The main goal of solarworks.co is to help facilitate discussion on renewable energy
By providing facts and figures you, the reader, can use to draw your own conclusions about renewable energy – and especially solar energy. But there’s a stumbling block if we consider only facts and figures, and it has to do with how most of us view the value of things. It has to do with our short-term mindset. It boils down to the notion of payback.
Start a discussion on renewable energy, such as a residential solar photovoltaic (PV) system, and the question of payback inevitably comes up, often as one of the first asked. How much does the system cost? How long until the system pays for itself – how long till payback?
Seems like a reasonable question, but it shouldn’t be the only one, and in my view, it’s not even the most important. But too often, it seems all that people worry about, the money. It’s not that consideration of the economics is wrong – without sufficient money to pay for a system, it doesn’t matter whether the system is cleaner, more efficient, more sustainable; without enough funding, nothing will get built, nothing will get done. But the payback mindset we use to evaluate the economics gets us into trouble. Here are some of the ways this happens:
Short Term Thinking about Renewable Resources
We hear that a solar PV system might take ten years to “pay for itself” and somehow think that’s not good enough. We view it as failure. We want payback, right here, right now. Who cares, the consequences for tomorrow?
Unless this short-term thinking is changed, renewables won’t have a chance. Many forms of renewable energy will pay for themselves, but it might take decades. Adopting renewable energy requires thinking in the long term.
Buying Cheap Only Applies To Energy
When it comes to energy, the mindset is to always look for the “cheapest” alternative. Money is the only concern. Things like our health and quality of life, well, they go out the window. We want the cheapest source of energy, even if it poisons us.
But we are misers only when it comes to purchasing energy. For all other purchases – like cars, houses, clothes – all of a sudden, the notion of “cheapest” is thrown out the window. We want the luxurious leather seats, the 500 HP engines, the marble counter tops, the celebrity labels on our jeans. And we’ll pay to get them.
It’s not that we always buy these luxury items, but for most of our purchases, we tend not to think in terms of “cheapest.” We tend to think in terms of affordability, (and sometimes, not even that.) We like quality, and are willing to spend to get it, up to what we can afford. This is true in our car purchases and our house purchases. Likewise, for our clothes, furniture, toys, we buy what’s affordable, not what’s cheapest. We go for as much quality as our budget allows.
But paying our electric bill? No way! We don’t care about the “quality” of energy, (ie. how clean or safe it is). No sirree, we’ve got to have the cheapest source, even if it dirties our water, dirties our air, cuts down our mountains, leaves us with piles of highly toxic waste.
Renewable Energy is not a Strange Mindset
I once took a tour of a house here in the Phoenix metropolitan area that runs on hydrogen gas. Solar panels produce electricity which is used to produce hydrogen gas that is then used to power appliances and heat and cool the home. There is only one other house in the world like it. Now, this is an upscale house costing millions of dollars. On top of having a high-tech, pioneering energy system, the house has all the luxuries money can buy. During the home tour, as we were standing next to the fancy swimming pool, surrounded by marble tiling imported from Italy, the owner told us that many people ask about the payback period on his solar panels, his solar hot water heating system, his hydrogen production system. But not a single person has ever asked about the “payback period” on the expensive marble tiling used to surround the pool. After all, he could have gone with cheaper pool decking. So how long until these marble tiles pay for themselves? Why is that question not asked? Why the seeming double standard?
External Costs for Traditional Energy Are Not Accounted For
Let’s say a particular coal-fired power plant costs X amount to build, fuel, and maintain. Let’s say the electric company figures out all these costs and charges 10 cents / kilowatt-hour to cover them and also provide profit to its shareholders. These costs are called the internal costs.
What’s not included in our electric bill are the external costs – indirect costs that come from the consequences of using that energy. In the case of our coal-fired power plant, this comes in the form of pollution – tons and tons of particulates added to the air, tons and tons of poisonous chemicals. This then translates into health problems, climate problems, quality of life. It’s very hard to put a price tag on these concerns, but don’t worry, we are not charged for them on our electric bill. Out of sight, out of mind.
Other examples of external costs are the geo-political costs. To keep the price of coal down, we strip-mine our prairies, and level entire mountain tops; for natural gas, we use hydro-fracking, consuming large amounts of water, and then polluting said ground water with nasty chemicals; for oil, we rely on countries that aren’t necessarily our friends, resulting ultimately in costly wars, and even when we do obtain oil locally, things can go wrong, as in the recent Gulf oil spill, and we end up with entire ecosystems destroyed. What’s the cost of despoiling the Gulf of Mexico? Do you know? Are you directly paying for it? Should you?
Unfair competition in Energy Generation
The notion of payback is an unfair metric as long as externalized costs are not accounted for. When we are not charged these costs on our energy bill, it puts the cleaner, safer, more sustainable forms of energy at a disadvantage. How can they ever compete on such an unfair playing table?
Even if renewable energy does successfully compete on this unfair playing table – and solar and wind are on the verge of doing so – people are still hesitant to take the plunge, for these renewables involve payback on the long-term – that seems to be the nature of renewable energy – and with our short-term thinking, that’s apparently not acceptable.
Maybe instead of thinking “pay back,” we should be thinking “pay forward.” If we use a cleaner form of energy, and maybe pay higher costs because of it, (or maybe not), we are not only enjoying the benefits of cleaner energy now, we are paying forward to future generations, (and that includes your children and grandchildren), so they can have a cleaner, safer world. How much are you willing to pay for this, right now? How much can we afford, as a society?
These are the questions we should be asking. This is the mindset we need to adopt. Not just short-term, payback thinking.The subject will mostly be on solar energy, since that’s the form that personally appeals to me the most, but I’ll also be discussing wind energy, geothermal, electric vehicles, and so on. Also discussed will be nuclear energy. Not that’s it’s a “renewable” form per se, but a form that will most likely play an important role in the foreseeable future, a form which at least gets us past the “dirty” non-renewable technologies of oil, coal, and other combustion-derived forms of energy.
There’s a lot of disinformation out on the web on the subject of renewable energy, a lot of hysteria, a lot of misguided thinking. In whatever small way I can, I hope to contribute to the debunking of this misinformation, and the toning down of the hysteria. I hope to put up interactive tools that help guide the reader through the math of simple thought experiments that illustrate, in very clear terms, the pros and cons of each form of energy.
These are ambitious goals, so who knows how much of this I can actually accomplish, but it’s time to take the plunge and do what I can.