January 04, 2018  Outside/In Radio

There’s a legend among energy nerds.

It’s the kind of thing that is whispered to the new guy at the water cooler, “You want to know where this business really got its start?”  It’s the sort of thing that, as a reporter, you hear over and over again.

According to this legend, California pot-growers — with their illicit capital and counter-cultural ideas — were instrumental in getting solar manufacturing off the ground, and without them, the industry as we know it would have withered on the vine.

So we set out to find out: where did this legend start, and is it true?

These days, solar energy has gotten really cheap.  In certain places, depending on how you crunch the numbers, it can be the cheapest type of energy out there, and it’s becoming easy to forget that back in the ‘70s and ‘80s, it was incredibly expensive stuff.

“Solar in those days was like a religion, you had to believe.  And you had to espouse the religion.  And I was a believer,” says Arthur Ruden, a 40-year veteran of the industry who worked for America’s first big solar panel manufacturer: ARCO solar.

Arthur is a businessman; an east-coast conservative.  His job was to sell solar modules — the more the better — and at one point, he noticed that one of their sales representatives was doing pretty well.

“And we asked him, where are they going?"  The reply?  "‘Oh, Northern California.’”

This was a confusing answer to most people at ARCO.  What’s going on in Northern California? So they sent Arthur to check it out.

What he found was that there were a handful of little shops — mom and pop retailers — that were selling solar panels to regular folks. People were rolling up to these stores, and laying out cash for these incredibly expensive pieces of technology.  So, what where was the money coming from?

“There was enough familiarity with various cultures that we kinda knew what crops they were growing and where it came from,” says Arthur.

The source was illegal marijuana sales.

 

“Dr. Kludge”

If you’ve got a bunch of money from growing weed, why would you spend that cash on super expensive technology that was essentially fresh off the satellites over at NASA?

To answer that question, you need to know the story of Kathleen Jarschke-Schultze. A name that came to be very familiar to certain solar devotees.  But back before Kathleen was a household name for people in the solar industry, she lived a fairly normal big-city life.

“I was psychiatric technician, and I could go six months without stepping on dirt,” she says. “I’ve thought about this.  There were whole points in my life where all I did was walk on asphalt, sidewalk or linoleum floors in a hospital.”

But Kathleen’s life looks very different now.  She was introduced to a man (who charmingly went by “Bob-O”) by a friend, and they began sending each other letters.  Eventually Bob-O coaxed Kathleen into coming to visit him.

“I said, ‘you live in the middle of nowhere,’ and he said, ‘yeah kinda but come visit me anyway.’”  Kathleen remembers, “So I did, and we got snowed in for a week and then I never left.  And that was 32 years ago.”

Kathleen had unwittingly become part of what would come to be known as the “Back to the Land” movement.  He was a hippy, and part of the counterculture was a rejection of the way everyone lived their lives.  They lit the house using a tiny hydropower turbine — about the size of a lunchbox — dropped into a river out back, that charged a couple of 12-volt car batteries.  They communicated with the outside world using a HAM radio, and heated the house entirely with firewood.

And because of their experience living in this house out in the middle of nowhere, lit up by a tiny, cobbled-together electric system, Kathleen and husband Bob-O were able to get jobs writing for Home Power Magazine, which was like a pre-internet internet forum.  It is full of letters from readers that said “Hey, here’s what I did.  Here’s how I get electricity.  Here’s how I wired my lights.”

“It was called the hands-on journal of home-power,” says Kathleen.  It was the handbook of how to build an off-grid life with bubble-gum, baling wire and soldering irons.  “We called it kludging... Dr. Kludge.”

40-Acre Suburbia

It was those articles about kludgy home-made, off-grid homes that made Kathleen famous among distributed energy nerds, because there was serious demand for solutions for these homesteads.  Many were getting by with dim, smokey kerosene lamps, and hauling water for drinking and taking cold showers.  Their homes were often miles from the nearest electrical line, which would have made a grid-connection prohibitively expensive.

