The theme of escalating acrimony and mistrust between the U.S. and China, at least as recently reported by the mainstream media, may give the impression that the U.S. and China face seemingly irreconcilable differences. But this portrayal is extremely one-sided for it obscures the fact that the U.S. and Chinese economies are increasingly interdependent. The U.S. remains China’s leading trading partner, and China is the second most important trading partner for the U.S. There are also many broad ranging bilateral governmental exchanges around pollution control, sustainable energy, medical science, culture, entertainment, and education. One experiment well worth pursuing at the state level is a California-China Solar Partnership. Its success will depend upon good will, mutual understanding, and more effective communication. If this can be accomplished, the Partnership may provide a template for other imaginative engagements between the two countries.
* Breakthrough Value Proposition: When President Kennedy announced on May 21, 1961 that the U.S. would put man on the moon within a decade, he articulated what in business terms is now called a “Breakthrough Value Proposition (BVP).” Every effective BVP satisfies four criteria: It must be clear, powerful, measurable, and unreasonable. Few believed at the time that President Kennedy’s vision was possible. But it galvanized the nation’s creative energies, and Lo! a decade later Neil Armstrong stepped from Spacecraft Eagle onto the moon!
* The benefits of solar are now well recognized: It is clean, safe, and infinitely sustainable. It conserves water better than fossil fuel or nuclear alternatives. Its costs of installation are sharply declining; its efficiencies rising. At present solar provides 1.5% of California’s energy requirements. We propose a BVP of 15% within five years to be achieved by a California-China Solar Partnership. This will reflect a jump up from 200,000 present users (2 giga/watts) to about a million (12 giga/watts including commercial users). This will align the BVP with the goal of California Solar Initiative.
* In order to accomplish this dramatic leap forward high quality products on attractive financial terms must be delivered to solar literate and motivated consumers. The base is already in place. Many companies are currently are offering solar rooftop installations at zero upfront cost. One leading company makes a new solar installation every three minutes. A winning strategy has four elements.
* BVP: A Million Rooftops as Laboratories of Learning—It is possible to turn the BVP into a catalyst for sustainable economic growth and job creation in California. The idea is to interest a million customers in becoming solar explorers, innovators, and entrepreneurs, and offering practical opportunities to profit from their new skills and knowledge. A platform already exists in the form of a “Smart-Collaborative Innovation Network (S-COIN)” which integrates social media, crowd intelligence, smart technology, and a Discovery/Innovation Engine. Effectively it becomes a Solar Brain. Here’s how it works.
* Suppose you are a new member of the S-COIN. The first thing you might do is to click for a bit of solar history. You will learn that China has been using solar energy for the last 6,000 years, beginning with Neolithic homes that were designed to scoop up solar heat in winter and avoid it during the hotter months. Within a few hours of further exploration you are introduced to the basics of solar science, technology, economics, and finance. If you are a customer about to make an important solar decision, you simply tap your smart solar phone into the S-COIN’s Q/A smart data base and receive specific and practical information. You may also enjoy learning how to cultivate your solar explorer/innovators’ mind. The S-COIN provides training in these essential skills through multimedia videos and massive open online courses (MOOCs). Perhaps you would like to test your skills by entering a Collaborative Solar Competition and win Solar Innovator’s Prizes. Or as a budding solar entrepreneur you and some new Chinese friends may decide to launch a start-up venture in China. The platform learns about you and thousands of other explorers without encroaching upon your privacy. The key is a breakthrough in “psychographic data mining” derived from harvesting the stories of its participants. The S-COIN becomes your personalized Solar Avatar learning along with you and working 24/7 on your behalf. A final key feature: with a simple click everyone in the S-COIN can see how close the enterprise is to achieving the BVP. This instantaneous feedback delivered in a game-like environment will build an unstoppable momentum.
* A Solar Bank—One of the reasons that one company, Solar City’s stock price has soared from $ 8 to $ 50 within a year is its innovative solar lease financing program. The program has been particularly effective in commercial and governmental installations. But there are limitations. Residential customers are uncertain about the economics of the solar leasing program which will be vulnerable if the Congress repeals or reduces the solar tax credit. Given the robust and growing solar market there are major opportunities for a California-China Solar bank along the lines first proposed by President Jimmy Carter. The Bank can be organized and managed as a collaborative venture between U. S. and Chinese partners with significant financing provided by the Chinese government and private entrepreneurs. The Bank would offer low interest loans and other financial incentives. If a major U.S. company in the solar field is interested in collaboration, the Solar Bank could be established as a strategic alliance and include lease financing along with home improvement loans. The infusion of significant amounts of Chinese capital will propel California’s solar economy like a rocket.
* Accelerating Distributed Storage—California’s Public Utilities Commission is now implementing new regulations that require utilities to include distributed storage as part of their power delivery services. Distributed storage coupled to solar energy will protect local communities from grid interruptions due to power failures, natural disasters, and terrorist attacks. The smart way for Chinese companies to participate in these new procurement programs is to join forces with California’s systems integrators; in reciprocation China could encourage collaborative opportunities for California’s and other U.S. companies in China’s huge domestic battery market. If these positive steps are taken, new opportunities may open for Chinese companies to participate in pre-competitive research consortia on distribute storage organized by Lawrence Livermore Labs and the Argonne National Laboratory.
* Aligning International Trade and Solar Industry Policies—A California-China Solar Partnership can be further advanced by imaginative statecraft on the federal level. It makes no sense to admonish the Chinese government for its carbon emissions from coal fired plants but then to impose antidumping and countervailing duties in retaliation for its support for its solar industry. The Obama Administration should seriously consider removing the present sanctions, especially if the Chinese government will reciprocate by eliminating China’s similar duties on U.S. exports of poly-silicon, the material of choice in solar module manufacturing.
* Smart Adaptation--2014 marks the 60th Anniversary of the invention of the first solar chip by Daryl Chapin, Calvin Fuller, and Gerald Pearson at Bell Laboratories. It is a testament to American ingenuity. In the early days of the communications revolution the telecommunications industry faced the quandary of whether to oppose disruptive cellular technology or to adapt creatively. They wisely choose adaptation. Today the utilities face a similar dilemma. Solar is ready to break free from the chrysalis of governmental largesse. It is virtually self-sufficient, and under $ 4 kilowatts/hr, competitive with coal. Even if the investment tax credit is repealed or reduced, with a significant infusion of capital from China solar is poised to soar. The time has arrived for the utility industry to step imaginatively out of the box. What better way than for the world’s two economic powerhouses to work together in bringing the solar revolution to its next and brightest stage of innovation?
© Copyright Julian Gresser and John Perlin, June 2014. All rights reserved. Julian Gresser is the Chairman of Alliances for Discovery and the author of Piloting Through Chaos—The Explorer’s Mind, the world’s first smart book. John Perlin is a leading solar scholar and the author of Let It Shine: The 6000-Year Story of Solar Energy. The authors express their appreciation to their colleague, Don Lewis, for his comments on an earlier draft.