More `corporate welfare' is OK when it comes to solar electricity

December 17, 2006|By Jay Hancock | Jay Hancock,Sun Columnist

Two days after Bill and Robin Hembree put a solar-electricity rig on their roof last month, they went outside and looked at the BGE meter.

Inside the house, lights and the fridge were on. But the little wheel in the glass case was frozen, which meant BGE wasn't getting a 72 percent markup on these kilowatts. Sometimes it moved backward, which meant BGE was paying the Hembrees instead of vice versa.

The Hembrees, who live in Severna Park with their two boys, have opted for the most extreme solution to electric-rate shock, short of living in a tent and bathing in the Chesapeake. To reduce pollution along with their Baltimore Gas & Electric bills, they spent $30,000 on the kind of hardware that powers NASA space probes.

Time will tell whether, as "early adopters" of technology, they bought the equivalent of a cell phone in 1985 (an expensive gadget that became cheap and ubiquitous) or a Betamax video recorder in 1976 (an expensive gadget that didn't).

Let's root for the cell phone.

Solar energy, the hope of greenies for three decades, needs to become more than a novelty power source. But it requires research, luck, government assistance and many more customers like the Hembrees.

Solar power has two big problems. First, it requires users to prepay for decades of energy. The Hembrees' $30,000 financed juice that was burned over Thanksgiving and juice that won't be used until 2030. Most families can't afford, or don't want to make, that kind of investment.

The second problem is that, on a per-year, per-kilowatt basis, solar electricity is still much more expensive than BGE or other "grid" power. If you account for iffy Maryland sunshine (which reduces output over the life of the equipment) and the fact that the $30,000 could otherwise have been invested in Treasury bonds, the Hembrees are paying more than twice the standard BGE price (up 72 percent) that everybody is so upset about.

Buying in bulk gets you discounts at Costco, but not, so far, in the solar-energy bazaar. (Even though they sometimes sell electricity back to BGE, the Hembrees' array doesn't erase their utility electricity bill; it just sharply reduces it.)

Solar power is increasing, but it's a teeny piece of Maryland's energy output.

Since July 1, the Maryland Energy Administration's grants for solar energy installations have grown to 87, nearly triple the number in the comparable period last year, says program manager Tim LaRonde. The Hembrees got $3,000 from the state, reducing their out-of-pocket cost from $33,000.

"We're growing," says Isaac Opalinsky, sales manager for Aurora Energy of Annapolis, which installed the Hembrees' system. "We're doing more. We have more customers. We're seeing people purchase larger systems."

Two years ago, Aurora had three or four employees at any given time; now it has five to seven, he said.

Long and high may these kinds of numbers increase. Private-sector money is pouring into solar. BP Solar's Frederick factory, which made the Hembrees' hardware, just announced a $70 million, 70-job expansion. Across the industry, engineers are figuring how to make more electrons with thinner pieces of photovoltaic silicon.

All this will continue to lower costs. In 1987, the Frederick plant employed 400 people working one year to produce one megawatt of solar-cell capacity. Now it employs 550 to produce 100 megawatts a year, says Jean P. Posbic, BP Solar's director of product development.

But the momentum may not be enough to push solar out of the quasi-hobby category. The time is now for a big increase in government incentives for solar power.

The federal tax code should boost solar credits, and Maryland should raise the size and number of its alternative-energy grants. Maryland should also require BGE and other utilities to pay peak prices for electricity made during peak hours by the Hembrees and other home generators. Now they get a lower rate that doesn't reflect the full value of kilowatts fed to the grid in high-demand times.

Even free-market economists (including Greg Mankiw, former adviser to President Bush's Council of Economic Advisers) back a carbon tax that would reflect the full, environmental cost of fossil energy and make renewable energy more competitive.

What? More corporate welfare? For another industry? Favored by Hancock, the corporate welfare scold?

Yep, but electric solar isn't just any industry. It's one of Maryland's few manufacturing sectors that is adding jobs. It's more promising and less polluting than ethanol, shale-oil and other alternatives. It might help keep the economy from playing energy hostage to a deteriorating Middle East or cooking itself in a cloud of carbon dioxide.

Since it began working Nov. 22, the Hembrees' array has stopped 81 pounds of CO2 from issuing from a coal or gas generator that otherwise would be powering their home, the equipment's software says.

"We know that energy prices are pretty much going to continue to climb," says Robin Hembree. "And we figured we could hopefully get a return on our investment and help the environment at the same time."

More Hembrees, fewer Humvees, is my new motto.

jay.hancock@baltsun.com

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