Spirit in Action
The Business of Solar - Ralph Jacobson
Ralph Jacobson founded Innovative Power Systems in 1991, giving him 20 years on the learning curve. His outlook & views have been significantly changed by the experience of "doing business". He is also president of the Minnesota Solar Industries and lives in St Paul, Minnesota.
- Broadcast on:
- 20 May 2012
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- other
[music] ♪ Let us sing this song for the healing of the world ♪ ♪ That we may hear as one ♪ ♪ With every voice of every song ♪ ♪ We will move this world home ♪ ♪ And our lives will feel the echo of our healing ♪ ♪ With every voice of every song ♪ Welcome to Spirit in Action. My name is Mark Helpsmeat. Each week, I'll be bringing you stories of people living lives of fruitful service, of peace, community, compassion, creative action, and progressive efforts. I'll be tracing the spiritual roots that support and nourish them in their service. Hoping to inspire and encourage you to sink deep roots and produce sacred fruit in your own life. ♪ Let us sing this song for the dreaming of the world ♪ ♪ That we may dream as one ♪ ♪ With every voice of every song ♪ ♪ We will move this world home ♪ Today for Spirit in Action, we're going to do some thinking and talking about the solar business. And by that, I mean both the alternative energy part of that and the essentials of what it takes to conduct a healthy, successful business in the field. We'll be speaking with Ralph Jacobson, President of the Minnesota Solar Industries Association and owner of Innovative Power Systems, a company he founded 20 years ago. Ralph is a deep thinker and powerfully motivated by a desire to do good in and for the world. We go to the phone now to speak to Ralph Jacobson of Innovative Power Systems in St. Paul, Minnesota. Ralph, welcome to Spirit in Action. Hello, Mark. Thank you for having me here. You've been in the industry for a long time, alternative energy. When did you start and tell me a little bit about your company? Mark, I've been trying to figure out how to make a career for myself in solar energy most of my adult life, and I'm now 58. I went through a solar training program in 1979 during the Carter administration. I had thought previous to that that I was going to make a living as an organic orchardist and found that it was one of the hardest things I could have imagined. I might as well have tried to start a steel mill. Fighting golfers, fighting deer, I was a city boy. I was not prepared for that endless battle, so I came back to the cities and I was looking for what next. I was kind of dejected for a couple of years, and then when the solar industry started to pick up during the second pair of oil embargo in 1978-79, I kind of caught fire and said, "Boy, this might be the thing." You know, I had been involved in the late '60s and into the '70s in passing petitions about nuclear power. You know, no nukes. And I remember I was at a demonstration, it must have been all of '22, so I was telling this old guy, you know, they've got to end the nuclear power and no more nukes, and he said, "So, young man, what do we do then?" You know, I thought, "Oh boy," and launched in a little tirade about how great wind was in solar and what we could do with it, and he said, "So, what have you done with wind and solar?" And I realized that he had caught me. I had done nothing. And, you know, that little exchange with that fellow in the early '70s kind of stuck with me, and so I kind of thought that, you know, if I get a chance, I would really like to see for myself what can be done with wind and solar energy. And so there was an opportunity in 1979 to get involved in a solar training program, and I jumped on the opportunity. Members, Acita, T-E-T-A, you could get paid minimum wage to go through training, though I had got a CITA job at a nine-month training out in Menominee, Wisconsin. And since that time, my checkered career has had me working in a energy-efficient construction company and as an energy auditor. I eventually went back to school and studied engineering, and I thought, "Boy, I'm going to be able to pick my job as an engineer or pick a job in solar industry." I went in in 1985, and by the time I graduated in 1989, that era of the solar industry had died completely in Minnesota, and there was nobody left standing. And I realized that if I was going to be able to find a job in the solar industry, in Minnesota, I was going to have to create something out of nothing. And so I started, in my living room, in my garage, just accumulating experiences going out and talking about it when I had opportunities. And doing odd jobs, I worked as an energy auditor for a couple of years and built a Quaker Meeting House in St. Paul for a year while I was kind of incubating a business. One of the businesses that I had worked in the late '70s and into about mid-'80s was a cooperative. It was an energy-efficient construction company named Whole Builders Co-op. It was the perfect place for a guy with a purely proletarian background. You know, I'm a pair of hands. I can do certain things. Please hire me, kind of thing, for a guy with a proletarian background to learn to think in a way that would be, see, I'm doing a little class analysis, quick and dirty here. In a more, what I would call, petty bourgeois way of thinking, where you have this fiercely independent, small shopkeeper who, you know, if they're running their own little operation. So I had the background from six years in this construction co-op to have the illusion that I might be able to start a business and be successful. And so I launched into it in 1991. So I started the business with a fellow that I -- it was a fellow student of mine S and we were both graduating from the engineering school. He insisted that we have the name innovative somehow in the name of the company. And I went along with that. And so we decided to name it innovative power systems. I thought at times that I should have had, you know, solar more explicitly in it. So instead of changing the name of the company, we hit upon the idea of just putting the word "solar" in the domain name. So IPS - solar, you know, and because the web is such a powerful marketing tool, it means that most of the world that interacts