Peripheral Vision: Climate Change

and Global Development in the

21st Century







By Peter Schwartz


Jeremiadus.com May 31, 2014




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Summary
Global warming poses an existential threat to life on Earth. This
existential threat challenges our capabilities and calls into question
the viability and effectiveness of mechanically conceived grid
maintenance options.
Solar Roadways smashing crowdfunding campaign success provides
a terrific opportunity to assess the current state of business
crowdfunding in relation to the future of solar power.
Distributed investing and distributed electricity are part of a grid
revolution that may structurally shift financial and political power
globally from the 1 Percent to the 99 Percent and from the Core to the
Periphery.
The distributed grid paradigm echoes current philosophical,
engineering, and economic models grounded in an ecological
metaphor that values species diversity, small-scale experimentation,
and distributed risk and parcelized decision-making.



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The Cracking of the Global Grid
With its Indiegogo campaign winding down, folksy technology startup Solar
Roadways has raised well north of $2 million from 48,000 funders, released
a YouTube video that has received more than 16 million views, and for the
moment can proudly boast of being the 3rd most funded project in the
history of Indiegogo.
Solar roads are likely not the 1st-best option, nor perhaps even the 10th-
best option, for widespread capture of solar energy. Nonetheless, Solar
Roadways smashing campaign provides a terrific opportunity to assess the
current state of business crowdfunding in relation to the future of solar
power, what we will call sunfunding. The connections between
crowdfunding and sunfunding exist. They matter. And they may surprise
you. Lets roll the tape.
Crowdfunding has grown approximately 80 percent year over year since
2009, a pace expected to continue for the foreseeable future. In 2014, global
crowdfunding projections approach $10 billion, a 20-fold increase from the
$500 million raised in crowdfunding campaigns in 2009. If trend


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lines persist, in 2020, crowdfunding will deliver $500 billion in seed capital
to nearly 10 million projects, in the form of donation, reward, lending, and
equity-based investments generating millions of new jobs and more than
$3 trillion in new revenue.
Sunfunding also has mushroomed. In 2013, solar power installations in the
United States exceeded 4.5 gigawatts, a more than 5-fold increase from
installations in 2010. Because solar still only contributes less than 0.5
percent of electric power nationwide, the industry can assume a blue-sky
future for years to come, with installation trend lines indicating potential
capacity installation of 225 gigawatts in 2020, enough capacity in that
single year to power nearly 40 million American homes.
Indeed, solar installations in the U.S. have rocketed so rapidly toward grid
pricing parity with coal that analysts now predict utilities will construct few,
if any, coal-fired power plants going forward. In the more optimistic of its
future-oriented Scenarios, energy company Shell estimates that solar PV
could account for 20 percent of global energy by 2060 and nearly 40 percent
of the total by the end of the 21st century.
With remarkably aligned annualized growth rates of 75-80 percent,
crowdfunding and sunfunding trends, depicted graphically, resemble
nothing so much as the trajectory of space vehicles obtaining escape velocity
from the earths atmosphere. But for those with boots on the ground, the
impact of these trends more likely resembles displacement associated with
the cracking of tectonic plates. Or perhaps more aptly, the cracking of the
global grid.



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Crowdfunding Dreams
The Solar Roadways campaign provides a textbook example of how to plan
and execute a crowdfunding initiative. However, the more important point
may be that the Solar Roadways Indiegogo campaign also illustrates
perfectly the underlying psychology of crowdfunding, and that this crowd
psychology is tuned to an emotional resonance far different from, indeed
orthogonal to, the investment psychology associated with institutionalized
finance capital.
The solar roads concept has been around for more than 30 years, but had
gained little traction until Scott and Julie Brusaw, hailing from Sandpoint,
Idaho a picture-perfect small town straight from central casting, nestled
between staggeringly beautiful mountain ranges and the placid shores of
Lake Pend Orville launched their Solar Roadways Indiegogo campaign on
Earth Day of April 2014.
Scott Brusaw is an electrical engineer who, since 2006, has explored the
feasibility of replacing the 31,000 square miles of paved roads, parking lots,
driveways, playgrounds, bike paths, and sidewalks that traverse the United
States (about 1 percent of the nations total land surface) with a smart
road system constructed of hexagonal, recycled glass-encased solar panels,
capable of powering well and doing well pretty much everything!
Through initial funding from the Federal Highway Administration, along
with modest support from General Electric, the Brusaw team has designed
and built roadworthy solar panel prototypes and completed initial
construction of a prototype parking lot that integrates connected solar cells,
LED lights, heating elements, and a textured glass surface. Funds raised


