The view from the NRG suite at Redskins Park

The Washington Redskins played with enough energy to send Sunday’s game against the Dallas Cowboys into overtime, but by the time the ‘Skins fell to their sixth consecutive loss, my host at Redskins Park  — David Crane, the chief executive of NRG Energy — had left. Actually, he exited before halftime . . . to attend another NFC East showdown, the Giants-Eagles prime time game in New Jersey.

No, Crane is not a football fanatic. But the affable 52-year-old CEO is fanatic about promoting solar power, which is why he’s been spending time lately with NFL owners. NRG installed solar panels last summer at Redskins Park [See my blogpost,  An NFL rivalry...over solar], and he would like the company, which is based in Princeton, N.J.,  to deliver solar energy to the stadiums where the Giants and Jets, Philadelphia Eagles and New England Patriots play.

Why? To show people–particularly the influential, well-to-do types who attend NFL games–that solar energy makes sense, today.

“This is about demonstrating to the public the potential of solar,” David told me, as Dallas jumped to an early lead.  and we made our way up to the front of the suite. “I just want to make sure I see at least one play before I go,” he said, ruefully.

David Crane

Most utility company CEOs are, frankly, dull. Not Crane. He’s straightforward and occasionally outspoken, friendly and open, and ready to think in new ways about an industry that hasn’t changed all that much since Edison’s day. He is passionate about the climate crisis–he was active in USCAP, the failed big biz-big green coalition that lobbied for federal regulation of greenhouse gases, and he pushed hard to build a low-carbon nuclear plant in Texas until the risks grew too high post-Fukushima. He’s a friend of the Clintons, which is one reason why NRG made a $1 million contribution through the Clinton Global Initiative to deliver solar power to Haiti.

Now he is pushing hard for rooftop solar, smart meters and electric cars–a set of technologies that has the potential to transform the way utilities operate.

He believes that distributed energy — that is, energy generated at the place where it’s used — is gradually going to replace some centralized power plants built by regulated utilities over the last century.

“To me, this is the next big thing in the industry,” Crane said. “It’s disruptive in the way that the cell phone was disruptive to telephony. It was severely disruptive over a 20 to 30 year period, not overnight.”

“When we can offer you solar power from your roof, at the same price or lower than grid power, the whole nature of what it means to be retail electricity provider is going to change, and we want to be on the front end of that,” he said.

Rooftop solar photovoltaics don’t have to be cheaper than the wholesale cost of burning coal or natural gas to tip the market. They only have to beat the retail price of electricity to a business or home owner.

Now, before we get ahead of ourselves, a few caveats. NRG is not the Sierra Club. With $8.8 billion in revenues last year, NRG made most of its money by burning coal, natural gas and oil. Unless and until the cost of solar power drops further, that’s unlikely to change.

Crane believes that the cost curve for solar is trending down fast. Subsidies from China as well as technology advances are reducing module costs. As the industry grows, costs of the balance-of-system costs will be driven lower by standardization and economies of scale. Installation costs are also sure to drop, he said. “We should be able to get to the point where installation isn’t three days, it’s three hours,” he said.

Crane told me:

Our basic view is that within two or three years, we’ll be able to offer electricity from your roof for 12 or 13 cents a kilowatt hour. That may not be that exciting in Texas where the price is seven or eight cents. But I think the average price in Connecticut is 17 cents.

An eVgo charging station at Redskins Park

Cheap solar would change the game, in other words.

The CEO isn’t just talking green. He’s investing NRG’s money in a clean-energy future, and betting consumers will follow. In the last couple of years, NRG has bought Green Mountain Energy, a retail provider of clean energy, for $357 million, and Energy Plus, an energy retailer with a loyalty program, and it  launched eVgo, a network of charging stations for electric cars. Today (Nov. 21), NRG announced the acquisition of Solar Power Partners, a San Francisco firm that develops commercial and industrial solar projects.

Don’t read too much into this, but others in the NRG suite on Sunday were Fred Ni, an executive at the Chinese electric car and solar company BYD (it was his first live football game) and entrepreneur Jack Hidary, founder of Samba Energy, which offers a web-based platform the matches solar power installers with commercial and industrial building owners who want rooftop solar. Both are doing business with NRG.

You can expect NRG to move aggressively into the residential solar market soon, Crane indicated.

We’re not really in residential solar the way we should be, the way that Solar City is, but that is an industry that you’ll see us in. In residential solar, you’re going to see a lot of change. We want to offer a seamless product—we want to supply you both with your grid power and with the solar power on your roof—so that for you it’s simple, you get one bill, one price. No one’s really doing that yet.

If I’d had a bit more time with David, I would have asked him whether NRG might be contemplating an acquisition of Solar City, SunRun, or Sungevity, all of which are  fast-growing companies in the home and commercial solar financing business. You can read about NRG’s green energy plans in detail in this excellent interview at Yale Environment 360.

I did ask him whether cheap, abundant natural gas could derail his solar plans. He replied that the two fuel sources are complementary, with natural gas supplementing solar until energy storage (possibly in the form of electric car batteries) becomes ubiquitous.

Said Crane: “Natural gas is going to take business away from coal. Solar is going to take business away from wind. That’s the way the world is going to work.”

Dan Snyder, the owner of The Washington Redskins, is not exactly a tree-hugger. To the contrary, he once offered to pay the National Park Service $25,000 to cut down trees on federal land near his estate overlooking the Potomac River. So when Snyder embraces solar power, by installing more than 8,000 solar panels at FedEx Field, well, that tells you something.

It tells you that the economics of solar make sense–because Snyder is known for extracting every dollar he can from the business of the Redskins.

It also tells you that he’s a competitor.  The Redskins deal with NRG Energy, a Princeton, N.J.-based independent power producer,  took root at last year’s Super Bowl, after the NFL East rival Philadelphia Eagles announced that they were installing solar, wind and biofuel energy at Lincoln Financial Field. [See my 2010 blogpost, Climate leaders: Chevy, NRG Energy and the Eagles].

No surprise, then, that the Redskins/NRG announcement made a point of calling the solar project “the largest installation at an NFL stadium.” It’s also the largest solar installation in the Washington, D.C., metro area.

