Gulf Oil Spill Outrage – What About Coal?


gulf oil spillI like many others in the U.S. are watching on in horror as the Gulf oil spill saga continues. The public outcry has been immense – calls to boycott BP and cease off shore oil exploration are everywhere in the news. Aerial shots showing the oil plumes, oil-soaked beaches visually remind us of the catastrophic effects of this disaster.

But what about the billions of tons of emissions that leak from a multitude of coal-fired power plants all over the U.S. The public outcry to halt electricity generation from coal-fired plants pales in comparison to that of the oil spill yet the long-term effects may be just as catastrophic, but on a larger scale. Is the fact that we can’t see large plumes of CO2, SO2, and NOx in the sky the issue?

According to the Energy Information Administration (EIA), in 2008, CO2 emissions from energy consumption at conventional power plants and combined-heat-and-power plants totaled 2.5 billion metric tons, which is equivalent to the CO2 that would be released from burning 320 billion gallons of oil.

So why do we continue to burn coal and other fossil fuels to generate the majority of our electricity?
The short answer is because they’re cheap, and they’re cheap because of the subsidies paid by the federal government over the past century. In addition, the United States is the Saudi Arabia of coal. According to the Pew Center on global climate change, at current consumption rates and with current technology and land-use restrictions, the U.S. coal reserves would last well over 250 years. So just because it is cheap and plentiful but extremely damaging should we continue down the same road? Imagine if food companies supplied meals that were cheap and plentiful but damaging to our health would people continue to eat them?

So while many of us feel helpless to stop the gulf oil leak we can however choose to do something about reducing how much CO2 in released into the atmosphere and that something is installing a home solar energy system. The best part is that not only will you be reducing emissions, you will be saving significant amounts of money and right now you can save even more thanks to rebates from the federal and state governments, cities, and utilities.

I have read some blogs and articles that suggest subsidies for renewable energy are damaging to the industry because they cause late adopters to enter the market earlier due to artificially low prices and that when the subsidies go away the industry is set back. From a technical point of view this may be true but the fact is that we as a country have a choice and if we chose collectively to subsidize renewables more than we currently subsidize fossil fuels then we wouldn’t have to reduce renewable subsidies and over a period of time, everyone who owned a home and had roof space could get solar or some other renewable energy generation source.

Even without subsidies solar still makes financial sense for many people. Let’s take Texas as an example where the average price for residential grid electricity is 11.7 cents per kilowatt-hour *kW-hr). If we assume that a family will consume 12,000 kw-hrs of electricity on an annual basis then we can calculate using theIn My Backyard (IMBY) tool that a 9.5 kW solar power system will be required to generate that amount of electricity. As you can see in the table below, even without subsides, over a 25 year period, a solar-powered home will cost much less to operate.

Electricity Costs Over 25 Years
Solar-powered home (without subsidies)Grid-powered home (with subsidies)Solar-powered home (with 30% federal subsidy)
Cost of Electricity 11.7 cents/kw-hr
Annual Electricity Usage 12,000 kW-hrs 12,000 kW-hrs 12,000 kW-hrs
Annual Increase in Electricity Rates 6%
Size of Solar Power System 9.5 kW 9.5 kW
Cost of Installed Solar Power System ($6/Watt) $57,000 $57,000 – $17,100 (30% subsidy) = $39,900
Inverter replacements over 25 year life (2 inverters) $6,000$6,000
Electricity Produced over 25 year System Life (factoring in a 1% annual decline in efficiency)275,000 kW-hrs275,000 kW-hrs
25-year Average Price/kW-hr 23 cents 27.7 cents (factoring in 6% annual rate increase) 16.7 cents
Total Cost over 25 years $63,000 $76,175 $45,900
Total CO2 Emissions Saved / (Emitted)245 metic tons(245 metric tons)245 metic tons

The way that I like to think about solar in a financial sense is as an investment. When you go solar the rate that you pay for electricity is locked in. Therefore, your return is the money you save by avoiding the yearly increase in electricity rates from your utility. In this case I have used a 6% increase – so unless you think grid electricity is going to get cheaper that is a pretty attractive and low risk investment.

If you’d like to learn more about going solar, we’d love to help.  Fill out our free evaluation form and we’ll put you in touch with local installers who can help you out.

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