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from the Indiegogo campaign will support creation of a solar panel
production capability.
While the Solar Roadways concept itself is pretty interesting, the response
this concept has evoked from simple folk across the globe is yet more
newsworthy, and for the following reason meta analysis of Solar
Roadways as an instrument of the vox populi captures information about
shared, species-level hopes and fears for our future that might otherwise
remain inchoate and elusive. With this information, we can not only track
the deep movements of an organically activated human mind, but also
connect these mental movements directly to policy-relevant and market-
relevant feedback loops that short-circuit the existing decision-making
loops in Washington, corporate America, and on Wall Street.
The Solar Roadways campaign has channeled the vox populi by using
messaging strategies that allow the intellectual concept of solar roadways
to resonate across an emotional range encompassing hope, fear,
happiness, frustration, humor, excitement, and inspiration. The following
bridge elements of the Solar Roadways campaign activate emotional
receptors for communal bonding experiences around this intellectual
content.
Tell Me a Story The Solar Roadways message is easy to understand,
easy to trust, and scales in a narrative that conforms to a clear and
simple logic starting with parking lots and driveways in small-town
America and ending with superhighways crossing every nation of the
world.


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Sing Me a Song Solar Roadways resonates melodically. As in a
Broadway musical, the Brusaw crowdfunding campaign hits every
note needed to harmonically score the right emotion in a larger
drama. Like John Denvers iconic song Country Roads, the Solar
Roads concept creates a level of comfort that we associate with Mom
or Dad tucking us into bed at night, the secure belief that a familiar
pathway can transport us home, the conviction that we are safe and
that everything will be okay.
Paint Me a Picture Were Scott Brusaw to approach Wall Street
institutional investors, they would ask him tough questions and
quickly expose logical problems with getting from A to Z, covering
every letter of the alphabet. By contrast, Main Street crowdfunders
will only respond to a simple, evocative picture of what it would mean
to get from A to Z. They dont even want to know what happens
between B and Y. The technical merits and financial nuances of the
project are simply not relevant to their evaluation.
Give Me a Hero - The Solar Roadways campaign is genius at
communicating the tropes of popular American success mythology
the Sarah Palin view that anyone with good old American spunk and
grit can change the world. Whatever the Brusaw clan may think of
their fellow Sandpointillist (Sarah Palin was actually born in
Sandpoint in 1964), they artfully attach their project to old-style, non-
corporate, can-do values. And whether intended or not, their
(somewhat passing) reference to a decentralized grid evokes similarly
resonant themes of individual freedom, autonomy, and innovation.


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Make Me Smile - Unlike many crowdfunded initiatives, Solar
Roadways does not promise to deliver its product functioning solar
surfaces to donors. Rewards are merely symbolic. The absence of
any need to justify the product except at the symbolic level, liberates
the campaign instead to elicit excitement, astonishment, awe, and
good feelings all around. The Solar Roadways gang makes solving a
set of huge and scary problems look so easy! And fun! Compelling
details about the myriad benefits of solar roads, such as
programmable colored LED lights, evokes late-night television
commercials for all-in-one devices like the Ginsu knife But wait!
Theres more! However, one cannot overstate the marketing value of
these LED lights we can solve global warming and pollution and
also play Dance Dance Revolution on the grid!
If there is a childlike simplicity to the Solar Roadways vision, well, perhaps
that is the point. Naive simplicity is an integral, and remarkably functional,
element of crowdfundings appeal and effectiveness, making it possible for
projects to surface, fund, live, or die, quickly and definitively. Crowdfunding
represents what one might call an acceleration ecology, in which as
in nature movies that speed up annual cycles of birth, maturation, and
decline allocation of small funding amounts from large numbers of
individuals rapidly and continually distributes investment risk across a
constantly shifting map of opportunity and possibility.
The crowdfunding paradigm appears isomorphic to other currently
fashionable philosophical , engineering, and economic models grounded in
an ecological metaphor that values species diversity, small-scale
experimentation, and distributed risk and parcelized decision-making