with us, you know, interacts with us through the web and they see the solar in our name. And they get the right idea of what we're up to. I have been slowly growing a solar business in the Twin Cities metro area for 20 years now. And it has been slow every step of the way. There's been no point where it felt like a great leap forward. It's been tiny steps. I hired my first employee in 1998. I hired my second employee in 2000. When I started my business, you have to understand my wife had the good job as I went through school. She's a nurse. Good steady income. And her expectation was that when I graduated that I would go find a job as an engineer somewhere and then take some of the earning pressure off of her and maybe she could work part-time. Well, since there was a recession going on, that wasn't happening. I was pretty discouraged about job hunting. And on the other side of the coin, I was quite excited about starting my own thing, but I knew it was going to be a long, slow process. And she was quite irritated with me. She was angry with me for about 10 years of that long, slow process. But one thing that I did, quite soon after I started launching into developing a business, was I wrote down a page of how would I define success for myself? You know, in 1998 or '99, I happened to find that, just tucked in a drawer, and I took it out, and I shared that with her, you know? She cried. She cried because she read that, and she said, "You know, Ralph, I have had these expectations that you were going to actually have a successful business, you know, lots of money, and a trajectory that I imagined." What you define back then has been playing out, but it's success on your terms. And I have to honor that because that's exactly what's happened. My definition of success basically dealt with things like going up my learning curve, becoming perceived as a local expert in my community, helping to organize the local solar community, helping to create some awareness in the local population about what the opportunity was with solar energy, creating market where there was none. You know, these are all things that do not spell, get rich quick. And so, by my definition of success, she felt that I had achieved enough success that it was time for her to kind of get over being angry with me for taking the hard scrabble route. And so, actually, she quit her job as a nurse and became my business manager for a year. One of the things that's difficult about that, I mean, rather than her standing there on the shore yelling me while I'm in a whitewater canoeing situation, you know, sending off the rocks, she was jumping in the canoe with me, figuratively speaking. And that was great. It felt really supportive, really supportive. Like, there was some healing that went on there. And by then we had maybe five employees. And the difficulty was that if we knew, if we could see that we were not going to make payroll next Friday, we were both up that one in the morning worrying about it, not just me. That was a tough one because it felt a lot more fragile. So we had to institute the toothbrush rule, among other things. And our toothbrush rule was, after we brushed our teeth, no more talk about business. And of course, we brushed our teeth right after dinner at seven o'clock, so that, you know, maybe we would get in a habit of not talking about business. But of course, if we really were worrying about where money for payroll was coming from and so forth, with that man, we were still worrying about it. And the toothbrush rule only took us so far. But it was fun to invent creative ways to minimize that difficulty that we were both in the canoe, doing like water canoeing now. She asked it about a year, and at that point, it was pretty obvious that it would feel a lot more comfortable for both of us if she went back to nursing. And so she found a job that she really liked and went back to nursing. And that has felt like her best role. And she has continued to be kind of the rock solid, you know, good income, so that I was able to do what, you know, I feel led to do in my life. One agreement that we have is that I have to honor her for being my partner in that, although I get the glory part where I'm kind of slogging my way through the business world and learning all my lessons. Still, she's my partner in that. Well, it sounds like you've done some good work getting to this point. Talk a little bit about the company. You said you added one employee, and then a second. You know, that was, what, eight years or something into it that you finally added an employee. How's your trajectory gone since then? Very slow, and, you know, the thing is the market for solar energy has been nonexistent to crappy in Minnesota for most of the 20 years that I've been doing the business. And so I have been, I've become very conservative about hiring because it feels disingenuous to hire somebody and then lay them off a few months later when things get a little tight. So when I hire one of the first questions that I ask and the major part of the conversation, no matter how talented the person is, no matter how good of a fit they are, we have to talk about what kind of staying power they have. You know, I recognize that I have staying power because my spouse says, "The good job, what kind of staying power do they have in their life?" Because they may be just wildly excited about working in solar, but we live on what we sell. We don't live on grants. We do live on subsidies. Well, that is to say, incentive programs are huge in creating market. But as a business, we live on what we sell. And so if we do run into tight spots and tough times, I really don't want them to have the illusion that I miss their money bags and I'm going to be able to carry them through that. So it's an interesting conversation I have with the people that work with me because we are all in the canoe and when the canoe hits a sandbar, we all got to get out and push or, you know, people have to find something else to do. So right now I have about 15 people working for me or with me, I'd rather say because we're their colleagues and I honor that. So I have about 15 people. Last fall I had 20, that was the most I've had. So we've gotten spoiled the last few years. Maybe global warming has been good to