Business Opportunities Through Decentralization- Mark Moore

What will be the effect of greater decentralization of power generation?

The decentralization of power generation is an important step in attaining energy efficiency and meeting future demands. First, it is important to consider the drawbacks of a centralized system. Centralized power is a wide network of transmission lines which supply residences, industries, and almost every structure demanding power. This system is very inefficient because of the distance the energy must travel and from the loss of energy through conversion. The biggest problem; however, is the systems vulnerability to natural hazards. When one section of the distribution system is cut off due to a natural hazard, the whole system suffers.

Greater decentralization will provide a more flexible system where distributive capacity could be added through the development of a smart grid. This allows consumers to generate their own power and supply the grid with any excess power not used. The formation of ‘micro grids’ will create a more efficient, reliable system that can form a symbiotic relationship with the main grid. In the event of natural disaster, a micro grid can disconnect from the main grid and still generate it’s own power. The market implications are enormous through decentralization of power generation. Of course, the decentralization depends on government policy and the massive amounts of money spent on lobbying politicians.


What new businesses will evolve in this changing landscape?

There will be many business opportunities in the energy industry created by decentralization. The renewable energy sector alone will have major growth potential in solar, wind, geothermal, biomass, and other forms. Within these renewable energy generation sectors there will be need for installers, maintenance workers, and designers. Battery storage is a business opportunity that will continue to expand as technology increases the storage capacity. Computer software and sensors will play a large part in the development of the micro grid, which will create opportunities for entrepreneurs to cash in on their innovations. Consulting firms will be needed to help direct entrepreneurs and forecast certain niche markets made available in the changing energy industry. Finally, capital will be needed to finance these business opportunities and investors who can foresee the potential, while understanding the government incentives, stand to make substantial returns.


What business can you see yourself creating to serve this market?

I could see myself starting a consulting firm. I am not a computer programmer and do not possess the engineering skills to create something innovative. I am more interested in finance and policy, and would help entrepreneurs navigate through the government incentives and regulations, while providing them with a financial analysis of project plans. My consulting firm will help align business strategy and compliance initiatives while also providing risk assessment and governance goals. The consulting aspect in this industry could provide a business the tools needed to capture it’s full market potential.

Solar System Investment – Mark Moore

Renewable energy projects need to be carefully researched and analyzed in order to interest any potential investors. Investors need to know how much energy the renewable source has the potential to generate and how the calculations were derived. Solar energy is infinite, so the risk of running out of this resource is essentially nil. The maintenance of a solar energy system is  less than that of other renewables, and considerably less than that of fossil fuel energy. The lifespan of solar panels are on average 30-40 years, and most warranties of solar panels cover an average of 25 years. Investing in solar energy is also very beneficial to the environment. The investment in solar will expand any investor’s portfolio to show environmental awareness, and reduction in their carbon footprint. The solar energy system will also qualify for Solar Renewable Energy Credits (SREC), which earn income through their sale to electrical suppliers in the grid. A federal tax credit of 30% for the system is another important deduction in capital cost. Solar’s extensive lifetime of producing energy make it an attractive investment option for any investor, considering demand for energy and government energy policy.


The potential for financial success is present for investing in solar energy. The federal tax credit reduces the upfront investment by 30% and the IRS allows for accelerated  depreciation over a 6 year span. Of course, the most important financial concern to an investor is return on investment (ROI). The US T-Bill has a yield of 2.98% for a 30 year investment. The S&P 500 has an average return of approximately 10%. There are many risks involved with any investment, but the risk analysis for energy demand has a low beta. The internal rate of return (IRR) is a good metric to determine the rate of growth a project is expected to generate. The weighted average cost of capital (WACC) is another analysis to show how capital structure is used, which will help make the decision to invest. The net present value (NPV) is possibly the best financial analysis to determine the value and profitability of an investment. NPV gives results based on cash flows discounted at WACC and proves whether a project is financially worthwhile.


According to the National Renewable Energy Laboratory (NREL), the long-term decline in installed PV system prices is clearly the result of reductions in both module and non-module costs, and module costs have declined at a faster pace, especially over the past several years. In addition, the NREL states that analysts project that PV price trends will remain in their downward trajectory in the near term (NREL, 2012). Technology is reducing the cost of capital for solar investment and the government has incentives in place to reduce upfront costs. The investment in a solar renewable energy system is a good, sound investment decision.


National Renewable Energy Laboratory (NREL). (2012). Photovoltaic (PV) Pricing Trends:       Historical, Recent, and Near-Term Projections. Retrieved October 13, 2014,



Mark Moore Efficiency Consulting L3

The government has a responsibility to promote policy which drives the economy towards energy efficiency. Corporations have no intention of investing in research and development to create more efficient products unless forced to do so. Business as usual will occur until policy changes this business mindset or enough people demand more energy efficient products. I believe the government needs to strongly promote two basic policy types. First, a policy which can provide a benchmark for energy efficiency measures for energy generation, transmission, and end-use. Second, a financial policy which includes tax incentives, rebates, grants, and subsidies to attract investment by corporations. These policies together would create an even playing field and incentivize corporations to invest in energy efficient technology.

