Following Tuesday’s announcement of the approved construction of two solar power facilities in California, the string of skepticism has already begun to sink in. The Wall Street Journal reported that the two projects will be built on federal publically owned land and will be contracted by Chevron Corp. and Irish Developer NTR PLC.
The buzz in California is currently over the estimated $1 billion dollars that the projects will generate for the economy, including 950 jobs and the resulting capacity to power 500,000 homes. The projects are being partially subsidized by federal tax incentives for renewable energy that expire at the end of the year.
Everyone is excited, but how great will the projects really be? It’s important to consider a few of the unknowns before we give the project our blessing. First, what are the construction costs going to be? Likely astronomical. The cost of building these plants is enormous and in order to generate and store power past dark, the plants will require special batteries that are also extremely expensive. The price per kilowatt is still unknown, but the plants will have to churn out massive amounts of power to recoup the initial investment price and prove it to be beneficial.
There’s no doubt it’s a step in the right direction for California who aims cut greenhouse gas emissions to 1990 levels by 2020, but the question marks surrounding the plant’s productivity and construction costs remain important. Until then, it sounds good, and it’s election season. With only 22 days to go, I’d say timing is everything.
Sources: The Wall Street Journal, Chevron
I think that California's approach to the issue of alternative energy is deffinitely an interesting one. However, it seems based of the evidence presented in your post that at least in the short term the cost does not justify the benefit. This is due to the fact that it is expensive to construct these facilities and whether their productivity will make up for the expenses remains to be seen. Although if California's wager is successful it could be a blueprint for other states to follow in successfully divesting from foregin oil.
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