During a recent stay in Maine for a little R&R, I talked with a retiree who produces all his electricity for his lakeside cabin with on-site solar panels. He uses a couple of marine batteries for storage. “Works great!” he said, “It powers everything we need – appliances, everything.” Once upon a time, I would’ve dismissed such a set-up as a novelty – it’s not particularly uncommon to have on-site power generation in remote or rural areas such as the Maine Highlands. But when he ran down his cost outlays for his system, which powers a washer, refrigerator, and everything else a modern home needs, I realized this guy is the model for a clean energy future.

Why? Because energy-producing technology is no longer the domain of hard-hatted oil men and engineers with capital budgets in the hundreds of millions. Now in the U.S. you can buy a solar energy system from Home Depot. In the United Kingdom, you can go down to IKEA and buy solar panels. The use of small-scale technologies to generate your own power from unlimited sources like wind, solar, water, and geothermal opens up an entirely new level of lifestyle options for consumers and lays the foundation for a new industry of service providers to serve that market. Welcome to the era of personal power generation.

Personal technology – mobile phones, tablets, and laptops – offers an interesting analogy to what we might expect in a distributed or “nodal” power generation landscape. Not too long ago, having a computer meant a desktop with a monitor, a CPU, and peripherals like printers and scanners. Experimentation, scaling, and an open-source culture have created new tools, devices, and business opportunities unimaginable only a short time ago. Prices have dropped incredibly fast and made the technology accessible to just about anyone. It has also led to lifestyle changes, empowered consumers, and market shifts. Can you think of anyone who owns a land line anymore? Certainly the younger generation (read: future energy users) does not.

The logical next step in the energy economy is similar to the path tread by personal technology – going from large, capital-intensive power plants to distributed, portable, personalized power generation. This era is slowly dawning and it’s being driven by increasingly favorable economics. A slew of recent reports indicate that prices are dropping and the presence of renewable energy sources in everyday life is growing.

For utilities, all of this is very sobering news. That’s why the fossil fuel industry is not sitting around and waiting to see how these trends develop. But regardless of how much money the fossil fuel lobby throws at the policymaking process, they’re still swimming against the tide. The availability of affordable renewable energy technology at your local hardware store is simply one of many factors arguing for a complete shift from centralized power generation to distributed, nodal energy systems. There is also a strong energy security imperative that favors localized power generation. Energy security used to mean getting enough oil from overseas. Now it means protecting your grid against hackers. If the entire electric grid is based on one or even a few IT management systems, hackers can cause much more damage with fewer keystrokes. With a distributed infrastructure, the hackers’ targets are diversified and numerous, requiring much more effort to bring them all down.

And of course there’s climate change, the biggest environmental wild card of them all. Within risk management circles, the overarching discussion these days is centered around climate resilience and adaptation. A significant amount of recent research funded by the Department of Homeland Security focuses on ways to secure our energy infrastructure. Federal government and local policymakers are faced with choices as to how to spend taxpayer dollars to increase resilience in their communities. Not surprisingly, they are looking for integrated solutions which deliver the biggest bang for the buck.

When considering options such as hardening infrastructure or restoring wetlands, policymakers may want to refer to the principles of 2,500 year-old Chinese philosopher Lao Tzu and his famous fable “The Oak and the Reed”. When the storm comes, the mighty oak stands tall and rigid and is blown over, while the smaller and flexible reed survives. The lesson? Diversified, flexible energy sources and integration of ecosystem services with resiliency measures are likely to fare better during the storm and are a better long-term investment.

Embracing this metaphor would be a good way to build a prosperous economy, too. Diversity, flexibility, and resilience are becoming increasingly important economic advantages. The Internet derives its value from diversity – it’s a constantly evolving wilderness of ideas and services. Clean, distributed energy systems could follow this same path. And while innovation seems to conjure images of nifty new devices or flying cars, innovation in the energy sector is like anything else with staying power – it’s an evolution, not a revolution. There will be wrenching change for some, and they need to be accommodated and given assistance. But remaining on the current fossil-fuel driven path is not only unwise, it’s a bad business decision. For those of you pining for a clean energy future, feel confident. The economics are on your side.

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