The New York Times Blows the Solar PV Story, Too
It would seem like an easy story for the paper of discord record:
In recent months, chains including Wal-Mart Stores, Kohl's, Safeway and Whole Foods Market have installed solar panels on roofs of their stores to generate electricity on a large scale....
In the coming months, 85 Kohl's stores will get solar panels; 43 already have them. "We want to keep pushing as many as we possibly can," said Ken Bonning, executive vice president for logistics at Kohl's.Macy's, which has solar panels atop 18 stores, plans to install them on another 40 by the end of this year. Safeway is aiming to put panels atop 23 stores....
Wal-Mart [is considering a] program that would put panels and other renewable technologies at hundreds of stores.
All that is left for the Sunday NYT story, "Giant Retailers Look to Sun for Energy Savings," is to explain why these bottom-line savvy companies are making such large bets on rooftop solar photovoltaics (PV), even though the power is widely thought to be expensive.
This should be incredibly easy -- assuming this reporter or her editor even bothers to read their own paper. After all, just a few months ago a different NYT reporter explained it all in a story titled, "Pay for the Power, Not the Panels":
The new financial techniques allow the solar companies to separate the capital expense of the systems they sell and the tax benefits that accrue to the buyer from the final costs of the electricity produced. In doing so, the solar companies have made it possible for more corporations and even some homeowners to kill two birds with one stone:doing good for the environment while cutting the cost of the power they consume.
[Small note to NYT: In an environmental story, maybe use a different metaphor than bird-killing.]
That's right. Corporations are actually cutting their electricity costs by installing solar panels. But you would never know that from Sunday's story. In fact, you'd think these companies were throwing away their money:
Booming demand in recent years has driven up the price of solar panels, and analysts say it costs far more to generate electricity from solar energy than from coal.
Coal generation costs about 6 cents for a kilowatt hour, which is enough electricity to run a hair dryer for an hour. Natural gas generation costs about 9 cents a kilowatt hour, said Reese Tisdale, a senior analyst with the consulting firm Emerging Energy Research. In comparison, "best case" for power from solar panels is about 25 to 30 cents a kilowatt hour, he said.But retailers believe that they can achieve economies of scale. With coal and electricity prices rising, they are also betting that solar power will become more competitive, especially if new policies addressing global warming limit the emissions from coal plants.
No, no, no, and no! Un-friggin'-believable.
Readers of this story would be left with the distinct impression that major retailers are paying four times more for electricity than they should be just to satisfy some irrational green urge. The line "retailers believe that they can achieve economies of scale" wins points for unintentional humor, given the old joke about the retailer who lost money on each sale but hoped to make it up "on volume."
Why on earth would you compare the price of coal from existing plants, which no retailer can buy power directly from, with the supposed "best price" from some uninformed "senior analyst" at an obscure, albeit cleverly misnamed, research firm?
The fact is that the retail price for electricity in most parts of the country is considerably higher than six cents per kilowatt hour, especially during the peak times when PV panels deliver most of their power. And as the NYT itself noted in its earlier story, clever firms like SunEdison have figured out how to finance solar projects so as to offer retailers a guaranteed long-term contract for electricity below their current electricity rate.
Retailers see solar energy as a way to provide certainty for their own electricity costs at a time when traditional providers are raising rates (see "AEP demands 45% rate increase for Ohio").
Yes, you (currently) need to have government incentives to make this work, but U.S. incentives are considerably less than many major countries that see the benefits to their nations of pushing clean energy and establishing a major foothold in what is certainly going to be one of the biggest job-creating industries of the century.
And by 2015, solar PV shouldn't need government incentives, since the price is expected to drop considerably and since we should have a price for carbon dioxide by then that starts to reflect its environmental damage.
But the bottom line is that solar is good for the bottom line right now in many states.
Let's award the NYT five spent nuclear fuel rods on energy issues for their ongoing lame coverage of this seminal issue (see also "The NY Times' absurd attack on Obama's energy plan").
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Joseph,
Here, Southern California Edison's domestic retail peak rate is 45 cents per kwh. It makes solar electric power a very good deal.
Regards,
Good grief, people. Have you ever had a lesson about corporate accounting? Let's say you have $10 million in corporate earnings that you don't need (because you are stinking rich already).
If you cash them out of the business, you will pay corporate income tax on that. In other words, you lose three or four million right there. Gone forever. Unrecoverable money. It's like burning a heap of General Grants. Stupidest thing in the world to do.
Now lets say you buy solar panels for $10 million. It's a capital investment in the growth of your company. You pay less taxes on the money because you can amortize it over the next five, ten or fifteen years (Which means that future earnings will be taxed less, too). Moreover, the state/federal government will give you another $5 million for free because you are doing good for the environment. So instead of burning $3 million in corporate income tax, now you own a solar farm worth $15 million that makes energy worth a couple hundred thousand dollars a year.
And everyone who does not understand corporate accounting thinks that you are a good corporate citizen who does something for the environment.
It's a nobrainer.
I read this story when it appeared, then re-read it today. I feel that it is a fair and accurate report about a positive development in a green industry. I completely disagree with Romm's charge. The idea that solar can save money is stated in the headline and in the body of the story.
