Here at CGC we are all about innovation and ingenuity. However, it’s important to step back and recognize what limits there are to ingenuity. As James Boyce of Resources for the Future says, “There aren’t many substitutes for the relatively untouched expanse of Alaska’s North Slope if what matters to you is its very wilderness.”
In the famous 1970s Ehrlich-Simon wager, economist Julian Simon bet biologist Paul Ehrlich $1,000 that the combined price of five commodity metals would fall over the next decade. Ehrlich lost the bet. Because commodity metals can be traded and sold on a private market, businesses and consumers eagerly sought substitutes for the hard-to extract and finite resources at the center of the Ehrlich-Simon wager and prices fell.
But what about resources that “you don’t eat or mine and you can’t find on any international exchange or market?” What about resources as abstract and sublime as wilderness? How do we find an innovative substitute for that?
To follow up on the April 8 blog post about distributed solar, we thought it would only be fair to share both sides of the distributed solar roll-out plan. Below is a table comparing reasons for accelerating the distributed solar push and reasons for letting it grow more languidly.
Accelerated Distributed Solar Roll-Out
Slow Distributed Solar Roll-out
An additional benefit of “green collar jobs” that could be created by distributed solar roll-out is that the jobs require a variety of skills and pay a variety of salaries. Working in the solar industry can involve a broad range of tools and skills ranging from electrical work to sales to structural engineering. Similarly, the salaries range from just over $20,000 to nearly $80,000 per year. The table below displays the variety of jobs involved with distributed solar.
Source: The American Solar Energy Society. Green Collar Jobs in the U.S. and Colorado. December 2008.
Note: Data prepared for Colorado, salary range may differ for Nevada.
What is one of the biggest problems in the United States right now?
Unemployment in the U.S. is currently 7.7%. While this number is an improvement from the high of 10% measured in October of 2009, it remains a disheartening reminder of America’s stagnant economic growth and widespread budget cuts.
How can the energy sector improve unemployment?
One of the best programs that has the ability to show widespread, accelerated expansion in the next year or two years is distributed solar. There have been numerous other energy-related ideas championed by the government and national energy experts in recent year; however, none have as great of an immediate impact on unemployment as distributed solar.
For example PACE (Property Assessed Clean Energy) is a fine idea; however, it requires more time to evolve. In order to provide commercial, industrial, and multi-family property owners affordable long-term financing resources for energy efficiency upgrades, PACE spreads the cost of the efficiency improvements over the expected life of the measure and can take years to reach completion. Similarly weatherization and other smart energy upgrades must be customized and are hamstrung by so many problems that they will take at least a year to get going at a rapid pace. Lastly, microgrids and similar efforts are laudable for reasons other than impact on unemployment.
Distributed solar appears to be the fastest and most effective way to improve unemployment through clean energy work. The basic math on jobs as a function of distributed solar, shows that distributed solar has enormous potential to create jobs across the country. Consider the following states:
Connecticut: The average capital spending per roof is $30,000 for 7 KW. The estimated addressable market is 80,000 homes – 10% of total residential market. Saturation of this market amounts to $2.4 billion in spending. That equals approximately 20,000 job years. Every year Connecticut accounts for about 1.5 million job years, so 20,000 accounts for 1.3% employment increase. If we assumed the spending were spread over four years, we would see an additional .35% increase in the population /employment ratio (roughly from 52% to 52.35%).
New York City: Several years ago, the City University of New York developed a map showing that 66.4% of the rooftops in New York City are suitable for Solar PV systems. Saturation of this market would amount to roughly $20 billion in spending. That equals approximately 166,667 job years.
In many American states, penetration is currently only a few percent of the total addressable market. Because an installer that persuades a customer to provide access to a roof would almost have to commit a felony to be dislodged, a competitive race to the rooftops is a practical way to stimulate consumer demand and therefore create much-needed jobs.
