Energy Generation: Today's Rising Cottage Industry
It's not news that infrastructure in this country is hurting... badly.
One of the biggest and potentially most critical prongs of this issue is our power grid — the system of power stations, transformers, and distribution lines that bring electricity to the farthest reaches of inhabited land.
Built mostly in the post–World War II era, this incredibly complex network is responsible for connecting thousands of power plants to more than 150 million customers through 5 million miles of power lines.
And the price tag matches the size of the grid itself.
According to a report from the International Energy Agency, as much as $2.1 trillion of investment will be needed by the year 2035 just to keep our existing systems online and capable of supporting a demand for power that grows daily.
And the main problem facing it today is age.
Crumbling Infrastructure... Mounting Costs
As cited in a 2013 report from the Department of Energy, power grid outages in the U.S. have risen by 285% since records on blackouts began in 1984 — an increase driven by natural factors such as weather but also stress fatigue and demand overload.
The problem, however, isn't growing linearly as time progresses. Pushed by age-related failure rates as well as constantly increasing demand (expected to grow by 30% over the next 25 years, despite a near universal push for more efficient, "greener" design and construction techniques in new buildings), that $2.1 trillion sum begins to look more and more reasonable as we stretch our outlook out to the 2030s and beyond.
Whether the U.S. will have the public funds, the engineering prowess, or the logistical know-how required to pull off this transition without any catastrophes is questionable — a fact that's been worrying industry analysts for years.
Today, however, there is an entirely new trend emerging in the world of energy generation, and it's threatening the status quo in a way we haven't seen since the advent of centralized power distribution.
And it all has to do with de-centralization.
Making the Grid Dependant on YOU
Announced in 2015, the Tesla (NASDAQ: TSLA) Powerwall, on the surface, is nothing more than a big lithium-ion battery, designed to be hung on a garage wall in a typical single-family home.
The idea behind it isn't hard to understand.
Much like a water well on a property can store and supply water to the residence on demand, regardless of whether local water mains are running, the Powerwall was designed to allow homeowners to store energy for usage in the event of a blackout, as well as to time their energy purchases to take advantage of lower prices at non-peak usage hours.
It's a cool feature to give homeowners some freedom and peace of mind. But when coupled with a local power generation system, such as a small wind turbine or solar panels on the roof, the Powerwall suddenly provides the missing puzzle piece for what is essentially a small, private power plant.
With power generation now working in unison with the local power storage, homeowners can produce their own electricity for their own consumption, as well as store and even sell the excess back to the power company through existing power lines.
The benefits are twofold: The obvious cost savings and even profit potential for homeowners will be the initial carrot for prospective buyers, but, if implemented on a mass scale, it's the second effect that has the potential to disrupt and forever change the power grid as a whole.
With hundreds of thousands and eventually millions of users producing, consuming, and distributing their own power, no longer will the national power grid have to be dependent on a few thousand centralized power stations.
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And the benefits only stack up from there, as aging, high-polluting fossil fuel plants that still represent a huge chunk of our collective energy demand will be allowed to transition out of service without causing potentially dangerous power interruptions.
Compared to $2.1 trillion in public spending to overhaul and modernize the cumbersome beast that is currently responsible for running the homes and businesses of those 150 million-plus customers, the crowdsourced solution is elegant, realistic, financially incentivized for the buyers, and, most important of all, sustainable.
Tesla founder Elon Musk is largely to thank for kicking off this new trend in domestic power storage and generation, but, since his announcement just two years ago, competition has started to rear its head.
There is one particular company that stands out among this crowd, but unless you work in the battery industry or an industry where large batteries are crucial, such as automotive, you probably haven't even heard of it.
It's small and little known, but it's already disrupting the great disruptor itself: Elon Musk's own Tesla Motors.
The company recently stole one of Tesla's biggest clients away — a major carmaker currently in the process of expanding its line of electrical vehicles.
And just last week, it reported its first mass order for its AC Battery for the Australian residential market.
This company is getting ready to take on one of the biggest tech brands in existence in one of today's fastest-growing sectors... and it's already got a major head start.
Get the full picture on this technology and the groundbreaking tech firm that's about to turn the industry upside down.
Fortune favors the bold,
Coming to us from an already impressive career as an independent trader and private investor, Alex's specialty is in the often misunderstood but highly profitable development-stage microcap sector. Focusing on young, aggressive, innovative biotech and technology firms from the U.S. and Canada, Alex has built a track record most Wall Street hedge funders would envy. Alex contributes his thoughts and insights regularly to Wealth Daily. To learn more about Alex, click here.
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