Why America Doesn't Have A Respectable Solar Industry

Solar power in America is nothing new — Californians were heating water with it back in 1908 — we've just generally ignored it since WWII. Powering the Dream, by Alexis Madrigal explains how we managed to squander this energy for nearly 75 years.

You could be excused for thinking that there is no history of what we call green technology. Conventional wisdom holds that solar and wind are new, geothermal has barely been tried, and efficiency begins tomorrow. Perhaps some hippies toyed with off-grid living in the '60s, and maybe a few windmills once creaked on your great grandfather's farm. General Motors killed the electric car, too, right?

To those who remember a few facts from the past, green tech is an engineering bust that has been given ample opportunity to prosper, but has only succeeded in failing spectacularly. There's almost no institutional memory of what happened before the energy crises of the ‘70s, and little of what happened technologically during that time has been documented in any serious way. Far more people know about the demise of the spotted owl than about any solar, wind, wave, water, or geo-thermal project.

Nonetheless, some remnants of the past endure. Way back when I started researching my book, when I typed the word "solar" into the search box of the American Memory collection on the Library of Congress Web site, I got one good search result: "Death Valley Ranch, Solar Heater, Death Valley Junction vicinity, Inyo county, CA." Three black-and-white photos show a rotting wooden building on a concrete foundation maybe 60 feet long and nine feet wide, taller in the back than the front. It's covered in copper metal coils that are painted black and snake back and forth. Behind it a tall cylinder, wrapped in felt made from cattle hair and what looks like aluminum foil, rises 20 feet into the air. The entire scene is surrounded by desert-cactus, rock, sand, sky. The caption reads, "The Solar Heater at Death Valley Ranch is a rare surviving example of a solar industry that thrived in Southern California before World War II and before the widespread use of natural gas."

There was a flourishing solar industry in California before World War II? If solar heaters worked, why did people stop using them?

The history is long and deep, but criminally obscure. It's understandable; victors don't only write the history in military battles. The popular view of technology is that the best one wins. We assume that alternatives did not exist or that, if they did, they were obviously and irreversibly inferior to the options that were chosen. It's as if no one had ever heard of Microsoft Windows or Betamax.

Survey the range of discoveries, inventions, industries, and large-scale systems that have arisen during the past century and notice which paths in modern technology have been selected. You'll find good ideas that were dropped and bad ideas that were probably better forgotten. Some real alternatives to technologies we've selected merely lacked funding and scale, not technical sophistication. In 1900 people could use the sun to heat the water for a shower. They could drive across New York City in an electric taxicab. Even if these cabs did not work perfectly, they existed before most people even had a single light bulb in their home. In 1945 a person could have purchased a solar house or gone to see the one-megawatt wind turbine. During the 1970s one could have visited the Solar Energy Research Institute and, 10 years later, seen the massive solar fields of the Mojave Desert. Green technology has been a viable set of technologies for more than one hundred years but, regardless, supplies little of America's energy. So why weren't those alternatives selected at the time? Could any be reclaimed now?

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On any old evening in October 1929, one might have found Death Valley Scotty and his patron, Albert Mussey Johnson, coming back from a horseback ride among the rattlesnakes and scorpions to the sprawling Moorish villa that Johnson had built in the hottest place on earth, miles from nowhere. However, nights could still get a little nippy. And if one of them wanted a hot shower, he could have one courtesy of a new Day and Night Solar Hot Water Heater, which the duo had gotten installed earlier that month. Johnson was an insurance magnate and millionaire (even after the stock market crash that lit the Depression's fuse) from Chicago. Scotty was from Kentucky, a cowboy who'd hung around Death Valley for years and a confidence man. One of his first marks had been the city slicker, Johnson. Somehow, however, they became friends.

Neither was known to be much of an environmentalist, or, as they might have been known then, conservationists. They used the force of an underground spring to do mechanical work and run a generator, and they had diesel generators and fuel tanks, too. Why, then, install a solar hot water heater?

Built from simple materials — concrete, copper loops painted black to absorb heat, and glass — it was probably the best option they had. It worked well, even if in the winter months, the water was warm, not hot. The decision was a common one for consumers in southern California. The Day and Night Solar Heater Company was already generating $230,000 a year in revenue as far back as 1923, its owner William J. Bailey bragged. The Los Angeles Times even covered the rise of the company, noting in the subheadline, "Factory Forced to Move to Larger Quarters Twice as Demand Grows."

They weren't the only game in town. Clarence M. Kemp's Climax solar water heater had come into widespread use in the years following its development in 1891. Two Pasadena businessmen paid Kemp $250 in 1895 for the right to market the device in California. Within five years they had sold more than 1,600 in southern California alone at $25 a pop, at a time when Los Angeles had just 100,000 people. Clearly, they were a good deal. Ken Butti and John Perlin wrote in their wide — ranging treatment of the history of solar power, A Golden Thread, that "for an investment of $25, the average homeowner saved about $9 per year on coal — and more if artificial gas was used for water heating."

