When the cost of the next Kilowatt is $0

In 2006, Chris Anderson - author of the Long Tail made the following statement - The basic idea is that incredible advances in technology have driven the cost of things like transistors, storage, bandwidth, to zero. And when the elements that make up a business are sufficiently abundant as to approach free, companies appropriately should view their businesses differently than when resources were scarce (the Economy of Scarcity). They should use those resources with abandon, without concern for waste. That is the overriding attitude of the Economy of Abundance -- don't do one thing, do it all; don't sell one piece of content, sell it all; don't store one piece of data, store it all. The Economy of Abundance is about doing everything and throwing away the stuff that doesn't work. In the Economy of Abundance you can have it all.

Now while this idea has its detractors, with the ever reducing cost and increasing capability of distributed and renewable energy technologies are we seeing a shift in the underlying economics of the energy industry? As the cost of a kilowatt hour of renewable energy marches downwards, businesses married to the old economic approach based on scarce or finite fuel sources will be faced with a difficult future.

Once a business has paid back their investment in renewable energy technologies like solar, wind and storage the cost of the next kilowatt hour is effectively $0. The current seemingly endless cycle of increasing power prices simply works to hasten the payback of renewable energy investments. Therefore if you run a business with a very large roof space and a low level of energy intensity it makes economic sense to invest in renewable energy resources at your site in some shape or form. With shorter paybacks and longer renewable energy lifespans the equation is constantly improving.

For all those regulators and policy makers the challenge for you is how do you move the energy industry framework forward and hand back value to the consumer? Otherwise they will act for themselves and take that value back.