This made them a perfect fit for solar panels: they didn’t really need much power, and they were willing to pay a little extra for something more convenient than a diesel generator.

“My introduction to solar was ... a guy named Sam walked in one day, brought in a little solar panel, about a foot square and said, ‘You know you should really sell these in your store,’” says Johny Hill, who lived off-grid and ran a little shop called the Earth Store, which served the back-to-the-landers.

“He said ‘well, it’s a solar panel and you can hook it up to a battery and then you can have lights!’”  Johny remembers, “And since kerosene was my biggest selling item in store I thought … ‘oh, that’s really gonna be bad for kerosene sales.'  And it really kinda was!”

But for the legend about the early days of solar power to be true, this would have to be a pretty big market.  And really, how many people were there who were willing to suffer out there taking cold showers in tiny, hand-made, off-grid cabins?

Well ... kind of a lot.

At the time, a developer had purchased a huge amount of logging land in Mendocino and Humboldt counties, and was selling 40-acre parcels to anyone who showed up in his office.

“When I moved there he said, 'it’s $16,000 for forty acres,'” says Dave Katz, who eventually started a business called Alternative Energy Engineering, which sold solar equipment.  Katz says this developer would let buyers pay for the land over 10 years or 12 years or 20 years, and said, “If you don't have the down payment, you can start next year.”

Katz says these handshake agreements were possible because the homesteaders would just grow marijuana to sell, and the developer would get his money in no time.

“There were about 3,000 people living on 40-acre parcels, if you can picture it.  It was becoming a 40-acre suburbia,” Katz says, “None of them had electricity.  And so my joke is, everyone else was growing pot, and so instead of me becoming a gold-miner like everyone else, I got to become the guy selling the shovels to the gold-miners.”

While solar panels still cost $12 per watt (that price is down to less than $.50 per watt today) the back-to-the-landers had money, because weed was selling for $5,000 a pound.  And so a market was born.

“Water Pumping”

So that bring us back to Arthur Ruden in the offices of solar panel manufacturer ARCO solar.  His initial customers, they’re nothing like these West Coast hippies.  In fact, his company was owned by Atlantic Richfield, a big oil company, and his first customers were the oil and gas industry.

“All off-grid … everything was off-grid,” says Arthur.  He remembers that Atlantic Richfield would say, “‘Hey, go out to the platforms help us out.  We don’t have power out there.’  So that, along with oil pipelines became the cornerstone of our business.”

So when he starts to notice all these people buying solar panels in Northern California, no one at ARCO had any idea what was happening.  Arthur was sent to check it out.  One of the people he got in touch with was Dave Katz, and when he arrived at Dave’s store, what he saw was astonishing: bare-foot, off-grid-homesteading hippies, walking into stores and paying cash for these incredibly expensive solar panels.

“I didn’t really know what to make of the whole thing,” Art recalls, “I come from Boston. I’m a conservative guy by nature.  And I’m with these people who look different, dress different than I do in a three piece suit, but yet they have the same values.”

Of course, he then had to figure out how to explain to his superiors at the corporate offices what was going on.  What Arthur told them was that the panels were being used in remote off-grid homes for “water pumping” for “organic agriculture.”

Arthur was sure that everyone at ARCO was wise to where the funds for these panels were coming from, “but again it was easy enough to look the other way because that was only one part of the business.”

The Valley of Death

So there’s no doubt that California’s pot-growers were big customers in the days of early solar, but were they big enough to prop up the industry?  

When you launching a new technology, if you’re lucky, you can score funding for the initial research.  And once you’re ready to take it to the masses, you can find investors who will back you up, but in between there’s a wide-gulf.

There’s a phrase people use for this time: the Valley of Death.  In this period, you’ve got to spend lots of money— buy stuff, build stuff, hire people — but there isn’t necessarily a commensurate amount of money flowing in from sales.  It’s the period where most startups die.

