Alternatives to Feed-in Tariffs

Solar panels are sprouting all over Germany and Spain as a result of feed-in tariff programs by their governments. When governments face the need to develop their solar energy, the question comes up if they should consider feed-in tariffs.  Feed-in tariffs is a policy of governments to pay grass-roots producers of solar electricity higher fees (than traditional electricity rates) for the electricity that they generate. This policy has been extremely successful in Spain and Germany, to the point that so many people are putting up solar panels, and have become a major drain on their governments’ budgets.

The Philippines has very recently instituted a system of Feed in Tariffs for Renewable Energy. I think it will not only not work, it will end up raising the price of electricity to consumers, and be an unacceptable burden to the national budget.

I think that a feed-in tariffs policy may have been a good idea in the past; but that we should now use other strategies for promoting solar power. Feed-in tariffs are potentially a big drain to national budgets; but the main reason for not using them now is that the price of solar panels have dropped sharply in recent years, to the point where the price for generating solar electricity is almost the same as ‘grey’ electricity in some times and places. This means that price is no longer the main obstacle to people shifting to solar. Government programs to promote solar energy should address these obstacles directly.

Solar Bank
The biggest obstacle that keeps households or businesses from installing solar panels is the need for a large expense up front. It is similar to having a mobile phone where you pay for 15-20 years worth of service at one time. The mobile phone industry would not have taken off if this was the case. There needs to be a way to ‘cut up’ the expense of solar power to convenient monthly portions.

The government should put up a ‘Solar Bank’ which would pay for the panels, and to which the buyer could make monthly payments. The bank could charge the household for electricity produced, at slightly below the prevailing price of  ‘grey’ electricity(and at a very low interest), until they are fully paid (which should be between 15 and 20 years (solar panels are expected to last at least 25 years) . Included in this contract should also be insurance coverage, so that people will not continue paying if the panels get destroyed or damaged.

Net Metering
Another measure would be to require electricity providers to offer net metering for a modest one-time fee. Net metering is when a user is allowed to sell (excess) electricity to the grid at the same price that he pays for getting electricity.  This is favorable for those who produce electricity themselves,  from solar, wind, biomass etc. Another advantage is that net metering also reduces the need for batteries, which are a significant part of the expense of solar systems.

In Europe, net metering arrangements mean that a household can ‘sell’ excess electricity to the grid, for the same price, but only as long as it does not exceed the household’s monthly consumption. Beyond that, the electricity provider will only pay the ‘generating cost price’ (i.e. excluding transport and taxes )

Business Incentives
Businesses should be stimulated to adopt solar energy.  In a previous blog, I pointed out that, for commercial and industrial users in Metro Manila, the cost of Meralco electricity is sometimes higher than the cost of solar electricity (Solar Cheaper than Meralco in April). This is especially so during the dry season, when cheap hydro-electric power is less abundant. But businessmen consider not only the cost of solar energy; they also have other concerns, which need to be addressed.

Reliability. Solar electricity depends on the presence of the sun; so the panels don’t produce energy at night and only a little during cloudy days. Companies should be able to combine grid and solar electricity to get a very reliable energy supply. And for this, they would need heavy-duty batteries. I propose that the government subsidize the batteries for solar installations of businesses. Perhaps a subsidy from 25% to 50% of the cost of the batteries would be appropriate.

Resale Value. The government could take measures to develop the secondary market for solar panels. This would stimulate businesses to buy and install solar panels. Some businesses may then opt to install second-hand panels that are cheaper. A secondary market would also stimulate businesses to upgrade their panels when technological improvements improve panel efficiency.

One measure to help stimulate the secondary market is to allow panels to be subject to accelerated depreciation. When the panels’ book value reaches zero, businesses may decide to sell them for a tidy profit, and then buy new panels.

Maintenance. Companies may be unwilling to install solar panels because of perceived maintenance costs and hassle. The government should provide them with technical support, and even training programs for building administrators or maintenance staff, to teach them how to maintain the panels properly.

Of course, businesses should also be able to avail of the loans/insurance from the Solar Bank, as well as benefit from net metering.

Compel Lawmakers to Understand Filipino

On 24 August, during the House debate on the RH Bill, Representative Apostol of Southern Leyte demanded that Rep. Bag-ao be compelled to speak in English. Bag-ao replied that Filipino is an official language and that she had all the right to speak it in Congress. This was upheld by Deputy Majority Floor Leader Magtanggol Gunigundo who said that indeed Filipino is an official language. To this, Apostol said Filipino is not his official language, and that if Bag-ao persisted, he would then demand to have an interpreter.