While I prefer baseball to football, and the New York Giants to the Redskins (despite last Sunday’s game), I made the trek  to FedEx field by Metro today to see the solar panels and hear what Snyder and David Crane, the CEO of NRG, had to say about them.

"Solar man" sculpture

The array is impressive. About 7,500 panels, made in the USA by Sunpower, cover about 841 parking spaces in the lot next to the stadium, providing shade from the sun and rain. Nearby are charging stations for 10 electric cars. Another 525 roof panels and 188 translucent panels over a ramp, made by Schott, show how solar can be built onto existing structures. Finally, thin film solar panels made by Konarka Technologies  have been assembled to create “solar man,” a solar-powered sculpture of a quarterback outside the park. Nearby is lots of promotion for solar energy and for NRG, which is a good thing–maybe a few members of Congress will pass by and realize that despite the Solyndra fiasco, solar energy can and does work.

Dan Snyder, going green

Snyder was in good spirits, and why not, given his team’s spot atop the NFC East. “I’m really proud of this,” he told reporters. “It’s innovative. It’s special. It’s the future.”

I asked Crane how the deal was structured. He said he couldn’t reveal the cost, but that NRG will own the solar installation, which can produce up to two megawatts of electricity, enough to meet 20% of the stadium’s needs of game days and all of its power on non-game days. The Redskins signed a nine-year deal to buy all of its electricity, solar and grid-delivered, from Reliant, an NRG subsidiary the sells electricity in competitive markets like Texas and Maryland. A 30% federal tax credit offsets some of the capital costs.

“Solar power is very price competitive,” Crane said, “but it takes times to recover your money.”

Bottom line: The Redskins will probably pay about the same as they do now for their electricity, but the costs will be predictable for at least nine years and they will reap the PR benefits of going green. Not a bad deal.

NRG and Reliant, meanwhile, enjoy the marketing benefits of a highly visible solar installation just outside the nation’s capital. The solar array will be spotlighted before this Sunday’s home game against the Arizona Cardinals during the “NRG Solar Bowl Quarterback Challenge” featuring ‘Skins veterans Joe Theisman and Mark Rypien.

Finally, here’s a cool video showing how the solar installation was built. It speeds up time, obviously, but it’s worth noting that solar installation took less than four months to build–less than the time from opening week of the NFL to the Super Bowl.

Washington may be stuck in neutral–or worse–when it comes to climate policy, but NRG Energy and its chief executive, David Crane, are aggressively pushing clean energy.

NRG Energy is investing in nuclear power, solar energy (photovoltaic and utility-scale solar thermal) and electric cars. It’s powering the Empire State Building. It’s even helping to finance off-the-grid solar power in Haiti.

“Washington is not filled with people who are going to lead,” Crane says. So it’s up to business to show the way.

I interviewed David Crane at the State of Green Business 2011 forum in Chicago. He’s always a pleasure to talk to because he’s brimming with ideas and tells it like it is. Based in Princeton, N.J., NRG is a $9 billion a year independent power producer that operates coal, nuclear, natural gas, wind and solar plants.

Here are some highlights from our conversation:

On nuclear power: “Nuclear is the ultimate green solution, if what we are solving for is climate change,” Crane said. NRG wants to build a new 2,700 MW nuclear faciity in Bay City, Texas, next to an existing plant. It would supply enough energy to power 2 million Texas homes. The project requires federal loan guarantees and progress through the regulatory system has been slow.

Despite strong support for nuclear from President Obama, Energy Secy Chu and Republicans in Congress, the U.S. is likely to build no more than two new nuclear power plants in this decade, “which is not exactly a nuclear renaissance,” Crane said.

On the temptation created by low natural gas prices: “The greatest question of the day is how to deal with natural gas,” Crane says. “Right now, left to its own devices, the only thing the power industry would build on an economic basis is natural gas plants  It wouldn’t build wind. It wouldn’t build solar. It wouldn’t build nuclear. It wouldn’t build coal.”

Natural gas plants are, at best, a short-term solution. Natural gas is “obviously from an environmental perspective much cleaner than coal, but it’s an imperative that we get carbon emissions down by 80% by the year 2050,” he said. Natural gas won’t do that, he said.  “The power generation system, I think, basically needs to go to zero. You can’t just cut it in half. And natural gas cuts it in half.”

Why solar has a brighter future than wind: Although NRG has an offshore wind subsidiary called Bluewater Wind, Crane is more enthusiastic about solar. The wind industry has been slow to bring down costs, and it has done so mostly by building bigger and bigger turbines.

Said Crane: “We are not that bullish on wind, compared to solar. We’re fanatically bullish on solar.”

“What we love about solar,” he explained, “is that the sun is more reliable than the wind. The sun tends to be coincident with peak demand for our product, electricity.”

NRG’s biggest single investments for now, he indicated, are solar thermal projects like the 392 MW Ivanpah facility being built by Brightsource Energy in the Mojave Desert  that will be the world’s largest when completed. “This is where most of NRG’s money is going right now,” he said. The company has also formed a venture investment fund with GE and Conoco Phillips which will look at solar technology.

Crane is also excited by the potential of rooftop solar panels because they compete not with coal or natural gas plants but with the retail price of electricity, since they deliver power directly to customers. Solar panels are a form of self-expression for green consumers, he suggested.

“ People who are living a sustainable lifestyle want other people to know that they are living a sustainable lifestyle,” he said. “A solar panel is a billboard.”

Why electric cars as disruptive technology: Working closely with Nissan and other partners, NRG is building an electric car charging system around Houston. [See Climate Leaders: Chevy, NRG Energy and the Eagles.] For $80 a month, customers of an NRG subsidiary called eVgo can get a home charging system and as much electricity as their car can consume. Charging stations will be located at Walgreen’s, Best Buy and HEB supermarkets.

Crane, who owns a Tesla and is buying a Nissan Leaf, says the target market for the cars are the 60 million Americans who own two or more cars. They’ll recognize that the cost of owning an electric car, over time, is less than the cost of driving a conventional one.

On NRG in Haiti: In cooperation with the Clinton Global Initiative, NRG donated $1 million to deliver solar power to schools, health clinics and other public buildings in Haiti, where only 12% of the population is connected to the grid.  It’s also helping power a fish farm.

