Third grade students at the Brewster Pierce School in Huntington learned about solar energy, but missed a great opportunity to learn about the economics of solar energy.
The students (with a lot of help) installed some solar panels at the school which will generate 2,000 kwh of electricity. According to the Freeps article,
About $1,000 of the project's $20,000 price tag came from the sale of compact fluorescent light bulbs. Donations of labor and materials topped $10,000.
Let's assume the $10,000 worth of donated materials are included in the $20,000 price tag and is not in addition to it. The solar-powered electricity generated by the panels is "free", although the up front cost is not. Assume the opportunity cost of the $20,000 is 10%. That means the $20,000 could have earned $2,000 per year, which means each kwh costs $1.00. Even discounting it at 5% yields a cost of 50 cents per kwh.
The going price for electricity in Vermont is around 14 cents.
One of the adults who helped with the project, an employee of a solar energy firm, said
"People put these up for a full spectrum of reasons," he said. "Some will say they're doing it to 'stick it to the man.' Others tell you they're thinking about the future of their grandchildren. And some people just want to save money."
I'm not sure who the man is who is getting stuck, and what he's being stuck with. Electrons?
If the students are learning that installing solar panels is a way to save money, they are being terribly misinformed, and are missing a great opportunity to learn a fundamental principle of economics which can easily be taught to third grade students.
As to the future of their, or my, grandchildren, we should realize they will be phenomenally wealthy by our standards. Given a modest rate of economic growth, my (as yet unborn) grandchildren, when they are 50 years old, will have a family income of more than $160,000 in inflation-adjusted dollars. They will be able to afford many things that I cannot even dream of, and will be taking advantage of many technologies that will be available, some which will no doubt enable them to use electricity with a lower carbon footprint than we have today.
While I agree with the author's comments with regards to the article in question. The economics of solar or other alternate energy sources become much more palatable when the consumer is not in close proximity to the existing grid. At about $1000/power pole, there are a many areas in the state which may be served more economically with an off-grid solution.
Posted by: Corin Wright | November 29, 2007 at 01:42 PM