I was laid off from my job as a software engineer in January, and I went back to work selling solar power systems for a local firm called Second Generation Energy, LLC. I prefer this line of work to writing systems for the 1%!
Last year, I wrote a post here at BMG about the economics of solar power – the situation has changed, and some innovative financing options have made it even more desirable to go solar here in Massachusetts. As usual, we are leading the way, showing the rest of the country how to spur investment in renewable energy technologies!
A couple of weeks ago, I took the company Prius for a drive through a neighborhood in Brimfield, MA, which had been devastated by killer tornados in June of last year. While no single unusual weather event can be traced directly to climate change, patterns of unusual weather certainly can be, and these torndos are part of a pattern of crazy weather we’ve had in the northeast these last few years. The winter of 2010-2011 saw so record setting snowfall, but this past winter saw almost no snowfall, except for a freak blizzard around Halloween! Floods, hurricanes, killer tornados – as Charley noted a few weeks ago, think of Jose Canseco’s biceps and his use of steroids, it’s highly unlikely that you would see the one without the other. We are, today, experiencing wild weather swings and climate change is the culprit.
The damage is still evident – play the short video below to see some of the after effects still in evidence today:
Once upon a time, that area was heavily forested – now, not so much. One person was killed in Brimfield, and I spoke with a man who told me how he, his wife and their 4 year old daughter huddled in the basement while their house was ripped off the foundation over their heads.
I grew up in a big family in Connecticut during the sixties, in the days before that noted Commie Richard Nixon created the Environmental Protection Agency. Ah, the good old days, when Republicans espoused good governance…
I was the sixth child of seven, and my mom would always take us to the Uniroyal factory in Naugatuck when we needed sneakers, she could get decent factory “seconds” for a low price there. The factory was situated on the Naugatuck River, and it belched enormous volumes of steaming chemical solutions out of huge pipes into the river, day and night. The river smelled horrible, and it ran a sickly yellow-green color from that point until it merged with the Housatonic River many miles to the south. It was lifeless, and unsafe for any use.
In this same time frame, the Cuyhoga River in Ohio actually caught fire. Why did corporations pollute the earth in this manner? Simple – there was no law against it. The need for the EPA was clearly evident – you could see it, you could smell it, you could actually taste it, and if you got too close, it would make your eyes water. This, I think, is one reason why it is so difficult to convince people that carbon pollution is a problem – since they can’t sense it in any real way, it’s easier for them to deny that it’s happening, or at least believe the lies of folks who want them to believe it’s not happening. So, what do we do?
Someone smarter than me once said “you can’t reason someone out of a position they weren’t reasoned into”. So if the climate change deniers won’t listen to environmental reason, then maybe economic reason will appeal to them. Here in Massachusetts, we have established a program called the Clean Energy Center to spur everyone to adopt renewable power solutions, and it’s working. From the CEC web site:
Massachusetts is leading the way in innovative and comprehensive energy reform that will make clean energy a centerpiece of the Commonwealth’s economic future. Created by the Green Jobs Act of 2008, the Massachusetts Clean Energy Center (MassCEC) is dedicated to accelerating the success of clean energy technologies, companies and projects in the Commonwealth—while creating high-quality jobs and long-term economic growth for the people of Massachusetts. MassCEC is a partner, clearinghouse and connector for people in the clean energy sector, making direct investments in clean energy companies, building a strong clean energy workforce, and supporting responsibly sited renewable energy projects across the Commonwealth. MassCEC works with the entire clean energy community in Massachusetts to propel promising technologies from the drawing board to the global marketplace.
The CEC is funded by a small charge on everyone’s electric bill – it costs me under $1.00 per month on mine. They make millions of dollars available for rebates on residential solar power systems, and they are doing a fantastic job of spurring the solar power industry in this state. For residential installations, the current round of rebates provide up to $4,250, and properties impacted by natural disasters, like the houses in the video above, can get as much as $5,000 more.
In addition to the rebates from the CEC, there is a 30% federal tax credit and a 15% state tax credit (capped at $1,000). The remaining system costs are wiped out by direct savings on the household electric bill and through the sale of Solar Renewable Energy Certificates. For every megawatt-hour of power the system produces, the homeowner earns one SREC – a typical 5 kW system will produce 6 per year. By law, SRECS have a floor price of $300 each, and at the end of 2011, they sold for $540 each. Typical residential solar power systems pay for themselves in 4-5 years as a result of these incentives. SRECs accrue for the first ten years of system ownership, and the system will produce power for almost 40 years.