us. You know, the winters were milder and we were able to work most of the winter and consequently the cash flow was better throughout the winter. This last winter was a real tough one. It just got so bad it felt like a mountain climbing expedition just trying to do a simple job. We came to the point where early in this year we laid everybody off except for the sales staff and the bookkeeper. Some businesses are used to that and I kind of had to swallow my pride and do that too. And since then, you know, by early April we were able to hire most of the people back. And how does your business compare, your solar business, compare to other similar businesses in Minnesota or in the region? We have kind of an interesting situation. I would call it interesting, because I have been trying to put my energies towards growing the market, you know, call it enlightened self-interest. But I see that with the market that's good and brisk, there's more opportunity for my business to be successful and I certainly want that. But with the economic slowdown of the past couple of years, and especially because the construction industry was hit so hard, the electrical union has been a very strong supporter since really the turn of the century for the past 10 or 12 years, they have been increasingly supportive of the solar industry and it's because they, I think, perceive that there's a lot of potential there. There's some opportunity for electricians. So by supporting the growth of that industry, they've been a partner in some of what we've done. But with the construction industry hit so hard, there have been somewhere between 1 in 2000 electricians, highly talented, highly trained, sitting on the bench. What's happened is they've been training electricians and a guy or gal goes through some solar training and says, okay, now I'm ready to get out there and hit the job market. Well, there's a bunch of little mom-and-pop shops that aren't really sophisticated enough to hire them. And so we've got a lot of new businesses coming on the market now. So whereas five years ago, maybe we had 20 or 25 struggling little solar businesses, maybe less than that, maybe 15, now we have 115. And so whereas the market has not grown by a hundred times, the number of players out there has grown tremendously just because there's a large pool of trained people who are not employed. They're not going to sit there on the bench forever waiting for a job. So they're going to hang out there and say, hey, I'm a solar installer too. And so it's a shakeout period. One of the things I've struggled with in the last, let's say, year is what kind of staying power does not only do I have or my colleagues, but what kind of staying power does my business have? You know, having grown in a fickle market here in Minnesota, we haven't exactly built up layers of fat that we could live on. You know, we've been pretty lean. And so I think by force of will that we survived this last winter. I'm glad, Ralph, that you were somehow able to survive the challenging economic ups and downs. But what's your vision of where this is going? You said that you got into solar essentially because of opposing nuclear power. Is that still the central or major motivation for you in doing the solar business? And again, what's the vision of where you're headed? You know, when I was 22, I think that I would have said, you know, we need to do anything to keep nuclear power from becoming a dominant energy source because I could see that, you know, we're going to ignore, let's say, the waste issue as long as we could, but by the time we couldn't anymore, it would be so huge. And of course, the power was all used. Well, I've modified that. I would not be, as a solar installer, I would not be a guy that just categorically no nukes because I see, by virtue of experience over 20 years, 30 years, I see where the technology that I work with may fit in. And rather than argue about that endlessly, I'd rather just make my place in the marketplace. And it's really satisfying to me that the utilities, whom I was really largely opposing back in the 70s, you know, they were the ones that were promoting nuclear power and developing it, the utilities are really coming onboard as well as the IBEWN, let's say, micro. In support of solar energy, the utilities see where it fits in. You know, hot summer days, the sun is shining and that's what's making it a hot summer day. And so you've got such a direct correlation that you just can't help but say, you know, we should be using that and we have the technology to use that now to offset that air conditioning load. So I would modify my position and say that I'm all for nuclear power but, and sort of like the Obama argument, that we have some issues that we really have to work out before we run, you know, headlong into deployment of nuclear power. One is, what do we do with the waste? If I might quote George Crocker, you know, one of my colleagues from back in the 60s and 70s who was a big opponent of nuclear power, if we could all agree that we're going to keep the waste here and we will leave the air for our progeny to safeguard and keep out of our environment until it's gone. And that will be millions of years then let's sign on. And if we can't come up with the solution for that, let's hold off. And so although I'm a supporter of nuclear power in theory, I think we have some issues to work out that we're going to, it's going to take a while for us to work them out. So let's work them out. And in the meantime, the sun is shining every day. So let's go ahead and use it. I guess that's more the attitude that I have now. There's so much going on right now in nuclear power and in solar energy that I would not predict with certainty that one is going to be in one camp and the other is going to be in the other. Let's let them both work out the issues. With solar power, it's of course the front end cost. And one of the big issues because of that is financing. Not only can we make it cheaper, but can we figure out how to finance it? I think there's a growing agreement in the solar community and then the utility community and then actually the financial community that it's possible to position solar energy in the same place in terms of our investment and how we invest. The same place