Sustainability Law Talk

The environmental impact of solar energy systems includes the energy (and resulting GHG emissions) needed to produce and install the systems, the impact of mining raw materials and producing the systems, the environmental disruption of the installations, and, finally, the wastes generated when they no longer function.  These factors must be considered, and the adverse imacts reduced, if solar-produced electricity is to be a truly sustainable resource.

A report by the National Research Council of the National Academies, Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use, examined the often-ignored or "externalized" costs of various sources of energy.  These costs are not usually reflected in the market price of the energy but are, instead, imposed on the environment, human health, or society in general.  The report examined a few of the costs related to the production of electricy from solar energy.

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Prices of installed photovoltaic cells (PV) continue to drop, but the industry must change to make the technology economically-feasible as a sustainable source of electricity.

In its most recent study of U.S. PV installations, Tracking the Sun IV, the Lawrence Berkeley National Laboratory (LBNL) found the capacity-weighted average cost of installed PV systems in 2010 was $6.2/Watt, which is down from the 1998 cost of $11/Watt.

These costs reflect total system installations without accounting for incentives and rebates. Decreasing costs come, in part, from price reductions in the PV cells and modules themselves.  This is good news for residents and businesses that want to invest in clean energy.

But is the news good enough?

Let’s look at example calculation done by the folks at Four Peaks Technologies in Scottsdale, Arizona. Four Peaks hosts a website, Solar Cell Central, which is an easy-to-use resource for renewable energy.

• In their estimate, a 5 kW residential installation including the PV modules, power inverter, and connections, will cost about $25,000. The PV cells have a useful life expectancy of 25 years, but the power inverter only about 12. Replacing the inverter brings the total outlay for the 25-year life up to about $27,000.
• The Four Peaks example describes about $18,000 in state and federal incentives
  (taxes, cost-sharing, etc.).
• It also includes savings of $74 per month made possible by net metering with the local utility where standard rates are 11 ¢/kWh.
• If you disregard the incentives but take advantage of the $74 per month savings, then the payback period will be about 30 years ($27,000 investment = $74 per month x 12 months per year x 30 years = $26,640).

Thirty years is more than the PV cells’ useful life.  In areas with electricity rates less than the
11 ¢/kWh average cost, the payback time is even longer. This is not sustainable.

But making it work is not impossible. I will discuss some of the possible solutions in the next post.

In its International Energy Outlook 2011, the U. S. Energy Information Administration predicts that from 2008 to 2035, worldwide energy consumption will increase 53 percent to a total of 770 quadrillion Btu in 2035.  The largest class of energy sources are liquid fuels, including fossil fuels such as petroleum and coal-to-liquid and renewable fuels like ethanol and biodiesel.  Coal, the next largest source, is followed by natural gas, renewable sources (wind and hydropower), and nuclear power. 

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The U. S. District Court for the District of Columbia struck down policies and procedures adopted by the U. S. Environmental Protection Agency (EPA) and the U. S. Army Corps of Engineers (Corps) regarding dredge and fill permits required under the Clean Water Act.  According to many commentators, the opinion in National Mining Association v. Jackson, No. 10-CV-1220 (D. D.C. Oct. 6, 2011), was a victory for the Appalachian coal industry because the permits at issue in the case involved surface coal mining operations, particularly “mountaintop removal mines.” The court ruled that the EPA had “exceeded the statutory authority conferred upon it by the Clean Water Act” and that the agencies had ignored the proper “notice and comment rulemaking requirements” of the Administrative Procedures Act.

It was a procedural victory, but the mining industry’s celebration may be short-lived.  The issue before the court was not whether the policies and procedures were warranted by the facts related to the environmental impacts of filling hollows with mine spoil, and the court did not suggest that similar policies and procedures, if adopted according to statutes and procedural rules, would not be upheld.  The importance of the decision is the court’s reaffirmation that agencies may not adopt policies that are actually regulations without first going through the formal regulation development process.

(Photo from EPA presentation by Tom Welborn)

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The Obama administration’s budget for fiscal year 2012 proposes over $6 billion to support clean energy.  But it appears that only about $340 million of this investment is planned for sustainable biofuels such as cellulosic ethanol.

Erin Voegele has reviewed the budget request by Secretary of Energy, Steven Chu.  The budget request includes $10 million for analysis and sustainability and $150 million to support the Cellulosic Biofuels Reverse Auction Initiative.  Not All Biofuels Are Green, but cellulosic biofuels have great potential to be beneficial in terms of energy return and greenhouse gas reduction.

The Cellulosic Biofuels Reverse Auction (PDF) has been slow to ramp up.  In fact, when the DOE published a proposed rule on the topic, the only commenter was from the cellulosic leader, Dupont Danisco Cellulosic Ethanol, LLC.  In light of the many beneficial aspects of cellulosic biofuels production it is disappointing that the budget invests so little there.  Nonetheless, the infusion of funds into this previously unfunded strategy may help jump start research and development.