A Financial Stimulus Package that Pays for Your Photovoltaic System?
Could the economic downturn hurt the green movement? Thomas L. Friedman, the Pulitzer Prize winning columnist of the New York Times, breaks down the possibility in today’s Bailout (and Buildup) of a tight economy and lower fuel prices leading to a greater reliance on foreign oil and a postponement of a national switch to cleaner energy. It is understandable that economic worries have pushed environmental worries to the background for most Americans, but as Friedman points out, a financial stimulus package is an ideal way to kill two birds with one stone - inject money into the United States economy, but invest in green technologies.
Recently, we talked about the impressive return on investment for those who choose to install a photovoltaic system next year due to the Senate rescue package in The Future of Home Solar Power. Starting next year, the United States Government will pay for 30% of your cost to go solar. One of Friedman’s suggestions is a national renewable energy standard for utility companies, forcing them to produce 20 percent of their power through clean energy sources, including such non-CO2 producing sources as wind, solar, nuclear, and biomass. He mentions a proposal by Andy Karsner, the former assistant secretary of energy, to increase tax credits for investing in clean energy. But perhaps there is a way for homeowners or companies to recoup their investment in home solar and set a national energy standard for utility companies at the same time. I propose the following addition to the renewable energy standard: increase the percentage of clean energy that utility companies must use but allow the utility companies to buy some of that power from homeowners and companies.
That’s right, let’s allow the utility companies to buy clean power from us.
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The vast majority of electrical power comes from coal power plants, easily the most environmentally destructive form of energy. Though several kinds of clean home power systems exist, since my previous posts have been on solar energy I’ll limit my discussion to photovoltaic systems. Depending on the size of the home and system, a photovoltaic system can reduce a home’s dependence on dirty energy by half. The more widespread home solar power becomes, the less reliant the United States will be on coal powered electricity.
If the United States Government imposed a new renewable energy standard on utility companies at a rate of 20 to 25 percent, but allowed those utility companies to buy clean energy credits - much like carbon credits - from homeowners and companies who create their own power, then homeowners and companies would have yet another incentive to install a photovoltaic system (or another type of clean energy system) and government can make good on promises of a cleaner, greener future. These purchased credits would count against their clean energy quotas. The more photovoltaic systems in use, the less demand on “dirty” energy.
The utility companies would not be able to meet the 25% clean energy requirement without major investment in large-scale clean energy plants, so the incentive will still be there to begin a shift from coal based electricity to a cleaner alternative. What my proposal does is decrease the overall demand for energy while rewarding those who invest in clean energy.
Of course this is a simple idea for a complex system. Energy systems vary by state, with some government controlled and others not. All systems are regulated to some degree. But if the goal is to encourage utility companies to invest in clean energies, allow homeowners to benefit from that investment.
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Picture courtesy of A. Kratzenberg at stock.xchng
Joel-
What you’re suggesting sounds a bit like what they do here in Colorado. The biggest investor-owned utility in the state (Xcel Energy) will pay rebates to customers who install solar PV systems (and I think small wind, too).
But I propose we take your suggestion a step further and not only allow, but require utilities to purchase back the power that you put back on the grid. I’m not talking net-metering; I’m talking feed-in tariffs. Feed-ins REQUIRE utilities to buy any electricity produced from solar, wind and other renewables, from anyone who puts it back on the grid. In short, the theory being if people have the financial incentive to do more than simply “break even,” they will.
Now of course, there would be a small increase in the average family’s electricity bill, but the estimated cost of that incrase in Germany, where they’ve had a feed-in for a while, is roughly 1 percent of the bill.
What do you think?
Great idea, Tim. Thanks for your comment.
As an Xcel Energy customer in MN where this program is NOT available, I can assure you that they are doing it because of legislation, not out of the goodness of their hearts. Laws requiring these steps are the only way we’ll accomplish any progress in this area, so don’t be shy about contacting your representatives in government to push for these changes.
Alex-
I guess I should have made it clearer that Xcel gives rebates because the voters approved a referendum mandating an aggressive Renewables Portfolio Standard.
That said, Xcel is now a huge champion of clean energy in Colorado. After having fought the original referendum, they stood completely behind the doubling of it a few years later.
The Bush government was forced to borrow huge sums of money from China to pay off OPEC countries for the oil we burn! We must stop oil addiction! Plug in hybrid cars will reduce the amount of oil we burn, but require electricity to do so. We have little choice in the matter. We must generate electricity, by burning coal, windmills and solar installations or be blackmailed by greedy OPEC countries for another century!If the U.S. had chosen to be a moral people, and leaving Iraqi oil alone, and following Al Gore, decided to develop the South Western deserts, with the technology of the times - solar/thermal-molten sodium - electricity installations, for the same amount of money as that war cost, ($650 Billion), today, we would be tapping into the largest, renewable, sustainable, energy source the world has ever known. It would have paid every energy bill in the U.S.A. for maintenance fees only - FOREVER! It would be equivalent to an oil field that can NEVER run dry! Low cost electric power, and storeable hydrogen gasoline replacement from the electricity, for all!
After the millions of murders, and $650 billions of dollars, borrowed from our children’s futures and pissed away, with thousands of our own and others maimed and disfigured for life, millions of families utterly destroyed, ours and theirs, we are no closer to Iraqi oil production than the Iraqis are!
The next time you hear a blithering idiot spoiled brat, drunken, drug addicted, sociopath, rich Arabic saber dancing daddie’s boy oilman, stand at a microphone and threaten YOUR safety with someone ELSE’S weapons, remember what you lost America, remember, and weep! (also see http://www.sciam.com/article.cfm?id=a-solar-grand-plan)
Well after so many years spent dodging “Kyoto” bullets, seems something is moving now. A big oil shock first, facing China challenge, then this financial crisis… It is rude but true : “Grab ‘em by the balls, and their hearts and minds will follow”. Though more than from a green sensitivity the appeal comes again from earning money. If this is the only thrust this “get paid for” policy will be flushed as soon as conventional power sources prices fall down again.