But it gets better – solar leasing is making these systems even more affordable. We have 20 year leases for as little as zero down – these leases put cash into our customer’s pockets in the first year of ownership. Alternatively, you can prepay the lease up front and turn an even greater profit over the life of the system, better than purchasing the system outright. Our leases let the customer keep the SRECs, something not offered by many of our competing firms. We have several firms willing to pre-purchase 10 years worth of SRECs at a decent price, making a lease even more affordable. Contact me for more information – my email address is in my profile.
John- are your typical clients who install solar panels on their homes typically part of the 1%, or the upper crust. Typically costs $30K to install and tax rebates are $15k, both fed and state, that sound about right? Is it really 4-5 years to break even, or 10-15? Also, do you need a southside facing roof?
I have a few potential clients with homes on Martha’s Vineyard or Nantucket who are considering solar, but by and large they’re middle class, two-income households. Your numbers are about right, but leasing makes systems more affordable, you can lease for no money down and put cash in your pocket every year for the first ten years of ownership. 4-5 year payback is typical – the longest ones I’ve seen are around 8 years, usually those folks have a municipal electricity provider. The lower rates from the muni stretches out the payback time, since the avoided cost of electricity is lower.
Great info, really appreciate it. I wonder how long these tax rebates will last? Seems to me now is the time to do it, unless you go the leasing route?
Imo, we should be building Pilgrim II to replace Pilgrim I but we need Nevada store all the waste. climate change is too general and vague, and i’m cynical of those pushing it like Gore, Ken Lay, Hollywood who uses more energy in a year than most of us do in a lifetime, u know what I mean?
Good luck in your new field, seem very interesting and exciting.
Leases still take advantage of the rebates and tax credits, if those go away, the price of the lease will go up.
As to the reality of climate change, your cynicism is misplaced – just because someone uses energy doesn’t mean they can’t be concerned about climate change. Re-read what I wrote above – climate change is real, and we are feeling the effects now.
It would be cheaper for a utility [or a merchant power plant owner] to build and operate enough photovoltaic to generate as much electricity as a nuclear power plant as it would cost to build and operate the nuclear power plant. Additionally, the PV generates more valuable electricity because electricity at noon is worth a heck of a lot more than electricity generated at midnight.
New England is deregulated. Private entities own the power plants and sell the generation, capacity, ancillary services, and other products into the New England grid at competitive prices. Absolutely no free enterprise private company will build nuclear in America. None. Know why? They can’t get financing, because the cost to build it is higher than lots of other choices, so it’s a money loser. Sure, nuclear can be built in other parts of the country where the customers are on the hook for payback, but not in New England where our free market system allows for nuclear in law but not in practice because — and I’ll say it again — nuclear power is far more expensive than other options, including solar power.
Old bumper sticker from the early 80’s. Anyway, driving on Rt 3 and saw these massive turbines a/k/a bird killing guillotines. At the top near the blades, it read Hundai. Are these things made outside the U.S.A? I shook my head, since I make all attempts to buy American made products.
This is why building nuke plants would benefit the country because all the engineering, materials and labor would be domestic. I believe many solar panels are made in China. Wind power seems like a waste. Cape Wind is extremely expensive, since it is on the ocean, and it makes the area look like a junk yard. The land based turbines can be noisy for the local residences, let alone the poor birds that are killed. What is wrong with clean coal?
Nukes lead to events like Three Mile Island, Chernobyl and Fukushima, not to mention the question of where the nuke waste goes. Cape Wind won’t make the sound look like a junk yard, and clean coal doesn’t exist.
Nuke plant designs haven’t changed since 70’s? France seems to do fine with nuclear. Best not to put the backup generators above ground.
You should not lie about the bird kills due to the wind turbines. It is all over the net, hawks being killed in Europe at a alarming rate. And yes, themmakemthe landscape look like a junk yard, it is gawd awful looking.
…as a result of Fukushima.
As to birds and wind turbines:
http://science.howstuffworks.com/environmental/green-science/wind-turbine-kill-birds.htm
http://www.treehugger.com/renewable-energy/common-eco-myth-wind-turbines-kill-birds.html
http://turbinegenerator.org/wind-turbines-kill-birds
http://www.carbonlighthouse.com/2011/09/wind-turbines-birds/
A quote from that last link:
http://articles.latimes.com/2011/jun/06/local/la-me-adv-wind-eagles-20110606
Stupid turbines are going to make the golden eagle extinct. These are just the killed birds the find, but many many many more are killed, but the remains are eaten by scavengers.