“With a fairly small solar array, we can increase their production from 200,000 pounds of fish a year to 1 million pounds of fish,” Crane told me. “Haiti itself consumes 17 million pounds of fish a year and, surprising for an island, they only produce five million of their own. This tiny solar array can make a big difference. That’s the type of thing that gets me up in the morning.”

We wrapped up by talking about how to change the public conversation around climate and energy. Three years ago, Crane joined business execs like GE’s Jeff Immelt and Duke’s Jim Rogers and top environmental leaders to call for regulation of CO2 emissions. The leading presidential candidates–Obama, Hillary Clinton, McCain–all supported cap-and-trade.

Since then, he said: “We haven’t gone forward. We haven’t stood still. We’ve basically drowned.”

It’s now up to business to show Americans that clean energy is not a high-cost proposition, but a smart way forward.

“What we need to spend the next several years doing is changing this image of green away from being something that’s expensive, it’s constrained, it’s sincere but it’s unhappy, it’s doom.”

Instead, green needs to come across as better and smarter than conventional energy. “Electric vehicles are fun, happy, optimistic, forward looking,” he said. Solar PV is a clean and appealing technology. Like mobile phones, both could spread faster than the pundits expect.

“The game changers are electric vehicles and solar panels,” Crane said. Let’s hope so.

While the new Congress appears likely to do nothing, or worse, to deal with climate change, and while expectations of the upcoming UN negotiations in Cancun are lower than low, GM’s Chevrolet, NRG Energy and the NFL’s Philadelphia Eagles today all announced climate actions — which suggests that business will keep moving towards sustainability, with or without prodding from the government.

Briefly, the most entertaining news of the day is about the Eagles. (After last week’s Monday Night Football game,  I was tempted to write a headline saying: Philadelphia beats Washington, again! ) The team is installing 80 wind turbines, 2,500 solar panels and a 7.6 megawatt on-site dual-fuel cogeneration plant (which can operate on bio-diesel or natural gas) at Lincoln Financial Field, which may well be, as the team boasts, the greenest sports stadium in the world. Here’s a mockup of the stadium provided by the Eagles.

“This is one of the most exciting things to take place in Philadelphia,” the city’s mayor, Michael Nutter, at ceremonies shown on the web. “Having partners like the Philadelphia Eagles makes going greener much easier.”  Jeffrey Lurie, the owner of the Eagles, and his wife Christina expressed their passion for the “Go Green” initiative, which includes recycling, composting, water conservation as well as renewable energy. (The Eagles even planted 4,000 trees in a Louisiana state park to offset team travel.) Said Christina Lurie: “The Eagles have embarked on a never-ending sustainability journey.”

The deal make business sense for the Eagles, the team said in its announcement.  A Florida company called Solar Blue will install the wind turbines, solar panels and co-generation plant–which will provide about 70% of the electricity–at a cost of about $30 million. The company will charge the Eagles a fixed rate for electricity for the next 20 years. The announcement said the deal will save the Eagles “an estimated $60 million in energy costs,” an estimate that sounds like a best case scenario. (They can’t really know much they will save because no one knows what electricity from the grid will cost 10 or 20 years from now. And natural gas, which will fuel the generator, is neither renewable nor clean.) Nevertheless, the project has real symbolic value–think how many football fans, both at the games and watching on TV, will see how low-carbon wind turbines and solar panels can be used as substitutes for fossil fuels.

The Chevy announcement today is also symbolic–a $40 million investment in communities across the country to reduce greenhouse gases, by financing renewable energy, energy efficiency and tree-planting projects. The carbon reduction effort — which includes its own website, www.chevycarbonreduction.com — is timed to coincide with the release of the electric Chevy Volt. The company aims to offset about 8 million tons of carbon emissions, explaining:

GM estimates its new carbon-reduction goal equates to the emissions in 2011 from driving the 1.9 million vehicles Chevrolet is expected to sell in the United States over the next year. According to www.epa.gov, 8 million tons equals the CO² emissions of one year of electricity use in 970,874 homes or the annual carbon reduction from 1.7 million acres of pine forest. Projects will be implemented during the next three to five years.

I spoke about the announcement to Joel Ewanick, GM’s vice president of marketing, who drove a Volt from Detroit to the LA auto show last week, who said that the Volt, the carbon-reduction projects and the fuel-efficient Chevy Cruze is part of a new approach to environmental issues from GM. “At the end of the day, we know we have to reduce the CO2 emissions from our cars,” Ewanick said. Rather than fight fuel-efficiency regulations or carbon controls, he said, “We’re going to use technology and innovation to tackle those challenges head on.”

Chevy expects to sell about 10,000 Volts in 2011 and another 45,000 in 2012, Ewanick told me, but the car will have an importance that goes beyond its sales figures. It had better–most analysts think there’s little chance that GM can make money on the Volt because of the high initial cost of its batteries. The hope is that the car will have a halo effect for Chevy, just as the Prius has  enhanced the Toyota brand.

“This is a car that we think will change the way people drive cars for the next couple of decades,” Ewanick said.

The clean energy and energy efficiency projects will be administered for Chevrolet by third-party organizations such as Bonneville Environmental Foundation, a nonprofit based in Portland, Ore.  Other NGOs advised GM, too, and the company won plaudits from the likes of Eileen Claussen, president of the Pew Center on Global Climate Change, who is quoted in the news release as saying:

Chevy is an iconic emblem of America and it is a big deal that it is stepping forward to address one of our greatest challenges – moving us toward a low-carbon future…Chevy’s Volt and its clean energy investment both exemplify the bold leadership businesses can take today to address our changing climate.

Finally–and this is the most significant announcement of the day–NRG Energy says it will build the first privately funded network of electric car charging stations in the U.S. in Houston, of all places. [See Why the "Petro Metro" wants electric cars.] Working with local utilities and such retailers as Best Buy and Walgreen’s, NRG’s network, which is branded as eVgo (don’t ask me why the V is upper case), will including home chargers, about 50 to 150 chargers around Houston and incentives for employers to offer charging facilities to employees. It’ll cost about $10 million, which is pocket change in the world of merchant utilities such as NRG, as David Crane, the company’s CEO, noted in a call with reporters.

