Michael Giberson
Consider the claim in the headline, “How One Man’s Roof Paid for His Car.” Here’s the introduction:
It’s the first feel-good sustainability story of 2012. A man in Orlando, Florida installed solar panels on the roof of his home, sold the excess power back to the grid, and then used that money to make a down payment on a new Chevy Volt, the plug-in car that gets 60 miles to the gallon.
Now those solar panels are charging his new car.
The nut of the story is that over the last two years the Orlando homeowner netted $5,600 in power sales to his local utility due to the oversized solar power system installed on his roof and in his backyard, and he recently made a similarly-sized down payment on a Chevy Volt.
If we were to assume that the solar panels fell like manna from the skies and were installed by angels refusing payment for their services, it still just isn’t the case that the solar system paid for the car. One indication: it took two years to accumulate $5,600, an average of about $117 per month, and actual monthly car payments for a Volt are likely north of $400. Maybe the homeowner is (reasonably) figuring in foregone electric power bills, but that value is not reported.
The story appearing at StateImpact Texas was based on a newspaper article appearing in the Orlando Sentinel under the more modest headline of “Sun Powers Orlando Man’s Electric Car.” The Sentinel article describes the homeowner’s own investment in the solar power system as “hundreds of thousands of dollars” and mentions “tax breaks and rebates” provided by taxpayers and ratepayers without quantifying them.
Let’s look at it this way: If I poured hundreds of thousands of dollars into the ocean and caused other taxpayers and ratepayers to pour tens of thousands of dollars into the ocean, and then the waves washed a few hundred dollars back each month, the claim that “the ocean paid for my car” would seem a little silly.
The Sentinel reported the owner’s own estimate of the payback period at an astounding “50 years or more.” (Astounding because, as the NPR story discussed yesterday indicates, the projected lifespan of the system is much closer to 20 or 25 years.)
Picky, picky, picky Mike. Solar energy is free, man. You know that. Get with the plan, dude! Geesh!
Of course, the Orlando man’s neighbors have been paying extra for their electricity, since he is selling his power to the utility which serves all of them at a substantially higher price than the utility would have to pay in the wholesale power market; and, “earning” a portion of the utility’s fixed cost recovery in the process. This lost fixed cost recovery must be made up by other utility customers.
Obviously, the rest of us have also been paying extra taxes to subsidize the sale and installation of his solar collector field, many of the components of which might well have been made in China.
The headline is the thing. All of the rest is just uninteresting details. Reality TV is much more fun. 🙂
I guess as long we’re counting up costs here, shouldn’t we also have to count up the externality costs associated with coal-fired power that he would likely be using if he didn’t have solar panels and factor that into the equation? Seems fair to me to ask who’s paying the bill, but poke around Appalachian “mountain-top removal” coal mine facilities and you’ll probably find a lot of costs that are being dumped on other folks in exchange for “cheap” electricity. Wonder a bit if maybe the million dollars in the ocean analogy would apply to that too. I won’t deny there are a lot of free riders out there in the solar business, what with the feed-in tariffs, and the state and federal tax breaks, with project returns stretching out over ten years or more even with all that stuff thrown in. I just think maybe these same sort of questions could be asked about power that’s assumed to be cheap and unsubsidized.
Here is a classic from the NYT on New Years Day:
“Where the Real Jobs Are”
http://www.nytimes.com/2012/01/02/opinion/where-the-real-jobs-are.html
Forget Keystone, real jobs are building energy systems that only cash flow from government subsidies.
quasecarioca, I agree that there are unpriced third-party effects associated with coal-fired power plants (and similar, but much less significant effects associated with gas-fired power plants). The current range of policy supports for renewable power production is almost completely detached from any concern for addressing such effects, except accidentally, so I can’t give it much credit in this regard. But getting back to the original story: yes, a careful assessment of the costs and benefits from the project should consider the environmental benefits yielded by the project.