Solar Energy Is Much Cheaper Than You Think

What's the cost of solar today? Well, it depends a great deal on where exactly you are located, but no matter where you're located, I'd bet that most of you have a cost of solar in your head that's 2-100 times greater than the actual cost of solar power.

One of the things I majored in for my bachelor's degree (a long time back) was sociology. I think one of the key lessons I learned in those four years was that we are not exactly rational beings (okay, I guess I had a sense of that beforehand). Societal theories and economic models based on the idea of humans making completely rational decisions simply don't work. There are a lot of different reasons for this, but one huge one is that we often don't have all the information we would need in order to make a rational decision.

In a related manner, something I've learned in my several years reading and writing about clean energy is that the average person has a price of solar power or price of wind power in their heads that is at least a few years old, sometimes even many years old.

No criticism from me - I know how busy modern life is! It's often hard to make time even for the essentials. If you're not working and living in the clean energy arena, you probably don't feel like you have time to practice your clean energy free throws (i.e. keep up with the price of different energy technologies).

But energy is a huge deal. It's most likely a big portion of your monthly expenditures. And it has a transformational effect on the world we live in. But we won't get into all that today - let's get into the fun stuff! I'm going to catch you up on some tremendously awesome news about solar power.
First, however, to make one of my points, I need to give you a short briefing on some wind power facts. (I know, this is getting complicated - just stick with me.) On average, a Bloomberg New Energy Finance study has found that people think wind power is about twice as expensive as it actually is.
Unfortunately, I'm not aware of a similar study on solar power. But I think this is still very useful for solar power for a few reasons. To get to those, we have to ask, "Why do people think wind power is so much more expensive than it is?"

From my experience covering this topic for years, I have a few ideas:

Wind turbine prices have fallen 29% since 2008, and about 50% since 1990. Very possibly, people simply have an outdated price of wind power in their heads. It's quite logical - if they heard the price of wind power 10 years ago but haven't kept up with changes in the industry, they simply have that one price in their heads.

There's a lot of bashing of renewable energy by certain politicians and media agencies. In particular, one of the most repeated claim is that "renewable energy is too expensive." For those tied to the coal, natural gas, and nuclear industries, this falsehood is key to their own financial success, because everyone knows that wind and solar power are popular with the masses, and almost everyone knows they're clean and good. The only hope for these dirtier industries is to try to convince people that clean energy is more expensive... even when it's not.

However, the even bigger news is that the two points above apply to solar power even much more than wind power!

Solar power prices have fallen off a cliff in recent years.

Yep, if you have a 1977 price of solar panels stuck in your head, you think solar panels are 100 times more expensive than they actually are. If you have a year 2000 price of solar panels stuck in your head, you think they're about twice as expensive as they actually are. Even if you have a 2008 price of solar panels stuck in your head, that's about 80% too high. And, actually, even if you have an early 2012 price of solar panels in your head, that's about 20% too high!

Did you get a solar quote back in 2008? If so, it's probably quite a bit higher than it would be today. Maybe it's time to check again?

But while we're at it, let's not forget the political and media coverage. Either through simple lack of awareness, or something more nefarious, many politicians and members of the media repeatedly assert that solar power is "so expensive." They've got outdated information in their heads. Don't listen to them. Check the numbers for yourself. And, very importantly, share this information with your friends and family so that they are not tricked by outdated information and misinformed media professionals and politicians.

I think the points above are quite interesting and informative. But there's a lot more to say about the cost of solar.

I do some freelance research and writing for Cost of Solar (http://www.costofsolar.com), a nationwide network of highly experienced, licensed solar professionals dedicated to raising awareness and educating the public about the benefits of solar energy. You can view some of my other posts and some I've contributed research to at http://costofsolar.com/news/

The Obamacare Joke Is On Us

A tongue-in-cheek warning is making the rounds: If an email offers you a functioning link to create an account on HealthCare.gov, it's a scam run by offshore con artists. Nothing on the legitimate HealthCare.gov website actually functions.