This exchange may sound quite trivial, but it has bigger implications. Filipino IS an official language, and one of the implications of this is that government officials should be fluent at it. Being an official language also means not only that Representatives are allowed to speak it; but that the other representatives should be able to understand what she is saying. Otherwise, it would not effectively be an official language; because why have it as an official language if it cannot be used?

In Switzerland, they have four official languages ( German, French, Italian and Rumantsch). While the parliamentarians are not required to be fluent in all four, they ARE required to understand other parliamentarians speaking them. It is fascinating to attend such sessions, where the MPs speak in German (actually, the Swiss dialect of German), French, Italian or Rumantsch, and they don’t have interpreters! (When Italian or Rumatsch speakers want to make sure the others understand the nuances of what they say, however, they speak in either German or French) I think it would be unthinkable to have a lawmaker there who cannot speak fluently at least two languages.

I believe that Philippine government officials need to be fluent in Filipino, and not merely be able to comprehend it. I applaud PNoy’s consistency in speaking Filipino during his speeches. I note that he is speaking ‘ordinary’ Filipino, and not the version that is too ‘deep’ or ‘classical’. It has many borrowed words from Spanish and English.

The use of Filipino as an official language should also extend to our foreign relations. Erap Estrada was the first, I think the only, Philippine president who talked to US officials in Filipino; forcing the Americans (Sec. of State Albright) to hurriedly look for an interpreter. I think PNoy should follow Estrada’s example and talk Filipino to Americans, just to make the point. Talking in English to the Americans is a courtesy; the Americans should return this courtesy sometimes by listening to us speaking Filipino. I suggest that when Filipino officials talk to Americans in the Philippines, they speak Filipino; and if they talk to the Americans in the US or elsewhere, that they talk in English.

I understand the sensitivity of people like Apostol, who is a Cebuano speaker, to the predominance of the mainly Tagalog-based Filipino over other languages such as Cebuano. I am a Cebuano myself, and my father raised me to be English-speaking. But c’mon: Representative Apostol lives in Manila; he speaks colloquial Filipino every day. Why can’t he learn just a bit more Filipino to understand official talks in it? It isn’t really that difficult, a couple of months of study should do it. I know, I did it too.

The barrier to learning Filipino is more a question of arrogance, rather than difficulty. I bet that Rep Apostol couldn’t also make an official speech in Cebuano (his native tongue) either. He does all official duties back home in Southern Leyte in English (even though he surely speaks colloquial Cebuano fluently.)  It is really a question of an ‘air’ that he is educated, a lawyer, and speaking Filipino or Cebuano in official functions is below him.

I think this is a matter for the Supreme Court to decide. We could not have lawmakers declaring that Filipino is not THEIR official language. They should declare that having Filipino as an official language means that lawmakers should be able to comprehend it. They should decide to compel Apostol and other lawmakers to understand Filipino.

Biofuels are not the Answer

Biofuels have been hailed as our way out of the dependence on fossil fuels. In the US, massive amounts of government funds have gone into making ethanol from corn. In the Philippines, the 2006 Biofuels Act targets the mixing of 5% ethanol in gasoline and 1% biodiesel in petrodiesel.

Biofuels as the solution to the energy problem is a myth, especially if you look deeper into its real prospects. Experts have computed that, in order to supply enough fuel for US’ transportation needs, they would have to grow corn in 3x the current cropland of the US. In other words, it is impossible for corn to do the job.

But why is that the case? Well, plants are actually (contrary to the myth) very inefficient transformers of solar energy. Plants transform only about 1% of the energy from sunlight into plant material. And of this plant material, perhaps only 20% (or 0.2% of the total) gets into the corn cob, which is what is processed towards ethanol. Then, the processing uses up energy. The end result is that only about 0.1% (one-thousandth) of the sun’s energy is transformed into ethanol.

Contrast this with silicon solar panels, which transform 16% of sunlight into energy. This is 160 times the energy obtained from corn! Some solar panels can even achieve 30% efficiency; but these are made with expensive Gallium Arsenide, and are thus only used for things like space satellites.

