Tuesday, March 8, 2011

Guest Blog by Willem Post: Subsidies for Wind and Solar

Guest blog by Willem Post

Today's Valley News (my local paper) contained a front-page article: Is the Home Solar Market Dimming? The article was by Chris Fleisher, an excellent business writer, and included a picture of Kimberly Quirk, a local engineer who owns the Energy Emporium in Enfield, New Hampshire. I have known Kim for several years, and have the greatest admiration for her knowledge and her store.

The article had a picture of Ms. Quirk in her super-insulated basement, but very little else about conservation. Willem Post wrote this guest post in response to the Valley News article.


The March 6th, 2011, Sunday Valley News article Is Home Solar Market Dimming? describes that the future of PV solar looked bright until about 2008. Then the Great Recession began to bite. Many households in the top 5% of income, who had been benefiting the most from the generous PV solar subsidies, decided to be less green as there was less of the green stuff in their financial accounts.

Vermont had a substantial amount of funds in the Clean Energy Development Fund (CEDF) but it was decided to rapidly spend most of it (lest legislators would raid that kitty for other "worthwhile" state programs) on subsidies of up to $250,000 per project for wind turbine and PV solar systems. The politically well-connected received most of the subsidies for commercial projects (groSolar recently sold its residential division), leaving not enough for no-political-clout households.

The CEDF has about $800,000 left. Vermont Yankee had been required to kick in about $6 million per year since about 2002, but with the prospect of that plant closing that source of funds will disappear.

A CEDF Funded Project

For example, the CEDF provided a $250,000 subsidy to the Bolton Valley Ski Area so it could install a 100 kW, Vermont-made, wind turbine for $750,000; it has not been not operating for at least a week, even though there was plenty of wind.

According to Bolton Valley's website, the wind turbine generated 204,296 kWh from October 2009 to-date, about 17 months. Capacity factor is (204,296 kWh/1.4 years)/(8,760 hr/yr x 100 kW) = 0.17.

The web site has extensive information on the turbine. The wind turbine was sold to Bolton Valley on the basis it would produce 300,000 kWh/yr, for a capacity factor of 300,000 kWh/yr/(8,760 hr/yr x 100 kW) = 0.34. It is somewhat like selling a car and telling the new owner it will do 34 mpg, whereas it actually does only 17 mpg.

Icicles and the Use of Taxpayer Money

It is a travesty to waste scarce taxpayer money on projects of dubious value considering the many low-income households "living, i.e., freezing their toes off", in leaky, drafty, under-insulated single and doublewide housing all over the Vermont.

There are icicles hanging off almost ALL roofs in Vermont. The icicles mean that heat rises through the openings in the ceiling of the house, moves through the poor insulation into the attic, warms the roof, melts the snow to water which runs down to the colder eaves where it refreezes and forms an ice dam. Then the water backs up, forms a puddle, goes under the shingles and into one's living space.

How about a 30% subsidy for insulating houses, instead of the comparatively measly PACE program where households that borrow money to install energy systems have to pay back the loans with interest? (Note: Vermont's PACE program is described in the Valley News article. PACE stands for Property Assessed Clean Energy, and is a way for homeowners to borrow for energy improvements.)

Keeping the Subsidies Predictable

The end of the current funding from the CEDF was discussed extensively in the Valley News article. The concern was that on-again, off-again subsidies would not encourage the renewable industry. Rep. Margaret Cheney is a member of the House Natural Resources and Energy Committee. What are Cheney and her cohorts cooking up to bring subsidy predictability back?

The Committee is considering flat fee of 55 cents per month for households and a higher fee for businesses. These fees will be added to the electric bill. Note the fee for businesses is not specified. Will it be on kWh consumption? Will funds raised from households be allocated to households and funds raised from businesses be allocated to business? The idea is to start the fee low and jack it up later, as was done with the Efficiency Vermont fee (a quasi-state agency reporting to the Public Service Board. The head count at Efficiency Vermont is well over 175) which started at about 2% and is now about 5% of monthly electric bills, or $60/yr.

Energy Independence?

The Valley News story ends with this quote from Rep. Cheney:

“We need to become independent from out-of-state energy sources,” she said.

Cheney looks forward to the day Vermont becomes independent from out-of-state energy sources, such as Hydro Quebec which supplies about 30% of Vermont's power. However, many in the legislature look forward to closing Vermont Yankee which supplies about 35% of Vermont's power; both reliably provide low-cost, CO2-free, 24/7/365, steady power. Cheney has not taken a position on Vermont Yankee. Last year, around the time of the vote, she said that she would prefer to vote after tritium investigations ran their course. She said, however, that if she were to vote right at that moment, she would vote against relicensing the plant. (The House did not vote last year on Vermont Yankee. Only the Vermont Senate voted.)


I think Cheney should forward to the day Vermont is really serious about energy efficiency.

Energy efficiency will have a much bigger role in the near future, as energy system analysts come to realize that tens of trillions of dollars will be required to reduce CO2 from all sources and that energy efficiency will reduce CO2 at a lesser cost and more effectively.

Energy efficiency projects
  • will make the US more competitive, increase exports and reduce the trade balance.
  • usually have simple payback periods of 6 months to 5 years.
  • reduce the need for expensive and highly visible transmission and distribution systems.
  • reduce two to five times the energy consumption and greenhouse gas emissions and create two to three times more jobs than renewables per dollar invested; no studies, research, demonstration and pilot plants will be required.
  • have minimal or no pollution, are invisible and quiet, something people really like.
  • are by far the cleanest energy development anyone can engage in; they often are quick, cheap and easy.
  • have a capacity factor = 1.0 and are available 24/7/365.
  • use materials, such as for taping, sealing, caulking, insulation, windows, doors, refrigerators, water heaters, furnaces, fans, air conditioners, etc., that are almost entirely made in the US. They represent about 30% of a project cost, the rest is mostly labor. About 70% of the materials cost of expensive renewables, such as PV solar, is imported (panels from China, inverters from Germany), the rest of the materials cost is miscellaneous electrical items and brackets.
  • will quickly reduce CO2 at the lowest cost per dollar invested AND make the economy more efficient in many areas which will raise living standards, or prevent them from falling further.
  • if done before renewables, ENERGY EFFICIENCY will reduce the future capacities and capital costs of renewables.
I look forward to the day when Vermont is serious about Energy Efficiency.

German PassivHaus thermogram (house on right, with low thermal leakage) from Wikimedia.


Travelogue for the Universe said...

Thanks for this enlightening article. Hard to keep up with all the nuances. Nice job on the radio yesterday! Keep it up! Mary Gerdt

Alice Finkel said...

Thanks very much. We consider Vermont to be a leader in the fight for clean energy.

Wind energy may have many shortcomings, but it makes us feel clean and good all over.

That has to be worth something!