Crane, who drives a Tesla, is a big believer in electric cars as well as a supporter of clean energy. (NRG recently bought Green Mountain Energy, a retailer of clean electricity that operates in competitive electricity markets, like much of Texas.) He aims to establish eVgo as a national brand of charging stations, deploying an innovative business model: In Houston, consumers who sign a three-year contract will pay a monthly fee of $49, $79 0r $89, which includes a home charger and, in the case of the higher-priced plans, unlimited electricity from eVgo network stations. One minute of charging will deliver three to four miles of driving. (Details here, and for those of you who have been paying attention, yes, this is similar to Shai Agassi’s Better Place, which borrowed the model from the mobile phone industry. Instead of buying unlimited minutes for your monthly fee, you buy unlimited electricity.)

There’s no more need to pay for gas every time at the pump,   not that anyone will need pumps with all-electric cars.

“The service station of the future is your garage,” Crane likes to say.

NRG has a long list of partners in Houston, most importantly, Nissan, which is rolling out its electric Leaf. (Not the Chevy Volt, which relies on a gas engine to extend its range.) Others include Aptera, Hertz, Gulf States Toyota and SmartUSA for cars, AeroVironment and GE for the charging stations, and TXU Energy, a rival utility.

If Nissan sells lots of electric cars in Houston, and NRG and its partners sell lots of electricity, and the cars make economic sense for their owners — all big ifs — people will look back at this deal as a key moment in the electrification of the U.S. auto industry.

Electrification of cars will slow down what Crane called “the staggering transfer of American wealth to oil producing  countries.” And, of course, it will reduce GHG emissions.

Washington may not be ready to do much about that, but NRG is. Said Crane: “We believe society is trending towards sustainability.”

In this sluggish economy, you would think that selling expensive electricity to businesses or homeowners would not be a good business. But the solar-power industry is doing exactly that. Solar power is more expensive that making electricity from natural gas, coal, wind or existing nuclear plants, and yet the business is booming. [See: U.S. solar power: doubling in 2010!]

Hardly a day goes by without good news for the solar industry. For example:

BrightSource Energy, Inc. just announced that power generation company NRG Energy will invest up to $300 million to become the biggest owner of the  Ivanpah Solar Electric Generating System, the largest solar thermal system in the world, just beginning construction in California’s Mojave Desert. Gov. Schwarzenegger and Interior Secy Ken Salazar joined in a groundbreaking today. That’s a mock-up of the Ivanpah plant, above.

And:

SunRun, a California-based home solar company, said this week it received an additional commitment of tax equity from an affiliate of U.S. Bancorp to develop 1,900 residential solar installations. Given that the typicalinstallation costs about $35,000, that’s roughly a $65 million investment. SunRun has now raised more than  $300 million in project financing.

Recently, I visited a solar PV manufacturer,  Solyndra, at its headquarters in Fremont, CA. While Solyndra is worried about competition from low-cost manufacturers in China, it is still selling all of the photovoltaic panels it manufacturers. Recently:

It announced deals to installs its cylindrical solar panels on the roof of a Frito-Lay manufacturing plant and on rooftops in the Los Angeles area that will supply 16.2 MW of power to Southern California Edison.

None of this comes cheap, although calculating the cost of solar power is not simple–it depends on the kind of system in place, its location and the costs of financing, since “fuel” from the sun is free. Solarbuzz, a respected source, says that:

Solar Electricity Prices are today, around 30 cents/kWh, which is 2-5 times average Residential electricity tariffs.

According to the Energy Information Administration, the average residential price for electricity in June was 12 cents/kWh, the  average commercial retail price was 10.70 cents/kWh and the  average industrial retail price was 7.31 cents/kWh.

So why do the economics of solar power work for the industry? The answer, you won’t be surprised to learn, is generous government subsidies.

Take that Ivanpah solar-thermal plant. It’s big: 392MW, enough to power 140,000 homes. “That’s greater than all of the solar in the U.S. that was constructed last year,” said Brightsource CEO John  Woolard, on a call with reporters today.

Getting the project off the ground required a$1.375 billion in loan guarantees from the U.S. Department of Energy as well as a cash grant of $500 to $600 million under a Treasury Department program that has replaced, temporarily, an investment tax credits for solar. Put another way, the government is investing twice as much in the plant as NRG, which will own 40 to 60% of the equity. [NOTE: A early version of this blog was incorrect on this point.]

What’s more, California has an aggressive Renewables Portfolio Standard, requiring utilities to buy 20% (soon likely to be lifted to 33%) of their power from renewable sources by 2030, which helped create demand for the Ivanpah plant. That law permits Pacific Gas and Electric (PG&E) and Southern California Edison (SCE), which have contracted to buy the electricity, to charge ratepayers for the higher costs of renewable energy.

SunRun and its investor, U.S. Bancorp, also benefit from the Treasury Department grant program (known as 1603, and part of the 2009 stimulus package) and from the California Solar Intitiative, a state program that offers homeowners and businesses cash rebates if they install solar power. Rebates can cover as much as one-third of the cost of a home system; the $3 billion, 10-year estimated cost is shared by all ratepayers.  Solyndra, meanwhile, also won approval for a $535 million DOE loan so it could build a cool new factory (see photos below) to make its innovative cylindrical CIGS thin film solar modules.

Good arguments can be made on behalf of all these projects, and their subsidies. First, they displace fossil fuels, which for now (and for the foreseeable future in the U.S.) can emit global warming pollutants into the air without paying a price. Second, they can help the still-new solar industry get bigger and bring down its costs, through economies of scale and learned efficiencies.

“We’re striving to get a point where the global demand is no longer metered by the political incentives,” said Mike Grunow, vice president of marketing for Solyndra. The company also has to compete on the global market with Chinese panel makers that benefit from cheap financing and land, as well as low labor costs.

David Crane, the CEO of NRG, said today that without clean-energy subsidies, utilities would build only natural-gas plants right now because gas prices are so low. “That would be a huge mistake for our country in terms of fuel diversity and the environment,” Crane said. Natural gas burns cleaner than coal, but it still produces significant greenhouse gas emissions. Utility-scale solar-thermal technology, he argues, has the potential over time to compete with fossil fuels.

