October 13, 2009

The Absolute Value of Technology

Filed under: Articles + Blogs — smeyer @ 3:16 pm

I have written a number of blogs on the Project Mechatronics website about a term I have coined “The Absolute Value of Technology”.  It is simply the idea that we must always evaluate the economic merit of technology.  Does technology offer an improved cost performance point, or is making a technology commitment going to cost money?.

So, for example, the flat screen television monitor has finally won the day.  Even the 19″ CRT has finally given way to the new flat screen equivalent at prices below $200.  And for the most part, the performance of the new monitor technology is superior to the CRT.  Higher resolution and clearer images are intrinsic to the technology since it comes from the personal computer world which long ago surpassed the humble CRT’s 240 x 70 line scan image.  By the way, some things we don’t know are how the technology will perform over time.  And vendors are reluctant to talk about how the contrast ratio decays over time.

But that’s OK.  Because we are willing to make the tradeoff for the convenience of image monitors that are only 3 to 4 inches thick and screen sizes that are 32, 42 and 54 inches wide.  Great for watching movies and picking up all the nuance of the best camera work and graphics available..

The conversion of the monitor has rapid, widespread and without much economic upheaval.  Why?  Because the forces of the marketplace are natural and orderly.  Just as audio cassettes gave way to CD’s.  Yes Vinyl is still with us for the purist.  but at somewhat of a premium.  And as technology becomes inexpensive, most often with massive volume of units, the economic merit is established.  Anyone still arguing over Beta format versus VHS?  Of course not.  DVD’s are cheaper, more stable over time and easier to operate.  Only one electric motor is required.  Anyone still arguing over 8 track tape versus cassette?  (which only tells you how old I am)

But the notion of the Value of Technology is completely absent from the public pronouncement by government that we will have Wind Power, Solar Power and Better Cars.  I am the biggest fan of green technology, but if it is not an economic benefit, than it’s going to cost money.  That means trouble.

The government, federal or state, is going to have to collect taxes to pay for the technology with subsidies and incentive programs.  Extra texas, by the way, because of course, they won’t cut their defecit budgets like you or I might have to in order to pay for the new toys.  And it might even be justifiable if it were a matter of the temporary funding to reach economic quantities that will become cost effective.  But that isn’t the case.

Recently, having found that they are running out of cash, the utility companies have begun to reduce their subsidy programs for solar power.  This is causing anxiety among the solar cell manufacturers.  If the present rate of sales diminishes, it will stall the progress of one of the few high growth industries in the US economy.  Something we cannot afford.   But how do you run a business that is based on 60-90 of the investment cost being paid for by others?  You don’t.  Not in a capitalist economy. Maybe that’s a bad assumption at this point.

Big wind power projects are suffering from lack of financing, but they have orders for equipment that are going to take 2 years to fill. So the short term is still rosey.

But solar and wind project take 9 to 10 years to break even without subsidies.  And the reason you and I can’t put solar on our roofs is because its too expensive.  But when it’s a political issue, no one want to deal with the facts.

So let’s see, the power industry generates electricity at less than 5 cents a kilowatt hour, charges more for it and makes a profit.  Yes, California residents pay 23 cents a kilowatt hour.  They’re special.  But Texas residents pay 11.5 to 14.5 cents.  So projects that generate power at 22 cents per kilowatt hour don’t make sense.  No matter if the legislature passes a law forcing the utility company to build these projects.  It just means someone else is going to have to pay for it.

I want green technology to win.  But it has to pay for itself.  Solid Tech is committed to solutions in solar tracking solutions that increase energy harverst by 30+%.  Solid Tech has technology concepts for wind power that will pay for itself in 3-5 years WITHOUT subsidy programs.  And we have advanced electric motor and drivetrain solutions that will make electric cars more efficient WITHOUT spending millions of dollars on development.

Let me know if you are interested in finding out more and getting involved.

Steve Meyer

7 Responses to “The Absolute Value of Technology”

  1. Michael Kujawa says:

    Re: Absolute Value of Technology

    Even wind is no good in a vacuum. When you say that electricity has a “price” and “show” that oil is the “cheaper” alternative to electric vehicles, have you factored in ANYTHING ELSE? such as what is now happening in the Gulf(s) (what is the number?: $0.37 of every tax dollar to defend access to Middle East hydrocarbons). The slave camps and proliferating toxic pools in Nigeria, an oil tanker busted open on the Great Barrier Reef, the vastly unrecovered Prince Edward Sound??? Nuclear waste that remains dangerous for 24 million years…
    And, oh yeah: the total disruption of the ecosphere from global warming?
    So, what is the price? Please put a number on the corruption of so much of terrestrial existence by, in that great mind W’s words: “our addiction to oil.”
    Or, taking another tack: energy is essential to the existence of civilization. A heart is essential to life. Would you in truth buy the cheapest pacemaker you can find when it comes time for a new timer? Hey, it’s economics. The True Value of Technology. (is a low-cost hardware store reference?)

  2. smeyer says:

    Interesting rant. There is no oil used to generate electricity so there’s not much connection to the other issues. Electric vehicles cost a tiny fraction per mile of operation, in part based on fuel cost per mile driven and in part because of low cost of maintenance. Depending on the design, like a real hybrid (Chevy Volt or similar) they don’t require oil changes, don’t have transmissions or drive shafts. That’s the point. More reliable also means lower operating costs. Maybe I wasn’t being clear on that.

    Are there other consequences to our actions? Of course. And you should try and calculate some of the damage from things like Oil rig blowouts. The media reports all kinds of wild number about the cost of the Deep Horizon disaster. That concerns me. Same with big government. Numbers for all occasions, not much consistency.

    On Global warming, sorry, but no sale. There is no connection. The sun puts 1533 watts per square meter on the Earth’s surface. We can’t begin to match that or conclude that man is making a dent. Smog yes, Global warming no. Some Phd’s did a correlation with the solar cycle, and so far, that’s been the most likely explanation for variations from the Global Cooling of the 1970’s to the warming of the present.

    Nuclear? Actually there are a couple of very promising mini-reactor technologies that have been proven to be completely safe. No chance for thermal runaway and no chance for it to go critical mass. My biggest concern is that companies like GE have done such a good job lobbying Congress that we will never see the technology that can best serve our energy demand. One process called a “wave reactor” actually turns the nuclear material into something inert with no radioactive residue. That’s pretty cool.

    Do some more homework, and think a little harder about the problem. There are solutions out there. And we need them.

  3. itil says:

    While we’re on the subject of The Absolute Value of Technology | Solid Tech Inc, The vast majority of today’s population can’t imagine a life without computers. Computers and their application have been closely entwined with our day to day lives. Where demands increase, supplies automatically improve too. The elevated usage of computer and its applications demand an increased number of computer professionals.

  4. smeyer says:

    Every product has a “food chain” of supply. Sometimes on the source end, components and materials, sometimes in the aftermarket. The need for IT support is incredible. I think the industry is still figuring this problem out because it seems to be changing a lot over time.

  5. Fairly great article. I just got here by your blog and wished to say that I’ve actually enjoyed looking your posts. Any method, I’ll be subscribing to your feed and also I hope you post once more quickly!

  6. smeyer says:

    Brady

    Thanks for the post. I entered the workplace right after your post so I have been out of touch getting spun up on my new gig. We’ll see. Hoping to sharpen my skills in getting industrial America more competitive in the world marketplace and will continue to blog more.
    Thanks again.

  7. smeyer says:

    Migdalia

    Thanks for you post. Will try and do more. There’s a lot going.

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