White Elephant?

  by Art Woolf

A year after receiving a state energy grant, a clothing and outdoor gear store here is using solar power to generate almost half its electricity.

---Valley News

The store's manager says

he expects Farm-Way's $12,500-a-year electric bill to drop by almost half.

Another example of solar energy's potential?  Before you go out and install one of these babies in your store or house, you might want to read the fine print:

A $226,000 Vermont Clean Energy Development Fund grant paid for more than half the $400,000 solar panel system

So for the low, low price of $400,000 the Farm-Way store in Bradford, VT will be able to save almost $6,200 a year.   I hope their other investments give them a better return.

The store got its $226,000 grant from the Vermont Clean Energy Development Fund.  And where did the Fund get its money?  From Entergy Vermont, the folks who own Vermont Yankee, who made a deal with the state several years ago (couldn't the state find a better use for that money today?--ed).

I'm not too excited to learn that

Farm-Way's project is among the top five systems -- in terms of energy generation -- the Vermont Clean Energy Development Fund last year subsidized

If this was something being sold on an infomercial on late night TV, you wouldn't call the toll free number and buy it.

But suppose we all did.  If every residential electricity customer in Vermont installed this type of technology and could save half of the 2,169,646 megawatt hours of electricity Vermont's residential customers used in 2007, it would save us about $150 million annually, or about $1,000 for a family.   That's nothing to sneeze at.

To get that savings, though, we'd have to spend a total of $10 billion on the solar systems.  Following the Farm-Way pattern, we'd all get subsidies to help us pay them.   But even Entergy doesn't have the profits, much less the revenues, to pay for the $5.5 billion in subsidies it would require.    

Gro Solar, a Vermont company and installer of the solar system, would certainly be happy with that kind of new business. 

Kevin McCollister, commercial project manager for groSolar, the solar energy company based in White River Junction that installed the Farm-Way system....[said] with continued government support of alternative energy, the Farm-Way project “will look tiny” several years from now.

Perhaps solar projects will be larger in the future.  But they won't occur with this level of government support.  No one has that kind of money.  

By the way, the definition of a white elephant is 

a valuable possession of which its owner cannot dispose and whose cost ... is out of proportion to its usefulness.

Comments

[Chris Campion]

Art, unfortunately I'm not young enough to enjoy the fruits of the payback period for this investment. 64.5 years seems like a long time to see any payback, but perhaps I don't understand the new green economy.

Chris

[T. Shea]

Chris,

You forgot interest. At 3% interest (if you could get that rate), you'd accrue an additional $5,800 INCREASE in debt each year.

You would need a 1.5% annual interest on capital to have a chance of EVER paying it off.

It is even more insane than it first appears.

[Ed G. Mann]

The "new" green economy will turn out to be moss, lichen and mold. The first two look good on rocks; mold only on dead things!

At 0% growth, doesn't mold express Vermont's economy?