For their part, SunRun, which serves homeowners by providing finance and taking the hassle out of solar installations, and Solyndra, whose cylindrical panels are designed for flat, commercial roofs, both provide electricity at places where it’s used (as opposed to in large-scale plants like Ivanpah). By doing so, they eliminate the costs of transmission and compete not with the wholesale cost of buring fossil fuels but with the retail price of electricity.

Ed Fenster, SunRun’s chief executive, told me by phone the other day that Solar PV is “well suited to displace the most expensive power you can find. That is the power that’s sold to homeowners.” He added: “You could never build a residential-scale, cost-effective nuclear power or natural gas plant.” True enough.

But assuming we can agree that there’s good reason to subsidize solar power, as well as other forms of low-carbon electricity (including nuclear), you have to ask–is this hodge-podge of loan guarantees, federal funds and ratepayer support an efficient way to do so? Wouldn’t it be better to enact a steep carbon tax, and then let all forms of energy compete? Should a friend of mine who lives in upscale Los Altos and put a $35,000 solar system on his roof be subsidized by the rest of us? Is this going to lead us to a sustainable energy future, one in which we can collectively make smart choices? I don’t know. But somehow I think not.

A robot delivering panels inside Solyndra's factory

Solyndra panels on the roof of its factory

If you are someone who watches your dollars and cents, you probably don’t own a plug-in hybrid. Sure, they deliver good gas mileage but it’s not good enough to offset the higher sticker price needed to cover the costs of the battery. (That’s why I own a Honda Fit.) Cars like the Toyota Prius and Honda Insight are expensive ways to say, ‘I’m green.’

Nissan Leaf

Electric cars are another story, and that’s why the arrival of the Nissan Leaf and the Chevy Volt in just a few months could become a watershed moment for the auto industry, as well as for the environmental movement. Unlike the Prius, the Leaf and Volt are not aimed at the early-adopter, eco-conscious, well-to-do niche buyers on the coasts and in places like Amherst, Ma., and Ann Arbor, Mi. They are being built for the mass market.

The economics make all the difference.

That, at least, is my takeaway from a discussion about electric cars held earlier today at a Washington Post Live event called Energy Now. (Video will be posted on the site, the newspaper says.) The panel was stacked with electric-car enthusiasts–Tony Posawatz from Chevy, Carlos Tavares of Nissan, David Crane of NRG Energy, David Vieau of battery-maker A123 Systems and a lone skeptic, Alan Crane of the National Research Council. But with the exception of Alan Crane, they all argued that electric cars will be not only fun to drive, not only convenient (because you don’t need to drive to a gas station to refuel) and not only good for the climate and for U.S. energy security, but also cheaper to own over the life of the car.

Chevy Volt

That’s essentially because (1) electric car engines are more efficient than internal-combustion engines and (2) generating electricity from a big coal, natural gas or nuclear plant is more efficient than burning gasoline in millions of cars.

This isn’t a new argument. I’ve heard it from people like David Sokol of Berkshire Hathaway and BYD, and from Shai Agassi (See Electric cars: all systems go) but David Crane’s explanation today laid out the math in clear terms.

Describing NRG’s plans in Houston (see Why the Petro Metro wants electric cars), Crane said the NRG-owned utility company, Reliant Energy, is working with Nissan and plans to offer Leaf owners an all-you-can-eat model for buying electricity to power the car. Here’s the selling proposition:

First, NRG would buy and install a Level 2 car charger for the home. Those are worth $1,500 to $2,000, Crane said, and they can fully charge a Leaf, which has a range of about 100 miles, in four to eight hours. “You come home from work, you plug it in, and in the morning it’s ready to go again,” he said. Second, NRG will build a network of charging stations around the city of Houston. “At no point will you be more than five miles away from a fast charge,” he said. )The business model for sustaining the stations remains uncertain.)  Third, NRG will offer  unlimited mileage for three years at a price still to be determined, but estimated at $70 to $80 a month, added to the utility bill. After the three years, the price would drop because by then NRG will have recouped the cost of the charging station and would only need to pay for the electricity.

So how does the math look? At $80 a month, fuel costs for the Leaf would be $960 a year. By comparison, assume that you drive a conventional car 15,000 miles a year and get 20 mpg. You’ll buy 750 gallons of gas. At $2.58 per gallon, the current average price on the Gulf Coast, you’ll pay just under $2,000 a year.

You can challenge my assumptions, but that $1,000 a year in fuel savings will over time offset the upfront cost of the Leaf, which is roughly $25,000 after a federal rebate in most places and $20,000 in California which offers a state rebate as well. If gas prices rise, the deal looks sweeter. It looks better yet if, as seems likely, the costs of batteries (and the sticker price) falls.

Then there are the psychic benefits. A123′s Vieau said the company has already hired 300 people at the battery-making plant it just opened in Livonia, Mi., and expects to hire many more. “We’re shifting dollars spent on oil overseas to create jobs at home,” Vieau said.

People who care about the environment, meanwhile, can take pride in the fact that they are driving cleaner cars.

“American’s want to make a difference if they can,” NRG’s Crane said. “Look at the organic food business.”

Now, a couple of caveats: Today’s electric car business is heavily subsidized, it must be noted. Buyers get tax breaks. Battery maker A123 got a $249-million stimulus grant, a federal loan guarantee and state subsidies and Nissan was given a $1.4 billion energy department loan guarantee to retool a plant in Smyrna, Tennessee. GM, of course, got bailed out.

The second caveat is that it will take years for electric cars to have a major impact. The Chevy Volt will be available in only seven states at first, Posawatz told me that Chevy will make only “thousands” of the cars in the first model year, and “tens of thousands” after that. “If the demand is there, we’ll keep building more,” he said.

Nissan will make about 60,000 Leafs in  Japan during 2011, for the world market. Nissan had been taking pre-orders for the Leaf on its U.S. website, but stopped today because 20,000 have been ordered. The company will be able to build more starting late in 2012 when it opens the Smyrna plant, which has a capacity of 150,000 units a year.

To put that in context, there are more than 250 million cars on the road today in the U.S.