“You’re the proverbial trailblazer at the head of a trail, often-times others that follow behind you will be stepping over you as you’ve with your face in the mud and an arrow in your back,” explains Charlie Gay, who was head of manufacturing, research and engineering for ARCO solar, and who now works for the department of energy.

Charlie says solar got through the valley of death by starting with places that would be very, very expensive to run an electrical wire to.  For instance, space.  When Russia launched Sputnik, it only had a couple of batteries, and died after a few weeks in space.  The first US satellite was equipped with solar panels and ran for years.

The technology then moved to Earth.  It started with things like really really remote microwave repeater towers: those little dishes that send radio or telephone or television data through the air across line of sight, instead of using wires.

And we're talking really remote.  As an example, Charlie heard a this story from an East Coast academic who took his family on an (oddly colonial, oddly voyeuristic) vacation in Papua New Guinea, staying with an isolated indigenous community.  They traveled by jeep for a day, on horseback two or three days, and then took a rowboat upriver for 4 days. When the family arrived, a bunch of kids from this remote community swam out to their boat to when they arrived.

“And as the kids pulled themselves up on the gunnels of the boat, they all had ARCO solar t-shirts on,” Charlie says, “We had been there and done that.”

Solar's early markets included fog-horns and warning lights on oil rigs and protecting oil pipelines.  Then they slowly started to power remote water-pumping on isolated ranches.

The real nut of this question, then, is this: did the solar industry get through the valley of death thanks to backwoods hippies in Northern California, kludging together their solar homes with bubble-gum, baling wire, and soldering irons?

David Katz certainly thinks so.  “Because people were growing marijuana, they could afford solar panels that cost $12 a watt at the beginning,” he says, “So it made it grow.  They were the ones who really enabled rooftop solar to get a foothold.”

But the consensus from the people with the 30,000 foot view, is that the Northern California home-power market was really just one that the manufacturers were selling to.

When I ask Art Ruden if ARCO would have been able to keep going if not for the hippies, he replies, “My guess is yes, it would have.”

Similarly Charlie Gay notes, “the majority of my career in industry up until perhaps the last five years, more than half my time was spent outside of America.”  Though, he adds “you know, we all love to take poetic license and pride in our contribution and I don’t want to take anything away from an incredibly meaningful part of helping popularize solar in America.

What did we get from Northern California?

The most obvious thing that these folks did give the world was to figure out how to build a solar home.  All of the solutions in the pages of Home-Power Magazine — charge controllers, AC inverters borrowed from wind turbines — were eventually taken up by the industry, and sold to off-grid homes nation-wide.

And the home-power market did eventually become substantial.  By 1996, which seems to be the earliest date that the industry was keeping track of this information, one-third of solar panels installed in the US were on off-grid residential buildings.  That business eventually began to stagnate once grid-tied solar panels began to explode in 2008.

So while Northern California may not have been an important market on its own, it was the proving ground where technologies were developed that became an important market in the late-80s and 90s, until grid-tied solar power could take off.  Why was Northern California important?  “It was the development of technology and systems solutions that could be applied everywhere in the world, to this day,” says Arthur Ruden.

On a less substantial level — and this might just be me editorializing, here — I think this is also where we get the association between solar power and “backwoods hippies.”  Just think, why would solar power be associated with radicals, revolutionaries, and alternative types any more than kerosene?  I think it’s because for years these folks were the face of solar power, and that managed to seap its way into the collective consciousness.

But now, solar has started to leave that association behind … mostly because of the price. You don’t have to be a believer anymore - it’s not a religion.  For an increasing number of businesses and individuals, it’s just good economics.

It’s also become kind of cool. “There’s two kinds of people who wants solar,” says Kathleen Jarschke-Schultze, with a laugh, “people who’ve never had it, and people who want more.”