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what Nassim Nicholas Taleb has called stochastic tinkering;
what RAD software engineering advocates aim for with dramatically
shortened planning, development, and release cycles; and what Thomas
Piketty has imputed with his exposure of wealth-concentration
dynamics within capitalist economic systems.
Not surprisingly, knowledgeable observers of the Solar Roadways
phenomenon pavement engineering consultant David Peshkin and solar
energy physicist Zoltan Kiss are skeptical about the practical details and
feasibility of the Solar Roadways vision. Perhaps more surprisingly,
Peshkin and Kiss marvel at the success of the Solar Roadways campaign and
frankly acknowledge the larger significance of the attention crowdfunding
has brought to ideas about solar power and the distributed grid. The
innovation genie is out of the bottle. And given the difficulty in picking
technology winners, no matter what selection process one adopts, both
Peshkin and Kiss would probably agree with Taleb that the best approach is
to let a thousand flowers bloom and minimize the risk associated with any
particular outcome.
Going forward, the challenge facing established financial grid players
commercial lending banks, investment banks, private equity firms, venture
funds, and angel networks may not be whether they can match the growth
arc of crowdfunding platforms. The financial grid itself may be at risk. Few
pundits would argue that risk and capital-allocation models used by
financial institutions will disappear any time soon. But even those who
assume that early-stage investment capital can absorb crowdfunding
lessons and co-opt crowdfunding portals may be mistaken. Because almost
by definition, the operational imperative of financial grid systems is a


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command-and-control gate-keeping imperative the hierarchical, top-
down deployment, organization, and direction of finance capital toward
targeted ends.
The viral spread of the distributed, acceleration funding model obliterates
the gate-keeping functions of institutionalized finance capital, and in the
process deals a significant blow to the legitimacy of the financial grid itself.
Because it directly activates the human hive mind with the capacity to
apportion risk more minutely, more quickly, and across the surface of the
globe crowdfunding is now structurally positioned to always run ahead
of institutionalized, grid-integrated investment capital. The ascent of the
crowdfunding regime surfaces altogether new perspectives on the eternal
questions we face as human creatures: Who bears the risk? Who receives
the reward?

The Future of Solar Power
Many moons ago, environmental philosopher, physicist, and entrepreneur
Amory Lovins teased out the radically divergent social paths associated with
nuclear power and solar energy. Even then, the political and social
implications of nuclear with its capital-intensive, highly regulated,
densely centralized, military-industrial utility model were pretty obvious,
and the vectors all pointed in the same direction toward an authoritarian,
militarized, paranoid, lumbering, half-blind, declining great power. Pretty
much what we see today, even without nuclear at the center of the grid.
Of course, Lovins radicalism emerged from this general insight about the
grid, not his particularly pointed analysis of nuclear power. The


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organization of the grid itself is what matters, not necessarily any particular
energy source. Scale, modularity, portability, redundancy, efficiency,
sustainability, and affordability are presumably the key elements of a grid
revolution, and the global political implications of this path could not differ
more from the direction we take with the traditional utility model. For this
reason, the acceleration ecology model also manifests a clear tension
between solar energy and power storage companies tied to the centralized
electric and financial grids (via utility-scale installations and both project
and residential finance) and those companies at least cognizant of the
distributed grid beginning to arise both in developed and (perhaps more
significantly) in emerging and frontier economies.
In late May of 2014, Barclays Bank downgraded the high-grade bond
market for electric utility companies, a move analysts have declared as
a watershed moment in the epic struggle for grid mastery between old-
school carbon-based power companies and upstart renewable technology
companies. In a nutshell, the problem confronting electric utilities is that
the existing grid model depends on capital-intensive plant and
infrastructure investments that only recoup slowly over time, with
significant economic risk accruing to the ratepayer.
Leaving aside for the moment the irrelevance of the utility grid model for
much of the developing world, even within advanced industrial nations this
model is faltering rapidly, and it would be a mistake to assume utilities can
simply incorporate solar into existing infrastructure in the same way that it
would be a mistake to assume financial institutions can simply incorporate
crowdfunding into their lending and investment practices. For utilities, the
major issue will remain the capital costs of grid maintenance and the