The main ‘problem’ that silicon solar panels face is that they still cost too much to make, making it cheaper to rely on traditional sources of energy. But the cost of making solar panels is rapidly going down; even to the point where it has reached ‘grid parity’ (i.e. solar costs the same as ordinary electricity) for some places or applications.  Reaching grid parity is important because this means that subsidies will no longer be necessary for these applications.

Cellulose and Algae
There are efforts aimed at using cellulose or algae as the source of biofuels. Using cellulose would mean that the full 1% of sunlight that the plant transforms will be used. Algae transforms up to 3% of sunlight, but they require expensive glass containers (which need to be regularly cleaned) so that the net yield of algae would be something like 1.5%.  Another problem with algae is that it grows slowly when it is producing hydrocarbons.

Algae is only marginally better than cellulose. And there is still a long road ahead, in terms of bringing either cellulose or algae to even get to 1-1.5% efficiency. It is a terrible waste of money to spend so much on biofuels of any kind. At the same time, solar is already 16 times more productive than algae and cellulose will ever be. And with further research, it should be possible to raise solar’s efficiency even more.

Use Other Technologies
The logical conclusion to all this would be that governments should stop all subsidies for biofuels immediately, and to rechannel the funds to more promising technologies. I suggest that these be solar, geothermal and wind. With a relatively small amount of research on solar and wind, their efficiency stands to improve a lot. Geothermal needs relatively big investments, but pays off well. Geothermal costs much less than traditional sources of energy to generate.  At the same time, the use of electric cars should be stimulated, so that gasoline and diesel will be replaced by electricity.

The Philippines should rescind the 2006 Biofuels Act. It is already a failure. Both ethanol and biodiesel are suffering from “volatile prices and insufficient supply”.  This is a natural result of the inefficiency of their production; and this basic inefficiency means that prices and supply will never be satisfactory, even with subsidies. Instead of biofuels, the Philippines should stress more on geothermal and solar, which are a lot more cost effective, and for which future price developments are growing more favorable.

Empty Shops

There are two shops that will be empty soon in the shopping center (Wagnerplein, in Tilburg, the Netherlands) near where I live. One was a lingerie store, and another was something like a permanent clearance sale, selling stuff from excess inventories. Whenever a shop leaves our shopping center, I wonder if they are leaving because there is not enough of a market for what they sell, or because of another reason entirely. When the video rental shop left, it was obvious – people were now buying CDs, many through the internet, that so few still wanted to rent videos. (I notice that in some poorer areas, though, there are CD rental stores, though.) The Chinese restaurant left, giving way to a bank. The restaurant was doing well, but the bank made them an offer that they couldn’t refuse. A music store closed shop, giving way to a travel agency; making the shopping center now have 2 travel agencies and one music store, instead of the other way around.

There used to be a store selling fresh vegetables and salads. I miss that store; I used to buy there when I only had little to buy, instead of going through the grocery. The place is now a hairdressing salon. Does this mean that having your hair cut and dyed is now more important than fresh vegetables?

Since the Wagnerplein is an ‘A’ location, I think that the shops will be replaced by new ones. They always are; well, almost always. There is one space that is extremely ‘unlucky’ – I think shops only last one or two years at that location. It has extremely bad feng shui – being at the head of a ‘T’ crossing. Also, it is quite small – something like 25 square meters.  It is currently empty.  Most spaces are taken over almost immediately, and I fully expect that this would be the case for the two spaces that are going to be vacant soon.

The changes in the mix of shops reflects progress or other changes in society. In the last three years I witnessed the demise of the video rental shop. But also the coming of two new optical shops; it seems that the standardization of lenses has made for increased competition in the market for eyeglass frames and sunglasses. The coming of a bank indicates the renewed importance of retail banking, after the banking crash of 2008-2009. Wagnerplein used to have 4 banks, then about 4 years ago it became 1, and now it will be two banks.

Some shops adjust with the times. The photo shops used to be the place to buy and develop films. Now, it sells cameras and camera accessories, does colored printing, makes special products with photo in it e.g. key chains, mouse pads, greeting cards, and prints digital photos. The toy shop is half-filled with electronic games.

Of course, when shop spaces are empty, it indicates something else – an economic crisis (either local or national).  Some other cities have a crisis in their shopping centers; with some having vacancy rates of up to 15%. This is terrible for a shopping center, and could signal its further slide as a shopping destination.

