com

  • SolarInvest2020: Solar Profitability Calculations: Residential and Commercial

    As people hunker down at home, and spend time doing all those fix-up items that have been waiting for years, they should also consider working through the details of adding solar.
    First, of course, do those energy efficiency tricks that cost very little: smart thermostats, caulk windows and cracks, and improve your insulation. Your favorite power company will do an energy audit so you can get a check list of things to do. The typical building can save 15% to 25% on simple and cheap energy savings. Monitor usage, because the biggest culprit may be humans with bad energy usage habits. Insulation in the attic could have a 3 to 4 year payback and reduce your electric bill by 15 to 25%. Now with the lower energy usage, you should consider adding Solar.

    [UPDATE: 30% Investment Tax Credit on renewables in the IRA Act 2022. See our Blog post here. This makes all the financial discussions below much more profitable. Also, higher inflation and higher power inflation.]
    Solar can be a Good investment in many cases, like Residential. But it can be a Crazy Profitable investment for Businesses. The renewable investment tax credits (ITCs) drop down again at the end of 2020, so now is a great time to think about it.* 

    Residential Solar

    SBP has done several detailed financial calculators for analyzing both residential and commercials solar projects. Here are articles discussing both:

    1. Quick Take on  Residential Solar: Solar Invest 2020: Do Good and Save Money Too
    2. Full Financial Analysis: SolarInvest2020: Residential Solar is Good, but Commercial Solar can be Crazy Profitable!
    Commercial Solar
    Commercial

    Every situation is a little (or a lot) different. A solar system is specifically designed for the building and the location (average sun hours, etc.). As discussed in the second article, not all systems and warranties are created equal.

    About BizMan (Elmer Hall) & Strategic Business Planning Company. Elmer Hall has a Doctorate in International Business Administration and is an adjunct Professor of Business. He is President of Strategic Business Planning Company, a company that does business plans, especially plans that focus on intellectual property and sustainability. Look for Hall’s Perpetual Innovation™ line of books for innovators and inventors. Website: SBPlan.com Blog: SustainZine.com

    * Update: As of January 2021 the ITC has been extended at 26% for 2021 and 2022. See Discussion at SEIA.
    [UPDATE: 30% Investment Tax Credit on renewables in the IRA Act 2022. See our Blog post here. This makes all the financial discussions below much more profitable. Also, higher inflation and higher power inflation.]