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rapidly increasing benefits of point-of-use installations. And as with
crowdfunding, the emergence of an acceleration ecology for distributed
solar power and storage technologies indicates the approach of a tipping
point that begins to spawn an independent global power hive that
operates largely beyond the purview of the regulated electric power grid.
In a number of thoughtful essays published by Seeking Alpha in the last
year, Zoltan Kiss has:
Exposed the deep structure of the solar future.
Explained how the shape that future takes depends on the
interactions between an array of technology, economic, financial,
political, and environmental factors, including distributed energy,
power storage, rare earth materials extraction, environmental risk,
and SPV financing & securitization.
Summarized how both limitations of the utility and financial services
models of power delivery and larger philosophical considerations
regarding sun ownership augur for the 3rd path, the distributed
solar ownership model (see Battle for the Sun, Solar PV
Market, Trends in the Cost of Energy).
Kisss deep knowledge of and commitment to multi-junction thin-film
technologies firmly aligns him with point of use technology advocates.
Kisss sunowner paradigm, as with the concept of sunfunding, also
reinforces the idea of crowdfunding. The slippery duality of sunownership
and sunfunding which is that both terms can refer to solar installation
financing or, more radically, to the sun itself funding our energy needs
(instead of the banks) resembles how the crowd can now fund our


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business capital needs (instead of the banks). Sunownership, sunfunding,
and crowdfunding all evoke the unstable quantum dialectic (supporting 2
opposing realities simultaneously) that informs the accelerated ecology
model.
Taking the long view that often deepens the wisdom of those who have lived
a lot of life, Kiss (perhaps more than anyone else in the industry)
appreciates the high stakes of the battle for the sun.
While technology is the basic determinant of future energy, the real
battle for the sun is more a political and economic battle for the very
nature of our existence.

Peripheral Vision
As crowdfunding and sunfunding claim the contemporary public stage,
pundits pondering the meaning of global warming and the future of the
centralized service grid reliably unspool a didactic narrative about the
civilizing history of grid infrastructure, fossil fuels, and Oxford University
(George F. Will and Charles Krauthammer). Supported by their Don-like
commitment to the past as primer, the 20th century history of grid
infrastructure becomes a telescoping lens on the future of the grid
everywhere else in the world.
But perhaps we are looking through the wrong end of the telescope.
Pavement Engineer Peshkin recently returned from a week-long visit to
India that included meetings with contractors, consultants, and
transportation agencies. While skeptical about the viability of solar


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roadways in the United States, at least in the near term, Peshkins visit
heightened his awareness of the opportunity for solar roads in developing
countries such as India. Just as these countries currently bypass hard-wired
communications infrastructure, Peshkin (echoing Alexander Gershenkron)
now wonders whether they might also use solar technology, including solar
roads, to overleap less innovative and less future-oriented infrastructure
development options, and whether seizing this opportunity in the
developing world might be a wiser allocation of resources than installation
of solar surfaces on top of existing driveways and parking lots in the United
States.
Peshkins insight is that we might best understand 21st-century global
development path potentialities by starting from the grid periphery from
the nations and regions of the earth presently least tapped into grid
matrices. Posted at the periphery, we can most easily track the adoption
rates, effectiveness, and future prospects of emerging options for the
provisioning of basic human needs. We can then travel inward toward the
economically developed core, and evaluate businesses and technologies
with fresh eyes as advanced industrial societies navigate both grid realities
and hive possibilities.
Much like a New Yorker map of the world, peripheral vision allows us to
see through the eyes of the billions of people with only a tenuous grasp on,
or no connection whatsoever to, centralized grid services. When we peer
through the far end of the telescope, we suddenly see the pivotal impact of
radically decentralized mobile technologies in providing access to money
and power (electric and otherwise) to millions of people whom the 20th-
century industrial grid could never reach.


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Long Tail Liberation
Crowdfunding models exploit online technologies and social networks to
create new financing opportunities for a long tail of small business ideas
and arts projects that otherwise would not find financial grid sponsorship.
Similarly, microfinance initiatives exploit the mobile technologies that now
globally connect a vast portion of the worlds population, providing millions
of small-scale opportunities for local businesses to profit from meeting the
basic financial needs of the unbanked. As with crowdfunding, we can
measure the growth and success of an emergent global finance hive mind
and acceleration ecology with reference to participation rates on both sides
of the transaction.
Mobile Telecom / Microfinance
Historically, a vast percentage of the worlds population has been ill-served
by grid financial institutions approximately 2.5 billion working-age adults
(about 50 percent of the total) presently lack basic access to financial
services (see the Gates Foundations Financial Services for the
Poor initiative). The challenge in serving the poor faced by traditional,
centralized, capital-intensive banking institutions reduces to the generally
high cost of doing business in long-tail markets due to far smaller
transaction sizes that high infrastructure and service costs cannot
accommodate within any grid-based business model. Hence the promise for
investors of low-cost financial inclusion business models that can scale
rapidly to serve basic financial needs presently neglected by the grid.


