Friday, April 30, 2010

Saving money with solar panels — Oh, Sure!!

On December 9, 2009 the Journal Times reported that the solar panels installed at the City Hall Annex were generating more savings than the city had anticipated.

Public Works Commissioner Rick Jones reported it was estimated that selling the electricity generated by the panels to We Energies would bring in $10,000 per year. Experience for 2009 shows that the actual revenue will be closer to $12,000 and that the timetable for paying off the project would be about nine years. Earlier estimated indicated a 22 year payoff.

The program is being developed in two phases—144 panels in 2009 and 144 in 2010. The first phase cost is about $340,000 and the second phase will be considerably less because the first phase had one-time, non-recurring costs.

Jim Morrison of the Racine Taxpayers Association asks a good question: How does one pay off $340,000 in debt in nine year at only $10,000 per year?

As we get further into this story we find that We Energies gave the City $150,000 to help pay for the project and is committed to buying power back from the City. The City buys power from We Energies at about 10¢ per kilowatt hour, but sells the electricity generated by the solar panels to We Energies for 22¢ per KWH.

That is apparently very generous of We Energies. But why on Earth buy a product that you sell for more than twice the price for which you produce it? Because the State Legislature says so. That’s why.

When the State of Wisconsin legislature passed its Focus on Energy legislation it required We Energies and other utilities to take steps to assure that 20% of its energy be generated by renewable sources by the year 2020.

Buying electric power produced by solar, wind, biomass and other renewable sources is one approach being use by We Energies to comply with the legislative mandate.

So Rick Jones is clever enough to tap into that legislative windfall.

But is it really “clever?” Who really produces the savings going into Mr. Jones bureaucratic empire?

It turns our Mr. Jones is about as clever as a pickpocket.

We Energies is a public utility — a legal, legislature-protected monopoly. As those costs to produce energy increase, so must We Energy’s price they charge to their customers, the consumers of gas and electric power.

And that is who really "saves" the money for Mr. Jones power scheme. He is not making saving money selling electricity. He is stealing the money from consumers of electric power — you and me — to produce the savings of which he boasts.

It is the Working People of the State of Wisconsin, each doing their bit through the consumption of gas and electric power, chipping in to make sure that the bureaucrats in the Department of Public Works, City of Racine, keep their jobs, their Cadillac health care plans and their bountiful pensions, that makes Mr. Jones' solar savings plan “sunny.”

And that, Ladies and Gentlemen, is an object lesson in saving money — government style!