Economic Difficulties of Renewable Energy

Posted: November 8, 2010 in Politics, Technology

Green Power’s High Cost Scuttles Projects – NYTimes.com

The great philosopher Billy Joel sang, “Advice is cheap, you can take it from me. It’s yours to keep ’cause opinions are free.”  And so it is with this post.

Anecdotal evidence seems to indicate that a large majority of people agree that the U.S. needs to reduce it’s dependance on fossil fuels (particularly on foreign oil).  Yet the debate rages over the best methods of doing so. Renewable energy tends to cost more especially at the outset with setup seen as a long term investment.  The big problem here (and this is again pure opinion based on the anecdotal evidence of conversation, reading of newspaper, magazine and journal articles) is that most people just don’t think in the long term.  Americans are an instant gratification people and the idea of dropping (taken on the micro level) $30,000 on a home solar system (a very conservative estimate) that won’t pay for itself for twenty years or so is repugnant to most.  Taken on a macro scale, the cost of building renewal energy installations and bringing them online is enormous.

West Virginia regulators killed a renewable energy deal because it would have increased residents energy rates by 0.2% stating,  “The ratepayers of Virginia must be protected from costs for renewable energy that are unreasonably high.”  The average increase would have been 0.2% (not 2%, but 0.2%).  [Begin sarcasm] Hmmm… let me do the math really quickly… if my electrical bill is $100/mo, then this renewable energy deal would have increased it to… $100.20.  Oh yea, that’s a completely unreasonable rate increase.  I’d never make it. [End sarcasm]

As one wind farm company owner observed, this is a very short sighted view.  “They have to look for the ratepayers’ long-term interest,” he said, “not just the bills this year.”

In some cases using renewable energy would drastically increase energy costs.  I realize this.  It is a fine tightrope to walk, balancing renewable energy and responsible economics.  I applaud those, be they individuals, companies or government entities and officials, who are sincerely attempting to perform that circus act.

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Comments
  1. Ed Hurst says:

    “Americans are an instant gratification people” — Oh, the vast ocean of sins surging behind that statement! Americans do assume the long-term because they don’t want to think about it. Even if you don’t reap the long-term benefits of such an initial investment in renewable energy, it is still righteous for today that we work in that direction.

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