What did you get for Christmas?

One of the lowest electricity bills ever! At least the part of the bill that shows how much they pays us. December had all the wrong weather, and our earnings dipped under 30,000 yen for the first time. Six thousand yen less than the previous low in December 2012.

The first three years of our solar enterprise have been going well otherwise, and even this low monthly income was three times what we paid for the electricity we used.

In terms of energy use and generation is we're producing more than we're using, even in the lean months. 

So we could unplug from the mains and have more than enough energy for our needs. We're not in a hurry to do this, as it makes much more financial sense for us to sell all the electricity we produce in the day, and buy electricity at night. And at the moment we have no storage facilities, so we wouldn't really be able to. At some point I may calculate how big a battery we would need to keep enough electricity. The only useful data I have now is the number of days per year when we consume more electricity than we produce, which is under 50, or less than one day per week. Most of these days are between November and March. That data is not particularly useful: we don't need to store power for average situations, but for extreme situations, such as cold winter nights when our power source has been covered with snow for a couple of days, and it's dark anyway.

The amount of storage we need is a complex and exciting calculation, but for now we are connected to the electricity grid with cheap, night-time rates, and getting five times more for the electricity we sell in the day time for another seven years, so I'm not in a hurry to work out how big a battery we would need. 

Thanks for the card, Michael!

A passive house in Karuizawa

Another passive house in Nagano prefecture, this time in the much cooler city of Karuizawa. There are some great points in this interview. One interesting comment is about the trade off between the high installation and low running costs of low energy buildings, compared to the lower initial cost and higher running costs of buildings using fossil fuel energy. Since most people borrow money from the bank to build, the actual initial costs to the owner of the house are very low, since the bank will pay for them. Effectively there are two sets of running costs: utility bills and loan repayments. Since people in Japan can often get low-interest 35-year loans, the loan repayment is a fixed cost. On the other hand, the utility repayments, at least the fossil fuel component of them, seem very likely to rise for the foreseeable future. 

https://catforehead.wordpress.com/2014/10/31/passive-houses-a-conversation-with-kevin-meyerson

I've already built the charger for my electric car

Thanks, Sam, for sending this article about the impending and inevitable replacement of fossil fuels with solar based on the ideas of business lecturer and entrepreneur Tony Seba. The argument in a nutshell is that fossil fuel extraction is becoming more difficult and so more expensive, while technologies in solar panels and batteries are getting cheaper. These trends will continue and at some point the current situation where petrol driven cars perform better than electric cars will flip, so electric cars will be cheaper.

At first there will be a few early adopters, paying higher prices for the new technology - like now in fact! Then prices will approach parity. Soon a critical mass will be reached, and economies of scale will further lower costs of the new technology. Since the price falls are exponential, the old technology will very soon be confined to small groups of wealthy fanatics.

So when will this happen? "By his forecast, between 2017 and 2018, a mass migration from gasoline or diesel cars will begin, rapidly picking up steam and culminating in a market entirely dominated by electric vehicles (EV) by 2030."

Note the expression "picking up steam" in this quote. I read straight through it the first time, but on the second reading it raised a smile, as it is using a metaphor from one obsolete mode of transportation to describe the transition between another two. It also somehow reinforces what Seba says about the speed with which technologies change.

Swift technological change is certainly possible, and I remember our electrician saying that LEDs were a waste of money when we were starting to build our house, but everyone nodding when the architect was boasting about "his" decision to put them in as he was showing people around just before we moved in.

The example of digital cameras is given in the article, and here there are similarities with electric vehicles. Traditional cameras need to be constantly fed with film, just like conventional cars need to drink petrol. Early digital cameras had low resolution and short battery life, but the technology rapidly improved and today they totally dominate. Kodak went from photographic giant to bankruptcy in about ten years.

Of course not everyone believes in this inevitability, but they are probably wrong. I remember a story recently about the problems Nissan was having with batteries for its electric vehicles, told with a strong editorial line that electric vehicles are a doomed fad. We have to be careful with new technologies though, and not mistake the signs. Just like Kodak, dominant powers of previous technology regimes may not survive and when they make mistakes it does not mean the technology is wrong. Polaroid were early pioneers in digital cameras, but it did not save them, and although Apple are now suppliers of many de-facto digital cameras, their early attempts at the technology failed. Even among start ups there will be losers as different parts of the technological jigsaw puzzle  jostle for their place in the big picture.

So the future trinity is likely to be solar panels on the roof, and batteries for the electric car. I'll let you charge your EV from my solar panels if you let me charge mine from yours!

Eco friendly fridges

However eco-friendly your house is, according to this report, what's in the fridge can make a big difference.

diets_effects_on_emissions_give_food_for_thought

The variable rate hasn't varied for 5 years...

Talking of future-proofing...

I have a fairly good grasp of mathematics, but my understanding of numbers dissolves away when you start putting currency marks next to them. 

Our land loan has reached the end of the five-year fixed rate we signed up for, and we have to decide what to do next. 

If we do nothing, it defaults to a variable rate. Alternatively we could go for another five-year fixed rate, or a ten-year fixed rate. I just got a phone call from the bank, and heard some percentages--I think I heard 1.5% and 1.7%--but I really need to sit down and look at things in writing.

According to this website, the current floating base rate is 2.475%. In fact, the flexible rate has been 2.475% since February 2009. That dark blue line is not part of the grid, it is part of the data.

Is that some kind of joke? Isn't variable supposed to mean that it can vary? 

It looks like we would have done better getting that rather than the five-year fixed rate. 

I know past results are no indicator of future performance, so just because the floating rate has stayed the same for the past five years doesn't mean it will stay the same for the next five years. 

Whatever we do will probably be wrong. Going for the fixed rate seems the most sensible approach since we may be losing out, but it will be by a predictable amount from each month's salary. The risk is much less than going for a floating rate loan, and suffering an interest rate hike. 

The ten-year fixed rate is at a historical low of 2.9%, which surely means something. The rate the bank charges is a little more than 1% less than this. Of course the numbers don't know the history, and they are probably just as likely to keep going down. As long as interest rates stay above zero, the banks will still be winning.

On the other hand, talking of risk, perhaps we should leave it with the flexible rate. This would then cause the interest rates to go up, which would be connected to increased inflation, which would in turn mean that the value of our loan goes down, and we would be owing and paying less in real terms.