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Microfinance Case Study M-PESA. Most East Africans have never gone
to the bank. But now the bank goes to them. Kenya leads the world in mobile
money. In Kenya, mobile provider Safaricom delivers a broad range of
connected financial services via M-PESA, the worlds most successful
mobile payments platform. M-PESA (loosely, cash in Swahili) is ubiquitous
in Kenya, supporting a base of 20 million users, 80,000 payment agents,
and more than $1 billion of monthly transactions. Approximately 50
percent of Kenyan GDP passes through M-PESA, which presently offers
money transfers (P2P, P2B, B2B, and international), airtime top-up,
product purchases, bill payments, and salary payments. If processed
through the financial grid, each M-PESA transaction would, on average,
require 2-3 hours of time and a cost of $3. M-PESA allows Kenyans to
instead invest this savings of time and money in economically productive
activities, purchases of food, and savings. A sister service, M-Shwari, offers
mobile savings and loan options.
Mobile Telecom / Micropower
As with global finance, the most rapid and sustainable energy sector growth
opportunities over the next decade will address markets and populations
historically under-served or neglected by power grid utilities. While
journalists and bloggers freely toss around exciting, disruption-sounding
terms such as micro-grid and smart-grid , and rural electrification in
Africa, Asia, and Latin America may eventually adopt these technologies,
for the moment the most exciting development in the creation of distributed
access to electric power involves a simple solar lamp. And as it turns out,
mobile technology also provides the key to understanding an emerging
acceleration ecology in the provision of off-grid power services in Kenya.


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According to the World Bank, over 1.2 billion people worldwide 20% of
the global population still live off the electric grid and lack access to
reliable power. This total includes about 550 million people in Africa and
another 400 million in India. In Kenya, the national electricity grid
bypasses nearly 80 percent of the households, leaving families to rely on
lethal kerosene fuels, candles, coal, or biomass for cooking, lighting, and
heat (around the world, nearly 1.5 million people, primarily women and
children, die annually from exposure to the fumes from these energy
sources). However, leveraging the same mobile communications and
payments systems supported by Safaricom, innovative pay-as-you-go
services such as M-KOPA have developed sustainable business models that
can deliver basic power services for lighting, cell phone charging, and
radios to many of these people who have labored without light and
literally lived in darkness.
Micropower Case Study M-KOPA. The mobile technology economy in
Kenya and in East Africa now supports a highly transactional and
participatory ecosystem, characterized by thousands of simultaneous
interactions conducive to rapid, frictionless self-assembly of markets and
services. The key to the success of this mobile economy is risk mitigation.
People without resources cannot manage significant risk. The mobile
economy slices risk into such minute particles that transactional rewards,
small though they might be to a capital-intensive utility, are vastly
asymmetric to the associated risk quanta for both parties to the transaction.
M-KOPA extends this risk model into the provision of solar power as
a supported service, similar to a regulated utility in the commitments to
service reliability and customer support.


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From a risk-management perspective, M-KOPA grasps that people living
within environments of scarcity neither possess nor typically desire the
luxury of limitless choices. They only need what is enough, and settling for
enough radically constrains systemic risk. The ability to provision power
and lighting needs for millions of people at just this basic level is a novel
concept to centralized grid operators for whom more choices fueled by
financing incentives represent more revenue. While large electric power
companies including solar power companies generally operate
financing divisions as significant profit centers for the business, innovative
companies such as M-KOPA that serve off-grid markets view pay-as-you-go
financing as a low-cost lever to crack open the market for its transactional
power services.
Longplay
Precisely at midnight on December 31, 1999, a musical project
called Longplayer launched in London. Longplayer is a one thousand year-
long musical composition created specifically for bronze singing bowls, and
dedicated to human reconsideration of existential concepts such as
resonance, endurance, and time.
Longplayer reminds us that resonation which can refer both to a deep,
full, reverberating sound and to electrical or mechanical waves or cycles
may be the defining feature of emergent, flexible, and durable forms of
communication connecting members of the human species to each other
and to their common home, the planet called Earth.
Global warming poses an existential threat to life on Earth. This existential
threat challenges our capabilities and calls into question the viability and


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effectiveness of mechanically conceived grid maintenance options. What
one might call quantum options, which I have associated with the concepts
of hive mind and acceleration ecology, have now begun to self-assemble in
finance and energy domains (as well as in education, health-care, and
national security domains) governed in the past century by grid paradigms.
If we attune ourselves to the signals that resonate, it may be that we can
find our way home.