I just knew you were talking about the Altamont Pass project. That particular windfarm, yes, is big trouble for the birds. As the name indicates, it’s a pass in the Diablo Mountains, which makes it, so they thought, an ideal place for a windfarm. Wind flowing from one side of the mountains to the other will go through the pass, greatly magnifying any atmostpheric effects. (Think of being in a wind tunnel effect between two tall buildings in a city.)
This was one of the earliest large-scale wind projects in the country, and, indeed, the effect on the bird population was not adequately planned out. Turns out, a mountain pass is the preferred route for a whole lot of wildlife, including birds, to get from one side of the mountains to the other.
It’s been a real learning experience for all in the field of wind. Modern wind farms are much more cautious about environmental effects.
You’d be badly mistaken to think that all wind farms have the problems that Altamont does. You’d also be badly mistaken to think nothing’s being done; they are in a gradual process of replacing the small high-speed turbines there with larger turbines that move slower but generate the same or more power.
Good info, thanks. IMO, every turbine there should be shut down until they are replaced.
It’s hard to argue with that. I tend to be of a similar mind. But at least some mitigation is being done…
Um, the Audobon society is as real as it gets when it comes to birds… and they overwhelmingly endorse wind turbines.
Your clinging to the birds screams of concern trolling.
Like I said, have you taped up X’s on all your home and office windows? Have you stopped driving your car? If you care so much about birds, those are the first things you’d be doing.
Also, note the fact that in your article, it says those wind turbines are from the 1980s. New Wind Turbines, as I’ve said, have been specifically designed to avoid killing birds. If those 1980s-era Wind Turbines were updated with new tech, I’d imagine the 67 birds they’re killing a year (per your article) would dramatically drop.
And, oh… that’s exactly what they’re doing, from your own article.
But no matter what, the amount of birds killed even by those 1980s era turbines pale in comparison to the amount of birds killed from coal plants, as JohnT linked above. There will always be special, local circumstances, with regional species, and we should take great deal to be mitigate impacts… but the fact remains that wind will help save birds in the end, compared to the damage coal, oil and gas are doing to birds all over the world.
Further posts on your concern of the birds re: wind will only scream of more desperation on your part to avoid sensible and environmentally friendly energy sources.
Do you really have so little knowledge of what happened at Fukushima? It was because the generators were too low that the tsunami knocked them out and caused the cooling pumps to fail.
There is all kinds of fiction that is “all over the net.” I really never expected to see “It’s on the Internet, it must be true” advanced as an argument here, of all places.
I didn’t know the generators were underground in Japan, but they were still flooded?
We might as well hire people to run on treadmills.
Cape wind at full capacity would still produce less electricity than Pilgrim I, which was built in the early 70’s.
.
I’ll assume you’ve taped X’s across all the windows in your home and office building, right?
No?
Or that you’ve stopped driving and walk or take public transportation. Right? No?
Because all of those things kill about a gazillion more birds than modern wind turbines ever will. Wind Turbines have been very well designed over the past *several* decades in order to avoid killing birds. That’s why the Audobon Society has endorsed major Wind Turbine projects, including Cape Wind.
Want to save birds? Then we need to save their habitats and make sure the seasons we have stay the seasons we have. Climate change is doing a number on migratory patters and, thus, birds.
All of that is due to climate change, something solar and wind projects will help with. Which is why, again, the Audobon Society endorses major Wind projects.
A) That’s not true — nuclear energy isn’t necessarily a ‘stay in America’ industry. Know what company was pushing nuclear facilities in America, because they wanted to run them? TEPCO. You know, the one in charge of Fukushima. Just what we need.
B) The math doesn’t add up. If you’re a free-market capitalist, then you ought to think spending 2-5x more to do something over that thing’s lifetime is a really dumb idea, regardless of which global or national company is building the facilities.
B) Wind Power is NOT expensive. It lowers prices for consumers, including Cape Wind.
C) The ancillary benefits of wind and solar will save money, jobs and the environment going into the future – and a strong investment in them will spur development of that technology in America.
D) There’s little more mine-able uranium on the earth than there is oil, so investing in oil is just swapping one temporary technology for another. Wind and solar will never go away, not as long as the earth rotates around the sun. It’s literally the future, so we may as well start investing in it now.
Let’s start and end at the fact that it doesn’t exist. Seriously, it’s a made-up myth, to sucker people into keeping with coal rather than investing in renewable energy.
You seriously need to do some real, non-Republican-Talking-Point-Land research on this stuff, because you are seriously misinformed.
