May 28, 2024

Green: Study Finds Solar Panels Increase Home Values

DESCRIPTIONJack Smith/The New York Times When Bill and Suzann Leininger put solar panels on their Escondido, Calif., home a few years ago, they most likely enhanced its resale value, a new study says.
Green: Living

All those homeowners who have been installing residential solar panels over the last decade may find it was a more practical decision than they thought. The electricity generated may have cost more than that coming from the local power company (half of which, nationwide, comes from burning coal), but if they choose to sell their homes, the price premium they will get for the solar system should let them recoup much of their original capital investment.

That is the conclusion of three researchers at the Lawrence Berkeley National Laboratory, who looked at home sales — both homes with photovoltaic systems and homes without — in California over an eight-and-a-half-year period ending in mid-2009. The abstract of their study states, “the analysis finds strong evidence that California homes with PV systems have sold for a premium over comparable homes without PV systems.”

The premium ranged from $3.90 to $6.40 per watt of capacity, but tended most often to be about $5.50 per watt. This, the study said, “corresponds to a home sales price premium of approximately $17,000 for a relatively new 3,100-watt PV system (the average size of PV systems in the study).”

And the bottom line: “These average sales price premiums appear to be comparable to the investment that homeowners have made to install PV systems in California, which from 2001 through 2009 averaged approximately $5/watt.”

If the California findings can be extrapolated nationally, it would mean that the owners of 139,000 homes can collect a premium at resale time. For those who promote photovoltaic systems, it is a second line of defense against the argument (and reality) that the initial cost of installing the solar means using it for many years before the savings on electricity are enough to pay back the investment.

But there is a caveat. Homeowners who install solar on existing houses get nearly three times the premium of homeowners whose house came with solar panels. The study speculates about the reasons, suggesting that “new home builders may also gain value from PV as a market differentiator, and have therefore often tended to sell PV as a standard (as opposed to an optional) product on their homes and perhaps been willing to accept a lower premium in return for faster sales velocity.”

Residential solar installations have been growing at an average 51 percent rate annually for the last five years, according to Larry Sherwood, a consultant to the Interstate Renewable Energy Council, a nonprofit group that works on helping interested parties navigate various legal, technical and economic aspects of renewable energy. As of 2010, the total capacity of these systems was 677 megawatts, he said. (His most recent report can be found here.)

And Jared Blanton, a spokesman for the Solar Energy Industries Association, reports that in 2010, the residential market was 30 percent of the national solar PV market, above the utility market (28 percent) but behind commercial installations (42 percent).

A news release on Thursday from Lawrence Berkeley National Laboratory said that over all, approximately 2,100 megawatts of grid-connected solar photovoltaic systems (residential and nonresidential) have been installed across the country, almost half of this total in California.

The growth in residential solar systems, of course, is taking place on a tiny base. About a tenth of a percent of all households have photovoltaic systems, and all solar systems combined — industrial and residential and everything else, as well as concentrated-solar plants in the California deserts — amount to about two-tenths of 1 percent of all renewable electricity in the country, according to the federal Energy Information Administration. Renewable electricity, in turn, makes up about 8 percent of the electricity used in this country.

But the backers of solar power might talk about thousand-mile journeys beginning with a single step.

Article source: http://feeds.nytimes.com/click.phdo?i=ede0ee83e37a54bc46b7936111475e9d

Asia-Pacific Governments Play Catch-Up on Minimum Wages

KUALA LUMPUR — Eight hours a day, seven days a week, a 40-year-old woman in this sweltering capital sweeps the footpaths of the public housing development where she lives. In the afternoon, she returns to her room, where she and four of her children, ages 5 to 15, sleep on a double mattress on the floor.

There have been nights when the children have cried after she could not afford to buy food; her monthly salary of 450 ringgit, or $149, often runs out before the next payday. She has already given up one daughter for adoption because she could not support her, and she relies on a church group to provide her with some food staples and help with the children’s school fees.

The woman, who insisted she not be identified for fear of losing her job if her employer found out she had spoken to a reporter, is one of the vast network of working poor in Malaysia. But these days, there is at least the possibility that her life could improve, now that the country has begun talking about a minimum wage.

