Traditionally, when someone buys a house, they receive a card from their realtor that says, “Thanks for your business,” and a gift basket with some thoughtful housewarming gifts.  Now, thanks to new zoning codes in Lancaster, California, new homebuyers will also receive a brand-new solar photovoltaic (PV) system (though “receive” is probably a misnomer, as the cost of the system is presumably built into the home price).

Lancaster changed its zoning code in March 2013 to require a 1.0 to 1.5 kW PV system for every new home built on lots larger than 7,000 square feet or 1.5 kW systems for rural homes up to 100,000 square feet.  Builders will also have the option of building distributed systems for new developments.  For example, a builder could install a single 20 kW system for a 20-home development.  (Note that Sebastopol became the second California city to enact a solar requirement for new homes in May.)

Lancaster is the first city in the United States to require PV systems for new residential construction.  This regulation marks a significant win for solar companies, the renewable energy industry, and the state of California.  The advantages for the PV industry are obvious: the regulation will drive the market as new homes are built, creating revenue and jobs.  Widespread installations will also improve installation techniques and develop a base of skilled installers.  For California, this change will help relieve an already stressed electric grid that funnels power from the northwest to southern California (Lancaster is about 65 miles north of Los Angeles).

National Impact

Extrapolating numbers across the United States paints an even more ambitious picture.  The National Association of Home Builders forecasts that 647,000 new homes will be built (or at least started) nationwide in 2013.  Imagine that each of these homes comes with a 1.0 kW PV system installed; by the end of 2013, we would have a new 647 MW power plant distributed across the country.  It’s not quite that simple, but the point is this: a seemingly innocuous zoning change like Lancaster’s could have a tremendous impact once it scales across the country.

Furthermore, this would mean more good news for a growing North American PV market.  Navigant Research’s report, Distributed Solar Energy Generation, forecasts that 220 GW of distributed solar PV will be installed worldwide from 2013 to 2018, representing $540.3 billion in revenue, but the majority of that growth will come from Europe.  Extrapolating again, adding 647 MW of PV capacity each year in the United States would increase distributed PV capacity by approximately 15% to 20%.

Builders Object

Of course, there are numerous hurdles standing in the way of widespread adoption of anything similar to Lancaster’s zoning laws, and not everyone is applauding this move.  While there has been relatively little opposition from Lancaster residents, the homebuilders clearly object to the new codes.  Specifically, they feel that this change puts their product at a disadvantage when compared to the resale market.  Regardless, it will be interesting to see if other cities follow suit, making the new regulation a boon for the PV industry, or if Lancaster and Sebastopol prove exceptions in an already growing market.

The building automation world was rocked last week by the news that Google’s Wharf 7 building in Australia was hacked.  The building management system (BMS), built on the Tridium Niagara AX platform (Honeywell acquired Tridium in 2005), was compromised by security researchers Billy Rios and Terry McCorkle, who used a backdoor to access the system and gain access to the building automation system (BAS) – and all the equipment it controls – as well as the other systems running on the same network.

This is not the first time an Internet-connected BAS or BMS has been hacked.  History buffs may remember that when the U.S. Chamber of Commerce was hacked in 2011, they discovered that a thermostat in a Chamber of Commerce-owned property was communicating with a computer in China.  However, this is certainly the most high-profile breach of a building’s automation system to date, and it emphasizes the fact that, as the industry grows and embraces the Internet’s capabilities, it must also embrace the Internet’s challenges.

Chaos Scenario

The threats are very real.  In this case, the hack was orchestrated for demonstration purposes, so there was no real risk involved.  But think about the individual systems controlled by a BAS/BMS: fire and life safety, security, elevators, etc.  It’s not a far leap to consider worst-case scenarios where fire suppressant systems are de-activated or unwarranted persons are allowed into sensitive areas of secure buildings.  Chaos could be induced if control of the BAS/BMS landed in the wrong hands.

Everyone involved in the building automation industry should be working to improve BMS security.  The magnitude is huge – Navigant Research forecasts that the market for building energy management systems will grow to nearly $6 billion by 2020.  Rios and McCorkle claimed they found 25,000 active Tridium systems online, and with customers like ABB, Boeing, Changi Airport, and James Cook University Hospital, the scale of the risk is enormous.

Lynxspring – a leading provider of building automation and control solutions – recently announced a partnership with Netop to develop a cyber security solution for BAS/BMS.  The attention around this week’s event reminded me of a great article by Lynxspring’s Marc Petock on the subject of cyber security for building automation, in which he declared, “Gone are the days of security through obscurity.”  Now it’s time for all stakeholders in the industry to come together to protect its customers, their assets, and most importantly, the people within these buildings.