I think the leasing model is a good one, and I wish you all the best on your new job.
In previous posts, I have taken the position that neither solar nor wind can compete effectively with coal, gas, hydro, or nuke power. It takes an array of state and federal tax credits, state clean energy mandates (our RPS,) and a synthetic market for RECs to make any economic sense of solar or wind, whether it’s a rooftop PV array on a house or something as large as Cape Wind.
This is not to say that both individuals and Second Generation Energy shouldn’t take advantage of these subsidy programs. As long as they are available, go for it.
But on an unsubsidized basis, wind and solar cannot and will not compete economically with conventional power generation. Not even close. Off by factors of 3 to 50 times.
Because these subsidies are driven by politics and public policy, they may not be good allocations of our national economic resources, doubly so since low-efficiency wind and solar generally require equivalent amount of conventional power as “24/7” back up. That’s amazingly capital inefficient.
I have yet to see a persuasive argument for wind or solar. I know an economic one doesn’t exist.
Va. study makes economic case for renewable energy
Dollars from Sense: The Economic Benefits of Renewable Energy
Solar Revolution
The Economic Transformation of the Global Energy Industry
To BostonShepherd, I would add: the economic case for massive renewable energy certainly exists, if only you would open your eyes to it. If renewable energy programs got the same level of subsidy that the oil companies presently enjoy (around $4 billion annually) we would have baseload power delivered by geographically dispersed off-shore wind farms, with solar on every rooftop and minimal fossil fuel usage.
The “analysis” you’re doing ignores:
1) “Tax expenditures” (direct and indirect) that subsidize petroleum and fossil fuel
2) External costs (climate change, keeping supplies secure, etc)
3) Replacement costs
What’s the present value of losing our coastal cities to flooding?
Wind in the Dakotas, Kansas, Illinois, and thereabouts is coming in at under 4 cents per kWh all-in. You can’t come anywhere near that price with new coal, and you can’t come within half of that with new nuclear, even with the subsidies for both of those industries. The value of a REC in those regions: well under a penny.
Furthermore, tUSA has tremendous amount of natural gas generation — both CC and CT — which has capacity factors south of 30%. We have far more generation capacity than we have need. The backup already exists.
I can’t help but be frustrated with posts like that by bostonshepherd. You raise interesting concepts, but your facts are just plain shite. I know — I work as a consultant in the electricity industry, across the country, providing analysis and expert testimony in utility cases before state commissions. I analyze the confidential plans that utilities put together to determine how they should operate over the next 30 years, including the capital and O&M costs of all kinds of generation, the fuel costs, the regulatory risks, the environmental permitting [both to build and to operate], the locational marginal price of electricity across the country, the capacity payments, and on and on and on. It’s a complex industry, and one for which you’re claims just aren’t correct. And it’s not just you — I see lots of junk assertions about electricity from people who are users but not employed in the industry.
P.S. You are correct that solar can’t compete today dollar-for-dollar. Wind can and does. One ought also consider that fossil plants aren’t paying for their detrimental externalities, and until we’re charging for that to complain about government skewing prices on one side but not the other seems a bit silly.
… all of the above are merely stored forms of solar power.
This is true. But it is true not because of any inefficiency nor inferiority of solar power but because of the difficulty and discontinuities involved in tying in solar to what is, essentially, a very simple coal/nuclear grid. In essence, you’re trying to sell Chinese food at an Italian restaurant. Might be the best Chinese food ever cooked… but you can’t get people to eat it cause they came looking for Italian…
The answer is a smarter, more flexible, power grid…. or, to maintain the analogy, to make your restaurant an ‘everything’ restaurant, rather than just Italian, or just Chinese.
This is not true. Conventional power has low startup costs and continued rents. Solar and wind are high-startup with low (indeed almost non-existent) rents. And the low cost of conventional is mitigated by our wholesale storage of carbon waste in the atmosphere: that’s a ballon payment fast coming due…
If the goal is to provide electricity, then low maintenance solar panels and high efficiency turbines can meet or exceed, by amortization, almost any price the competition can throw at it. That’s all the persuasion I need.
If the goal, however, is to protect rents, then of course solar/wind are not the answer…
Extend WAY BEYOND what’s given to renewable energy. WAY BEYOND.
These ‘we can’t subsidize solar’ cries smack of the same insanity that comes across when people say the same thing about public transportation, even though highways and roads get magnitudes more in subsidies than public transit.
Nuclear, in particular, benefits enormously from subsidies. It cost 2-4x more to build nuclear than it does coal, and you have to staff and maintain it for decades after the plant was shuttered and no longer produces electricity.