The government, which recently mandated a base pay for security guards, has pledged to submit broader legislation to Parliament by June. It plans to establish a National Wages Consultative Council to study various options, including a universal minimum wage for all workers in Malaysia.

If the plans bear fruit, Malaysia will join the growing list of Asia-Pacific governments that in the last decade have been playing catch-up with most of the world, either by introducing a minimum wage or by stipulating new forms of minimum wages for specific industries or regions. According to the International Labor Organization, those governments include Indonesia, Mongolia, Vietnam, China and Cambodia.

Hong Kong is among the most recent to join the list. In January, it approved legislation to introduce a minimum hourly wage of 28 Hong Kong dollars, or $3.59. The law is scheduled to go into effect May 1. According to John Ritchotte, a labor specialist at the International Labor Organization’s Asia-Pacific office in Bangkok, Singapore is now the only country in the region without any kind of legislated minimum wage.

There is, to be sure, considerable variation among these locales, in terms of both the amount designated and how many workers receive it. For instance, Mr. Ritchotte said, Vietnam sets minimum wages by region based on the cost of living; Cambodia has a minimum wage for workers only in the garment, textile and shoe industries; and in China, provinces and municipalities, rather than the central government, set the minimums.

In terms of purchasing power, the most recent International Labor Organization figures available showed that Vietnam’s minimum wage provided $85 a month, compared with $148 in Indonesia, $295 in Thailand and $379 in the Philippines.

The motives behind the legislation also vary. “Rapid industrialization, growing inequality and, in some countries, rising labor disputes have led governments to introduce minimum wages,” Mr. Ritchotte wrote in an e-mail. “In other countries, concerns about stagnant wages or the persistence of the working poor lead policy makers to introduce them.”

In Malaysia’s case, the plans reflect the country’s ambitions to move into the ranks of high-income nations by 2020, which would require the average annual income to increase to about 45,300 ringgit from about 24,500 currently.

It has a long way to go. A 2009 study of 1.3 million Malaysian workers by the Ministry of Human Resources showed that almost 34 percent earned less than 700 ringgit a month — below the official poverty line of 720 ringgit. In fact, the new monthly minimum wage for security guards is only 700 ringgit.

“The bottom 40 percent of households have experienced the slowest growth of average income, earning less than 1,500 ringgit per month in 2008,” S. Subramaniam, the Malaysian human resources minister, said in February at a workshop in Kuala Lumpur organized by the government. “Therefore, measures are needed to narrow this income disparity.”

According to Malaysian trade unions, wages in the country have been depressed partly because of the availability of cheap foreign labor from places like Indonesia, the Philippines and India, particularly in construction and manufacturing. It has long been the government’s goal to reduce the dependence on foreign workers, but there are still an estimated 1.5 million documented foreign workers and as many as one million illegal workers in Malaysia, which has a population of 28 million. Proponents of a minimum wage say it would persuade more native-born Malaysians to take jobs that now only foreigners want.

The Malaysian Trades Union Congress, which represents 600,000 workers, wants to see a minimum monthly wage of 900 ringgit apply to all workers, foreign and domestic, supplemented by a cost-of-living allowance that would vary by location.

Article source: http://www.nytimes.com/2011/04/14/business/global/14wage.html?partner=rss&emc=rss

Studies Say Natural Gas Has Its Own Environmental Problems

Even as natural gas production in the United States increases and Washington gives it a warm embrace as a crucial component of America’s energy future, two coming studies try to poke holes in the clean-and-green reputation of natural gas. They suggest that the rush to develop the nation’s vast, unconventional sources of natural gas is logistically impractical and likely to do more to heat up the planet than mining and burning coal.

The problem, the studies suggest, is that planet-warming methane, the chief component of natural gas, is escaping into the atmosphere in far larger quantities than previously thought, with as much as 7.9 percent of it puffing out from shale gas wells, intentionally vented or flared, or seeping from loose pipe fittings along gas distribution lines. This offsets natural gas’s most important advantage as an energy source: it burns cleaner than other fossil fuels and releases lower carbon dioxide emissions.