Still, I received an interesting 62-page report earlier today from HSBC Research called Sizing the Climate Economy. (If you Google it, you can download a PDF.) Its best guess is that the market for low-carbon vehicles — essentially, electric cars — will grow to $473 billion worldwide by 2020, making low-carbon transport business a bigger investment opportunity than low-carbon energy.

Electric cars, in other words, are going to be a very big deal.

FORTUNE’s third annual Brainstorm Green conference about business and the environment starts today (Monday), and one new twist this year is that you can play along at home.

For the next three days, many of the plenary sessions at the event, which is being held at the Ritz Carlton in Dana Point, Ca., will be shown on the web. People who sign up to attend online will be able to ask questions, I’m told. This is an experiment, an effort to see how a virtual conference will work and, of course, to expand FORTUNE’s business. (Hint: You can tune in for free this year, but that may not be the case in the future.)

As the co-chair and creator of Brainstorm Green, I’m obviously biased but I think we’ve got a great lineup again this year. I’m going to take a break from blogging for a few days to focus on the conference. Here are some  highlights:

Today (Monday) at 3:05 p.m. (all times are listed as Pacific Time, so this is  6:05 in the East), Lee Scott, the former CEO of Wal-Mart who is now chair of the executive committee of the Wal-Mart board, will talk about Wal-Mart’s sustainability efforts with John Huey, the editor in chief of Time Inc. John is a great interviewer who once wrote a book about Sam Walton, so this session should be a treat.

Following that session, at about 3:50 p.m.,  I’ll be asking some of America’s most important environmental leaders: What Do Environmentalists Want? Joining me will be Frances Beinecke of the Natural Resources Defense Council, Mark Tercek of The Nature Conservancy, David Yarnold of the Environmental Defense Fund and Mike Brune, the new head of the Sierra Club. We’ll talk about the outlook for climate legislation in Washington, as well as such hot topics as nuclear power and geoengineering.

Later Monday, I’ll talk to Sally Jewell, the CEO of REI, about “sustainability as a team sport.”

David Sokol

On Tuesday at 9:15 a.m., David Sokol, the chairman of MidAmerican Energy Holdings and a director of Chinese electric car company BYD, will talk with FORTUNE managing editor Andy Serwer. Sokol is a fascinating guy, a plain-spoken Midwesterner who may be in line to succeed Warren Buffett at Berkshire Hathaway, so we are calling the session Warren Buffett’s Power CEO.

We’ll follow that with a panel called Renewable Energy—Hype and Reality. I’ll be speakng with Jeff Broin, the CEO of POET, the big ethanol company; David Crane, CEO of NRG Energy; Bill Gross, the founder of eSolar; Katrina Landis, who runs the alternative energy division at BP; and Martha Wyrsch, president of Vestas Americas.

Later on Tuesday, we’ll webcast panels on nuclear energy and electric cars as well as one-on-one interviews with Lew Hay, the chairman and CEO of FPL Group and venture capitalist Vinod Khosla, who is never dull.

On Wednesday, I’m going to lead a discussion about sustainable consumption. The basic question: How can a company or an economy grow its business, generating things we want like jobs and wealth, while at the same time limiting or shrinking its environmental footprint, so we get less of what we don’t want, like pollution and greenhouse gases. Tackling that topic will be Cliff Burrows, the president of Starbucks U.S., Scott Griffith, the CEO of  Zipcar and Robin Johnson, the chief information officer at Dell.

Also on Wednesday, my co-chair Brian Dumaine will moderate a penal on sustainability indices, notably the one being led by Wal-Mart. Andy Serwer will interview Yvon Chouinard, the legendary co-founder of Patagonia. And Andy will wrap up with a conversation with Bill Ford, the executive chairman of Ford Motor.

It’s going to be a great three days, I hope. I’ll take lots of notes and report back when I come up for air.

Why on earth would Houston, the city of drill-baby-drill, the fossil-fuel capital of America, the city whose NFL franchise used to be called the Oilers, embrace the electric car? For good reason, it turns out–so says the city’s mayor, the local utility company, Reliant Energy,  its parent company NRG Energy and NRG’s CEO, David Crane.

“Houston’s not a natural market for electric cars,” Crane admitted, when we met the other day. “But electric cars are good for our business in all kinds of ways,” he added. So NRG and Reliant is working with officials Houston, America’s 4th largest city, to persuade Nissan to make Houston one of the leading launch markets for the Nissan Leaf, the all electric vehicle that the Japanese automaker plans to start selling later this year.

Houston's skyline at night

“We are the Petro Metro, but we are also a car city,” said Houston’s newly-elected mayor, Annise Parker, at an event earlier this month to welcome Nissan to the city. Certainly there’s a sizable market awaiting Nissan in the city. Houston is home to 4.5 million vehicles that travel 86 million miles a day, according to Reuters.

The problem for Houston–and for most other cities that want to welcome electric cars–is that it lacks an infrastructure of charging stations where electric car owners can fill up their cars with, er, electricity. This winter, Nissan took the Leaf on a three-month, 24-city tour designed to spark excitement about the car, a five-passenger car that the company says will travel about 100 miles on a single charge.

But because the Leaf will be produced in limited numbers, at least at first, the tour was also a way for Nissan to solicit partners, mostly cities and utility companies, that will assume the costs of building charging stations that will allow electric car drivers to overcome what is known as “range anxiety”–the feeling that they might run out of electricity without a charging station nearby.

Nissan has persuaded a number of cities to build charging stations, including those that are part of the EV Project, which the company says is the world’s largest EV infrastructure deployment. Nissan says:

The EV Project, funded by a $98 million grant from the Department of Energy and led by EV infrastructure provider eTec, a division of Ecotality, will provide an unprecedented number (6,510) of public charging stations across the 5 participating markets and will provide home charging stations for up to 4700 Nissan Leafs sold in those markets. The public stations will include both Level 2 (240V) and Level 3 DC fast chargers.  The EV Project markets are Seattle, Oregon, Tennessee (Knoxville, Nashville and Chattanooga), Phoenix/Tucson, Ariz., and San Diego.