The Day and Night hot water heater installation at Scotty's Castle, as the compound became known, was a pretty standard job. However, it was one of the last for the Day and Night Solar Heater Company. Its solar heaters had competed well against other hot water systems — usually just one's stove — that burned coal or gas manufactured from coal. With California far from the deep coal seams of the East, transportation costs made the fossil fuels expensive. Beginning early in the century, though, gas started to get cheaper as gas manufacturing plants began to be built increasingly larger and the gas industry began to consolidate.

From 1902 to 1920, northern California's Pacific Gas and Electric Company doubled its gas output and miles of pipeline, and near Los Angeles, the Southern Counties Gas Company was completing a similar consolidation. Standard Oil, of Rockefeller fame, hit the gas well equivalent of a gusher in the Midway oil field near Bakersfield in 1909. With the new supply, the gas companies expanded their pipeline networks to reach most of the major towns in California, mirroring the electrical grid in the state.

The cheaper natural resource combined with better transmission made solar more expensive than gas. What's more, the overabundance of gas in the still-young state had the natural gas companies hunting for markets for their fuel. To oil companies, natural gas was a waste product of drilling for the real crude. In the early twentieth century 90 percent of the nation's oil-related natural gas was burned simply to get rid of it. So the gas companies subsidized the up-front cost of the gas water heaters in hopes of growing the natural gas market. Given how much gas was being wasted, finding ways to get consumers to use natural gas was, to the mind of Standard Oil's Frederick Hillman, "in the spirit of conservation."

The solar hot water business didn't die, though; it just moved to Florida. In that state, where gas wasn't as abundant, the solar hot water heaters took off.

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Miami was booming, nearly tripling its population from 1920 to 1925. H. M. "Bud" Carruthers showed up in the hot town with the Florida rights to Bailey's patent and with the California experience in hand, he set about creating the most successful solar industry of the first half of the twentieth century. "More than half the Miami population used solar heated water by 1941, and 80 percent of the new homes built in Miami between 1937 and 1941 were solar-equipped," wrote Butti and Perlin.

By the late 1930s ten companies were competing for the solar hot water market. They would install perhaps as many as 100,000 units in Florida between 1936 and 1941. Furthermore, the newly created Federal Housing Authority financed the purchase of some solar units under a home improvement loan program. This first federal solar incentive let Floridians buy a solar heater for installment payments of six bucks a month.

Later solar hot water studies found that the technology remained cost competitive with fossil fuels into the 1970s-and probably remains so today-but nonetheless, the industry slowly died out after the war. It's a perfect example of how costs alone don't always determine people's choices in technologies.

As people looked to purchase new water heaters in the early 1950s, they tended to see old solar heaters that had been installed during the 1930s. Many of these had problems with corrosion in the water tanks-an easily avoidable problem in retrospect. A few burst tanks "badly tarnished solar energy's reputation of being a trouble-free way to heat water." As solar's reputation was taking a hit, Florida Power and Light, like many utility companies, "mounted a major publicity drive for electrification." The grow-and-build plan for big power companies dominated their thinking throughout the middle of the century, leading them to push consumers to consume larger and larger amounts of energy.

This strategy often worked to push down the cost of a kilowatt-hour of electricity, as it did in Florida. By the early 1950s the price of that much energy was only four cents, down three cents from the previous couple of decades. With this tough new competitor, solar would have had to cut its costs to keep its price advantage.

However, the use of copper, a major solar hot water material, was skyrocketing for other applications like electronics and infrastructure. Between 1930 and 1960 the use of copper in America nearly doubled. Between 1938 and 1948 alone, its price actually did double, making the solar collectors more expensive at the moment when they needed to be cheaper.
To make matters worse for the solar industry, "a new force, the large-scale builder-developer," showed up in Florida. These companies had a perverse set of incentives because they built homes before they sold them. Their only concern was driving down the up-front cost of construction. Electric water heaters fit their needs perfectly because they seemed cheaper, even if their cost over the life of the house could have been higher. "Developers almost always included electric hot water systems in new homes because of their low capital cost," wrote a historian of the period. "Monthly electricity bills were not their concern."

With all that stacked against them, the U.S. domestic solar hot water industry slowly withered away. However, others picked up where American R&D had left off, notably Levi Yissar's work on new absorptive coatings in Israel. The Japanese market boomed, as did Turkey's and much of the European Union. But China became the big market. In 1991 the country had little solar heater manufacturing capacity. By 2005 thirty-five million Chinese families were using solar hot water heaters, with solar commanding a 12 percent market share in the country. In 2007 China had nearly 70 percent of the world's 2.2 billion square feet of installed collector capacity. Chinese solar heater production outpaced Americans' by 160 times.

Like so many other renewable energy industries, a field that the United States once dominated has moved on to greener pastures. A technology invented and improved in the United States is a dim memory here and a thriving industry elsewhere.

Why America Doesn't Have A Respectable Solar Industry

Alexis Madrigal is a senior editor at The Atlantic. He's a founder of Longshot Magazine, a high-speed media experiment that garnered attention from the New York Times, Wall Street Journal, and the BBC.

Powering the Dream: The History and Promise of Green Technology is available from Amazon.com.