I also noticed that the kinds of shops at Wagnerplein are different from other shopping centers in poorer neighborhoods. These would often have an ‘exotic’ bakery – I noticed one shopping center with 10 shops, where you could buy bread in 4 places ( 3 bakeries and one grocery). I wonder how long this situation would last. And then, they invariably have a store selling sim cards and phones (and which also sell pens, paper, magazines, tobacco products…) No, not marijuana – that is sold mainly on ‘C’ streets, in special shops. Business there is always booming.

It seems that new technology and the internet do not spell the end of shops. Rather it just forces changes in the mix of the shops and of what the shops have to offer. I think that people will always need shopping centers.

Blasphemy?

There has been a lot of controversy about the art exhibit called Poleteismo by artist Mideo Cruz at the Cultural Center of the Philippines. Cruz says that the exhibit is about “how religion has been commodified and how capitalist commerce has become the new religion”.  But many Catholics did not pay too much attention to the overall message of the exhibit, but to the penis on the cross.  The exhibit also showed Jesus with a clown’s nose and Mickey Mouse ears. They said that this was blasphemous – I wonder which shocked them more, the penis on the cross, or Jesus with a clown’s nose? . After all the furor, the board of the CCP decided to ‘temporarily’ close the exhibit.

I fully understand that some people found Poleteismo distasteful or ugly. After all, if I was an art collector, I probably wouldn’t want to buy such works of art – they are not to my taste, to say the least. But to ban it, or to persecute the CCP for exhibiting it, is way too much, an arrogant abuse of power.

But it seems that undue political pressure had been put on the CCP board to discontinue the exhibit. President PNoy Aquino for one, called the board to tell them that he disapproved of the exhibit. Then there were senators calling for cutting the budget for the CCP over this incident. I think the politicians have gone too far. They go even further than the official censors (i.e. those who censor motion pictures). At least the motion picture censors have the excuse that some movie scenes are a bad influence on children, thus explicit sex or graphic violence is not allowed by them. But in the CCP case, the censorship was not really a question of public morals, but rather ‘blasphemy’.

Blasphemy
Blasphemy is defined as “irreverence toward holy personages, religious artifacts, customs, and beliefs”. It is an ancient offense, which brings to our mind an ancient scene of a man stoned because he said that the Bible was not literally true, or the miracles are fake. Blasphemy is always the charge against people with a different view of religion.

In modern times, blasphemy is illustrated more by the uproar  against the Danish newspaper which published cartoons of the prophet Mohammed in 2005. Danish embassies were burned, Danish products were boycotted, and there were terrorist plans to kill people connected to the newspaper (luckily, the police were able to stop these).

There is also the anti-blasphemy law in Pakistan, which is a law that persecutes Christians there. If a Christian has a conflict with a Muslim, the Muslim could simply claim that the Christian said something bad against Muslims, and then the Christian gets sentenced to death. Politicians in Pakistan who spoke out against this law have been assassinated.

I think the basis of blasphemy as a reason to ban, to suppress, or to kill somebody should be left in the Dark Ages. Citing blasphemy in the present-day Philippines only underscores our being a feudal and backward country.

Freedom of Expression
The suppression of ‘blasphemous’ art such as Poleteismo is a dark day for freedom in the Philippines. Freedom of expression boils down to the freedom to express contrary views. If people only had the ‘freedom to express’ things that are approved by the authorities, then it is not freedom at all. Even in a dictatorship, there is always the freedom to express pro-government opinions or views.

The question of whether the CCP, being government supported, should promote such ‘blasphemous’ art should be answered in the affirmative. The government should be the guarantor of the freedom of expression, instead of acting as a censor.

The country has everything to gain by protecting the freedom of expression – it would unleash the creativity of our artists, writers, movie makers, etc. The creative spirit could help Philippine economic development. The creative spirit is not nurtured by succumbing to the disapproval by church elders or the wife of our former dictator.

If you go around European art musea, you will notice that there was a long period where the only art was religious art or portraits – things that are absolutely non-controversial and non-blasphemous. Art then was extremely boring, and not beautiful. Then, there came the time when art took on other topics, many of which were scandalous. Some of these ‘scandalous’ art (e.g. nudes) was even beautiful, but the important thing was that a lot of other art got made, which would not have been the case if the tight censorship by the church had continued to prevail.

So, the question is: Do we want the Philippines to progress and be open to new ideas, or do we want it to remain a backward, feudal country?