Everybody tells me solar is too expensive for electrical generation. Is it?
Renewable energy has really taken off in America. Solar and Wind are big now, and Geothermal is gaining converts by the day. But I am still hearing on a regular basis that fossil fuels are a better value for the money.
Let's look at it:
Recently I noticed even the Los Angeles Times adding to the confusion. They reported (I saw it referred to as being misreported. That was probably more accurate.) the results of a report (draft report) which had been issued by the California Public Utilities Commission (CPUC) back in 2009. We all remember that during the late (thankfully) elections Jerry Brown had a vision of the state of California using thirty three percent of renewables by 2020. The reporter stated that this would cost the state's citizens $60 billion. Article in question also stated that in order to accomplish this, the state would require a rate hike on the order of fourteen and a half percent.
Actually it was Governor Schwarzenegger who had this particular vision. But let's leave that aside and look at the numbers.
In point of fact, the draft report I mentioned was never finished. There should be new numbers out fairly soon. These figures are used to guide the utilities in their long term planning. I suspect that the new numbers coming out soon will show a serious decrease in the costs of wind turbines as well as solar panels.
The sixty billion dollar amount mentioned was actually $58.6 billion. And the amount stated in the report is actually the total amount of expenditures that is required for all electrical investments by the year 2020, not at all the cost of gaining the thirty-three percent renewables.
And the 14.5 rate hike mentioned is actually the projected hike which would result from "high distributed generation" scenario. This relies on smaller solar projects to meet the thirty three percent mandate, instead of larger projects along with wind and geothermal technologies, which are less expensive than solar.
The actual rate hike is more like a 7.2 percent with a total investment of just $3.6 billion. This is a distant figure from the sixty billion being tossed about by the Los Angeles Times.
Even larger reporting errors were present. The Times article made the assumption of no reduction in renewable energy cost by the year 2020, which is just plain wrong. Anyone with open eyes knows that the cost for solar panels and wind turbines both dropped seriously in the last two years. I know for a fact that solar panels have dropped about thirty percent in the last two years and are projected to fall more in the next few years. The global market is being saturated with product because of increased global production. This is considered very bad news for the producers. True, but also very, very good news for the consumers of California.
All of the numbers being spread around depend on the numbers in the initial report being accurate. I'm not sure that is the case.
Actually, the report has been out for about a year and a half, and it seems like the numbers have changed quite a bit. The reader can seek out these numbers for themselves. You don't need me to do it.
And, be advised that the California Energy Commission's most recent costs show that renewable energy can actually be cheaper than the much vaunted petroleum. Let me put that another way. It seems that in-conduit hydro, geothermal, and wind can be highly cost effective. And solar, not always known to be cheap and cost effective, can be when compared to peak natural gas power plants.
So here's the point: If California ratepayers will invest in the thirty-three percent energy mandate, they will see a very small rate increase by 2020. And here's the big point: They will save money in the long term. By doing this we will also see this state being part of the solution, not part of the problem.
Hurrah for Solar and Wind.
Jimmy writes a home power generation review web site. He is interested in what works and what scams are out there.
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