“The old dogma of natural gas being better than coal in terms of greenhouse gas emissions gets stated over and over without qualification,” said Robert Howarth, a professor of ecology and environmental biology at Cornell University and the lead author of one of the studies. Mr. Howarth said his analysis, which looked specifically at methane leakage rates in unconventional shale gas development, was among the first of its kind and that much more research was needed.

“I don’t think this is the end of the story,” said Mr. Howarth, who is an opponent of growing gas development in western New York. “I think this is just the beginning of the story, and before governments and the industry push ahead on gas development, at the very least we ought to do a better job of making measurements.”

The findings, which will be published this week, are certain to stir debate. For much of the last decade, the natural gas industry has carefully cultivated a green reputation, often with the help of environmental groups who embrace the resource as a clean-burning “bridge fuel” to a renewable energy future. The industry argues that it has vastly reduced the amount of fugitive methane with new technologies and upgraded pipe fittings and other equipment. Mark D. Whitley, a senior vice president of engineering and technology with Range Resources, a gas drilling company with operations in several regions of the country, said that the losses suggested by Mr. Howarth’s study were simply too high.

“These are huge numbers,” he said. “That the industry would let what amounts to trillions of cubic feet of gas get away from us doesn’t make any sense. That’s not the business that we’re in.”

Natural gas is already the principal source of heat in half of American households. Advocates like the former oil tycoon T. Boone Pickens have also long sought to promote it as a substitute for coal in electricity generation or gasoline in a new generation of natural gas cars. And the development of new ways to tap reserves of natural gas means production is likely to increase sharply.

Two weeks ago, President Obama included natural gas in his vision for America. Clark Stevens, a White House spokesman, said that the administration’s energy priorities were not about picking one energy source over another, but about diversifying the nation’s energy mix. “This process will continue to be based on the best science available to ensure our energy sources, including our nation’s natural gas reserves, are developed safely and responsibly,” Mr. Stevens said on Friday.

The ability to pull natural gas economically from previously inaccessible formations deep underground has made huge quantities of the resource available in wide areas of the country, from Texas, Louisiana, Pennsylvania, New York, Wyoming and Colorado.

Such unconventional gas production accounts for roughly nearly a quarter of total production in the United States, according to the latest figures from the Energy Information Administration. That is expected to reach 45 percent by 2035.

But the cleanliness of natural gas is largely based on its lower carbon dioxide emissions when burned.. It emits roughly half the amount of carbon dioxide as coal and about 30 percent that of oil.

Less clear, largely because no one has bothered to look, are the emissions over its entire production life cycle — that is, from the moment a well is plumbed to the point at which the gas is used.

Methane leaks have long been a concern because while methane dissipates in the atmosphere more quickly than carbon dioxide, it is far more efficient at trapping heat. Recent evidence has suggested that the amount of leakage has been underestimated. A report in January by the nonprofit journalism organization ProPublica, for example, noted that the Environmental Protection Agency had recently doubled its estimates for the amount of methane that is vented or lost from natural gas distribution lines.

Chris Tucker, a spokesman for Energy in Depth, a coalition of independent oil and natural gas producers, dismissed Mr. Howarth as an advocate who is opposed to hydraulic-fracturing or “fracking,” a practice associated with unconventional gas development involving the high-pressure injection of water, sand and chemicals deep underground to break up shale formations and release gas deposits. Mr. Howarth said his credentials as a scientist spoke for themselves.

Mr. Howarth included methane losses associated with flow-back and drill-out processes in hydraulic fracturing and other unconventional gas drilling techniques.

Article source: http://feeds.nytimes.com/click.phdo?i=1f2a1509d79617b34345ffb097a2caea

Reuters BreakingViews: BP Fast Becoming a Takeover Target

Almost a year since the Gulf of Mexico spill hobbled BP on its western front, the company finds itself bogged down in Russia. An arbitration court has ruled that BP’s proposed drilling alliance with Rosneft breaches terms of an existing joint venture with TNK-BP. Any resolution will probably be costly.

The fight with TNK-BP is especially damaging because Robert Dudley, BP’s chief executive, once led the venture.

Worse, BP is considering swapping 5 percent of its equity for a stake in Rosneft even if TNK-BP succeeds in blocking the drilling alliance outright. The reasoning is hard to justify.

Add it up and BP looks exposed. Adjust for the gain in global stock markets since the gulf fiasco, and BP’s market value of $146 billion is $75 billion below where it was before the spill.