where utilities fit in because when utilities built the nuclear plants, they were taking out 40 year bonds. That means that they were basically getting into debt when it was going to take 40 years to pay off in order to build those nuclear reactors. Now when we talk about solar power, "Gee, what's the payback?" Well, the payback might be 30 or 40 years and people are shocked and they go, "Oh my God, how could I ever do that?" Well, you're putting it right squarely in the same timeframe that nuclear power plants fit into. And utilities, as long as they were given certain perks by the government, let's say good terms, smaller insurance requirements and that sort of thing, they were able to go out and get the financing to build nuclear power plants. Well, if we position solar the same way in our smartest board of energy sources, you can fit it right in that same place. How we do infrastructure in this country is we set up financing mechanisms to pay for the front-end costs so that we can afford the technology and then we spread those costs out over time and it gradually pays off. Well, if we can see, are we clear to doing that with nuclear power? Why can't we see, are we clear to doing that with solar? And actually, the economics of scale says that as we scale up solar, the payback has come down from 100 years is what it was when I went into business in 1991, that it might be 25 years now. That's with no incentives. You put the incentives in place that the government did. You know, the tax credits and the utility incentives that are coming into place. And for the business customer, it's under five years. That's eminently doable. Only in the worst of economic times is it impossible to pay for something that's going to pay back in five years. And so the economic hurdle is really getting dealt with. I think the other hurdle in Minnesota is that we, in the 1970s and '80s, what we were trying to do was heat our homes. Now, if you look at when the sun is the strongest and when do we need to heat for our homes, there's sort of an inverse relationship. And so we kind of got into a way of thinking about solar energy that, well, it doesn't work too well in Minnesota because, you know, it just didn't pan out when we came to heating our homes. Well, if we're comparing it to air conditioning in the summertime, that's a lot better comparison. Or even something as simple as heating water. You know, we actually use more hot water in the summertime. That's because we sweat, so we do more laundry, we take more showers, we have more use of hot water. That's a perfect fit for the solar resource in Minnesota. Sure, we need a boost, you know, in the winter when we get a lot of cloudy days and short days and it's cold and all that. So there's an opportunity for a partnership there between two technologies, you know, natural gas or propane or electricity on the one side. That's the fossil fuel side. And then solar, you can position solar as a way to stretch out our natural gas supply. I like to ask people, how long did the Roman Empire last? Let's say 500 years. How long did the British Empire last? Maybe 300 years. How long has the American Empire lasted for? If we clock in at around the turn of the 20th century, that's 100 years. That's not very long. And if it's based on cheap fossil fuel, how long is that American Empire? Our American Empire are going to last. If we expect it to last more than 50 years, then we've got to be figuring out ways of stretching out our fossil fuel supplies, not gobbling them up faster and faster. So we really ought to be positioning solar energy as a way of stretching out and ultimately replacing. But that might be 200 years from now or 150. When we really do have maybe better technologies for storage so that we can use that stored solar power in the nighttime and in the winter as well as when it's available. And as far as my vision for my business is by selecting good applications and not doing really marginal ones, we want to build a better track record for solar energy. You know, if we set our customers expectations according to what's realistic, rather than what's in somebody's pipe dream, we get you a good application, heating water or generating electricity, and then the system really fulfills on that expectation. We're building a better reputation for solar energy, a better track record, because we're going to have a trail of happy customers. In the long term, that's going to build the market. It's going to build the market with integrity for solar energy. That's my vision for my business and what it can contribute, let's say, over several decades. It's interesting, Ralph, to hear your journey into solar business over the decades, because it sounds like you started off, perhaps, as the proverbial starry-eyed idealist, and that you've turned into a hard-headed, pragmatic businessman. Do you look back at yourself, kind of shake your head and say, "I was so young?" Oh, for sure, but, you know, we could touch on politics, too, and I would say that for a long time, I would have thought that the progressive politics of the Democrats was where I solidly saw myself, and over two decades of owning a business, I would say I've moved more towards the center. And actually, I would consider myself a greened who would be fiscally conservative and social liberal. Where that puts me, though, is I get irritated and annoyed with Democrats who maybe want to throw a little money at solar and say they did something for solar, but maybe haven't put their attention to policy work, which would actually be more fundamental to building the market. And what I saw maybe a couple years ago, or a year ago when the Republicans took the legislature, with it maybe we had an opportunity for making that a healthier conversation, with a group that I know is not going to just go throwing money at it, they might be willing to back up a couple steps and talk about better policy. You know, what's a good long-term way to build that relationship between fossil fuels and solar power, or renewable energy, and we'll have policy that is well-crafted to encourage people to do that. Right now, I'm kind of annoyed with the Republicans, however, because I think that they've just gotten into that budget-cutting frenzy and maybe some favorite pet issues