I think it’s important that we stop burning petrofuels or indeed any fuels and get energy from better sources.
But there’s a disturbing phenomenon I have seen from people who believe the same thing too much. They want to believe so much, they forget their math. (Or I may be being charitable. Some of them, trying too hard to sell an idea or a product, may be deliberately forgetting their math.)
I see this over and over again in articles about photovoltaic solar, wind and other forms of power. They suggest you could put in a PV panel array for $20,000, have it provide you with $1,000 worth of electicity per year and thus “pay for itself” in 20 years. Again and again I see people take a series of payments that happen over a long time and just divide the total by the monthly or annual amount.
Recently I saw an article in IEEE Spectrum, an engineering magazine, where a $9,000 wind power system which would generate 100,000 khw over its 20 year life was thus providing power for 9 cents/kwh. The same terrible high school math, this time from people who should not be making math mistakes at all.
It’s particularly disturbing because effectively everybody who puts in a PV Solar system or a wind system is a homeowner, who has a mortgage, and should be reminded every month that $1,000/month does not pay off $120,000 in 10 years.
FYI, at today’s 7% interest rate, that wind power system actually costs about 17 cents/kwh. This is no minor difference. Not only is it close to double, it’s the difference between being below the grid price (and thus making economic sense) and being above it.
The unfortunate truth is that it’s very, very hard to make such systems make economic sense today. The stock market’s historical long-term rate of return is 10%. So if you were to take the $10,000 you might use to buy a 2500 watt solar array (at the $4/watt post-rebate cost you might get in California) it would return $1,000 per year with no reduction of the principal, except inflation. That $1,000 would buy around 7,500 khw of grid power here, much more in areas with cheaper power. (Accept to lose the principal after 30 years and we get 8,000 khw.) Alas, the 2500 watt solar system can only produce around 5,000 khw of power in a year. Compared to the stock market, the PV panels never, ever pay for themselves. Get them down to $2.50/watt and you’re breaking even at 13 cents/khw for grid power.
This calculation is of course for grid-tie power, where you sell your excess back to the grid. Battery based systems, aside from dealing with the cost of batteries, also discard their power when the batteries are full or near full. Which is much of the time if you want long battery life and good capacity from your system. Batteries can make sense for an expensive off-grid power system, but they are “false green” if you could tie to the grid but deliberately install a battery system. It seems green but it’s actually environmentally damaging, because of the cost of making the panels and batteries and other equipment.
The math is even more complex than I describe above, of course. One must make predictions about the expected cost trends for both grid power (which many think will go up) and alternative energy equipment (which many think will go down) but of course prediction will not be perfect. In addition, inflation alters the equation. But the basic math mistake is still disturbing. Trust me, when power companies build power plants, you can bet they carefully amortize their expenses and power production to work out their costs and to figure what’s economical. Companies selling solar who don’t do the same thing are commiting fraud in my opinion.
I’m identifying 3 kinds of environmental action today. There’s “true green” which really promotes environmentally non-destructive and sustainable types of energy. There’s “false green” where let emotions ruin their math and do something environmentally poor while thinking they are being good. And in the middle there is “evangelical green” where people do activities that don’t make economic sense yet in order to make a point and in particular to promote the activity so that it has a chance of becoming economical with time.
When I wrote earlier about how the Prius’s hybrid engine costs vastly more than just buying carbon credits to offset burned fuel, several Prius owners said that even understanding the math, they felt it was important to make a statement and demonstrate demand for fuel efficient cars, so that eventually they would be made in volumes that brought their cost down. I can understand that argument, though it’s a good idea that people realize this is what they are doing.
Next year, Burning Man’s theme is environmental. I know a number of people will try to express that by bringing solar panels to the desert for power. I predict a fair number of those panels will be panels that are only used while camping, ie. they are not being taken out of and placed back into a working, grid-tied solar power system. Turns out that making solar panels with today’s tech requires lots of energy. In the past, calculations suggested making a panel took 4 years worth of its output, though today I’ve seen estimates getting closer to 1 year. Either way, panels brought out only for camping are just transporting grid energy, and not very efficiently. False green at worse, evangelical green at best.
Update: Here’s a solar economics spreadsheet to let you explore the math.