You’ll note that Houston isn’t on that list. That’s where Crane, NRG and Reliant come in. Last fall, Reliant and Nissan said they’d work together to build a network of charging stations. Reliant also launched an EV pilot project with 10 city-owned Toyota Prius cars that have been converted to plug-in hybrids. “Those are just a taste of what’s ahead,” Crane told me.

Crane’s one of the liveliest and most likable energy executives around. The Princeton- and Harvard-educated CEO is smart, straightforward and funny. As CEO of NRG, he leads an independent power producer (meaning that its electricity is usually sold to consumer-facing utilities, not directly to homeowners or businesses) that is investing in an array of low-carbon energy sources–nuclear power, utility-scale solar thermal plants and solar photovoltaic arrays. NRG is exploring offshore wind energy and so-called clean coal, too.

For electric power companies like NRG, which have seen demand for electricity slip during the recession, the electric car represents a new business opportunity, at least in theory. As  Kevin Book, managing director of research at ClearView Energy Partners LLC, told Reuters: “What a salvation the electric car revolution would be for generators that are well below their capacity margins and trying to figure out how to make money.”

While Houston may lack the green culture of, say, Portland, Oregon, the city wants to welcome electric cars for a couple of reasons, Crane explained.

First, west Texas has an abundance of cheap wind energy (See my blogpost, Electricity That’s Cheaper Than Free) that is available overnight and during periods of low demand to recharge electric cars at a low cost.

Second, Houston has a serious smog problem. The EPA is proposing tougher limits on ozone pollution, which contributes to smog, and those limits “will force Houston to make deeper emissions cuts just as the former smog capital met the previous standard for the first time,” according to The Houston Chronicle. Cities that fail to comply with EPA air pollution rules run the risk of losing federal highway funds.

No wonder Houston’s civic and business establishment are eager to welcome the Leaf, which markets itself a Zero Emission Car, apparently choosing not to count the emissions created when coal or natural gas is burned to make electricity.

Nissan Leaf

All this, in the end, will be driven by the compelling economics of electric cars. (See Electric Cars: All Systems Go.) In the U.S., assuming $3 a gallon gas, fuel costs for a mid-sized car with an internal combustion engine are about 12 to 14 cents a mile. For an electric car, with its more efficient engine, electricity costs are 2 to 4 cents a mile. That doesn’t include the substantial cost of amortizing the battery but, even so, as Crane put it: “There’s a big delta in there that you can use to pay for other services.”

He envisions Reliant helping Nissan to sell the Leaf by providing a Level 2 (medium-fast) charging station for the home and then selling the new car owner a contract to buy as many miles as desired. “Think of the electric car as a cellphone,” Crane says, where the utility is the equivalent of A&T or T-Mobile, selling access to a network and minutes instead of miles. Crane can get even more excited talking about V2G, or a network of electric vehicles tied to a smart grid, where owners could buy cheap, clean, wind-powered electricity at night and sell it back to the grid during the day when demand peaks.

A futuristic vision? Maybe. Then again, Crane gets around his home town of Princeton, N.J., in a Tesla that he’s been driving for seven months. It’s too small to ferry his kids to their hockey games but otherwise it’s been trouble free, it’s got a range of more than 200 miles, and it charges overnight.

“Your garage,” he says, “is the service station of the future.”

I’m pleased that David Crane will be joining us again in April at FORTUNE’s Brainstorm Green conference on business and the environment, where he’s talk about electric cars, NRG’s nuclear ambitions and the Washington scene.

William Clay Ford Jr.

Before I head to Copenhagen this week for the global climate extravaganza, I want to bring you the latest news about Brainstorm Green, FORTUNE’s conference about business and the environment. I’m delighted by the caliber of leaders and thinkers who have agreed to speak at the event, which will be held April 12-14 in Laguna Beach, CA.

Bill Ford, the executive chairman of Ford Motor, who was a huge hit last year, will be back in 2010. Ford (the company) is one of the few bright spots in the U.S. auto industry, as you know, and while it took a long while coming, the firm seems committed to hybrids, electric cars and other environmentally-friendly technologies, including wheat-straw reinforced plastic and other bio-based materials. Hybrid sales are taking off, as the company recently reported:

Ford Motor Company’s year-to-date hybrid sales are 73 percent higher than the same period in 2008, fueled by the introduction of hybrid versions of the 2010 Ford Fusion and Mercury Milan

More than 60 percent of the sales of Fusion Hybrid are by non-Ford owners – with more than 52 percent of those customers coming from import brands.

Stewart Brand

One of the best books that I’ve read in a long time is Whole Earth Discipline: An Eco-Pragmatist Manifesto by Stewart Brand, so I’m thrilled to announce that Stewart will be featured at Brainstorm Green. In the book, he brings a fresh perspective to nuclear power (he’s for it), geo-engineering (he’s intrigued) and megacities (they are both green and engines of economic growth). You can be sure he will challenge conventional wisdom at the conference.

Three powerhouse leaders of the enviromental movement–Frances Beinecke of the Natural Resources Defense Council, Fred Krupp of Environmental Defense and Mark Tercek of the Nature Conservancy–are also planning to attend. Fred and Frances have ben at the event before, and they both plugged into the Washington scene, which will surely be a topic this spring, while Mark, formerly of Goldman Sachs, will be able to offer great insight into the role of markets in solving environmental problems.

Sylvia Earle

New to Brainstorm Green this year will be Sylvia Earle, the well-known American oceanographer. Dr. Earle was chief scientist for the U.S. National Oceanic and Atmospheric Administration from 1990-1992, and she has been a . National Geographic Explorer-in-Residence. We’ll be talking about the health of the world’s oceans, from a business perspective. Other voices on that topic will include Kim Lopdrup, president of the Red Lobster seafood chain.

Since this is a FORTUNE conference, we’ll also be hearing from some of the most thoughtful and influential CEOs and business leaders in the world. I’ve already reported that Lee Scott, the former CEO of Wal-Mart who is now chairman of the company’s executive committee, has agreed to speak. So, once again, has Paul Hawken, the influential author and thinker who, among other things, has advised Wal-Mart. I’m hoping that Paul, who did a fabulous job for us last year, will have news to share about the innovative solar power company he’s been working hard on.