that really have sidestepped the opportunity to build long-term policy. But I think in the next year, that'll even out depend a little, start swinging the other way. I can't quite say that being in business has made a Republican out of me, but it has definitely made me more aware of the impact of different kinds of legislation on me, on my business, and let's say different patterns in the legislature. So my politics has, I think, gotten more sophisticated, and I wouldn't just put myself in either camp or any camp. It needs to be well thought out, whatever it is. If you've just tuned in, you're listening to Spirit In Action. I'm your host, Mark Helpsmeet, and this is a Northern Spirit Radio production originating via WHYS LP in Eau Claire, Wisconsin. Check out northernspiritradio.org to find our broadcast locations, listen to all of our broadcasts for the past six years, and to post a comment or contact us. You hear me, and I'd love to hear from you. We're visiting with Ralph Jacobson, founder of one of Minnesota's Enduring Solar Power Companies, Innovative Power Systems, website IPS-Solar.com. Ralph is also president of the Minnesota Solar Industries Association, so he brings with him a good deal of expertise about solar technology and solar business in the far north USA. You were just talking, Ralph, about some of the criteria that you've come to value in your decision making. Behind that, however, what's your motivation currently? Why do solar now? I mean, you started out in alternative energy because you wanted to oppose nuclear power, and maybe from a kind of general liberal opposition to fossil fuels. What would you say now is your motivation? Why is solar important now if you are no longer so strongly opposed to nuclear power and fossil fuels? Where does this fit in terms of your spiritual outlook or your big picture of creation? I'm going to launch into that with maybe something a little more down to earth or immediate, which is that because I went through a training program and worked in the solar industry early on in the 70s and 80s, and in the 90s I was still attempting to do that, I hadn't given up. I kind of saw myself as a bridge builder from one era to another, that if I could point out some of the mistakes that we made in the 70s and 80s to the next generation, maybe we could avoid them this time around, and I do see that I have that kind of a role. I do a lot of teaching now, and whenever I speak about it, I try to point some of those things out so that it moves back into the group mind rather than the group mind having to put their foot in each pitfall all over again. Well, solar energy, I think, is a lot more gentle on earth than most of the other things that we do. I guess I've always had, let's say, a sensitivity. I mean, when I was a kid, I remember having some experiences with Native Americans, and sort of being sensitized to their view that the world had changed so utterly from the world that their forebears lived in to the world that we were now living in, and that there was a great loss. So I think ever since I was a kid, I felt a great sense of loss, that we tend to commodify the world. I mean, with slavery, we commodify human beings. With animal power, we commodify animals. With fossil fuels, we commodify the fruit of the earth. With rampant housing development, we commodify the land. And I think that's a way of thinking that I, let's say I'm allergic to, solar energy gives me an opportunity to create something that is more thoughtful, that is to say that I've personally been able to put some thought into. How do I want to do this? How would I like to see this unfold? How can I have those conversations with the people around me, with the people I work with, so that maybe we build some of that awareness into our work culture? And so I have a very, what's called, consultative management style, or leadership style. I would be the last person to try to say that I know all this stuff, and so now we're going to do it my way, because everybody has their own perspective, and I want to make sure that I understand theirs before I launch into something new. So I think that this awareness of, let's say, our negative impact on creation, put a real passion in me to slow down and look at my impact on creation. A little bit like the Amish, who I've always admired because they don't just lock, stock, and barrel go for the next new thing. If they think about it, then they don't just reject it out of hand. They say, "Well, this is going to have an impact on our culture." So let's look at what that impact is. And well, we're going to have electricity in the barn because we milk cows and we need coolers, and we're not going to write bicycles to get coolers. But we're not going to have it in the house. Thinking about my technology means that I look at solar power, and I look at the proclivity of my society to say, "Well, gee, if solar power is so great, let's just start doing 100-acre systems all over Minnesota and just start covering the farmland with solar panels." Thank you very much. I'd rather see the land either farm or forested or wetlands. You know, let's slow down here. How many thousands of square miles of rooftop do we have? Well, my allergy to that way of thinking about commodifying everything means I don't want to commodify the land. I don't want to commodify the solar panels. I want to think about how we deploy them. And if the roofs are there, if it makes sense, let's put them on the roofs. Maybe it's easier to just put them on the ground. But what do we do about our open space? What do we do about habitat when we're just putting them all over the land? So that's just one example of a way that I see my kind of underlying desire to have right relationship with the rest of creation. That's where it shows up in how I want to do my business. And so I might see other business people just taking solar and taking off with it and doing the big systems that cover hundreds of square miles. That's not what I'm going to do. That's not the business model I want to pursue. And I'm going to exercise my voice and say with the word of caution, let's think about that. Because if we're doing this because we want to be gentler on the earth, then let's follow through. Is there any reason to hurry up, you know, to