As I read the Sept. 20 article by Charles Crumm, “Renewable Energy proposal on November ballot,” I ask myself, where has the balance gone in reporting. Not a mention on the pros and cons relative to the merits of this proposal.
No discussion relative to what the results are on the current 10 percent target for 2015 relative to payback, electricity generated or cost. No discussion relative to where the money is going to come from to provide the funds to build these renewable sources. This hardly constitutes providing your readership with the information they need to make up their minds on this subject.
Supporters of this initiative wish to impose the cost to build more renewable energy facilities on the utilities, yet limit the utilities ability to recoup their expense from customers to rate increases of no more than 1 percent per year.
That’s an interesting concept: we want it, but we don’t want to have to pay for it. I suspect this could work, if the utilities and state government had the same ability to print money that the federal government does, because that is exactly the crux of the spending problem in Washington. We want it, we don’t have the funds to pay for it, so let’s just print more money to pay for it.
This Renewable Energy PAC has a huge lobby of support, but it lacks solid economics and even the science behind this continues to be the subject of debate. Case in point, last year, between DTE Energy, the federal government and renewable energy credits, approximately 80 percent of the labor and material to construct solar panel installations would be rebated back to the consumer. The consumer purchasing such an installation only had to come up with about 20 percent out of pocket to pay for these installations. So for a $100,000 installation, approximately $80,000 would be paid for by others. You only had to pay approximately $20,000.
The funds DTE had available to support this program quickly dried up as it was a limited amount of money appropriated by the Michigan legislature. In other words, the rebate for these solar panel installations came from our tax dollars.
On the surface this would almost appear to be like getting something for nothing. But upon closer examination, when you calculated the time it would take to just break even and recoup one’s 20 percent investment from the savings in the cost of electricity, the typical payback period ran 6 to 10 years!
When was the last time you made an investment that only provided a return of your principal in that kind of time? You will rarely get an investor to participate in any opportunity with that kind of return.
As for wind power, it gets worse. We simply do not have enough areas in Michigan with high enough wind speeds over a sufficient number of hours in a year to make the current wind turbine technology economically viable.
Case in point, I have driven the stretch of M-31 just south of Ludington numerous times over the past year and stared in awe at the countless wind turbines near the freeway. I say in awe because I have never seen any of them turning. Not a single one. You can take all your payback calculations and toss them out the window. If a wind turbine is not turning there is no payback, just a cost. Let’s build them elsewhere you say. Well short of putting them out in Lake Michigan, beyond eyesight and at even greater expense, just about anywhere else in Michigan has even lower wind speeds and less hours of speed over 5 mph.
Yes, but we need this you say. We have to protect the environment and I agree. But we have to do it in a responsible way that is economically feasible or else it’s time for us to pony up to the bar and pay the taxes to fund this project in a responsible time frame. This legislation is simply rooted in the kind of socialistic mentality displayed by those that seem to think there are no limits to how much tax we should all pay to support the common good.
Society has lots of wants and needs. We must choose from our wish list wisely. We do not have limitless resources to fund every desire that every taxpayer has on their wish list for society at large. How about our schools? They are in financial crisis. What about our cities on the brink of receivership starting with Detroit. Aren’t they important too?
My point is, we the taxpayers elect representatives to allocate those funds. We expect them to do it wisely. We need to examine the benefit that we as citizens will derive when we spend tax dollars funds and make sure we spend those dollars on the wants that will provide the greatest benefit to the public at large.
Requiring utilities to carry this kind of financial burden, simply to satisfy the “green coalition” is an idea that is not grounded in good economics at this time. This is not to say there isn’t a need. I am very convinced that if we do nothing to address global warming, that at the rate of the current ice melt of the polar ice cap, by 2025 coastal cities like L.A., Miami and New York will be under about one foot of water. Perhaps if we factor those costs into the equation relative to the cost to rebuild these areas with our tax dollars funded by the federal government, the calculations will change.
But for now, we can only hope that either renewable energy costs will continue to decrease and/or the technology will improve, so that in time, this will make more sense in the future. But today, voters should vote against this poorly conceived proposal in November – Lansing is not running a charity Bazaar.
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