Renewable Energy, Winning by Default

The one thing that may put renewable energies like solar power over the top in the future is not price, efficiency, or even the size of environmental footprints, but merely the fact that oil and gas reserves are becoming increasingly uncertain.

Examining solar energy from a price standpoint, we find that solar is now very close to grid parity with conventional electricity generation from utility companies, which include coal, oil, gas, and even nuclear and hydropower in their supply-side generation mix.

For example, to install an 8-kilowatt solar photovoltaic (PV) panel system, which would provide about 9,600 kilowatt-hours per year, or enough electricity to power the average home (with a few efficiency upgrades), would cost about $60,000. After federal tax credits (which only kick in the year after installation), the cost could be reduced to $30,000, at most. Add other incentives, including state and regional incentives (property taxes deferred, cash incentives from utilities, even solar renewable energy credits, or SRECs, at about $450 per megawatt-hour), and you might get the system down to $20,000. Average this over the system’s 20-year lifetime, and you pay $1,000 a year, providing you can get the incentives or wait to collect them. If not, the upfront costs are unaffordable.

The average cost of residential electricity in the United States in April of 2009 was 0.12 cents per kilowatt-hour (including all those little surcharges and taxes utilities impose). This means your yearly electricity bill from the utility (for 9,600 hours) is $1,152.

As solar panels become more efficient, rising from less than 10 percent conversion rate a decade ago to more than 15 percent today (in real-world trials) for affordable panels, the possibility of solar systems becoming affordable without incentives rises exponentially. Again, however, the caveat is the huge upfront cost. Scientists also speculate that a 40 percent conversion rate may be the maximum efficiency solar power can ever achieve.  Furthermore, although this efficiency rate has already been demonstrated, it has been done at the sacrifice of cost and predominantly in scientific laboratories.

Wind is a more cost-effective energy source, by up to 50 percent, but it suffers from resource failure. That is, the sun shines more often in more geographic locations than the wind blows, and recent research suggests that this situation may become more prevalent. 

Wind is also more liable to failure, often catastrophic. Where solar panels may stop producing, and even self-destruct, at extremely high temperatures due to thermal expansion, the effects aren’t likely to endanger anyone, or any thing. When a wind turbine collapses, or the blades fling off into space because wind-speed mechanisms failed, it can have dire consequences.

Both wind and solar have small, but definitely visible, environmental footprints. Utility-scale solar uses a lot of water, particularly concentrating solar applications, and the advent of dry-cooling (or air-cooling) reduces that use but also reduces output. Wind farms use minute amounts of water, but can kill birds or bats, and the vibration from the turbines has been implicated in reduced milk production from diary cows and sleeplessness among humans. 

Cost and benefit aside, renewable energy may triumph simply because gas and oil are not as plentiful as the world once imagined. In fact, a recent report, the "World Energy Outlook," by the International Energy Agency (IEA), a key organization for providing oil and gas availability statistics and future projections, has called the availability of oil and gas into question  The "World Energy Outlook" states that senior officials reportedly claim that oil and gas availability figures were inflated, at the behest of the U.S. government, to prevent an energy supply panic.

The Oil Drum, an electronic publication, recently published an article on the limits to oil production, showing graphs which delineate the gradual decline as a result of oil supplies which are too difficult or too costly to extract, like shale and tar sands, with the peak of production coinciding with very high oil prices in 2008.

Gas production, according to Arthur Berman, faces a similar decline, as well as the environmental problems presented by fracking. More recently, natural gas drilling in New York State has apparently released radioactive isotopes into drinking water. Together, this negative environmental portrait may trigger legislation that makes gas drilling not only toxic, but unaffordable.

The last energy source in the U.S. worth consideration is coal, but coal is, as we all know, so dreadfully polluting (from source to ash pond) that most utilities are searching for the holy grail of carbon capture and storage, or CCS, to give coal’s environmental profile a facelift, albeit a very small one.

Unfortunately, CCS technologies are not only costly and inefficient, but they use a lot of source energy to implement, further reducing electricity output. In fact, the technology is so imperfect that the federal government cancelled its FutureGen CCS project in 2008, after five years of deliberation, and then in June of 2009 restated it, with a final disposition, yes or no, due in 2010.

Other technologies, like coal gasification, are equally problematic, according to Greenpeace and other environmental watchdog groups.

So, it appear it is this failure, of both supply and technology, that will likely propel America (and the world) toward clean, renewable energy. In other words, solar and wind might win not because they are better, but simply by default.