The three different levels of government, federal, state, and local all need to be considered when developing policy. Is a comprehensive one size fits all policy wise? I believe that the state and local levels should be allowed to tweak policy to conform with their distinct areas. As stated in the National Renewable Energy Laboratory report, ‘There is a consonance among policy goals at all three levels, with each jurisdiction focusing its operations on its own unique geographical scope. Understanding how the policies interact and can contribute to a comprehensive efficiency policy is critical to developing a plan to reduce energy consumption (Cochran, Doris, & Vorum, 2009, p. 10). Policy at the federal level should be broad with ordered guidelines providing authority over policy matters. The state and local levels need to be customized to fit into state and local laws and regulations. Each level of government can mold the most effective policy within its jurisdiction. I believe policy along these lines would be most effective in promoting energy efficiency.


The market for consulting firms, I believe, will grow in the near future as the need for knowledge on energy efficiency rises. The McKinsey report describes the value of such consulting to achieve maximum savings through energy efficiency, ‘energy managers can directly play a decisive role in capturing 1730 trillion BTUs of end-use energy consumption, but only 2% of facilities used on-site energy managers’ (McKinsey & Co., 2009, p. 83). Clearly there is a market for consulting services to large and small businesses alike. Some advantages of energy efficiency measures include, energy auditing and lifecycle cost analysis, which  could save companies vast amounts of money, while reducing carbon emissions in the process. I would like to start a consulting firm and be part of the solution to promote energy efficiency.

Cochran, J., Doris, E., & Vorum, M. (December 2009). Energy Efficiency Policy in the United  

    States: Overview of Trends at Different Levels of Government. Retrieved Sept. 11, 2014,



McKinsey & Co. (2009). Unlocking Energy Efficiency in the US Economy. Retrieved Sept. 11,

2014, from

Mark Moore Renewable Future L2

Nuclear energy has been an attractive source since first developed in the late 1940’s. Continuous research and development has streamlined nuclear power fostering it’s capacity factor to approximately 90%, whereas the capacity factor for wind is 34%, solar photovoltaic 25%, and hydroelectric is 54% (EIA, 2013). The fact that nuclear is identified as a dispatchable technology, possesses a much higher capacity, and can reliably meet demand and base load capacity supplies makes it more attractive than renewables. Nuclear is perceived as being a much cleaner energy source than fossil fuels, and nuclear already supplies close to 20% of the energy in the U.S. Nuclear power plants are expensive to build but relatively cheap to run. In many places, nuclear energy is competitive with fossil fuels as a means of electricity generation (World Nuclear Association, 2014). Fossil fuels are still leading the energy sector and the government has tried to incentivize renewables, but politicians and lobbyists ultimately control policy on energy, which in turn affects investment. Investment in renewable energies is staying strong and if investors such as Warren Buffett keep investing in renewables the future looks bright. Warren Buffett briefly lost track of how many billions of dollars his Berkshire Hathaway Inc. is spending to build wind and solar power in the U.S. That didn’t stop him from vowing to double the outlay (Buhayar & Polson, June 2014). I believe renewable energy financing will eventually surpass that of nuclear. Granted nuclear is a ‘clean’ energy source, there are far more safety risks and hazards than that of renewable. I believe worldwide renewable energy investment will grow larger as climate change becomes more and more obvious to the non-believers.

I believe there are several niche opportunities for entrepreneurs in the renewable energy sector. One such niche is battery storage. Battery storage would benefit both residential and commercial energy consumers. Commercial consumers would have back up energy for peak hour use or for emergency need. Residential would have back up power for non-windy or cloudy days for example. There is a huge market for renewable energy and especially battery storage in developing nations where infrastructure is lacking. Speaking of infrastructure, there is a need for efficient transmission lines, smart grid technology, and construction in developing nations, as well as in the U.S. I believe in the next couple years policy and financing for renewable energy will come together and substantial growth will take place.


Buhayar, N. & Polson, J. (June 10, 2014). Buffett To Double Down on Renewable Energy
Investments. Retrieved September 4, 2014, from

Energy Information Administration. (January 28, 2013). Levelized Cost of New Generation
Resources in the Annual Energy Outlook 2013. Retrieved September 4, 2014, from

World Nuclear Association. (June, 2014). The Economics of Nuclear Power. Retrieved from

Mark Moore Introduction

My name is Mark Moore and I currently live in Lake Ariel, Pa. I started my secondary education in 1990 when I attended Temple University. I majored in biology and unfortunately in my junior year I lacked the financial support to finish so had to withdraw. I then moved to NYC (East Harlem) where I worked at a mid-town restaurant, Sparks Steakhouse for 14 years. I was earning a very good living with free health care so my education was not a priority at that age of my life. In 2009, my wife and I moved permanently to Lake Ariel and I quickly realized how important education is in obtaining a ‘real career’.

I have always been interested in business and environmental issues. I would like to start a business in the renewable energy sector providing residential and commercial structures a clean source of energy. I plan on gaining experience in the energy/utility sector next summer working for Consolidated Edison in their development program(renewable/sustainability department). I have no prior experience in starting a business or even working in the energy sector, so my eyes and ears are wide open. I expect to learn a great deal in this course to help me better understand what is needed to start a business. I plan on working for ConEd for a few years to also gain knowledge in the energy sector. I hope to start my own company in 10 years based on all the knowledge and experience I will gain. I also hope to gain valuable knowledge from fellow classmates who already work in the energy field and from those who have started their own business’s.

I look forward to working with everyone this semester!