Even if BP were to be found grossly negligent, the post-tax bill would be just under $50 billion. The problems in Russia, which account for about 10 percent of BP’s profit, justify some additional discount.

Though Shell, known for being ultracautious, would be unlikely to make a hostile offer, Exxon must be tempted. The cost savings from its 1998 deal to buy Mobil were about 10 percent of combined operating expenses. On that basis, an Exxon-BP combination could yield annual savings of $12 billion.

The industry already has cut fat over the last decade, so a more realistic figure may be $10 billion. Taxed and capitalized, this would be worth about $70 billion. That’s enough to pay for a 30 percent premium for BP shareholders and still leave room to resolve the issues over the Russian deal and the gulf spill.

Any deal still looks complex. Antitrust watchdogs would probably require ExxonMobil and BP to sell American refining and marketing activities. The gulf and Russian liabilities remain big overhangs. And there are political challenges for any advance on Britain’s national oil champion.

A deal in the short term doesn’t look likely, but the longer BP’s shares languish, the more the financial logic will overcome other worries.

Not Quite OpenTable

The dot-com sector’s latest crop of I.P.O. hopefuls wants to emulate OpenTable. They are all conjuring up comparisons to the company, a restaurant booking Web site whose shares have risen fivefold since they started trading. While similarities exist, none of the comers can quite match OpenTable.

Don’t blame underwriters and venture capitalists for trying. OpenTable’s $2.6 billion current market value means it trades at an enviable 18 times the $146 million analysts expect the company to book in revenue this year. And the stock fetches 99 times consensus estimated earnings per share of $1.10.

No wonder a handful of companies harnessing the Internet to add a new twist to relatively old business models want to sit around OpenTable. Two already have filed I.P.O. plans: Pandora in the radio trade and Zipcar in the rental-car business. Zillow, the real estate information service, could start an offering soon, too.

All of them may deserve to trade at a premium to their Jurassic competitors by dint of enormous top-line growth rates. Pandora’s annual advertising sales more than doubled in the year through Jan. 31. Zipcar’s top line grew 42 percent in 2010.

But investors sizing them up against OpenTable ought to consider the distinguishing factors. First, both Zipcar and Pandora are clawing most of their revenue away from traditional rivals. That limits the revenue pools they are stealing from. It also means competitors will fight back.

That raises a fresh question about barriers to entry. Zipcar has created a handy network of locations for its car-sharing customers, but Hertz has begun to create one of its own. Pandora’s brand is valuable and the stations its clients create make the service sticky, but it has no exclusivity on the musical content it provides.

OpenTable is in a different class because of the network effect: every restaurant that uses the reservation software makes the service more valuable for the site’s users. And restaurants will be happy to pay fees to OpenTable as long as it generates additional demand.

It’s hard to blame any I.P.O. newbie for wanting to cast itself as the OpenTable of its industry. But with few exceptions, investors should know better.

FIONA MAHARG-BRAVO, CHRISTOPHER SWANN and ROB COX

Article source: http://feeds.nytimes.com/click.phdo?i=1d3f76971ba3b43e7afb4b72f309e84c

Economix: The Census Surprise in New York

Today's Economist

Edward L. Glaeser is an economics professor at Harvard and the author of “Triumph of the City.”

One of the biggest surprises from last week’s release of Census data was that New York City’s population appears to have grown by only 2.1 percent in the last decade, or about 167,000 people. The city’s overall population, 8.175 million, is 200,000 less than the Census Bureau had estimated for 2009.

Unsurprisingly, Mayor Bloomberg is challenging the Census figure and demanding a recount.

The crucial question is whether the Census missed significant numbers of immigrants in Brooklyn and Queens. If the Census total were left unchanged, New York’s population growth rate would have fallen significantly between the 1990s and the 2000s.

At first blush, this decline would seem quite surprising. After all, the city has continued to surge economically. Between 2000 and 2008 (the latest year available from County Business Patterns) payroll per worker in Manhattan increased by 35 percent (7.8 percent in real terms — that is, after adjusting for inflation) to $102,000. Over the same period, national payroll per worker increased by 25 percent (for no real gain) to $42,000.

