Solar subsidy, charge a feel-good waste
Last year I investigated installing a solar-powered photovoltaic system at my primary residence. I discovered the unfavorable economics didn’t justify the expense. Even with federal and state subsidies the cost was more than $10,000 for a seven kw system and the payback exceeded 10 years.
I then looked into the System Benefits Charge/Renewable Portfolio Surcharge on my monthly bill; this charge ranges from about $3 to more than $5 depending on my energy usage, which ranges from about 450 kilowatt-hours to 800 kwh. Part of the SBC/RPS charge is funneled to New York State Energy?Research and Development?Authority, the state agency which subsidizes part of the SPV installation cost. Pursuant to the Freedom of Information Act, I requested a list of installed residential SPV systems and I was given a list of completed installations spanning an approximately three-year period ending on Dec. 6, 2013, from NYSERDA.
About $126 million, including $32 million of direct subsidies provided by NYSERDA, was used to pay for the installation of about 24,300 kw of nameplate residential SPV capacity. NYSERDA uses a standard utilization (capacity) factor of 0.134 multiplied by the nameplate capacity and the total number of hours in one year to estimate the kwh production. I determined the payback by dividing the total cost of all of the SPV systems by the product of the annual kwh production and the market price of a kwh (with all costs on a typical utility bill allocated to the kwh consumed) which works out to about $0.15/kwh. This resulted in a payback of 30 years. If utilities weren’t required to enter into net-metering agreements but instead only had to pay avoided cost, then the payback would be even longer.
The inescapable conclusion is SPV system subsidies are a waste of ratepayer money. Moreover the subsidy is an inequitable transfer of wealth from poorer ratepayers to more affluent ratepayers because affluent individuals have more savings and/or more disposable income to indulge themselves in feel-good renewable energy pursuits. For these reasons NYSERDA’s mandate to subsidize SPV installations and the part of the SBC/RPS charge that funds the NYSERDA SPV subsidy program should be eliminated, if not by the Public Service Commission then by the New York state Legislature and Gov. Andrew Cuomo.
CHARLES F. HEIMERDINGER?