Making Clean Energy Pay

Michael Giberson

The Washington Post headlined a story in today’s edition, “In Ontario, Making ‘Clean Energy’ Pay.” From what I gather reading the article, they have in fact discovered how to make renewable energy pay in Ontario, at least if by “clean energy” you mean “other people’s wallets.”

The story kicks off with a solar panel installer saying the good news he has for consumers is that it will no longer take 50 years to recoup the cost of an investment in roof-top panels. The reason? The Ontario provincial government has ordered local utilities to pay as much as 42 cents a kw/h for excess solar power produced by consumers. Wind, hydro, or bio-electric production will pay 11 to 14.5 cents a kw/h. The article notes that “power sells at an average of about 5.8 cents” in the region, so the program is requiring local utilities to “buy high, sell low.”

Earlier this week the Raleigh News & Observer ran several articles on clean energy enthusiasts. (See Pioneers generate their own juice, Sunshine keeps his green house humming, Passive solar house is a model of efficiency, and Off the power grid completely.) In two of the cases, government subsidies are involved (“He recouped much of the investment through government incentive programs”; “the family expects to recoup about 80 percent of their $15,000 investment over five years through federal and state incentives”). The third case – a couple living completely off the grid – doesn’t mention subsidies, but does provide some idea of the costs:

The solar and wind equipment cost $45,000. One way to look at it is that this exotic hobby costs Carter $150 a month over a 25-year period. Another view: It’s outrageously expensive and impractical.

“If you’re off the grid, you not only have to be efficient, you have to be ultra-efficient, because your power is costing five times more than your neighbor’s,” Carter said.


3 thoughts on “Making Clean Energy Pay

  1. I thought all this renewable energy technology was supposed to be cost competitive with commercial power. I guess I was wrong.

  2. What’s a kw/h anyway? 😉 [Quibbling D.O.U.G.s would insist that kWh is a unit of energy, but a kw/h is a quantity with which they aren’t familiar. A kW/h could be a ramp rate, I suppose. Don’t get me started on mWh and MWs.]

    In all seriosity, too often the average cost per kWh for renewable power is stated without reference to the value of the power generated. Solar has a good chance of producing high-value power, but wind may produce a lot of low-value power in some locations. Taking it to an absurd extreme, if the wind blows only at night, the windmill generates when costs and prices are lowest.

  3. For off the grid stuff, there are a couple of things. First, the major portion of that is batteries! Yes, panels cost a chunk (something like $1000 for good big ones) but batteries sufficient to run a house round the clock are pricey.
    Second, while you are free to rail against govt subsidy — knock yourself out! — the main point of solar is that you’re getting an up front cost to balance against the substantially fluctuating costs that also include inflation over 20-25 years or so. You do of course have to factor in maintenance costs, which do not crop up often given the solid state nature of things but which do occur.
    In addition, I live in California, and my monthly **energy** bill (gas and electric) over the course of the year was about $170 or so. And this guy is paying $150 a year, locked in? Are you nuts to call this costly? He’s making money over me **now** and is immune to fluctuations in energy costs for twentyfive years….

    Mind you, I don’t care if you believe that the upfront investment costs are too high for most users (but that subidies are inappropriate) — that’s a reasonable position to take. But from an investment in one’s future energy point of view, using solar is entirely reasonable as well. It’s the up front, short-term cost that seems bad…..

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