Greenwashing Virginia's renewable energy law, part 2: Check, please!

Even if Dominion Power meets the goals in Virginia's renewable energy law, it won't do it with wind or solar--but it will still collect a bonus from customers.

In our last column, we looked at Virginia’s renewable energy standard, trying to grab hold of its 15% goal as it shrank three sizes in the greenwash. At the end of that discussion, you may have consoled yourself with the thought that 10% or 5% or 3% is, at least, better than nothing. Besides which, the law is only voluntary, so how much harm can it do?

“Voluntary” has such a nice ring to it, doesn’t it?  You probably think it has something to do with customers deciding whether to participate. You might think it’s for those virtuous people who sign up to buy “green” power, and the rest of us will just go on burning coal.

That is not what voluntary means at all. “Voluntary” means your utility gets to choose whether to participate, and then you have to go along with it. The law says that if your utility opts in, it will spend some of your money on renewable energy, and then because it did all that work, you have to add a big tip to your utility bill.

I suppose, in theory, a utility like Dominion Power might decide it didn’t want to spend your money, and it could just skip the fat tip. In reality, refusing a tip isn’t part of a corporation’s DNA any more than it is of a waiter’s. Tom Farrell’s momma didn’t bring him up to be a fool who leaves money on the table. So our voluntary RPS is kind of like one of those annoying restaurants where they automatically add the tip to the bill for parties of six or more.

In this case, the tip adds up to more than $38 million per year. Mind you, this is on top of the profit they had already added to your bill. This is a very lucrative line of business.

Well, you might think, at least I got fed. You like renewable energy, after all. It replaces smog-causing fossil fuels. It lowers our carbon footprint. It creates jobs and enhances our national security. A utility shouldn’t have to be bribed into buying it for you, but at least now it’s part of the meal.

But look more closely. If that renewable energy were food, you’d send it back. You assumed you were getting fresh, Virginia-grown electrons, made with the sun and the wind—and what is this stuff they are serving? Energy from dams, trash and wood, most of it fifty years old or more, of such poor quality that no other state will let it be served to their customers. They only call it “green” because it’s practically moldy. (And such small portions!)

You call your utility over and demand an explanation. “Where’s the wind energy? Where’s the solar? Why isn’t this fresh and local?” And your utility looks down its nose at you and answers, “Those things cost more. We have an obligation to be careful of your money. So for you, we go dumpster diving.”

At that point, you might be glad the renewable energy portion of your meal barely amounts to a garnish. The trouble is, you can’t take your business elsewhere. Your utility has a monopoly, and it guards your patronage jealously. So you’re stuck with the meal they serve you. The closest you’re going to get to real renewable energy is the picture of a wind turbine on the cover of the menu.

It’s only now that you notice an asterisk by the wind turbine and fine print that reads: “Coming soon!” And below that, in print so tiny you have to reach for your glasses: “Or not.”

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Rob Jackson December 14, 2012 at 04:56 PM
A spokesperson for the Solar Alliance made an interesting presentation to the Fairfax Federation of Citizen Associations last evening. I was surprised at the very low payback on solar even with big government subsidies. With a southern exposure, the 40-year payback was only $6 K and change. That's not enough to movtivate many people to go solar. On the other hand, the third party installations and ownership looked more interesting. Unfortunately, there were no comparable figures on the economic payback..
Ivy Main December 17, 2012 at 01:59 PM
Rob, I put this question out to members of the VA-SUN listserve, which includes many solar installers. Someone ran the numbers assuming $4/watt (the current residential price), or $20,000 for a typical 5 kW system, and calculated a 19-year payback period. (It's lower in other states.) Given that the solar panels will last 30-50 years, some people would consider this a better investment than they can get putting their money in the bank, but the greater motivator today is that people would rather use solar power than fossil fuels. The calculus often isn't about what is cheapest, but about how we want to live our lives and what we are willing to do to slow climate change. One of my friends bought solar panels instead of a sports car for his mid-life crisis. Solar definitely has a better ROI than a Porsche!
Rob Jackson December 17, 2012 at 04:12 PM
Ivy, thanks for the comments. I would certainly agree that many people would see advantage in buying solar panels without regard to the financial payback period. Others wouldn't. I respect both viewpoints. I had thought the economic payback would be higher. I assume that, as technology improves, the payback will be faster. We also had a speaker from Fairfax County who said it's hard to persuade some people to make an "invisible" improvement (say more insulation or a solar array) versus a "visible" investment (say granite counter-tops). She thought the economic payback was very important. In any event, I thought the two speakers were informative and thought-provoking.
Ivy Main December 17, 2012 at 06:42 PM
Yes, we've run into the same problem that invisible changes are harder, even when they are clearly cost-effective, like insulation. That's where stronger building codes come in, I think. A few more responses have come in from solar owners showing better numbers, depending on the assumptions. You're right that solar prices will continue to decline, and Dominion's rates will likely keep going up, so the ROI calculations will continue to improve. By the way, the numbers in Maryland and DC are much better, which may be why you were surprised they aren't better here. They have stronger incentives and higher utility prices, plus policies that allow small businesses to compete with the utilities by offering financing models that aren't available in Virginia, due to Dominion's actions to protect its monopoly.
Rob Jackson December 17, 2012 at 08:04 PM
As I've noted before, I think the alternative (renewable) energy community needs to think differently and look for ways to beat Dominion on price. It is not inconceivable new technology could generate electricity at a lower cost than can the incumbents and incumbent technology. In the early days of automobile production, cars were extremely expensive and most could not afford them. Along comes Henry Ford and, through new manufacturing technology, produces affordable automobiles. There is no reason not to believe more Henry Fords came come along. The renewable energy pitch still sounds like "eat your brussel sprouts." I've heard arguments on how to construe the state statute on competition. I don't buy the Dominion argument that people can buy from another renewable source only if they buy all their electricity from such source. But I'm not the court.


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