President Obama clearly senses that his signature policy achievement is on the verge of becoming a laughingstock. He responded yesterday, as is his habit, by staging a campaign-style appearance in the Rose Garden, complete with hand-picked ordinary citizens serving as silent witnesses to the Affordable Care Act's merits, while the president declared that "there's no excuse for the problems." (1)

One of those ordinary citizens, expectant mother Karmel Allison, provided a rare unscripted moment when she became woozy as she stood behind the president. Obama, who is much more likeable when he gets out of his near-constant campaign mode, quickly turned to help her as he quipped, "This happens when I talk too long." (2)

There was little else to smile about when the commander-in-chief, stating only the obvious, announced that HealthCare.gov is too slow, that "there's no excuse for the problems," and that "they are being fixed" by "some of the best IT talent in the country." (1) (That might be part of the problem. In the absence of immigration reform, maybe we should be recruiting the IT talent behind some of those fraudulent offshore websites.) At the same time, the president churlishly admonished Republicans who have opposed this law at every turn to stop "rooting for its failure." (1) He sounded like the manager of a losing ballclub who blames opposing fans for booing his players.

Obama's broad points, however, were perfectly fair - and perfectly irrelevant. Eventually, the federal website that provides an individual insurance market for 36 states will be fixed, after a fashion. Consumers will, someday, be able to go online, compare their insurance options, obtain a price that reflects any government subsidies for which they qualify, and sign up.

But it is going to take more than just speeding up the site before that can happen. Though the federal Health and Human Services department has imposed a virtual news blackout on the website's performance, word is leaking out from insurance companies that only a trickle of customers gets through, and that many of those who make it through the maze are being mishandled. Some of the information funneled to insurers is wildly inaccurate, including customers who are reported as having multiple spouses or who have signed up for multiple concurrent insurance policies.

Even after those more serious technical problems are ironed out, we will be left with a law whose fundamental architecture is flawed beyond redemption. The statute gives the sick an ironclad right to obtain insurance they are certain to buy, but healthy people have only a minimally enforced "mandate" to purchase coverage that is inherently overpriced in order to cover those who are already sick. Large employers have already received a one-year reprieve from their own mandate to offer coverage, and many are reducing their full-time headcount anyway, further diminishing the pool of people over whom risk is spread.

It gets worse. Though the Supreme Court upheld the Affordable Care Act's basic constitutionality last year, it sided with the roughly half the states that have chosen to opt out of the expansion of Medicaid, which was crucial to the law's goal of providing near-universal coverage. More litigation is underway on the question of whether the law even allows the government to offer, in the 36 states that do not offer their own exchanges, the planned subsidies for coverage for households with income between the poverty level and four times greater. A defeat on that point would mean that Obamacare would require millions of Americans to buy insurance that they simply could not afford, at least if they want to attend to matters such as paying rent or eating. The individual mandate would certainly fall at that point, leaving insurers forced to cover mainly the sick people who would still buy policies - policies whose prices would inevitably spiral upward.

The president faults Republicans for "rooting" for the law to fail. But if Obama and his party wanted GOP buy-in, the time to get it was when legislators were writing the law. It would have been a tedious, messy, uncertain process, and it might not have borne fruit. Yet had Obama asked lawmakers of both parties to help him draft a health care reform plan, he might well have gotten a sound blueprint, just as he did with the Simpson-Bowles plan for deficit reduction. (Obama did not ultimately support that deficit plan, but at least the process demonstrated that compromise is possible on difficult issues when the two parties actually work together.)

Right now neither side is being practical. Obama and other Democrats pretend that fixing Obamacare is just a matter of fixing a website. Republicans want to stop Obamacare by any means necessary - but they have no plan whatsoever for what would happen next. If the Affordable Care Act disappeared, we would still be left with serious issues of affordability and availability.

Most Americans wanted someone to do something about these issues. Somebody - namely Democrats - did. Getting what we wanted, and belatedly discovering that it isn't what we really wanted, is going to be the least funny joke of all.

Sources:
1) The Washington Post, "Obama on health-care site: 'There's no excuse for the problems, and they are being fixed.'"
2) The New York Daily News, "'This happens when I talk too long:' President Obama helps fainting audience member during long-winded speech"

For more articles, please visit the Palisades Hudson Financial Group LLC newsletter or subscribe to the blog.
Newsletter: http://www.palisadeshudson.com/insights/sentinel/