Money spent on environmental projects had to be earned and therefore has an associated environmental cost. It should be spent carefully in order to minimize environmental harm and maximize benefit.
Mayor Sanders is currently asking for comments on his proposal to leverage $5 million in federal stimulus funds to gain 3 megawatts (MW) of solar energy panels in Balboa Park, "enough to power about 2,000 homes." Mayor Sanders offers that "the total cost of the solar project -- about $30 million -- will largely be borne by solar energy services provider SunEdison through a power purchase agreement, or PPA, with the city."
Let's be candid, the public, not SunEdison, is going to pay the total price for this electricity. Query: why so costly, who ultimately owns the panels and who gets the valuable carbon credits?
Simply put, the cost of solar power for this project is roughly $10 per watt. The retail price for residential solar installation is about $6.15 per watt, or 62 percent of the cost of the mayor's proposal. It seems the $5 million will be used to buy down the price, but the price remains higher than standard electricity rates.
The mayor's concept and recent comments by a representative of a group opposing the Sunrise Powerlink, a group whose technical leadership is Bill Powers, point to the various shades of green which emerge when different factions seek to achieve economic ends and what might appear as desirable environmental objectives.
The current cost of solar power is relatively high compared with other renewable energy sources.
What can endlessly complicate and obscure cost discussions are the incentives, subsidies, tariffs, and the political and legal wrangling which can be introduced to shift, skew and distort costs one way or another.
That said, someone is going to pay, regardless of cost-shifting efforts, and by using plain dollars and cents for installed equipment, irrespective of who pays, PV is clearly more expensive than a transmission system which can link into a diverse renewable energy portfolio. Hence, tension exists between different groups seeking similar results.
It is incumbent upon the environmental community to be honest about actual costs and the alternatives which might be purchased with those environmental dollars. The approach used by Wall Street speculators who distort costs should not be adopted as a method for achieving environmental ends. After all, it is not merely the cost of electricity, but avoiding untoward environmental harm, which makes all renewable energy sources desirable.
Bill Powers opposed the Sunrise Powerlink transmission system, arguing, inter alia, that reduced demand and distributed solar power can meet San Diego's needs at lower cost. However, a review of Bill Powers' videotaped presentation from February 20, 2007, and relevant portions of his May, 2008 second printing of "San Diego Smart Energy 2020" ("SD2020") provides some interesting insights and raises concerns over his suggested economic strategies for creating renewable energy.
In the video, Powers explains several aspects of his proposed plan for San Diego's energy future. At one point he began to describe what his report identifies as the cost of installing "2,000 (megawatts) MW of (photovoltaic) PV by 2020 to achieve a 50 percent [green house gas] GHG reduction from electric power generation."
In his SD2020 report, at page 45, Powers says "the most abundant renewable resource in San Diego County is the sun. San Diego County currently has approximately 38 MW of installed commercial and residential PV capacity," 1.9% of the 2000 MW required.
The SD2020 report at page 56 also states: "wind power is considerably less capital intensive than PV on a (megawatt) basis."
Physical capital is the primary basis of renewable energy production. Spending excessive amounts on an expensive energy source is a misallocation of natural resources and money. It is not wise environmentalism.
While not entirely clear, at one point Powers mentioned a cost of $8 per installed watt for solar PV panels, not including the significant additional costs required for large-scale battery storage systems. In past comparison calculations, I have used an advertised retail price of $22,700 for a 3.7 kilowatt PV installation, or about $6.15 per watt.
To provide 2000 MW of solar (PV) power would require 540,000 (3.7 kW) rooftop installations, occupy a minimum of 16,000 rooftop acres, and would cost $12.3 billion. Powers says this approach saves money when compared to Sempra's $1.3 billion dollar Sunrise Powerlink transmission line, a project which, even with a 40-year pay-down period, including interest, Powers says is $7 billion. That leaves $5.3 billion for power production equipment and enables the transmission and purchase of less expensive, more efficient, renewable energy.
When $30 million builds a 15 MW wind power project at $2/watt, producing five times the electricity, shouldn't we carefully consider how we expend 30 million precious "green" dollars?
Coffey is an attorney based in San Diego. He can be reached at firstname.lastname@example.org. Comments may be published as Letters to the Editor.