rush this? Because we passed peak oil or because of global warming or something else? I mean, it seems like the market is moving at a fairly slow. I mean, that's an understatement, fairly slow pace towards adopting alternative energy models. Is there a reason that we really should, you know, put the pedal to the metal? Well, from the point of view of building a good solid market and building a good solid business, I think I'd rather see it happen. Let's say in a planned way, what I've seen in the last couple years is a lot of chaos moving into the market where I thought the market was going to get better and, you know, we'd have more business and we have, my business has grown. Still, I've got 120 competitors now as opposed to 20 competitors. And that means that there are a lot of desperate people who are just trying to figure out some basic things about running businesses and they're making, you know, let's say they're making that well thought out moves. They're underbidding on projects. Maybe they get them and I miss out. And then they eat their shorts and they go out of business. So what's the fallout of acting quickly? If we have more planned approach and we say, okay, here's a target and we're going to make these modifications in the industry and the prices for the solar are going to come down like at this rate and the price of capital is going to behave this way, you're going to have things that are a little more sure things and you're going to be able to grow your business more easily if you can count on a sure market. Hiring risk decisions are big risk in a real tumultuous market and with a lot of people out of work. We want solar to be a jobs program, but it's hard to make it a jobs program if there's a lot of chaos in the system. It just means you've got a lot of companies rising up and then crashing. You've got the boom bus cycles going on, which I don't think is good for many people. The way we use capital and the way the Chinese use capital here, the US government has the power of the printing press. The Chinese government has the printing press. They can both print money and put it into the economy. But I think that for the last 50, 60, 70 years, the way the Chinese have been evolving is when they use capital, they're doing it to create employment. Increasingly, I think that you can look at the way that they spend their money, they're doing it to create jobs because they've got the Tibetans, the Whiggers. They've got 50 different ethnic groups on their margins on the fringes that they've got bad relationships with. They've got some big-time pain there and they recognize that unemployed human beings are dangerous. We do not have that experience, either it goes over our heads or we just have not had to deal with issues as bluntly as they have. Consequently, they look at how they're going to build industry as a way of putting people to work, creating wealth in society. We use capital to preserve wealth. The rich get richer, the poor get poorer. We see that going on right now. You look at the way that the renewable energy industry is growing, just it's mushrooming in China right now. It's not in the United States. As a matter of fact, they heard an analysis just yesterday, and this was by an industrialist. A Minnesota-based industrialist, their product is used by the Chinese, the Germans. It's used all over the world to make solar cells. He's paying attention to the world market. What he's saying is that the United States and Europe, because we do different things with our capital, are going to become increasingly irrelevant. The Chinese are going to become preeminent in the solar industry in the world. They're going to be the ones that are going to be creating market and calling the shots and saying how the market is going to develop. Why? Because they've been practicing a planned economy for the last 50 years. We have not. We've decided that lies affair is the way that an economy grows best, that the free market do what it will. What I'm saying is maybe we could take a couple lessons from the Chinese and be more deliberate and more planned about how we grow an industry like solar, and that we really have to look at chaos as our enemy. I think I've understood, Ralph, all that you said about capital markets and a good way to grow a business and that kind of thing. But I still have the impression you either didn't answer my question or maybe you answered it implicitly and so you don't need to explicitly answer it. My question was, is there any emergency situation, global warming, peak oil, or whatever, such that nationally, and I don't know that this is an individual company decision, but nationally we should massively retool in the direction of alternative energy. You talked about good ways to build a business and if there's a national emergency going on that we're going to hit a wall in five years, all the proper theories and approaches to building a business probably don't make sense. That is when you've got a war going on, you kick into an alternate mode of retooling. I think there are a lot of people who believe we're in an emergency situation and that it's time to bypass the normal operational mode and nationally support our industries in retooling massively quickly and redoing things. So implicitly, maybe you said, no, there is no such emergency. There's no reason to do a radical retooling. Is that your point of view? Well, you know, on the one hand, I do feel a sense of urgency because of climate change and also because there are a lot of unemployed people. And I would love to be able to put them to work quickly. On the other hand, I think business, we should set targets and goals and be more methodical about growing the market. So my question is, should we be methodical even though that may mean we may get this industry ramped up by the time it's too late to do any good for ourselves? Well, now you've hit upon another issue that came up in a meeting earlier this week, which is that with the technology that is discretionary, like solar energy, it seems to me that over time what I've noticed is that no matter how rich the incentives, you're only going to get about 5% at the most of people will start to use it. Those are the early adopters. If you really want to speed it up the process, you need