With U.S. oil imports hitting a 17-year low, the mainstream media has awoken to the fact that, as I pointed out in a Fortune.com article 3 years ago, peak oil is not happening anytime soon.  Charles Mann’s excellent cover story in this month’s Atlantic, “What If We Never Run Out of Oil?” focuses on an obscure though potentially vast source of energy: methane hydrates, or crystalline natural gas trapped below the seabed.  If early exploration ventures by Japan and other countries succeed, this gas “could free not just Japan but much of the world from the dependence on Middle Eastern oil that has bedeviled politicians since Churchill’s day.”

An Associated Press story last week reached a similar conclusion about “unconventionals” in general: companies are opening huge deposits of shale gas, “tight oil,” and other hard to reach petroleum sources that will essentially flip the energy world upside down, as the United States regains its status among the world’s largest exporters of petroleum.

Both of these stories, though, share a common misconception, captured in the AP article’s headline: “New Technology Propels Old Energy Boom.”

In fact, the technologies underlying today’s petro-boom are not new at all; they are innovative applications and refinements of technology that has existed for decades.  The boom’s core technology is hydraulic fracturing, or fracking.  And drillers have been fracking wells for nearly 60 years.  More than 1 million wells have been developed using fracking since the 1940s, according to EnergyFromShale.org, an industry-supported website.

The early use of fracking to get at reserves previously thought of as unrecoverable, emerged in the early 2000s after exploration companies began examining geologic formations using x-ray computed tomography, or CT scanners.  The CT scanner was invented in 1967.

Tinker Imaginatively

What’s happening today is not a new-technology revolution; it’s an evolution of new applications for existing technology.  We are doing things that we’ve been doing for decades more efficiently, more effectively, and in much wider applications.

That may sound like a fine distinction, but it’s an important one: Silicon Valley has for years invested in sexy new technologies, from smartphones to social media to exotic solar power materials.  The cleantech industry itself has not benefited from a fascination with the new, the exotic, and the high-tech.  The technology for embedding sensors in a drill head so that technicians on the surface can map a formation as they drill is not all that sexy, and it didn’t come from a VC-funded startup in a Mountain View garage.  It came from drilling engineers in the field figuring out, incrementally, how to do things better, cheaper, and smarter.  Often, as in the case of the 21st century oil and gas boom, imaginative tinkering can be more fruitful than reinvention or laboratory R&D.

Leaving aside, for the purposes of this blog, the question of how we can move toward a carbon-free energy system in a world suddenly awash in hydrocarbons, the next phase of technology will almost certainly focus on how to better store, transport, and distribute the seemingly limitless supplies of natural gas now becoming available.  The difficulty and expense of liquefying and transporting natural gas have been a drag on the wider use of the relatively clean fuel for many years, particularly in the transportation sector.  In 2012, GE Oil and Gas introduced its Micro LNG plant to power remote industrial locations and fuel long haul trucks and locomotives, and last month the company debuted its LNG In A Box system for small-scale retail fueling stations.  The Norwegian gas producer and distributor Gasnor in 2009 launched the world’s first specialized, small-scale LNG carrier, the Coral Methane, designed to deliver fuel to remote ports along Norway’s coastline.

These are not “new technologies,” and they’re not being developed and funded as such.  But they’re exciting innovations.  And they are helping to power an energy transformation that will shape the world’s economy and its geopolitics through the rest of this century.

Deploying smart meters across Britain turned out to take longer than expected.  In a surprise move, on May 10, the U.K. Department of Energy & Climate Change (DECC) announced it will postpone the mass rollout of smart meters for another year.  The extra time is needed for vendors to work out technical issues associated with the new equipment and conduct further testing, the Department said.

Before the delay, the plan called for installing more than 50 million smart meters (both electric and gas) in about 30 million homes and businesses, beginning in 2014 and lasting through 2019.  Now the massive deployment will begin in the fall of 2015, with expected completion by the end of 2020.

Vendors for the most part welcomed the delay.  Angela Knight, chief executive of Energy UK, an industry trade association, said the delay was a prudent move, allowing the program to “be completed in a more efficient and cost-effective manner.”

Nonetheless, for vendors counting on 2014 deployments, this delay has to hurt at some level.  Companies like Landis+Gyr, a major meter supplier to British utilities, and Trilliant, which supplies smart meter communications gear to British Gas, will need to push back their manufacturing schedules.  They’ll have to find other business as they wait for clarity on technology issues in the United Kingdom.

For utilities, on the other hand, the delay brings relief.  They can now take time to better plan for the massive deployments and the logistical challenges they entail.  However, this delay does not signal a complete halt to new smart meters in the United Kingdom.  British Gas, for instance, has already deployed some 800,000 smart meters as part of the first phase of the national rollout, and a government spokeswoman said there is nothing to stop energy suppliers from installing smart meters now, even as there is a delay in the nationwide rollout.

Consumers won’t be able to manage their consumption with the latest technology as soon as expected, but the new metering system should have fewer glitches once it moves to the big rollout stage in 2015.

The delay shouldn’t come as a big surprise.  Reshaping the grid on a country-wide scale is a huge undertaking, and getting it wrong would set the United Kingdom’s smart grid back by years.