So much has happened with solar and wind in 2015: Wind now has a US capacity of over 70,000MW,
and solar, between commercial grade and rooftop applications, is around
20,000MW. Almost all this new
technology has been built in the last 10 years, compared to the 100,000MW of
nuclear capacity slowly constructed since the 1960’s, now diminishing because
it has run its course. The growth of
both solar and wind will escalate exponentially in the next couple of years due
primarily to the Paris Climate Change agreements, the five year extension of
the tax credits, and the leadership and investments by both business and
individuals. The potential is
huge!
Case in point…my $12,000 investment in the PV system on my
roof, returned $524 in this first year.
That’s a 4.4% cash return…tax free. I’ve mentioned this to a couple of solar installers I’ve run
into, and their response has been “ Is that all?” A lot of people in Humboldt County are getting 6-10% back. The reason I’m so low is that I went for the
most expensive, high-quality system available (could have done it for about
$8000), and there are a few shading issues in my solar window during the
winter-time. As the economics of
renewables become more commonly and realistically understood, and as prices
continue to come down for whole systems, the reality of cost-effective,
cleaner, and saner energy will become mainstream. A new 128KW system going on the old Yakima building in Arcata
will pay for itself in 5+ years (16% return), and will generate over $1m in
profit over the next 20 years; plus provide clean electricity to the 35
businesses housed there. No CO2 or
other emissions, no long term wastes, no need for cooling water, no need to extract,
refine, and transport fuel…on and on!
Economic sense? A
fiscal conservative’s panacea? All this
in foggy Humboldt County; what about San Diego, Arizona, Texas, Florida? I should do better next year, since PG&E
announced a 7.5% rate increase, which began a few days ago on January 1st,
and another one coming in June.
Three major changes are occurring, which testify why we
didn’t get here sooner.
The first is the technology itself. Solar panels are just a small part of the
total investment package. Inverters,
wiring, and mounting racks are getting cheaper as demand justifies the
economies of scale. And of course,
labor is one of the biggest costs. As
the industry grows and learns, all of these costs are decreasing to where most
renewables are more competitive than everything else except natural gas; but
that all can change very rapidly with issues of water, fracking, pipelines,
etc. Funny how natural gas is
wholesaling at what it was about 20 years ago (25 cents/therm); yet PG&E is
charging me $1.25-1.50/therm…mainly to pay for the upgrades to the aging gas
infrastructure. One installer told me
solar electric is cost-competitive today with propane for water heating…an
efficient electric water heater is 97% efficient. No need for bulky solar water heating panels on the roof…just add
a few more PV panels! And just wait
until energy storage really hits the market in the next few years… The potential to use renewables in
appropriate applications is almost unlimited…just wait!
The second major development deals with who is leading the
green energy revolution. Major
businesses…old and new…are realizing it is cheaper, and a better investment to
produce their own power. We hear about
Apple, Google, Tesla, Audi…a lot of
major corporations taking it on themselves to build wind and solar systems to
power their facilities. But media
silent, a lot of smaller businesses, and commercial and residential endeavors
are seeing the benefits in today’s “investment” reality. One no longer has to “be rich” to afford
solar. Today, you can buy systems
outright, lease them for your roof, and invest in someone else’s “roof” and get
a decent return. All pretty much
guaranteed, with little worry of market fluctuation, crashes, etc. The technology is very stable…no moving
parts!...and now modular, so if for some reason a single panel or inverter
malfunctions, it is easily and simply replaced. My system has a 25 year warranty! The only thing I did all year was hose the panels down a couple
of times, and scrubbed them once when I also did my windows in early
summer. As long as the sun shines, the
money keeps rolling in! We’re seeing a
change in how the financial institutions, local governments, and the general
public views solar…no longer a subset of wacko “enviros” wanting to save the
earth; but a major moneymaking investment tool, with environmental benefits.
The third area of concern deals with politics, or whatever
you want to call it. The whole concept
of Global Warming, Climate Change, Greenhouse…all of that has been crucial in
the renewable energy picture. How the
fossil fuel industries, media, financial institutions, politicians and even the
average ignorant person have portrayed the use of solar and wind has been very
well manipulated by the powerful few. As
it has finally been exposed publicly, Exxon did most of the leading research on
Climate Change back in the 70’s and ‘80’s, and spent the last 20 years
colluding with others in the fossil fuel business interests, spending tens of millions of dollars buying
scientific “experts,” politicians, and the media in a brilliantly executed PR
stunt of denial…the biggest hoax in human history! Well, all this is changing; and the presidential campaign in 2016
will feature a major battle between “greed and the environment.” It’s no longer a battle between “jobs vs.
environment.” It will be interesting.
Not soon after on another segment, they reported a new study
from the Wyoming Institute of Technology (you’ve heard of that great
institution?) saying that PV panels are horrible because they suck out more
energy from the sun than what is naturally beaming down to earth!
Obviously some folks in North Carolina believed this,
because they recently voted down a solar project in their community…save the
sun’s energy for their kids and grandkids.
One last example is an editorial written in the Wall Street
Journal just a few weeks ago.
A couple of great letters in response:
Mainstream media continues to downplay the positive gains
and potentials renewables offer. A recent article about wind in the Economist was
titled “Wisps of Hope!”
This year will see enormous battles as states, and their
public and private utilities, try to figure out what to do with the huge
increase in individual owned energy generating systems. Loss of electricity sales, loss of revenue,
increasing costs of upgrading and maintaining the grid and local transmission
lines, etc., etc. These are all serious
problems, which will be dealt with…how fairly, nobody knows; but one can guess
from past experience how the fight will unfold. Just like the land-line vs. the mobile phone, on-line banking vs.
real bank tellers, carmakers vs. horseshoers, and a multitude of other industry
challenges, changes will occur in corporate boardrooms, finance and legislative
chambers, and research labs and engineering firms to accommodate the future. Solar is not going away…it is escalating
exponentially, with new, cheaper equipment, big and small scale electricity
storage, and the shift in understanding the reality of our ability to move to
cleaner, safer, job creating, cost effective, and sustainable renewable
technologies.
Add to all of this the potentials in new energy efficiencies
and new energy storage (I still think utility grade hydrogen-fuel cell
technology will be with us in a few years), and we have such a positive and
exciting energy future.
Happy New Year!