That would make the energy sector one of the largest contributors to growth in this critical ratio. It would mean that the contributions to job growth of this sector gave particular prominence to the clean energy
There do not appear to be any logistical obstacles to full saturation. There are more than enough distributed solar installers, operating under two different business models. Costs are dropping and as scale expands further cost declines seem certain.
The question of whether or not the country should push for full penetration of the distributed solar market is a yes or no question. In several states, such as Connecticut and New York, green banks could mobilize installers of both types of business models to press for changes in policy.
There would also have to be several changes made to policies that currently act as barriers to achieving market saturation:
- Rooftop solar must be allowed to substitute for grid power during outages;
- Rooftop solar must be able to monetize RECs;
- There must be a predictable plan for cash incentives;
- The approval and review processes must be streamlined and made more efficient;
- And the sale of surplus electrons off rooftops must be maximized and encouraged
There are counterarguments to the acceleration of distributed solar deployment; nonetheless, it is worth considering the potential impact on unemployment before settling for a laggard solar roll-out.
Mireya Navarro, “Mapping Sun’s Potential to Power New York,” The New York Times, June 18, 2011. Available here.
Coalition for Green Capital’s CEO, Reed Hundt, wrote a Washington Post op-ed today regarding a letter he released to Washington football team owner Dan Snyder requesting that he change the “archaic and racially stereotyped name” of the team. The letter was co-signed by a bi-partisan group of other former FCC officials.
The letter points out that the current name is the most derogatory name a Native American can be called, as the term originated with bounty hunters who received government payments for delivering dead bodies of Native Americans. The former officials note that it is inappropriate for broadcasters to use such ethnic slurs as part of normal, everyday reporting. In the same way, they argue, it is inappropriate to have football broadcasts continually use an ethnic slur as it insults part of the population and desensitizes the rest of the population to that harm.
Noting the central role that Washington D.C. should play in uniting all Americans, the letter further notes that it “is especially unseemly for our nation’s capital to be represented by a football team whose name and mascot keep alive the spirit of inhumanity, subjugation and genocide that nearly wiped out the Native American population.”
The letter concludes by asking Mr. Snyder to “exercise leadership by changing the team’s name so that it promotes an image that positively reflects the ethnic and cultural diversity and mutual respect that defines our great Nation.”
How has Google done so well? Certainly part of its success has come from its multi-billion dollar investments into clean energy projects. Rick Needham, Google’s Director of Energy and Sustainability sums up the investment decision quite well, “While fossil-based prices are on a cost curve that goes up, renewable prices are on this march downward.” Furthermore, it is only logical to invest in an accessible and limitless resource such as wind or solar, rather than investing in fossil fuels that are hard to extract and limited by definition. Hopefully Google will continue to act as a leader in the clean energy arena, just as it has in so many others.
Here are some of Google’s sustainability achievements
- An employee frustrated with his commute inspired Google to set up its own van pool. Now, 4,500 employees ride on the Google shuttle fleet. The custom-built coaches run on a biodiesel blend and come equipped with WiFi so employees can work during the commute. It has taken 3,000 cars off the road and reduces carbon emissions by 16,000 tons annually.
- The 240 EV chargers in the parking lots support a corporate EV fleet that has logged 500,000 miles.
- Google has procured 260MW of wind power. Some wind contracts will provide Google power at stable prices for up to 20 years.
- The company has also invested $1 billion directly into alternative power projects that will generate over 2GW of power, or twice as much power as Google used in 2011.
- Google’s data centers use half as much power as conventional ones. The company has saved over $1 billion in energy costs through data center initiatives.
We at Coalition for Green Capital hope to see more global corporations like Google investing in sustainability and renewable energy in the near future. With the development of green banks that make commercial-level loans for solar and wind installation, these investments will become easier, more reliable, and more cost-effective.
*Statistics and background information for this blog post can be found here.
The Clean Energy Future Blog
for links, analysis, and commentary on the world of green banks and clean energy investment