I also think Romm misunderstands what the story says about economics of scale. The NYTimes is actually saying that big retailers hope the cost of solar panels will come down as production volume increases - much as happens with electronics and other manufactured goods.
More media outlets need to do the kind of good job done in this case by the NYTimes.
While solar may have its issues, the Times gets it wrong in a major respect - the price of solar is going DOWN. There have been extraordinary advances in solar in the past two years, especially with thin film technology. Additionally, many of the panels are made with silicon, and analysts predict a bottleneck effect of silicon becoming available to produers, which will make the panels far less expensive. Also, a major problem with solar is the cost of installation, which often time discourages people to install the panels on their own, but many states/companies are actually creating programs that would cut costs for consumers by offering reductions in installation costs. Other countries with generous feed-in tarriffs (similar to the tax breaks we are about to eliminate in the US) have stimulated their solar market, enabling a very fast expansion of the industry. Also, although Wal-Mart may be the devil in some ways, they actually ALREADY created a program for installation of solar rooftop power, in which BP Solar and other companies won the contracts, and they recently announced that they will sell solar panels at 9 Sam's Club stores in California (as a pilot program) that connects the customer with savings for panels and installation.
The price of solar is going down because solar silicon is becoming more available. Thin film technology presents only a small fraction of the market and is a borderline technology because it is still very inefficient. Most users are willing to pay the premium for silicon which allows them to use their limited roof real estate to the max..
With residential solar the bottom price is set by installation cost. I can not imagine anybody will crawl around on your roof all day long to install a 1kW system for much less than $1000. So that sets the limit price of solar at the $1/W level, already, for the smallest of systems and slightly less for a typical rooftop installation. Even if panels, wiring and inverters came for almost free, it could never get much cheaper than that. Since 1W average requires approx. 5W peak, a typical American consuming 10kW on average needs 50kW of solar installed to offset his complete energy budget. At those rock bottom prices that would be $50k/capita in investment and at today's prices it's more like $250k. So we have to start by cutting our energy needs by a factor of two. Ultimately solar energy will eventually produce a significant fraction of our energy needs. But it will take some 30 years to get to that point and we will probably have to be willing to double our energy cost.
I am in. Are you?
i am confused by your figures. the people i know who more than zero out their bills for their active families, full A/C and 2,500 square foot houses have 6 kW PV systems, which run less than $50,000 full retail, installed, inverted and grid tied. they do not charge electric cars, but household use is covered.
as for your note about corporate accounting, one of the main reasons the utilities don't want us getting paid for power, even though they could hit their RPS without capital outlays, is that they've determined that it's better for them, financially, to write off all OUR conservation and OUR generation - which cost them NOTHING - as "losses" on their books. capital outlays are virtually free to them, since they get to amortize them across the CAISO grid and get them back from all ratepayers, so monopolies benefit them coming and going.
i agree we should cut our consumption, definitely, but what we really need to do is CHANGE ENERGY POLICY so that ratepayers, taxpayers and the planet can win in a renewable era, instead of Big Energy Monopolists killing off our open spaces and hijacking ratepayers. generous incentives, feed in tariffs, loans, tax credits and otherwise are the first step.
Around where I live, the cost of electricity is going up about 70% this year. The increase in the cost of sunshine: 0%.
People make all these arguments based on the premise that the current cost of electricity will never increase (yeah, right). The solar panels all come with a 25 year warranty. So you really need to consider the cost of power from coal or whatever averaged out over the next 25 years. Here's a hint: that's a heck of a lot more than it is today.
That might be true for where you live because your utility messed up by investing in the wrong energy mix. It is not true in general.
NEXT!
even if "energy mix" is correct, rates are going to SKYROCKET over the next 10 years, since we will be forced to pay for Big Energy to build out its new, monopolistic "renewable" infrastructure, while it destroys our land, our views, and forces us from our homes. the ONLY way to insulate ourselves is by Point of Use renewables that we own, and being paid for excess power we produce. a free market...
when is someone going to write the story about how Big Energy is trying to re-monopolize the market on our lands and our dime in a renewable-
when is someone going to expose how INCREDIBLY harmful and wasteful CSP (solar thermal) power plants are, and how completely unnecessary they are, as is new transmission, since point of use will eliminate at least 50% of grid congestion, so existing transmission could be used...
of course, NYT and 90% of other publications, politicians and Big Enviros keep spreading the same lies about how incredibly effective and affordable point of use PV, thermal and wind are, because they are lazy enough to think they are being clever and cynical, when really they are being ignorant and serving their corporate masters ahead of their readers.
we can either have a peaceful revolution where we get to participate in the green economy as more than consumers, or we can re-enslave ourselves to Big Energy. Gotta choose now, though, or the moment will pass...
I don't get it...your just restateing there argument but just adding more infomation.
Absolute right, InofTouch. I'm glad SOMEBODY can read, and can also make judgements with an open mind.
Yah - like Massey said.
if you live in AZ CA CN MN CO Mo NY OR TX,
Installed Solar power is FREE !!!!!!!!!!
http://www
BTW, the NYT is a conservative corporatist paper. Stop being surprised.
Research, you are far ahead of the curve on alternative energy. HuffPo should put you on staff to blog on the new green page. Ever think about it?
Good post Joe. I'm reading your book "Hell and High Water" now on my Kindle. Thanks for keeping up the good fight.
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