Power from the people

Rising out of a cornfield like a '70s-era subdivision, the tiny community of Stelle, Ill., offers a glimpse into the future.

Two wind generators whir in the cool spring breeze. Roughly a quarter of the 45 homes here sport solar panels. Even the community-owned telephone company and Internet service run on sun power.

The idea: Instead of relying solely on utilities, homeowners and small businesses can supplement them - with their own backyard power plants.

It's an idea that's catching on in the wake of California's rolling blackouts and threatened utility price hikes. If it becomes widespread, the notion of "distributed generation" could shake up the electric industry and transform the way Americans get their energy.

But before running out to put up your own solar panel, beware: Backyard power plants remain costly and may require a few lifestyle changes - at least until new technology breakthroughs come along.

"The future of the industry is up for grabs to some degree," says Doug Herman, program manager for distributed generation at the Electric Power Research Institute, an industry-funded group in Palo Alto, Calif. Electric rates are projected to rise so quickly in California that, with beefed up subsidies, distributed - or decentralized - generation is becoming a reality in the Golden State.

For example: Utilities are putting up temporary banks of diesel generators to produce needed power rather than fix bottlenecks in their distribution systems. Businesses are installing microturbines (think of stationary jet engines) so they can keep working during blackouts.

Demand for renewable-energy hardware has also soared. Homebuilders and homeowners are installing so many solar-power systems as backup power that solar panels remain in short supply. Utilities and rural homeowners are putting up wind generators so quickly that the American Wind Energy Association expects a banner year.

Public interest is higher than ever, says Richard Perez, publisher and editor in chief of Home Power magazine in Ashland, Ore. "[The blackouts] changed people's perception of utilities and their reliability."

In theory, distributed generation should be more reliable than centralized power because the power doesn't have to travel as far. If a neighborhood operates, say, three backyard plants - each rated to carry 50 percent of the load - one unit could get knocked out with no appreciable effect. But it's not clear whether today's centralized system will be distributed to that extreme.

"Maybe it doesn't make sense to build huge power plants and giant transmission lines, but maybe it doesn't make sense to have a power plant in your backyard, either," says Mr. Herman of the Electric Power Research Institute. "Intuitively, to me, the optimal system is somewhere between the two."

For one thing, backyard power still faces big hurdles. Despite all the criticisms leveled against them, today's centralized power plants still manage to produce reliable power at a national average of 6 to 8 cents per kilowatt hour. All the current alternatives either cost more or don't look feasible for many cities and suburbs.

Here in Stelle, for example, Steve Bell installed a solar- and wind-energy system that could nearly run his house year-round without help from a utility. As manager of technical support for SunWize Technologies, a solar-power company with Midwest offices in Stelle, he got a break on the $65,000 worth of equipment and installed the system himself. Had he paid for installation, such a large system would have cost nearly $80,000. Even a more modest-size system still goes for $40,000.

"The typical payback is 20 to 40 years for solar," says Mr. Bell. "The average homeowner isn't interested in that." Wind turbines offer better value, but few urban or suburban residents are likely to put up such large and occasionally noisy contraptions in their backyards, he adds. Microturbines remain too large for homes.

Before moving to backyard power, homeowners should take steps to reduce their own energy use - from improving insulation to getting high-efficiency appliances, Bell says. As big as his system is, it can't comfortably run his central air conditioning without drawing power from the local utility. He relies instead on a high-efficiency window unit for his bedroom.

Homeowners could also save thousands of dollars on a backyard power system if they didn't install costly batteries. In this case, they would sell unused power to a utility rather than store it. The idea, called "net-metering," makes many consumers smile. The challenge is that without batteries, the system offers no backup power. When the grid goes down, so does a homeowner's system.

Of course, you don't have to spend thousands of dollars to experiment with backyard power. Two years ago, George Matyaszek of Berwyn, Ill., bought a $275 portable solar unit called a Nomad 300. He lugs it around to power his ham radio in remote locations or run his electric trimmer in the yard. Last year, when a knocked-out transformer caused a local blackout, he took the unit to his grandmother's apartment and plugged in her television so she could watch for nearly an hour and a half.

"I've been real happy with it," Mr. Matyaszek says.

Many energy experts believe the real breakthrough will come when - and if - fuel cells become economically feasible. If manufacturers could get the price per kilowatt of capacity down to $1,000, then an average-size house could install a fuel cell for about $5,000.

"We think the really big market is five years away," says H. Frank Gibbard, chief executive officer of H Power Corp., a fuel-cell manufacturer in Clifton, N.J. "By the time the costs get down to $1,000 per kilowatt ..., then about half of the population of the United States should be able to generate their own power and get it more cheaply than they get it from the grid."

Not only would homeowners have competitively priced electricity, they'd also be able to use the waste heat to provide hot water for free. "People are seriously considering it as an alternative," says Herman of the Electric Power Research Institute. "I feel pretty confident the costs will be there" to make it cost-competitive.

Not everyone is a believer. Critics point out that fuel cells have been "five years away" for the past two decades. "Fuel cells are the current darlings of the electric industry," says Mr. Perez of Home Power magazine. But "it's a Band-Aid.... What they're going to do is get you to buy a fuel cell from them. And they'll get you to buy the hydrogen" from them. Thus, customers will still be dependent on big industry, he argues.

"There's no one winner," says Richard DeBlasio, technical manager for distributed power at the National Renewable Energy Laboratory in Golden, Colo. "It's going to have to be a combination of one or two technologies."

"Competing with the grid is a tough proposition," acknowledges Gordon Gregory, director of market research and communications for IdaTech, a fuel-cell systems-development company in Bend, Ore. But "I think there will be a time when people will be able to make a decision: 'Do we hook up to the grid and have a heat pump ... or do we have a fuel-cell system that gives us both power and heat?' When people truly have a choice, then I think the world as we know it ... will begin to change."

(c) Copyright 2001. The Christian Science Monitor