David Sokol

Other chairmen, CEOs or presidents we will be hearing from include Lew Hay of FPL Group, Jeff Smisek of Continental Airlines, Arne Sorenson of Marriott, David Sokol of Mid American Energy (and board member of BYD Automotive), David Crane of NRG Energy, John Replogle of Burt’s Bees, Sally Jewell of REI, Bill Roe of Coskata, Randy Zwirn of Siemens Energy, Kevin Surace of Serious Materials, Kevin Czinger of Coda Automotive and Naomi Porat of Zeta Communities.

We’ll also have investors Vinod Khosla of Khosla Ventures, Alan Salzman of VantagePoint Venture Partners, Wilber James of Rockport Partners, Anup Jacob of Virgin Green. We’re working on getting Obama administration officials. We’ll showcase some great green ideas you haven’t heard much about.

Meanwhile, we are organizing a series of panels that I think of as news-you-can-use, explaining how  how to think about, organize and implement sustainability practices in big companies. Just this week, for instance, Will Sarni, the founder and CEO of consulting firm Domani, agreed to help me organize a conversation about why your company needs a water strategy. (Will is literally writing the book on that topic right now.) And Justin Yuen, the dynamic young president of FMYI, will lead a discussion about how to engage employees around sustainability–how to get them excited, tap into their best ideas and measure progress.

One last treat: Have you ever seen Julie Scardina on The Tonight Show? She has been on the program more than 20 times! Julie is the “animal ambassador” of Sea World and Busch Gardens, as well as an expert conservationist. She will be a Brainstorm Green and, yes, she will be bringing some of her “friends” along.

Brainstorm Green will be held April 12-14, 2010, at the Ritz Carlton in Laguna Niguel, CA. You can sign up to attend at the website. As the co-chair of the event, with my FORTUNE colleague Brian Dumaine, I’m also open to hearing proposals for just a few more speakers. (We could use an expert on geoengineering, for example.) No hurry–I don’t expect to be extending any more speaking invitations until after I return from Copenhagen in about 10 days.

“We are producing the lowest cost solar electrons in the history of the world,” Bill Gross is telling me. “Nobody’s ever done it. Nobody’s close.”

Bill Gross is nothing if not an enthusiast, which makes him a great salesman for whatever it is he happens to be selling. A lifelong entrepreneur, a longtime evangelist for solar energy and the CEO of eSolar, a Google-funded startup that designs and develops concentrating solar power (CSP) projects at utility scale, Gross is one of the most interesting business people I’ve known.  I met Bill in 2002, when I wrote a critical story about him for FORTUNE – investors in Idealab, his Internet incubator, were suing him after the dot-com bubble burst – and although he and his wife, Marcia Goodstein, were more than mildly irritated with me then, we’ve reconciled and I now count myself as an admirer of Bill’s. He’s always got a million things going on, some of them slightly nutty, but all of them interesting.  He’s in the robot business with a company called Evolution Robotics and he’s the founder of Aptera, a very cool electric car company (in which Google has invested) that I wrote about last spring.

Today, Bill and eSolar are staging a grand opening for eSolar’s first plant, called the Sierra SunTower, located in the southern California desert near Lancaster. Below are a couple of photos, taken by Bill, from a helicopter ride over the plant on July 3. He sent them to me via Picasa, the photo sharing site now owned by Google, which he founded back in the 1990s. Like I said, he’s a serial enterpreneur. (Bill also invented the idea of paid search, but that’s another story.)

In any event, this eSolar plant is a big deal, according to Bill, because it is producing solar energy at a lower cost than other solar thermal plants and at a much lower cost than utility-cale solar photovoltaic arrays. Concentrating solar power (CSP), also known as solar thermal power, produces energy by using mirrors or lenses to focus the sun’s heat and boil liquids that become a heat source for a steam turbine. Climate-change expert Joseph Romm, writing in Salon, opined last year that solar thermal

will be the most important form of carbon-free power in the 21st century. That’s because it’s the only form of clean electricity that can meet all the demanding requirements of this century.

Solar thermal technology has been deployed commercially for decades, but Gross tells me that eSolar has been able to drive costs down by mass-producing and deploying thousands of small mirrors across fields that track the sun and reflect its heat back at a thermal receiver mounted on a tower. ”Our breakthrough is lots and lots of small mirrors, and lots and lots of software to control them,” he says. The Sierra SunTower alone uses 24,000 mirrors, made by a contract manufacturer in China. You can read about the technology and see pictures here on eSolar’s website.

Through a power purchase agreement with Southern California Edison, the Sierra SunTower plant will supply 5 MW of clean energy to the grid. That’s not a lot, but it’s just the start of big things to come, Gross says.

While Google is eSolar’s best-known investor, two other big backers of the company—an Indian energy and telecom firm called the ACME group and Princeton, N.J.-based NRG Energy—are ready to step up their commitment to solar thermal, now that they can measure the cost and efficiency of eSolar’s technology under real-world conditions.

Acme, which invested $30 million in eSolar, has agreed to invest another $20 million, Gross told me. ACME has said it plans to build, own and operate up to 1 GW of solar thermal plants over the next 10 years using eSolar’s designs and mirrors. Construction will begin this year.

NRG, meanwhile, plans to start building a 92 MW plant in New Mexico as soon as it wins regulatory approval, Gross says.  NRG has agreements with eSolar to develop solar power plants with a total generation capacity of up to 500 MW at sites within California and across the southwest.

I emailed David Crane, the chief executive of NRG, to ask him about eSolar. He was on his way to today’s ceremony and emailed back:

Bill Gross is the kind of can-do visionary–with the innate ability to find the “winning” disruptive technology of the future–who we, at NRG, want to work with as we seek to deploy a new generation of sustainable and climate-friendly power technology in this country.

It’s impossible for me to evaluate Gross’s claims for his technology. But the fact that big companies are willing to invest capital in eSolar—at a time when capital is scarce—leads me to believe that Bill is, once again, onto something big.

“We have a cost-effective, no-subsidy solar power solution and it’s for sale, anywhere around the world,” he says.

Bill Gross and David Crane are regulars at FORTUNE’s Brainstorm: Green conference about business and the environment, which I co-chair, and I’m pleased that they’ll both be back as speakers next year.

eSolar's Sierra Sun Tower plant