You might have thought that robust increases in earnings in the economic heart of the city would have pulled in plenty of people.

Moreover, the high prices that persist in New York City suggest that the demand for city living isn’t falling. Case-Shiller data, which captures the metropolitan area rather than the city, shows that the New York area’s prices have risen by 67 percent since 2000 (32 percent in real terms), more than any metropolitan area in the sample except Los Angeles.

We don’t have comparably reliable figures for the city itself, but most data seems to show increases over the decade, as well.

In national perspective, New York’s limited growth is also somewhat surprising. A new policy brief of mine shows that people are moving disproportionately back to areas close to our old ports and to areas that had high wages as of 2000.

But the combination of economic strength and high prices need not lead to population growth if an area doesn’t build many more units. In that case, high housing demand leads only to higher prices — not more people.

The Bloomberg administration has long pushed for more building permits, and there were years during the middle of the last decade when the city was permitting construction of more than 30,000 units annually.

I had thought that all that building activity would lead to a significant increase in the housing stock of the city, but the city ended up adding only 170,000 units over the decade, a 5.3 percent increase.

Typically, population increases by a few percentage points less than the housing stock increases because of shrinking household size, so perhaps we shouldn’t be shocked that New York City’s population grew by only 2.1 percent.

For example, Boston’s population growth of 4.8 percent, the first time the city had grown more quickly than the state since the 1870s, was made possible by an 8.2 percent increase in the housing stock.

The growth of New York’s housing stock in the 2000s was not greatly lower than in the 1990s, when the city added about 200,000 housing units. But during that decade, the population increased far more quickly, in large part because of increased crowding in the outer boroughs.

During the 1990s, New York City’s population increased by 690,000, while Manhattan’s population rose by 50,000. The population of Queens increased by more than 10 percent during that decade, 280,000 people, although the number of occupied housing units increased only by 60,000.

The current 2010 Census doesn’t show a similar surge in the population of the boroughs outside Manhattan, and New York’s growth during the 2000s seems to have been more closely in line with what we should expect from the growth in the amount of housing.

Moreover, the city’s measured vacancy rate increased to 7.8 percent in 2010 from 5.6 percent in 2000, which means 80,000 fewer units being occupied. Increased vacancies meant that the number of occupied units grew less than 90,000, or under 3 percent, which makes 2.1 percent population growth completely understandable.

But this vacancy rate is far higher than the 2.7 percent vacancy rate reported by the 2008 New York Housing and Vacancy Survey, which is one reason why it will surely be part of the dispute between the city and the Census. One question is whether the Census takers made sure that seemingly empty units were actually empty.

One hypothesis is that the immigration-led growth of the 1990s was much slower during the 2000s. The other hypothesis is that the Census managed to miss large numbers of immigrants in the outer boroughs. If there is a recount, we may see which hypothesis is correct.

In either case, the Census count of the number of total housing units is likely to be correct, and that count shows relatively modest growth. Those boom years during the middle 2000s did not expand the city’s housing enough to make the city much more affordable and inclusive, especially in its most attractive neighborhoods.

The Bloomberg administration has worked hard to allow more building, but the recent Census numbers seem to suggest that a combination of slow growth and continuing high prices implies that New York’s barriers to building, such as a complex zoning code and ever more Historic Preservation Districts, are still shutting out families that would like to move to the city.

Article source: http://feeds.nytimes.com/click.phdo?i=ce34b5ce516a1561187a54f312459034

Amber Waves to Ivory Bolls

In other years, American farmers have responded to high prices by devoting more land to staple food crops.

But this spring, many farmers in southern states will be planting cotton in ground where they used to grow corn, soybeans or wheat — spurred on by cotton prices that have soared as clothing makers clamor for more and poor harvests crimp supply.

The result is an acreage war between rival commodities used to feed and clothe the world’s population.

“There’s a lot more money to be made in cotton right now,” said Ramon Vela, a farmer here in the Texas Panhandle, as he stood in a field where he grew wheat last year, its stubble now plowed under to make way for cotton. Around the first week of May, Mr. Vela, 37, will plant 1,100 acres of cotton, up from 210 acres a year ago. “The prices are the big thing,” he said. “That’s the driving force.”