a catalyst. The catalyst, you could call it pain. Pain in the wallet, you know, high energy prices, that's one thing. Or if we lived, if Minnesota actually had coastline and we were watching the ocean level rising and our coasts moving inland, there'd be a sense of urgency. But in Minnesota, I guess one of my gripes is that I think we still have kind of a feeling of entitlement about we get to continue using fossil fuels. Maybe those people out in California or those people in Germany don't get to do that, but we do in Minnesota because we're smart and we're a little more clever and we figured out how to get a really good system and we deserve it. That seems disingenuous and I think that, you know, any thinking person would say, "Well, of course we shouldn't feel a sense of entitlement about that." We just happen to be lucky. If that's the case, then when's our luck going to run out? And what's it going to look like? What is pain going to look like around climate change to a Minnesota as opposed to somebody in Florida? Is it going to look like an environmental refugee coming in and maybe finding it easier to find a job? Then you or I or my kid, is it going to look like changed growing season? Or is it going to look like the vouchtabin in Germany in all the death of certain kinds of trees because they don't get cold enough in the winter and so the insects and disease take them out? What's it going to look like? And I'm going off on a little bit of a sidetrack here, but I think this relates because I am quite frustrated that in my community, solar energy is taken so lightly, not taken seriously by so many people and it's discretionary and it's a thing of the future. You know, people have the luxury of saying that. And if we were experiencing a little pain, you know what tax policy does? It doesn't have to create a lot of pain, but when it hits you in the wallet, you respond and you go the direction that the tax policy is telling you to go in terms of your economic behavior. Well, so I think we could use what I call price signals in the marketplace to create a little bit of pain to kind of just make us think, well, maybe I should go check that incentive program for solar out or for energy efficiency out. And without that price signal, that little bit of pain, goodness in the wallet, we just don't have the incentive to do that. Okay, to be more direct about answering your question, there is an explosion of technology right now, of creativity even though the Chinese are the ones that mass produce. But we have so many different chemistries for solar and ways of configuring it. There's just an explosion of bright ideas right now. And so you're not going to see one type of solar panel being deployed. You're going to see ten different ones and some of them you won't even recognize. Maybe it'll be clothing that somebody's wearing. Maybe it'll be the hood of your car. Maybe it'll be the skin on the building that just looks like the skin of the building. And there'll be different ways of using it, storing it, smart grids. I don't know if you've read Thomas Friedman, Hot Flat and Crowded, but I think he lays out a really good vision for, you know, what that might look like. So I think that it is accelerating and there is a lot of chaos. And so maybe I'm just venting a little bit emotionally and saying, "I ruined the fact that so much chaos comes with a bigger market." So there are two sides to it. One is that there's an explosion of technology which is going to filter into how we live. And then on the other, I think there's some thinking about how do we create a little bit of pain to steer behaviors? We've got the rising price of gasoline, of oil in general, which I think is coming through in terms of all forms of energy. Electricity, I know mine has gone up. Isn't that the pain, the impetus we need to have the market go the direction you'd like to? And what's the essential ingredient that's missing? And why isn't your business just booming? Because obviously it's clearly needed. Well, Mark, my business is booming. You know, ever since I started doing solar energy systems, design and installation, mine market has been people with money and ideals, or businesses with money and ideals. So where there's a really good cash flow and the person or the business can afford to, let's say, by being governed by their ideals, they will. But that's a small and capricious market. You know, we hear the question regularly about payback. So what's the payback? What's the payback now? You know, is the payback getting shorter? Well, the people who actually buy solar energy systems from me have never really had to ask that question because they can afford it. And what they're buying is a smaller environmental footprint. And as soon as we turn that system on, they have a smaller environmental footprint. And so they're getting what they paid for, and they're happy. It's a little different way of thinking. It's almost like if you have to ask about payback, you probably can't afford this system. Well, then, what I think you're saying is that solar isn't to the point yet where it makes sense economically. Is that what you're saying? No, I'm saying our society is not to the point where they can think about a radically different approach to how we spend our money. People are willing to go away into debt to buy a nice car. So why are they not willing to go away into debt to buy a nice supply of electricity? Some people do, but it's not many. Are you hopeful overall about the situation, about the progress? And again, this is maybe a little question about your vision. Where are we headed in 20 years? What will our landscape look like energetically? Over the next 10 years, I'm looking forward to quite an amusing show, which will be the two 900 pound gorillas in the energy marketplace fighting it out for market share. That is the oil companies who have traditionally been the ones to fuel our fleet of vehicles and the electric utilities, which is looking to be the new one fueling the American fleet of vehicles. And so, of course, there's a huge partnership there potentially between my industry, the solar industry, and utilities, because if they can gain market share, charging vehicles with electricity rather than people driving gasoline powered vehicles, that