Funny numbers from Palm Desert, CaliforniaMarch 20, 2009
This New York Times story tells us the tale of Rick Clark and the financial backing he is getting from the Palm Desert, California city government to pay for a home solar PV installation. Applying some back of the envelope calculations based on this NYT piece leaves me scratching my head. Mr Clark, who the Times takes pains to assure us is not some global warming fearing greeny, borrowed $62,000 on a twenty year loan from a municipal financing program to pay for his new PV array. Clark’s monthly payment would be about $400 per month at 4% interest. This is probably not a great hardship for guy who has “a buggy for racing on sand dunes, and two sleek power boats for pulling water skiers” in his garage. Clark won’t have to worry about any financial pinch because, as the article explains…
“California residents receive a straight rebate for about 20 percent of the cost of a solar power system. In addition, a federal income tax credit for 30 percent of the cost of installing solar panels was extended to participants in the municipal loan programs as part of the economic stimulus bill passed by Congress.”
The article doesn’t say, but by my calculations this $62,000 of city money bought about 8,000 watts of installed PV at $8/Watt. A generous estimate would be that this array will yield about 50 kilowatt-hours per day, or about 1500 kilowatt-hours per month in sunny southern California. (Insolation at Palm Desert is about 6000 Watt-hours per square meter per day. Roughly speaking, each installed watt will then yield about 6 Watt-hours per day. So, 8000 installed watts X 6 watt-hours per installed watt per day gives 48,000 watt hours per day or 48 kilowatt-hours per day.) This is important to Clark because
“His monthly energy bill for a 3,400-square-foot home and a guest house routinely surpassed $1,400 in summer months when the air conditioning ran all the time.”
I am forced to conclude one of two things. Either Mr. Clark is a colossal energy hog, or the cost of electricity is way too high in California. The average residential cost for electricity in the United States was 11.47 cents per kilowatt-hour in November of 2008. At that rate Clark’s monthly $1400 would buy 12,000 kilowatt-hours of energy. That’s more than amount of electrical energy I use in my house every two years!!!! We’re told by the Energy Information Administration that the average cost per kilowatt-hour in California is 14.76 cents per kilowatt-hour. In this case Mr. Clark must have been paying for 9500 kilowatt-hours per month. Still a colossal amount. But wait a minute, we calculated above that Clark’s PV system would yield about 1500 kilowatt-hours per month, nowhere near 9500. If 1500 kilowatt-hours is worth $1400, that’s almost $1 per kilowatt-hour!!! Even the vaunted tiered utility pricing doesn’t come close to this (…yet).
Neither one of these conclusions seems possible. So maybe the claim that “his monthly energy bill…routinely surpassed $1,400 in summer months” was a wee bit of an exageration to make the story in the NYT more compelling. The storyline goes something like this:
“See how expensive electricity is in California. It will soon be that expensive for you to. But don’t worry, solar PV is a great investment.”
City provided $7.5 million for loans
Mr Clark’s $62,000 came from a $7.5 million pool of city money provided these solar PV loans. The money is almost tapped out with about 100 borrowers. With an estimated 2.5 people per household those 100 borrowers represent about 0.5% or Palm Desert’s total population of 50,000. I would be willing to bet that Mr. Clark (with his house, guest house, dune buggy, two speed boats and $1400 monthly summer electric bill) and the other 100 borrowers live off incomes far above the average Palm Desert household income of $65,505.
There is something funny about these numbers. This is just one more gear in the elaborate political/economic/eco-religious Rube Goldberg machine that delivers energy to consumers in California.