Framing the Dialogue

Let The Sunshine In, Let The Sunshine In

PennLive ran a story this week with the following headline:

The sun shines on taxpayers: Measuring solar performance

You would expect a story with this headline to contain some good news for taxpayers and perhaps it does, but I am too jaded by the desire, no compulsion to give away my hard earned money to others. The story is about a solar project completed by the Lycoming County School District.

“The project is expected to reduce the district’s annual electricity use by 700,000 kilowatt-hours and act as a hedge against future escalation of the cost of electricity.”

That sounds like savings to for the taxpayers in the Lycoming County School District and good for them. Based on a price of around ten cents per KWH that is a savings of $70,000 per year. The article also indicated that the project will pay for itself in about nine years. A Return On Investment (“ROI”) of nine years is not too bad. If you discount interest (paid as a loan or lost as an investment) on the investment, cost of maintenance, cost of repairs, etc. that would mean that the District invested around $650,000 for the project. Unfortunately real investors cannot discount those things there was not much detail given on the District’s outlay.

The writer did, however, mention that,

“As do many new solar installations in Pennsylvania, the East Lycoming School District received a financial jump-start in the form of a grant from the Pennsylvania Energy Development Authority ($1.5 million in its case). What makes its project unique from many other deals is that the risks of SREC deflation and nonperformance of the system aren’t the burden of school district taxpayers. Instead those risks revert to PPL Energy Services, who furnished an eight-year contract that guaranteed positive cash flow to the school district regardless of actual SREC market conditions.”

To interpret for you…the “jump start” was the rest of Pennsylvania’s taxpayers paying a lot more for the solar array than the school district that directly benefits. If I may take a wild stab at this I would say that Pennsylvania taxpayers paid at least 75 percent of the bill. There was no mention of a ROI for the taxpayers outside of this school district. What are the chances they will get any return on their taxes?  When did you last get a jump start from Big Government?

To interpret for you…the SREC are actually Solar Renewable Energy Credits. Pennsylvania passed legislation requiring energy companies to supply a certain, stipulated amount of their energy from renewable sources. In order to comply with the law they must seek out and pay for electricity generated and often at an inflated price. Any guesses about what happens to the price of your electricity when it costs more to generate or acquire? Don’t let me get started on the common practice where governments offer attractive financing, elimination of property taxes, etc. to attract green businesses. When they don’t pay taxes you’ll pay more unless government spending is cut. It’s hard to even type that.

I have nothing against alternative energy, but they need to be market driven. If government wants to invest our tax dollars then the facilities should be used for the public use or at government locations. If we are going to pay at least let us have some of that ROI!

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