The fact of the matter is solar and wind (especially wind) dramatically lower electric rates for consumers. Dramatically. The price to build them is very reasonable, taking into consideration that maintenance costs are very slim. Cape Cod residents will save almost $300 million in energy costs a year once Cape Wind is finished.
that renewable energy was cost efficient. I thought solar was the answer when Gov. Patrick gave Evergreen Solar the multimillion dollar grant to build at Devens…..even invested in the company. Fortunately i bailed out before they did. I thought wind was the answer, but Vestas has tanked and they are the best known wind turbine company. These energy sources appear to be cost efficient only when government grants are used for installation.
…when other externalizations of their costs, such as fighting wars in the middle east, subsidizing oil production at home and drowning our coastal cities in the next 50 years, are not factored in.
What about limiting oil production here, like making the east coat off limits, blocking Anwr, and stopping Keystone Pipeline. These actions cost us anything?
“Drill, baby, drill”, right Dan? The USA has 2% of the world’s known oil reserves. Oil companies currently have millions of acres of federal land under lease for oil that they are not drilling on. Oil from the Keystone pipeline is the dirtiest in the world from a carbon perspective – using it will hasten coastal flooding, what’s the cost of that, Dan?
The sun provides 12 times our annual energy usage every single day – we should be moving heaven and earth to use the sun, the wind, the oceans, geo-thermal, and every other renewable source imaginable. If you want to talk about the economics of oil, go start your own thread.
Should look like thus:
But the energy we have now…
…. is not cost efficient. We’ve been storing the cost in our atmosphere and have been living, in essence, on credit. It doesn’t make sense to say you are against renewables on the basis of cost efficiency because you can’t, possibly, be in favor of our present system on the same basis. 2 + 2 does not equal 3.
Owning a car is cost efficient only when a loan is used for installation. What’s the difference between a loan and a government grant: they are both upfront money. So why doesn’t some enterprising young capitalist get in the business of leasing/installing solar? (hint: scroll up to the top… see it?)
At one point purchasing a car was a decision left only to the upper class. Enterprising young capitalists put some skin in the game and now it is ridiculously easy (comparatively speaking) to get your hands on a car. Same goes for home ownership. There are whole new markets awaiting that look quite similar to the old markets: It just wants for some enterprising young capitalist not under the thumb of a reactionary ideology to recognize this… It only wants people who aren’t reflexively dismissive… It wants of people who have got imagination…
Go get ‘em!!!
I repeat: Cape Wind will save consumers money.
Cape Wind will save consumers money.
Cape Wind will save consumers money.
Cape Wind will save consumers money.
I figured if I said it five times, the deadenders would finally get it stuck in their head: Cape Wind will save consumers money.
The problem with wind and solar companies getting off the ground and wind and solar being cost effective are entirely different. Wind and solar companies are bogged down because there’s little incentive for big investment by coal, oil and gas companies, and lobbyists pouring gazillions of dollars to try to keep government from investing in it in a serious way (one that goes beyond tax credits to consumers — and into ‘we’re going to build dozens of Cape Winds around the country in the next couple years’).
Furthermore, either wind and solar companies are geared more toward smaller projects, which depend on people being able to afford building it (or, as Johnt makes the case, they may not be *aware* that they can afford it), or the big projects that come around face fierce opposition from both entrenched (moneyed) interests and NIMBY types.
A project like Cape Wind also had to deal with loads more regulatory hurdles, delaying it my years, because it needed approval from just about any sort of state or federal entity imaginable, up to and including the freaking US Navy.
Yet, none of that means these things aren’t cost effective for consumers.
Again, I repeat: Cape Wind will save consumers money.
Just like most wind and solar projects across the world.
The Oil Drum is an excellent blog about energy. Back in February they had a post that compared different energy sources, and solar came out looking very good.
There’s two things I wish he considered, though. The first being Stomv’s frequent point that Solar PV’s are greatest when we need electricity the most, and thus the problems of ‘intermittency’ aren’t such a big deal.
The second thing is the fact that while Wind has intermintency issues, too, it’s production is actually very efficient — both points he recognizes and are true — we could help navigate around that by building the wind turbines in disparate places. While one day it may not be windy at all in one location, it may be extra windy in another — and with good infrastructure in place, we can make basically ‘insure’ ourselves against non-windy patches in one area by having a bigger ‘pool’ of turbines throughout America.
So, when it came to both of those issues, I think he was looking at them with a micro lens, when he should have also been using the macro.