means they're going to be pulling some of that market in their direction. Now, if you think about who are the people who are going to be buying electric cars, and how do they think in the next 10 years? It's people who want a smaller environmental footprint. Those are the people who are going to be buying electric cars while they're cheaper than a gasoline car or, let's say, until whatever the downside is less. So, you give those two factors, the fact that it's people who want a smaller environmental footprint, and it's the utilities that want to provide them with the power. And I would say there's a partnership, a natural partnership between the utility industry and the solar industry to satisfy that market. But people are going to be demanding, at least those electric car drivers, electric vehicle users are going to be demanding clean electricity, by and large. Well, Ralph, you've given us a lot of food for thought, a lot of issues, in terms of pragmatics, ideals, economic forces, that'll drive solar process. It sounds like you've gone through quite the transformation yourself, still pursuing your ideals, but doing it may be in a way that you can come closer to achieving your ideals. Is that how you think of yourself? You know, I'd have to say that I do struggle. My self-identity does take beating sometimes. You know, we have our upturns and our downturns. You know, when, let's say I have some competitors come in and snatch some projects away from me, or I have been teaching classes and then somebody else comes along and has a better idea or a different idea. You know, I think, well, maybe I've played my part and I'm washed up and I should, like, go, you know, get involved in something else now. But then people will come up to me and say, "Boy, Ralph, you are a real pioneer. You've been at this for 20-some years and have paved the way for me to even think that I could come in and do this." And, you know, that is really, that voice me up when people do something just as simple as acknowledging that I've been doing it for a long time. It lifts my spirits. The pioneer thing, though, if I've made it from being, let's say, a person that comes into an already-going organization and wanting to improve it, I've made the transition so now that I think of myself more as a pioneer who can start something, take a concept or write an idea and, you know, get a group of people excited about it and start to make it manifest, I have to really change the way I thought when I started the business. A lot of us, the way we would look at our lives is when I have achieved a certain level of, let's say, prosperity, then I'll be able to do what I want to do. Then I can quit my job and then go do what I really want to do. When I was starting this business, I kind of had to get myself into that way of thinking. You know, I'm in my 40s now, and I was back then. I'm not going to wait another 20 years, you know, working, doing something that maybe I'm not that excited about before I really launch into what really gets my passion. And so I had to start thinking that I've already got resources. So that kind of got into thinking of myself not so much as a young idealist or an old jaded guy, but somebody that's accumulated enough life experience to be able to apply it in a wider variety of situations. One thing that I'm really excited about right now is building bridges from my industry, that is the solar industry, to communities of color. It's the kind of thing that the Green for All organization, Van Jones, and some of his colleagues, you know, have been doing, where we look at the high unemployment among African Americans, for instance, and just say, there could be a lot of solar going on in those parts of town and those neighborhoods. Let's get some people organized there to be involved in this. Let's do some outreach. So that's kind of where I'm headed next with, well, my ideals. Well, thank you, Ralph, for your persistence and for all the learning you've gone through, the refining and the rededication you've done to your ideals. And thank you for joining me for Spirit in Action. Mark, it's been really fun and thank you so much for letting me just unwind and speak off the top of my head. My guest for today's Spirit in Action program was Ralph Jacobson, founder and owner of Innovative Power Systems, and you can find them at ips-solar.com or follow the link from northernspiritradio.org. We'll finish off today with a bit of anti-nuclear, pro-alternative energy music, maybe of the sort that inspired Ralph Jacobson into his decades in the solar power business. This is Holly Neer, and the song is called Simply Power. ♪ ♪ Just give me the warm power of a sun ♪ ♪ Give me the steady flow of a waterfall ♪ ♪ Give me the spirit of living things as they return to play ♪ ♪ Just give me the rest of power of a wind ♪ ♪ Give me the comforting flow of a wood fire ♪ ♪ But won't you take all your atomic poison power away ♪ ♪ Everybody needs some power untold ♪ ♪ To keep them from the darkness and the cold ♪ ♪ Some may seek away into gain control ♪ ♪ And it's fallen so ♪ ♪ We keep selling our lives ♪ ♪ I know that lives are at stake ♪ ♪ Yours and mine and our descendants in time ♪ ♪ So much to mine ♪ ♪ So much to lose ♪ ♪ I think that every one of us has to choose ♪ ♪ Just give me the warm power of a sun ♪ ♪ Give me the steady flow of a waterfall ♪ ♪ Give me the spirit of living things as they return to play ♪ ♪ Just give me the rest of power of a wind ♪ ♪ Give me the comforting flow of a wood fire ♪ ♪ But won't you take all your atomic poison power away ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ The theme music for this program is Turning of the World, performed by Sarah Thompson. This Spirit in Action program is an effort of Northern Spirit Radio. You can listen to our programs and find links and information about us and our guests on our website, northernspiritradio.org. Thank you for listening. I am your host, Mark Helpsmeet, and I welcome your comments and stories of those leading lives of spiritual fruit. May you find deep roots to support you and grow steadily toward the light. This is Spirit in Action. ♪ With every voice, with every song, we will move this world along ♪ ♪ With every voice, with every song, we will move this world along ♪ ♪ ♪