Economists, agricultural experts and government officials are predicting that many farmers, both in the United States and abroad, will join Mr. Vela this year in chasing the higher profits to be made in cotton — with consequences that could ripple across the globe.

“It’s good for the farmer, but from a humanitarian perspective it’s kind of scary,” said Webb Wallace, executive director of the Cotton and Grain Producers of the Lower Rio Grande Valley. “Those people in poor countries that have a hard time affording food, they’re going to be even less able to afford it now.”

Myriad factors determine food prices. Ethanol demand has pushed up corn prices. Wheat prices rose last year when Russia banned exports after drought devastated its crop.

Farmers typically respond by increasing plantings of the most profitable crop. In the middle of the last decade, as food prices began to rise, cotton prices remained low, prompting farmers to switch from cotton to grains and other food crops. When corn prices jumped with ethanol demand in 2007, farmers grew much more corn.

This year, cotton prices are the highest they have been in years, luring farmers despite strong prices for other crops.

The United States Department of Agriculture predicted last month that southern farmers this spring would plant 12.8 million acres of upland cotton, the type that accounts for the vast majority of the crop. That is a 19 percent increase from last year, when farmers grew 10.8 million acres. It also predicted that the acreage for corn and wheat would grow, although the increases would be lower than they might have been without the competition from cotton. On Thursday, the department will release an updated forecast, based on a survey of farmers.

The effect of the cotton shift is expected to be magnified internationally, as farmers in other major cotton-producing countries, like Brazil, also respond to the high prices.

Cotton futures prices reached nearly $2.20 a pound this month on the ICE futures exchange in New York, up from $0.73 a pound last July. The price is expected to fall by harvest time, but farmers said they hoped to get close to $1 a pound.

In the United States, the economics of growing cotton vary according to many factors, including regional differences and whether or not the land is irrigated. Farmers in several southern states said that at a cotton price of about $1 a pound, their profit could be roughly $200 to $500 more per acre than they could earn growing corn or wheat. For 1,000 acres planted in cotton, that means an additional $200,000 to $500,000 profit.

“It’s going to be cotton stalks everywhere,” said Travis Patterson, 44, a farmer near Spearman, who was irrigating one of his fields on a recent afternoon with help from his son Zane, 12, in preparation for planting cotton. “The landscape’s going to change,” he said, describing a countryside blanketed with the white of cotton rather than the more familiar green and gold of corn.

Mr. Patterson expects to plant 1,500 acres of cotton this year, up from 600 last year. He said the frenzy was so intense that even cattle ranchers were talking about growing cotton.

Farmers say they have no choice but to plant the crops that give them the best chance of making money. They face many uncertainties, and their profits can be wiped out by bad weather, rising costs for items like fertilizer, fuel or seed, or unstable crop prices, which can plummet as rapidly as they rise.

The National Cotton Council expects substantial increases in all cotton-growing states, including large jumps in North Carolina, Mississippi and TennesseeBut Texas is the nation’s biggest cotton producer, and will have by far the biggest increase in acreage.

The shift is particularly noticeable in the Texas Panhandle, where cotton is a relative newcomer. Traditionally, the region was too far north and the growing season too short for cotton. But within the last decade, hardier varieties were introduced and slowly the crop caught on. One reason for cotton’s growing popularity is that it takes far less water to grow than corn. Panhandle farmers tap into the Ogallala Aquifer, but that water source is being depleted and farmers face looming restrictions on water use.

So much cotton is going to be planted in the Panhandle this year — some counties expect at least double the acreage — that there has been talk of a shortage of seed for the most popular varieties.

“We’ve never seen anything like it,” said Leighton R. Stovall, the general manager of the Moore County Gin, north of Dumas, Tex., a facility that cleans and bales newly harvested cotton. Workers at the gin are finishing the foundation of a new building, part of a $6.5 million expansion that will double the facility’s capacity.

Mr. Stovall said the gin expected to clean cotton from 90,000 acres this year, twice what it handled last year. He said about 40 farmers who had not planted cotton before had told the gin they would raise the crop this year, many more new growers than in previous years.

Article source: http://feeds.nytimes.com/click.phdo?i=0f86fdfa0856fa762790c24e9cac901e